Khashayar Vosough, M.D. v. Roger Kierce, M.D.

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-3017-11T1
KHASHAYAR VOSOUGH, M.D., an
APPROVED FOR PUBLICATION
individual, CHARLES G. HADDAD,
M.D., an individual, MAHIPA August 27, 2014
PALLIMULLA, M.D., an individual,
and COMPREHENSIVE WOMEN'S APPELLATE DIVISION
HEALTHCARE, P.C., a corporation
of the State of New Jersey,
Plaintiffs-Respondents/
Cross-Appellants,
v.
ROGER KIERCE, M.D., an individual,
WILLIAM A. MCDONALD, an individual,
ST. JOSEPH'S REGIONAL MEDICAL CENTER,
a New Jersey non-profit corporation,
Defendants-Appellants/
Cross-Respondents,
and
MARIAN H. SPEID, ESQ., an individual,
Defendant.
__________________________________________
Argued May 12, 2014 – Decided August 27, 2014
Before Judges Yannotti, Ashrafi, and Leone.
On appeal from Superior Court of New Jersey,
Law Division, Bergen County, Docket No.
L-6420-09.
Lance J. Kalik argued the cause for
appellants/cross-respondents Roger Kierce,
M.D., and William A. McDonald (Riker Danzig
Scherer Hyland & Perretti, L.L.P.,
attorneys; Mr. Kalik, of counsel and on the
joint brief; Tracey K. Wishert and John
Atkin, on the joint brief).
Thomas E. Hastings argued the cause for
appellant/cross-respondent St. Joseph's
Regional Medical Center (Smith, Stratton,
Wise, Heher & Brennan, L.L.P., attorneys;
Mr. Hastings, of counsel and on the joint
brief; Kimberly M. Parson, on the joint
brief).
Barry D. Epstein argued the cause for
respondents/cross-appellants (The Epstein
Law Firm, P.A., attorneys; Mr. Epstein, of
counsel and on the brief; George B. Forbes
and Michael A. Rabasca, on the brief).
The opinion of the court was delivered by
ASHRAFI, J.A.D.
In this lawsuit for breach of contract and tortious
interference with contract and economic advantage, plaintiffs
are three doctors specializing in obstetrics and gynecology,
Khashayar Vosough, M.D., Charles G. Haddad, M.D., and Mahipa
Pallimulla, M.D., and also their medical practice, Comprehensive
Women's Healthcare, P.C. ("CWH" or "CWHC"). Defendants are St.
Joseph's Regional Medical Center located in Paterson, its chief
executive officer, William A. McDonald, and the chairman of its
department of obstetrics and gynecology, Roger Kierce, M.D.
2 A-3017-11T1
After a sixteen-day trial, defendants appeal from the
jury's verdict awarding $423,026.33 against each of the three
defendants, totaling $1,269,079. Plaintiffs cross-appeal from
exclusion of their expert testimony alleging a higher amount of
future anticipated losses, and the trial court's denial of their
claims for punitive damages and prejudgment interest. We
reverse the judgment and dismiss the cross-appeal.
I.
Plaintiffs filed a four-count complaint in 2009 alleging
breach of contract by the hospital, tortious interference with
contract and with prospective economic advantage by the
individual defendants, and respondeat superior liability of the
hospital for the negligent conduct of the individual defendants.1
The negligence allegations did not survive the trial and are not
an issue on appeal.2 The jury awarded damages against the
hospital for breach of contract and against the individual
defendants for the tortious interference counts of plaintiffs'
complaint.
1
"Respondeat superior liability" means "vicarious liability" for
the wrongful conduct of an employee or agent. See Davis v.
Devereux Foundation, 209 N.J. 269, 287 n.2 (2012).
2
The trial court also dismissed plaintiffs' claims against a
third individual defendant, Marian Speid, who was legal counsel
to the hospital.
3 A-3017-11T1
To summarize plaintiffs' lawsuit, we quote directly from
the preliminary statement in their brief on this appeal:
This appeal and cross-appeal follow a
verdict in favor of a medical group CWH and
its shareholders against a defendant
hospital and two of its executive officers
arising out [of] intolerable situations and
intimidation which forced the group and its
doctors to resign lucrative independent
contractor agreements ("ICAs") and
ultimately their staff privileges thereby
causing substantial financial losses.
The initial reason for defendants'
coordinated effort of harassment was alleged
untruthful testimony that one member of CWH
gave during a deposition concerning the
hospital's OB/GYN department policy. St.
Joseph's Regional Medical Center's officials
reacted negatively to this testimony and
retaliated against [CWH] in response,
eventually forcing plaintiffs to resign
their independent contractor agreements.
