Sheila Manhas, M.D. v. Franciscan Hammond Clinic, LLC, Hammond Clinic, LLC, and Deepak Majmudar, M.D., Individually (mem. dec.) ( 2017 )

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be FILED
regarded as precedent or cited before any Feb 24 2017, 8:20 am
court except for the purpose of establishing
CLERK
the defense of res judicata, collateral Indiana Supreme Court
Court of Appeals
estoppel, or the law of the case. and Tax Court
ATTORNEYS FOR APPELLANT ATTORNEYS FOR APPELLEES
Kristen E. Prinz Robert A. Anderson
Chicago, Illinois Shannon L. Noder
Merrillville, Indiana
Bryan Bullock
Merrillville, Indiana Libby Yin Goodknight
Indianapolis, Indiana
Jacqueline Sells Homann
South Bend, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Sheila Manhas, M.D., February 24, 2017
Appellant-Plaintiff, Court of Appeals Case No.
45A05-1602-CT-328
v. Appeal from the Lake Superior
Court
Franciscan Hammond Clinic, The Honorable John Sedia, Judge
LLC, Hammond Clinic, LLC, Trial Court Cause No.
and Deepak Majmudar, M.D., 45D01-1311-CT-216
Individually,
Appellees-Defendants.
Altice, Judge.
Court of Appeals of Indiana | Memorandum Decision 45A05-1602-CT-328 | February 24, 2017 Page 1 of 15
Case Summary
[1] Sheila Manhas, M.D., (Dr. Manhas) appeals from the trial court’s grant of
summary judgment in favor of Franciscan Hammond Clinic, LLC (FHC),
Hammond Clinic, and Deepak Majmudar, M.D., individually (Dr. Majmudar),
(collectively, the Defendants) on her complaint for defamation per se,
defamation per quod, and for violation of Ind. Code § 22-5-3-2, a.k.a. Indiana’s
blacklisting statute. Dr. Manhas presents several issues for our review, which
we consolidate and restate as: did the trial court properly grant summary
judgment in favor of the Defendants?
[2] We reverse and remand.
Facts & Procedural History
[3] On July 28, 2008, Dr. Manhas entered into a two-year employment agreement
with Hammond Clinic to work as a full-time, licensed neurologist. On June 11,
2010, Dr. Cynthia Sanders, the Medical Director and Managing Partner of
Hammond Clinic and Dr. Manhas’s supervisor, notified Dr. Manhas that she
was being terminated for cause due to her failure to obtain unrestricted hospital
privileges at Community Hospital. Ultimately, however, Hammond Clinic
decided not to terminate Dr. Manhas’s employment, but instead chose to
employ Dr. Manhas through the expiration of her employment agreement,
which was set to expire by its own terms on July 27, 2010. According to Dr.
Manhas, her employment agreement with Hammond Clinic was not extended
because she had informed Hammond Clinic that she was pregnant. On
Court of Appeals of Indiana | Memorandum Decision 45A05-1602-CT-328 | February 24, 2017 Page 2 of 15
September 9, 2010, Dr. Manhas filed a sex discrimination claim against
Hammond Clinic with the Equal Employment Opportunity Commission.
[4] While Dr. Manhas’s discrimination claim was still pending against Hammond
Clinic, Franciscan Alliance, Inc. acquired substantially all of the assets of
Hammond Clinic and transferred those assets to FHC on or about June 1, 2011.
Thereafter, on September 25, 2011, Dr. Manhas and Hammond Clinic settled
the discrimination claim and both parties signed a Confidential Severance
Agreement, General Release, and Waiver (Settlement Agreement). Section 4 of
the Settlement Agreement provided:
Dr. Manhas will direct inquiries from prospective employers to
Karen Weyer, Director of Human Resources, [FHC], . . . who
will provide only the following information: dates of
employment, last position held, and salary.
Appellant’s Appendix Volume 3 at 71.
