Masterson-Carr v. Anesthesia Services P.A., et sl.

• Court: Superior Court of Delaware
• Decided: August 28, 2015
• Docket: 12C-11-107
• Status: Published

Opinion

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE IN AND FOR NEW CASTLE COUNTY

EILEEN MASTERSON-CARR, ) ) Plaintiff, ) ) v. ) C.A. No. N12C-11-107 MJB ) ANESTHESIA SERVICES, P.A., ) MARK SCHNEIDER, M.D., and ) KEN SILVERSTEIN, M.D., ) ) Defendants. )

Submitted: May 14, 2015 Decided: August 28, 2015

SUPPLEMENTAL DECISION AFTER TRIAL

Michele D. Allen, Esq., Law Office of Michele D. Allen, LLC, 724 Yorklyn Road, Suite 300, Wilmington, Delaware 19707; Gerald R. Clarke, Esq., Clarke and Associates, 119 S. Easton Road, Suite 207, Glenside, Pennsylvania 19038, Attorneys for Plaintiff.

Laurence V. Cronin, Esq., Smith, Katzenstein & Jenkins LLP, 800 Delaware Avenue, 10th Floor, P.O. Box 410, Wilmington, Delaware 19899, Attorney for Defendants.

BRADY, J.

1 I. INTRODUCTION

On November 3, 2012, Eileen Masterson-Carr (“Plaintiff”) filed suit against her

former employer, Anesthesia Services P.A. (“ASPA”), ASPA’s Chairman of the Board Mark

Schneider M.D. (“Schneider”), and ASPA’s CCO Ken Silverstein M.D. (“Silverstein”)

(collectively “Defendants”). Plaintiff initially alleged six claims: (1) ASPA breached her

Employment Contract; (2) ASPA breached the implied covenant of good faith and fair

dealing; (3) Plaintiff was defamed by members of ASPA, including Silverstein and Schneider;

(4) ASPA violated the Delaware Wage Payment and Collection Act by failing to pay Plaintiff

her 6.5% bonus for time worked in 2012; (5) Silverstein and Schneider tortuously interfered

with Plaintiff’s Employment Contract; and (6) ASPA acted in a way justifying promissory

estoppel. On March 21, 2013, upon Defendant’s motion, the Court dismissed Plaintiff’s

promissory estoppel claim. Subsequently, on March 18, 2014, Plaintiff stipulated to the

dismissal of her claim for breach of the implied covenant of good faith and fair dealing.

The parties elected to have a bench trial on the remaining four claims. Trial began on

April 3, 2014 and ended on April 7, 2014. 1 Following closing arguments, the Court ruled that

Plaintiff was entitled to her 6.5% bonus for time worked in 2012 but reserved decision

regarding the specific amount to which Plaintiff is entitled. The Court also reserved decision

on Plaintiff’s allegation that she was wrongfully terminated. In a post-trial decision dated

September 25, 2014, the Court ruled that Plaintiff was not terminated but resigned.

At trial, Plaintiff suggested that even if the Court found that Plaintiff technically

resigned, Plaintiff might still recover on the theory that she had been “constructive[ly]

1 The parties submitted a Joint Exhibit Binder. Exhibits from the Joint Exhibit Binder shall be cited as “Joint Ex.” The transcript of April 3, 2014 will be cited as “T1.” The transcript of April 4, 2014 will be cited as “T2.” The transcript of April 7, 2014 will be cited as “T3.”

2 discharged.” 2 The Court reserved decision on the constructive discharge issue until it had

made its finding of fact on the issue of whether Plaintiff was actually discharged or resigned. 3

In its post-trial decision, the Court determined that Plaintiff resigned and permitted the parties

additional briefing on the constructive discharge issue. Because the Court found that the issue

of Plaintiff’s alleged constructive termination was intertwined with the remaining claims for

tortious interference and defamation, the Court also reserved decision on these issues pending

supplemental briefing.

Plaintiff filed her post-trial opening brief on January 20, 2015. 4 Defendants filed their

answering brief on March 23, 2015. 5 Plaintiff filed a reply on April 22, 2015. 6 Defendants

requested oral argument, and oral argument was held on May 14, 2015, at which time the

Court reserved decision on the pending matters. 7 Having heard oral argument and reviewed

all of the parties’ submissions, the Court now finds that Plaintiff’s constructive termination

claim is barred and that Plaintiff has failed to establish tortious interference or defamation.

II. BACKGROUND

A. The Structure of ASPA

ASPA is a professional services corporation, organized under the laws of Delaware,

that is involved in the practice of medicine. 8 ASPA is comprised of approximately thirty-one

physicians, some of whom are shareholders, as well as other medical personnel, including

nurses. The company’s Board of Directors (“Board”) is composed of shareholder-members of

2 T3 at 197. 3 T3 at 234. 4 Opening Brief, Item 79. 5 Answering Brief, Item 81. 6 Reply Brief, Item 82. 7 Judicial Action Form, Item 85. 8 Employment Agreement, Joint Ex. 4, at 1.

3 ASPA. 9 ASPA’s governance structure initially included a Chief Executive Officer (“CEO”),

Chief Financial Officer (“CFO”), and Chief Clinical Officer (“CCO”). 10 However, in

approximately 2011, ASPA modified its governance structure, changing the executive

positions.11 The CEO became the Chairman of the Board (“Chairman”), the CCO remained,

the CFO became the Treasurer, and ASPA created a new position, the Chief People Officer

(“CPO”). 12 Like under the former structure, all executive members were elected by the 13 Board.

ASPA’s corporate structure also includes an Executive Committee. 14 The Executive

Committee has the responsibility, on behalf of the Board, “for managing the business and

affairs of [ASPA] between meetings of the Board in order to provide an efficient,

expeditiously assembled forum to investigate, discuss, analyze, oversee and make decisions

regarding day-to-day operations of the Corporation.” 15 Additionally, a critical part of the

Executive Committee’s function is to “make recommendations to the Board with respect to

corporate policies and practices and on all matters requiring Board action.” 16 At all times

relevant to the instant matter, the Executive Committee was comprised of the Chairman,

CCO, CPO, Treasurer, two at-large members, who were elected by the Board, and the

Executive Director, who was responsible for overseeing ASPA’s administration. 17

9 ASPA Bylaws, Joint Ex. 5, at 2. 10 ASPA Bylaws, Joint Ex. 5, at 42. 11 ASPA Bylaws, Joint Ex. 5, at 7. 12 ASPA Bylaws, Joint Ex. 5, at 7. 13 ASPA Bylaws, Joint Ex. 5, at 7. 14 ASPA Bylaws, Joint Ex. 5, at 5. 15 ASPA Bylaws, Joint Ex. 5, at 5. 16 ASPA Bylaws, Joint Ex. 5, at 7. 17 ASPA Bylaws, Joint Ex. 5, at 7.

4 Dr. Schneider joined ASPA in 1988 and has served as a board member since 1989. 18

Schneider became CEO (later titled Chairman) in 2010 and was integral to managing

ASPA. 19 Dr. Silverstein currently serves as ASPA’s CCO and, like Schneider, is a

shareholder-board member. 20 Because he is the CCO, Silverstein also sits on the Executive

Committee.

B. Plaintiff’s Employment with ASPA

In 2008, Plaintiff was hired as Executive Director of ASPA. 21 Plaintiff’s primary

duties as Executive Director included “overseeing billing and collection by [ASPA’s] third

party billing company, assisting with billing compliance issues, negotiating managed care

contracts, monitoring the performance of vendors providing services to [ASPA], overseeing

[ASPA’s] malpractice and other insurance carriers, and addressing health and benefit plan

administration.” 22 Plaintiff signed an employment contract with ASPA, providing that either

party could terminate “without stated cause by giving the other party at least ninety (90) days’

advance written notice of intent to terminate.” 23

Under her contract, Plaintiff is eligible to receive severance compensation in the event

of termination of the employment contract “(i) by [ASPA] without cause . . . ; or (ii) by

[Plaintiff] with cause (but only if [Plaintiff] has properly fulfilled all other contractual

obligations).” 24 The contract provides that, after the Plaintiff’s first year of employment with

18 T2 at 38-39. Schneider left ASPA for a few years around 1999 to 2001 but subsequently returned to the practice. T2 at 38-39. 19 T2 at 41-44. 20 T2 at 142. 21 T1 at 25. 22 Employment Agreement, Joint Ex. 4, at 1. 23 ASPA Bylaws, Joint Ex. 5, at 3. 24 Employment Agreement, Joint Ex. 4, at 7.

5 ASPA, “a sum equal to ninety (90) days salary shall be payable to [Plaintiff] as severance.” 25

The parties agree that Plaintiff would not be entitled to severance if she (i) was terminated by

ASPA with cause or (ii) resigned from ASPA without cause.