The main aggressor against plaintiffs was
defendant Roger Kierce, M.D. Kierce is the
head of St. Joseph's OB/GYN department, and
was plaintiffs' direct supervisor. To this
end, Kierce engaged in a course of conduct
that included but was not limited to
humiliating Dr. Khashayar Vosough in front
of colleagues by asserting that he committed
the crime of perjury, threatening
plaintiffs' position with the hospital by
stating that he was going to "rip their
skulls from their skeletons and keep a head
count" if they failed to attend a department
meeting, even though no attending physician
had ever been disciplined for missing a
department meeting, and threatening
plaintiffs that he would fire them from
their positions at St. Mary's hospital once
St. Joseph's and St. Mary's merged.
4 A-3017-11T1
To stop Kierce's abuse, plaintiffs
invoked their rights and sought the
protection of St. Joseph's CEO, William
McDonald pursuant to the hospital bylaws.
However, McDonald did not consider Kierce's
abuse to be a serious issue, and failed to
perform any meaningful investigation into
plaintiffs' complaints. In fact, McDonald
considered Kierce's statements to be little
more than jokes. Realizing that there would
be no relief from Kierce's abusive behavior,
plaintiffs were forced to tender their
hospital privilege resignations, and suffer
the losses alleged.
Describing the case thus in the best light from plaintiffs'
point of view, plaintiffs allege they were constructively
discharged and were entitled to compensation because of
harassment, abuse, and retaliation by their supervisor at the
hospital and failure of the hospital's CEO to stop that wrongful
conduct.
It is important to keep in mind that plaintiffs did not and
could not allege constructive discharge resulting from unlawful
discrimination or from any conduct of plaintiffs that was
protected by law or a clear mandate of public policy.
Plaintiffs' claims of a hostile work environment and retaliation
are not a cause of action under New Jersey's Law Against
Discrimination (LAD), N.J.S.A. 10:5-1 to -49; under a
constitutional provision or any federal statute prohibiting
discrimination; under New Jersey's Conscientious Employee
Protection Act (CEPA), N.J.S.A. 34:19-1 to -8; or under Pierce
5 A-3017-11T1
v. Ortho Pharmaceutical Corp., 84 N.J. 58 (1980), the common law
antecedent of CEPA. This case is simply a common law contract
and tort case.
When considering defendants' several pretrial and trial
motions seeking judgment in their favor, the trial court should
have viewed with more circumspection the tenuous nature of
plaintiffs' allegations in a common law contract and tort case.
Our common law recognizes no cause of action for a hostile work
environment simply because an employee is mistreated by a nasty
boss. The common law does not protect employees generally
against an unpleasant work environment, or the failure of the
employer to address incivility in the workplace. Cf. Oncale v.
Sundowner Offshore Servs., Inc., 523 U.S. 75, 80, 118 S. Ct.
998, 1002, 140 L. Ed. 2d 201, 207 (1998) (Title VII, 42 U.S.C. §
2000e, prohibits workplace harassment only if members of a
protected class are treated differently from non-members).
With respect to St. Joseph's hospital, plaintiffs' claim
was viable only if they could prove breach of contract and
damages caused by that breach. Furthermore, since their
contracts were with the hospital and not with the individual
defendants, their claims against McDonald and Kierce could be
maintained only if plaintiffs could prove that the conduct of
the individual defendants that constituted their alleged
6 A-3017-11T1
tortious interference was outside the scope of their employment
with the hospital.
If the individuals were acting outside the scope of their
employment, however, then those same acts were not committed on
behalf of the hospital, and plaintiffs' breach of contract claim
against the hospital was not viable. The same conduct of the
individual defendants could not be both breach of contract by
their employer and tortious interference by them individually.
In the end, none of plaintiffs' claims should have survived
summary judgment or a directed verdict at trial.
II.
Because we will apply the standard of review applicable to
summary judgment, R. 4:46-2(c); Brill v. Guardian Life Ins. Co.
of Am., 142 N.J. 520, 540 (1995), and that applicable to a
directed verdict or judgment in favor of defendants at the time
of trial, R. 4:37-2(b); R. 4:40-1; R. 4:40-2(b); Verdicchio v.
Ricca, 179 N.J. 1, 30 (2004), we will recite favorably to
plaintiffs the facts of the case and all reasonable inferences
that could be drawn from the evidence. In other words, our
recitation of the facts omits defendants' responses and defenses
to plaintiffs' allegations and assumes that the jury would or
did believe plaintiffs' version of the facts.
