Campbell v. Emory Clinic , 166 F.3d 1157 ( 1999 )

United States Court of Appeals,
Eleventh Circuit.
Nos. 97-8290, 97-8291.
David G. CAMPBELL, M.D., Plaintiff-Appellant,
v.
EMORY CLINIC, A Partnership, Emory University, H.D. Cavanagh, M.D., Charles R. Hatcher,
M.D., Defendants-Appellees.
J. Allen GAMMON, M.D., Plaintiff-Counter-Defendant, Appellant,
v.
EMORY CLINIC, A Partnership, Emory University, Charles R. Hatcher, M.D., Defendants-
Appellees,
H.D. Cavanagh, M.D., Defendant-Counter-Claimant, Appellee.
Feb. 4, 1999.
Appeals from the United States District Court for the Northern District of Georgia. (Nos. 1:90-CV-
1403-HTW, 1:91-CV-3030-HTW), Horace T. Ward, Judge.
Before TJOFLAT, Circuit Judge, and GODBOLD and HILL, Senior Circuit Judges.
HILL, Senior Circuit Judge:
For disposition, we consolidate these two appeals.1 The allegations upon which both
complaints were based are virtually identical. They both have been subject to years of protracted
litigation. Upon careful review of the record, we find only two issues remaining. One is procedural;
one is substantive. First, the district court did not abuse its discretion in denying motions filed by
1
Campbell and Gammon filed separate complaints in the district court. They were
represented by the same counsel. Although the cases contained common questions of law and
fact, they were not consolidated by the district court until November 22, 1996, upon defendants'
motion. Campbell and Gammon dismissed all remaining claims on March 20, 1997. At oral
argument the cases were argued together.
appellants David G. Campbell, M.D. and J. Allen Gammon, M.D. for leave to amend their
complaints to assert a breach of fiduciary duty claim against the individual appellees, H.D.
Cavanagh, M.D. and Charles R. Hatcher, M.D. Second, as a substantive matter, the district court did
not err in granting summary judgment in favor of the appellees, individual or otherwise, on
appellants' claims for tortious interference with business relations and conspiracy to tortiously
interfere. Based upon the following, we affirm the judgments of the district court.
I. PROCEDURAL BACKGROUND
Campbell filed his complaint in 1990. Gammon filed in 1991. Both plaintiffs alleged,
among other things, that certain of the defendants possessed questionable medical abilities and used
fraudulent billing practices for medical procedures. When plaintiffs "blew the whistle," they
alleged, the defendants breached various legal duties to them to cover up improper actions.
Plaintiffs each alleged numerous federal and state claims.2 While the complaints contained a claim
for breach of the duty of good faith against Emory Clinic, they did not contain separate claims for
breach of fiduciary duty against Hatcher and Cavanagh, individual defendants, and partners in the
Emory Clinic.3
Years of litigation followed. Then, in October 1994 (in the Campbell case), and March 1995
2
These included claims against all four defendants for tortious interference with business
relations and conspiracy to tortiously interfere; claims against Emory University alone for
breach of contract and breach of the duty of good faith; claims against Emory Clinic alone for
breach of the partnership agreement and breach of the duty of good faith. Additional antitrust
and other claims have been separately disposed of on appeal (Nos. 96-8543 and 96-8544) and are
not part of this appeal.
3
It is interesting to note that, unlike the breach of good faith counts, the tortious interference
counts are styled separately, in the name of each defendant, individual or otherwise.
(in the Gammon case), the appellees moved for summary judgment.4 In support of its motions, the
appellees argued that undisputed facts demonstrated that appellants' claims were based upon
self-serving conclusory allegations or hearsay, or that the conduct alleged was privileged. On July
27, 1995 (Campbell ), and August 22, 1995 (Gammon ), the district court granted the appellees'
motions for summary judgment.
In response, Campbell (August 1995) and Gammon (September 1995) each moved for partial
reconsideration of the summary judgment orders, alleging for the first time according to the
defendants, a breach of fiduciary duty claim against Hatcher and Cavanagh. Defendants claim that
plaintiffs recast their breach of good faith claim against the Emory Clinic as a claim for "the tortious
breach of the duty of good faith by the Clinic partners." Plaintiffs asserted that their now
voluminous pleadings contained a breach of fiduciary claim against these individual defendants.
