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Wood v. Southside Physician Network, LLC

United States District Court, E.D. Virginia, Richmond Division

July 29, 2019

MICHAEL N. WOOD, Plaintiff,


          David J. Novak, United States Magistrate Judge.

         Plaintiff Michael N. Wood ("Plaintiff) brings this action against Defendants Southside Physician Network, LLC ("SPN"), and Joseph D. Wilkins ("Wilkins") (collectively, "Defendants"), alleging that Defendants breached written and oral contracts with him by providing only 120 days' notice when terminating his employment. Plaintiff further alleges that Defendants committed actual and constructive fraud by misrepresenting the terms of his employment. This matter comes before the Court by consent of the parties pursuant to 28 U.S.C. § 636(c)(1) on Defendants' Motion to Dismiss (ECF No. 11), moving this Court pursuant to Federal Rules of Civil Procedure 12(b)(6) and 9(b) to dismiss Counts I and II of Plaintiff s Complaint as to Wilkins and Counts III and IV as to both Defendants.[1] For the reasons set forth below, the Court GRANTS Defendants' Motion to Dismiss (ECF No. 11) and DISMISSES WITH PREJUDICE Counts I and II of Plaintiff s Complaint as to Wilkins and Counts III and IV as to both Defendants.

         I. BACKGROUND

         In deciding a motion to dismiss pursuant to Rule 12(b)(6), the Court must accept Plaintiffs well-pleaded factual allegations as true, though the Court need not accept Plaintiffs legal conclusions. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Based on this standard, the Court accepts the following facts.

         A. Contract Negotiation and Plaintiffs Employment

         On April 22, 2014, Wilkins and Anne T. Fereday ("Fereday") held a conference call with Plaintiff, inviting Plaintiff to operate the open-heart surgery program at Southside Regional Medical Center ("Southside Regional" or the "Hospital") in Petersburg, Virginia. (Compl. (ECF No. 1) ¶¶ 2, 40.)[2] At that time, Wilkins served as the Assistant Chief Executive Officer ("CEO") of Southside Regional and Fereday served as the Hospital's Cardiovascular Service Line Director. (Compl. ¶¶ 6-7.) Following his phone call with Wilkins and Fereday, Plaintiff engaged in a lengthy contract negotiation with Wilkins and Southside Regional's CEO at the time, Doug Moyer ("Mover"). (Compl. ¶ 7.)

         Following the parties' negotiations, on June 5, 2014, Plaintiff received a written offer from Southside Regional, which included, among other provisions, a base salary of $650, 000, $25, 000 in relocation assistance and an option to terminate the agreement without cause with 120 days' notice. (Compl. ¶ 8.) Unsatisfied with the terms of Southside Regional's initial offer, Plaintiff asked Wilkins to increase his relocation assistance to $30, 000, increase the notice required for Southside Regional to terminate his employment without cause to 180 days and reduce the number of on-call weekends to which he would be assigned. (Compl. ¶¶ 9-14.)

         In response, on July 29, 2014, Wilkins sent Plaintiff an email confirming amendments to Southside Regional's initial offer, including: (1) an increase in relocation assistance to $30, 000; (2) an expansion of Southside Regional's ability to terminate the agreement without cause after twelve months; (3) an increase in the notice period for termination without cause from 120 days to 180 days; and, (4) a decrease of Plaintiff s on-call weekend assignments to thirty-five weekends annually. (Compl. ¶ 15.) Wilkins attached the revised agreement to the offer email and informed Plaintiff that Southside Regional would hold the offer open until August 6, 2014. (Compl. ¶ 16.)

         On August 6, 2014, Plaintiff accepted Southside Regional's revised offer, memorializing his acceptance with a cover letter reiterating the terms of the agreement. (Compl. ¶ 17.) Plaintiff signed the cover letter and initialed the bottom right hand corner of each page of the agreement that followed. (Compl. ¶ 18.) The parties made no further alterations to the agreement, and Southside Regional returned it to Plaintiff on August 6, 2014. (Compl. ¶ 19.) On September 1, 2014, Plaintiff began working at Southside Regional. (Compl. ¶ 20.)

