Wanna v. Navicent Health, Inc.
| Decision Date | 15 October 2020 |
| Docket Number | A20A1378,A20A1401 |
| Citation | 357 Ga.App. 140,850 S.E.2d 191 |
| Parties | WANNA v. NAVICENT HEALTH, INC. et al.; and vice versa. |
| Court | Georgia Court of Appeals |
Smith Gambrell & Russell, Anthony L. Cochran, Emily C. Ward ; Martin Snow, Stuart E. Walker, for Wanna.
Parker Hudson Rainer & Dobbs, Robert M. Brennan, Jared C. Miller, Julie A. Wood ; Magda Law, Julia H. Magda, for Navicent Health, Inc. et al.
Dr. Fady S. Wanna previously was employed by Navicent Health, Inc. f/k/a Central Georgia Health Systems, Inc. ("Navicent"), and Navicent's affiliate, Health Services of Central Georgia, Inc. ("Health Services"). This lawsuit concerns a dispute between the parties over Dr. Wanna's contracts governing his employment with Navicent and Health Services and the sale of his medical practice. In his complaint, as amended, Dr. Wanna asserted claims against Navicent and Health Services for breach of his employment agreements, fraud, negligent misrepresentation, violation of the Employee Retirement Income Security Act of 1974 ("ERISA"), and attorney fees and expenses under OCGA § 13-6-11. In their answer, as amended, the defendants asserted counterclaims for breach of contract, breach of non-compete and non-solicitation covenants, breach of the duty of loyalty, breach of fiduciary duty, and attorney fees and expenses under OCGA § 13-6-11. At issue in these companion appeals are two summary judgment orders relating to those claims and counterclaims and a discovery order entered by the trial court.
In Case No. A20A1401, Navicent appeals the trial court's denial of its motion for summary judgment on Dr. Wanna's breach-of-contract claims relating to the failure to pay him severance and an annual bonus or to provide him with director and officers ("D & O") liability insurance coverage. Navicent also appeals the trial court's denial of its motion for summary judgment on Dr. Wanna's ERISA claim. Lastly, Navicent appeals the denial of its motion for summary judgment on Dr. Wanna's claim for OCGA § 13-6-11 attorney fees. For the reasons discussed below, we reverse the trial court's denial of Navicent's motion for summary judgment on Dr. Wanna's breach-of-contract claim predicated on the failure to pay him an annual bonus; we vacate the denial of Navicent's motion for summary judgment on Dr. Wanna's ERISA claim and remand with direction as to that claim; and we affirm in all other respects.
In Case No. A20A1378, Dr. Wanna appeals the trial court's grant of summary judgment to the defendants on his fraud and negligent misrepresentation claims; the denial of his motion for summary judgment on certain of the defendants’ counterclaims; and the denial of his motion to compel discovery relating to Navicent's decision not to pay him particular contractual compensation and benefits. For the reasons discussed below, we vacate the trial court's grant of summary judgment to the defendants on Dr. Wanna's fraud and negligent misrepresentation claims and remand with direction as to those claims. We affirm in all other respects.
Summary judgment is proper when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. A de novo standard of review applies to an appeal from a grant or denial of summary judgment, and we view the evidence, and all reasonable conclusions and inferences drawn from it, in the light most favorable to the nonmovant.
(Citation and punctuation omitted.) Testamentary Trust of Moseley v. Barnes , 245 Ga. App. 817, 817, 538 S.E.2d 873 (2000). See OCGA § 9-11-56 (c). Guided by these principles, we turn to the record in the present case.
Factual Background. Navicent is the corporate parent of the Medical Center of Central Georgia, Inc. ("Medical Center"), which operates an acute care hospital in Macon, Georgia. Health Services is a subsidiary of Navicent that employs physicians in various specialties and provides faculty and physicians to the Medical Center.
Dr. Wanna is a surgeon who is licensed to practice medicine in the State of Georgia and is board-certified by the American Board of Thoracic Surgery with a specialty in cardiothoracic and vascular surgery. Dr. Wanna is a former executive of Navicent and a former physician of Health Services who held clinical privileges at the Medical Center. Central to this case are the contracts that Dr. Wanna entered into with Navicent and Health Services that governed his employment as an executive and physician and the sale of his medical practice.
The Executive Agreement. Effective July 1, 2013, Dr. Wanna and Navicent entered into an employment agreement under which Dr. Wanna agreed to serve as a Vice President and the Chief Clinical Officer of Navicent ("Executive Agreement"). The initial term of the Executive Agreement was three years.
