Weston v. Margaret J. Weston Med. Ctr.
| Decision Date | 18 April 2008 |
| Docket Number | 2008-UP-240 |
| Parties | Paul Weston, MD, Respondent, v. Margaret J. Weston Medical Center, Appellant, v. Odessa K. Chavous, Third-Party Defendant, |
| Court | South Carolina Court of Appeals |
THIS OPINION HAS NO PRECEDENTIAL VALUE. IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 239(d)(2), SCACR.
Heard February 12, 2008
Appeal From Aiken County Doyet A. Early, III, Circuit Court Judge
Charles J. Boykin and Karla McLawhorn Hawkins, both of Columbia, for Appellant.
Donald Gist, DeAndrea Gist Benjamin, John S. Nichols, and Stephen Keith Benjamin, all of Columbia, for Respondent.
This appeal stems from an action for breach of contract and breach of contract accompanied by a fraudulent act. The plaintiff Dr. Paul Weston, M.D., (Weston) obtained a jury verdict for $200, 000 in actual damages and $300, 000 in punitive damages against the defendant, the Margaret J. Weston Medical Center (the Center). The Center contends the trial judge erred in denying the Center's: (1) motion for directed verdict (2) motion for a new trial absolute; (3) motion for a new trial nisi remittitur; and (4) motion for a mistrial. We affirm.
On June 24, 2002, Paul Weston, M.D., (Weston) entered into a contract (the Contract) with the Center to serve as its medical director in Clearwater, South Carolina. The Contract provided for a two-year term and an annual salary of $140, 000. The Contract's terms required Weston to work a forty-hour week or provide a minimum of eight hours per day in clinical services. Additionally, the Contract's terms required Weston to attend to patients and render treatment, provide consultation with clinical personnel, nurses, and doctors and participate in a quality assurance program. The Contract contained a termination clause that provided the following:
This agreement shall be effective when all signatures have been affixed to the agreement and shall terminate 24 months after signing, however, this agreement shall be terminated by either party upon ninety (90) days written notice. The [Center] may terminate the agreement without notice for cause and may terminate the agreement immediately in the event of financial exigency.
The Center terminated Weston prior to the expiration of the contract for the stated reason of financial exigency. David Macuch (Macuch), the Center's chief financial officer (CFO), sent Weston a termination letter (the Letter) on August 7, 2003, which stated:
Weston filed a complaint against the Center alleging retaliatory discharge, breach of contract, breach of contract accompanied by a fraudulent act, gross negligence, and bad faith discharge. The Center filed a third-party complaint against the former chief executive officer (CEO) of the Center Odessa Chavous (Chavous), alleging breach of fiduciary duty. Chavous denied liability and filed a motion for summary judgment. The trial judge granted the motion for summary judgment and dismissed Chavous from the case. The case was tried before a jury in October 2005.
At trial, Weston admitted he had no access to or knowledge of the Center's financial status at the pertinent time. However, Weston stated he believed the Board of Directors (the Board) simply used [him] to get their financial house in order.” In addition, Reverend Lester Smalls (Smalls), chairman of the Board when the Center hired Weston, testified regarding the Center's financial situation. As a member of the Board, he stated he received regular financial reports, and while he resigned in May 2003 prior to Weston's termination, he could not recall any financial strains while chairman. [1]
Weston averred he performed his duties under the Contract and no one on the Board indicated to him they had problems with his job performance. [2] Weston admitted he saw a total of only 214 patients between July 2002 and July 2003. However, Weston testified he believed the Center had a deliberate plan to assign patients to other physicians to portray low productivity on Weston's part. Weston stated the routing of patients began shortly after Chavous' hiring in August 2002. Weston further explained his patient numbers continued to decrease after Chavous transferred him in March 2003 to the Center's new site in Jackson, South Carolina.
Conversely, Weston claimed the Board did not carry out its duties under the Contract. The Board did not permit him to supervise other physicians or to participate in the quality assurance program. Further, Weston stated there was no communication between his office and Chavous, who had taken charge of some of the other clinical employees. Weston opined this was done to keep [him] out of the loop.” Weston also stated he attended Board meetings in an attempt to give the medical director's report and so he could report complaints regarding the way the Center was run. The complaints included the Board's hiring of two unlicensed doctors and the limitation placed on Weston from carrying out the medical director's supervisory duties.
Weston stated he suffered damages in numerous ways. According to Weston, the situation was emotional and traumatizing. Also, Weston explained he built an enviable record” and reputation in the fifty-five years of working in the medical community in Richmond County, Aiken County, the Edgefield area, and Augusta, Georgia. Weston claimed his name had been vilified because of the Center's breach. Weston also stated he was due $140, 000 under the contract. Additionally, to support Weston's alternative theory of modification of the Contract, he testified the Center never contacted him after the Letter to notify him he could return to work at the Center.
Macuch testified he had serious concerns about the financial condition of the Center. Specifically, Macuch testified that month after month, the Center's expenses exceeded its revenues. He explained the disparity existed because the revenue from patient encounters was not sufficient to support the growing number of personnel at the Center. The Center also opened a new site in Jackson, South Carolina, in March 2003. Macuch stated it was expected the new center would operate at a loss for the first year and at a reduced schedule compared to the Clearwater site.
Macuch explained he met with Chavous monthly to discuss the upcoming Board meeting and the Center's failing finances. Chavous gave Macuch a copy of the Contract during a meeting. Macuch reviewed the Contract to determine if there were any provisions that could be used to terminate Weston's employment. According to Macuch, he reviewed the Contract and pointed out to Chavous that considering the financial condition of the Center, the Contract with Weston could be terminated. Macuch testified he became chief operating officer after the Board terminated Chavous' employment in July 2003. Macuch testified he terminated Weston's employment at the direction of the Board Chair. He further stated had he not fired Weston, there would have been a continued financial drain on the Center. He explained Weston was paid approximately $85, 000 from January 2003 to August 2003 but had generated only $11, 000 in revenue.
After Weston concluded his case-in-chief, he moved to abandon all causes of action except breach of contract and breach of contract accompanied by a fraudulent act. The Center moved for a directed verdict on both causes of action, which the trial judge denied.
During the Center's case-in-chief, witnesses testified as to the Center's financial status. Maxine Jefferson, a Board member, testified a number of employees were laid off due to the financial crisis. John Shirley (Shirley), the certified public accountant who conducted an independent review of the Center's financial situation in May 2003, stated the Center was running out of cash” and was headed for rapid disaster. Shirley stated his review revealed the Center had to either increase revenue or cut expenses, or it had only two months of operation before it had to shut down. However, he also testified he did not consider in his review the CEO's aggressive strategy for growth of the Center in late 2002 and early 2003. Shirley also indicated he did not know the Center's grant writer had obtained a $600, 000 grant from the government during the same time period as Shirley's audit.
The Center also called Dr. James Coleman (Coleman), the Center's new CEO, to testify about documents from the Center. The Center presented a letter from Health and Human Services dated March 4, 2005, regarding the Agency's response to the Center's financial crisis for the 2003 fiscal year. Weston objected on the grounds of hearsay and relevance. The trial judge inquired, [W]hat is the relevance of something in March 4 of '05 and we're talking...
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