Rhodes v. Amarillo Hospital Dist.
| Decision Date | 04 September 1981 |
| Docket Number | No. 80-1217,80-1217 |
| Citation | 654 F.2d 1148 |
| Parties | Jess F. RHODES, Plaintiff-Appellant, v. AMARILLO HOSPITAL DISTRICT, Defendant-Appellee. . Unit A |
| Court | U.S. Court of Appeals — Fifth Circuit |
Judge & Brown, John Judge, Amarillo, Tex., for plaintiff-appellant.
Gibson, Ochsner, Adkins, Harlan & Hankins, James H. Doores, Amarillo, Tex., for defendant-appellee.
Appeal from the United States District Court for the Northern District of Texas.
Before MARKEY, * Chief Judge, and GEE and POLITZ, Circuit Judges.
Dr. Jess F. Rhodes filed this diversity suit for breach of contract against the Amarillo Hospital District. The district court concluded that Rhodes, not the district, had breached his employment contract and rendered judgment for the defendant district. From this adverse judgment plaintiff appeals to this court. He argues that the court below erred in its findings on breach of contract; that defendant waived any possible breach on plaintiff's part by its behavior during the course of his employment; and that he was deprived of a fair trial by the court's denial of motions for continuance, for leave to file an amended complaint, and for jury trial after waiver. He also urges this court, on its reversal of the liability finding below, to award damages in excess of $100,000. We have carefully reviewed Dr. Rhodes' complaints and find them without merit. The judgment of the district is in all respects affirmed.
In March of 1976, Dr. Rhodes, a Florida physician, signed a contract with the Amarillo Hospital District 1 to serve as the community psychiatrist for the district. 2 In that capacity he was to perform administrative and supervisory services for the clinical staff, teach and counsel staff members, and treat patients in need of psychiatric care. 3 At the execution of this contract Dr. Rhodes was not licensed to practice medicine in the State of Texas. Dr. Cannedy, the district's executive director, had learned of Rhodes' nonlicensure during the contract negotiations. Cannedy testified at trial that he had assumed that Rhodes would be licensed before beginning his contract duties. Dr. Rhodes testified that he made clear to the district his unwillingness to seek state licensure until the contract was in hand. Whether the district, through Dr. Cannedy, thought Rhodes had his Texas license on March 1 or was aware he still had not acquired it is essentially irrelevant for purposes of our discussion. If not before, very shortly after the execution of the employment contract, Dr. Cannedy learned of Dr. Rhodes' unlicensed status. The district court found that Rhodes did not notify Cannedy on March 1 that he had not yet initiated the application process. The problem was not then acute; some weeks of formal orientation necessarily preceded the full assumption of duties by Dr. Rhodes. The expectation of all concerned was that Dr. Rhodes would be licensed presently.
Rhodes immediately entered into that portion of his duties for which no medical license was required; he did not, as under state law he could not, treat psychiatric patients or otherwise "practice medicine." Officials of the district remained concerned with Rhodes' nonlicensure and assisted him, chiefly through the provision of secretarial help, in his dilatory efforts to complete the forms and follow the procedures necessary for licensure. After three months' delay, Dr. Cannedy, dissatisfied with an employee unable to perform his duties fully, sent plaintiff a letter on June 1, 1976, that constituted the four-week written notice of contract termination stipulated in Article F of the employment contract. 4 Dr. Cannedy's letter read, in pertinent part:
This action is taken consistent with Article F of our agreement and will culminate on July 1, 1976, with contract termination for the following reasons:
Article C, Part 1: The physician has not provided psychiatric service for persons needing psychiatric, alcohol, or drug treatment as an indigent person under the regulations of the district.
Article C, Part 1, c: The physician has not provided psychiatric services for patients with no psychiatrist, referred by the Court and law enforcement agencies for evaluation and commitment.
Article C, Part 5: The physician has not worked in the Psychiatric Clinic.
Article F: The physician has not made application for active staff privileges at the District.
As we discussed in the above referenced conversation, this noncompliance with the terms of our agreement is due largely to your failure to obtain the legal ability, through licensure or temporary permit or other means, to practice medicine in Texas. At such time as you can provide assurance of your ability to meet the above terms, I remain ready for discussion at your convenience.