7 A-3017-11T1
Plaintiff doctors, Vosough, Haddad, and Pallimulla, are
highly-regarded OB/GYN specialists. They completed their
residencies in that field under defendant Kierce at St. Joseph's
hospital. After their residencies, plaintiffs formed CWH to
practice their specialty, and they had admitting privileges at
St. Joseph's and other hospitals in the region.
Each plaintiff had an independent contractor agreement
(ICA) with St. Joseph's hospital to be an "attending physician"
in the OB/GYN department on a schedule assigned by the hospital.
An attending physician supervised residents, fellows, and
medical students; provided physician coverage at the hospital
for all "unassigned" patients, meaning patients who came to the
hospital without their own doctors; and responded immediately to
"in-house obstetrical and gynecological emergencies." The ICAs
provided that the doctors would be paid $100 an hour by the
hospital for their services as attending physicians and they
would not bill patients separately for those services.
Plaintiffs' ICAs went into effect on March 1, 2002, and
were to continue until terminated in accordance with the terms
of the ICA. The ICAs permitted "either party" to terminate the
agreement "without cause, reason or justification upon sixty
(60) days' prior written notice to the other party," or to
8 A-3017-11T1
terminate the agreement "immediately upon a material breach of
this Agreement by the other party."
Plaintiffs also had staff privileges at St. Joseph's
hospital, which means they were permitted to admit their own
patients for care at the hospital. They billed separately for
their physician services to their own patients. As previously
stated, plaintiffs had staff privileges as well at other
hospitals in the area.
Kierce was the chairman of the OB/GYN department at St.
Joseph's hospital. He had a reputation of striving for an
unreasonable level of perfection and being a hard-hearted and
belligerent taskmaster. He was inclined to disparage and insult
physicians and staff under his supervision. In addition to the
three plaintiff doctors, several other doctors testified that
Kierce would use profanity and demeaning comments to reprimand
physicians and hospital staff, including publicly. Kierce
admitted in his testimony that he would use "biting language"
and be "harsh" and "stern" in his treatment of doctors and staff
under his supervision. He acknowledged he had made "mistakes"
but rationalized his lack of professionalism and civility on the
ground that he had high expectations "to have perfect outcome
with the patients" and would not "tolerate people that do not
respect the privilege to take care of patients."
9 A-3017-11T1
Kierce's conduct violated the Medical Staff Bylaws adopted
by St. Joseph's hospital. The bylaws stated that "[i]t is the
policy of St. Joseph's Regional Medical Center that all persons
within its facilities be treated with courtesy, dignity and
respect." The purpose of this policy was "to prevent or
eliminate conduct that disrupts operations at [the hospital],
affects the ability of others to do their jobs, creates a
hostile work environment for employees or other medical staff
members or interferes with their ability to work competently."
The bylaws described prohibited conduct to include: "[v]erbal or
physical attacks, hostility, threats of violence or retaliation
. . . [c]riticism addressed to the recipient in such a way as to
unreasonably intimidate, undermine confidence, belittle or imply
stupidity or incompetence."
The ICAs required that plaintiffs adhere to the bylaws, and
plaintiffs expected that other physicians at the hospital would
also be required to adhere to the same bylaws. They alleged in
their lawsuit that the hospital was impliedly bound by their
ICAs to enforce the bylaws and to take action against Kierce's
violations. They alleged that the hospital, through McDonald's
inaction, breached their ICAs by failing to enforce the bylaws
and to discipline Kierce.
10 A-3017-11T1
Three discrete incidents formed the heart of plaintiffs'
case. First, plaintiffs claimed that Kierce publicly accused
Vosough at a department staff meeting of committing perjury in
deposition testimony he gave in a malpractice lawsuit brought
against Vosough and St. Joseph's hospital. In that testimony,
Vosough disclaimed responsibility for the patient's condition on
the ground that he had not been notified by other staff at the
hospital that the patient had been admitted and was in need of
his services. He testified there was a "chain of command" at
the hospital, like in "an army," and the attending physician,
like "a general," could only act on information that those in
the chain had provided to him.
Kierce privately told Vosough that he disagreed with
Vosough's disclaimer and considered his testimony to be perjury
because an attending physician should take responsibility for
the treatment of patients during his schedule whether or not he
was specifically notified of a patient's need for his services.
According to Vosough, at the staff meeting, Kierce gazed
straight at him for about five seconds while telling the twelve
to fifteen people assembled, "some people perjure themselves on
the stand." Vosough considered this perjury comment to be a
public accusation against him intended to intimidate him and all
the staff in the OB/GYN department. In the same context,
11 A-3017-11T1
plaintiffs also alleged that Kierce insulted all attending
physicians by calling them "vultures."