In the procedural confusion that ensued,5 the first reaction of the district court, on September
28, 1995, was to reconsider its orders of July 27 (Campbell ) and August 22 (Gammon ), grant
plaintiffs' motions for partial reconsideration, and find the breach of fiduciary duty claim to be in
the cases. Six months passed. Upon reflection, the district court corrected its own mistake. It found
that neither Gammon (March 21, 1996) nor Campbell (June 6, 1996) had pled a breach of fiduciary
duty claim against the individual defendants and dismissed the claim in both cases. Then, on June
6, 1996, the district court, again on its own motions, reinstated summary judgment for appellees.
Plaintiffs were not deterred. On June 20, 1996, they moved for leave to amend their
complaints to assert claims for breach of fiduciary duty, arguing that these claims "had been part of
4
Summary judgment was sought on numerous claims, including the tortious interference with
business relations and the conspiracy to tortiously interfere claims.
5
The district court admonished counsel for both parties for providing the court with
inconsistent briefs, resulting in inconsistencies between the two cases.
the case" for six months—that is, the six months that passed before the district court corrected its
mistake on its own motion.
In its discretion, on August 26, 1996, the district court denied plaintiffs' motions to amend,
stating that they "ha[d] not brought, and may not bring, a breach of fiduciary duty claim against
defendants Hatcher and/or Cavanagh." This consolidated appeal follows.
II. FACTUAL BACKGROUND6
Campbell and Gammon are physicians specializing in ophthalmology. Campbell was a
tenured associate professor at Emory University Medical School7 and a partner in the appellee
Emory Clinic (Clinic).8 Gammon was an assistant professor on a tenure track at the medical school
and also a partner in the Clinic. Hatcher9 and Cavanagh10 are also faculty members of the medical
school and Clinic partners.
The underlying lawsuits have their origins in 1982 when Campbell and Gammon actively
assumed the role of whistleblowers as to Cavanagh's medical ability. This foreshadowing
culminated in September 1983, when Cavanagh operated on the wrong eye of a patient.11 At a
6
We provide a brief overview of the facts of the underlying lawsuits for the reader's benefit,
although not germane to our discussion of the amendment issue discussed in Part IV.A of this
opinion.
7
Appellee Emory University operates the medical school as a private Atlanta institution.
8
Emory Clinic is affiliated with Emory University.
9
Hatcher was not an ophthalmologist but from 1976 to 1984 was department chairman and
section head of the Cardiothoracic Surgery Section and a Clinic director. In 1984 he became
Emory Clinic's chief financial officer, vice president of health affairs for Emory University and
medical center director.
10
Cavanagh was an ophthalmologist who served as department chairman and section head of
Emory Clinic's ophthalmology section.
11
This case resulted in a substantial settlement. The publicity generated by the case caused
the filing of ten or eleven more malpractice cases.
faculty meeting three days later, Campbell called for a review of the surgery. Gammon seconded
the motion. As a result, the Waring Committee,12 was convened to investigate the surgery and issue
a report. When it did, Campbell and Gammon were not satisfied and continued actively to voice
their concerns. Two years later, another committee, the Tindale Committee,13 was convened to
review Cavanagh's practice.
Ironically, yet allegedly unrelated, on the same day the Tindale Committee issued its report,
Campbell was reprimanded by the Clinic director for repeatedly making and discussing allegations
about Cavanagh's medical abilities with ophthalmologists all over the country, outside the University
family. Campbell resigned and joined the faculty of Dartmouth College and became a member of
its affiliated clinic.
During this same time frame, Gammon's career took a similar tack. Ironically, it was
Cavanagh who began to express concerns about Gammon's ability to achieve tenure based upon the
number and quality of Gammon's publications. For what was to be a two-year term, Gammon
switched to a clinical (versus tenure) track professor with hopes to improve his academic standing.
