Highlands Oncology Group, P.A. v. Hershey Garner, M.D. ( 2024 )

Cite as 2024 Ark. App. 310ARKANSAS COURT OF APPEALS
DIVISION III
No. CV-22-486
Opinion Delivered May 15, 2024
HIGHLANDS ONCOLOGY GROUP, APPEAL FROM THE WASHINGTON
P.A. COUNTY CIRCUIT COURT
APPELLANT [NO. 72CV-22-1207]
V. HONORABLE DOUG MARTIN,
JUDGE
HERSHEY GARNER, M.D.
APPELLEE AFFIRMED
BRANDON J. HARRISON, Chief Judge
Highlands Oncology Group, P.A. (Highlands) appeals the preliminary injunction
entered in favor of Dr. Hershey Garner. Highlands argues that the circuit court erred by
not following the rule of non-review and by granting Garner’s motion for a preliminary
injunction. We affirm.
I.
Garner is a radiation oncologist who practiced with Northwest Arkansas Radiation
Therapy Institute (NARTI) for approximately twenty years until NARTI was purchased
by Highlands in 2008. Along with being a shareholder in Highlands and a member of its
Board of Directors, Garner entered into an employment agreement with Highlands in 2008;
this agreement gave specific limited terms under which Garner’s employment could be
terminated.
In early 2021, the radiology oncology (rad onc) department had only two physicians,
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Garner and Chris McClinton. In addition to hiring a third physician in 2021, Garner and
McClinton discussed bringing Garner’s son, Wesley, into the rad onc practice after Wesley
graduated from medical school in 2022. The minutes from the February 2021 executive
committee meeting contain the following language:
Hershey asked if anyone had an issue with Wes joining the practice as
his replacement in 2022, and that he and Chris were agreed on that addition.
The committee had no objections. It was pointed out that a contract for Wes
had not been finalized and so hadn’t been reviewed, and the board would
need to be involved in that hiring decision due to Wes Garner being
Hershey’s son.
Garner later denied ever saying that Wesley would be his replacement and stated, “I don’t
know how that got in there.”
While the shareholder physicians in the rad onc department generally have authority
over its hiring decisions, Highlands has a company nepotism policy that states, “It is
Highlands Oncology policy that members of your immediate family will not be considered
for employment unless approval is granted by the Board of Directors.” When the decision
about Wesley’s employment came before the Board, Garner was asked not to attend the
board meeting, and he did not object. On 1 March 2021, the Board voted to approve the
hiring of Wesley Garner. That evening, Highlands’ CEO, Jeff Hunnicutt, sent a text to
Garner stating that the Board “voted unanimously to override the nepotism policy and allow
Wes to join Highlands.” On March 4, Garner reviewed the minutes from the March 1
board meeting, which included the following:
There was discussion and agreement that two family members couldn’t
effectively or fairly work together in the same department in these positions.
Hershey has indicated that Wes will be his replacement, and he will retire
prior to Wes’[s] start date.
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The group determined that this variance to the policy would be
granted with the understanding that Hershey will end employment prior to
Wes beginning employment. Administration will assist in determining a
preferred timing strategy.
A motion was made and seconded that Wes Garner be offered a
position as radiation oncologist at Highlands but that there be no overlap of
employment between Hershey and Wes. This motion was unanimously
approved.
Garner contended that he had never said he would retire before Wesley’s start date
and sought to correct the Board’s misunderstanding about the timing of his retirement. He
texted Hunnicutt and said, “[T]here’s a problem” with the minutes. Hunnicutt responded
that he understood Garner’s confusion because part of his text from March 1 had not gone
through. The message that Garner had not received on March 1 stated, “We will still need
to work through your departure, as the board does want to avoid two family docs working
together.” Garner responded, “We need to revisit that[.] . . . [L]et’s address this sooner
rather than later.”
