Hamby v. Health Management Associates, Inc. , 2015 Ark. App. LEXIS 361 ( 2015 )


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  •                                 Cite as 
    2015 Ark. App. 298
    ARKANSAS COURT OF APPEALS
    DIVISION II
    No.CV-14-667
    JEFFREY D. HAMBY, M.D.                           Opinion Delivered MAY   6, 2015
    APPELLANT
    APPEAL FROM THE CRAWFORD
    V.                                               COUNTY CIRCUIT COURT
    [NO. CV-2010-593(II)]
    HEALTH MANAGEMENT                                HONORABLE LYNN WILLIAMS,
    ASSOCIATES, INC.                                 JUDGE
    APPELLEE
    AFFIRMED IN PART; REVERSED
    AND REMANDED IN PART
    DAVID M. GLOVER, Judge
    Appellant Dr. Jeffrey Hamby brings this appeal from an order dismissing his claims
    against appellee Health Management Associates, Inc. (HMA) pursuant to Arkansas Rules of
    Civil Procedure 8(a) and 12(b)(6). The sole issue on appeal is the legal sufficiency of Dr.
    Hamby’s claims against HMA as presented in his second amended complaint (SAC). Because
    we conclude that the trial court abused its discretion by dismissing a portion of Dr. Hamby’s
    claims against HMA, we affirm in part and reverse and remand in part.
    HMA is the operator and part-owner of Summit Medical Center in Van Buren,
    Arkansas. Pursuant to a contract with HMA, Emcare Physician Providers, Inc. (Emcare)
    provided emergency-medical services to Summit Medical Center. Emcare hired Dr. Hamby
    to serve as an emergency-medical physician at Summit Medical Center. His contract was
    effective on October 1, 2009, and had a one-year term. Several months into the term of the
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    2015 Ark. App. 298
    contract, in May 2010, Emcare officials notified Dr. Hamby that his contract was being
    terminated for cause.
    As a result of his termination, Dr. Hamby sued HMA, Emcare, Dr. Joni Carmack, and
    Dr. Michael Wheelis.1 He amended his complaint twice, and his SAC is the operative
    pleading for our review. The SAC sets forth three causes of action against HMA: (1) tortious
    interference, (2) violations of the Arkansas Deceptive Trade Practices Act (DTPA), and (3)
    violations of the Civil Action by Crime Victims Act (CACVA).            Dr. Hamby’s general
    theory of his case set forth in the SAC is that HMA was engaged in a scheme to increase its
    profit by unnecessarily and improperly performing medical tests and admitting patients. He
    alleges that when he refused to be complacent in this scheme, Emcare prematurely
    terminated his employment at the behest of HMA.
    HMA petitioned the trial court to dismiss the claims against it. The trial court
    entertained arguments on this motion and ultimately granted the motion to dismiss in its
    entirety pursuant to Arkansas Rules of Civil Procedure 8(a) and 12(b)(6). Dr. Hamby timely
    appealed.
    I. Standard of Review
    Our standard of review for the granting of a motion to dismiss is whether the trial
    court abused its discretion. Dockery v. Morgan, 
    2011 Ark. 94
    , 
    380 S.W.3d 377
    . In reviewing
    a trial court’s decision on a motion to dismiss, we treat the facts alleged in the complaint as
    true and view them in the light most favorable to the party who filed the complaint. 
    Id. All reasonable
    inferences must be resolved in favor of the complaint, and the pleadings are to be
    1
    Drs. Carmack and Wheelis are agents and employees of Emcare.
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    2015 Ark. App. 298
    liberally construed. 
    Id. However, our
    courts consistently hold that a complaint must state
    facts, not mere conclusions, in order to entitle the pleader to relief. Born v. Hosto & Buchan,
    PLLC, 
    2010 Ark. 292
    , 
    372 S.W.3d 324
    .
    II. Tortious Interference
    Dr. Hamby alleges in his SAC that HMA tortiously interfered with his employment
    contract with Emcare. A meritorious claim for tortious interference requires (1) the
    existence of a valid contractual relationship or business expectancy, (2) knowledge of the
    relationship or expectancy by the interfering party, (3) intentional interference inducing or
    causing a breach or termination of the relationship or expectancy, and (4) resulting damage
    to the party whose relationship has been disrupted. Baptist Health v. Murphy, 
    2010 Ark. 358
    ,
    
    373 S.W.3d 269
    . HMA does not challenge that Dr. Hamby has sufficiently pled these
    elements in his SAC.
    In addition to these requirements, the interfering party’s conduct must be improper.
    