At the same time as this incident, Kierce announced a new
department policy that attending physicians would be responsible
for all patients within the scope of their duties, whether or
not the attending physician had specific notification of the
patient's admission and need for services. This change in
policy was of great concern to plaintiffs, and Vosough voiced
his objections to Kierce. Vosough testified that Kierce
responded with a disrespectful comment: "you don't like it,
don't let the door hit you – don't let the door slap you in the
ass."
In Vosough's opinion, the policy change would cause
increased medical malpractice exposure to the point where the
doctors would not be able to practice medicine. Vosough
complained to CEO McDonald and to Ed Jimenez, the hospital's
director of physician relations, about the change in policy and
requested that it be rescinded. McDonald attempted to allay
Vosough's fears, but decided that the new policy would remain
unchanged.
On February 25, 2006, plaintiffs gave written notice that
they were terminating their ICAs as attending physicians. Their
resignation letter stated:
12 A-3017-11T1
Dear Dr. Kierce
It has always been an honor and pleasure to
work with you. As our group is expanding
and concentrating in the new and exciting
field of complete laparascopic minimally
invasive surgery as well as robotic surgery,
we feel that in order to pursue our goals we
no longer can commit to working weekends in
St. Joseph's Hospital.
Furthermore with the new changes that were
instituted for attending physicians covering
house, CWHC feels that we are at grave risk
for a malpractice fiasco. Our insurance
carrier has strongly suggested that we no
longer cover service calls at St. Joseph's
Hospital. We would like to stop coverage as
of March 1, 2006 or April 1, 2006. We know
that there are many physicians who are eager
and waiting to take this position. Thus
this seems a great chance to pass the torch
to them. Clearly if there is an emergent
need, we may help until you find suitable
replacements. CWHC shall continue to bring
private patients to this fine institution as
we always have.
According to Vosough's testimony, this letter was not
entirely truthful, and the reasons for the resignation were
stated in this way so that plaintiffs would remain on good terms
with defendants. He testified that plaintiffs would need future
references from Kierce, and they did not wish to cause further
animosity. He claimed that he and the other plaintiffs resigned
from their attending physician contracts because of the policy
change and because of Kierce's abusive conduct.
13 A-3017-11T1
Kierce attempted to convince plaintiffs to change their
minds about resigning as attending physicians. The second
discrete incident occurred when Kierce called them to a meeting
and discussed the termination of their ICAs, which were valued
at about $700,000 in annual income. When plaintiffs were not
persuaded, Kierce became angry and threatened to sever their
association with a different hospital, St. Mary's, after its
anticipated merger with St. Joseph's hospital. According to
Vosough, Kierce said that he had seen plaintiffs' contracts with
St. Mary's and that he would change those contracts because St.
Mary's overpaid them. Kierce also insulted plaintiffs and said
they should be "good little boys" and withdraw their
resignations.
Plaintiffs complained again to McDonald and Jimenez about
Kierce's threat, but again the hospital executives took no
action against Kierce. As it turned out, St. Joseph's did not
merge with St. Mary's and Kierce had no influence on plaintiffs'
contracts with St. Mary's.
The third incident occurred in May 2006 when plaintiffs
were no longer serving as attending physicians. Kierce had
scheduled a "Residents Research Day" where department staff,
including physicians, were told they must attend a meeting to
14 A-3017-11T1
hear hospital residents make presentations on research projects
they had completed. Plaintiffs did not attend the meeting.
In the presence of about twenty people at the meeting,
Kierce yelled to Dr. Shihad, who was also associated with CWH,
"where are your boys," meaning plaintiffs and other doctors
associated with CWH. Kierce then said in a loud voice: "Tell
them if they don't attend the meeting, I'm going to rip their
skulls from their skeletons and keep a headcount."
Shihad immediately conveyed this message to Vosough, who
called Kierce to complain about the threat. Kierce responded
that Vosough should calm down because he meant it as a joke.
Vosough asked Kierce to assemble the people who heard the remark
and tell them publicly that he was joking. Kierce responded,
"keep dreaming." Vosough then complained about Kierce's public
threat to Jimenez and Dr. Labagnara, the vice-president of the
hospital for medical affairs. Subsequently, he spoke to
McDonald about the incident and said that Kierce's remark made
his practice group feel unsafe at the hospital.
McDonald and Jimenez went to CWH's Ridgewood office and met
with plaintiffs and other CWH doctors to hear their complaints
about Kierce. Vosough demanded that Kierce be fired and that
Vosough and other attending physicians have a greater voice in
running the OB/GYN department. McDonald promised that an
15 A-3017-11T1
investigation of Kierce's conduct would be undertaken by Jimenez
and Labagnara. According to plaintiffs, the investigation was a
sham, and McDonald and the hospital took no action to discipline
Kierce for his "rip your skulls" threat.
