Joseph F. Uddo, Jr, M.D. Versus Jefferson Parish Hospital Service District No.2 D/B/A East Jefferson General Hospital ( 2023 )

JOSEPH F. UDDO, JR, M.D. NO. 22-CA-403
VERSUS FIFTH CIRCUIT
JEFFERSON PARISH HOSPITAL SERVICE COURT OF APPEAL
DISTRICT NO.2 D/B/A EAST JEFFERSON
GENERAL HOSPITAL STATE OF LOUISIANA
ON APPEAL FROM THE TWENTY-FOURTH JUDICIAL DISTRICT COURT
PARISH OF JEFFERSON, STATE OF LOUISIANA
NO. 790-224, DIVISION "E"
HONORABLE FRANK A. BRINDISI, JUDGE PRESIDING
April 12, 2023
ROBERT A. CHAISSON
JUDGE
Panel composed of Judges Fredericka Homberg Wicker,
Robert A. Chaisson, and John J. Molaison, Jr.
AFFIRMED
RAC
FHW
JJM
COUNSEL FOR PLAINTIFF/APPELLEE,
JOSEPH F. UDDO, JR, M.D.
Bobby Ray T. Malbrough
COUNSEL FOR DEFENDANT/APPELLANT,
JEFFERSON PARISH HOSPITAL SERVICE DISTRICT NO.2 D/B/A EAST
JEFFERSON GENERAL HOSPITAL
Daniel E. Buras, Jr.
Matthew A. Sherman
Patrick R. Follette
Nicholas R. Varisco
CHAISSON, J.
In this case concerning an alleged breach of contract, Jefferson Parish
Hospital Service District No. 2, d/b/a East Jefferson General Hospital (“EJGH”),
appeals a June 3, 2022 judgment of the trial court in favor of Dr. Joseph F. Uddo,
Jr., in the amount of $453,375.00, together with legal interest from the date of
judicial demand. The judgment also dismisses EJGH’s reconventional demand
with prejudice. For the following reasons, we affirm the judgment of the trial
court.
BACKGROUND
On December 12, 2013, EJGH, through its then President and Chief
Executive Officer Dr. Mark Peters, and Dr. Uddo entered into two written
agreements, the Emergency Preparedness On-Call & Management Services
Agreement and the Clinical Advisor to Chief Executive Officer Agreement.
Pursuant to the Emergency Preparedness Agreement, Dr. Uddo provided
day-to-day administrative and management services related to emergency
preparedness, support for EJGH’s response to disaster, and on-call coverage
services. The management services were limited to no more than 65 hours a month
unless otherwise approved, for which Dr. Uddo would be paid $225.00 per hour.1
The initial term for the Emergency Preparedness Agreement ran from
December 15, 2013, to December 14, 2015, with subsequent annual renewals.
Following the initial term, each party was allowed to terminate the Agreement at
any time, with or without cause, upon 180 days written notice. On June 28, 2016,
the parties executed an Amendment to this Agreement. Under the Amended
agreement, the initial term was to run to June 30, 2019, with subsequent automatic
1
The Agreement sets forth separate compensation for the on-call services provided at a rate of $1,000.00
per seven day week, pro-rated for each day Dr. Uddo was on call and available to perform the services
required. Dr. Uddo does not seek recovery for damages under this portion of the agreement, though it is
subject to EJGH’s demand in reconvention.
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annual renewals. Following June 30, 2019, either party could terminate the
Agreement at any time, with or without cause, upon 180 days written notice.
Sometime in April 2017, Dr. Uddo was advised that the new CEO of EJGH,
Mr. Gerald Parton, had concerns regarding the agreements entered into by Dr.
Peters on behalf of EJGH. On June 5, 2017, Dr. Uddo and EJGH decided to
suspend the agreements to give both parties an opportunity to address concerns
about them. On October 18, 2017, EJGH sent Dr. Uddo a letter terminating both
agreements.
