Shepard v. Beck

• Citation: 154 P.3d 982,2007 WY 53
• Decision Date: 28 March 2007
• Docket Number: No. 06-98.,06-98.
• Parties: Shelly M. SHEPARD, MD, Appellant (Plaintiff), v. David A. BECK, MD, Appellee (Defendant).
• Court: Wyoming Supreme Court

154 P.3d 982

2007 WY 53

Shelly M. SHEPARD, MD, Appellant (Plaintiff), v. David A. BECK, MD, Appellee (Defendant).

No. 06-98.

Supreme Court of Wyoming.

March 28, 2007.

Representing Appellant: Patrick Dixon of Crowell, Chapin & Dixon, LLC, Casper, Wyoming.

Representing Appellee: Paul J. Drew of Drew Law Office, P.C., Gillette, Wyoming.

Before VOIGT, C.J., and GOLDEN, HILL, KITE, and BURKE, JJ.

VOIGT, Chief Justice.

[¶ 1] Dr. Shelly Shepard ("the appellant") appeals a judgment and order of the district court finding that Dr. David Beck ("the appellee") did not breach an employment agreement with the professional corporation formed between the appellant and the appellee, Associates in Obstetrics/Gynecology, P.C. ("the corporation"), and ordering the corporation to dissolve. We affirm in part and reverse in part.

ISSUES

[¶ 2] 1. Did the district court err when it concluded that the appellee did not breach his employment contract?

2. Did the district court err when it split the costs of an accounting audit between the parties instead of placing liability for the costs of the audit on the appellee?

3. Did the district court err when it declined to award attorney's fees to the appellant?

4. Did the district court err in its order regarding the division of corporate equipment between the parties?

FACTS

[¶ 3] The appellant and the appellee, who practice obstetrics and gynecology, formed a corporation as equal shareholders in 2002. At that time, they also each entered into employment agreements with the corporation as its employees. Problems soon arose regarding the bookkeeping for the corporation. The appellee insisted that his mother, Carol Beck, handle the bookkeeping, though apparently she was not trained or experienced in such work. The appellant, meanwhile, preferred that a professional billing service manage the books. The parties ultimately agreed that Carol Beck would handle the appellee's bookkeeping while a professional service would keep the appellant's books. The parties amicably coexisted in this fashion until they decided that the corporation would employ a third doctor.

[¶ 4] Dr. Marshall was scheduled to begin working for the corporation in August 2003. Initially, the parties agreed that the appellant's billing firm would handle Dr. Marshall's billing; however, the appellee subsequently changed his mind and insisted that Carol Beck handle the billing. The parties finally agreed to resolve the dispute by allowing an outside auditing firm, Eide Bailly, to audit 100 charts billed by Carol Beck. The agreement provided that if Eide Bailly determined that her "billing was appropriate," then she could handle Dr. Marshall's billing, but if not, then Dr. Marshall's billing would be outsourced like the appellant's.

[¶ 5] When Eide Bailly performed its audit in July 2003, it found errors in a large majority of the charts selected for review.¹ The appellee, however, insisted that Dr. Marshall utilize Carol Beck for his billing, contrary to his agreement with the appellant. Ultimately, in July or August 2003, the appellee communicated to the appellant his desire to dissolve their practice and the parties began negotiating to effectuate such dissolution.

[¶ 6] Subsequently, in the fall of 2003, problems arose at Campbell County Memorial Hospital regarding the on-call schedules of the appellant, the appellee, and Dr. Marshall. It appears that the staff at the hospital was given conflicting directions by the parties regarding whom to call when one of the doctors' patients was admitted to the hospital. Despite a promise to "work it out," the appellee and Dr. Marshall unilaterally decided that the appellant would be solely responsible for her own patients, effectively requiring the appellant to stay on-call 24 hours a day.

[¶ 7] Finally, on January 1, 2004, the appellee informed the appellant that he had moved his practice out of the building that they previously occupied and he had taken with him such items as were necessary for his new practice. The appellant filed the instant action on January 2, 2004. The appellee filed his answer and counterclaim on March 29, 2005. In April 2004, the appellant hired the Wipfli accounting firm to conduct an audit of the corporation as part of the litigation. After a bench trial, the district court made findings of fact and conclusions of law, ultimately deciding: (1) that the appellee did not breach his employment contract; (2) that the appellee should not be enjoined from relocating his practice; (3) that the appellant was entitled to an accounting, but that the cost of the Wipfli audit should be considered a cost of winding up the corporation and, therefore, be shared equally between the parties; and (4) that the corporation should be dissolved and each party allowed to keep the assets currently in his or her possession.² This appeal followed.