On June 8, 2006, plaintiffs resigned from their staff
privileges at St. Joseph's hospital. Vosough wrote:
Due to Dr. Roger Kierce's public threat to
"Rip Our Skulls from your Skeletons" in
front of St. Joseph's Labor and Delivery
Staff, and his further statement "I keep a
headcount": CWHC does not feel safe
practicing in St. Joseph's Healthcare
System.
Although I have nothing but the best of
comments to bestow upon the staff at the
Wayne Campus, I am currently stepping down
to courtesy privileges at Wayne and hereby
resign from St. Joseph's Regional Medical
Center, effective immediately. This
includes all physicians currently employed
by CWHC except Dr. Shihad and Dr. Kuegler.
In my opinion in a wor[l]d where big
corporations no longer tolerate sexual
harassment, hospital should no longer
tolerate these comments, coming from their
chairmen to their staff, in any way, shape
or form.
Upon sending the June 2006 resignation letter, plaintiffs
immediately stopped admitting patients at St. Joseph's Paterson
facility, but they continued to admit patients to the hospital's
Wayne facility for a while because of certain contractual
obligations. The CWH Paterson office was across the street from
16 A-3017-11T1
St. Joseph's hospital, and Vosough described it as "the most
convenient office I have ever had." That office had allowed his
practice group to have many hospital employees as patients.
According to Vosough, their termination of the ICAs and
relinquishment of staff privileges "crushed" CWH's practice,
requiring Vosough to work "incredible hours" to save the
practice. After the resignations, he and the other CWH doctors
worked more at Valley Hospital and St. Mary's, and eventually
also expanded to Mountainside Hospital in Montclair. In time
plaintiffs closed CWH's Paterson office, which had been the hub
of their offices, and the closing set the practice back by four
or five years, according to Vosough.
Plaintiffs presented testimony from a forensic accountant
regarding their loss of anticipated future income that resulted
from the termination of their ICAs and resignation from
admitting privileges at St. Joseph's hospital. The expert's
December 2010 report calculated total losses of $1,269,079 for
calendar years 2007 through 2010, and estimated additional
losses of $1,450,000 for the following five years through 2015.
Upon defendants' objection to the anticipated expert testimony,
the trial court conducted a hearing under N.J.R.E. 104(a) and
ruled that the expert could testify about his calculation
through the time of the report, ending in 2010, but that his
17 A-3017-11T1
estimate of future losses beyond the time of the report was
speculative and would not be admitted in evidence.3
After deliberating for only thirty-five minutes, the jury
returned a verdict finding St. Joseph's hospital liable for
breach of contract and Kierce and McDonald liable for
interference with plaintiffs' contracts and prospective economic
advantage. The jury awarded total damages of $1,500,000,
assigning one-third of that amount to each defendant.
Because the jury's award was more than the $1,269,079 in
losses alleged by plaintiffs' expert and admitted in evidence,
the trial court instructed the jury that its damage award was
improper and that it should deliberate further on damages based
on the evidence that was admitted. The jury returned after a
few additional minutes of deliberation with a verdict of
$423,026.33 against each of the three defendants, thus totaling
the maximum amount in plaintiffs' case, $1,269,079.
3
In response to plaintiffs' forensic accounting evidence,
defendants presented expert testimony that plaintiffs' tax
returns actually showed increase in revenues after their
resignations from St. Joseph's, and therefore, they suffered no
loss of income as a result of the resignations. The defense
expert also testified that any damages alleged by plaintiffs
should be limited to the sixty-day notice of termination clause
of their ICAs and that plaintiffs presented no evidence that
they suffered any monetary losses during the sixty days after
their resignation letters of February 25 and June 8, 2006.
18 A-3017-11T1
The trial court dismissed plaintiffs' claim for punitive
damages and denied all other post-trial motions, both the
motions filed by defendants for judgment in their favor or a new
trial and the motion filed by plaintiffs to add prejudgment
interest to the jury's award. This appeal and cross-appeal
followed.
III.
We first address plaintiffs' claims of tortious inter-
ference with their ICAs and with their prospective economic
advantage of using their staff privileges at St. Joseph's
hospital to treat patients and derive income.
Because plaintiffs' ICAs were contracts with the hospital
and not with its individual executives and managers, McDonald
and Kierce could not be held personally liable to plaintiffs for
their actions that constituted alleged breach of the ICAs. "[A]
corporation is an artificial entity that lacks the ability to
function except through the actions of its officers, directors,
agents, and servants," but those individuals "are not parties to
any contract" of the corporation. Printing Mart-Morristown v.
