Women's Care Specialists, P.C. v. Dr. Margot G. Potter

Rel: May 19, 2023
Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern
Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts,
300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-0650), of any typographical or other
errors, in order that corrections may be made before the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2022-2023
_________________________
SC-2022-0706
_________________________
Women's Care Specialists, P.C.
v.
Dr. Margot G. Potter
Appeal from Jefferson Circuit Court
(CV-21-903797)
_________________________
SC-2022-0707
_________________________
Dr. Karla Kennedy, Dr. Elizabeth Barron, and Beth Ann Dorsett
SC-2022-0706 and SC-2022-0707
v.
Dr. Margot G. Potter
Appeal from Jefferson Circuit Court
(CV-21-903798)
COOK, Justice.
These consolidated appeals arise out of an employment dispute
between Dr. Margot G. Potter and her former employer, Women's Care
Specialists, P.C. ("Women's Care"), and out of a dispute between Potter
and three Women's Care employees -- Dr. Karla Kennedy, Dr. Elizabeth
Barron, and Beth Ann Dorsett ("the WC employees").
In case no. CV-21-903797, Potter alleged claims of defamation,
tortious interference with a business relationship, and breach of contract
against Women's Care. In case no. CV-21-903798, Potter alleged claims
of defamation and tortious interference with a business relationship
against the WC employees.
After the cases were consolidated by the Jefferson Circuit Court,
Women's Care and the WC employees filed motions to compel arbitration
on the basis that Potter's claims were within the scope of the arbitration
provision in Potter's employment agreement with Women's Care and that
2
SC-2022-0706 and SC-2022-0707
the arbitration provision governed their disputes even though Potter was
no longer a Women's Care employee. In short, the arguments concerned
whether Potter's claims are within the scope of the arbitration provision,
whether the arbitration provision continued to apply after the
"termination" of her employment, and when that termination occurred.
The trial court entered an order denying those motions. Women's Care
(appeal no. SC-2022-0706) and the WC employees (appeal no. SC-2022-
0707) separately appealed; this Court consolidated the appeals.
For the reasons stated below, in appeal no. SC-2022-0706, we
reverse the trial court's order denying Women's Care's motion to compel
arbitration. In appeal no. SC-2022-0707, we reverse the trial court's order
denying the WC employees' motion to compel arbitration.
Facts and Procedural History
On December 10, 2015, Potter, an obstetrician and gynecologist,
entered into an employment agreement with Women's Care, which
operates a medical clinic in Birmingham that specializes in obstetrics and
gynecological services. Three years later, the employment agreement was
3
SC-2022-0706 and SC-2022-0707
amended. 1
In that amended employment agreement, Women's Care and Potter
agreed to the following regarding termination of her employment:
"12. Termination. [Potter's] employment shall be terminated
upon the happening of any of the following events:
"12.1 Notwithstanding any of the provisions of this
Agreement, upon at least ninety (90) days' prior
written notice served by either [Women's Care] or
[Potter] upon the other, in which event [Women's
Care] shall have the right at any time during the
ninety (90) day notice period to terminate
[Potter's] services, provided that [Women's Care]
shall continue to pay [Potter] her normal
compensation pursuant to this Agreement … for
the remainder of the notice period …."
(Bold typeface in original; emphasis added.) Section 13.1 of the amended
employment agreement further defined "termination of employment" as
"any termination of employment pursuant to Section 12 of this
Agreement or, if and only so long as applicable, any other
termination or deemed termination of employment with
[Women's Care], … including any situation where the facts
and circumstances indicate that [Women's Care] and [Potter]
reasonably anticipated that no further services would be
performed after a certain date …."
(Emphasis added.)
1We note that Kennedy, the president of Women's Care, and
Barron, a physician with Women's Care, signed the amended
employment agreement on Women's Care's behalf.
4
SC-2022-0706 and SC-2022-0707
Next, in Section 22.2 of the amended employment agreement,
Women's Care and Potter agreed to resolve "any and all disputes related
in any manner whatsoever to [Potter]'s employment" by arbitration.