On April 16, 2012, Plaintiff’s employment with ASPA ended. At trial, Plaintiff

maintained that she was terminated without cause by the Executive Committee. Defendants

maintained that Plaintiff voluntarily resigned when she was told that the Executive Committee

would recommend her termination to the Board. Both parties agreed, and it is clear from the

record, that the relationship between Plaintiff and ASPA had been eroding for some time

before Plaintiff’s employment ended. Defendants alleged that the erosion was caused by

Plaintiff’s labor law violations and other misconduct including gossiping about doctors’

personal lives. 26 Plaintiff denied any misconduct and attributed the erosion of the relationship

to disagreement concerning the direction that the company was taking and alleged personal

animus from Dr. Schneider and Dr. Silverman. 27

III. STANDARD OF REVIEW

The Court is the finder of fact in a bench trial. 28 The plaintiff must prove each

element of her claim by a preponderance of the evidence, meaning that the Court shall find in

favor of the party upon whose side “the greater weight of the evidence is found.” 29 Because

the Court is the finder of fact, it is up to the Court to weigh the credibility of witnesses and

resolve conflicts in witness testimony. 30

25 Employment Agreement, Joint Ex. 4, at 7. 26 T2 at 90-91; T2 at 126. 27 T2 at 45-50. 28 Pencader Associates, LLC v. Synergy Direct Mortg. Inc., 2010 WL 2681862, at *2 (Del. Super. June 30, 2010). 29 Id. (quoting Pouls v. Windmill Estates, LLC, 2010 WL 2348648, at *4 (Del. Super. June 10, 2010)). 30 Id. at *3.

6 IV. THE COURT FOUND THAT PLAINTIFF RESIGNED

A. Trial Testimony

Plaintiff testified that she had a “confrontation” with Silverstein in late March 2012. 31

Plaintiff testified that after this confrontation, she texted her husband to tell him that she

thought that she had just lost her job. 32 Silverstein confirmed that he had had a hostile

interaction with Plaintiff in late March. 33 Silverstein testified that he apologized two days

after the incident, but he did not feel like the issue was completely resolved. 34 Nonetheless,

Silverstein testified that “so far as [he] knew, that was the end of it.” 35

Plaintiff testified that the week before her employment with ASPA ended, on April 11,

2012, she received a phone call from Dr. Nick Gagliano, who was one of the ASPA

partners. 36 According to Plaintiff, Dr. Gagliano, who did not testify at trial, asked Plaintiff if

she was aware that Dr. Schneider, who was then Chairman of the Board, and Dr. Lucente,

who was then HR Officer, had been meeting behind closed doors. 37 Schneider confirmed in

his trial testimony that he had a private conversation with Dr. Lucente on April 10, 2012,

concerning alleged misconduct by Plaintiff. 38 Plaintiff testified that she told Dr. Gagliano that

she was not aware of these meetings. 39 Plaintiff testified that Dr. Gagliano expressed concern

that Plaintiff, as Executive Director, was unaware of these meetings between the Chairman

31 T1 at 50-51. 32 T1 at 51. 33 T3 at 149-52. 34 T3 at 151. 35 T3 at 151. 36 T1 at 52 37 T1 at 52. 38 T3 at 56-57. 39 T1 at 52.

7 and the HR Officer. 40 Plaintiff testified that she concluded that she had been excluded from

these meetings because they concerned her. 41

Plaintiff testified that, a couple days later, on Friday, April 13, 2012, Plaintiff heard

that “a serious HR issue was going to be announced next week.” 42 Plaintiff also testified that

she received a “very odd text [message]” from Tina Smith, who handled general HR issues,

saying that she would not be in that day and would not be available by phone. 43 Plaintiff

testified that, under these circumstances, she further concluded that the HR announcement

would involve her. 44

Plaintiff testified that, on Monday, April 16, 2012, she contacted Schneider and Dr.

Lucente in two separate phone calls to ask them what was going on. 45 Plaintiff maintains that

she confronted both Schneider and Lucente, telling both of them that Plaintiff knew

something was going on that involved her. 46 Plaintiff alleges that neither Schneider nor

Lucente would provide her with any details, but Lucente finally told Plaintiff that Mary

Quinn, an HR consultant who had been working with ASPA, was scheduling a meeting

concerning the issue. 47 In his trial testimony, Dr. Lucente confirmed that he did speak by

phone with Plaintiff that morning and that he told Plaintiff that he could not discuss the details

of the upcoming meeting. 48 Plaintiff testified that she then asked Mary Quinn, who told her

40 T1 at 52. 41 T1 at 53. 42 T1 at 54. 43 T1 at 54. Tina Smith also did not testify at trial. 44 T1 at 54. 45 T1 at 55. 46 T1 at 55. 47 T1 at 55. 48 T3 at 17.

8 that the meeting was scheduled for around 11:30 a.m. that morning. 49 Plaintiff testified that

she thought that she was being terminated and began to pack up her office. 50

The parties agreed that sometime after 11:00 a.m., Dr. Schneider, Dr. Lucente, Mary

Quinn, and Dr. Chua 51 came into Plaintiff’s office. Plaintiff alleges that Schneider opened the

meeting by telling her that the Executive Committee had made a unanimous decision to

terminate Plaintiff for cause. 52 Schneider, Lucente, and Quinn allege that Schneider only told

Plaintiff that the Committee was recommending termination with cause. 53 Dr. Chua also

confirmed that the position that Schneider communicated to Plaintiff was that the Executive

Committee was going to make a “termination recommendation.” 54

Plaintiff testified that she asked Schneider what the cause was, and he would not go

into detail, but told her that the cause was related to a comment Plaintiff made about other

physicians in the group in front of staff as well as Plaintiff’s speaking about employee health

issues in front of the staff. 55 Plaintiff testified that at the time she did not know what the

comment was. 56 In his trial testimony, Schneider confirmed that he gave Plaintiff “a couple

of examples” of the issues that were the basis for the Executive Committee’s decision, but

Schneider did not specifically identify at trial what these examples were. 57

Schneider alleged that he explicitly told Plaintiff that she was not being terminated.58

According to Schneider’s testimony, they told her, “We’re not terminating you. We’re

49 T1 at 55. The issue of this conversation confirming the meeting time was not explored in Mary Quinn’s trial testimony. 50 T1 at 56. 51 Dr. Chua was another member of the Executive Committee. 52 T1 at 56. 53 T1 at 70-71; T3 at 17-18; T3 at 79. 54 T3 at 208. 55 T1 at 57. 56 T1 at 57. 57 T2 at 71. 58 T2 at 70-71.

9 recommending this termination. But the issues are significant, and we don’t think they’re

recoverable.” 59 Schneider testified that he then told Plaintiff that she could resign instead. 60

Schneider, Lucente, and Quinn all testified that there was some additional discussion

after which Plaintiff said, “I resign.” 61 Schneider testified that Plaintiff agreed to follow up

with a written letter confirming her resignation. 62 Plaintiff did not dispute that she said the

words “I resign.” However, Plaintiff alleged that she only said these words in response to the

question of what she wanted to tell the staff. 63

The parties agreed that, at some point in the meeting, Schneider recommended that

Plaintiff leave the office. Plaintiff said that she wanted to say goodbye to the staff. Plaintiff

testified that Schneider asked her what she was going to tell the staff. 64 Plaintiff testified that

because she did not know why she was being terminated and because she did not want to

place the administrative staff in an uncomfortable position, Plaintiff told Schneider, “I will tell

them that I resigned.” 65 Plaintiff testified that she then proceeded to go out and say goodbye

to the administrative staff. Plaintiff told some of them that she had resigned. 66

It was undisputed that Plaintiff received a follow-up email from Dr. Schneider on

April 19, 2012. 67 Plaintiff subsequently received a letter from Dr. Schneider on behalf of

ASPA, stating that Plaintiff had resigned and presenting a proposed severance agreement. 68 It

59 T2 at 70-71. 60 T2 at 70. 61 T2 at 71; T3 at 18 ; T3 at 79. 62 T2 At 71. 63 T1 at 59. 64 T1 at 59. 65 T1 at 59. 66 T1 at 59. However, according to Plaintiff’s testimony, she told all of the physicians that she had been terminated. T1 at 60. 67 Schneider Email, Joint Ex. 34, 68 The letter, dated April 30, 2012, stated, “[a]s you stated on Monday, April 16, 2012, and as we discussed, you have voluntarily resigned your employment with Anesthesia Services, P.A., (“ASPA”) effective April 16, 2012.” Letter to Masterson-Carr, Joint Ex. 29. Plaintiff acknowledged receipt of this letter in her testimony at trial. T1 at 60-61.

10 was undisputed that Plaintiff never submitted a written termination letter and never signed a

separation agreement. 69 On May 3, 2012, Plaintiff sent a letter to the Executive Committee as

well as to numerous members of the Board. 70 In the May 3 letter, Plaintiff stated that she had

been terminated “for cause” but that she did not understand what the cause was. 71 Plaintiff

testified that she sent this letter in response to the correspondence she had received from

ASPA saying that she had resigned, and she wanted to make clear that this was untrue. 72

B. The Court Found that Plaintiff Resigned from ASPA

Considering the totality of the evidence presented, the Court found it more likely than

not that Plaintiff resigned from ASPA. In reaching this determination, the Court found three

factors particularly compelling. First, the Court found compelling Plaintiff’s deposition

testimony in which she made it clear that, when confronted with the dissatisfaction of the

Executive Committee, she saw herself as having “a choice” to resign, and she “chose that

choice [i.e., to resign].” 73 When asked the clarificatory question, “What you then in response

chose was to resign?”, Plaintiff answered, “I did.” 74

The Court also found compelling Plaintiff’s subsequent correspondence with ASPA.