Sharp Elec. Corp., 116 N.J. 739, 761 (1989). "A corporation is
regarded in law as an entity distinct from its individual
officers, directors, and agents." Ibid.; see also Saltiel v.
GSI Consultants, Inc., 170 N.J. 297, 303-05 (2002) (corporate
19 A-3017-11T1
officers and employees may be charged individually under a
participation theory with a tort committed by the corporate
employer, but not for breach of contract by the corporation).
Recognizing this basic concept of contract and agency law,
plaintiffs charged only the hospital with breach of contract in
the first count of their complaint.
Conversely, the hospital could not be charged with tortious
interference with its own contract. Printing Mart, supra, 116
N.J. at 752; see also Cappiello v. Ragen Precision Industries,
Inc., 192 N.J. Super. 523, 529 (App. Div. 1984) ("[I]nterference
with one's own contract is merely a breach of that contract.").
Consequently, the individual defendants alone were charged in
the second and third counts of plaintiffs' complaint.
"The tort of interference with a business relation or
contract contains four elements: (1) a protected interest;
(2) malice — that is, defendant's intentional interference
without justification; (3) a reasonable likelihood that the
interference caused the loss of the prospective gain; and
(4) resulting damages." DiMaria Const., Inc. v. Interarch, 351
N.J. Super. 558, 567 (App. Div. 2001), aff'd o.b., 172 N.J. 182(2002); accord MacDougall v. Weichert, 144 N.J. 380, 404 (1996);
Printing Mart, supra, 116 N.J. at 751-52.
20 A-3017-11T1
Theoretically, employees and agents of a corporation can be
charged with the tort of intentional interference with a
plaintiff's contract with the corporation. Printing Mart,
supra, 116 N.J. at 761-63. However, "if an employee or agent is
acting on behalf of his or her employer or principal, then no
action for tortious interference will lie." DiMaria Const.,
supra, 351 N.J. Super. at 568. "[A]n action for tortious
interference will lie" only if "the employee or agent is acting
outside the scope of his or her employment or agency." Ibid.To recover for tortious interference, plaintiffs were
required to prove that the alleged wrongful actions of Kierce
and McDonald were outside the scope of their employment and done
for personal motives, out of malice, beyond their authority, and
otherwise not in good faith in the interests of the hospital.
See ibid. (citing Varrallo v. Hammond Inc., 94 F.3d 842, 849
n.11 (3d Cir. 1996); George A. Fuller Co. v. Chicago Coll. of
Osteopathic Med., 719 F.2d 1326, 1333 (7th Cir. 1983)). In this
context, "malice is defined to mean that the harm was inflicted
intentionally and without justification or excuse." Printing
Mart, supra, 116 N.J. at 751 (citing Rainier's Dairies v.
Raritan Valley Farms, Inc., 19 N.J. 552, 563 (1955)).
Kierce and McDonald contend that no rational jury could
conclude they acted outside the scope of their employment in the
21 A-3017-11T1
matters alleged by plaintiffs. Plaintiffs' allegations against
Kierce are that he was insulting, demeaning, and belligerent in
his verbal communications with them when he was supervising them
in the OB/GYN department and that he threatened them regarding
their contracts with St. Mary's hospital in an effort to
persuade them not to resign as staff physicians. Their
allegations against McDonald are only that he failed to do more
to investigate Kierce's behavior and to discipline him for
violating the hospital's bylaws. Defendants argue that the
actions alleged against them are directly linked to the
performance of their job duties within the scope of their
employment by the hospital.
Plaintiffs respond that whether the individual defendants
were acting within the scope of their employment was a fact
issue properly reserved for the jury to decide.
The question of whether an individual acted within or
outside the scope of employment often arises in the context of
intentional wrongful acts of the individual employee that the
corporation disavows in order to avoid respondeat superior
liability. A number of cases in which a plaintiff alleged
intentional or reckless assault have found that the employee
nevertheless was or could be found to have acted within the
scope of his employment although he exceeded lawful or proper
22 A-3017-11T1
means in carrying out his duties. See, e.g., Gibson v. Kennedy,
23 N.J. 150, 154-57 (1957) (train conductor who assaulted
passenger for failing to get off train was acting within the
scope of his employment); Mason v. Sportsman's Pub, 305 N.J.
Super. 482, 499-501 (App. Div. 1997) (tavern's bouncer was
acting within the scope of his employment when his physical
ejection of a patron resulted in injury to the patron); Schisano
v. Brickseal Refractory Co., 62 N.J. Super. 269, 275-76 (App.
