McNamara v. Picken ( 2012 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
__________________________________________
)
SCOTT A. McNAMARA, M.D., )
)
Plaintiff, )
)
v. ) Civil Action No. 11-1051 (ESH)
)
CATHERINE A. PICKEN, M.D., et al., )
)
)
__________________________________________)
MEMORANDUM OPINION
Plaintiff Scott McNamera (“McNamera”) filed this action against defendant Catherine
Picken (“Picken”) and defendant Washington ENT Group, PLLC (“WENT”) for an accounting,
conversion, breach of contract, interference with business relations, and defamation. Before this
Court is defendants’ motion pursuant to Federal Rule of Civil Procedure 12(c) for judgment on
the pleadings. (See Def.’s Mot. for J. on the Pleadings [Dkt. No. 26] (“Defs.’ Mot.”).) For the
reasons stated, this Court grants defendants’ motion with respect to Count III, but denies it in all
other respects.
BACKGROUND
McNamera and Picken are both physicians practicing in the District of Columbia.
(Compl. ¶¶ 1, 2.) Picken is the sole owner and member of WENT. (Defs.’ Answer, Affirmative
Defs., & Countercl. ¶ 4 [Dkt. No. 5].1). In June 2010, McNamera and Picken began meeting to
discuss the possibility of working together and sharing office space. (Answer ¶¶ 13, 14, 17, 21.)
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Within this document, there are two separate sections ((1) Answer and (2) Affirmative
Defenses/Counterclaims) with separately numbered paragraphs. Therefore, this Memorandum
Opinion will cite to the specific section of this document (as “Answer” or “Defs.’ Countercl.”)
and the paragraph number.
These discussions continued through that summer and included negotiations to lease office space
together near Sibley Memorial Hospital. (Id. ¶¶ 14–18, 25, 26.) Plaintiff alleges that during this
period, McNamera and Picken agreed to merge their practices. (Compl. ¶ 9.) In August 2010,
Picken and McNamera executed a sublease for an office on Mass. Ave. and McNamera moved
into that office. (Defs.’ Countercl. ¶¶ 27–30.) They sent out printed announcements announcing
the merger of their practices. (Compl. ¶ 13.) WENT began billing health insurers for services
rendered by McNamera and depositing the money into WENT’s account. (Id. ¶¶ 14–16.)
McNamera was added to the WENT account at Bank of America. (Id. ¶ 18.) The parties
exchanged communications indicating that each would be expected to contribute equally to the
cost of McNamera’s move and the initial operating expenses of WENT, and that they would
receive an equal salary. (Defs.’ Countercl. ¶ 33; Pl.’s Answer ¶ 33.) McNamera alleges that the
parties agreed to become partners and share profits and losses equally. (Compl. ¶ 17.) Picken
disputes this allegation. (Answer ¶ 17.) McNamera and Picken discussed signing a partnership
agreement, but never completed a draft or executed a written agreement. (Defs.’ Countercl. ¶
44.)
Subsequently, the relationship between McNamera and Picken broke down and, on
January 21, 2011, Picken informed McNamera that she wanted to separate their practices.
(Compl. ¶ 23.) Picken had come to believe that McNamera had stolen money from WENT and
indicated this in an email sent to both McNamera and Suzanne Kujawa, an employee of WENT.
(Id. ¶ 52.) On February 9, 2011, Picken fired the employee who had assisted McNamera for
years. (Id. ¶ 26.) Three days later, McNamera moved out of their shared office. (Id. ¶ 28.) In
April 2011, Picken informed colleagues at Sibley Hospital, where she and McNamera both
worked, that he had engaged in unprofessional acts. (Id. ¶ 53.)
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On May 2, 2011, McNamera filed suit in the Superior Court of the District of Columbia.
On June 7, 2011, defendants removed the suit to this Court. Defendants now seek judgment on
the pleadings on all counts.2
ANALYSIS
I. STANDARD OF REVIEW
Under Rule 12(c) of the Federal Rules of Civil Procedure, “[a]fter the pleadings are
closed— but early enough not to delay trial— a party may move for judgment on the pleadings.”
Fed. R. Civ. Pro. 12(c). A motion pursuant to Rule 12(c) is appropriately granted when, at the
close of the pleadings, “no material issue of fact remains to be resolved, and [the movant] is
clearly entitled to judgment as a matter of law.” Montanans for Multiple Use v. Barbouletos, 542
F. Supp. 2d 9, 13 (D.D.C. 2008) (citations omitted), aff’d 568 F.3d 225 (D.C. Cir. 2009).
When evaluating a motion for judgment on the pleadings under Federal Rule of Civil
Procedure 12(c), courts employ the same standard that governs a Rule 12(b)(6) motion to
dismiss. Jung v. Ass'n of Am. Med. Colls., 339 F. Supp. 2d 26, 35–36 (D.D.C. 2004).
A court must treat the complaint's factual allegations as true, “even if doubtful in fact,”
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007), but it need not accept as true legal
conclusions set forth in a complaint. Ashcroft v. Iqbal, 129 S.Ct. 1937, 1948 (2009).
