Reddy v. Good Samaritan Hosp. & Health Ctr.

• Decision Date: 19 September 2000
• Docket Number: No. C-3-90-197.,C-3-90-197.
• Citation: 137 F.Supp.2d 948
• Parties: Bhimavarapu K. REDDY, Plaintiff, v. GOOD SAMARITAN HOSPITAL AND HEALTH CENTER, et al., Defendants.
• Court: U.S. District Court — Southern District of Ohio

137 F.Supp.2d 948

Bhimavarapu K. REDDY, Plaintiff, v. GOOD SAMARITAN HOSPITAL AND HEALTH CENTER, et al., Defendants.

No. C-3-90-197.

United States District Court, S.D. Ohio, Western Division.

September 19, 2000.

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Alan C. Witten, McShane Breitfeller & Witten, Louis A. Jacobs, Ralph E. Breitfeller, Columbus, OH, for Plaintiff.

Robert J. Brown, Sue K. McDonnell, Dayton, OH, John L. Green, Dinsmore & Shohl, Susan E. Wheatley, Taft Stettinius & Hollister, Cincinnati, OH, Roger J. Makley, Dayton, OH, for Defendants.

EXPANDED OPINION SETTING FORTH REASONING AND CITATIONS OF AUTHORITY IN SUPPORT OF COURT'S ORDER OF SEPTEMBER 24, 1994 (DOC. # 153), WHICH SUSTAINED THE MOTION OF DEFENDANT GOOD SAMARITAN HOSPITAL AND HEALTH CENTER FOR SUMMARY JUDGMENT (DOC. # 112), WHICH SUSTAINED IN PART AND OVERRULED IN PART THE MOTION OF DEFENDANT ANESTHESIA ASSOCIATES OF NORTHWEST DAYTON, INC., FOR SUMMARY JUDGMENT (DOC. # 118), AND WHICH SUSTAINED THE MOTION OF DEFENDANT ANESTHESIA ASSOCIATES OF DAYTON, INC., FOR SUMMARY JUDGMENT (DOC. # 120); EXPANDED OPINION SETTING FORTH REASONING AND CITATIONS OF AUTHORITY IN SUPPORT OF COURT'S ORDER OF FEBRUARY 6, 1995 (DOC. # 154), WHICH SUSTAINED IN PART AND OVERRULED IN PART THE MOTION OF DEFENDANT ANESTHESIA ASSOCIATES OF NORTHWEST DAYTON, INC., TO STRIKE (DOC. # 139); JUDGMENT TO BE ENTERED IN FAVOR OF DEFENDANTS AND AGAINST PLAINTIFF; TERMINATION ENTRY.

RICE, Chief Judge.

In 1973, Plaintiff Bhimavarapu K. Reddy ("Reddy") was hired as an anesthesiologist by one of the Defendants, Anesthesia Associates of Dayton, Inc. ("AA/Dayton").¹ He was employed by AA/Dayton for one year. Thereafter, Plaintiff became both a shareholder and an employee of AA/Dayton, a status he continued to maintain until 1988. As both an employee and a shareholder of that corporation, Reddy's practice of anesthesiology was centered at Defendant Good Samaritan Hospital and Health Center ("Good Samaritan").² At some point, disputes regarding compensation and referrals arose between Plaintiff and the other shareholders of AA/Dayton who practiced at that facility. Therefore, in 1987, Plaintiff began to explore leaving AA/Dayton and establishing his own group to practice anesthesiology at Good Samaritan. In March, 1988, Plaintiff told his fellow AA/Dayton shareholders of his intention to leave AA/Dayton, and in August of that year, his fellow shareholders asked him to leave the group. He did so and formed a sole proprietorship, B.K. Reddy and Associates, under which he continued to practice anesthesiology at Good Samaritan. At that time, both Plaintiff and AA/Dayton provided anesthesia services at that institution.

During the period that Plaintiff practiced at Good Samaritan under his sole proprietorship, changes were made in the manner in which anesthesiologists practiced at that hospital. For instance, the number of Certified Registered Nurse Anesthetists ("CRNA") which a physician could supervise was limited. In addition, the ability of a physician both to supervise a CRNA and to provide services himself or herself was curtailed.

Having two separate anesthesia groups providing services at Good Samaritan was not successful. Consequently, the hospital's administration decided to enter into an exclusive contract for the provision of anesthesia services. Initially, Good Samaritan negotiated with Drs. Thomas and Seitzman. Although these two anesthesiologists were both shareholders of AA/Dayton, they formed there own corporation, RTHS, Inc. ("RTHS"), for the purpose of entering into the exclusive contract. In other words, Thomas and Seitzman negotiated the exclusive contract for themselves and not on behalf of AA/Dayton. In early 1990, K. Douglas Deck ("Deck"), Good Samaritan's President and CEO,³ announced that the hospital had entered into an exclusive contract with RTHS. However, that decision was not favorably received. As a consequence, the exclusive contract between the hospital and RTHS was not consummated. Good Samaritan's Board of Trustees then told Deck to work with the anesthesiologists on staff to form a new corporation, which would be given an exclusive contract to provide anesthesia services at the hospital. Deck met with those anesthesiologists and told them that the hospital would enter into an exclusive contract with a newly formed corporation, and that all anesthesiologists would be permitted to participate equally in that corporation. Deck was adamant that the hospital would not contract with any of the existing groups providing services (i.e., AA/Dayton, Plaintiff, or RTHS).⁴ As a result, a new corporation, Anesthesia Associates of Northwest Dayton, Inc. ("AA/Northwest"), was formed in March, 1990, for the purpose of negotiating a contract.

