Anesthesiology Consultants of Cheyenne, Llc v. Ronald E. Stevens, M.D., and High Plains Anesthesia, P.C., a Wyoming Professional Corporation

2020 WY 67, 464 P.3d 584
CourtWyoming Supreme Court
DecidedJune 2, 2020
DocketS-19-0210
StatusPublished
Cited by1 cases

This text of 2020 WY 67 (Anesthesiology Consultants of Cheyenne, Llc v. Ronald E. Stevens, M.D., and High Plains Anesthesia, P.C., a Wyoming Professional Corporation) is published on Counsel Stack Legal Research, covering Wyoming Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Anesthesiology Consultants of Cheyenne, Llc v. Ronald E. Stevens, M.D., and High Plains Anesthesia, P.C., a Wyoming Professional Corporation, 2020 WY 67, 464 P.3d 584 (Wyo. 2020).

Opinion

IN THE SUPREME COURT, STATE OF WYOMING

2020 WY 67

APRIL TERM, A.D. 2020

June 2, 2020

ANESTHESIOLOGY CONSULTANTS OF CHEYENNE, LLC,

Appellant (Plaintiff),

v. S-19-0210

RONALD E. STEVENS, M.D., and HIGH PLAINS ANESTHESIA, P.C., a Wyoming Professional Corporation,

Appellees (Defendants).

Appeal from the District Court of Laramie County The Honorable Thomas T.C. Campbell, Judge

Representing Appellant: Henry F. Bailey Jr. and Ronald Jay Lopez, Bailey Stock Harmon Cottam Lopez, LLP, Cheyenne, Wyoming. Argument by Mr. Bailey.

Representing Appellee: J. Kent Rutledge, Corinne E. Rutledge and Meri V. Geringer, Lathrop & Rutledge, P.C., Cheyenne Wyoming. Argument by Mr. Rutledge and Ms. Geringer.

Before FOX, BOOMGAARDEN, and GRAY, JJ. and SNYDER, CONDER, D.J.

NOTICE: This opinion is subject to formal revision before publication in Pacific Reporter Third. Readers are requested to notify the Clerk of the Supreme Court, Supreme Court Building, Cheyenne, Wyoming 82002, of any typographical or other formal errors so that correction may be made before final publication in the permanent volume. BOOMGAARDEN, Justice.

[¶1] We review this case for a second time. Anesthesiology Consultants of Cheyenne, LLC (ACC) claims its former manager and member, Dr. Ronald E. Stevens, took for himself ACC’s business opportunity to provide anesthesiology services to Cheyenne Eye Surgery Center (the Eye Surgery Center). See Stevens v. Anesthesiology Consultants of Cheyenne, LLC, 2018 WY 45, 415 P.3d 1270 (Wyo. 2018) (Stevens I). In Stevens I, we concluded the district court improperly granted ACC summary judgment because genuine issues of material fact existed as to ACC’s breach of fiduciary duties and covenant of good faith and fair dealing claims. Id. We therefore remanded for further proceedings. Id.

[¶2] A seven-day jury trial commenced following remand. The jury considered ACC’s claims for breach of fiduciary duties, breach of the covenant of good faith and fair dealing, and—over ACC’s objection—breach of contract. ACC appeals the jury’s verdict in favor of Dr. Stevens on all claims. We affirm.

ISSUES

[¶3] The dispositive issues are:

I. Whether sufficient evidence supports the jury’s verdict that Dr. Stevens did not breach his fiduciary duties of loyalty and care or the covenant of good faith and fair dealing.

II. Whether the district court properly submitted ACC’s breach of contract claim to the jury.

FACTS

[¶4] We stated the basic facts in Stevens I.

In 1999, a group of anesthesiologists in Cheyenne formed [ACC]. The members of ACC typically provided anesthesiology services at Cheyenne Regional Medical Center [(the Hospital)] and High Plains Surgery Center [(the Surgery Center)]. ACC also provided services to a group of Cheyenne ophthalmologists, who generally performed surgery on their patients at either [the Hospital] or [the] Surgery Center. Some of the members of ACC had performed anesthesiology services for the ophthalmologists even before 1999.