Accordingly, a court must accept the plaintiff’s well-pleaded factual allegations to the extent that
“they plausibly give rise to an entitlement to relief,” id. at 1950, and “may thus only grant
judgment on the pleadings if it appears, even accepting as true all inferences from the
complaint’s factual allegations, that the plaintiff cannot prove any set of facts entitling him to
2
Defendants also sought judgment on the pleadings on plaintiff’s affirmative defense of fraud.
(Defs.’ Mot. at 11.) However, plaintiff has subsequently withdrawn that defense. (Counter-
Def.’s Resp. to Counter-Pls.’ Mot. to Strike the Affirmative Def. of Fraud [Dkt. No. 30].)
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relief.” Lans v. Adduci Mastriani & Schaumberg L.L.P., 786 F. Supp. 2d 240, 265 (D.D.C.
2011).
II. COUNTS I, II, AND IV
Defendants seek judgment on Counts I (accounting), II (accounting and conversion), and
IV (breach of contract), arguing that these claims fail as a matter of law because plaintiff has not
adequately alleged the existence of a partnership agreement. (Defs.’ Mot. at 6–11.) This
argument is based on the fact that the parties had discussed executing a written agreement and a
written partnership agreement had never materialized. (Id.) Because the parties had talked about
creating a written agreement, defendants argue, the parties could not have had the requisite intent
to create an enforceable oral contract.
Under District of Columbia law, parties may create an enforceable oral contact if both
parties intend to be bound and they agree on the material terms. Perles, P.C., v. Kagy, 473 F.3d
1244, 1249 (D.C. Cir. 2007). To determine if parties intend to be bound by an oral agreement,
courts may find the fact that “parties contemplate a writing” to be evidence that they do not
intend to bind themselves by an oral agreement. Id. However, this is one factor among many,
for courts may also consider parties’ conduct after they reach an alleged oral agreement, the
amount of money at stake, and other factors. Id. at 1249–50. Moreover, “‘[p]arties [may] make
an enforceable contract binding them to prepare and execute a subsequent documentary
agreement’” and, in that case, “‘[t]hat document is understood to a mere memorial of the
agreement already reached.’” Jack Baker, Inc. v. Office Space Dev. Corp., 664 A.2d 1236,
1238–39 (D.C. 1995) (quoting D.C. Area Community Council v. Jackson, 385 A.2d 185 (D.C.
1978) (per curiam) (some alternations in original)).
Here, the fact that a written agreement was contemplated is not dispositive of whether an
enforceable agreement was created. In this case, plaintiff’s factual allegations regarding the
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parties’ conduct after the alleged creation of the oral agreement are sufficient to support his
contention that they created a valid oral contract and, therefore, plaintiff has satisfied his burden
under Ashcroft v. Iqbal. 129 S. Ct. 1937. Accordingly, this Court will deny defendants’ motion
for judgment on the pleadings as to Counts I, II, and IV.
III. COUNT III
Defendants also move for judgment on the pleadings on Count III, in which plaintiff
claims tortious interference with business relationships. (Defs.’ Mot. at 11–13.)
To establish a claim on this basis, a plaintiff “must plead ‘(1) the existence of a valid
business relationship or expectancy, (2) knowledge of the relationship or expectancy on the part
of the interferer, (3) intentional interference inducing or causing a breach or termination of the
relationship or expectancy, and (4) resultant damage.’” Browning v. Clinton, 292 F.3d 235, 242
(D.C. Cir. 2002) (quoting Bennett Enters. v. Domino’s Pizza, 45 F.3d 493, 499 (D.C. Cir. 1995)).
Under District of Columbia law, “a plaintiff must allege business expectancies, not grounded in
present contractual relationships, but which are commercially reasonable to expect.” Sheppard
v. Dickstein, Shapiro, Morin & Oshinsky, 59 F. Supp. 2d 27, 34 (D.D.C. 1999) (internal
quotation marks omitted). Thus, the resultant damage element of this tort includes “the
pecuniary loss of the benefits of the . . . prospective relation . . . [and] consequential losses for
which the interference is the legal cause.” AMTRAK v. Veolia Transp. Servs., 592 F. Supp. 2d
86, 100 (D.D.C. 2009) (quoting Restatement (Second) of Torts § 774A)).
Defendants argue that plaintiff’s claim fails because he has not alleged actual damage.
(Defs.’ Mot. at 11-13.) Plaintiff responds that he has satisfied his burden by alleging that his
“efforts to obtain his patients’ medical records” have been “frustrated” (Compl. ¶ 39), WENT
employees have been instructed not provide his phone number to people and to instead offer
another WENT physician’s services (id. ¶¶ 40–41), and his name has been removed from the
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Washington Physician’s Directory (id. ¶¶ 42, 44, 45). (Pl./CounterDef.’s Opp’n to
Defs./CounterPls.’ Mot. for J. on Pleadings (“Pl.’s Opp’n”) [Dkt. No. 29] at 5–7.) Nowhere does
plaintiff allege any actual loss of business, time, or money as a result of the alleged interference.
