Shelbyville Hospital Corp. v. Mosley

69 F. Supp. 3d 718, 2014 U.S. Dist. LEXIS 164990, 2014 WL 6674467
CourtDistrict Court, E.D. Tennessee
DecidedNovember 24, 2014
DocketNo. 4:13-cv-088
StatusPublished
Cited by2 cases

This text of 69 F. Supp. 3d 718 (Shelbyville Hospital Corp. v. Mosley) is published on Counsel Stack Legal Research, covering District Court, E.D. Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Shelbyville Hospital Corp. v. Mosley, 69 F. Supp. 3d 718, 2014 U.S. Dist. LEXIS 164990, 2014 WL 6674467 (E.D. Tenn. 2014).

Opinion

MEMORANDUM OPINION

THOMAS W. PHILLIPS, Senior District Judge.

Plaintiff/Counter-Defendant Shelbyville Hospital Corporation d/b/a Heritage Medical Center (the “Hospital”) has moved to dismiss [Doc. 32] the amended counterclaim of defendant/counter-plaintiff E. Wayne Mosley, M.D. (“Dr. Mosley”). Dr. Mosley has responded in opposition to the motion [Doc. 34] and the Hospital has filed a reply' [Doc. 35]. Accordingly, this matter is ripe for determination.

I. Relevant Facts1

The Hospital is a for-profit Tennessee corporation that operates the local hospital [721]*721in Shelbyville, Tennessee, and recruits doctors to practice in the area [Doc. 31 at ¶ 2]. The Hospital is wholly owned by Community Health Investment Co., LLC [Id.]. Community Health Investment Co., LLC, also wholly owns the Shelbyville Clinic Corporation (the “Clinic”), which operated an orthopedic clinic prior to Dr. Mosley’s arrival in Shelbyville and rented office space to Dr. Mosley [Id.]. Dr. Mosley is an orthopedic surgeon and a resident of Gulf Breeze, Florida [Id. at ¶ 1].

In April 2011, Dr. Mosley was approached by representatives of the Hospital to relocate his orthopedic practice to Shelbyville, Tennessee [Id. at ¶ 4], In June 2011 during the course of negotiations, the Hospital disclosed what was purported to be financial information for the first six months of practice of the previous orthopedic surgeon [Id]. Dr. Mosley contends that these figures were inaccurate or inflated and that he relied upon them in agreeing to relocate his practice [Id. at ¶¶ 21-22]. The Hospital also represented to Dr. Mosley that x-ray services and facilities would be available for his practice from a company controlled by the Hospital and that it would assist Dr. Mosley in establishing his orthopedic medical practice [Id. at ¶ 5]. Dr. Mosley agreed to relocate his orthopedic practice to Shelbyville and the parties entered into a Recruitment Agreement on or about July 27, 20112 [Id. at ¶ 8]. In conjunction with the Recruitment Agreement, Dr. Mosley contends that he was forced to lease office space for his orthopedic practice from the Clinic [Id. at ¶ 9].

Although not explained in the Counterclaim, the Recruitment Agreement3 reveals that the parties agreed that Dr. Mosley would engage in the full-time practice of medicine in Shelbyville for 36 months [Doc. 10-1, § B.l], During the first 18 months (the “Cash Collections Guarantee Period”), the Hospital guaranteed that his practice would generate cash collections of at least $84,416.66 per month (“Monthly Cash Collections Guarantee Amount”) [Id. § C.l]. If his cash collections in a given month were less than $84,416.66, then the Hospital would loan Dr. Mosley the difference between $84,4166.66 and his actual collections [Id. § D.2], The Hospital agreed to loan Dr. Mosley up to $1,013,000.00 (“Total Cash Collections Guarantee Amount”) [Id.]. At the end of the first 18 month period, the Hospital [722]*722agreed to forgive l/18th of the amount loaned to Dr. Mosley for every month that he continued to engage in the full-time practice of medicine in Shelbyville [Id. § D.7]. If Dr. Mosley fulfilled his total 36 month commitment, the Hospital would forgive all of his debt [Id. § D.8].