On December 7, 2018, Dr. Uddo filed a Petition for Damages for Breach of
Contracts against EJGH seeking recovery for the loss of income for payment of
services under the Emergency Preparedness Agreement and Clinical Advisor
Agreement.2
EJGH filed an answer to the petition raising numerous affirmative defenses,
and also a demand in reconvention alleging that Dr. Uddo breached the contractual
agreements by performing work in excess of the hours permitted without prior
approval from the CEO.
Following a trial on the merits, the trial court rendered judgment in favor of
Dr. Uddo. EJGH’s timely appeal followed.
On appeal, EJGH raises as legal error: the trial court’s interpretation of the
Emergency Preparedness Agreement; the trial court’s finding that the Emergency
Preparedness Agreement was valid under Louisiana public policy or under EJGH’s
policies and procedures; the trial court’s finding that Dr. Uddo was not legally
estopped from seeking future damages under the Emergency Preparedness
Agreement despite the June 5, 2017 agreement to suspend the Agreement; and, the
trial court’s granting of Dr. Uddo’s breach of contract claim pursuant to La. C.C.
2
Although Dr. Uddo sought damages for loss of income pursuant to the Clinical Advisor Agreement, he
subsequently voluntarily dismissed those claims prior to trial.
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art. 2749 even though that statute was not pled or argued by Dr. Uddo. EJGH also
argues that the trial court factually erred when it failed to find that EJGH properly
terminated the Emergency Preparedness Agreement for cause, and in dismissing
EJGH’s reconventional demand.
DISCUSSION
EJGH assigns as error multiple legal determinations by the trial court,
including the interpretation of the Emergency Preparedness Agreement. Appellate
review regarding questions of law is simply a review of whether the trial court was
legally correct or incorrect. Anderson v. Dean, 22-233 (La. App. 5 Cir. 7/25/22),
346 So.3d 356, 364. On legal issues, the appellate court gives no special weight to
the findings of the trial court, but exercises its constitutional duty to review
questions of law de novo and renders judgment on the record. Id. With regard to
the assigned errors of fact, factual determinations are reviewed by the appellate
court under the manifest error or clearly wrong standard of review. Quintanilla v.
Whitaker, 21-160 (La. App. 5 Cir. 12/1/21), 334 So.3d 892, 893.
Duties Under the Emergency Preparedness Agreement
EJGH first argues that the trial court incorrectly interpreted the Emergency
Preparedness Agreement. More specifically, EJGH argues that the trial court erred
in interpreting Section 2.1 of the Emergency Preparedness Agreement to mean that
EJGH and/or its CEO did not have the authority to alter or reduce Dr. Uddo’s
duties listed in the attached Exhibit “A” and therefore EJGH was not in breach of
the contracting agreement when it zeroed out those duties and terminated the
contract in October of 2017.
Interpretation of a contract is the determination of the common intent of the
parties. La. C.C. art. 2045. Each provision in a contract must be interpreted in
light of other provisions so that each is given the meaning suggested by the
contract as a whole. La. C.C. art. 2050. The words of a contract must be given
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their generally prevailing meaning. La. C.C. art. 2047. When the words of the
contract are clear, unambiguous, and lead to no absurd consequence, no further
interpretation may be made or consideration of extrinsic evidence be had in search
of the parties’ intent, and the contract must be enforced as written. All Am.
Healthcare, L.L.C. v. Dichiara, 18-432 (La. App. 5 Cir. 12/27/18), 263 So.3d 922,
928; La. C.C. art. 2046.
The relevant language of the Emergency Preparedness Agreement states the
following:
2. PHYSICIAN’s Responsibilities, Duties, and Qualifications.
2.1 Management Services. HOSPITAL hereby appoints
PHYSICIAN, and PHYSICIAN hereby accepts such appointment, to
provide certain day-to-day administrative and management services
related to Emergency Preparedness for and on behalf of HOSPITAL
assigned from time to time by the CEP which may include specifically
delineated and defined duties within Exhibit A, attached hereto and
made a part of this Agreement.
