Wolnak v. Cardiovascular Surgeons

Decision Date07 September 2005
Docket NumberNo. 2004AP1051.,2004AP1051.
Citation706 N.W.2d 667,2005 WI App 217
PartiesDr. Kenneth M. WOLNAK, Plaintiff-Appellant-Cross-Respondent,<SMALL><SUP>†</SUP></SMALL> v. CARDIOVASCULAR & THORACIC SURGEONS OF CENTRAL WISCONSIN (n/k/a Wausau Heart & Lung Surgeons, S.C.), Defendant-Respondent-Cross-Appellant,<SMALL><SUP>‡</SUP></SMALL> Dr. Fernando A. Riveron, Defendant-Respondent.<SMALL><SUP>‡</SUP></SMALL>
CourtWisconsin Supreme Court

On behalf of the defendant-respondent-cross-appellant and the defendant-respondent, the cause was submitted on the combined briefs of David J. Eckert of Tuchscherer, Eckert & Wagman, S.C. of Wausau, and Douglas J. Klingberg of Ruder, Ware & Michler, LLSC of Wausau.

Before CANE, C.J., HOOVER, P.J., and PETERSON, J.

¶ 1 HOOVER, P.J

This appeal arises from a breach of contract and defamation action brought by Dr. Kenneth Wolnak against Dr. Fernando Riveron and Riveron's clinic, Cardiovascular & Thoracic Surgeons of Central Wisconsin, S.C. ("CATS").1 CATS counterclaimed, alleging breach of contract, tortious interference with a contract, and misrepresentation. Wolnak appeals: (1) the denial of summary judgment on the tortious inference claim; (2) the denial of his motion in limine to exclude character evidence; (3) the jury's verdict finding tortious interference; (4) the granting of CATS's motion in limine excluding evidence on the non-compete clause; and (5) the denial of his motion after verdict for statutory wage claim penalties.2 CATS individually cross-appeals, arguing: (1) the damage award for CATS's breach of contract should be reduced or struck because Wolnak breached first and (2) the jury erroneously concluded CATS did not rely on Wolnak's misrepresentations. For reasons given in this opinion, we affirm in all respects.

Background

¶ 2 CATS is a private surgical practice that Riveron joined in 1996. At that time there were two other surgeons in the practice. By 1998, they needed an additional surgeon to handle the workload and Riveron was put in charge of hiring the new doctor. Ultimately, he hired Wolnak, a surgeon he knew from his residency, based on what Riveron thought was an impressive resume.3 Wolnak joined CATS under contract in January 1999. Dr. John Johnkoski joined the practice sometime thereafter, and the two surgeons with whom Riveron initially practiced left. Riveron eventually became president of CATS.

¶ 3 CATS is affiliated with Wausau Hospital. The hospital would not grant surgical privileges to any surgeon who did not have at least one other surgeon available as backup. This is the hospital's "two surgeon rule."

¶ 4 During Wolnak's employment at CATS, there were issues with both his performance and his compensation. According to Riveron, Wolnak's performance problems included poor record keeping, patient handling, surgical judgment, and staff relations, as well as high morbidity and mortality rates. Regarding compensation, the contract initially based compensation on "physician production" rather than salary. Wolnak claims he was underpaid under this contract, although Riveron claims they agreed to orally modify the contractual compensation structure after repeated problems with Wolnak's performance.

¶ 5 Around Christmas 2000, Wolnak asked Riveron if he would ever become a partner in CATS. When Riveron's answer was unsatisfactory, Wolnak handed a resignation letter to Riveron, who responded that Wolnak was fired.

¶ 6 Sometime prior to this conversation, Wolnak had spoken with Johnkoski, who was also dissatisfied with his partnership track. He thought Riveron was failing to honor a verbal promise regarding the timeframe. Wolnak told Johnkoski he was thinking of resigning and forming a competing practice. When the subject of a non-compete clause within their contracts came up, Wolnak stated that he believed the clause only applied if they were fired.

¶ 7 After his conversation with Wolnak, Riveron telephoned Johnkoski, who was vacationing in Michigan. Riveron told Johnkoski that Wolnak had quit and asked Johnkoski if he was thinking of resigning as well. Johnkoski expressed his disappointment over his contract's timeline for becoming a partner, and Riveron agreed to make him a partner sooner than called for in the contract. Ultimately, Johnkoski stayed with CATS.

¶ 8 Wolnak continued to practice with the clinic for a few weeks following his resignation, but was ultimately unable to reconcile with CATS. He finally left, and commenced this action for breach of contract and defamation. CATS counterclaimed for breach of contract, tortious interference with Johnkoski's contract, and misrepresentation.