In addition, Gammon applied for and received two extensive research grants. Gammon thought this
would improve his academic standing. The University thought otherwise. On what it perceived to
be an over-commitment to research, the University undertook to accommodate the research
commitment by decreasing Gammon's clinical practice, moving him to another hospital.14
12
The Waring Committee was composed of tenured Emory Clinic ophthalmologists.
13
The Tindale Committee was a pre-existing professional standards and ethics committee
made up of chairmen and professors from various departments (excepting ophthamology) within
the medical school.
14
Emory University decided that Gammon would have to give up his administrative
appointments as chief of pediatric ophthalmology and chief of ophthalmology at Henrietta
Egleston Hospital, the children's hospital at Emory University. It also decided that Gammon
Gammon asserted that he felt "evicted." He claims these changes were due to his whistle
blowing activities regarding Cavanagh's medical practice. University claims its actions were based
upon legitimate business reasons.
Gammon then requested and received a one-year leave of absence for the second year of his
two-year term. He accepted a job in Saudi Arabia. At the end of the two-year term, the University
did not renew his appointment on the faculty and Gammon was automatically withdrawn from the
Clinic.
III. STANDARD OF REVIEW
We review the denial by the district court of plaintiffs' motions to amend their complaints
under an abuse of discretion standard. Lockett v. General Finance Loan Co. of Downtown, 623 F.2d
1128, 1130 (5th Cir.1980). We review the grants of summary judgment by the district court de
novo. Jaques v. Kendrick, 43 F.3d 628, 630 (11th Cir.1995).
IV. DISCUSSION
A. The Amendment to the Complaint Claims
Count XI of Campbell's amended complaint and Count XII of Gammon's complaint are titled
"Breach of Duty of Good Faith by Defendant Clinic." Cavanagh and Hatcher were not named as
defendants in this count. They did not undertake to answer it. Paragraph 100 of Campbell's
amended complaint (paragraph 115 of Gammon's complaint) reads in full "Defendant Clinic owed
certain duties to Plaintiff, including the duty to act in good faith and duty of fairness. Defendant
Clinic, acting by and through various of its Partners, breached these duties owed to Plaintiff."
(Emphasis added). The next paragraph in each complaint states that "As a direct and proximate
would have to move from the new Emory Eye Center to Crawford Long Hospital, another of the
locations of the department of ophthalmology.
result of the Clinic's breach of duty Plaintiff has suffered actual damages in an amount to be shown
upon the trial of this case." (Emphasis in original). The last paragraph of this count reads:
The actions and conduct of Defendant Clinic herein alleged were intentional, malicious,
intended to injure, and in bad faith, therefore demanding imposition of punitive damages
against Defendant Clinic and entitling Plaintiff to recover his expense of litigation, including
attorneys fees, in such amounts as shall be determined by the jury upon trial of this case.
Nowhere in any of the paragraphs of the counts are mentioned the names of Hatcher or Cavanagh;
neither does the term "fiduciary" appear.
First, appellants argue, apparently invoking the doctrine of notice pleading, that these
individuals, must have been aware of the claims asserted against them and the grounds upon which
they rest, especially in view of the language "acting by and through various of its Partners." See
Fed.R.Civ.P.R. 8(a); Leatherman v. Tarrant County Narcotics Intelligence and Coordination Unit,
507 U.S. 163, 168, 113 S.Ct. 1160, 122 L.Ed.2d 517 (1993). We conclude, however, under the
notice pleading doctrine, that the complaints failed to provide notice to Hatcher, Cavanagh, or the
court, that a claim for breach of fiduciary duty was asserted against these two individuals under
either complaint.15
Next, appellants argue a type of virtual reality, more closely akin to the "Emperor's new
clothes." They seize upon the error made earlier by the district court, and assert that the claims were
"in the case" because they and the court had been proceeding as such for six months, from the Fall
of 1995 to the Spring of 1996. Appellants contend that the court record is virtually littered with
references to these claims in briefs and motions filed by them with the court. See Foster Medical
Corp. Employees' Pension Plan v. Healthco, Inc., 753 F.2d 194, 197 (1st Cir.1985) (where claim
15
See Foster Medical Corp. Employees' Pension Plan v. Healthco, Inc., 753 F.2d 194, 197
(1st Cir.1985); Vidimos, Inc. v. Laser Lab Ltd., 99 F.3d 217, 222 (7th Cir.1996). See also
Plumbers & Steamfitters Local No. 150 v. Vertex Const. Co., 932 F.2d 1443, 1448 (11th
Cir.1991).