…
EXHIBIT “A”
Emergency Preparedness Director Duties
HOSPITAL hereby appoints PHYSICIAN, and PHYSICIAN
hereby accepts such appointment, to provide certain day-to-day
administrative and management services related to Emergency
Preparedness for and on behalf of HOSPITAL as are specifically
delineated below … and as may be modified from time to time upon
mutual agreement of the HOSPITAL and PHYSICIAN, and to assist
the HOSPITAL in making certain operational improvements with
respect to the HOSPITAL’s continuing state of preparedness in
advance of and during catastrophic events in order to attain the
preparedness goals of the HOSPITAL and its medical staff as required
by industry practice and state and federal law.
…3
3
Exhibit “A” also enumerates ten specific duties to be performed under “Management Services”
including: acting as EJGH’s Medical Director of Emergency Preparedness, assuming the primary
leadership role in maintaining the hospital’s emergency preparedness level consistent with State and
Federal law and industry standards; checking daily status of weather reports, infectious disease outbreaks,
and other threats that may affect the hospital’s disaster response; acting as liaison with the Jefferson
Parish Sheriff’s Office emergency clinic and regional 9-1-1 providers; coordinating medical staff issues
relating to EMS; and serving on the Hospital’s Emergency Preparedness Committee and Incident
Command Team.
22-CA-403 4
EJGH argues that the language of section 2.1 requires the CEO to
affirmatively task the physician with day-to-day duties and allows the CEO the
discretion to unilaterally change and terminate those duties. In support of this
interpretation, EJGH cites the testimony of Mr. Jim Hritz, the in-house counsel for
EJGH at the time the contract was drafted. Such testimony is extrinsic evidence of
the parties’ intent that is only appropriate where the language of the contract is
unclear or ambiguous, which EJGH has not argued.
Upon de novo review of the contract, we find no ambiguity in the language
of Section 2.1 or Exhibit “A,” which is expressly incorporated in and made part of
the Emergency Preparedness Agreement. Exhibit “A” sets forth clear duties to be
performed by the physician, and more importantly, provides that those duties “may
be modified from time to time upon mutual agreement of the HOSPITAL and
PHYSICIAN.” This language is clear and unambiguous, that any alteration of the
duties to be performed by the physician is to be by mutual agreement. The
interpretation proposed by EJGH disregards this clear language and attempts to
create ambiguity where there is none. We find no error in the trial court’s
interpretation of Section 2.1 of the Emergency Preparedness Agreement.
Validity of Emergency Preparedness Agreement Under Louisiana Law
We next considered EJGH’s argument that the trial court legally erred in
finding the Emergency Preparedness Agreement was valid under Louisiana public
policy or under EJGH’s Policies and Procedures. Specifically, EJGH argues that
the Emergency Preparedness Agreement should not be interpreted as providing a
fixed-term through June 30, 2019, because under Louisiana law, a public entity has
no authority to fix the term of a services contract with any appointee, employee, or
independent contractor.
In support of this argument, EJGH cites no statute or code, but rather cites
the cases of Potts v. Morehouse Parish School Board, 177 La. 1103, 1106 (1933);
22-CA-403 5
Garnier v. Louisiana Milk Commission, 200 La. 594, 602 (1942); Hartwig Moss
Insurance Agency v. Board of Commissioners, 206 La. 395, 397-403 (1944); and
Shows v. Morehouse General Hospital, 463 So.2d 884 (La. 2nd Cir. 1985). We
find these cases to be factually distinguishable from the suit before us. Potts
concerned the authority of a school board to appoint a school superintendent. 177
La. at 1105. Garnier concerned an injunction to prevent the removal of a legally
appointed secretary of the Louisiana Milk Commission. 200 La. at 598. Hartwig
concerned the authority of the Board of Commissioners of the Port of New Orleans
to employ and appoint an exclusive insurance agent. 206 La. at 397. Shows, the
only case cited by EJGH that involves a hospital, concerned the authority of a
board of commissioners operating a public hospital to fire the full-time director of
the hospital without providing two years notice or two years salary per the terms of
their agreement. 463 So.2d at 885. We do not find these cases, which have clearly
distinguishable facts from the case before us, applicable or persuasive in this
matter involving the part-time employment of an independent contractor. We find
this argument to be without merit.