When he started his clinic on August 15, 2011, Dr. Mosley had a full day of patients scheduled by the Hospital and whose treatment had already been billed by the Clinic. Thus, Dr. Mosley could not bill for the treatment he provided to these patients [Doc. 31 at ¶ 11]. From August 15, 2011, through February 28, 2013, the Hospital interfered with Dr. Mosley’s ability to operate his orthopedic practice by placing employees in his leased space, collecting payments from his patients for Hospital services, registering Hospital patients for diagnostic procedures through his office, and entering his office space without permission [Id. at ¶ 12]. Hospital agents also failed to remove or replace inadequate signage which referenced the former orthopedic practice, “Shelbyville Orthopaed-ics and Sports Medicine,” rather than Dr. Mosley’s practice, and- this confused his patients who could not find his office for their appointments [Id. at ¶¶ 12, 23]. Hospital agents also removed necessary equipment from Dr. Mosley’s office, including an ice maker and a copy machine, which disrupted his ability to operate and develop his practice [Id. at ¶ 12]. Hospital agents or employees conducted Hospital business out of his office, including the operation of a competing orthopedic practice [Id. at ¶ 13].

After a rental dispute arose between Dr. Mosley and the Clinic, the Hospital closed its imaging/diagnostic services next door to Dr. Mosley’s office with only a few days’ notice [Id. at ¶ 14]. Dr. Mosley contends that the Hospital and the Clinic made joint representations to him that x-ray services and facilities would be available for his practice from a company they controlled [Id. at ¶ 20]. The closure of these services hindered his ability to successfully operate his orthopedic clinic and treat patients in a timely and efficient manner [Id.]. Dr. Mosley contends that this closure was in response to his position in favor of an orthopedic surgical suite which was opposed by the Hospital at a Certificate of Need hearing, as well as Dr. Mosley’s witness statement regarding a Department of Labor complaint against the Hospital and/or the Clinic [Id. at ¶ 14]. Finally, Hospital agents Dan Buckner, Tisha Rader, and/or Jon Baker further interfered with Dr. Mosley’s ability to operate his practice by improperly removing him from his leased office space [Id. at ¶ 15].

The Hospital has sued Dr. Mosley for breach of contract and seeks to recover all guarantee payments made to him [Doc. 1]. Dr. Mosley has countersued and, in Count 1, claims that the Hospital has breached the Recruitment Agreement [Id. at ¶¶ 16-26]. In Count 2, Dr. Mosley claims that the Hospital intentionally interfered with his business relationships with patients [Id. at ¶¶ 27-32]. In Count 3, Dr. Mosley claims fraud in the inducement of the contract based on the inaccurate, inflated, and/or false misrepresentations of the anticipated income from the prior orthopedic clinic [Id. at ¶¶ 33-38]. In Count 4, Dr. Mosley claims reckless or negligent misrepresentation through the false information the Hospital provided regarding the previous orthopedic surgeon’s billing for the first 'six months of his practice and regarding Dr. Mosley’s access to x-rays and imaging services [Id. at ¶¶ 39-41]. Finally, in Count 5, Dr. Mosley claims quantum meruit/unjust enrichment because he was forced to treat patients of the Hospital’s “alter ego,” the Clinic, which had already billed for services not yet rendered [Id. at ¶¶ 42-49].

[723]*723II. Standard of Review

Federal Rule of Civil Procedure 8(a)(2) sets out a liberal pleading standard, Smith v. City of Salem, 378 F.3d 566, 576 n. 1 (6th Cir.2004), requiring only “ ‘a short and plain statement of the claim showing that the pleader is entitled to relief,’ in order to ‘give the [opposing party] fair notice of what the ...

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69 F. Supp. 3d 718, 2014 U.S. Dist. LEXIS 164990, 2014 WL 6674467, Counsel Stack Legal Research, https://law.counselstack.com/opinion/shelbyville-hospital-corp-v-mosley-tned-2014.