Orcutt v. Kettering Radiologists, Inc., C-3-00-545.

Decision Date11 March 2002
Docket NumberNo. C-3-00-545.,C-3-00-545.
PartiesMarsha ORCUTT, M.D., Plaintiff, v. KETTERING RADIOLOGISTS, INC., et al., Defendants.
CourtU.S. District Court — Southern District of Ohio

Randolph Freking, George Reul, Cincinnati, OH, for Plaintiff.

William J. Faruki, Charles Faruki, Richard Talda, Dayton, OH, for Defendants.

DECISION AND ENTRY SUSTAINING THE MOTIONS OF KETTERING RADIOLOGISTS, INC., AND KETTERING RADIOLOGISTS IMAGING CENTER, INC., TO COMPEL ARBITRATION (DOC. # 9-1) AND TO DISMISS (DOC. # 9-2); KETTERING MEDICAL CENTER'S MOTION TO STAY PROCEEDINGS (DOC. # 17) OVERRULED; CONFERENCE CALL SET WITH THE COURT AND COUNSEL FOR PLAINTIFF AND COUNSEL FOR KETTERING MEDICAL CENTER TO RESET TRIAL DATE AND OTHER DATES LEADING TO THE RESOLUTION OF THIS LITIGATION BETWEEN THOSE PARTIES

RICE, Chief Judge.

The instant litigation arises out of the termination of Plaintiff Marsha Orcutt, M.D., from her employment with Defendants Kettering Radiology, Inc. ("KRI"), and Kettering Radiologists Imaging Center, Inc. ("KRIC"). According to her Complaint (Doc. # 1), in November of 1991, Dr. Orcutt was hired by KRI to perform services as a radiologist. She and KRI executed a written employment contract on November 19, 1991, which was to be effective between March 16, 1992, and March 15, 1993. On March 18, 1993, Orcutt and KRI modified the agreement to reflect a new compensation formula and a new vacation schedule, and to extend the term for an additional year. Plaintiff alleges that the employment contract was subsequently extended and modified by verbal agreement, and was in effect until she was terminated on May 19, 1999.1

In January of 1997, KRI and KRIC entered into an arrangement with the Kirkland Medical Group ("Kirkland"). In accordance with that arrangement, Kirkland performed radiology tests on its patients at its premises, and the films were sent to KRI and KRIC for interpretation. Kirkland allegedly billed the United States government and third party payers, and paid KRI $7.00 per interpretation. Kirkland also referred patients to KRI for the performance and interpretation of more expensive tests. Plaintiff alleges that KRI's agreement with Kirkland for the interpretation of films outside of Kirkland's premises is a violation of Medicare rules.

On several occasions, Dr. Orcutt expressed her concerns regarding the quality of films from Kirkland and the legality of KRI's arrangement with Kirkland under Medicare reimbursement laws. Between June and July of 1998, Plaintiff expressed her concerns to KRI's Board of Directors. After the Board repeatedly failed to address those issues, Plaintiff informed KRI that she would no longer interpret any of Kirkland's films.

On March 25, 1999, Plaintiff had an altercation with Dr. Jerry Andrews at Kettering Medical Center ("KMC"), during which Dr. Andrews informed Plaintiff that he would not present two cases during the Tumor Board Conference. When Plaintiff commented that she considered his refusal to be unprofessional, he approached her in an intimidating manner and repeatedly yelled at her that she was a bitch. As a result of the incident, Dr. Orcutt filed a sexual harassment complaint with the Chief Executive Officer of KMC. On April 13, 1999, Plaintiff met with Dr. Gregory Wise, the Vice President of Medical Integration at KMC. She believed that the purpose of the meeting was to discuss her sexual harassment complaint. However, the discussion turned to an incident that had occurred between Plaintiff and an ultrasound technician on March 4, 1999. On April 14, 1999, KMC informed Plaintiff that she had violated the "rules and regulations" of the hospital and the contract between KMC and KRIC, presumably due to the March 4th incident. On April 22, 1999, Plaintiff was placed on administrative leave and relieved of all duties at KMC, pending action by KRI's Board regarding her employment. On May 19, 1999, KRI's Board of Directors voted to terminate Plaintiff's employment. Her privileges with KMC were terminated on May 26, 1999.