This correspondence included an April 19 confirmation email from Dr. Schneider, stating that

Plaintiff had resigned. 75 Plaintiff confirmed that she made no effort to contact Dr. Schneider

or dispute his characterization of her as having resigned. 76 When Dr. Schneider subsequently

sent Plaintiff a letter, dated April 30, once again confirming her resignation and asking for a

69 T1 at 60. 70 Masterson-Carr Letter, Joint Ex. 7. 71 Masterson-Carr Letter, Joint Ex. 7, at 1. 72 T1 at 63. 73 Masterson-Carr Deposition, Joint Ex. 30, at 97-98. 74 Masterson-Carr Deposition, Joint Ex. 30, at 98. 75 Schneider Email, Joint Ex. 34. 76 T1 at 134.

11 written resignation letter, Plaintiff did not respond directly. 77 Instead, a couple weeks later,

after retaining counsel in this matter, Plaintiff sent a letter to various ASPA board members

stating that she had been terminated. 78 Finally, the Court found compelling Plaintiff’s

testimony concerning her general willingness to resign her job in the event of certain sorts of

disagreement, including statements that she would “walk away graciously” from ASPA “if

there was ever a time that anyone did not think [Plaintiff] was right for the job.” 79

V. POST-TRIAL BRIEFING

A. Plaintiff’s Opening Brief

i. Constructive Termination

Plaintiff argues that her resignation was given in response to a situation that amounted

to an ultimatum—either resign or be fired—and that such resignations have been found to

constitute “constructive discharge” under Delaware law. 80 Plaintiff maintains that there was

no cause for her termination under the circumstances, and hence she is entitled to the remedy

under her employment contract for termination “without cause.” 81 Plaintiff further alleges

that she is entitled to damages for Dr. Schneider and/or Dr. Silverstein’s tortiuous interference

with her employment contract and for alleged defamatory statements by Dr. Schneider. 82

Plaintiff argues that Delaware recognizes the concept of constructive discharge as set

forth by the United States Supreme Court in Pennsylvania State Police v. Suders, where the

Court held that “under the constructive discharge doctrine, an employee’s reasonable decision

77 T1 at 138-39. 78 Masterson-Carr Letter, Joint Ex. 7. 79 Masterson-Carr Deposition, Joint Ex. 30, at 147. 80 Opening Brief, Item 79, at 14. 81 Opening Brief, Item 79, at 15. 82 Opening Brief, Item 79, at 15.

12 to resign because of unendurable working conditions is assimilated to a formal discharge for

remedial purposes.” 83 Plaintiff argues that constructive discharges in Delaware fall into two

categories: (1) ultimatums to resign or (2) poor working conditions, the former of which

applies to the instant case. 84 In the case of an ultimatum, it is necessary that the individual

conveying the information to the employee must have sufficient authorization by the

employer for the ultimatum to carry sufficient weight. 85 The individual relaying the message

must be in a position of authority in the company. 86 Plaintiff argues that the party issuing the

ultimatum in the instant case, Dr. Schneider, was in such a position of authority as he was the

Chair of the Board and hence “clearly has sufficient authority to bind the corporation.” 87

Plaintiff argues that constructive termination has been found in cases of much less dire

ultimatums than the one Plaintiff faced. Plaintiff cites PAL of Wilmington v. Graham, a case

in which the employee resigned rather than agree to the employer’s proposed plan, which

included a reevaluation after thirty days. 88 The employee in Graham interpreted the plan as

an ultimatum, which “implied the intention to terminate [the employee] at the end of 30

days.” 89 Plaintiff argues that her situation was clearly more serious than that in Graham.

Whereas the employee in Graham at least had the possibility that things could change after

thirty days, Plaintiff was told that her situation was not “recoverable.” 90 Plaintiff further

argues that “[w]hen faced with the prospect of imminent or immediate termination, Delaware

83 Opening Brief, Item 79, at 16 (quoting Pennsylvania State Police v. Suders, 124 S.Ct. 2342, 2344 (2004)). 84 Opening Brief, Item 79, at 16 (citing Ingleside Homes v. Gladden, 2003 WL 22048205,*8 (Del. Super. Ct. Aug. 27, 2003) (explaining that of the two constructive discharge situations, “[t]he first, more traditional, and common situation involves an employer giving an employee an ultimatum with regard to the employment”)). 85 Opening Brief, Item 79, at 16 (citing State v. Potter, 2011 WL 5966720, *2 (Del. Super. Ct. Nov. 29., 2011). 86 Opening Brief, Item 79, at 17 (citing Anchor Motor Freight v. Unemployment Ins. Appeal Bd., 325 A.2d 374 (Del. Super. Ct. 1974)). 87 Opening Brief, Item 79, at 17. 88 Opening Brief, Item 79, at 17 (citing PAL of Wilmington v. Graham, 2008 WL 2582986 (Del. Super. Ct. June 18, 2008). 89 Opening Brief, Item 79, at 17 (citing Graham, 2008 WL 2582986, at *2). 90 Opening Brief, Item 79, at 17-18.

13 courts have found that decisions to resign in order to preserve future employment

opportunities or for other personal reasons are consistent with a finding of constructive

discharge.” 91 Plaintiff argues that she reasonably realized that termination was imminent and,

as the Court found, Plaintiff was preserving “her future employment opportunities and self-

image by her resignation.” 92

Plaintiff says that she is entitled to the remedies under her employment contract for

termination without cause because a “for cause” termination requires the employer to follow

certain procedural requirements, including providing written notice and some effort at

corrective action. 93 As neither of these requirements was met, Plaintiff argues that her

termination must be considered to be without cause. 94 Plaintiff further argues that the

employment agreement was not actually terminated until the June 8, 2012 correspondence

from Defendants’ attorney to Plaintiff’s attorney. 95 Plaintiff argues that she is entitled to her

prorated salary from April 16, 2012 until June 8, 2012, which is approximately $32,700. 96 As

the employment agreement provides for 90 days’ advance written notice, Plaintiff argues that

she is also entitled to her salary during the 90-day notice period beginning on June 8, 2012

(approximately $56,250). 97

In addition to her prorated salary during the time leading up to the June 8, 2012 letter

and the subsequent 90-day notice period, Plaintiff contends that she is entitled to the

following: (1) severance equal to 180 days of compensation ($112,500); (2) a bonus for the

91 Opening Brief, Item 79, at 18 (citing Thompkins v. Franciscan Elder Care, 2008 WL 2602171, *2 (Del. Super. Ct. June 27, 2008) (The UIAB found constructive discharge where the employee chose to resign to avoid “tarnish(ing) his employment history with a termination” when told he was going to be “let go”). 92 Opening Brief, Item 79, at 18 (quoting Decision After Trial, Item 71, at 18). 93 Opening Brief, Item 79, at 18. 94 Opening Brief, Item 79, at 18-19. 95 Opening Brief, Item 79, at 19. 96 Opening Brief, Item 79, at 19. 97 Opening Brief, Item 79, at 19.

14 period of time her contract was in force in 2012 (though the end of the 90-day notice period);

(3) pension contributions (made at the same rate as were made for senior board members

during the plan year) for 270 days after June 8, 2012 (the notice period plus the severance

period); (4) long term care insurance for Plaintiff and her husband; and (5) all legal fees and

costs in bringing this action. 98

ii. Tortious Interference

Plaintiff cites the elements of tortious interference with contract as: (1) the existence

of a contractual relation between the plaintiff and a third party; (2) purposeful action by the

defendant intended to harm the existing contractual relation; (3) the absence of privilege or

justification on the part of the defendant; and (4) resulting actual damages. 99

Regarding the second prong of the elements of tortious interference, Plaintiff alleges

that Dr. Schneider “took very specific, unilateral, and often secretive action to ensure the

termination of the Plaintiff’s contract.” 100 Plaintiff argues that, at each step in the process, the

specific reasons and the depth of the investigation into Plaintiff’s alleged misconduct were

obscured from other parties that were supposed to be involved in the decision. 101 Plaintiff

alleges that Schneider fostered the impression among members of the Executive Committee

that (a) a more complete investigation would be conducted regarding the alleged inappropriate

comment by Plaintiff; (b) Plaintiff would have the opportunity to respond to the individual

who reported the alleged comment; and (c) there were other performance issues about which

Plaintiff have been counseled in the past. 102 Plaintiff alleges that none of these impressions

98 Opening Brief, Item 79, at 19-20. 99 Opening Brief, Item 79, at 20 (citing UbiquiTel v. Sprint, 2005 WL 3533697, *5 (Del. Ch. Dec. 14, 2005)). 100 Opening Brief, Item 79, at 20. 101 Opening Brief, Item 79, at 20-21. 102 Opening Brief, Item 79, at 21.