Specifically, they agreed
"to resolve any and all disputes related in any manner
whatsoever to [Potter]'s employment with [Women's Care] by
binding arbitration. [Women's Care] and [Potter] further
agree to select the American Health Lawyers Association …
to arbitrate the dispute. … Disputes relating to employment
include, but are not limited to, … claims based upon tort or
contract laws or any other federal or state law affecting
employment in any manner whatsoever."
(Emphasis added.) Section 22.4 of the amended employment agreement
provided the sole exception to this arbitration provision for "suits brought
on behalf of [Women's Care] or [Potter] seeking a temporary restraining
order, preliminary injunction and/or permanent injunction ('injunctive
relief')." No other exceptions to the arbitration provision were made for
any other forms of liability between the parties. In fact, in Section 17 of
the amended employment agreement, Women's Care and Potter agreed
that the termination of the agreement -- whether through the
termination of Potter's employment or otherwise -- "shall not affect any
liability or any other obligation of either party to the other which may
have accrued prior to such termination."
5
SC-2022-0706 and SC-2022-0707
On September 23, 2021, Women's Care gave Potter a "notice of
termination" that stated:
"Pursuant to Section 12.1 of the Employment Agreement
between you and [Women's Care] dated December 10, 2015,
as amended (the 'Employment Agreement'), notice is hereby
served that your employment with WCS is being terminated.
In accordance with Section 12.1 of the Employment
Agreement, you are entitled to ninety (90) days' notice of
termination. Therefore, your employment with [Women's
Care] will terminate effective December 22, 2021. As we have
advised you, [Women's Care] has exercised its right under the
Employment Agreement to pay your normal compensation
during the 90-day notice period and require you to cease
performing services and vacate the premises immediately."
(Emphasis added.) Potter ceased performing services on behalf of
Women's Care that same day.
Over the next couple of months, per the terms of Section 12.1 of the
amended employment agreement, Women's Care paid Potter her normal
compensation and apparently intended to do so until December 22, 2021,
at which point the 90-day notice period would be over, thereby officially
marking the end of Potter's employment with Women's Care.
According to Potter, after she received her termination letter and
ceased performing services on behalf of Women's Care, the WC employees
and others began making remarks to her former patients that, she
alleges, were an attempt to "take over [her] practice." Those remarks
6
SC-2022-0706 and SC-2022-0707
included statements such as:
• Potter "is staying at home with her husband and
children."
• "We don't know where [Potter] is."
• Potter "has relocated to Florida."
• Potter has "been arrested."
• Potter has "retired and [is] not practicing medicine."
She also alleged that Women's Care and the WC employees tried to
prevent her patients from finding out if she was still practicing so that
they could continue their medical care with her.
On November 22, 2021, Potter began working for another medical
practice in Birmingham. At that point, Women's Care ceased paying
Potter her "normal compensation" as required under Section 12.1 of the
amended employment agreement.
A month later, Potter commenced two separate actions -- one
against Women's Care in which she alleged claims of tortious
interference with a business relationship, defamation, and breach of
contract and another against the WC employees in which she alleged
claims of tortious interference with a business relationship and
defamation. As stated previously, those actions were eventually
7
SC-2022-0706 and SC-2022-0707
consolidated.
In response, Women's Care and the WC employees filed motions to
compel arbitration. In its motion, Women's Care argued that, because
Potter's claims against it related to her employment with Women's Care
and because they had agreed in the amended employment agreement to
resolve "any and all disputes related in any manner whatsoever to"
Potter's employment with Women's Care through arbitration, those
claims were subject to arbitration. In support of its motion, Women's Care
attached, among other things, copies of the amended employment
agreement and Potter's termination letter.
In their motion to compel arbitration, the WC employees raised
many of the same arguments that Women's Care made in its motion.
They also attached the same exhibits in support of their motion.
In her response to the motions, Potter acknowledged that her
breach-of-contract claim against Women's Care was subject t o
arbitration but disputed that her tort claims against all the defendants
were subject to arbitration. According to Potter, contrary to the
contentions of Women's Care and the WC employees, her employment
with Women's Care terminated on September 23, 2021 -- the day she
8
SC-2022-0706 and SC-2022-0707
received her termination letter -- and not on November 22, 2021. Because
her tort claims were based on incidents that, she said, occurred after her
employment with Women's Care came to an end, they did not "relate in
any way whatsoever" to her employment with Women's Care and, thus,
were not governed by the arbitration provision in the amended
employment agreement.