[5] Dr. Manhas claims that during the summer of 2013, she was offered a
temporary position as a neurologist at Tripler Army Medical Center (Tripler) in
Honolulu, Hawaii. Tripler had hired Platinum Business Corporation
(Platinum), a temporary physician placement agency, to complete the
credentialing process, which included verification of Dr. Manhas’s previous
employment. Before compiling the required information, Platinum required
Dr. Manhas to sign a Release of Information/Consent to Background Check
(Authorization Form). The opening paragraph of this form explained:
Court of Appeals of Indiana | Memorandum Decision 45A05-1602-CT-328 | February 24, 2017 Page 3 of 15
A report is being obtained for the purpose of evaluating you for
employment. This report may include among other items,
criminal background information, confirmation of your
educational and employment history, work performance and
confirmation of references provided.
Id. at 86. By signing the Authorization Form, Dr. Manhas
authorize[d] [Platinum] . . . and or its agents to perform a check
of [her] background, references, character, employment, motor
vehicle, education and criminal history record bearing on
information which may be in any state or local files, including
those maintained by both public and private organizations and
all public records for the purpose of confirming the information
contained in the application and/or obtaining other information
which may be material to [her] qualifications for employment.
Id. She further “consent[ed] to the release of such information by said
individuals and organizations to [Platinum] and authoriz[ed] [Platinum] to
consider such information when making decisions regarding [her]
employment.” Id. The form also included the following provision (hereinafter
referred to as “the Release”):
I hereby release [Platinum], its corporate affiliates, its current
and/or former officers, directors and employees, its authorized
agents and representatives and all others involved in this background
investigation and any subsequent investigations, from any liability
in connection with any information they give or gather and any
decisions made concerning my employment based on such
information.
Id. (emphasis supplied).
Court of Appeals of Indiana | Memorandum Decision 45A05-1602-CT-328 | February 24, 2017 Page 4 of 15
[6] Gay Lynn Heaney (Ms. Heaney), a credentialing coordinator for Platinum, was
in charge of compiling information from Dr. Manhas’s previous employers,
including Hammond Clinic. Ms. Heaney sent three separate forms to
Hammond Clinic, “Attention: Barb”.1 Id. at 81. Two of the forms sought an
evaluation of Dr. Manhas as a physician and the third document was the
Authorization Form signed by Dr. Manhas. One of the evaluation forms
(hereinafter referred to as “the Evaluation Form”) requested the evaluator to
provide an opinion of Dr. Manhas by marking in the appropriate column for
“Good”, “Fair”, or “Poor” in the following areas: technical skills, attitude
towards supervision, attitude towards duties, attendance record, and overall
employment performance. Id.
[7] The Evaluation Form was given to Dr. Sanders, but she refused to complete it
because she did not believe her position with FHC authorized her to do so.
Eventually, Dr. Deepak Majmudar completed the Evaluation Form on behalf
of Hammond Clinic and returned it to Ms. Heaney. Even though Dr.
Majmudar had never worked with Dr. Manhas and did not recall ever meeting
her, he assessed Dr. Manhas’s skills as either “Fair” or “Poor” and further
indicated that she was not eligible for rehire, writing “see above” as a reference
to the “Fair” and “Poor” ratings. Id. Dr. Majmudar also stated that Dr.
Manhas had been “terminated.” Id. Dr. Majmudar was not aware of the
1
Barbara Belligio was the credentialing specialist at FHC and had worked in that capacity during Dr.
Manhas’s tenure with Hammond Clinic.
Court of Appeals of Indiana | Memorandum Decision 45A05-1602-CT-328 | February 24, 2017 Page 5 of 15
Settlement Agreement from the discrimination action. Ms. Heaney forwarded
the information provided by Dr. Majmudar to Tripler. Based in part on the
poor evaluation, Tripler ultimately decided not to hire Dr. Manhas.