See Kwang Dong Pharm. Co. v. Myun Ki Han, 205 F. Supp. 2d 489, 497 (D. Md. 2002) (damage
element unfulfilled under District of Columbia law where plaintiff did not point to a loss of any
specific employment); cf. Parnigoni v. St. Columba's Nursery Sch., 681 F. Supp. 2d 1, 30
(D.D.C. 2010) (damage element fulfilled by loss of enrolled students); AMTRAK, 592 F. Supp. at
100 (damage element fulfilled by loss of specific contract); Gross v. Akin, Gump, Strauss,
Hauer, & Feld, LLP, 599 F. Supp. 2d 23, 32 (D.D.C. 2009) (damage element fulfilled by the
failure of prospective client to retain attorney). In the absence of factual support, plaintiff’s
allegations of “irreparable harm” (Compl. ¶ 44) and “damages” suffered (id. ¶ 46) are
insufficient under Twombly. 550 U.S. at 555 (observing that “[w]hile a complaint attacked by a
Rule 12(b)(6) motion to dismiss does not need detailed factual allegations . . . a plaintiff's
obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’requires more than labels and
conclusions, and a formulaic recitation of the elements of a cause of action will not do”) (internal
citations omitted). This Court will therefore grant defendants’ motion with respect to Count III.
IV. COUNT V
Finally, defendants move for judgment under Rule 12(c) on plaintiff’s defamation claim,
arguing that it is insufficient because plaintiff has failed to plead the absence of a common
privilege. (Defs.’ Mot. at 13–14.)
To state claim for defamation, a plaintiff must allege:
(1) [t]hat the defendant made a false and defamatory statement
concerning the plaintiff; (2) that the defendant published the
statement without privilege to a third party; (3) that the defendant's
fault in publishing the statement amounted to at least negligence;
and (4) either that the statement was actionable as a matter of law
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irrespective of special harm or that its publication caused the
plaintiff special harm.
Howard Univ. v. Wilkins, 22 A.3d 774, 785 (D.C. 2011) (quoting Blodgett v. The Univ. Club,
930 A.2d 210, 222 (D.C. 2007)). An otherwise defamatory statement is, however,
protected by a common interest privilege if it was ‘(1) made in
good faith, (2) on a subject in which the party communicating has
an interest, or in reference to which he has, or honestly believes he
has, a duty to a person having a corresponding interest or duty, (3)
to a person who has such a corresponding interest.’
Howard Univ., 22 A.3d at 785 (quoting Moss v. Stockard, 580 A.2d 1011, 1024 (D.C. 1990)
(quotation marks in Moss omitted)). If a statement is deemed privileged, the plaintiff must
prove the privilege was abused “by showing that the statement was made with ‘express malice or
malice in fact.’” Howard Univ., 22 A.3d at 785–86 (quoting Moss, 580 A.2d at 1024).
Defendants challenge only the second element of plaintiff’s defamation claim. In the
complaint, plaintiff alleges that Picken made false and defamatory statements without privilege
to Suzanna Kujama, a WENT employee, and to colleagues and management personnel at Sibley
Hospital, where he and Picken both work. (Compl. ¶¶ 52–55.) Defendants have raised the
common interest privilege as an affirmative defense (see Defs.’ Countercl. ¶ 69),3 and in their
motion, they contend that plaintiff was required to plead the factual basis to overcome that
privilege. (Defs.’ Mot. at 14.)
On the contrary, “the Rules only require a plaintiff to set forth a short, plain statement of
its claims; they do not require a plaintiff to anticipate affirmative defenses which might be raised
by a defendant.” Chem-Met Co. v. Metaland Int’l, No. 96-2548, 1997 U.S. Dist. LEXIS 1659(D.D.C. Feb. 19, 1997) (referencing Federal Rule of Civil Procedure 8(a)); see also Abbas v.
3
See also Howard Univ., 22 A.3d at 786 n. 12 (discussing qualified privilege as an affirmative
defense).
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Dixon, 480 F.3d 636, 640 (2d Cir. 2007) (“The pleading requirements in the Federal Rules of
Civil Procedure, however, do not compel a litigant to anticipate potential affirmative defenses,
. . . and to affirmatively plead facts in avoidance of such defenses.”); Wright & Miller, Fed.
Practice and Procedure § 1276 (1990). The plaintiff was not required to anticipatorily negate
that defense in his pleadings, and thus the Court cannot conclude, as a matter of law, that
“plaintiff cannot prove any set of facts entitling him to relief.” Lans, 786 F. Supp. 2d at 265.
CONCLUSION
For the foregoing reasons, the Court grants defendants’ motion with respect to Count III,
but denies the motion with respect to all other counts. A separate order accompanies this
Memorandum Opinion.
/s/
ELLEN SEGAL HUVELLE
United States District Judge
Date: January 11, 2012
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