    Id. The parties
    dispute whether Dr. Hamby has alleged facts demonstrating that HMA’s
    conduct was improper. Impropriety is determined by (1) the nature of the actor’s conduct,
    (2) the actor’s motive, (3) the interests of the other with which the actor’s conduct interferes,
    (4) the interests sought to be advanced by the actor, (5) the social interests in protecting the
    freedom of the action of the actor and the contractual interests of the other, and (6) the
    proximity or remoteness of the actor’s conduct to the interference and the relations between
    the parties. 
    Id. The actor’s
    conduct is to be considered in light of what is fair and reasonable
    under the circumstances. Hayes v. Advanced Towing Servs., 
    73 Ark. App. 36
    , 
    40 S.W.3d 800
    (2001). The determination of whether the interference is improper is ordinarily left to the
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    jury. 
    Id. As a
    preliminary matter, HMA contends that any interference it had with Dr.
    Hamby’s employment contract was necessarily proper because of privilege. Privilege is an
    affirmative defense that HMA bears the burden of proving. AMI Civ. 403 (2014). When
    reviewing a motion to dismiss pursaunt to Ark. R. Civ. Pro. 12(b)(6), the trial court must
    look only to the complaint. Moore v. Wallace, 
    90 Ark. App. 298
    , 
    205 S.W.3d 824
    (2005).
    Any discussion of HMA’s privilege to interfere is not ripe for our review, and we need not
    consider this argument.
    Turning our attention to the SAC, Dr. Hamby generally contends that, due to
    interference by HMA, he was prematurely terminated by Emcare because he refused to take
    part in HMA’s scheme to increase its revenue by improperly increasing patient admissions
    and medical testing in the emergency department. Dr. Hamby alleges that in September
    2008, HMA appointed Gary Newsome as president and CEO, and he announced that he
    would improve HMA’s financial performance by improving its emergency-department
    operations.     Several months later, in April 2009, internal correspondence from HMA
    indicated that Newsome was disappointed in the admission numbers at Summit Medical
    Center. Emcare began overseeing emergency-department physicians’ benchmarks and
    admission rates in October 2009. Several months later, in March 2010, Emcare officials
    chastised the emergency-department physicians for missing opportunities to order additional
    billable testing. And eventually, Emcare began implementing quality reviews of Dr. Hamby’s
    charts.
    The “smoking gun” linking HMA to the termination of Dr. Hamby’s employment
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    with Emcare comes from an April 2010 email from Pam Tahan, the CEO of Summit
    Medical Center. In that email, she wrote to Emcare officials, “We continue to have issues
    with low ER metrics from Dr. Hamby and [another physican]. Please send me your plan for
    how this will be resolved.” An Emcare representative responded that Dr. Hamby would be
    terminated, and his termination formally occurred in May 2010.
    In reviewing an order granting a motion to dismiss, we must treat the facts alleged by
    Dr. Hamby as true, construe the pleadings liberally, and resolve all reasonable inferences in
    favor of the complaint. 
    Dockery, supra
    . The facts alleged by Dr. Hamby indicate that HMA
    intended to increase revenue in its emergency departments and had input into ensuring that
    the staff at Summit Medical Center was pursuing this goal. According to the SAC, Dr.
    Hamby’s work was criticized because of his failure to conform to HMA’s objective. The
    email by Pam Tahan, when read with the preceding allegations, is sufficient to raise a factual
    question of whether HMA improperly interfered with Dr. Hamby’s employment contract
    with Emcare. The trial court abused its discretion in dismissing the tortious-interference
    claim, and we reverse and remand on this issue.
    III. Deceptive Trade Practices Act
    Dr. Hamby also sued HMA for violations of the DTPA. Specifically, he contends that
    HMA knowingly took advantage of a consumer who is reasonably unable to protect his or
    her own interest because of physical infirmity. Ark. Code Ann. § 4-88-107(a)(8)(A) (Repl.
    2011). Additionally, he claims that HMA violated the catch-all provision of this statute by
    engaging in an unconscionable, false, or deceptive act or practice in business, commerce, or
    trade. Ark. Code Ann. § 4-88-107(a)(10).
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    We have previously determined that, for purposes of the review of a motion to
    dismiss, Dr. Hamby sufficiently alleged facts to establish that HMA was engaged in a scheme
    to increase revenue in its emergency departments. As a result of this alleged scheme, HMA
    officials began overseeing the operations of the emergency department at Summit Medical
    Center with an emphasis on increasing its revenue, and this oversight occurred irrespective
    of the fact that Emcare managed the emergency department at Summit Medical Center.
    According to Dr. Hamby’s SAC, HMA’s oversight created pressure to increase admissions
    and medical testing.    This pressure manifested itself when Emcare officials chastised
    emergency-department physicians for failing to perform all possible billable testing and
    conducting quality reviews of Dr. Hamby’s patient charts. These facts, taken as true, support
    Dr. Hamby’s allegations that HMA was valuing earnings over patient care. Accordingly, we
    conclude that Dr. Hamby has sufficiently alleged a violation of the DTPA. This alleged
    conduct by HMA takes advantage of physically infirm customers and is an unconscionable
    business practice. Ark. Code Ann. § 4-88-107(a)(8)(A) & (10).
    We must also consider whether Dr. Hamby suffered damages as a result of the alleged
    DTPA violations. Actual damages are required for a private right of action for a DTPA
    violation. Baptist Health v. Murphy, 
    2010 Ark. 358
    , 
    373 S.W.3d 269
    ; Ark. Code Ann. § 4-
    88-113(f). Dr. Hamby contends that he was damaged because there was harm to his
    physician-patient relationships and because his termination resulted in him losing income in
    the amount of $265,500. According to his SAC, Dr. Hamby was terminated because of his
    resistance to take part in HMA’s scheme to increase revenue. Consequently, Dr. Hamby has
    alleged actual damages sufficient to withstand a motion to dismiss.
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    Therefore, we conclude that the trial court abused its discretion in dismissing Dr.
    Hamby’s DTPA claim and reverse and remand on this issue.
    III. Civil Action by Crime Victim Act
    Dr. Hamby also pursues a claim against HMA for a CACVA violation. This statute
    is codified at Arkansas Code Annotated section 16-118-107(a)(1) (Supp. 2013) and provides
    that “any person injured or damaged by reason of conduct of another person that would
    constitute a felony under Arkansas law may file a civil action to recover damages based on
    the conduct.” In order to prevail on a motion to dismiss, Dr. Hamby must allege facts to
    show that HMA engaged in felonious conduct that proximately caused him injury.
    The felonious conduct allegedly committed by HMA includes a theft of public
    benefits2 and violations of the Medicaid Fraud Act.3 In each instance, Dr. Hamby alleges that
    HMA’s scheme to increase revenue by increasing patient admissions and medical testing
    resulted in HMA making false statements or misrepresentations in order to receive public
    benefits. The success of the CACVA claim is contingent upon Dr. Hamby alleging facts in
    his SAC that indicate that HMA improperly received public funds.
    We need not consider the theft-of-public-benefits claim and Medicaid Fraud claim
    separately because each is without merit. The SAC includes no allegation that Dr. Hamby
    unnecessarily or improperly admitted patients or performed medical testing that resulted in
    fraudulent billing for public funds. Rather, his allegations are that emergency-department
    physicians were pressured to do so and that he was terminated when he refused to succumb
    2
    Ark. Code Ann. §§ 5-36-201 et seq. (Repl. 2013).
    3
    Ark. Code Ann. §§ 5-55-101 et seq. (Repl. 2005 & Supp. 2013).
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    to the pressure. Additionally, he does not allege that any other medical provider engaged in
    this conduct. Dr. Hamby’s CACVA claim requires us to speculate that patients were
    unnecessarily and improperly tested and admitted and that this resulted in fraudulent demands
    for payment from public funds.
    Arkansas is a fact-pleading state, and Arkansas Rule of Civil Procedure 8(a)(1) requires
    that a complaint state facts, not mere conclusions, in order to entitle the pleader to relief.
    