Garner and Hunnicutt also spoke in person soon after, and Hunnicutt told him that
“the board felt strongly that two family members couldn’t work together in the
department.” Garner responded that was a “non-starter” and that he was not going
anywhere. He suggested a board meeting be convened right away to discuss the concerns
and craft a solution. However, it was decided that the matter would be addressed at the
next regular board meeting. Meanwhile, Highlands executed a contract hiring Wesley, and
Garner signed as a witness to the contract. Garner interpreted the execution of Wesley’s
employment contract as a sign that “we were going to move forward, work together, and
build the department, address the issues, and take care of patients.”
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The next board meeting was not held until almost a year later on 21 February 2022.
The minutes from that meeting state:
Jeff Hunnicutt informed the group that Hershey had asked for the
board to be convened. Hershey Garner told the board that he would like to
discuss the decision that he would need to terminate employment when Wes
started, in acknowledgement of the no nepotism clause. Hershey said he had
recently been surprised to hear from Jeff that he would need to leave by July
1st, and he wanted to know why he couldn’t work with his son. Thad Beck
mentioned that Hershey had requested Wes’[s] contract be fast-tracked
approximately a year ago, and at that time Hershey had said he would leave
when Wes came. Hershey responded that he didn’t recall saying he’d leave
immediately, and he would prefer to wind down. . . . [Thad] suggested that
Hershey could potentially move into an emeritus role similar to Dr. Hayward
where he might be assigned special projects or fill in if requested when a rad
onc was on vacation.
....
Dan Bradford stated that the board needed some time to discuss this
and suggested another meeting in a month or two.
On 26 May 2022, Garner filed a complaint against Highlands alleging breach of
contract and seeking a preliminary injunction requiring Highlands to maintain his status as
an employee and shareholder of the company during the pendency of the case. In the
complaint, Garner reiterated that Highlands’ policy allows the hiring of immediate family
members if approved by the Board of Directors, and in this case the board had approved
pursuing an employment contract with Wesley. He asserted that Highlands was not firing
him as a result of any action he had taken and that, pursuant to his employment agreement,
Highlands did not have authority to terminate him absent some wrongdoing on his part.
He also expressed extreme concern for his patients, who would have their doctor-patient
relationship with him terminated while undergoing cancer treatment.
Garner also filed a formal motion for a preliminary injunction and an emergency
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hearing. He argued that Highlands was acting outside any legal authority to terminate him
from his position with Highlands, that the termination will cause irreparable harm not only
to him but, more importantly, to the doctor-patient relationship with those cancer patients
who are relying on him for their care and treatment, and that he has a reasonable probability
of success in the litigation.
The circuit court scheduled a hearing on 8 June 2022. But on June 1, Garner moved
for a temporary restraining order (TRO) after Highlands decided that he should be “relieved
of any patient responsibilities and prohibited from all Highlands Oncology properties with
immediate effect” in a letter dated 31 May 2022. The court entered the requested TRO
on June 1, finding that Garner had demonstrated good cause for entry of the TRO and that
the risk of irreparable harm to Garner’s patients was immediate in the absence of the TRO.
The court further found,
Issuance of this TRO without notice is justified due to the intentional
conduct evidenced by Defendant. Rather than present its case to the Court
in eight days, the Defendant chose to bar Dr. Garner from access to its facilities
and his patients, which is the very conduct Plaintiff[’]s motion sought to
enjoin.
The court ordered that Garner be provided full access to Highlands’ clinics and equipment
in order to treat his patients, that Highlands immediately cease diverting patients from Dr.
Garner’s care, and that Highlands maintain the status quo with regard to Garner’s status as
an employee and shareholder in all respects and take no action to lessen or remove his access
to patients or Highlands’ facilities.
After the June 8 hearing, at which the circuit court heard testimony primarily from
Garner and Hunnicutt, the court found that irreparable harm to Garner’s doctor-patient
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relationships would result absent the issuance of a preliminary injunction. The court also
found that Garner had demonstrated a likelihood of success on the merits of his breach-of-
contract claim. (Specific findings from the court’s ruling will be discussed below.) Thus,
the court issued a preliminary injunction that provided Garner shall have full access to
Highlands’ clinics and equipment in order to see his patients and shall see any patient that
requests to be treated by him or is referred to him. Highlands timely filed this interlocutory
appeal from the circuit court’s order.