AA/Northwest offered contracts to all anesthesiologists on staff, including Plaintiff.⁵ Plaintiff refused to join the new corporation. Rather, he initiated this litigation, on May 23, 1990, seeking to enjoin the exclusive contract, alleging that it violated 42 U.S.C. § 1981. When this Court denied Reddy's request for a preliminary injunction, the offer to Plaintiff was renewed. It was ultimately extended until June 29, 1990. On that date, Reddy attempted to join the new group; however, his effort was either too late or the offer was withdrawn.

In July, 1990, Plaintiff attempted to have his privileges at Miami Valley Hospital ("Miami Valley") upgraded from courtesy to active status.⁶ Although this process took longer than he thought it should have, in November, 1990, Reddy was granted active privileges at Miami Valley.⁷ However, before he was granted such privileges, Miami Valley entered into a letter of intent to enter into an exclusive contract with AA/Dayton. Although at one time he had been both an employee and shareholder of that organization, Reddy never requested that he again become a member or employee of that corporation.

In his Second Amended Complaint (Doc. # 43) Plaintiff sets forth six claims against Good Samaritan, AA/Northwest and AA/Dayton, to wit: a claim of discrimination, in violation of § 1981 (First Claim for Relief); a claim of restraint of trade, in violation of § 1 of the Sherman Act, 15 U.S.C. § 1, and Ohio's Valentine Act, Chapter 1331 of the Ohio Revised Code (Second and Third Claims for Relief); a state law claim of tortious interference with prospective contractual relationship (Fourth Claim for Relief); a state law claim of breach of contract (Fifth Claim for Relief); and a claim of retaliation, in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., and Chapter 4112 of the Ohio Revised Code (Sixth Claim for Relief).⁸

After extensive discovery, the three Defendants filed Motions for Summary Judgment, to wit: Good Samaritan (Doc. # 112), AA/Northwest (Doc. # 118) and AA/Dayton (Doc. # 120). On September 24, 1994, this Court entered an Order in which it sustained the Motions for Summary Judgment of Good Samaritan and AA/Dayton, as well as sustaining in part and overruling in part that filed by AA/Northwest (Doc. # 153). On February 6, 1995, the Court entered an Order (Doc. # 154), which sustained in part and overruled in part the Motion of AA/Northwest to Strike the Affidavits of Engel and Spirtos (Doc. # 139). The Court now sets forth, in this expanded opinion, the reasoning and citations of authority which support those two Orders. As a means of analysis, the Court will initially address the Motion to Strike, and then turn to the three Motions for Summary Judgment, first setting forth the standard which must be applied to every such motion, following which it will address the arguments that the parties have presented in support of and in opposition to the three motions filed in this litigation, discussing Reddy's claims in the order presented above.⁹

I. Motion to Strike of AA/Northwest (Doc. # 139)

Fed.R.Civ.P. 56(e) sets forth three requirements for affidavits which are used in support of or in opposition to a motion for summary judgment. It provides that those affidavits "shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein." These requirements are mandatory. Charles A. Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 2738 (2d ed.1983); Collazos-Cruz v. United States, 117 F.3d 1420, 1997 WL 377037 (6th Cir.1997). "An affidavit that does not satisfy the requirements of Rule 56(e) is subject to a motion to strike." Collazos-Cruz, 117 F.3d 1420, 1997 WL 377037 at *2, citing Noblett v. General Elec. Credit Corp., 400 F.2d 442, 445 (10th Cir.), cert. denied, 393 U.S. 935, 89 S.Ct. 295, 21 L.Ed.2d 271 (1968).

AA/Northwest seeks to strike, in their entirety, the affidavits of Ronald C. Engel and Gary N. Spirtos, which were offered by Plaintiff in his Memorandum in Opposition to Defendants' Motions for Summary Judgment. The crux of AA/Northwest's motion is that the matters set forth in those affidavits are not based upon personal knowledge and contain inadmissible speculation, accusations and hearsay (thus implicating two of the three criteria set forth in Rule 56(e)).¹⁰ In particular, AA/Northwest argues that the affidavits lack the requisite factual support for a finding of personal knowledge of the matters to which they attest. Defendant¹¹ states that the affidavits deliberately omit information, thus misleading the reader and, which would, in the case of Engel's affidavit, indicate that he could not have had personal knowledge of the events. Moreover, Defendant asserts that the declarant's statement that the facts contained in their affidavits are "to the best of his recollection and belief" is insufficient to satisfy the personal knowledge requirement of Rule 56(e). In addition, AA/Northwest asserts that certain paragraphs contain hearsay and conclusory statements based...