15 turned out to be the case. 103 Plaintiff alleges that Schneider was well aware of the economic

and non-economic damage that termination would cause to Plaintiff, including loss of salary,

reduced future job prospects, and damage to Plaintiff’s self-esteem. 104

Plaintiff argues that Schneider and Silverstein “acted in concert,” motivated by

personal animus, to ensure the termination of Plaintiff’s contract. 105 Plaintiff alleges that Dr.

Schneider was angry at Plaintiff for pointing out inconsistencies in his communications with

the Board, and Dr. Silverstein was motivated by a recent personal clash with Plaintiff.106

Plaintiff additionally argues that neither Schneider nor Silverstein are immunized from

corporate officer liability because they used “wrongful means” in terminating Plaintiff for

personal reasons. 107

Plaintiff states that although she held a consulting position for 15 months after her

separation from ASPA, she has been unemployed for the majority of her post-ASPA time.108

Accordingly, Plaintiff asks that damages be measured “from the day separated forward,

offsetting the compensation received from [Plaintiff’s] consulting assignment.” 109

iii. Defamation

Plaintiff cites the four elements of a cause of action for defamation in Delaware (1) a

false and defamatory statement concerning another; (2) unprivileged publication to a third

party; (3) at least negligence on the part of the publisher; and (4) either actionability

103 Opening Brief, Item 79, at 21. 104 Opening Brief, Item 79, at 21. 105 Opening Brief, Item 79, at 22. 106 Opening Brief, Item 79, at 22. 107 Opening Brief, Item 79, at 21-22 (citing Smith v. Hercules, 2002 WL 499817, *3 (Del. Super. Ct. Mar. 28, 2002)). 108 Opening Brief, Item 79, at 23. 109 Opening Brief, Item 79, at 23.

16 irrespective of special harm or the existence of special harm caused by publication.110

Plaintiff argues that she was falsely portrayed by Dr. Schneider as “an individual who is

uncooperative in the face of necessary improvements” to the business. 111 Plaintiff says that

Dr. Schneider was quick to tell the physician members of the Executive Committee that

Plaintiff had made the alleged statement about another physician member of ASPA having an

affair, and that Dr. Schneider did so without conducting a reasonable investigation into

whether Plaintiff actually made the statement. 112 Plaintiff argues that while the full extent of

the damages from these statements is not presently known, “it is a reasonable presumption

that the small healthcare community in Delaware would take notice when the top non-

physician employee of such a large physician group in the state is unceremoniously

displaced.” 113

B. Defendants’ Answering Brief

Defendants argue that Plaintiff is precluded from now arguing constructive discharge

because constructive discharge requires that the employee resigned her position, and Plaintiff

maintained throughout the pleadings and at trial that she did not resign, but was terminated. 114

Defendants argue that while a plaintiff may advance alternative theories of recovery, a

plaintiff cannot advance to different claims once trial has begun when the claims depend on

110 Opening Brief, Item 79, at 23 (citing Stevens v. Independent Newspapers, 1988 WL 25377, *2 (Del. Super. Ct. Mar. 10, 1988)). 111 Opening Brief, Item 79, at 23. 112 Opening Brief, Item 79, at 23-24. 113 Opening Brief, Item 79, at 24. 114 Answering Brief, Item 81, at 6.

17 contradictory factual assertions. 115 Defendants maintain that in order to claim constructive

discharge, the plaintiff must admit that she resigned. 116 Defendants argue that it is

inappropriate for Plaintiff, having lost on her termination claim at trial, to now be permitted to

argue that she was forced to resign. 117 Defendants also contend that the constructive

discharge claim should be barred as it was not pled in the complaint and the possibility of a

constructive termination theory was not raised until the pretrial conference. 118

Defendants further argue that allowing Plaintiff to now claim that she resigned, when

she maintained throughout trial that she was terminated, runs afoul of the well-established

doctrine of judicial admissions.119 Judicial admissions are “[v]oluntary and knowing

concessions of fact made by a party during judicial proceedings (e.g., statements contained in

pleadings, stipulations, depositions, or testimony; responses to requests for admissions;

counsel’s statements to the court).” 120 Judicial admissions “are traditionally considered

binding upon the party against whom they operate, and upon the court.” 121 Defendants

maintain that Plaintiff is now bound by her trial testimony (i.e., “I did not resign”). 122

Defendants argue that the cases cited by Plaintiff in her opening brief lack precedential

value because they are all Superior Court appellate review decisions of Unemployment

Insurance Appeals Board (“UIAB”) decisions, and Delaware courts have consistently rejected

attempts to apply termination precedent from UIAB appeal cases to other types of termination

115 Answering Brief, Item 81, at 6 (citing Schwartzkopf v. Brunswick Corp., 833 F.Supp.2d 1106, 1121 (D.Minn. 2011) (“Constructive discharge is necessarily inconsistent with termination, because it requires the employee to resign his position” (emphasis in original))). 116 Answering Brief, Item 81, at 7 (citing Smith v. Delaware State University, 47 A.3d 472, 476 (Del. 2012)). 117 Answering Brief, Item 81, at 7. 118 Answering Brief, Item 81, at 8. 119 Answering Brief, Item 81, at 12. 120 Answering Brief, Item 81, at 12 (quoting Merritt v. United Parcel Service, 956 A.2d 1196, 1201 (Del. 2008)). 121 Answering Brief, Item 81, at 12 (quoting Merritt, 956 A.2d at 1201-02). 122 Answering Brief, Item 81, at 13 (quoting T1 at 139).

18 claims. 123 Defendants also argue that these cases are all distinguishable from the instant case

because in each case the employee admitted they resigned, whereas Plaintiff consistently

maintained at trial that she was terminated. 124 Finally, Defendants argue that even if Plaintiff

has decided to resign, the decision would not have been a reasonable response to an imminent

threat as would be required to show constructive discharge. 125 Assuming, arguendo, that

Plaintiff resigned, Defendants argue that Plaintiff’s action was unreasonably premature and

that she should have waited to see how the ASPA Board would respond to the

recommendation of the Executive Committee. 126

Defendants first argue that there can be no tortious interference with Plaintiff’s

employment contract unless the contract was actually breached by ASPA. 127 Defendants

maintain that as Plaintiff resigned, ASPA did not breach the contract. 128 Specifically,

Defendants argue that the tortious interference requires that the alleged tortfeasor(s) use

wrongful means “to induce a third party to terminate a contract.” 129 Defendants maintain that

the third party in the instant case, ASPA, did not terminate the contract.

Additionally, Defendants argue that Schneider and Silverstein are shielded from

liability as officers or directors of ASPA. 130 Personal liability of an officer or director

123 Answering Brief, Item 81, at 14 (citing Meades v. Wilmington Housing Authority, 2003 WL 939863, *6 (Del. Ch. Mar. 6, 2003)). 124 Answering Brief, Item 81, at 15. 125 Answering Brief, Item 81, at 16. 126 Answering Brief, Item 81, at 16. Defendants cite Rizzitiello v. McDonald’s, 868 A.2d 825 (Del. 2005) in support of their contention that a reasonable employee would have waited “to allow her employer to make the decision as to her continued employment.” 127 Answering Brief, Item 81, at 18. 128 Answering Brief, Item 81, at 18. 129 Answering Brief, Item 81, at 19 (quoting ASDI, Inc. v. Beard Research, 11 A.3d 749, 751 (Del. 2010)). 130 Answering Brief, Item 81, at 17.

19 requires that the officer or director exceeded the scope of his authority. 131 Further,

Defendants argue that even when directors act, in part, with adverse motives this does not

necessarily mean that they acted outside the scope of their authority. 132 Defendants argue that

there is no evidence that Schneider or Silverstein did anything other than appropriately

present their sincere concerns to the Executive Committee and properly vote to recommend to

the Board that Plaintiff be terminated for cause. 133 Defendants maintain that Plaintiff has not

established that the actions taken by Dr. Schneider or Dr. Silverstein exceeded the scope of

their responsibilities as employees, officers, and directors of the company, or that Schneider

or Silverstein acted out of personal animus. 134

Defendants argue that Plaintiff has only identified four specific allegedly defamatory

statements, in either summary judgment briefing or argument: (1) Dr. Schneider told members

of the Executive Committee that Plaintiff “had engaged in labor law violations”; (2) Dr.

Schneider “falsely informed members of the Executive Committee that [Plaintiff] had

previously been counseled on these issues and failed to make the necessary corrections”; (3)

Dr. Schneider falsely informed the board that Plaintiff “had unilaterally changed a physician

contract[,] which damaged the company”; and (4) Dr. Silverstein told Dr. Richard Stern,

another ASPA physician, that Plaintiff “was involved with an HR situation that exposed the

corporation to liability.” 135 However, Defendants argue that it is notable that no specific

131 Answering Brief, Item 81, at 17-18 (citing MCG Capital Corp. v. Maginn, 2010 WL 1782271, *12, n.66 (Del. Ch. May 5, 2010)). 132 Answering Brief, Item 81, at 18 (citing Goldman v. Pogo.com, 2002 WL 1358760, *8 (Del. Ch. June 14, 2014)). 133 Answering Brief, Item 81, at 19. 134 Answering Brief, Item 81, at 19-20. 135 Answering Brief, Item 81, at 20-21.