Pursuant to the Executive Agreement, Navicent agreed to pay Dr. Wanna a base salary and certain benefits, including severance compensation if he resigned his executive position for "Good Reason at any time" after providing Navicent notice and an opportunity to cure. "Good Reason" was defined to include a material reduction in Dr. Wanna's base salary.
Under the Executive Agreement, Dr. Wanna also was eligible under certain circumstances for annual incentive compensation under Navicent's Management Incentive Plan ("MIP") and retirement benefits under its Supplemental Executive Retirement Plan ("SERP"). Additionally, Navicent agreed to provide Dr. Wanna with D & O liability insurance that covered him in his individual capacity and in his executive capacity as an officer of Navicent. Lastly, the Executive Agreement contained restrictive covenants, including non-compete and non-solicitation provisions that applied to Dr. Wanna during his employment and for a designated time period thereafter.
The Physician Agreement. While serving in his executive position, Dr. Wanna continued to maintain his cardiac surgery practice but reduced the number of surgeries that he performed. In 2014, Dr. Wanna entered into a physician employment agreement with Health Services that set out the parameters of his continued work as a surgeon ("Physician Agreement"). Under the Physician Agreement, Dr. Wanna agreed to work as a part-time physician and cardiothoracic surgeon with Health Services and remain a member of the active medical staff at the Medical Center while continuing to work as an executive for Navicent. Health Services agreed to pay Dr. Wanna a base salary as well as productivity compensation.1 The initial term of the Physician Agreement was three years, but Dr. Wanna was entitled to terminate the Physician Agreement "at any time upon the occurrence of a material breach of the terms of this Agreement by [Health Services]" if Health Services was afforded notice and an opportunity to cure. The Physician Agreement also contained a non-compete covenant.
Prior to entering into the Physician Agreement, as part of his private medical practice, Dr. Wanna also performed cardiothoracic and vascular surgeries at Coliseum Medical Center, another hospital located in Macon. After entering into the Physician Agreement, Dr. Wanna continued to perform surgeries at Coliseum. Coliseum was not expressly named or discussed in the Physician Agreement. However, according to Dr. Wanna, Health Services assured him that he could continue to perform surgeries at Coliseum during the term of the Physician Agreement, and after execution of the Physician Agreement, Health Services billed and collected for the surgeries that he performed at Coliseum and calculated his productivity compensation based in part on the surgeries he performed there. But Martin Plevak, Chief Executive Officer ("CEO") of Health Services, testified that while Health Services initially allowed Dr. Wanna to continue to perform surgeries at Coliseum, it never guaranteed that he would be permitted to do so throughout the term of the Physician Agreement.
The Asset Purchase Agreement. Effective March 2015, Dr. Wanna and Health Services executed an agreement under which Health Services agreed to purchase the assets of the professional corporation owned by Dr. Wanna and his surgeon partners ("Asset Purchase Agreement"). The Asset Purchase Agreement contained non-compete and non-solicitation covenants applicable to Dr. Wanna.
The Regulatory Compliance Issue. In 2015, Navicent's general counsel, Kenneth Banks, and its compliance officer, Steve Orquist, informed Dr. Wanna that someone had raised a regulatory compliance issue that involved him. According to Dr. Wanna, when he asked them to identify the compliance issue, they would not explain the basis of the accusation and told Dr. Wanna to hire an attorney. Although Navicent maintained D & O liability insurance coverage for its executives, Banks and Orquist did not mention the policy to Dr. Wanna, and Navicent did not submit a claim on his behalf at that time. Dr. Wanna hired counsel at his own expense to resolve any compliance issues.
Dr. Wanna's Resignation from His Executive Position. According to Dr. Wanna, in August 2015, Navicent's Senior Vice President for Human Resources, Barnee Price, told him that a final decision had been made to change his job description and reduce his base salary by more than 32 percent. The change was to take effect on October 1, 2015.
In contrast, Price testified in his deposition that he shared with Dr. Wanna his recommendation regarding how much Dr. Wanna's salary should be reduced if he changed executive positions, but that a final decision had not been made by Navicent on the issue.
On September 1, 2015, Dr. Wanna's counsel sent a letter to Navicent stating:
I am writing on behalf of my client, Fady Wanna, M.D., pursuant to Section 4 (b) (1) (i) of [the Executive Agreement]. My client is resigning for good reason pursuant to such section of his [Executive] Agreement as there has been a material reduction in his base salary which was not a uniform reduction in salary consistently applied to other similarly...
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