Following additional filings, the trial court entered an order
denying the motions to compel arbitration on June 22, 2022. In appeal
no. SC-2022-0706, Women's Care challenges the trial court's denial of its
motion to compel arbitration. In appeal no. SC-2022-0707, the WC
employees challenge the trial court's denial of their motion to compel
arbitration.
Standard of Review
This Court has stated:
" ' " 'This Court reviews de novo the denial of
a motion to compel arbitration. Parkway Dodge,
Inc. v. Yarbrough, 779 So. 2d 1205 (Ala. 2000). A
motion to compel arbitration is analogous to a
motion for a summary judgment. TranSouth Fin.
Corp. v. Bell, 739 So. 2d 1110, 1114 (Ala. 1999).
The party seeking to compel arbitration has the
burden of proving the existence of a contract
calling for arbitration and proving that the
c ontract evidences a transaction affecting
9
SC-2022-0706 and SC-2022-0707
interstate commerce. Id. "[A]fter a motion to
compel arbitration has been made and supported,
the burden is on the non-movant to present
evidence that the supposed arbitration agreement
is not valid or does not apply to the dispute in
question." Jim Burke Automotive, Inc. v. Beavers,
674 So. 2d 1260, 1265 n.1 (Ala. 1995) (opinion on
application for rehearing).' " '
"Hoover Gen. Contractors-Homewood, Inc. v. Key, 201 So. 3d
550, 552 (Ala. 2016) (quoting Elizabeth Homes, L.L.C. v.
Gantt, 882 So. 2d 313, 315 (Ala. 2003), quoting in turn
Fleetwood Enters., Inc. v. Bruno, 784 So. 2d 277, 280 (Ala.
2000))."
Performance Builders, LLC v. Lopas, 341 So. 3d 1084, 1088-89 (Ala.
2021).
Discussion
On appeal, Women's Care and the WC employees contend that the
trial court erred in denying their motions to compel arbitration because,
they say, the arbitration provision in the amended employment
agreement is broad enough to apply to all of Potter's claims against them,
which, they say, involve disputes related to Potter's employment with
Women's Care. Potter contends, however, that only her breach-of-
contract claim against Women's Care is subject to arbitration and that
her tort claims against Women's Care and the WC employees are not
subject to arbitration because, she says, they arose after her employment
10
SC-2022-0706 and SC-2022-0707
with Women's Care ended.
Our analysis of whether -- and to what degree -- an arbitration
agreement is enforceable as to certain alleged claims begins with
determining whether each party met its initial evidentiary burden. As
stated above, the party moving for arbitration has the burden of proving
the existence of an agreement to arbitrate and the existence of a contract
or transaction affecting interstate commerce. Performance Builders, 341
So. 3d at 1088-89. None of the parties dispute that the amended
employment agreement executed by Women's Care and Potter contained
an arbitration provision. They also do not dispute that the amended
employment agreement at issue in this case affects interstate commerce.
Accordingly, the burden then shifted to Potter -- the party opposing
arbitration -- to present " 'evidence tending to show that the arbitration
agreement … does not apply to the dispute in question.' " STV One
Nineteen Senior Living, LLC v. Boyd, 258 So. 3d 322, 324 (Ala. 2018)
(quoting Alabama Title Loans, Inc. v. White, 80 So. 3d 887, 891 (Ala.
2011)).
A. Potter's Breach-of-Contract Claim
As to her breach-of-contract claim against Women's Care, we note
11
SC-2022-0706 and SC-2022-0707
that it is undisputed that, under Section 12.1 of the amended
employment agreement, Potter and Women's Care agreed that, upon
termination of Potter's employment, Women's Care would continue to
pay Potter her "normal compensation" for the duration of the 90-day
notice period. The record indicates that, in her complaint, Potter alleged
that Women's Care breached that provision of the amended employment
agreement by not paying her the requisite compensation.
