Clark v. West Shore Hospital

16 F. App'x 421
CourtCourt of Appeals for the Sixth Circuit
DecidedJuly 31, 2001
DocketNo. 00-1419
StatusPublished
Cited by9 cases

This text of 16 F. App'x 421 (Clark v. West Shore Hospital) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Clark v. West Shore Hospital, 16 F. App'x 421 (6th Cir. 2001).

Opinion

OPINION

MARBLEY, District Judge.

Plaintiff-Appellant James F. Clark, M.D. (“Clark”) appeals from the district court’s order dismissing his § 1983 due process action, along with all of his pendant 1 state law claims, for failure to state a cause of action. Clark’s state law claims were dismissed with prejudice.

The primary question for this Court to consider is whether Defendant-Appellee West Shore Hospital (“Hospital”) breached its “Pathologist Agreement” (“Contract”) with Clark when it terminated the Contract effective January 29,1999. While we must also consider whether Clark has stated a viable claim under his due process theory, his good faith and fair dealing theory, and/or his tortious interference with business relations theory, the resolution of those issues will be controlled by our resolution of his breach of contract claim.

As the basis for his contract claim, Clark asserts that, under the “Disputes” provision of the Contract, he was entitled to a hearing before the Joint Conference Committee of the Hospital prior to the Contract’s termination. The Hospital counters, as it did below, that it complied completely with the “Termination” provisions of the Contract; thus, there arose under the Contract no “dispute” that would have necessitated a hearing.

The district court rejected Clark’s reading of the Contract and granted the Hospital’s motion to dismiss on that point. The district court then dismissed Clark’s § 1983 claims, finding that Clark had no property interest in his continued employment once the Contract was terminated, and that the Hospital did nothing to violate any liberty interest he may have had.2 The district court next dismissed Clark’s good faith and fair dealing claim, finding that no such duty exists in Michigan in the employment context, and that even if such a duty did exist, nothing the Hospital did would have breached it. Finally, the district court dismissed Clark’s tortious interference cause of action, finding that such a claim could not be based upon an action specifically allowed by contract.

We find that the district court correctly interpreted the Contract, and thus properly dismissed Clark’s breach of contract claim. Since Clark had no property interest in his employment relationship with the Hospital once the Contract was terminated, and since he failed to allege facts sufficient to support a finding that the Hospital violated his liberty interest in his professional reputation, the district court properly dismissed Clark’s due process claims. As no implied covenant of good faith and fair dealing exists in Michigan in the em[424]*424ployment context, and as even if such a duty did exist, nothing the Hospital did would have breached it, the district court properly dismissed Clark’s good faith and fair dealing claim. Because the allegedly tortious act of which Clark complains was lawful, and because Clark does not allege that it was done with malicious intent, the district court properly dismissed his tortious interference with business relations claim. Accordingly, we AFFIRM the district court’s order in its entirety.

I. BACKGROUND

A. Factual Background

Plaintiff James F. Clark, M.D. is a physician licensed to practice medicine in the state of Michigan. West Shore Hospital is a public hospital located in Manistee, Michigan. On April 18, 1991, Clark entered into a pathologist agreement with the Hospital; the agreement was for a period of two years, and was renewed without significant change in 1993, 1995 and 1997. The Contract at issue in this lawsuit was executed on August 27, 1997.

The Contract’s “Term of Agreement” is as follows:

This Agreement shall remain in full force and effect for a term of two (2) years from and after the 1st day of July, 1997 unless terminated in accordance with the provisions under the paragraph below entitled “Termination.”

The final provision of the “Termination” clause of the Contract-the only termination provision at issue here-provides:

It is also agreed that the Hospital or Pathologist shall have the privilege of cancelling and terminating this Agreement in the sole discretion of either party upon one hundred twenty (120) days written notice either party to the other.

On October 2, 1998, Burton 0. Parks, Administrator of the Hospital, sent a letter to Clark that stated, in pertinent part: “Last night, the Board decided to end the Agreement with Dr. Clark for the provision of pathology services at West Shore Hospital. This will become effective January 29, 1999.... ” On December 29, 1998, Clark sent a letter to the members of the Hospital’s Board wherein he requested “a forum within three weeks” where he would be able to “[t]ell ‘the rest of the story’ ” in an attempt to “[h]ave/help the Board of Trustees reverse the [decision to terminate the Contract].” No such forum was provided.

The Contract contains a “Disputes” clause, which states, in pertinent part:

All disputes arising under this Agreement shall be subject to the following terms and conditions:
b. all other disputes shall be determined by the Joint Conference Committee of the Hospital, subject to review by the Board of Trustees of the Hospital[J

Primarily at issue here is whether the Hospital violated this “Disputes” clause when it refused to afford Clark a hearing following the Hospital’s decision to terminate the Contract.

B. Procedural History

Clark initiated this lawsuit on September 20, 1999, when he filed a complaint in the United States District Court for the Western District of Michigan. The complaint set forth a claim pursuant to 42 U.S.C. § 1983, alleging that the Hospital acted under color of state law to deprive Clark of his property rights and liberty interests, as protected by the Fourteenth Amendment. Specifically, Clark alleged that the Hospital’s denial of a hearing and lack of explanation for its decision to terminate the Contract amounted to a stripping of Clark’s protected liberty and property interests without due process of law. [425]*425Clark also alleged that the Hospital’s decision to terminate the Contract was arbitrary and capricious, in violation of Clark’s substantive due process rights. As pendant claims, Clark alleged: (1) breach of contract; (2) breach of duty of good faith and fair dealing; and (3) tortious interference with business relations. For relief, Clark sought: (1) a monetary judgment “in an amount in excess of one million dollars”; (2) costs and attorneys’ fees; (3) punitive and exemplary damages; and (4) such further relief as deemed just and equitable.

The Hospital filed its answer on October 18,1999. The Hospital filed its affirmative defenses in a separate document on the same day. These papers presented the Hospital’s core theory of defense: Clark had no right to a hearing, so there was no contractual breach; once the breach of contract claim fails, the remainder of Clark’s causes of action necessarily follow suit.

On January 14, 2000, the Hospital filed its Motion for Relief under Federal Rule of Civil Procedure 12(b)(6) and 12(c).

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Bluebook (online)
16 F. App'x 421, Counsel Stack Legal Research, https://law.counselstack.com/opinion/clark-v-west-shore-hospital-ca6-2001.