¶ 9 The parties filed competing motions for summary judgment and the trial court denied them both, except for CATS's request to dismiss the punitive damages claim. Prior to trial, the court denied Wolnak's motion in limine to exclude character evidence against him. The court also granted CATS's motion in limine to bar Wolnak's assertion that the covenant not to compete did not apply if he resigned. After granting that motion, the court determined that it had to dismiss Wolnak's defamation claim against CATS because it had been premised on Wolnak's interpretation of the covenant.

¶ 10 Following a jury trial, the jury found that CATS breached its contract by failing to pay Wolnak according to the contract and awarded him $226,422.44. The jury also found that Wolnak misrepresented his background to obtain employment, but that CATS did not believe or rely on the misrepresentations, and awarded nothing. Finally, the jury determined that Wolnak tortiously interfered with Johnkoski's contract and awarded CATS $125,638.13. After trial, Wolnak filed a motion to change the verdict to add penalties for wage claim violations in accordance with WIS. STAT. § 103.455 and WIS. STAT. ch. 109.4 CATS sought to change the jury's answer that it did not rely on Wolnak's misrepresentation and sought damages on that claim. The court denied the motions after verdict. Wolnak appeals and CATS individually cross-appeals.

Discussion
I. Tortious Interference

¶ 11 Wolnak raises three issues regarding the tortious interference claim. First, he contends the trial court erred in denying his motion for summary judgment to dismiss the claim. Second, he claims it was error for the trial court to admit evidence pertaining to his character. Third, he argues there is insufficient evidence to support the jury's verdict. We disagree with all three assertions.

A. Summary Judgment

¶ 12 We review summary judgments de novo, using the same methodology as the trial court and benefiting from its analysis. Lambrecht v. Estate of Kaczmarczyk, 2001 WI 25, ¶ 20-24, 241 Wis.2d 804, 623 N.W.2d 751. First, we examine the pleadings to determine whether there is a claim for relief and whether genuine issues of material fact exist. Id., ¶ 21, 623 N.W.2d 751. If the pleadings state a claim and there are factual issues, we consider whether the moving party has made a prima facie case for summary judgment. Id., ¶ 22, 623 N.W.2d 751. Inferences drawn from the material submitted by the moving party are viewed in the light most favorable to the non-moving party. Id., ¶¶ 22-23, 623 N.W.2d 751. In order to be entitled to summary judgment, the moving party must prove there is no genuine issue as to any material fact and that moving party must show that it is entitled to judgment as a matter of law. Id., ¶ 24, 623 N.W.2d 751.

¶ 13 Wolnak concedes CATS stated a claim upon which relief could be granted. He argues, however, that his summary judgment proofs demonstrate CATS cannot prove the elements of tortious interference, thereby entitling him to summary judgment, despite the trial court's conclusion that issues of fact precluded granting his motion.

¶ 14 The elements of a claim for tortious interference with a contract are: (1) the plaintiff had a current or prospective contractual relationship with a third party; (2) the defendant interfered with that contractual relationship; (3) the interference was intentional; (4) a causal connection exists between the defendant's interference and the plaintiff's damages; and (5) the defendant was not justified or privileged to interfere. Duct-O-Wire Co. v. U.S. Crane, Inc., 31 F.3d 506, 509 (7th Cir.1994). Wolnak argues there is no issue of material fact on causation, intent, or privilege. In other words, he contends he did not cause CATS's damages, he did not act with the requisite intent, and his actions were privileged, and there is no factual dispute to the contrary. We disagree.

1. Causation

¶ 15 Causation exists in Wisconsin where the defendant's actions are a "substantial factor" in producing the harm to the plaintiff. World Wide Prosthetic Supply v. Mikulsky, 2001 WI App 133, ¶ 23, 246 Wis.2d 461, 631 N.W.2d 253. "Substantial factor `denotes that the defendant's conduct has such an effect in producing the harm as to lead the trier of fact, as a reasonable person, to regard it as a cause, using that word in the popular sense.'" Fischer v. Ganju, 168 Wis.2d 834, 857, 485 N.W.2d 10 (1992) (citation omitted).

¶ 16 Wolnak's causation argument is premised on two primary assertions. First, Wolnak points out that Johnkoski ultimately did not resign from CATS. Second, Wolnak relies on a portion of Johnkoski's testimony where he indicated he did not believe Wolnak had anything to do with his promotion. However, neither of these facts disproves or negates causation.

¶ 17 Johnkoski's resignation was not the only way CATS could be damaged. Interference that makes the performance of a contract more expensive can also be a basis for damages. Magnum Radio, Inc. v. Brieske, 217 Wis.2d 130, 136-37, 577 N.W.2d 377 (Ct.App.1998). Johnkoski testified that he...

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