KHASHAYAR VOSOUGH, M.D., an individual, CHARLES G. HADDAD, M.D., an individual, MAHIPA PALLIMULLA, M.D., an individual, and COMPREHENSIVE WOMEN'S HEALTHCARE, P.C., a corporation of the State of New Jersey, Plaintiffs-Respondents/Cross-Appellants,
ROGER KIERCE, M.D., an individual, WILLIAM A. MCDONALD, an individual, ST. JOSEPH'S REGIONAL MEDICAL CENTER, a New Jersey non-profit corporation, Defendants-Appellants/Cross-Respondents, and MARIAN H. SPEID, ESQ., an individual, Defendant
Argued: May 12, 2014.
Approved for Publication August 27, 2014.
On appeal from Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-6420-09.
Lance J. Kalik argued the cause for appellants/cross-respondents Roger Kierce, M.D., and William A. McDonald ( Riker Danzig Scherer Hyland & Perretti, L.L.P., attorneys; Mr. Kalik, of counsel and on the joint brief; Tracey K. Wishert and John Atkin, on the joint brief).
Thomas E. Hastings argued the cause for appellant/cross-respondent St. Joseph's Regional Medical Center ( Smith, Stratton, Wise, Heher & Brennan, L.L.P., attorneys; Mr. Hastings, of counsel and on the joint brief; Kimberly M. Parson, on the joint brief).
Barry D. Epstein argued the cause for respondents/cross-appellants ( The Epstein Law Firm, P.A., attorneys; Mr. Epstein, of counsel and on the brief; George B. Forbes and Michael A. Rabasca, on the brief).
Before Judges YANNOTTI, ASHRAFI, and LEONE. The opinion of the court was delivered by ASHRAFI, J.A.D.
[437 N.J.Super. 222] ASHRAFI, J.A.D.
In this lawsuit for breach of contract and tortious interference with contract and economic advantage, plaintiffs are three doctors specializing in obstetrics and gynecology, Khashayar Vosough, [437 N.J.Super. 223] M.D., Charles G. Haddad, M.D., and Mahipa Pallimulla, M.D., and also their medical practice, Comprehensive Women's Healthcare, P.C. (" CWH" or " CWHC" ). Defendants are St. Joseph's Regional Medical Center located in Paterson, its chief executive officer, William A. McDonald, and the chairman of its department of obstetrics and gynecology, Roger Kierce, M.D.
After a sixteen-day trial, defendants appeal from the jury's verdict awarding $423,026.33 against each of the three defendants, totaling $1,269,079. Plaintiffs
cross-appeal from exclusion of their expert testimony alleging a higher amount of future anticipated losses, and the trial court's denial of their claims for punitive damages and prejudgment interest. We reverse the judgment and dismiss the cross-appeal.
Plaintiffs filed a four-count complaint in 2009 alleging breach of contract by the hospital, tortious interference with contract and with prospective economic advantage by the individual defendants, and respondeat superior liability of the hospital for the negligent conduct of the individual defendants. The negligence allegations did not survive the trial and are not an issue on appeal. The jury awarded damages against the hospital for breach of contract and against the individual defendants for the tortious interference counts of plaintiffs' complaint.
To summarize plaintiffs' lawsuit, we quote directly from the preliminary statement in their brief on this appeal:
This appeal and cross-appeal follow a verdict in favor of a medical group CWH and its shareholders against a defendant hospital and two of its executive officers arising out [of] intolerable situations and intimidation which forced the group and [437 N.J.Super. 224] its doctors to resign lucrative independent contractor agreements (" ICAs" ) and ultimately their staff privileges thereby causing substantial financial losses.
The initial reason for defendants' coordinated effort of harassment was alleged untruthful testimony that one member of CWH gave during a deposition concerning the hospital's OB/GYN department policy. St. Joseph's Regional Medical Center's officials reacted negatively to this testimony and retaliated against [CWH] in response, eventually forcing plaintiffs to resign their independent contractor agreements. The main aggressor against plaintiffs was defendant Roger Kierce, M.D. Kierce is the head of St. Joseph's OB/GYN department, and was plaintiffs' direct supervisor. To this end, Kierce engaged in a course of conduct that included but was not limited to humiliating Dr. Khashayar Vosough in front of colleagues by asserting that he committed the crime of perjury, threatening plaintiffs' position with the hospital by stating that he was going to " rip their skulls from their skeletons and keep a head count" if they failed to attend a department meeting, even though no attending physician had ever been disciplined for missing a department meeting, and threatening plaintiffs that he would fire them from their positions at St. Mary's hospital once St. Joseph's and St. Mary's merged.