II.
We review a preliminary injunction under an abuse-of-discretion standard. City of
Jacksonville v. Smith, 2018 Ark. 87, 540 S.W.3d 661. This is a high threshold that does not
simply require error in the circuit court’s decision but requires that the court act
improvidently, thoughtlessly, or without due consideration. Holladay v. Glass, 2017 Ark.
App. 595, 534 S.W.3d 173. We will not delve into the merits of the case further than is
necessary to determine whether the circuit court exceeded its discretion in granting the
injunction. City of Jacksonville, supra. The sole question before us is whether the circuit
court departed from the rules and principles of equity in making the order and not whether
the appellate court would have made the order. Id.A. Rule of Non-Review
Highlands first argues that its internal affairs regarding Garner’s employment status
are not subject to court review and injunctive intervention because courts traditionally apply
a “rule of non-review” to a private medical center’s board decisions concerning medical
staff appointments. The Arkansas Supreme Court has addressed this rule on several
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occasions. In Brandt v. St. Vincent Infirmary, 287 Ark. 431, 701 S.W.2d 103 (1985), a case
of first impression, the supreme court held that a private hospital has a right to set its own
policies regarding medical treatment and reasoned that there is “no compelling reason to
conclude that a private hospital which is following appropriate state regulations must also
be subject to judicial scrutiny as to the reasonableness standard of public hospitals.” Id. at
437, 701 S.W.2d at 106.
In Baptist Health v. Murphy, 365 Ark. 115, 226 S.W.3d 800 (2006) (Baptist II), Baptist
appealed a preliminary injunction and argued, in part, that the rule of non-review applied
to preclude courts from reviewing the hospital’s economic-conflict-of-interest policy. The
doctors asserted that “the rule of deference to a hospital’s credentialing decisions, or the rule
of non-review, is one which must be limited to those instances where that decision does
not involve a violation of law, or is not used as a means for the commission of a tort.” Id.at 129–30, 226 S.W.3d at 812. The supreme court described the doctors’ point as “well
taken” and stated, “We do not believe that a private hospital may insulate itself from suit
when, as here, there is a finding that the hospital’s conduct has violated state law.” Id. at
130, 226 S.W.3d at 812. The supreme court has also recognized a limited review for alleged
violations of medical-staff bylaws and has restricted the relief available to injunctive relief,
not damages. Williams v. Baptist Health, 2020 Ark. 150, 598 S.W.3d 487.
Here, Highlands argues, Garner made no claim that its actions violated corporate
bylaws or state law, so neither exception to the rule of non-review applies. Highlands asserts
that its Board of Directors, comprised of seventeen physicians with more than 230 years of
combined medical experience, agreed that Garner and his son could not “effectively or fairly
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work together in the same department.” Therefore, the Board agreed to offer Garner’s son
a position in the rad onc department based on their expressed understanding and belief that
Garner had agreed to retire prior to the commencement of his son’s employment.
Highlands contends that the Board’s decision in this matter “is precisely the sort of decision-
making that falls squarely within sound public policy foundations of the rule of non-review”
and that the circuit court’s injunction effectively supplants the court’s judgment for that of
the medical professionals. Highlands concludes that the circuit court abused its discretion
in failing to adhere to the rule of non-review and in granting injunctive relief.
Garner responds by arguing that the rule of non-review does not apply in this case.1
He was not an at-will employee, and the parties had an employment contract that specified
limited terms under which his employment could be terminated. In contrast, no
employment contract or an alleged breach of that contract was at issue in the non-review
cases cited above.