         B. Plaintiffs Termination

         In the spring of 2015, following a reorganization, Wilkins left Southside Regional for another health system, and Trent Nobles ("Nobles") became chief operating officer of the Hospital. (Compl. ¶ 22.) In October 2016, Moyer announced his resignation as CEO of Southside Regional effective November 14, 2016, and Nobles became interim CEO. (Compl. ¶ 23.) A year later, on October 3, 2017, Southside Regional notified Plaintiff that it had decided to close the open-heart surgery program. (Compl. ¶ 24.) The next day, Plaintiff contacted SPN's Director of Practice Operations, Joanne Austin ("Austin"), to request a copy of his signed employment contract, which Austin provided. (Compl. ¶¶ 25-26.)

         A few days later, on October 8, 2017, Plaintiff realized that the employment contract provided by Austin, dated July 29, 2014 (the "120-Day Agreement"), contained different terms to the contract that he had accepted on August 6, 2014 (the "180-Day Agreement"). (Compl. ¶ 27.) Most notably, the 120-Day Agreement provided 120 days' notice for any no-cause termination, whereas the 180-Day Agreement provided 180 days' notice. (Compl. ¶ 36.) Plaintiff further realized that the 120-Day Agreement had signatures that did not match his signature on the 180-Day Agreement and, unlike the 180-Day Agreement, also lacked initials at the bottom righthand corner of each page. (Compl. ¶¶ 27, 36.) Plaintiff emailed Austin to inquire about these discrepancies, but received no response. (Compl. ¶ 27-28.)

         On October 9, 2017, Southside Regional and SPN delivered written notice to Plaintiff that they had terminated his employment for no cause pursuant to the "Physician Employment Agreement Dated July 28, 2014." (Compl. ¶ 29.) SPN instructed Plaintiff to stop practicing by 5:00 p.m. on October 13, 2017. (Compl. ¶ 29.) In a separate notice, SPN requested repayment of a prorated portion of the $25, 000.00 advance paid at the commencement of Plaintiff s employment, which totaled $9, 548.33. (Compl. ¶ 29.)

         In response, that same day, Plaintiff forwarded to Irene Buskey ("Buskey") - an employee with Southside Regional's Human Resources Department - the October 8, 2017 email he had sent to Austin concerning the discrepancies between the agreement on file with SPN and the agreement that he had signed in August 2014. (Compl. ¶ 30.) Plaintiff also worked with SPN, Southside Regional's Board of Directors and Nobles to develop transition care plans for his patients. (Compl. ¶ 32.) Plaintiff ceased practicing at Southside Regional on October 13, 2017. (Compl. ¶ 34.)

         Following his termination, on December 12, 2017, Plaintiff, through counsel, wrote to Nobles and Reginald Albert, Vice President of Physician Services at Southside Regional, notifying them of the discrepancy in notice periods between the 120-Day Agreement provided by SPN and the 180-Day Agreement Plaintiff had on file. (Compl. ¶ 35.) Plaintiff requested that SPN and Southside Regional correct the discrepancy by paying Plaintiff for the difference between the 120-day and 180-day notice periods. (Compl. ¶ 36.) To date, SPN and Southside Regional have paid Plaintiff only a 120-day separation payout, less the prorated portion of Plaintiffs commencement bonus. (Compl. ¶ 37.)

         C. Plaintiffs Complaint

         On March 6, 2019, Plaintiff filed suit in this Court against Defendants. (ECF No. 1.) Based on the above facts, Plaintiffs Complaint sets forth four counts for relief. (Compl. ¶¶ 39-83.) In Count I, Plaintiff alleges that Defendants breached the 180-Day Agreement by refusing to pay his salary for the full 180-day notice period. (Compl. ¶¶ 39-46.) Alternatively, in Count II, Plaintiff alleges that Defendants breached an oral contract with him by refusing to pay his salary for the full 180-day notice period. (Compl. ¶¶ 47-54.)

         In Count III, Plaintiff alleges that Defendants committed actual fraud by knowingly allowing Plaintiff to work under the assumption that the 180-day notice period constituted a term of his employment and by placing a "fraudulent replication" of Plaintiff s signature of the 120-Day Agreement. (Compl. ¶¶ 57-72.) Finally, in Count IV, Plaintiff alleges that Defendants' actions constituted constructive fraud. (Compl. ¶¶ 74-83.)

         Based on these Counts, Plaintiff seeks: (1) compensatory damages in the amount of $106, 849.20, representing his salary for the sixty days' difference between the 120-day notice period in the 120-Day Agreement and the 180-day period in the 180-Day Agreement; (2) statutory interest; (3) $300, 000 in punitive damages; (4) attorneys' fees and costs; and, (5) any ...

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