After receiving this letter, Dr. Rhodes completed the application process. The State Board of Medical Examiners approved his application for reciprocity licensure and issued a temporary license on June 25, 1976, which Dr. Rhodes received on June 30. He did not then begin treating psychiatric patients of the Amarillo Hospital District. On July 2, the day following that set in the June 1 letter as the date for termination, Rhodes met with Cannedy and presented his license. Cannedy replied, "Go to work." This Rhodes declined to do unless provided with a written rescission of the June 1 notice of termination. Upon Cannedy's failure to provide him this second letter, Rhodes refused to perform the services required by the contract and left Amarillo. Plaintiff, once again a Florida resident, then filed suit on May 20, 1977.
Dr. Rhodes advances two arguments against the finding that he, not the district, breached the employment agreement. He first argues that no state medical license was necessary to the performance of his contract duties and that for four months he fully performed those required services. This argument is absurd; stripped to its essentials, it maintains that plaintiff was not hired to practice psychiatry. Trial testimony, contract terms, and simple logic are to the contrary. On cross-examination Dr. Rhodes admitted several times that his contract duties included the treatment of patients in need of psychiatric care. 5 In argument to this court, plaintiff makes much of the fact that during contract negotiations he successfully struck the word "medical" and substituted "psychiatric" in the originally listed duty that he "provide professional medical services to every person needing psychiatric, alcoholism or drug treatment as an indigent person." 6 That emphasis is unpersuasive. One may argue that psychiatry is an inexact art, but the argument that its practice is not the practice of medicine needs no rebuttal beyond its restatement. The undoubted reason for Rhodes' insistence on substituting "psychiatric" for "medical" was his desire to limit his practice to his specialty; the doctor was not interested in setting broken arms. Full performance of the contract clearly required a license to practice medicine. Indeed, Rhodes' efforts, dilatory as they were, to secure a license further belie this argument.
Plaintiff's second argument against the district court's conclusions on breach revolves around the proper characterization of the June 1 letter from Cannedy to Rhodes. Dr. Rhodes asserts that the letter constituted an anticipatory repudiation of the contract by the district and that consequently any subsequent failure on his part to perform could not put him in breach. This argument misapplies legal doctrine and misstates fact.
The doctrine of anticipatory repudiation is poorly fitted to the facts of this dispute. Typically, "anticipatory repudiation" arises when a party unequivocally renounces his duties under a contract prior to the time fixed for his performance. Whatever the act of repudiation and by whom, it was here scarcely "anticipatory." Both parties had begun performance; neither, consequently, at that late date (June 1) could anticipatorily breach the contract. Further performance theoretically could have been repudiated by defendant, but that situation is properly dealt with as actual, not anticipatory, breach. Furthermore, as recognized by the district court and affirmed here, the hospital district did not breach this agreement.
The June 1 letter was merely the four-week written notice of intent to discharge stipulated in the contract. Neither party treated it as certain termination of Rhodes' employment; by its terms it was not. During the month of June Rhodes continued his partial services to the district and finally secured a license from the state board. July 1 passed, with no termination by the district of Rhodes' employment. At their July 2 meeting, Cannedy told the now-licensed Rhodes to go to work. Rhodes, apparently misapprehending the legal effect of the June 1 notice and fearing the contract was endangered by that letter's existence, refused to work until the June 1 letter was formally rescinded. Rhodes, unschooled in contract law, stood his ground when he should have yielded. His rights under the contract were unaffected by the June 1 letter. The mere passage of time from June 1 to July 1 did not terminate his employment. Additional, affirmative action by the district was necessary to do that. Contrary to his belief, Rhodes retained enforceable contract rights and responsibilities on July 2 without any written repudiation of the June 1 letter. His refusal to render the promised psychiatric services put him in breach.
Dr. Rhodes argues that, if his failure to provide full psychiatric services for the district constituted a breach of contract otherwise justifying his termination, the district's employment and payment of him for four months and acceptance of his limited services constituted a waiver of it. Several grounds foreclose this argument.
It does not appear that Dr. Rhodes timely raised this issue of...
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