In Carl Warren Adams, M.D. v. Rapid City Regional Hospital, Inc., Cardiology Associates, P.C. et al., Civ.-04-5067-RHB (D. S. D. 2007), the Plaintiff, a Cardiac Surgeon from Colorado, brought a an action against Rapid City Regional Hospital, Inc.("RCRH") alleging breach of contract of employment and related claims resulting from his prolonged negotiations with the hospital. RCRH moved for summary judgment on all claims and the District Court granted the dismissal of all claims based on the lack of mutual assent of the parties to all the major terms of the agreement. Dr. Adams also sued Cardiac Associates, P.C., and some of its officers and physicians asserting interference with his relationship with RCRH and defamation. The court granted dismissal of the defamation claim on the basis that Dr. Adams would not be able to show the defamation from hospital proceedings because of the bar to his access to peer review information under South Dakota law. The Court, however, did hold that Dr. Adams had made a sufficient showing to proceed against the cardiologists under a theory of wrongful interference with prospective economic advantage.
Even though the Court found that Dr. Adams and RCRH's negotiations had not advanced sufficiently to establish the existence of a contract, the Court determined that the groups interference with his business relationship with the hospital and expectancy was sufficient to give rise to potential liability. The elements of interference with a business relationship or expectancy are 1) the existence of a valid business relationship or expectancy, 2) knowledge by the interferer of the relationship or expectancy, 3) an intentional and unjustified act of interference on the part of the interferer, 4) proof that the interence caused the harm sustained; and 5) damage to the party whose relationship or expectancy was disrupted.
In order to create the expectancy there must be a "triangle",that is there must be a plaintiff who wished to deal, a defendant who interferes with the plaintiff's dealing and an identifiable third party that the plaintiff wished to deal with. The Court detailed the long and tortuous negotiations between the plaintiff and RCRH and determined that there was clearly evidence of a "prospective" employment relationship. There was evidence presented that the cardiologists had earlier interfered with another physician and RCRH; that they boasted that Dr. Adams would never work for the hospital unless he was an employee of the cardiologists; that the cardiologists indicated to the hospital that they would not refer any patients to Dr. Adams if he became an employee of the hospital. The hospital's director of recruitment told Dr. Adams that the "Heart Doctors would ice any surgeon hired by the hospital," and that RCRH " was not going to bring in a $400,000-a-year physician and watch him sit on his hands." The Court held that Dr. Adams raised a material issue of fact as to any justification claim by the cardiology group for its behavior and that evidence of damage to Dr. Adams was apparent.
The Moral: using referrals as either a carrot or a stick can raise substantial exposure for physicians.
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