Healthsource, Inc. v. X-Ray Associates of New Mexico, P.C.

2005 NMCA 97, 2005 NMCA 097, 116 P.3d 861, 138 N.M. 70
CourtNew Mexico Court of Appeals
DecidedJune 9, 2005
Docket24,589
StatusPublished
Cited by46 cases

This text of 2005 NMCA 97 (Healthsource, Inc. v. X-Ray Associates of New Mexico, P.C.) is published on Counsel Stack Legal Research, covering New Mexico Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Healthsource, Inc. v. X-Ray Associates of New Mexico, P.C., 2005 NMCA 97, 2005 NMCA 097, 116 P.3d 861, 138 N.M. 70 (N.M. Ct. App. 2005).

Opinions

OPINION

PICKARD, Judge.

{1} Healthsource, Inc. (Plaintiff) appeals from a district court’s order dismissing its lawsuit against X-Ray Associates and Dr. Jerome Burstein (Defendants). Plaintiff sued Defendants for breach of contract, tortious interference with contractual relations, civil conspiracy, negligent misrepresentation, and prima facie tort. Both Defendants filed motions to dismiss Plaintiffs complaint, with each motion claiming that Plaintiff lacked standing to bring suit against Defendants or that Plaintiff had failed to state claims upon which relief could be granted. The district court granted Defendants’ motions to dismiss on December 10, 2003. On appeal, Plaintiff argues that the district court erred by ruling that Plaintiff did not have standing to assert the claims against Defendants, and that the court also erred when it determined that Plaintiff had not stated claims upon which relief could be granted. In their answer brief, Defendants contend that Plaintiffs appeal as to Dr. Burstein was filed prematurely, and therefore this Court lacks jurisdiction to hear that portion of the appeal. We conclude that this Court does have jurisdiction to hear this appeal. We also hold that the district court did not err in dismissing Plaintiffs complaint because Plaintiff lacked standing to bring the claims against Defendants or Plaintiff failed to state claims upon which relief could be granted. Thus, we affirm.

FACTS AND BACKGROUND

{2} Plaintiff is a New Hampshire corporation. Until January 15, 2003, it owned 100% of the stock of Lovelace Health Systems, Inc. (Lovelace), a New Mexico corporation. CIGNA Health Corporation owns 100% of Plaintiffs stock. In turn, CIGNA Corporation owns all of the stock of CIGNA Health Corporation.

{3} At some point prior to July 2002, Plaintiff agreed to sell all of its Lovelace stock to Ardent Health Services (Ardent). Plaintiff and Ardent entered into a purchase agreement, which set the closing date for the sale as December 31, 2002. The purchase price that Ardent paid Plaintiff for Lovelace’s stock was nearly a quarter of a billion dollars.

{4} Defendant Dr. Burstein is a physician who was employed by Lovelace as the Chair of Lovelace’s Radiology Department. Dr. Burstein was employed by Lovelace from 1982 until December 30, 2002. In June or July 2002, Dr. Burstein became aware that Plaintiffs sale of Lovelace stock to Ardent was expected to close by the end of 2002. On December 13, 2002, Dr. Burstein left a voice mail message for Dr. Richard Rolston, Chief Executive Officer and Chief Medical Officer of Lovelace, informing Dr. Rolston that he intended to resign his employment with Lovelace and to commence employment with Defendant X-Ray Associates (X-Ray), which provides radiology services to various health facilities in New Mexico. Dr. Bur-stein also informed Dr. Rolston that X-Ray had decided to offer positions to all Lovelace radiologists.

{5} In late December 2002, Dr. Rolston was informed by Keith Winterkorn, President of X-Ray, that X-Ray had signed up all of Lovelace’s radiologists and X-Ray planned to use the enlistment of Lovelace’s radiologists as “leverage” to force Ardent to contract with X-Ray for radiology services. Upon learning of X-Ray’s attempt to employ the entire Lovelace radiology staff, Ardent informed Plaintiff that it would not agree to close the sale of Lovelace stock until the situation regarding Lovelace’s radiology department was settled.