20 allegedly defamatory statements are identified in Plaintiff’s post-trial briefing. 136 Instead,

Plaintiff refers generally to remarks by Dr. Schneider about “labor issues” related to Plaintiff

and Plaintiff’s “alleged statement against Dr. Silverstein’s interest.” 137 Further, Plaintiff only

vaguely alleges publication to a third party and damages, stating only that “[t]he full impact of

these damaging statements [is] not yet known since it is impossible to know to whom the

statements were made.” 138

With respect to the four specific statements previously identified, Defendants argue

that Plaintiff did not present any evidence that the first two statements were ever actually

made—“nobody testified that Dr. Schneider told the other members of the Committee that

Plaintiff had ‘engaged in labor law violations’ or that she had been ‘previously counseled on

these issues and failed to make the necessary corrections.’” 139 With respect to the third

statement, Dr. Schneider admitted making a comment concerning his subjective belief that

Plaintiff had changed a physician contract and testified that he continues to believe that this is

true. 140 Defendants argue that there is no evidence that the statement was false or that it was

made with negligence or ill intent.141 Regarding the fourth statement, Defendants point out

that the only person who is alleged to have heard the statement (Dr. Stern) testified at trial that

he did not consider the remark as intended to disparage Plaintiff. 142

Finally, Defendants argue that even if these statements were made and published as

Plaintiff contends, they were all made in the context of an employer-employee relationship

136 Answering Brief, Item 81, at 21. 137 Answering Brief, Item 81, at 21. 138 Answering Brief, Item 81, at 21 (citing Opening Brief, Item 79, at 24). 139 Answering Brief, Item 81, at 22. 140 Answering Brief, Item 81, at 22 (citing T2 at 73-74). 141 Answering Brief, Item 81, at 22. 142 Answering Brief, Item 81, at 23 (citing T1 at 208-209).

21 and hence are presumptively subject to a qualified privilege. 143 This means that not only must

Plaintiff prove each of the ordinary elements of defamation, but Plaintiff must also show that

the statements were made with actual malice, which Defendants contend the evidence does

not support. 144

C. Plaintiff’s Reply Brief

In her reply brief, Plaintiff addresses Defendants’ counterarguments concerning the

main claim for constructive discharge and the related claim for tortious interference. 145

Plaintiff does not further address the defamation claim. Plaintiff reasserts that she can now

make a constructive discharge claim even though her original claim was for actual discharge

and argues that the doctrine of judicial admission does not apply under the present

circumstances. Plaintiff suggests that the judicial admission doctrine only applies where one

party has made a statement of fact that has not been subsequently challenged by the other

party. 146 Plaintiff distinguishes two cases in which the court applied the doctrine of judicial

admission from the instant case.

In Merritt v. United Parcel Service, the defendant conceded the partial disability of the

plaintiff, and the plaintiff, in reliance on the defendant’s admission, did not present any

medical expert testimony. 147 As Plaintiff characterizes the holding, the Merritt Court found

that the defendant had made a binding admission “since there was no other evidence offered

on the subject” and because a finding to the contrary allowing the defendant to disavow his

143 Answering Brief, Item 81, at 23. 144 Answering Brief, Item 81, at 23 (citing Gilliland v. St Joseph’s at Providence Creek, 2006 WL 258259, *9 (Del. Super. Ct. Jan 27, 2006)). 145 Reply Brief, Item 82. 146 Reply Brief, Item 82, at 5. 147 Reply Brief, Item 82, at 5 (citing Merritt v. United Parcel Service, 956 A.2d 1196 (Del. 2008)).

22 admission would prejudice the plaintiff who had relied on it in deciding not to present a

medical expert. 148 Similarly, in Krauss v. State Farm, one of two co-plaintiffs admitted that

the two plaintiffs were part of the same household for insurance purposes. 149 There was no

other evidence offered regarding this issue. 150 In this context, the court found that in light of

this uncontroverted admission by a plaintiff, the insurance company was relieved from having

to prove the issue at trial. 151 Plaintiff argues that the instant case is very different from either

Merritt or Krauss as the issue of whether Plaintiff was terminated or resigned was disputed by

the parties and testimony was offered on both sides. 152

Plaintiff argues that Defendants are incorrect in their contention that the UIAB cases

cited by Plaintiff have no precedential value to the instant case. 153 Instead, Plaintiff argues

that in defining constructive discharge in Delaware, courts have included Delaware

unemployment decisions as support and have made no distinction between unemployment

cases and cases that do not involve unemployment benefits. 154

Plaintiff also argues that Defendants are incorrect to suggest that a reasonable

employee would have waited before resigning when confronted by the Executive

Committee’s findings. 155 Plaintiff says that Defendants were incorrect to conclude that

Plaintiff would have had the opportunity to go before the Board or to challenge the Executive

Committee’s decision; “[t]o the contrary, Plaintiff was repeatedly told that the Executive

148 Reply Brief, Item 82, at 5. 149 Reply Brief, Item 82, at 6 (citing Krauss v. State Farm Mut. Auto. Ins., 2004 WL 2830889 (Del. Super. Ct. Apr. 23, 2004)). 150 Reply Brief, Item 82, at 6 (citing Krauss, 2004 WL 2830889). 151 Reply Brief, Item 82, at 6 (citing Krauss, 2004 WL 2830889, at *5.) 152 Reply Brief, Item 82, at 7. 153 Reply Brief, Item 82, at 8. Plaintiff argues that the case cited by Defendants, Meades v. Wilmington Housing Authority, 2003 WL 939863, *6 (Del. Ch. Mar. 6, 2003), is not applicable to the instant case as it concerns the issue of willful misconduct rather than constructive discharge. 154 Reply Brief, Item 82, at 9 (citing Bali v. Christiana Care Health Services, 1998 WL 685380 (Del Ch. Sept. 22, 1998)). 155 Reply Brief, Item 82, at 10.

23 Committee unanimously [decided] that she was being terminated for cause.” 156 Plaintiff

maintains that she was never provided with any information about how to challenge the

Executive Committee’s decision and that “the circumstances presented at [the April 16]

meeting made it clear to the Plaintiff that her days at ASPA were done.” 157 Dr. Schneider told

Plaintiff that the issues were “non-recoverable.” 158 Plaintiff maintains that resignation would

be a reasonable response in the face of what appeared to be imminent and unavoidable

termination.

Concerning tortious interference, Plaintiff suggests that Defendant Schneider should

be held liable for “spearhead[ing]” the action leading to Plaintiff’s separation from the

company. 159 Plaintiff says that Defendants are wrong to suggest that Schneider was simply

acting within the scope of his duties as CEO. Instead, Plaintiff says that Dr. Schneider

purposely concealed the findings of his investigation of Plaintiff from the other decision

makers and/or often provided them with information that was not truthful, and that the

Executive Committee relied on these false representations in making its decision to

recommend termination of Plaintiff. 160

VI. DISCUSSION

A. Plaintiff’s Constructive Termination Claim is not Barred

Defendants argue that Plaintiff’s constructive termination claim is barred as (a)

constructive termination requires that the employee resigned, and (b) it was Plaintiff’s

156 Reply Brief, Item 82, at 10. 157 Reply Brief, Item 82, at 10. 158 T2 at 71. 159 Reply Brief, Item 82, at 12. 160 Reply Brief, Item 82, at 12.

24 considered position in the pleadings and at trial that she did not resign but was terminated.161

After an extensive review of the briefings and the case law, the Court finds that the claim is

not barred under the specific circumstances of this case. While it is a general principle that a

litigant is bound by her factual assertions, particularly in the pleadings, 162 the Delaware

Supreme Court has made clear that the rule only holds where the court relied on the factual

assertions. 163 Particularly where there has been a judicial determination to the contrary of

previously alleged facts, the litigant is permitted to adopt the judicial determination going

forward. 164

In Siegman, the plaintiff, a stockholder of the defendant corporation brought suit

challenging the validity of the issuance of series preferred stock. 165 After the initiation of the

suit, the defendant filed Certificates of Correction, which defendant argued cured the original

deficiencies in the issuance of the stock. 166 The plaintiff maintained that the Certificates of

Correction did not cure the original invalid issuances of the series preferred because the

Certificates could not operate retroactively under the circumstances. 167 Nonetheless, the court

161 See, e.g., Complaint, Item 1, at 2 (In the “Factual Background” section, there is a subsection entitled “Plaintiff’s Termination from A.S.P.A.” ); T3 at 163 (In Plaintiff’s closing argument, counsel stated, “the evidence is very clear and that what was conveyed to Miss Masterson-Carr on that day during that meeting is that she was terminated. She was absolutely terminated[,] and she was told that she had to leave the building, that she would not be permitted to return, all of her belongings were taken that day that belonged to ASPA, and she was required to pack up her office and leave”). 162 See, e.g., Krauss, 2004 WL 2830889; Merritt, 956 A.2d 1196; John B. Conomos, Inc. v. Sun Co., 831 A.2d 696, 712 (Pa. Super. 2003) (quoting Wills v. Kane, 2 Grant 60, 63 (Pa. 1853)) (“When a man alleges a fact in a court of justice for his advantage, he shall not be allowed to contradict it afterwards. It is against good morals to permit such double dealing in the administration of justice”). 163 Motorola v. Amkor Technology, 958 A.2d 852, 859-60 (Del. 2008) (explaining that “[J]udicial estoppel… prevents a litigant from advancing an argument that contradicts a position previously taken that the court was persuaded to accept as the basis for its ruling. The doctrine is not appropriate in all situations; parties raise many issues throughout a lengthy litigation such as this, and only those arguments that persuade the court can form the basis for judicial estoppel. Judicial estoppel operates only where the litigant’s [new position] contradicts another position that the litigant previously took and that the Court was successfully induced to adopt in a judicial ruling”) (internal quotation, citation omitted). 164 Siegman v. Palomar Medical Technologies, 1998 WL 409352, *3 (Del. Ch. July 13, 1998). 165 Id. at *1 166 Id. 167 Id. at *2.