In both her opposition to the motions to compel arbitration below
and in her brief on appeal, Potter has conceded that these allegations
relate to her employment with Women's Care and that, therefore, her
breach-of-contract claim is subject to the arbitration provision in the
amended employment agreement. Indeed, our review of the record
reveals no reason why Potter and Women's Care could not be compelled
to arbitrate that claim. Accordingly, we conclude that the trial court erred
in denying Women's Care's motion to compel arbitration as to that claim.
B. Potter's Tort Claims
Although Potter concedes that her breach-of-contract claim against
Women's Care is subject to arbitration, she maintains that her tort claims
against Women's Care and the WC employees are not. According to
12
SC-2022-0706 and SC-2022-0707
Potter, her employment with Women's Care officially terminated on
September 23, 2021 -- the day she received her termination letter.
Because, she says, the incidents underlying her tort claims arose after
that date, she asserts that those claims cannot be deemed "related in any
manner whatsoever to" her employment with Women's Care and, thus,
cannot be subject to arbitration. 2
" 'Whether an arbitration provision encompasses a party's claims
"is a matter of contract interpretation, which interpretation is guided by
the intent of the parties, and which intent, absent ambiguity in the
clause, is evidenced by the plain language of the clause." ' " STV, 258 So.
2Potter does not argue that the WC employees are nonsignatories
to the amended employment agreement and, thus, cannot claim the
benefit of the arbitration provision. In fact, in her appellate brief, Potter
specifically states that her argument on appeal is limited solely to the
effect the timing of her termination had on whether her tort claims are
subject to arbitration and that any characterization of her argument to
the contrary is "wrong."
In any event, this Court has allowed a nonsignatory agent to
enforce arbitration on behalf of the principal. See Ex parte Gray, 686 So.
2d 250 (Ala. 1996) (recognizing that a nonsignatory "agent" was allowed
to invoke arbitration); Stevens v. Phillips, 852 So. 2d 123, 131 (Ala. 2002)
(recognizing that an agent "stands in the shoes" of her principal). See also
McDougle v. Silvernell, 738 So. 2d 806, 809 (Ala. 1999) (recognizing that
a closing attorney, as agent of title insurer, had standing to enforce an
arbitration provision even though the attorney was not a party to the
agreement).
13
SC-2022-0706 and SC-2022-0707
3d at 325 (quoting Green Tree Fin. Corp. of Alabama v. Vintson, 753 So.
2d 497, 505 (Ala. 1999), quoting in turn Allied-Bruce Terminix Cos. v.
Dobson, 684 So. 2d 102, 110 (Ala. 1995)).
As noted previously, in the amended employment agreement,
Women's Care and Potter agreed that "any and all disputes related in
any manner whatsoever to [Potter]'s employment" would be resolved by
arbitration and that "[d]isputes relating to employment include, but are
not limited to, … claims based upon tort or contract laws or any other
federal or state law affecting employment in any manner whatsoever."
(Emphasis added.) Women's Care and the WC employees contend that
the language of this provision is "broad" and makes clear that any and
all disputes related to Potter's employment -- including "claims based
upon tort" -- are subject to arbitration. Potter contends, however, that
that provision applies only to disputes that arose while she was still
employed by Women's Care.
This Court has repeatedly held that the phrase "relating to" in an
arbitration provision is to be given a "broad construction." Carroll v. W.L.
Petrey Wholesale Co., 941 So. 2d 234, 236 (Ala. 2006) (quoting Serra
Chevrolet, Inc. v. Hock, 891 So. 2d 844, 847 (Ala. 2004)). In the
14
SC-2022-0706 and SC-2022-0707
employment context, in order for a dispute to be compelled to arbitration,
it must relate in some way to the employment relationship or agreement.
See Carroll, 941 So. 2d at 241.