Div. 1960) (employee who punched decedent during an argument
about parking in his employer's private lot, causing him to
suffer a fatal heart attack, could be found to have been acting
within the scope of his employment); Smith v. Bosco, 126 N.J.L.
452, 453-54 (E. & A. 1941) (bridge employee's attack on
plaintiff who refused to move his truck could be within the
scope of his employment); Gates v. St. James Operating Co., 122
N.J.L. 610, 611-12 (Sup. Ct. 1939) (assistant manager who
slapped patron for disregarding his instruction to "take your
feet down" could have been acting within the scope of his
employment). The fact that the employee's conduct is
intentional and wrongful does not in itself take it outside the
scope of his employment.
On the other hand, the employee's wrongful conduct may be
so far removed from the scope of his duties that the conduct
23 A-3017-11T1
cannot be viewed as within the scope of the employment. See
Davis v. Devereux Foundation, 209 N.J. 269, 305-06 (2012)
(employee of residential facility who intentionally scalded
developmentally disabled resident with hot water was personally
motivated by a desire to punish the resident for striking her
earlier and was not acting within the scope of her employment in
trying to control the resident); Di Cosala v. Kay, 91 N.J. 159,
165, 169 (1982) (Boy Scout Council was not vicariously liable
for camp counselor's reckless act of pointing a gun at a child
and pulling the trigger during a purely social visit because the
counselor's interaction with the victim was not part of his work
duties or done during his work time); Cosgrove v. Lawrence, 214
N.J. Super. 670, 679 (Law. Div. 1986), aff'd, 215 N.J. Super.
561 (App. Div. 1987) (county social worker's initiation of a
sexual relationship with his patient "was too little actuated by
a purpose to serve" the employer's goals).
Describing the test to be applied in intentional assault
cases, Chief Justice Weintraub wrote in Gibson, supra, 23 N.J.
at 158:
Assaults and batteries rarely, if ever,
redound to the economic advantage of the
employer, and it may readily be assumed the
employer would not wish them. The
outrageous quality of an employee's act may
well be persuasive in considering whether
his motivation was purely personal, but if
the employee is within the scope of
24 A-3017-11T1
employment and intends to further the
employer's business, the employer is
chargeable even though the employee's
conduct be "imbecilic."
[(citation omitted) (quoting Nelson v. Am.-
W. African Line, Inc., 86 F.2d 730, 732 (2d
Cir. 1936), cert. denied, 300 U.S. 665, 57
S. Ct. 509, 81 L. Ed. 873 (1937)).]
As Judge Learned Hand had observed in Nelson, supra, 86 F.2d at
731-32, "motives may be mixed; men may vent their spleen upon
others and yet mean to further their master's business; that
meaning, that intention is the test."
Relying on this understanding of the law, defendants argue
that, even if the evidence were sufficient to show they had a
personal motive, at least part of their intention was to perform
their duties as an employee or officer of the hospital. We
agree. There is no question that Kierce and McDonald were
performing their duties, respectively as chairman of the OB/GYN
department and as CEO of the hospital, when they engaged in the
acts alleged by plaintiffs.
In Davis, supra, 209 N.J. at 302-03, our Supreme Court
analyzed further how courts should distinguish between conduct
that is within the scope of employment and conduct that is
outside that scope:
"The scope of employment standard,
concededly imprecise, . . . 'refers to those
acts which are so closely connected with
what the servant is employed to do, and so
25 A-3017-11T1
fairly and reasonably incidental to it, that
they may be regarded as methods, even though
quite improper ones, of carrying out the
objectives of the employment.'"
[Id. at 302 (quoting Di Cosala, supra, 91
N.J. at 169 (quoting W. Prosser, Law of
Torts 460-61 (4th ed. 1971)).]
The Davis Court listed four factors "that collectively
support a finding that an employee's act is within the scope of
his or her employment," quoting the factors from the Restatement
(Second) of Agency § 228(1) (1958):
(a) it is of the kind he is employed to
perform;
(b) it occurs substantially within the
authorized time and space limits;
(c) it is actuated, at least in part, by a
purpose to serve the master; and
(d) if force is intentionally used by the
servant against another, the use of
force is not unexpectable by the
master.
[Davis, supra, 209 N.J. at 303.]
The Court added that "[c]onversely, an employee's act is outside
of the scope of his or her employment 'if it is different in
kind from that authorized, far beyond the authorized time or
space limits, or too little actuated by a purpose to serve the
master.'" Ibid. (quoting Restatement, supra, § 228(2)).