Validity of Emergency Preparedness Agreement Under EJGH Policies
EJGH next argues that the contract was invalid because the former CEO and
President, Dr. Peters, did not have the authority to enter into such an agreement
under EJGH’s Policies and Procedures, specifically Section III of the EJGH
Principal Purchasing Policy, which requires contracts for services like the
Emergency Preparedness Agreement and the Clinical Advisor Agreement to be
approved by the Board of Directors if the fair market value of those services is
over $100,000.00.
The parties introduced into evidence a copy of East Jefferson’s Principal
Purchasing Policy (No. MM-4) Section III (F), which provides:
22-CA-403 6
The President and CEO must review and may approve and sign
requisitions for:
1. Each Purchased services that cost up to $500,000.00 on an annual
basis.
2. Each Professional/Clinical and Consulting Services that cost up to
$100,000.00 on an annual basis.
…
The policy also provides that any acquisitions in excess of these specified limits
may be approved by the Board of Directors after receiving the recommendation of
the President.
This argument raised by EJGH is in the nature of an affirmative defense. A
party defendant who asserts an affirmative defense bears the burden of proof
thereof. Fin & Feather, LLC v. Plaquemines Par. Gov’t, 16-0256 (La. App. 4 Cir.
9/28/16), 202 So.3d 1028, 1034; La. C.C.P. art. 1005. Specifically, EJGH argues
that the Emergency Preparedness Agreement is relatively null because Dr. Peters
lacked authority to bind EJGH to the Agreement because the value of the contract
exceeded the $100,000.00 limit for professional services contracts set forth in the
above Purchasing Policy.
As the party bearing the burden of proof, EJGH was required to introduce
evidence establishing the nature of the contract, the value of the contract, and the
absence of board approval for the contract. Very little evidence was introduced
regarding these elements, and with regard to the last element in particular, whether
the Board knew of and/or approved the contract, the only evidence introduced is
the largely hearsay and self-serving testimony of general counsel to EJGH, Mr.
David Sherman, who testified that he was present at an April 2017 meeting of the
Board when the Board purportedly first learned of the existence of the contracts
with Dr. Uddo. In contrast, Mr. Parton, the CEO who began working in May of
2017 following Dr. Peter’s departure, testified that the Board was very committed
22-CA-403 7
to the hospital and very involved in overseeing hospital operations. Dr. Uddo
testified that he made disaster preparedness presentations to the Board of Directors,
and also that a member of the Board of Directors that he worked with often,
Michael McMinn, was aware of the contracts he signed with Dr. Peters back in
2013. No members of the Board testified at trial, and no other extrinsic evidence
such as Board meeting minutes were introduced. Upon de novo review of the
evidence, we do not find the Emergency Preparedness Agreement relatively null
because EJGH has failed to show that Dr. Peter’s lacked the authority to enter into
the agreement.
Estoppel
EJGH next argues that the trial court legally erred in finding that Dr. Uddo
was not legally estopped from seeking future damages under the Emergency
Preparedness Agreement despite his agreement with EJGH on June 5, 2017, to
suspend the Agreement.
Estoppel is not favored under Louisiana law and may only be applied as a
doctrine of last resort. Dye v. Ipik Door Co., Inc., 570 So.2d 477, 479 (La. App. 5
Cir. 11/14/90). The party invoking estoppel bears the burden of proving the facts
on which it is founded. Gunderson v. F.A. Richard & Associates, 09-1498 (La.
App. 3 Cir. 6/30/10), 44 So.3d 779, 789. Equitable considerations and estoppel
cannot prevail in a conflict with the positive law. Id. The applicable positive law
in this case may be found in La. C.C. art. 1967.