With regard to whether tort claims can be deemed arbitrable, this
Court has explained:
"An arbitration clause cannot be 'enforced to require
arbitration of a claim alleging an intentional tort that is in no
way related to the underlying transaction that gave rise to the
arbitration agreement.' Green Tree Fin. Corp. v. Shoemaker,
775 So. 2d 149, 151 n.3 (Ala. 2000). 'To hold otherwise would
allow persons signing broad arbitration provisions to commit
intentional torts against one another, which torts are outside
the scope of their contemplated dealings, without concern that
they might have to answer for their actions before a jury of
their peers.' Ex parte Discount Foods, 711 So. 2d 992, 994
(Ala.), cert. denied sub nom. Supervalu Inc. v. Discount Foods,
Inc., 525 U.S. 825, 119 S. Ct. 71, 142 L. Ed. 2d 56 (1998)."
Fountain Fin., Inc. v. Hines, 788 So. 2d 155, 158 (Ala. 2000) (emphasis
added). Thus, for Potter's tort claims to be subject to arbitration in this
case, we must first determine whether those claims are related to her
employment with Women's Care.
Here, the employment relationship between Women's Care and
Potter is what gave rise to the amended employment agreement
containing the arbitration provision at issue. Under Section 2 of the
amended employment agreement, Potter agreed to "personally perform[]
15
SC-2022-0706 and SC-2022-0707
histories and appropriate physical examinations" on "all new obstetrical
and new gynecological patients" "exclusively on behalf of [Women's
Care]" and to supervise other Women's Care employees to provide the
care needed for those patients.
In her complaint, Potter alleged that, after she was given her
termination letter, Women's Care -- through the WC employees --
"negligently or intentionally published false and defamatory statements"
about her to her "patients, other doctors, nurses and hospital personnel"
in an "attempt to take over [her] practice." She further alleged that,
before receiving her termination letter on September 23, 2021, she "had
business relations with over 8,000 patients she had treated at [Women's
Care's clinic]" and that "[a]ll of these patients were patients she solely
treated." (Emphasis added.) According to Potter, "[t]hrough the actions
and statements of the [defendants] … [they] intentionally interfered with
these business relations" and, as a proximate result of those actions, she
has suffered damages. (Emphasis added).
The "patients" Potter mentions in her complaint were the patients
she had when she was employed by Women's Care. Additionally, the
business relationship with which she specifically alleges the defendants
16
SC-2022-0706 and SC-2022-0707
interfered was her "business relations with over 8,000 patients she had
treated at [Women's Care's Clinic,]" all of whom "were patients she solely
treated [at Women's Care's Clinic]." Under these circumstances, it is
evident that Potter's tort claims are certainly "related in any manner
whatsoever to [Potter]'s employment" with Women's Care.
In addition, to the extent that there could be any doubt about how
to construe the language setting out the scope of the arbitration
provision, this Court has previously stated:
" 'In interpreting an arbitration provision, "any doubts
concerning the scope of arbitrable issues should be resolved in
favor of arbitration, whether the problem at hand is the
construction of the contract language itself or an allegation of
waiver, delay, or a like defense to arbitrability." Moses H.
Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-
25, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983) (… footnote omitted).
"Thus, a motion to compel arbitration should not be denied
'unless it may be said with positive assurance that the
arbitration clause is not susceptible of an interpretation that
covers the asserted dispute.' United Steelworkers of America
v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582-83, 80 S.
Ct. 1347, 4 L.Ed.2d 1409 (1960)." Ex parte Colquitt, 808 So.
2d 1018, 1024 (Ala. 2001) ….' "
STV, 258 So. 3d at 325 (quoting Elizabeth Homes, L.L.C. v. Cato, 968 So.
2d 1, 7 (Ala. 2007) (emphasis altered).
However, there remains a question of whether the timing of Potter's
termination from her employment with Women's Care impacts the
17
SC-2022-0706 and SC-2022-0707
arbitrability of her tort claims against Women's Care and the WC
employees. The United States Supreme Court has stated that "[r]ights
which accrued or vested under the agreement will, as a general rule,
survive termination of the agreement." Litton Fin. Printing Div., a Div.
of Litton Bus. Sys., Inc. v. NLRB, 501 U.S. 190, 207 (1991). Although
contractual obligations may expire upon the termination of a contract,
"structural provisions relating to remedies and dispute resolution -- for
example, an arbitration provision -- may in some cases survive in order
to enforce duties arising under the contract." Id. at 208. "We presume as
a matter of contract interpretation that the parties did not intend a
pivotal dispute resolution provision to terminate for all purposes upon
the expiration of the agreement." Id. Absent a contrary indication, the
parties' preference for arbitration may not automatically terminate with
the contract. See Nolde Bros. v. Local No. 358, Bakery and Confectionary
Workers Union, AFL-CIO, 430 U.S. 243, 253-54 (1977).
