Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Shelbyville Hospital Corp. v. Mosley

United States District Court, E.D. Tennessee

November 24, 2014

E. WAYNE MOSLEY, M.D., Defendant

Page 719

For Shelbyville Hospital Corporation d/b/a Heritage Medical Center, Plaintiff, Counter Defendant: Timothy G Harvey, LEAD ATTORNEY, Riley Warnock & Jacobson, PLC, Nashville, TN; William M Outhier, Bowen Riley Warnock & Jacobson, PLC, Nashville, TN.

For M.D. E. Wayne Mosley, Defendant, Counter Claimant: W Timothy Harvey, LEAD ATTORNEY, Law Office of Harvey & Silvus, Clarksville, TN.


Page 720


Thomas W. Phillips, J.

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 Facts[1]

The Hospital is a for-profit Tennessee corporation that operates the local hospital

Page 721

in 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, 2011[2] [ 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 Agreement[3] 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.1]. 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.1]. 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

Page 722

agreed to forgive 1/18th 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 Orthopaedics 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].

Page 723

II. 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 . . . claim is and the grounds upon which it rests,'" Bell A. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). Detailed factual allegations are not required, but a party's " obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions." Twombly, 550 U.S. at 555. " [A] formulaic recitation of the elements of a cause of action will not do," nor will " an unadorned, the-defendant-unlawfully-harmed-me accusation." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).

In deciding a Rule 12(b)(6) motion to dismiss, a court must construe the complaint in the light most favorable to the plaintiff, accept all factual allegations as true, draw all reasonable inferences in favor of the plaintiff, and determine whether the complaint contains " enough facts to state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570; Directv, Inc. v. Treesh, 487 F.3d 471, 476 (6th Cir. 2007) (citation omitted). " A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678. " Determining whether a complaint states a plausible claim for relief will [ultimately] . . . be a context-specific task that requires th[is Court] to draw on its judicial experience and common sense." Id. at 679.

III. Dr. Mosley's Breach of Contract Claim (Count 1)

The Hospital argues that Dr. Mosley has failed to state a claim for breach of contract because recitals are not binding obligations, because the purported obligations he claims were breached do not appear in the Recruitment Agreement, and because breach of the implied covenant of good faith ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.