25 held that the Certificates did retroactively validate the series preferred; and the plaintiff filed

for an award of attorney’s fees and expenses, despite having lost on the merits, on the ground

that the lawsuit induced the defendants to file the Certificates of Correction, thereby creating

the benefit of curing the deficiencies with the stock. 168 The defendants, citing the doctrine of

“judicial estoppel,” 169 argued that plaintiff was precluded from arguing that she was entitled

to fees for creating the curative benefit when it had been her position throughout the litigation

that filing the Certificates of Correction would not fix the problem. 170 The court found that

the doctrine of judicial estoppel prevents a litigant from advancing an argument that

contradicts a position previously taken by the same litigant only when the court was

persuaded to accept the previous position as the basis for its ruling. 171 The Delaware

Supreme Court approvingly quoted Siegman in Motorola v. Amkor Technology. 172

Like in Siegman, Plaintiff originally advanced one position, but now there has been a

judicial determination to the contrary. Thus, the Court finds that Plaintiff is entitled to avail

herself of the Court’s previous finding that she resigned going forward, and that Plaintiff may

now argue a constructive termination claim premised on the contention that she resigned.

B. Plaintiff has not Established Constructive Termination

The Court agrees with Plaintiff that the concept of constructive termination is well-

established in Delaware law, and that one of the two constructive termination scenarios is the

“ultimatum to resign.” 173 The concept of constructive termination is typically invoked in

168 Id. at *3 169 Judicial estoppel is the same principle as “judicial admission” as cited by Defendants in our instant case. 170 Siegman, 1998 WL 409352 at *3. 171 Id. 172 Motorola, 958 A.2d at 859-60. 173 Ingleside Homes v. Gladden, 2003 WL 22048205, *8 (Del. Super. Ct, Aug. 27, 2003).

26 unemployment insurance cases, where the claimant argues that he is entitled to unemployment

benefits because his apparent resignation was in fact constructive termination. 174 The Court

disagrees with Defendants’ assessment that the unemployment insurance cases are not useful

because of the different standard of review in these cases. The Court finds that these cases are

still instructive in defining the parameters of what may reasonably qualify as constructive

termination. 175

In Anchor Motor Freight, the court affirmed the Unemployment Insurance Appeals

Board (“UIAB”) decision finding that the claimant was constructively discharged without just

cause. 176 The claimant, who was pregnant at the time and due in July, was absent from work

for two weeks due to illness in January. When she returned to work, she was told that she

would no longer work the day shift as she had previously but would be assigned to rotating

shifts instead. 177 Throughout the two months after her return to work, the claimant was

constantly asked by representatives of her employer when she would be leaving. 178 Upon the

advice of her doctor, the claimant told her employer that she would be able to work until the

174 Under 19 Del. C. §3315, reasons that an individual will be disqualified from unemployment benefits include leaving work “voluntarily without good cause attributable to such work...” and being “discharged from the individual’s work for just cause.” The reason why an employee would want to argue constructive termination rather than resignation with good cause in the context of unemployment insurance benefits is that in the case of termination, the burden is on the employer to show just cause, whereas in the case of resignation, the burden is on the employee to show just cause. Gladden, 2003 WL 22048205 at *7. 175 The standard of review for an Unemployment Insurance Appeals Board (UIAB) decision upon appeal to Superior Court is that the UIAB’s decision must be “supported by substantial evidence” and “free from legal error.” Gladden, 2003 WL 22048205 at *4. The decision of the UIAB will only be overturned if there is an error of law, abuse of discretion, or the decision “exceeds the bounds of reason.” PAL of Wilmington v. Graham, 2008 WL 2582986, *4 (Del. Super. Ct. June 18, 2005). Thus, it is instructive to see in which cases the court has found the Board’s determination on the issue of constructive termination to be within the “bounds of reason” such as to require upholding the UIAB’s decision. 176 Anchor Motor Freight v. Unemployment Ins. Appeal Bd., 325 A.2d 374, 375 (Del. Super. Ct. 1974). 177 Id. 178 Id.

27 end of June. 179 However, the changes in the claimant’s work schedule eventually prompted

her to ask for a leave of absence in March. 180

On the day the claimant requested the leave of absence, the claimant’s supervisor, who

was also her brother, presented her with a letter of resignation prepared by the employer. 181

Her supervisor told her that if she did not sign the letter, she would not receive her last

paycheck or her vacation checks and would be fired as well. 182 He urged her to sign the letter

lest a discharge blemish her employment record. 183 The Board found that the claimant had

been constructively terminated, and the court agreed, finding that the claimant’s signing the

resignation letter was not “voluntary,” defined as “proceeding from one’s own choice or full

consent.” 184

In PAL of Wilmington v. Graham, the claimant originally worked as an administrator

for her employer, PAL of Wilmington, and then subsequently accepted a position as Director

of Programs. 185 After she had begun working as Director of Programs, the claimant received

a performance evaluation, which said that the claimant demonstrated deficiencies in areas

essential to her position. 186 The employer created a 60 day “performance plan” to address

these alleged deficiencies, which included a reevaluation of the claimant’s progress after the

first 30 days. 187 The objective of the plan was “to present again to [claimant] the tasks for

which she is responsible, evaluate progress toward successful completion of these tasks, and

determine what, if any, role [claimant] will have in the [employer] organization going

179 Id. 180 Id. 181 Id. 182 Anchor Motor Freight, 325 A.2d at 375. 183 Id. 184 Id. at 376. 185 PAL of Wilmington v. Graham, 2008 WL 2582986, *1 (Del. Super. Ct. June 18, 2005). 186 Id. 187 Id.

28 forward.” 188 During the 60 days, the claimant was to “provide a weekly written status of her

work and meet weekly with the Executive Director [of the organization] to review progress

with these assignments.” 189 At the end of the first 30 days, the claimant’s performance was to

be “reviewed, at which time [the employer would] take corrective action if necessary[,] up to

and including termination.” 190

Before implementing the plan, the employer asked the claimant to sign it.191 The

claimant refused to sign, interpreting the plan as addressing her duties in her previous lower

position rather than her current position, and submitted her resignation. 192 The claimant

maintained that she interpreted the performance plan as an ultimatum. 193 The employer

accepted the resignation, but disputed in writing the very next day that claimant was given an

ultimatum. 194 However, at the hearing before the UIAB, the same representative of employer

who wrote that there was no ultimatum testified that claimant was in fact given an ultimatum

to sign to evaluation. 195 The Board concluded that the performance plan “was clearly an

ultimatum, which at least implied the intention to terminate the claimant at the end of 30

days.” 196 Because the employer produced “no competent evidence of misconduct” such as

would constitute just cause for termination, the Board concluded that the claimant was

constructively terminated without just cause. 197

The court affirmed, finding the UIAB’s decision was supported by substantial

evidence. The court explained, that while the claimant “was not explicitly forced to sign the

188 Id. 189 Id. 190 Id. 191 Graham, 2008 WL 2582986 at *1. 192 Id. 193 Id. 194 Id. at *1-2. 195 Id. at *2. 196 Id. 197 Graham, 2008 WL 2582986 at *2.

29 evaluation plan, the wording of the plan was laden with implicit threats that [the claimant]

would be terminated.” 198 The court found that “[t]he language of the plan suggested, at least

implicitly, that [the claimant] must either accept the new evaluation, which mainly addressed

her old position, or risk termination.” 199 The threat of termination was supported by the

testimony of the employer’s representative who testified that the claimant “exhausted her

administrative remedies” by voicing disagreement with the plan and documenting her

disagreement. 200

The Court finds that Plaintiff has not established that she was presented with an

ultimatum to resign such as would constitute constructive termination. At trial, Dr. Schneider

testified that during the April 16, 2012 meeting, he explicitly told Plaintiff that she was not

being terminated but only that the Executive Committee was recommending termination.201

Schneider’s account was confirmed by the testimony of the other three employer

representatives present at the meeting, Dr. Lucente, Mary Quinn, and Dr. Chua, all of whom

testified that Plaintiff was told that the Executive Committee would be making the

recommendation that she be terminated. 202 The Court finds the consistent testimony of Dr.

