Vails v. United Cmty. Health Ctr., Inc.
| Decision Date | 05 December 2012 |
| Docket Number | No. C11-4048-LTS,C11-4048-LTS |
| Parties | JULIE VAILS, M.D., Plaintiff, v. UNITED COMMUNITY HEALTH CENTER, INC., MARK PROSSER, HUGH PERRY, BILL KRUSE, and DIANE HAMILTON, Defendants. |
| Court | U.S. District Court — Northern District of Iowa |
PROCEDURAL HISTORY........................................................................2
RELEVANT FACTS................................................................................3
SUMMARY JUDGMENT STANDARDS.....................................................11
ANALYSIS..........................................................................................12
CONCLUSION....................................................................................46
This matter is before me on defendants' September 14, 2012, motion for partial summary judgment (Doc. No. 17) and plaintiff's September 17, 2012, motion for partial summary judgment (Doc. No. 20). I conducted a hearing on both motions on November 7, 2012. Attorneys Stanley Munger and Jay Denne appeared for plaintiff. Attorneys Mary Funk and David Bower appeared for defendants. Both motions are now fully submitted.
Plaintiff Julie Vails, M.D., filed this action on May 20, 2011. Her complaint (Doc. No. 1) includes a jury demand and names five defendants: United Community Health Center, Inc. ("UCHC"), Mark Prosser, Hugh Perry, Bill Kruse and Diane Hamilton. Vails invokes the court's diversity jurisdiction pursuant to 28 U.S.C. § 1332. She alleges that UCHC is an Iowa corporation doing business in Iowa and that the four individual defendants were members of UCHC's executive committee during the relevant period of time.
Vails alleges that she had a successful medical practice in California and was solicited by UCHC to leave that practice to become an employee of UCHC in Storm Lake, Iowa. She further alleges that she entered into a written employment contract with UCHC and that UCHC breached that contract. Her causes of action are as follows:
Defendants filed their answer and affirmative defenses (Doc. No. 4) on June 27, 2012. The parties subsequently consented to trial, disposition and judgment by a United States Magistrate Judge pursuant to 28 U.S.C. § 636(c). This case was assigned to me on June 8, 2012. Trial is scheduled to begin January 22, 2013.
Defendants' motion for partial summary judgment seeks dismissal of Counts II, III, IV and V. According to defendants, "there are material factual disputes as to Plaintiff's breach of contract claim [Count I]." Doc. No. 17-4 at brief page 1. Vails seeks summary judgment with regard to Count I. She contends that UCHC breached the employment agreement in various ways and that one breach, in particular, is undisputed. Specifically, she contends that she was "not provided time to work on the administrative component of her job as set forth in the contract." Doc. No. 20 at 1. She further contends that the amount of her damages for breach (other than reputational damages) is undisputed. Doc. No. 20-1 at brief pages 6-7.
Because both sides seek entry of partial summary judgment, I will provide an overview of the basic, relevant facts here. In my analysis of each motion I will set forth additional facts as viewed in a light most favorable to the resisting party.
The Parties. Vails currently resides in the state of Washington. She received her medical degree in 1999. In 2002, she established a private medical practice in California, which she maintained until joining UCHC in 2010.
UCHC is a nonprofit corporation organized under Iowa Code chapter 504 that operates a community health center in Storm Lake. UCHC is a Federally Qualified Health Center that provides services to a "medically underserved population" asdefined by federal law. UCHC's bylaws provide that its affairs are to be managed by a board of directors. At all relevant times, defendants Prosser, Perry, Kruse and Hamilton (collectively "the Individual Defendants") were members of UCHC's board of directors and served as members of the executive committee. Prosser served as the Chairperson of the executive committee. All members of UCHC's board of directors are unpaid volunteers. UCHC does not pay dividends or share profits with its members, directors or officers.
UCHC's History. UCHC was formed in 2004. Under its bylaws, the board of directors is "responsible for the employment of a Chief Executive Officer" who, in turn, is responsible for carrying out the "management function of staffing, and directing and controlling the operations of the health center for the governing body." UCHC employed its first CEO, Renea Seagren, in 2004. UCHC hired its first medical provider, an Advanced Registered Nurse Practitioner (ARNP), in 2006, and began providing medical services to patients shortly thereafter.
In early 2007, UCHC hired Dr. Ubaldo Salazar to be its first full-time physician and Medical Director. As Medical Director, Salazar provided medical care to patients and performed various administrative functions. In 2009, UCHC learned that Dr. Salazar did not intend to continue his employment beyond the term of his contract and began searching for a replacement.
The Employment Agreement. In early 2010, a third-party recruiting service brought Vails to UCHC's attention. After some initial communications, Vails agreed to travel to Storm Lake from April 12-14, 2010. While in Storm Lake, she interviewed with Seagren, toured UCHC, the community and the local hospital (Buena Vista Regional Medical Center), met the Individual Defendants and other board members and met with some of UCHC's staff.
Seagren, acting for UCHC, offered Vails the position of Medical Director while Vails was still in Storm Lake. Seagren provided Vails with a draft employment agreement and the two of them discussed certain terms. Vails did not retain an attorneyto review the draft or otherwise advise her during the negotiations. Instead, she negotiated directly with Seagren.2 Vails sought and obtained certain changes to the first draft, including an increase in the proposed salary, a change in the allocation of her time between clinical and administrative duties and an increase in the allowance for moving expenses. She signed the final version (the "Agreement") on April 16, 2010. She read the Agreement before signing it.
The Agreement had a commencement date of July 5, 2010, and an initial term of three years. It further provided for automatic one-year renewals unless either side elected not to renew. Vails' primary duties were the provision of medical care to UCHC's patients (in accordance with "Exhibit A"), the provision of "administrative duties" (in accordance with "Exhibit B"), and the provision of "any other administrative duties the Board may reasonably assign." Agreement ¶ 2. The Agreement further stated:
Doctor shall devote a minimum of 40 total hours per week toward the provision of clinical and administrative services hereunder to the Clinic ("Work Week") in alignment with the hours of operation of the Clinic. Unless otherwise agreed to by the parties in writing, Doctor shall devote on average a minimum of 24 hours per Work Week to providing patient care and a minimum of 16 hours per Work Week to providing administrative duties to the Clinic as the Medical Director. Doctor shall maintain reasonable hours so that a practice can be developed.
Id. The Agreement stated that when more than one physician was employed by UCHC, Vails agreed to "split call coverage and rounds equally with the other physician(s)." Id.
The Agreement called for Vails to receive an annual salary of $225,000, paid time off, continuing education, various fringe benefits, malpractice insurance and up to $10,000 for relocation expenses. Agreement ¶ 5. It also included an integration clause:
The Agreement, including Schedules, Exhibits, and Attachments, if any, represents the entire understanding between the parties. Any prior agreements between the parties as to the subject matter of the Agreement are hereby expressly terminated.
Vails' Employment at UCHC. Vails' employment began on July 5, 2010. App. at 1-17. In early August, Seagren announced that she was resigning her position as UCHC's CEO. Seagren agreed that her resignation would be effective October 31, 2010. UCHC established a three-person management team to make day-to-day operational decisions pending the recruitment and hiring of a new CEO. The team included Vails, Rich Gehrig (UCHC's Chief Financial Officer) and Dr. Mike Munilla (UCHC's Dental Director).
In September 2010, Vails retained her...
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