To stop Kierce's abuse, plaintiffs invoked their rights and sought the protection of St. Joseph's CEO, William McDonald pursuant to the hospital bylaws. However, McDonald did not consider Kierce's abuse to be a serious issue, and failed to perform any meaningful investigation into plaintiffs' complaints. In fact, McDonald considered Kierce's statements to be little more than jokes. Realizing that there would be no relief from Kierce's abusive behavior, plaintiffs were forced to tender
their hospital privilege resignations, and suffer the losses alleged.
Describing the case thus in the best light from plaintiffs' point of view, plaintiffs allege they were constructively discharged and were entitled to compensation because of harassment, abuse, and retaliation by their supervisor at the hospital and failure of the hospital's CEO to stop that wrongful conduct.
It is important to keep in mind that plaintiffs did not and could not allege constructive discharge resulting from unlawful discrimination or from any conduct of plaintiffs that was protected by law or a clear mandate of public policy. Plaintiffs' claims of a hostile work environment and retaliation are not a cause of action under New Jersey's Law Against Discrimination (LAD), N.J.S.A. 10:5-1 to -49; under a constitutional provision or any federal statute prohibiting discrimination; under New Jersey's Conscientious Employee Protection Act (CEPA), N.J.S.A. 34:19-1 to -8; or under Pierce v. Ortho Pharmaceutical Corp., 84 N.J. 58, 417 A.2d 505 (1980), the common law antecedent of CEPA. This case is simply a common law contract and tort case.
[437 N.J.Super. 225] When considering defendants' several pretrial and trial motions seeking judgment in their favor, the trial court should have viewed with more circumspection the tenuous nature of plaintiffs' allegations in a common law contract and tort case. Our common law recognizes no cause of action for a hostile work environment simply because an employee is mistreated by a nasty boss. The common law does not protect employees generally against an unpleasant work environment, or the failure of the employer to address incivility in the workplace. Cf. Oncale v. Sundowner Offshore Servs., Inc., 523 U.S. 75, 80, 118 S.Ct. 998, 1002, 140 L.Ed.2d 201, 207 (1998) (Title VII, 42 U.S.C. § 2000e, prohibits workplace harassment only if members of a protected class are treated differently from non-members).
With respect to St. Joseph's hospital, plaintiffs' claim was viable only if they could prove breach of contract and damages caused by that breach. Furthermore, since their contracts were with the hospital and not with the individual defendants, their claims against McDonald and Kierce could be maintained only if plaintiffs could prove that the conduct of the individual defendants that constituted their alleged tortious interference was outside the scope of their employment with the hospital.
If the individuals were acting outside the scope of their employment, however, then those same acts were not committed on behalf of the hospital, and plaintiffs' breach of contract claim against the hospital was not viable. The same conduct of the individual defendants could not be both breach of contract by their employer and tortious interference by them individually.
In the end, none of plaintiffs' claims should have survived summary judgment or a directed verdict at trial.
Because we will apply the standard of review applicable to summary judgment, R. 4:46-2(c); Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540, 666 A.2d 146 (1995), and that applicable to a directed verdict or judgment in favor of defendants at the [437 N.J.Super. 226] time of trial, R. 4:37-2(b); R. 4:40-1; R. 4:40-2(b); Verdicchio v. Ricca, 179 N.J. 1, 30, 843 A.2d 1042 (2004), we will recite favorably to plaintiffs the facts of the case and all reasonable inferences that could be drawn from the evidence. In other words, our recitation of the facts omits defendants' responses and defenses to plaintiffs' allegations and assumes that
the jury would or did believe plaintiffs' version of the facts.
Plaintiff doctors, Vosough, Haddad, and Pallimulla, are highly-regarded OB/GYN specialists. They completed their residencies in that field under defendant Kierce at St. Joseph's hospital. After their residencies, plaintiffs formed CWH to practice their specialty, and they had admitting privileges at St. Joseph's and other hospitals in the region.
Each plaintiff had an independent contractor agreement (ICA) with St. Joseph's hospital to be an " attending physician" in the OB/GYN department on a schedule assigned by the hospital. An attending physician supervised residents, fellows, and medical students; provided physician coverage at the hospital for all " unassigned" patients, meaning patients who came to the hospital without their own doctors; and responded immediately to " in-house obstetrical and gynecological emergencies." The ICAs provided that the doctors would be paid $100 an hour by the hospital for their services as attending physicians and they would not bill patients separately for those services.
