Springdale Diagnostic Clinic v. Northwest Physicians
| Decision Date | 17 September 2003 |
| Docket Number | CA03-103. |
| Parties | SPRINGDALE DIAGNOSTIC CLINIC APPELLANT v. NORTHWEST PHYSICIANS, L.L.C., and NORTHWEST PRIMARY CARE PHYSICIANS, P.A. APPELLEES. |
| Court | Court of Appeals of Arkansas |
Appellant, Springdale Diagnostic Clinic, appeals from a summary judgment entered for appellees, Northwest Physicians, L.L.C., and Northwest Primary Care Physicians, P.A., in appellant's cause of action against appellees that stemmed from appellees' hiring of two physicians formerly associated with appellant. On appeal, appellant argues that the circuit court erred in concluding that there was not a remaining genuine issue of material fact in appellant's claims of conversion, tortious interference with a business expectancy, aiding and abetting a breach of fiduciary duty, and for fraud and constructive fraud. We hold that it did not err and affirm.
The sole shareholder of appellant, a professional association, is Dr. Curtis Hedberg. Other physicians, including Dr. Jennifer Bingham and Dr. Burton Bledsoe, also saw patients at appellant's clinic. Drs. Bingham and Bledsoe received no salary from appellant; instead, they were compensated by the local hospital, and in addition, they received the amount by which their collections for patient care exceeded their share of expenses, as calculated by appellant. Neither doctor was bound by a covenant not to compete. Both doctors were dissatisfied with their association with appellant, and Dr. Bingham was actively seeking alternative professional opportunities. In her quest, she contacted appellees' chief executive officer, Dr. William Kendrick. She told Dr. Kendrick that Dr. Bledsoe might also be interested in talking with him. Dr. Kendrick declined to contact Dr. Bledsoe; however, after Dr. Bledsoe made contact with him, appellees made offers of employment to both him and Dr. Bingham.
In the weeks before the doctors left appellant's business premises, and before obtaining contracts with appellees, they obtained their patient lists and appointment schedules. Dr. Bingham also invited some of appellant's support staff to a meeting at her home, during which they discussed the doctors' departure from the clinic. While the doctors did not encourage any staff members to leave their employment with appellant, Dr. Bingham told them that there would be opportunities to work with her should she terminate her business at appellant's clinic. Although both doctors anticipated and, in fact, did receive proposed future contracts of employment with appellant, they were also offered and ultimately accepted contracts with appellees. Immediately after the doctors stopped seeing patients at appellant's clinic, they signed employment contracts with appellees and moved into an office provided by appellees that was located next door to appellant. Using patient lists and appointment schedules taken from appellant's clinic, Dr. Bingham notified her patients of her inability to see them at appellant's clinic and informed them of her new location. The day following their departure, the doctors saw many of their old patients at the new office. There is no contention, however, that Dr. Hedberg's patients followed suit.
On March 13, 2001, appellant filed this action against appellees but did not name Drs. Bingham or Bledsoe as defendants. Appellant's complaint alleged that appellees sought to obtain appellant's practice by proselytizing Drs. Bingham and Bledsoe and by using stolen patient lists and appointment records taken by Drs. Bingham and Bledsoe to solicit appellant's patients. Appellant argued that appellees and Drs. Bingham and Bledsoe solicited and encouraged the patients to end their relationships with appellant. Appellant asserted claims for conversion of its business records and practice; for aiding and abetting Drs. Bingham and Bledsoe in breaching their fiduciary duty to appellant; for fraud and constructive fraud; and for tortious interference with business expectancy. Appellees filed a counterclaim for abuse of process.
Appellees moved for summary judgment on all claims and, in support of their motion, filed copies of excerpts from several depositions. In its response denying appellees' motion, appellant filed additional excerpts from several depositions and Dr. Bingham's employment contract with appellees. The circuit judge awarded summary judgment to appellees, and appellant appeals that award.