[8] Dr. Manhas retained an attorney, who, on Dr. Manhas’s behalf, corresponded
with Dr. Majmudar regarding his responses on the Evaluation Form. Dr.
Majmudar reviewed Dr. Manhas’s credentialing file and confirmed that he
made false and inaccurate statements about Dr. Manhas. Specifically, there
was nothing in Dr. Manhas’s file that indicated she was not eligible for rehire.
Dr. Majmudar then wrote two letters, one to Dr. Manhas’s attorney and one to
Ms. Heaney. In the letters, Dr. Majmudar apologized for the inaccuracies in
his evaluation of Dr. Manhas, noting that Dr. Manhas left Hammond Clinic in
good standing and that he would recommend her without reservation. He
further admitted that he “was wrong to make those statements” and that he
“completely and whole heartedly regret[ted] and retract[ed] [his] statements on
the reference evaluation to Platinum [].” Id. at 133. Dr. Majmudar further
noted that contrary to his responses, Dr. Manhas received positive feedback
regarding her performance at Hammond Clinic.
[9] On November 4, 2013, Dr. Manhas filed her initial complaint for defamation
per se, defamation per quod, and for violation of Indiana’s blacklisting statute,
I.C. § 22-5-3-2, naming Hammond Clinic, Dr. Majmudar, and FHC as
defendants. She filed an amended complaint on January 16, 2015. On January
28, 2015, Hammond Clinic filed its amended answer as well as a counterclaim
alleging that Dr. Manhas breached the terms of the Settlement Agreement that
Court of Appeals of Indiana | Memorandum Decision 45A05-1602-CT-328 | February 24, 2017 Page 6 of 15
arose from the discrimination claim. On February 23, 2015, FHC and Dr.
Majmudar filed their answer and a similar counterclaim. Hammond Clinic
subsequently withdrew its counterclaim, but FHC’s counterclaim remains
pending before the trial court.
[10] On July 6, 2015, FHC and Dr. Majmudar filed a motion for summary
judgment, arguing that the Release contained in the Authorization Form
relieved them of any and all liability arising out of the responses provided in the
Evaluation Form. Hammond Clinic filed a motion to join in FHC and Dr.
Majmudar’s summary judgment motion, which was granted by the trial court
on December 8, 2015. The trial court held a summary judgment hearing on
January 5, 2016. Three days later the trial court entered its order granting
summary judgment in favor of the Defendants. The trial court concluded that
the language of the Release was “explicit and unambiguous” that Dr. Manhas
was releasing designated parties from all liability. Appellant’s Appendix Volume 2
at 32. The court implicitly determined that the catch-all phrase in the Release –
“all others involved in this background investigation” – encompassed the
Defendants and thus, the Defendants were released from any liability arising
out of information provided on the Evaluation Form. Appellant’s Appendix
Volume 3 at 86. The trial court therefore granted summary judgment in favor of
the Defendants.
[11] On January 19, 2016, the trial court determined that there was no just reason
for delay and directed entry of final judgment for Hammond Clinic. A similar
Court of Appeals of Indiana | Memorandum Decision 45A05-1602-CT-328 | February 24, 2017 Page 7 of 15
order was entered for FHC and Dr. Majmudar on February 1, 2016. Dr.
Manhas now appeals. Additional facts will be provided as necessary.
Discussion & Decision
[12] We review summary judgment de novo, applying the same standard as the trial
court: “Drawing all reasonable inferences in favor of ... the non-moving parties,
summary judgment is appropriate ‘if the designated evidentiary matter shows
that there is no genuine issue as to any material fact and that the moving party
is entitled to judgment as a matter of law.’” Williams v. Tharp, 914 N.E.2d 756,
761 (Ind. 2009) (quoting Ind. Trial Rule 56(C)). “A fact is ‘material’ if its
resolution would affect the outcome of the case, and an issue is ‘genuine’ if a
trier of fact is required to resolve the parties’ differing accounts of the truth, or if
the undisputed material facts support conflicting reasonable inferences.” Id.
