Allison v. Union Hospital, Inc.

883 N.E.2d 113, 2008 Ind. App. LEXIS 543, 2008 WL 732424
CourtIndiana Court of Appeals
DecidedMarch 20, 2008
Docket77A01-0709-CV-435
StatusPublished
Cited by30 cases

This text of 883 N.E.2d 113 (Allison v. Union Hospital, Inc.) is published on Counsel Stack Legal Research, covering Indiana Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Allison v. Union Hospital, Inc., 883 N.E.2d 113, 2008 Ind. App. LEXIS 543, 2008 WL 732424 (Ind. Ct. App. 2008).

Opinion

OPINION

BAKER, Chief Judge.

Appellants-plaintiffs Edward J. Allison and Henry Charles Safford (collectively, the appellants) appeal the trial court’s order entering partial summary judgment in favor of appellees-defendants Union Hospital, Inc. (Union), and Wabash Valley Anesthesia, P.C. (WVA) (collectively, the appel-lees). The appellants argue that the trial court erroneously entered summary judgment in the appellees’ favor on the appellants’ claims for tortious interference with contractual relationship against both ap-pellees and constructive fraud and breach of the duty of good faith and fair dealing against Union. Finding that summary judgment was erroneously entered on the tortious interference claim against Union but properly entered on all remaining counts, we affirm in part, reverse in part, and remand for trial on the tortious interference claim against Union.

FACTS 1

Allison and Safford are Certified Registered Nurse Anesthetists (CRNA) who have worked for Union as independent contractors since July 1991. The parties renegotiated and executed a new contract on October 22, 2001, and that agreement included a provision specifying that either party could terminate the contract without cause. The appellants eventually concluded that the terms of the October 2001 contract were causing them financial difficulty. Thus, on May 81, 2005, they sent a letter to Steve Reed, Union’s former Executive Vice President and COO, providing ninety days of notice of their decision to terminate the contract pursuant to a without cause termination provision in the document. In the letter, the appellants expressed their desire to negotiate a new contract and referenced a previously scheduled meeting with Reed that was to take place on June 28, 2005. In the meantime, Union tried to find other CRNAs to replace the appellants but received no bids from other service providers.

On June 28, 2005, the appellants met with Reed as planned. Reed told the appellants that he wanted a three-year agreement and that he wanted the appellants “locked in to the three-year term.” Appellants’ App. p. 417. Union proposed a new contract in a June 30, 2005, letter, which the appellants rejected. The appellants submitted a counteroffer on July 9, 2005. On July 22, 2005, Union accepted the appellants’ July 9 counteroffer:

This letter is to accept your proposal dated July 9, 2005 regarding [Union] paying [the appellants], collectively, a *116 monthly stipend amount of $29,166.00 to continue providing 24/7 OB Anesthesia coverage here at [Union].
This agreement will be effective August 1, 2005, and continue in force until August 31, 2008.
All other terms and conditions of the Obstetrics Area Anesthesia Agreement dated October 22, 2001, as well as the three separate addendums [sic] to this agreement, will continue in force and effect.
Please sign a copy of this letter' below. ... I will then ask [Union’s attorney] to prepare a fourth addendum to the Obstetrics Area Anesthesia Services Agreement which contains the new monthly stipend amount for your review and signature in the very near future.

Id. at 141. Reed and the appellants signed the July 22, 2005, letter.

Union’s attorney proceeded to draft a formal agreement for the appellants’ signature, but instead of being an addendum it was a wholly new, thirteen-page “Amended Obstetrics Area Anesthesia Services Agreement” (the Contract), which he sent to the appellants on August 16, 2005. Id. at 143. The Contract has an effective date of August 1, 2005, and was to expire on July 31, 2008. It also has a lengthy termination provision, which states that the Contract may be terminated in a number of different ways, all of which are for cause, because of governmental action, or based on the parties’ mutual written agreement. Id. at 151-52. The Contract does not permit termination without cause. Additionally, the document contains a provision requiring the parties to hold its terms “strictly confidential,” prohibiting disclosure of its terms to third parties “except as specifically required by law or upon agreement of the parties.” Id. at 154. It provides that as of its effective date, the Contract shall supersede all previous agreements between the parties and that it “may be amended only by an instrument in writing signed by the parties.... ” Id. Safford signed the Contract on August 18, 2005, and Allison signed on August 20, 2005.

On September 12, 2005, Reed sent the appellants a letter terminating the Contract:

This letter puts in writing [Union’s] notice that we will be terminating the current OB Anesthesia Services Agreement effective December 31, 2005.... This termination is pursuant to Section 8 of the current [Contract] requiring us to provide you with Ninety (90) days written notice for terminating said agreement without cause.

Id. at 93. After receiving this letter, the appellants demanded to see copies of the Contract. Reed’s secretary then e-mailed the appellants an altered copy of the Contract. The altered version included a new “Without Cause Termination” paragraph providing that the Contract may be terminated “[w]ith or without cause upon one party giving the other party at least ninety (90) days written notice prior to the date of intended cancellation or termination.” Id. at 172. It is undisputed that the version of the Contract that Union e-mailed to the appellants on September 26, 2005, was different from the version the appellants actually signed and executed.

Union insists that it was compelled to enter into the Contract and agree to the financial terms requested by the appellants because it was unable to find another provider and did not want to have an interruption in its OB anesthesia service. But because the appellants had demanded a 325% increase in their monthly stipend, Union was examining other options even as it executed the Contract with the appellants. To that end, in mid-August 2005— even as the appellants were reviewing and *117 executing the Contract — Reed entered into discussions with Elliott McGregory, a principal of WVA, which was an entity capable of providing OB anesthesia services.

On August 22, 2005, Reed and McGre-gory met to discuss a possible agreement between Union and WVA for OB anesthesia services. At the meeting, Reed informed McGregory that “at the present time,” Union “worked under an agreement” with the appellants. Id. at 216. Reed also told McGregory that Union’s contract with the appellants allowed the hospital “to terminate the agreement without cause by giving a ninety day notice.” Id. The parties agreed on key terms to serve as a basis for a proposed contract. As contract negotiations continued, Reed emphasized to WVA “that we will need to give the existing OB Anesthesia group a 90-day termination notice per the existing contract” before entering into a final agreement with WVA. Id. at 222.

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Cite This Page — Counsel Stack

Bluebook (online)
883 N.E.2d 113, 2008 Ind. App. LEXIS 543, 2008 WL 732424, Counsel Stack Legal Research, https://law.counselstack.com/opinion/allison-v-union-hospital-inc-indctapp-2008.