1 [] Dr. Ronald Stevens[] joined ACC in 2001. Dr. Stevens had previously been an anesthesiologist in Denver, Colorado, and he had been a manager of a much larger group of anesthesiologists in that state before relocating his practice to Cheyenne. Shortly after moving to Cheyenne, Dr. Stevens met Cassandra Rivers. Ms. Rivers is a certified registered nurse anesthetist (“CRNA”). Ms. Rivers often performed work for ACC at [the Hospital], but she did not have a written contract with the company. Dr. Stevens and Ms. Rivers married in 2005.

In 2007, several of Cheyenne’s ophthalmologists decided to open their own eye surgery center. Dr. Stevens, Ms. Rivers, and possibly other members of ACC assisted the eye surgeons in selecting the proper equipment and setting up their surgery center. The [] Eye Surgery Center [] opened in 2008. ACC initially provided anesthesia services at [the Eye Surgery Center] after it opened. However, ACC also had a contract with [the Hospital] that required it to provide a certain number of physicians and/or CRNAs who would be available to cover the [H]ospital’s anesthesiology cases. Thus, it was sometimes difficult to have enough anesthesiologists to provide coverage for [the Hospital], [the] Surgery Center, and [the Eye Surgery Center]. This meant that some cases at [the Eye Surgery Center] were missed. Around the time [the Eye Surgery Center] opened, Ms. Rivers was looking for a position that would give her shorter hours. Dr. Stevens suggested to the members of ACC that Ms. Rivers provide services at [the Eye Surgery Center] when needed, and continue to work at [the Hospital] a couple of days each week. ACC would bill for her work there, pay her an hourly rate, and keep the rest of the income. ACC accepted this arrangement, and Ms. Rivers started providing services at [the Eye Surgery Center] in April of 2008. Ms. Rivers was scheduled to be at [the Eye Surgery Center] three days a week and at the [H]ospital the other two days. There was no written agreement either between ACC and [the Eye Surgery Center] or between ACC and Ms. Rivers. However, for the next several years, ACC billed for Ms. Rivers’ services at [the Eye Surgery Center], paid her an hourly rate, and kept the rest of the income. On average, ACC kept slightly more than half of the income that was generated at [the Eye Surgery Center].

2 ACC gave Ms. Rivers minimal, if any benefits, other than providing billing services. Ms. Rivers’ work was directly supervised by the ophthalmologists at [the Eye Surgery Center]. In May 2009, Ms. Rivers became an employee of Dr. Stevens’ company, High Plains Anesthesia, P.C. When this change occurred, ACC paid Ms. Rivers’ hourly wage to High Plains Anesthesia instead of directly to Ms. Rivers. High Plains Anesthesia then paid Ms. Rivers an hourly rate. High Plains Anesthesia paid Ms. Rivers’ worker’s compensation and unemployment premiums and it issued her a W-2 for the income she received. ACC continued to retain roughly half of the income from the services Ms. Rivers provided at [the Eye Surgery Center].

Stevens I, ¶¶ 3–6, 415 P.3d at 1274–75.

[¶5] Facts pertaining to ACC’s 2013 Restated Operating Agreement and separate Distribution Agreement (collectively, the Operational Agreements) are central to this appeal. The Restated Operating Agreement outlined the members’ and managers’ rights and obligations and required ACC to distribute available cash to the members according to the Distribution Agreement. The Distribution Agreement set the number of units assigned to each anesthesia service and valued each unit at approximately $26. Together, the Operational Agreements required each member to assign his benefits—wherever earned— to ACC, which ACC then pooled and distributed, biweekly, according to the number of units each member provided during that period. 1 ACC distributed any remaining income on a quarterly and yearly basis. This system “allow[ed] the physicians to share in the available revenue and eliminated any incentive to avoid patients in low-paying categories or to seek out only the best paying cases.” Id. ¶ 7, 415 P.3d at 1275.

[¶6] Some ACC members, including Dr. Stevens, provided low-paying pain management services. Pain management was less profitable because it primarily served Medicare patients, and Medicare only partially reimbursed the service’s cost. Because the biweekly distribution attributable to pain management units exceeded the revenue ultimately collected for those units, the quarterly and yearly distributions were reduced, accordingly. Noticing this reduction, ACC member Dr.

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2020 WY 67, 464 P.3d 584, Counsel Stack Legal Research, https://law.counselstack.com/opinion/anesthesiology-consultants-of-cheyenne-llc-v-ronald-e-stevens-md-and-wyo-2020.