The rule of non-review is generally applied to a private hospital’s credentialing or
other policy decisions unless one of the exceptions applies. See Baptist Health v. Murphy,
2010 Ark. 358, 373 S.W.3d 269 (Baptist III) (hospital’s hiring policy subject to review
because it violated state law); Baptist II, supra (same); Brandt, supra (private hospital’s policy
on medical treatment not subject to review). Here, Garner has not challenged the validity
1
Garner also argues that Highlands’ argument based on the rule of non-review is not
preserved for appellate review because it failed to obtain a ruling on the issue. We disagree.
Highlands’ point that the rule of non-review was presented as a threshold issue for the circuit
court and that reaching the merits of Garner’s motion means the court necessarily found
that the rule of non-review did not apply. That makes practical and logical sense to us.
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of any of Highlands’ policies or bylaws as applied to him; instead, he has alleged that the
board breached its employment contract with him by terminating his employment without
just cause. We therefore hold that the rule of non-review does not apply in this case.
B. Injunctive Relief
When deciding whether to issue a preliminary injunction pursuant to Ark. R. Civ.
P. 65, the circuit court must consider two issues: (1) whether irreparable harm will result in
the absence of an injunction or restraining order, and (2) whether the moving party has
demonstrated a likelihood of success on the merits. City of Jacksonville, supra. Irreparable
harm is the touchstone of injunctive relief, and harm is normally considered irreparable only
when it cannot be adequately compensated by money damages or redressed in a court of
law. Lamb & Assocs. Packaging, Inc. v. Best, 2020 Ark. App. 62, 595 S.W.3d 378. Although
we review a circuit court’s decision to grant a preliminary injunction on an abuse-of-
discretion standard, factual findings that lead to a circuit court’s conclusion of irreparable
harm and likelihood of success on the merits will not be set aside unless clearly erroneous.
Thurston v. Safe Surgery Ark., 2021 Ark. 55, 619 S.W.3d 1. A finding is clearly erroneous
when the reviewing court, on the entire evidence, is left with a definite and firm conviction
that a mistake has been made. Chekuri v. Nekkalapudi, 2020 Ark. 74, 593 S.W.3d 467.
1. Likelihood of success on the merits
The circuit court made the following findings in support of its ruling that Garner had
demonstrated a likelihood of success on the merits on his breach-of-contract claim:
a. Plaintiff has an employment agreement with Defendant with specific
provisions regarding Defendant’s entitlement to terminate Plaintiff’s
employment.
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b. At the Defendant’s March 1, 2021 Board meeting, the Board vote
requiring Dr. Garner to leave Defendant’s employ on or before the date that
Dr. Wesley Garner joined the practice was an effective termination of his
employment.
c. Defendant’s CEO testified that on March 1, 2021, Dr. Garner was
not in violation of any of the terms of his employment agreement or in
violation of any company policies.
Highlands does not dispute the first and third findings but contends that the second
finding—the Board vote on 1 March 2021 was an effective termination of Garner’s
employment—is clearly erroneous. It asserts that the Board vote did not require Garner to
retire at any certain time; instead, the vote merely allowed Hunnicutt to negotiate with
Wesley regarding employment and was based on the Board’s understanding that Garner had
represented to the executive committee that he would retire prior to any start date of his
son’s potential employment. Highlands claims that Garner’s agreeing to retire before his
son started his employment was a “condition precedent” to Wesley joining the practice,
and “[i]f Appellee had notified the board or any of its members that he had not agreed and
would not agree to retire prior to the start of any potential employment of his son, no offer
of employment would have been made to Appellee’s son.”
Highlands further notes that Garner was aware of the Board’s understanding (or
misunderstanding) by 4 March 2021, but he failed to call a board meeting to clarify the
situation. Instead, Garner stood by while contract negotiations with his son progressed, and
he even signed his son’s employment contract despite knowing the Board’s position.
Highlands argues that in signing his son’s employment contract, Garner “agreed and
consented to the contingency that he would retire prior to the start of his son’s employment
per the anti-nepotism policy.” Because Garner now refuses to comply with the policy in
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violation of his own employment contract—which requires him to comply with the
reasonable policies, standards, and regulations of the company—Highlands has the authority
to terminate Garner’s employment. And finally, Highlands disputes that Garner was
terminated on 1 March 2021 because he continued to work at the company for over a year.