Schneider, Dr. Lucente, Mary Quinn, and Dr. Chua credible, and finds that the employer

representatives clearly communicated to Plaintiff that their recommendation to the Board was

merely that.

The instant case is clearly distinguishable from the UIAB cases in which the Court has

upheld a finding of constructive termination. In Anchor Motor Freight, the employer

representative presented the claimant with an employer-prepared resignation letter and

198 Id. at *7. 199 Id. 200 Id. 201 T2 at 70-71. 202 T3 at 17-18; T3 at 79; T3 at 208.

30 suggested that she sign it. 203 The employer representative urged the claimant to sign the

resignation letter in order to receive her last paycheck and her vacation checks, and to avoid

having a blemish on her employment record. 204 In the instant case, the members of the

Executive Committee did not present Plaintiff with any letter of resignation to sign at the time

of the alleged ultimatum, instead asking that Plaintiff follow up with a written letter

confirming her resignation. 205 There was no testimony that Plaintiff was urged to resign in

order to receive paychecks or to preserve her future employment prospects as was the

claimant in Anchor Motor Freight. Dr. Chua testified that Dr. Schneider only mentioned the

need for Plaintiff to sign paperwork in order to receive her severance pay after Plaintiff had

already said that she resigned. 206 It is undisputed that nothing was signed by Plaintiff at the

April 16, 2012 meeting, which was what necessitated Dr. Schneider’s subsequent email and

April 30, 2012 letter, trying to get Plaintiff to put her resignation in writing. 207

Unlike in Graham, Plaintiff was not presented with a “performance plan,” created by

her employer to address deficiencies in her job performance. 208 The performance plan was an

official communication on behalf of the employer, which made clear the employer’s

dissatisfaction with the claimant’s job performance, hence operating as an ultimatum. The

employer’s representative even confirmed in testimony before the UIAB that the performance

plan was an ultimatum. 209 The instant case is different. It was clear from the beginning that

members of the Executive Committee present at the April 16, 2012 meeting were acting only

as members of the Executive Committee and not on behalf of the employer. It was also clear

203 Anchor Motor Freight, 325 A.2d a7 375. 204 Id. 205 T2 at 71. 206 T3 at 208. 207 Schneider Email, Joint Ex. 34; Letter to Masterson-Carr, Joint Ex. 29. 208 See Graham, 2008 WL 2582986, at *1. 209 Id. at *2.

31 that the members of the Executive Committee were communicating a mere recommendation,

rather than a final decision. The Court accepts Dr. Schneider’s trial testimony that he

unequivocally told Plaintiff that it was the recommendation of the Executive Committee that

she be terminated, but that this decision would be put before the Board. 210 With a few days

after the meeting, Schneider sent a follow-up email restating that termination was the

recommendation of the Executive Committee, but that Plaintiff had been given the option to

resign. 211

As an ASPA administrator, Plaintiff clearly understood the respective powers of the

Board and the Executive Committee and was familiar with ASPA termination procedure. 212

When asked who could terminate her employment contract, Plaintiff testified that it was her

understanding that it was the Board of Directors. 213 In this context, the Court finds that

Plaintiff could not have reasonably interpreted the content of the April 16, 2012 meeting as an

ultimatum. Plaintiff was aware that the Executive Committee could merely make a

recommendation. While Plaintiff may have decided, based on her own speculation about how

the Board would react to the Executive Committee’s recommendation, that she would

probably face termination in the near future, this is not tantamount to an ultimatum from her

employer. An employee is not constructively terminated merely because she sees the writing

on the wall and decides to avoid the perceived likelihood of termination by resigning.

210 T2 at 70-71. 211 Schneider Email, Joint Ex. 34 212 Plaintiff testified that she participated with all terminations, including those of physicians, nursing staff, and administrative staff. T1 at 65. Plaintiff also testified that the termination policy was the same for all ASPA employees regardless of their classification. T1 at 67. 213 T1 at 28.

32 C. Plaintiff has failed to Establish Tortious Interference or Defamation

The Court finds that Plaintiff has not established tortious interference with contract or

defamation. First, regarding tortious interference, the Court notes ASPA is not a proper

defendant as a party to a contract cannot be held liable for tortious interference with that

contract. 214 Plaintiff appears to be aware of this fact and to only be alleging tortious

interference against Dr. Schneider and Dr. Silverstein individually. 215 Regarding Defendants

Schneider and Silverstein, Plaintiff makes only vague allegations they “acted in concert to

ensure that [Plaintiff’s] employment with ASPA would be terminated.” 216 However, Plaintiff

alleges no specific actions by Dr. Silverstein towards this alleged nefarious purpose, aside

from his alleged statement to the Executive Committee that he felt that he would no longer be

able to work with Plaintiff. 217 Regarding Dr. Schneider, Plaintiff makes the general claim that

Schneider “took very specific, unilateral, and often secretive action to ensure the termination

of Plaintiff’s contract.” 218 Plaintiff also alleges, with only slightly more specificity but

without any supporting evidence, that Schneider fostered misimpressions among members of

the Executive Committee concerning the extent of his investigation of Plaintiff’s alleged

214 See, e.g., Tenneco Automotive v. El Paso Corp., 2007 WL 92621, *5 (Del Ch. Jan. 8, 2007) (“After all, a defendant cannot interefere with its own contract”) (internal quotation, citation omitted). 215 Complaint, Item 1, at 10; Opening Brief, Item 79, at 20. 216 Opening Brief, Item 79, at 22. Plaintiff is correct that Dr. Schneider and Dr. Silverstein are not shielded from liability for tortious interference as officers or directors of ASPA if, as Plaintiff alleges, they used wrongful means. Smith v. Hercules, 2002 WL 499817, *3 (Del. Super. Ct. Mar. 28, 2002) (holding that a CEO may be liable for inducing breach if the plaintiffs can establish that his actions “were not motivated by, and for, his corporate responsibilities, but were instead principally executed to further his personal investments”). The Court also notes that, contrary to Defendants argument, a claim for tortious interference does not require that breach of contract actually result. ASDI, Inc. v. Beard Research, 11 A.3d 749, 751 (Del. 2010). Courts have found tortious interference where the actions of a defendant cause third parties to lawfully terminate a contract with the plaintiff. Id. Nonetheless, the Court finds Plaintiff’s claim for tortious interference insufficient on other grounds. 217 Opening Brief, Item 79, at 22. 218 Opening Brief, Item 79, at 20.

33 misconduct, whether Plaintiff would be given an opportunity to confront the individual who

reported the alleged misconduct, and whether Plaintiff had performance issues in the past. 219

Dr. Schneider testified that he perceived problems with Plaintiff’s job performance.

Schneider said that he found Plaintiff “to be very difficult to work with in some situations[,]

and she did not receive feedback very well around certain issues.” 220 Schneider further

testified that Mary Quinn communicated concerns that Plaintiff was responsible for “[HR]

practices in the office… that would potentially expose the company to liability,” and that he

discussed these concerns at length with Mary Quinn. 221 Schneider also confirmed that Tina

Smith reported that Plaintiff had gossiped about a doctor’s alleged affair, and that Schneider

discussed this matter with members of the Executive Committee. 222 The Court finds that

while the trial testimony unequivocally establishes that Dr. Schneider had concerns with

Plaintiff’s job performance, Plaintiff presented no evidence that Schneider’s concerns

regarding her job performance were not sincere or that he mislead the other members of the

Executive Committee with regard to the existence of these issues, the extent of his

investigation into these issues, or whether Plaintiff would be permitted to confront

individual(s) who reported alleged misconduct.

The Delaware Supreme Court confronted similar facts in Nye v. University of

Delaware. 223 In Nye, the executrix of the estate of a former university dean filed suit for

breach of contract and tortious interference with contract based on the university’s failure to

reappoint the dean to a third term. Per university policy, the dean was evaluated by a review

committee, which in turn made a recommendation to the Provost, who made a

219 Opening Brief, Item 79, at 21. 220 T2 at 49. 221 T2 at 52-53. 222 T2 at 56-58. 223 Nye v. University of Delaware, 897 A.2d 768 (Table), 2006 WL 25003 (Del. 2006).

34 recommendation to the university President. 224 The ultimate decision on a dean’s

reappointment rested with the President. 225 The plaintiff accused the Provost of “improperly

influencing the committee’s decision to recommend [the dean] not serve a third term as

Dean.” 226 The trial court granted summary judgment to the defendants on tortious

interference, and the Supreme Court affirmed.