On November 6, 2000, Plaintiff brought suit in this Court against KRI, KRIC, and KMC. She set forth eleven claims for relief against KRI and KRIC, to wit: (1) a claim for violation of the whistleblower provisions of the False Claims Act, 31 U.S.C. § 3730(h) (Count One); (2) a state law claim for retaliatory discrimination and termination, in violation of Ohio Rev.Code § 4112.02(A) and § 4112.99, based on her opposition to harassment (Count Two); (3) a state law claim for retaliatory discharge, in violation of public policy, based on her opposition to discriminatory employment practices (Count Three); (4) a state law claim for sex discrimination, in violation of Ohio Rev.Code § 4112.99 (Count Four); (5) a state law claim for sex discrimination, in violation of public policy (Count Five); (6) a state law claim for religious discrimination, in violation of Ohio Rev.Code § 4112 (Count Six); (7) a state law claim for religious discrimination, in violation of public policy (Count Seven); (8) a state law claim for breach of contract (Count Eight); (9) a state law claim for promissory estoppel (Count Nine); (10) a state law claim for breach of implied contract (Count Ten); and (11) a state law claim for intentional infliction of emotional distress (Count Twelve). Plaintiff also asserted claims against KMC, to wit: (1) a state law claim for breach of implied contract (Count Ten); (2) a state law claim for tortious interference with contractual relations (Count Eleven); and (3) a state law claim for intentional infliction of emotional distress (Count Twelve).

Pending before the Court are KRI and KRIC's Motion to Compel Arbitration (Doc. # 9-1) and their Motion to Dismiss Plaintiff's Complaint (Doc. # 9-2), as well as KMC's Motion to Stay Proceedings Pending Arbitration (Doc. # 17). For the reasons assigned, KRI and KRIC's Motions to Compel Arbitration (Doc. # 9-1) and to Dismiss (Doc. # 9-2) are SUSTAINED. KMC's Motion to Stay Proceedings is OVERRULED.

In its Motion to Compel Arbitration, KRI asserts that its employment contract with Plaintiff contains an arbitration agreement, which is enforceable under the Federal Arbitration Act ("FAA") and the Ohio Arbitration Act, and that her claims fall within the scope of that agreement. KRIC asserts that Plaintiff is equitably estopped from avoiding arbitration of her claims against it, because those claims are intertwined with and substantially interdependent with the allegations raised against KRI.

The Court begins with a discussion of the scope of the Federal Arbitration Act ("FAA"). That Act was designed to quell the traditional common-law hostility to arbitration clauses and to ensure enforcement of such agreements. Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 105 S.Ct. 1238, 84 L.Ed.2d 158 (1985); see Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52, 115 S.Ct. 1212, 131 L.Ed.2d 76 (1995); Allied-Bruce Terminix Cos., Inc. v. Dobson, 513 U.S. 265, 270, 115 S.Ct. 834, 130 L.Ed.2d 753 (1995). To that end, Congress provided that provisions in any "contract evidencing a transaction involving commerce" which provide for settlement by arbitration of disputes arising out of such contract or transaction "shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of a contract." 9 U.S.C. § 2 (1947). The Supreme Court has recently clarified that the FAA applies to virtually all contracts of employment, and that only employment contracts of transportation workers are exempted from FAA. Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 121 S.Ct. 1302, 149 L.Ed.2d 234 (2001).

In determining whether the parties agreed to arbitrate their dispute, the Court is to use the federal substantive law of arbitrability.2 Moses H. Cone Mem'l Hosp. v. Mercury Const. Corp., 460 U.S. 1, 24-25, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983). "[A]ny doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability." Id. The FAA mandates that district courts refer parties to arbitration on issues as to which the parties have agreed to arbitrate. Byrd, 470 U.S. at 218, 105 S.Ct. 1238. Moreover, the FAA "requires piecemeal resolution when necessary to give effect to an arbitration agreement." Moses H. Cone Mem'l Hosp., 460 U.S. at 20, 103 S.Ct. 927 (emphasis in original).

When considering a motion to compel arbitration and to dismiss, due to an arbitration provision, a court has four tasks: first, it must determine whether the parties agreed to arbitrate; second, it must determine the scope of that agreement; third, if federal statutory claims are asserted, it must consider whether Congress intended those claims to be nonarbitrable; and fourth, if the court concludes that some, but not all, of the claims in the action are subject to arbitration, it must determine whether to stay the remainder of the proceedings pending arbitration. See Compuserve, Inc. v. Vigny Int'l Finance, Ltd., 760 F.Supp. 1273, 1278 (S.D.Ohio 1990); Stout v. Byrider, 228 F.3d 709, 714-15 (6th Cir.2000), cert. denied, 531 U.S. 1148, 121 S.Ct. 1088, 148 L.Ed.2d 963 (2001). Plaintiff has challenged Defendants' Motion on a number of grounds. First, she asserts that her employment contract with KRI has expired and, therefore, that agreement (including the arbitration provision within it) is unenforceable. Second, she argues that the Federal Arbitration Act does not apply to contracts of employment.3 Third, she asserts that the False Claims Act claim is not subject to arbitration. Fourth, she contends that the arbitration agreement violates public policy and, thus, is unenforceable. Plaintiff's arguments will be addressed as part of the Court's analysis of the four tasks listed above.

A. Agreement to Arbitration
1. KRI

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