Garner responds that Highlands is attempting to rewrite the facts in claiming that the
1 March 2021 meeting minutes expressly stated any “condition precedent” that had to be
satisfied before Wesley could join the practice. Below, Highlands relied on its argument
that Garner acquiesced to his retirement date when he signed Wesley’s employment contract
on 9 March 2021. In addition, there is no express statement in the 1 March 2021 meeting
minutes of any “conditions precedent.”
Garner also disagrees with Highlands’s claim that if he had notified the Board or any
of its members that he had not agreed and would not agree to retire prior to the start of any
potential employment of his son, no offer of employment would have been made to Wesley.
Garner argues that he communicated precisely that sentiment to Hunnicutt three days after
the March 1 board meeting, that he (Garner) suggested another board meeting to address
the issue, and that ultimately, they decided it could be addressed at the next regularly
scheduled board meeting. Meanwhile, Hunnicutt quickly proceeded with executing
Wesley’s employment contract, which was signed 9 March 2021, just eight days after the
board meeting. Garner argues that by acting so swiftly, Highlands “literally create[ed] the
conflict before convening the board to address what Appellee believed was simply confusion
about his position on retirement.”
Finally, Garner denies that signing Wesley’s employment contract was an agreement
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to retire effective 30 June 2022 and that the 1 March 2021 board decision was not an
effective termination because he continued to work at Highlands. He concludes that the
board’s authority under the antinepotism policy is to authorize the hiring of a family
member, and in this case, it chose to authorize Wesley’s hiring. The Board, however, did
not have the authority to force him into early retirement by entering into an employment
contract with Wesley. Its decision breached Garner’s employment contract, which specified
the limited circumstances under which he could be terminated.
Highlands does not dispute that Garner’s employment agreement had specific
provisions regarding its entitlement to terminate Garner’s employment and that, on 1 March
2021, Garner had not violated any terms of his employment. Nevertheless, the Board vote
required Garner to stop working for Highlands prior to Wesley’s start date, and Garner’s
termination date was later set for 30 June 2022. The Board’s decision to hire Wesley was
not, arguably, a basis on which Highlands could terminate Garner’s employment contract.
Because Garner provided sufficient proof to demonstrate a likelihood of success on the
merits, we hold that the circuit court did not abuse its discretion in checking this “box,” so
to speak, in its analysis.
2. Irreparable harm
The circuit court found that irreparable harm to Garner’s doctor-patient relationships
would result absent the issuance of the preliminary injunction, and it set forth the following
findings:
a. Dr. Garner is a radiation oncologist, treating patients at their most
vulnerable state and dealing with treatments involving life and death health
issues.
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b. Denial of the injunction would result in disruption to and
elimination of his doctor-patient relationships with these cancer patients.
c. Defendant’s arguments that Dr. Garner’s patients would be
adequately treated by other physicians is unavailing. As noted in Baptist Health
v Murphy, “physicians are not fungible as to their relationships with patients
or their specialties of practice.” 365 Ark 115, 133, 226 S.W.3d 800, 813.
Highlands contends that Arkansas courts have consistently held that disputes over a
loss of employment do not impart the sort of irreparable harm that is necessary to justify the
invocation of injunctive relief. See Doe v. Ark. Dep’t of Hum. Servs., 357 Ark. 413, 182
S.W.3d 107 (2004) (certified nursing assistants not entitled to injunctive relief because any
wrongful and illegal loss of employment can be fully compensated by money damages);
Manila Sch. Dist. No. 15 v. Wagner, 356 Ark. 149, 148 S.W.3d 244 (2004) (preliminary
injunction not warranted because former superintendent could be compensated with money
damages for loss of her job and the corresponding loss of salary, possibility that she might
have to relocate to obtain similar employment, and potential damage to her reputation);
Kreutzer v. Clark, 271 Ark. 243, 607 S.W.2d 670 (1980) (physician was not entitled to a
temporary restraining order preventing his termination; alleged harm from loss of his salary
and possible necessity of moving to find other employment could be recouped in a court of
law by a favorable judgment and an award of damages).