We note that Potter and Women's Care expressly agreed in Section
17 of the amended employment agreement that the termination of their
agreement -- whether through termination of Potter's employment or
otherwise -- "shall not affect any liability or any other obligation of either
18
SC-2022-0706 and SC-2022-0707
party to the other which may have accrued prior to such termination."
(Emphasis added.) Applying the caselaw discussed above, because Potter
and Women's Care specifically agreed that any obligations they owed to
one another -- including the obligation to arbitrate any disputes related
to Potter's employment -- would not terminate upon the expiration or
termination of the agreement, Potter's tort claims against Women's Care
and the WC employees are still subject to arbitration regardless of when
her employment with Women's Care ended. 3 Accordingly, the trial court's
3Given our resolution of this issue, we see no need to address exactly
when Potter was terminated from her employment with Women's Care.
However, even if we were called upon to decide this question, we note
that Potter contends that, under Section 13.1 of the amended
employment agreement, "termination of employment" occurs when
"[Women's Care] and [Potter] reasonably anticipated that no further
services would be performed after a certain date." Because her
termination letter specifically told her to "cease performing services and
vacate the premises immediately," Potter contends that her employment
officially terminated on the date she received that letter and that,
because the statements and actions underlying her tort claims against
Women's Care and the WC employees occurred after that date, those
claims cannot be subject to arbitration.
We note, however, as do Women's Care and the WC employees, that
Section 13.1 of the amended employment agreement states:
" 'Termination of Employment' shall mean any termination of
employment pursuant to Section 12 of this Agreement or, if
and only so long as applicable, any other termination or
deemed termination of employment with [Women's Care], …
19
SC-2022-0706 and SC-2022-0707
order denying the motions to compel Potter to arbitrate her tort claims is
due to be reversed.
Conclusion
Based on the foregoing, in appeal no. SC-2022-0706, we hold that
Potter's breach of-contract claim and her tort claims against Women's
including any situation where the facts and circumstances
indicate that [Women's Care] and [Potter] reasonably
anticipated that no further services would be performed after
a certain date …."
(Emphasis added.) It thus appears from the plain language of the
amended employment agreement that Potter and Women's Care agreed
that termination of employment would mean either "termination of
employment pursuant to Section 12" of the amended employment
agreement or "any situation where" Women's Care and Potter
"reasonably anticipated that no further services would be performed after
a certain date."
In the termination letter, Women's Care specifically stated that it
was exercising its right to invoke the 90-day notice period in Section 12.1
of the amended employment agreement and that, as a result, Potter's
employment with Women's Care would be deemed "terminate[d] effective
December 22, 2021" -- or 90 days after September 23, 2021 (and this
statement was made before the commencement of these actions).
According to Women's Care, per the terms of the amended employment
agreement, it paid Potter her normal compensation until she began
working for another medical practice on November 22, 2021, at which
point Potter was no longer an employee of Women's Care. Thus, under
these circumstances, it appears that Potter's employment with Women's
Care effectively ended on November 22, 2021, and it would, therefore, be
logical to conclude that any statements or actions that occurred before
that date could be subject to arbitration.
20
SC-2022-0706 and SC-2022-0707
Care are subject to arbitration. We therefore reverse the trial court's
order denying Women's Care's motion to compel arbitration, and we
remand the cause for an order or proceedings consistent with this
opinion.
In appeal no. SC-2022-0707, we hold that Potter's tort claims
against the WC employees are subject to arbitration. We therefore
reverse the trial court's order denying their motion to compel arbitration,
and we remand the cause for an order or proceedings consistent with this
opinion.
SC-2022-0706 -- REVERSED AND REMANDED.
SC-2022-0707 -- REVERSED AND REMANDED.
Parker, C.J., and Wise, Sellers, and Stewart, JJ., concur.
21