Pursuant to La. C.C. art. 1967, a party may be obligated by a promise when
he knew or should have known that the promise would induce the other party to
rely on it to his detriment and the other party was reasonable in so relying. This is
so called detrimental reliance or promissory estoppel. In order to prove a claim of
detrimental reliance, EJGH had to prove: (1) a representation by conduct or word,
(2) justifiable reliance, and (3) a change in position to one’s detriment because of
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the reliance. Teen Town Prods., L.L.C. v. Scurlock, 15-454 (La. App. 5 Cir.
12/23/15), 182 So.3d 1208, 1217. There is no evidence in the record indicating
that EJGH changed its position to its detriment because of the June 5, 2017
agreement. Prior to this agreement, EJGH claimed it was going to send Dr. Uddo a
termination notice. A few months later, EJGH sent him a termination letter
anyway. There was no detriment to EJGH. We find this assignment of error to be
without merit.
Breach of Contract Under La. C.C. Art. 2749
EJGH argues that the trial court legally erred in granting Dr. Uddo’s breach
of contract claim pursuant to La. C.C. art. 2749 even though that statute was not
pled or argued by Dr. Uddo. Appeals are taken from the judgment, not written
reasons for judgment. La. C.C.P. art. 1918. The trial court’s reliance on La. C.C.
art. 2749 is harmless error in this instance. Dr. Uddo’s remedy may be found
under the general rules applicable to conventional obligations, including La. C.C.
art. 1994, which states that an obligor is liable for the damages caused by his
failure to perform a conventional obligation. This assignment of error is without
merit.
Termination for Cause
EJGH argues that the trial court manifestly erred when it failed to find that it
terminated Dr. Uddo for cause under Section 5.2(d) of the Agreement. That
portion of the Emergency Preparedness Agreement provides “… [the] Agreement
may be immediately terminated by HOSPITAL upon the occurrence of …
PHYSICIAN’s material breach of any of its obligations under this Agreement. …”
EJGH argues that Dr. Uddo materially breached the Agreement by working in
excess of 65 hours per month without prior approval of EJGH and for failing to
turn in his timesheets in a timely manner.
22-CA-403 9
Section 3.2 of the Agreement, “Billing and Payment for Management
Services” provides:
As full compensation from HOSPITAL for the Management Services
provided for in Exhibit “A” herein PHYSICIAN shall be compensated
at the rate of $225 per hour. PHYSICIAN may work approximately
but not to exceed a maximum of 65 hours per month performing such
Management Services, unless otherwise approved or requested by the
HOSPITAL or the CEO. This maximum monthly average will not
include worked time at the HOSPITAL performed by PHYSICIAN
during a HOSPITAL declared disaster, which documented worked
time shall be paid at the above hourly rate. PHYSICIAN shall
separately document all such services on and PHYSICIAN will submit
monthly time logs on the Log approved by the HOSPITAL attached
hereto as Exhibit “B” or as changed from time to time by HOSPITAL
reflecting actual time spent conducing Management Services by the
10th day of the following month. Payment of the amount supported by
the monthly time logs shall be made no later than the 20th day of the
month in which the approved time logs are timely submitted.
PHYSICIAN understands and agrees that payment will be made only
for those services performed hereunder for and on behalf of
HOSPITAL and that are properly and adequately documented and
timely submitted by physician.
This contractual language does not specify when or how the Hospital or CEO was
to approve hours worked in excess of the 65 hours specified. There is no
requirement that the approval be in writing, nor that it be given before the excess
hours were worked rather than upon receipt of the timesheet prior to payment.
The evidence concerning the approvals received by Dr. Uddo is mixed. Dr.
Uddo testified that he received approval, either written or verbal, for all of the
work he performed, even for those months were he performed management
services in excess of 65 hours per week. The termination letter makes no reference
to billing or termination for cause. There are handwritten approvals from Dr.