(internal citations omitted).
[13] The initial burden is on the party moving for summary judgment to
“demonstrate ... the absence of any genuine issue of fact as to a determinative
issue,” at which point the burden shifts to the non-movant to “come forward
with contrary evidence” showing an issue for the trier of fact. Id. at 761-62
(internal quotation marks and substitution omitted). And “[a]lthough the non-
moving party has the burden on appeal of persuading us that the grant of
summary judgment was erroneous, we carefully assess the trial court’s decision
to ensure that [s]he was not improperly denied h[er] day in court.” McSwane v.
Court of Appeals of Indiana | Memorandum Decision 45A05-1602-CT-328 | February 24, 2017 Page 8 of 15
Bloomington Hosp. & Healthcare Sys., 916 N.E.2d 906, 909-10 (Ind. 2009)
(internal quotation marks omitted).
[14] The sole issue before us is whether the Release signed by Dr. Manhas applies to
the Defendants. A release, as with any contract, should be interpreted
according to the standard rules of contract law with the parties’ intentions
regarding the purpose of the document governing. Stemm v. Estate of Dunlap,
717 N.E.2d 971, 975 (Ind. Ct. App. 1999) (citing Huffman v. Monroe Cty. Cmty.
Sch. Corp., 588 N.E.2d 1264, 1266-67) (Ind. 1992)). The interpretation of the
language of a release presents a question of law and is therefore appropriate for
summary judgment proceedings. See TW Gen. Contracting Servs., Inc. v. First
Farmers Bank & Trust, 904 N.E.2d 1285, 1287-88 (Ind. Ct. App. 2009).
When construing the meaning of a contract, our primary task is
to determine and effectuate the intent of the parties. First, we
must determine whether the language of the contract is
ambiguous. The unambiguous language of a contract is
conclusive upon the parties to the contract and upon the courts.
If the language of the instrument is unambiguous, the parties’
intent will be determined from the four corners of the contract.
If, on the other hand, a contract is ambiguous, its meaning must
be determined by examining extrinsic evidence and its
construction is a matter for the fact-finder. When interpreting a
written contract, we attempt to determine the intent of the parties
at the time the contract was made. We do this by examining the
language used in the instrument to express their rights and duties.
We read the contract as a whole and will attempt to construe the
contractual language so as not to render any words, phrases, or
terms ineffective or meaningless.
Court of Appeals of Indiana | Memorandum Decision 45A05-1602-CT-328 | February 24, 2017 Page 9 of 15
T-3 Martinsville, LLC v. U.S. Holding, LLC, 911 N.E.2d 100, 111 (Ind. Ct. App.
2009), clarified on reh’g, 916 N.E.2d 205, trans. denied (citation omitted).
[15] Here, we note that the Defendants were not parties to the Authorization Form.
They seek the protection afforded by the Release as third-party beneficiaries.
Generally, only parties to a contract or those in privity with the parties have
rights under the contract. OEC-Diasonics, Inc. v. Major, 674 N.E.2d 1312, 1314-
1315 (Ind. 1996). However,
[o]ne not a party to an agreement may nonetheless enforce it by
demonstrating that the parties intended to protect him under the
agreement by the imposition of a duty in his favor. To be
enforceable, it must clearly appear that it was the purpose or a
purpose of the contract to impose an obligation on one of the
contracting parties in favor of the third party. It is not enough
that performance of the contract would be of benefit to the third
party. It must appear that it was the intention of one of the
parties to require performance of some part of it in favor of such
third party and for his benefit, and that the other party to the
agreement intended to assume the obligation thus imposed.
Id. at 1315 (internal citation omitted). The intent of the contracting parties to
bestow rights upon a third party must affirmatively appear from the language of
the instrument when properly interpreted and construed. Id. However, it is not
necessary that the intent to benefit a third party be demonstrated any more
clearly than the parties’ intent regarding any other terms of the contract. Id.