Plaintiffs' ICAs went into effect on March 1, 2002, and were to continue until terminated in accordance with the terms of the ICA. The ICAs permitted " either party" to terminate the agreement " without cause, reason or justification upon sixty (60) days' prior written notice to the other party," or to terminate the agreement " immediately upon a material breach of this Agreement by the other party."
Plaintiffs also had staff privileges at St. Joseph's hospital, which means they were permitted to admit their own patients for care at the hospital. They billed separately for their physician services to [437 N.J.Super. 227] their own patients. As previously stated, plaintiffs had staff privileges as well at other hospitals in the area.
Kierce was the chairman of the OB/GYN department at St. Joseph's hospital. He had a reputation of striving for an unreasonable level of perfection and being a hard-hearted and belligerent taskmaster. He was inclined to disparage and insult physicians and staff under his supervision. In addition to the three plaintiff doctors, several other doctors testified that Kierce would use profanity and demeaning comments to reprimand physicians and hospital staff, including publicly. Kierce admitted in his testimony that he would use " biting language" and be " harsh" and " stern" in his treatment of doctors and staff under his supervision. He acknowledged he had made " mistakes" but rationalized his lack of professionalism and civility on the ground that he had high expectations " to have perfect outcome with the patients" and would not " tolerate people that do not respect the privilege to take care of patients."
Kierce's conduct violated the Medical Staff Bylaws adopted by St. Joseph's hospital. The bylaws stated that " [i]t is the policy of St. Joseph's Regional Medical Center that all persons within its facilities be treated with courtesy, dignity and respect." The purpose of this policy was " to prevent or eliminate conduct that disrupts operations at [the hospital], affects the ability of others to do their jobs, creates a hostile work environment for employees or other medical staff members or interferes with their ability to work competently." The bylaws described prohibited conduct to include: " [v]erbal or physical attacks, hostility, threats of violence or retaliation . . . [c]riticism addressed to the recipient in such a way as to unreasonably intimidate, undermine confidence, belittle or imply stupidity or incompetence."
The ICAs required that plaintiffs adhere to the bylaws, and plaintiffs expected that
other physicians at the hospital would also be required to adhere to the same bylaws. They alleged in their lawsuit that the hospital was impliedly bound by their ICAs to enforce the bylaws and to take action against Kierce's violations. [437 N.J.Super. 228] They alleged that the hospital, through McDonald's inaction, breached their ICAs by failing to enforce the bylaws and to discipline Kierce.
Three discrete incidents formed the heart of plaintiffs' case. First, plaintiffs claimed that Kierce publicly accused Vosough at a department staff meeting of committing perjury in deposition testimony he gave in a malpractice lawsuit brought against Vosough and St. Joseph's hospital. In that testimony, Vosough disclaimed responsibility for the patient's condition on the ground that he had not been notified by other staff at the hospital that the patient had been admitted and was in need of his services. He testified there was a " chain of command" at the hospital, like in " an army," and the attending physician, like " a general," could only act on information that those in the chain had provided to him.
Kierce privately told Vosough that he disagreed with Vosough's disclaimer and considered his testimony to be perjury because an attending physician should take responsibility for the treatment of patients during his schedule whether or not he was specifically notified of a patient's need for his services. According to Vosough, at the staff meeting, Kierce gazed straight at him for about five seconds while telling the twelve to fifteen people assembled, " some people perjure themselves on the stand." Vosough considered this perjury comment to be a public accusation against him intended to intimidate him and all the staff in the OB/GYN department. In the same context, plaintiffs also alleged that Kierce insulted all attending physicians by calling them " vultures."
At the same time as this incident, Kierce announced a new department policy that attending physicians would be responsible for all patients within the scope of their duties, whether or not the attending physician had specific notification of the patient's admission and need for services. This change in policy was of great concern to plaintiffs, and Vosough voiced his objections to Kierce. Vosough testified that Kierce responded with a disrespectful comment: [437 N.J.Super. 229] " you don't like it, don't let the door hit you -- don't let the door slap you in the ass."
In Vosough's opinion, the policy change would cause increased medical malpractice exposure to the point where the doctors would not be able to practice medicine. Vosough complained to CEO McDonald and to Ed Jimenez, the hospital's director of physician relations, about the change in policy and requested that it be rescinded. McDonald attempted to allay Vosough's fears, but decided that the new policy would remain unchanged.
On February 25, 2006, plaintiffs gave written notice that they were terminating their ICAs as attending physicians. ...