DISCUSSION

Whether the district court erred when it concluded that the appellee did not breach his employment contract.

[¶ 8] The appellant argues that the district court's findings of fact are inconsistent with its ultimate finding that the appellee did not breach the employment contract. She contends that the following factual findings regarding the appellee's conduct warrant the conclusion that the contract was breached:

1. Reneging on the verbal agreement to have the new physician billed by an outside party if the Eide Bailey [sic] audit showed problems with his mother's billing. Even after re-auditing the files and complaining that the audit was not random, there were still problems found in the [appellee's] mother's billing. The audit seemed random enough for the court and sufficiently appropriate to discover if there were billing problems . . . .

2. Decision letter to the chief of staff on the "call" problem. This was not discussed in advance with the [appellant] and only communicated to the [appellant] by the recipient of the letter. This is hardly the mark of a 50-50 partnership or professional corporation.

3. [Appellee] decided to end the parties' practice together by moving out without notice. This also seems to have been made while leading the [appellant] to believe that they were very near a final settlement on their dissolution discussions.

4. When the [appellee] moved out, he decided what equipment he would take. Of course his letter says that he would be taking with him "such equipment, supplies and inventory as will be necessary to continue" his practice. He would "leave items . . . to enable [appellant] to continue (to) practice as well."

The district court further determined that the appellee "violated the duty of a director to the corporation and to its other director and employee." The appellee responds that the appellant was not a party to his employment contract with the corporation and, therefore, she could not enforce it. At oral argument, he alternatively argued that the appellant did not suffer damages resulting from any breach so the district court's decision was not erroneous.

[¶ 9] Our oft-stated standard for reviewing a district court's findings of fact and conclusions of law is as follows:

"The factual findings of a judge are not entitled to the limited review afforded a jury verdict. While the findings are presumptively correct, the appellate court may examine all of the properly admissible evidence in the record. Due regard is given to the opportunity of the trial judge to assess the credibility of the witnesses, and our review does not entail weighing disputed evidence. Findings of fact will not be set aside unless the findings are clearly erroneous. A finding is clearly erroneous when, although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed."

Forshee v. Delaney, 2005 WY 103, ¶ 6, 118 P.3d 445, 448 (Wyo.2005) (quoting Springer v. Blue Cross & Blue Shield, 944 P.2d 1173, 1175-76 (Wyo.1997)). Of course, we review conclusions of law de novo. E. Broadway Assocs. v. Dowell, 2002 WY 106, ¶ 17, 49 P.3d 1004, 1007-08 (Wyo.2002).

[¶ 10] Though the appellant's reply brief argues that she is entitled to third-party beneficiary status to enforce the appellee's contract, we need not consider that issue because, based on our review of the record, the appellee's claim that the appellant is not a proper party is raised for the first time on appeal. W.R.C.P. 17 provides, in pertinent part:

(a) Real party in interest—Every action shall be prosecuted in the name of the real party in interest . . . . No action shall be dismissed on the ground that it is not prosecuted in the name of the real party in interest until a reasonable time has been allowed after objection for ratification of commencement of the action by, or joinder or substitution of, the real party in interest; and such ratification, joinder, or substitution shall have the same effect as if the action had been commenced in the name of the real party in interest.

In Gifford-Hill-Western, Inc. v. Anderson, 496 P.2d 501, 502 (Wyo.1972), we said that a party's failure to object that its opponent was not the real party in interest until the close of the evidence "constituted a waiver of any objection on that ground." In the instant case, the failure to object to the appellant's status as the real party in interest is even more egregious than in Gifford-Hill-Western because, as the record exists on appeal, the first time this issue was raised is in the instant appeal and it was, therefore, waived by the appellee. Further, the appellee filed a counterclaim below alleging that the appellant was liable to him for "any amounts due the corporation which were improperly billed" by the appellant. Judicial estoppel is

sometimes referred to as a doctrine which estops a party to play fast and loose with the courts or to trifle with judicial proceedings. It is an expression of the maxim that one cannot blow hot and cold in the same breath. A...