[16] Dr. Manhas argues that when reading the Authorization Form as a whole, it is
clear that Platinum “drafted a broad document to protect itself from liability,
Court of Appeals of Indiana | Memorandum Decision 45A05-1602-CT-328 | February 24, 2017 Page 10 of 15
and that the words ‘all others involved’ [in the Release] are used as a catch-all
phrase to protect [Platinum],” not former employers. Appellant’s Brief at 17.
She points out that the Authorization Form defined Platinum as the
“Employer” and thereafter limited liability for Platinum’s “current and/or
former officers, directors and employees, its authorized agents and
representatives and all others involved in this background investigation.”
Appellant’s Appendix Volume 3 at 86. Because there is no comma separating “all
others involved,” Dr. Manhas maintains that such phrase is prefaced by the
phrase “[Platinum’s] authorized agents and representatives.” Id. In other
words, Dr. Manhas argues that the language used clearly evinces an intent that
the Release does not extend to the Defendants. At the very least, Dr. Manhas
argues that there is an ambiguity with regard to who falls within the scope of
the Release such that summary judgment was improper.
[17] Although finding that the language of the Release was “explicit and
unambiguous,” the trial court did not interpret such provision the same as Dr.
Manhas. Appellant’s Appendix Volume 2 at 32. Rather, the trial court sided with
the Defendants and concluded that the language of the Release clearly provided
that the Defendants were released of all liability for the responses provided on
the Evaluation Form, regardless of the accuracy thereof. In so concluding, the
trial court found “particularly instructive” this court’s decision in Eitler v. St.
Joseph Reg’l Med. Ctr. South-Bend Campus, Inc., 789 N.E.2d 497 (Ind. Ct. App.
2003), trans. denied. Appellant’s Appendix Volume 2 at 31.
Court of Appeals of Indiana | Memorandum Decision 45A05-1602-CT-328 | February 24, 2017 Page 11 of 15
[18] In Eitler, a nurse sought employment with a new healthcare agency. As part of
her application, she was required to sign and then send to her former employer
a Confidential Reference Check Report that requested an evaluation of the
nurse as “above average,” “average,” or “below average” in a number of
different categories and indication of whether the nurse would be rehired. The
form contained an authorization/release indicating that the nurse “authorize[d]
the addressed individual [her former supervisor] . . . to furnish an employment
reference (verification/evaluation) to [prospective employer]” and that she
“release[d] both parties from any and all liability for damages in the furnishing
and receiving of this information.” Eitler, 789 N.E.2d at 499 (emphasis
supplied). After the nurse received a negative review, she filed suit against her
former employer and supervisor claiming defamation and a violation of the
blacklisting statute. This court affirmed the trial court’s grant of summary
judgment in favor of the former employer and supervisor, concluding that the
nurse’s claims were barred by the “explicit and unambiguous” language of the
release. Id. at 501.
[19] Dr. Manhas asserts that the trial court’s reliance on Eitler is misplaced in that
Eitler is wholly distinguishable from this case. We agree. In Eitler, the release
provision specifically identified and named the former employer and the
prospective employer and expressly released “both parties” – a clear reference
to those named—from any liability arising out of information exchanged
between the named parties. Here, on the other hand, the Release provision
does not explicitly identify any of the Defendants. Indeed, the Authorization
Court of Appeals of Indiana | Memorandum Decision 45A05-1602-CT-328 | February 24, 2017 Page 12 of 15
Form identifies only Dr. Manhas and Platinum and the Release explicitly
applies to Platinum’s “corporate affiliates, its current and/or former officers,
directors and employees, its authorized agents and representatives and all others
involved in this background investigation.” Appellant’s Appendix Volume 3 at 86
(emphasis supplied).