The Nye Court explained that the plaintiff had failed to make a prima facie case of

tortious interference, offering only “vague out-of-court statements of [the Provost,] which [the

plaintiff] suggests, a finder of fact could interpret to find [that the Provost] intended to

interfere with [the dean’s] contract.” 227 Because the Provost was an agent of the university,

finding him liable required a showing that the Provost acted outside the scope of his authority,

interfering for a motive separate from his duties to the university. 228 The Court found that

plaintiff had made no such showing and explained that summary judgment is proper where “a

plaintiff opposing a motion for summary judgment has had fair opportunity to conduct

discovery to explore the defendant’s subjective state of mind, yet cannot point to any evidence

indicating that the defendant intended to deceive or to interfere.” 229

Like in Nye, the defendants Dr. Schneider and Dr. Silverstein were agents of the

employer, meaning that Plaintiff must demonstrate that they acted outside the scope of their

authority in interfering with Plaintiff’s contract. Plaintiff has presented only vague allegations

that Schneider and/or Silverstein improperly influenced the Executive Committee by their

statements and suggests reasons why Schneider and Silverstein may have acted out of

224 Id. at *1. 225 Id. 226 Id. 227 Id. at *3. 228 Id. 229 Id.

35 personal animus (namely that Schneider “did not appreciate the Plaintiff pointing out

inconsistencies in his communication with the Board,” and Silverstein “has a recent clash

with [Plaintiff],” presumably over allegations that she had been gossiping about his

extramarital affair). 230 The Court finds Plaintiff’s generalized allegations, unsupported by any

evidence, insufficient to establish that Defendants engaged in purposeful action, in excess of

their authority as officers or directors, with the intent to harm the contractual relation. 231

Plaintiff’s allegations of defamation are similarly deficient. It is difficult to identify

the specific alleged defamatory statements that Plaintiff is claiming. In her post-trial briefing,

Plaintiff identifies two allegedly defamatory acts by Dr. Schneider: (1) that he “portrayed”

Plaintiff “as an individual who is uncooperative in the face of necessary improvements” and

did so without adequately investigating whether this portrayal was accurate; and (2) that he

“was quick to let the physician members of the Executive Committee know that Plaintiff had,

indeed, made the alleged statement against Dr. Silverstein’s interest” before conducting a

reasonable investigation. 232 Plaintiff alleges that Dr. Silverstein “supported” Dr. Schneider’s

second defamatory act by telling members of the Executive Committee that he could no

longer work with Plaintiff knowing what she had said about him. 233 In their post-trial brief,

Defendants cite four additional alleged statements that Plaintiff had previously identified as

defamatory: (1) Dr. Schneider advised the Executive Committee that Plaintiff had engaged in

labor law violations; (2) Dr. Schneider told the Executive Committee that Plaintiff had been

counseled on these violations and had failed to make the necessary corrections; (3) Dr.

Schneider told the Board that Plaintiff had unilaterally changed a physician contract, thus

230 Opening Brief, Item 79, at 22. 231 UbiquiTel v. Sprint, 2005 WL 3533697, *5 (Del. Ch. Dec. 14, 2005). 232 Opening Brief, Item 79, at 23 233 Opening Brief, Item 79, at 24.

36 damaging the company; and (4) that Silverstein told Dr. Stern that Plaintiff was involved with

an HR situation that exposed the company to liability. 234

It is well-established that there are four elements of a cause of action for defamation

under Delaware law: (1) a false and defamatory statement concerning another; (2)

unprivileged publication to a third party; (3) at least negligence on the part of the publisher;

and (4) either actionability irrespective of special harm or special harm caused by

publication. 235

The two alleged acts of defamation cited by Plaintiff in her post-trial brief are

strikingly thin. The first alleged act is not even a statement precisely, but rather a vague

allegation that Dr. Schneider “portrayed” Plaintiff in a certain way. However, while there is

no evidence in the trial record regarding particular statements, Dr. Schneider’s testimony

confirms that he did have concerns about Plaintiff’s cooperativeness and ability to respond to

criticism. 236 Regarding the second alleged act, Plaintiff does not argue that the statement was

false, focusing instead on it having allegedly been made without adequate investigation.

While this may be meant to suggest negligence on the part of Dr. Schneider, Plaintiff has

certainly not demonstrated that Schneider’s discussion of the allegation was improper. The

Court accepts as credible Schneider’s testimony that he was merely discussing the allegation

made by Tina Smith, who claimed to have witnessed Plaintiff making the comment.237

Regarding the other four alleged statements, there is evidence in the record that Dr. Schneider

did, in fact, discuss these issues with other members of the Executive Committee.238

However, there is no evidence in the record that Schneider’s discussion of these issues was

234 Answering Brief, Item 81, at 20-21. 235 Stevens v. Independent Newspapers, 1988 WL 25377, *2 (Del. Super. Ct. Mar. 10, 1988). 236 T2 at 49. 237 T2 at 58-59. 238 T2 at 49, 52-53, 56-58.

37 improper, negligent, malicious, or not otherwise in keeping with his role as Chairman of the

Board.

The Court finds all of these alleged instances of defamation (both the two instances

alleged in Plaintiff’s post-trial briefing and the four previous statements cited by Defendants)

subject to qualified privilege, as they were allegedly made in the context of Executive

Committee official business and directly concerned Plaintiff’s job performance. “A qualified

privilege extends to communications made between people who have a common interest for

the protection of which the allegedly defamatory statements that are made or which are

disclosed to any person who has a legitimate expectation in the subject matter.” 239

When qualified privilege applies, a plaintiff must demonstrate actual malice, not just

negligence, to succeed in a defamation claim. 240 Delaware courts have recognized qualified

privilege allowing employers “to make communications regarding the character,

qualifications, or job performance of an employee or former employee to those who have a

legitimate interest in such information.” 241 In Lipson v. Anesthesia Services, another case

involving a claim for constructive termination from ASPA, the plaintiff physician alleged

defamation against various agents of ASPA for comments concerning his professional

competence, including that the plaintiff “nearly killed a kid” through his incompetence and

“was having a mental breakdown.” 242 At the summary judgment stage, the court held that the

qualified privilege applied to the alleged comments because “all of the participants in the

discussions and correspondence… did possess a legitimate expectation in the subject matter.

All were either directors, shareholders, employees, or agents of ASPA who would have an

239 Gilliland v. St. Joseph’s at Providence Creek, 2006 WL 258259, *9 (Del. Super. Ct. Jan. 27, 2006) (internal quotations, citations omitted). 240 Id. 241 Id. (quoting Lipson v. Anesthesia Services, 790 A.2d 1261, 1281 (Del. Super. Ct. 2001)). 242 Id. at 1283.

38 ‘expectation’ (or interest) in [the plaintiff’s] behavior as a representative of ASPA, or they

were physicians involved in [the same hospital health system] who would have an

‘expectation’ in the quality of care and competency of a physician with whom they were

expected to practice medicine.” 243 The court denied summary judgment because it found a

factual question as to whether the plaintiff could demonstrate actual malice, the showing

required to defeat the qualified privilege. 244

The standard for actual malice is high. A hostile relationship between the plaintiff and

the defendant is not sufficient. Once qualified privilege is established, it “is not forfeited by

the mere addition of the fact that a defendant feels indignation and resentment towards the

plaintiff and enjoys making such statements. 245 The plaintiff bears the burden of showing

“that the statements were made primarily to further interests other than those protected by the

qualified privilege and that the chief motive for making such statements was the defendant’s

ill will. 246

In the instant case, it is undisputed that the Executive Committee was charged with the

day-to-day running of ASPA and with making recommendations to the Board on issues

concerning employee performance. 247 Concerns about Plaintiff’s ability to cooperate and

allegations that Plaintiff gossiped about coworkers were matters of legitimate interest to the

other members of the executive committee. Plaintiff has not demonstrated any actual malice

on the part of either Dr. Schneider or Dr. Silverstein. The closest that Plaintiff comes is to

suggest that the two doctors may have had motives for personal animus as previously

243 Id. at 1282 (internal quotation, citation omitted). 244 Id. at 1283-84. 245 Battista v. Chrysler, 454 A.2d 286, 291 (Del. Super. Ct. 1982) (citing Coleman v. Newark Morning Ledger Co., N.J.Supr., 29 N.J. 357, 149 A.2d 193, 202 (1959)). 246 Id. (citing Sokolay v. Edlin, N.J.Super., 65 N.J.Super. 112, 167 A.2d 211 (1961)). 247 ASPA Bylaws, Joint Ex. 5, at 5, 7.

39 discussed. However, Plaintiff’s mere suggestion of a possible motive is far from sufficient to

demonstrate actual malice. The Court finds that that the alleged statements are protected by

qualified privilege; since Plaintiff has not demonstrated actual malice, the statements do not

qualify as defamatory.

Because the Court has found there is no legal basis to hold Defendants liable for

damages on any of the asserted grounds, the Court will not address issues raised regarding the

sufficiency of the pleadings or evidence regarding same.

VII. CONCLUSION

For the foregoing reasons, the Court finds that Plaintiff has failed to establish her

claims for constructive discharge, tortious interference with contract, and defamation.

IT IS SO ORDERED.

__________/s/____________________ M. JANE BRADY Superior Court Judge