Highlands claims that Garner “relied exclusively on language in Baptist Health II that
‘physicians are not fungible’ for the proposition that irreparable harm must result any time
there is a disruption or termination of a doctor-patient relationship.” Highlands also
contends that Garner failed to present any testimony from patients or otherwise offer any
evidence that his patients who had been transitioned or assigned to the department’s other
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radiation oncologists suffered any harm or detriment. Highlands argues that with its plethora
of resources, it is well equipped to provide care for the thirty patients that Garner’s complaint
alleged would be negatively impacted by his departure from Highlands.
Garner responds that this is the exact argument that the Arkansas Supreme Court
rejected in Baptist II. In that case, Baptist argued that any disruption to patient relationships
would be minimal due to the infrequency of the doctors’ admissions to Baptist’s hospitals,
the availability of other physicians, and the common practice of physicians caring for another
physician’s patients when necessary. The supreme court rejected this argument and agreed
with the appellees’ position that “while members of a practice group may occasionally cover
for each other, physicians are not fungible as to their relationships with patients or their
specialties of practice.” Baptist II, 365 Ark. at 131, 226 S.W.3d at 813. Garner also contends
that “given HIPAA protections” and “considerations of basic decency,” he could not and
would not subpoena his current cancer patients to testify on his behalf.
Highlands thinks Baptist II is distinguishable from this case because the plaintiffs there
had evidence of “certain and great harm” to their patients; but here, Garner presented only
unsubstantiated, hypothetical threats of future harm. Highlands insists that the “non-
fungible” language in Baptist II was not intended to set aside the requirement of “proof of
facts” demonstrating the presence of irreparable harm.
In Baptist II, the circuit court found that irreparable harm would result to both the
doctors’ reputations and to their relationships with their patients. Specific to patients, the
circuit court determined that irreparable harm would result from the disruption of the
doctors’ relationships with their patients and referring physicians and with the doctors’
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ability to provide proper healthcare to their patients. This is essentially the same reasoning
the circuit court applied here to Garner’s relationship with his patients facing emotional and
life-threatening situations. We disagree with Highlands’ position that relying on the
language in Baptist II means irreparable harm must result any time there is a disruption or
termination of a doctor-patient relationship. Each case must be evaluated on its own facts.
Here, we hold that the circuit court did not abuse its discretion in finding that Garner’s
doctor-patient relationships would suffer irreparable harm absent the issuance of the
preliminary injunction.
3. Misapplication of Baptist II
On this point, Highlands repeats its argument that the circuit court erred in finding
that Garner’s termination would disrupt his relationship with his patients and, citing the
language in Baptist II, concluding that irreparable harm would result. Highlands again asserts
that the circuit court’s conclusion runs afoul of the longstanding principle that a showing
must be made by proof of facts establishing that a party is entitled to injunctive relief. It
reiterates that the net effect of the circuit court’s ruling is that “there are no circumstances
under which a medical practice can terminate, suspend, or restrict a physician’s medical
practice if such might conceivably impact that physician’s patient relationships, without also,
per se, causing irreparable harm sufficient to support a request for injunctive relief.” In
response, Garner denies that the circuit court made any sort of blanket ruling that any
disruption in patient care automatically supports a finding of irreparable harm.
As we have already said, we disagree with Highlands’ argument on this point. The
circuit court’s finding here was based on the particular facts of this case, and there is no
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indication that the court treated the language in Baptist II as some sort of blanket or
categorical rule.
III.
The circuit court did not abuse its discretion in granting the preliminary injunction.
Affirmed.
VIRDEN and BARRETT, JJ., agree.
Carithers Johnson Devenport, PLLC, by: Kelly Carithers and Colin M. Johnson, for
appellant.
Clark Law Firm PLLC, by: Suzanne G. Clark and Payton C. Bentley, for appellee.
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