was sufficiently pled even though not specifically pled in complaint in light of references in
opposition to summary judgment). They reiterate this "implied litigation" theory by pointing to the
fact that these claims were in the proposed pretrial order and that the district court recognized the
claims to be in the case when it reconsidered and denied summary judgment. We are not
persuaded.16
Third, appellants point out that leave to amend "shall be freely given when justice so
requires," See Fed.R.Civ.P.R. 15(a) and the cases so holding.17 They claim that disallowance of the
amendment elevated technical pleading skills over the substantive merits of their cases and the
district court abused its discretion in denying their motions to amend.
Rule 15(a) gives a district court "extensive discretion" to decide whether or not to allow a
party to amend a complaint. Hargett v. Valley Federal Sav. Bank, 60 F.3d 754, 761 (11th Cir.1995).
This liberal discretion is not abused when the amendment would prejudice the defendant, follows
undue delays, or is futile. Technical Resource Services, Inc. v. Dornier Medical Systems, Inc., 134
F.3d 1458, 1463-64 (11th Cir.1998). Prejudice and undue delay are inherent in an amendment
asserted after the close of discovery and after dispositive motions have been filed, briefed, and
decided. Jameson v. Arrow Co., 75 F.3d 1528, 1534 (11th Cir.1996).
Here, these motions for leave to amend were filed more than one year after discovery had
16
Of course, there would naturally be references to this "claim" during the six months that the
district court erroneously thought it in the cases.
17
Davis v. Piper Aircraft Corp., 615 F.2d 606, 612-14 (4th Cir.1980)(where the rules were
designed to adjudicate actions on their merits, not on technical aspects of pleading); United
States v. Hougham, 364 U.S. 310, 317, 81 S.Ct. 13, 5 L.Ed.2d 8 (1960) (where the pleadings
should facilitate a proper decision on the merits, not be a game of skill where one misstep decide
the outcome); Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962)(where
leave to amend should be "freely given" in the absence of reasons such as undue dely, bad faith
or dilatory motive, repeated failure to cure deficiencies by previous amendment, undue
prejudice, etc.).
ended, after dispositive motions had been filed, and between five-and-six years after the lawsuits
were begun.18 The facts upon which the claims for breach of fiduciary duty against the individual
defendants were based were available at the time the complaints were filed. We conclude the district
court did not abuse its discretion in denying the motions to amend. Amendment at the late date
offered would have been futile, caused undue delay and expense, and resulted in unfair prejudice
to the individual defendants. Id.B. Grant of Summary Judgment on Employment Related Issues
Under our de novo review, we conclude that the merits of this substantive issue have been
thoroughly analyzed by the district court in its orders of July 27, 1995 (Campbell ) and August 22,
1995 (Gammon ), granting summary judgment to appellees on appellants' tortious interference and
conspiracy to tortiously interfere claims; reinstating summary judgment on June 6, 1996; and
denying appellants' motions to amend on August 26, 1996.19
There are no genuine issues of material fact, summary judgment is appropriate, and the
appellees are entitled to judgment as a matter of law. We applaud the tenacity of the district court
in its handling of these needlessly confusing cases and affirm this issue based upon these orders of
the district court.
V. CONCLUSION
We conclude that the district court did not abuse its discretion in denying appellants' motions
for leave to amend to assert breach of fiduciary duty claims against the individual appellees. Neither
18
Early in the case, Campbell was twice granted leave to amend his complaint to assert fraud
and antitrust claims, with the district court expressly noting that the case was still in discovery,
that dispositive motions had not been filed, and that there would be "no delay in this matter
which will unduly prejudice defendants."
19
See also Part I supra.
did it err in granting summary judgment to appellees on the tortious interference with business
relations claims and conspiracy to tortiously interfere. The judgment of the district court, in each
case, is
AFFIRMED.