Peters for some, but not all, of the months in which the hours exceeded 65. The
forensic accountant who testified for EJGH, Dennis Tizzard, testified that he did
not know what kind of approval was required under the contract. With regard to
the timing of the submission of Dr. Uddo’s logs, the evidence is also mixed. Dr.
Uddo testified that there were some months that he did not turn in the log before
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the 10th day of the month; however, there are also emails in the record indicating a
renegotiation of the format of the logs sometime in July of 2014. Notes on the log
sheets themselves indicate that in some instances they may have been submitted
timely but then resubmitted again at a later date for unknown reasons.
It is well settled that a court of appeal may not set aside a trial court’s
findings of fact in the absence of manifest error, or unless it is clearly wrong, and
where there is a conflict in the testimony, reasonable evaluations of credibility and
reasonable inferences of fact should not be disturbed upon review. Glob. Constr.
& Equip., L.L.C. v. Rathborne Properties, L.L.C., 18-169 (La. App. 5 Cir.
5/29/19), 274 So.3d 837, 841, writ denied, 19-1096 (La. 10/8/19), 280 So.3d 172.
Where there are two permissible views of the evidence, the factfinder’s choice
between them cannot be manifestly erroneous or clearly wrong. Id. From the
evidence presented, we do not find that the trial court manifestly erred in
determining that Dr. Uddo was not in material breach of the Emergency
Preparedness Agreement.
Dismissal of Reconventional Demands
Under this same rationale, we find no error in the trial court’s dismissal of
EJGH’s demands in reconvention. Based on the evidence presented, a factfinder
could reasonably conclude that Dr. Uddo received either verbal or written approval
for all of the hours he worked under the Agreements and that he did not materially
breach the agreements. Thus, the final assignment of error is without merit.
CONCLUSION
Upon de novo review of the record, we find no manifest or legal error in the
judgment of the trial court. EJGH breached its agreement with Dr. Uddo when it
terminated the Agreement without cause and without the 180 day written notice
required. The Agreement is not null and void as contrary to public policy or under
the Purchasing Policy. Dr. Uddo was not estopped from bringing a suit to recover
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damages for EJGH’s breach of the Agreement. EJGH has failed to show Dr. Uddo
performed hours in excess of the 65 hour limit without the approval of Dr. Peters
or that Dr. Uddo was otherwise in material breach of the Agreements. The
judgment of the trial court is affirmed.
AFFIRMED
22-CA-403 12
SUSAN M. CHEHARDY CURTIS B. PURSELL
CHIEF JUDGE CLERK OF COURT
SUSAN S. BUCHHOLZ
FREDERICKA H. WICKER
CHIEF DEPUTY CLERK
JUDE G. GRAVOIS
MARC E. JOHNSON
ROBERT A. CHAISSON LINDA M. WISEMAN
STEPHEN J. WINDHORST
FIRST DEPUTY CLERK
JOHN J. MOLAISON, JR.
CORNELIUS E. REGAN, PRO TEM FIFTH CIRCUIT
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I CERTIFY THAT A COPY OF THE OPINION IN THE BELOW-NUMBERED MATTER HAS BEEN DELIVERED
IN ACCORDANCE WITH UNIFORM RULES - COURT OF APPEAL, RULE 2-16.4 AND 2-16.5 THIS DAY
APRIL 12, 2023 TO THE TRIAL JUDGE, CLERK OF COURT, COUNSEL OF RECORD AND ALL PARTIES NOT
REPRESENTED BY COUNSEL, AS LISTED BELOW:
22-CA-403
E-NOTIFIED
24TH JUDICIAL DISTRICT COURT (CLERK)
HONORABLE FRANK A. BRINDISI (DISTRICT JUDGE)
BOBBY RAY T. MALBROUGH (APPELLEE) MATTHEW A. SHERMAN (APPELLANT) PATRICK R. FOLLETTE (APPELLANT)
MAILED
DANIEL E. BURAS, JR. (APPELLANT)
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