    Born, supra
    . While facts alleged in a complaint are treated as true, the plaintiff’s theories or
    speculation are not. Worden v. Kirchner, 
    2013 Ark. 509
    , 
    431 S.W.3d 243
    . Without any
    factual support for Dr. Hamby’s theory that public benefits were fraudulently received by
    HMA, we cannot say that the trial court abused its discretion by dismissing the CACVA
    claim. Accordingly, we affirm the dismissal of Dr. Hamby’s CACVA claim.
    Affirmed in part; reversed and remanded in part.
    KINARD and HIXSON , JJ., agree.
    Robertson, Beasley & Ford, PLLC, by: Mark E. Ford; and
    Williams & Anderson PLC, by: Peter G. Kumpe, Marie-B Miller, and Alec Gaines, for
    appellant.
    Robinson, Staley & Duke, P.A., by: Thomas B. Staley; and
    Gass Weber Mullins, LLC, by: J. Ric Gass, Pro Hac Vice, for appellee.
    

Document Info

Docket Number: CV-14-667

Citation Numbers: 2015 Ark. App. 298, 462 S.W.3d 346, 40 I.E.R. Cas. (BNA) 447, 2015 Ark. App. LEXIS 361

Judges: David M. Glover

Filed Date: 5/6/2015

Precedential Status: Precedential

Modified Date: 10/19/2024