[20] We now turn to interpretation of the Release at issue in this case. “To get at the
thought or meaning expressed in a statute, a contract, or a constitution, the first
resort, in all cases, is to the natural signification of the words, in the order of
grammatical arrangement in which the framers of the instrument have placed
them.” Lake Cnty. v. Rollins, 130 U.S. 662, 670, 9 S. Ct. 651, 32 L. Ed. 1060
(1889). See also, Hamilton Cnty. Dep’t of Pub. Welfare v. Smith, 567 N.E.2d 165,
169 (Ind. Ct. App. 1991) (“In addition, where the meaning of a particular
clause or phrase is in doubt, the court should examine the grammatical
structure of the clause in order to ascertain its meaning.”). FLM, LLC v.
Cincinnati Ins. Co., 973 N.E.2d 1167, 1176 (Ind. Ct. App. 2012). “As a matter of
strict grammatical construction, the descriptive words in a phrase should, in the
absence of punctuation, be referred to their nearest antecedent . . . .” First Nat’l
Bank of Peoria v. Farmers’ & Merchants’ Nat’l Bank of Wabash, 171 Ind. 323, 86
N.E. 417, 423 (1908).
[21] Here, the “all others involved” language is not separated by commas and is
prefaced by “authorized agents and representatives” of Platinum. Giving full
effect to its grammatical structure, the catch-all phrase refers to “all others
involved” with Platinum’s authorized agents and representatives. Further,
Court of Appeals of Indiana | Memorandum Decision 45A05-1602-CT-328 | February 24, 2017 Page 13 of 15
there is no language in the Authorization Form or the Release from which we
can decipher any intent to extend the protection of the Release to third parties,
i.e., former employers. A plain reading of the Authorization Form as well as
the Release contained therein reveals that Platinum cast a wide net to relieve
itself of any liability and clearly evinces an intent that the Release does not
extend to the Defendants.
[22] FHC and Dr. Majmudar’s2 argument to the contrary is disingenuous, if not
misleading. In arguing that the Release extends to them through its use of the
phrase “all others involved,” FHC and Dr. Majmudar misrepresent the
evidence in the record. Specifically, FHC and Dr. Majmudar assert that
“[p]ursuant to the Release, Dr. Manhas ‘released [Platinum], its corporate
affiliates, its current and/or former officers, directors and employees, its
authorized agents and representatives[.]’” Brief of FHC and Dr. Majmudar at 30
(emphasis and alterations in original). They then continue, stating that “Dr.
Manhas also ‘released . . . all others involved in this background
investigation[.]” Id. (emphasis and alterations in original). As set forth above,
these two parts of the Release are not separate and independent clauses as
suggested by FHC and Dr. Majmudar.
[23] As we noted, the phrase “all others involved in this background investigation”
is not set off by commas and is prefaced by reference to Platinum’s “authorized
2
FHC and Dr. Majmudar filed a joint brief. Hammond Clinic filed a separate brief, albeit incorporating
many of FHC and Dr. Majmudar’s arguments.
Court of Appeals of Indiana | Memorandum Decision 45A05-1602-CT-328 | February 24, 2017 Page 14 of 15
agents and representatives.” When read in context, it becomes evident that the
general, catch-all phrase “all others involved” is directed at Platinum, not
former employers as third-party beneficiaries. In sum, we find the language of
the Release to be unambiguous. We, however, interpret the language
differently than that urged by the Defendants.
[24] Having found the Authorization Form, and more specifically, the language of
the Release, to be unambiguous, we need only look within the four corners of
the document. The intent as expressed therein is clear—the Defendants, i.e.,
third-party beneficiaries, do not fall within the scope of the Release. 3 Summary
judgment in favor of the Defendants is reversed, and this case is remanded to
the trial court for further proceedings.
[25] Judgment reversed and remanded.
[26] Riley, J. and Crone, J., concur.
3
With regard to public policy considerations discussed by the parties, we agree that free flow of information
is critical. Equally as critical, however, is that the information be accurate.
Court of Appeals of Indiana | Memorandum Decision 45A05-1602-CT-328 | February 24, 2017 Page 15 of 15