We have ceased referring to summary judgment as a drastic remedy. Cumming v. Putnam Realty, Inc., 80 Ark. App. 153, 92 S.W.3d 698 (2002). We now regard it simply as one of the tools in a trial court's efficiency arsenal; however, we approve the granting of the motion only when the state of the evidence as portrayed by the pleadings, affidavits, discovery responses, and admissions on file is such that the nonmoving party is not entitled to a day in court, i.e., when there is not any remaining genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Id. The burden of proving that there is no genuine issue of material fact is upon the movant, and all proof submitted must be viewed favorably to the party resisting the motion. Id. On a summary-judgment motion, once the moving party establishes a prima facie entitlement to summary judgment by affidavits or other supporting documents, the opposing party must meet proof with proof and demonstrate the existence of a material issue of fact. Welch Foods, Inc. v. Chicago Title Ins. Co., 341 Ark. 515, 17 S.W.3d 467 (2000).
Appellant asserts that it raised a genuine issue of material fact as to whether appellees converted its patient and appointment records in order to obtain a substantial portion of its practice. Appellant primarily focuses on the terms of Dr. Bingham's contract with appellees, which stated that patient records would remain appellees' property. Appellees' contract with Dr. Bingham, however, is irrelevant to any relationship appellant may have had with either doctor. Instead, the terms of appellant's agreements, if any, with Drs. Bingham and Bledsoe, especially in regard to the use of patient records and appointment schedules, would have been relevant. Appellant, however, failed to produce any contract with Dr. Bingham and failed to provide any evidence of the terms of any agreement with Dr. Bledsoe.
Dr. Bingham stated in her deposition that she did not consider herself to be an employee of appellant, and appellant has failed to provide any evidence to establish an employee-employer relationship. Although Dr. Bledsoe, in discovery, admitted having an employment relationship with appellant, a copy of any contract or any evidence establishing the terms of that agreement is not in the record. The evidence did not establish the respective rights of appellant or the doctors in the records that are the subject of this controversy.
The tort of conversion is the exercise of dominion over property in violation of the rights of the owner or the person entitled to possession. Grayson v. Bank of Little Rock, 334 Ark. 180, 971 S.W.2d 788 (1998); Tackett v. McDonald's Corp., 68 Ark. App. 41, 3 S.W.3d 340 (1999). The intent required is not conscious wrongdoing but rather an intent to exercise dominion or control over the property that is in fact inconsistent with the plaintiff's rights. Id. Here, appellant failed to establish the respective rights of the parties to the patient information, and therefore, we affirm on this issue.
Appellant further contends that it had a valid business expectancy in the patients of Drs. Bingham and Bledsoe as a source of revenue and that appellees' use of the business records to divert patients to appellees was wrongful. To establish a claim of tortious interference, a plaintiff must prove: (1) the existence of a valid contractual relationship or a business expectancy; (2) knowledge of the relationship or expectancy on the part of the interfering party; (3) intentional interference inducing or causing a breach or termination of the relationship or expectancy; (4) resultant damage to the party whose relationship or expectancy has been disrupted. Vowell v. Fairfield Bay Cmty. Club, Inc., 346 Ark. 270, 58 S.W.3d 324 (2001). It is also necessary that the defendant's conduct be improper. Id. For guidance as to what is improper, the Restatement (Second) of Torts § 767 (1979) states that the court should consider: (1) the nature of the actor's conduct; (2) the actor's motive; (3) the interests of the other with which the actor's conduct interferes; (4) the interests sought to be advanced by the actor; (5) the social interests in protecting the freedom of action of the actor and the contractual interests of the other; (6) the proximity or remoteness of the actor's conduct to the interference; (7) the relations between the parties. Vowell v. Fairfield Bay Cmty. Club, Inc., supra; Dodson v. Allstate Ins. Co., 345 Ark. 430, 47 S.W.3d 866 (2001).
As we previously noted, appellant failed to establish any employment relationship with Dr. Bingham or the terms of such an agreement with Dr. Bledsoe. Without evidence of appellant's and the doctors' respective rights to those records, appellant cannot establish this claim on the wrongful use of the patient lists and appointment records. Without evidence to the contrary, the doctors were free to seek employment independent of appellant. Further, appellant admitted that it had no evidence that appellees had advised Drs. Bingham and Bledsoe to obtain the records. Thus, there was no evidence to support the contention that appellees had interfered with its business expectancy. We affirm on this point.
Appellant contends that genuine issues of material fact exist as to whether appellees aided and abetted Drs. Bingham and...
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