{6} On December 31, 2002, Lovelace filed a lawsuit against X-Ray and Dr. Burstein. Lovelace’s complaint alleged that Dr. Bur-stein and X-Ray had interfered with employment agreements between Lovelace and its radiology staff by soliciting the staff to work for X-Ray and that Dr. Burstein and X-Ray had conspired for this purpose. The complaint further claimed that Dr. Burstein had breached his confidentiality agreements with Lovelace and that X-Ray had unfairly competed with Lovelace in attempting to hire away Lovelace’s radiology staff. On the day that Lovelace filed it lawsuit, it also filed for a temporary restraining order, requesting that Dr. Burstein and X-Ray be enjoined from using any of Lovelace’s confidential business and employee information in an effort to solicit Lovelace radiologists to leave their employment with Lovelace and to commence employment with X-Ray. The district court granted the temporary restraining order, after which Ardent and Plaintiff closed on the purchase of Lovelace stock. Yet, the closing date of the sale was delayed until January 15, 2003, which was fifteen days after the sale had originally been set to close.

{7} After the sale of Lovelace stock had been completed, Lovelace amended its original complaint to add Plaintiff as a party to the complaint. On March 11, 2003, the district court entered a stipulated order dismissing, without prejudice, all claims that Lovelace had brought against X-Ray, which was followed on March 26, 2003, with a stipulated order dismissing, without prejudice, all claims that Lovelace had brought against Dr. Burstein. After Lovelace had dismissed its claims against X-Ray and Dr. Burstein, X-Ray filed a motion pursuant to Rule 1-012(B)(6) NMRA to dismiss the complaint, alleging that Plaintiff lacked standing to sue X-Ray. In its motion, X-Ray argued that Lovelace was the real party in interest and that any claims Plaintiff had set out in the complaint were derivative of duties owed to Lovelace, not Plaintiff. The district court denied the motion to dismiss, but it did order Plaintiff to amend the complaint to state claims that belonged to Plaintiff and not Lovelace.

{8} Plaintiffs second amended complaint alleged breach of contract on the part of Dr. Burstein and stated causes of action against X-Ray and Dr. Burstein for tortious interference with existing contractual relationships, civil conspiracy, negligent misrepresentation, and prima facie tort. After Plaintiff filed its second amended complaint, Dr. Burstein filed a counterclaim alleging that Plaintiff had defamed him in its complaint. In addition, both Defendants filed Rule 1-012(B)(6) motions to dismiss Plaintiffs second amended complaint. The district court granted Defendants’ motions to dismiss Plaintiffs second amended complaint on December 10, 2003, in an order that did not address Dr. Burstein’s counterclaim against Plaintiff. Plaintiff filed its notice of appeal on December 17, 2003. On January 30, 2004, the district court issued an order dismissing Dr. Burstein’s counterclaim against Plaintiff. Plaintiff did not file another notice of appeal as to Dr. Burstein.

{9} On appeal, Plaintiff claims that the district court erred when it dismissed its complaint against Defendants because it is the real party in interest in the causes of actions it filed in its second amended complaint and it has properly stated claims on which relief could be granted. In addition to the merits of these issues, Defendants argue that because the appeal in this case was filed before a final order was issued by the district court, this Court lacks jurisdiction to hear the appeal as to Dr. Burstein.

DISCUSSION

{10} We will begin our discussion by analyzing whether this Court has jurisdiction to hear this appeal, after which we discuss Plaintiffs breach of contract claim. We will then address each of Plaintiffs tort claims separately.

1. This Court has jurisdiction to hear this entire appeal.

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Cite This Page — Counsel Stack

Bluebook (online)
2005 NMCA 97, 2005 NMCA 097, 116 P.3d 861, 138 N.M. 70, Counsel Stack Legal Research, https://law.counselstack.com/opinion/healthsource-inc-v-x-ray-associates-of-new-mexico-pc-nmctapp-2005.