Applying these tests and factors, we conclude that
plaintiffs had no evidence that McDonald was acting outside the
26 A-3017-11T1
scope of his employment when he promised to investigate Kierce's
misconduct but his efforts were allegedly inadequate and
ineffective. McDonald's representation that he would
investigate was the kind of task he was employed by the hospital
to perform, it occurred at the time and place he was performing
his duties for the hospital, and it was intended to serve the
purposes of the hospital in managing its staff. Plaintiffs'
allegation that McDonald performed his duties poorly does not
place his conduct outside the scope of his employment and permit
plaintiffs to recover damages from him under tort law. See New
Mea Constr. Corp. v. Harper, 203 N.J. Super. 486, 494 (App. Div.
1985) ("There is no tort liability for nonfeasance, i.e., for
failing to do what one has promised to do in the absence of a
duty to act apart from the promise made." (quoting Prosser and
Keeton, Law of Torts, § 92 at 655 (1984))); see also Saltiel,
supra, 170 N.J. at 316 ("[A] tort remedy does not arise from a
contractual relationship unless the breaching party owes an
independent duty imposed by law.").
Plaintiffs were dissatisfied with McDonald's performance
and his failure to enforce the hospital's physician bylaws and
to rescind the new policy announced by Kierce. But plaintiffs'
dissatisfaction was not evidence of conduct outside McDonald's
scope of employment.
27 A-3017-11T1
Similarly, with respect to Kierce, all the incidents
occurred in the course of Kierce's employment as the chairman of
the OB/GYN department, they occurred at the time and place where
Kierce performed his duties as chairman, and he was motivated,
however misguidedly, by his desire to supervise in his own way
the work and performance of physicians and employees in his
department. Whether his methods were good or bad does not
change their nature and purpose as acts performed on behalf of
the employer.
In Davis, supra, 209 N.J. at 305, the Court noted an
important consideration in attributing wrongful conduct to the
scope of employment — "the starting point of each incident: the
employee's attempt to serve the employer." Here, the evidence
allowed no finding other than both Kierce and McDonald were
attempting to serve their employer, St. Joseph's hospital, even
if their methods were improper or their diligence subject to
criticism.
Plaintiffs emphasize the holding of DiMaria, supra, 351
N.J. Super. 558, in support of their contention that the
evidence permitted the jury to conclude that the actions of
Kierce and McDonald were outside the scope of their employment.
In DiMaria, however, evidence was presented from which the jury
could conclude the plaintiff's contract was terminated without
28 A-3017-11T1
justification, and on the basis of false information given by
the individual defendants, and at their urging. Id. at 570.
Also, there was evidence that the individual defendants stood to
benefit personally by the termination of the plaintiff's
contract. Id. at 573.
Similarly, plaintiffs' strong reliance on Cappiello, supra,192 N.J. Super. 523, is misplaced. In that case, we confirmed
that the plaintiff's corporate employer could breach but could
not tortiously interfere with its own contractual obligation to
pay commissions to the plaintiff. Id. at 529. The president of
the corporation and the plaintiff's supervisor could be liable
for tortious interference because, as the jury specifically
found, they had agreed to deprive the plaintiff of commissions
that were due to him so that they could procure those
commissions for their own economic benefit. Ibid.Here, in contrast to DiMaria and Cappiello, plaintiffs had
no similar evidence from which the jury could conclude that
Kierce and McDonald intended to harm plaintiffs with respect to
their ICAs or staff privileges because defendants stood to gain
personally from plaintiffs' resignations. There was no evidence
of economic or other personal benefit to Kierce and McDonald
resulting from plaintiffs' resignations.
29 A-3017-11T1
Furthermore, as we have stated, the conduct of Kierce and
McDonald that plaintiffs alleged constituted tortious
interference was the same conduct on behalf of St. Joseph's
hospital that plaintiffs alleged constituted the hospital's
breach of contract. While it is not improper to plead and
attempt to prove alternative theories of recovery, the two
theories could not co-exist in the jury's verdict. The trial
court erred in allowing the jury to find liability and award
damages simultaneously on both contract and tort causes of
action by treating precisely the same conduct as both within and
outside the scope of employment.
Defendants were entitled to judgment dismissing counts two
and three of plaintiffs' complaint because the evidence did not
permit a rational jury to conclude that Kierce and McDonald
acted outside the scope of their employment when they engaged in
the wrongful conduct alleged by plaintiffs.
Having reached that conclusion, we need not address
defendants' alternative arguments that plain error in the jury
instruction, error in the verdict sheet, erroneous admission of
evidence, and insufficiency of evidence of wrongful purpose also
entitle them to judgment in their favor or a new trial on counts
two and three.
30 A-3017-11T1
IV.
Our difficulty with the breach of contract claim alleged in
count one stems from a different deficiency in plaintiffs'
theory of recovery — the absence of compensable damages
resulting from the alleged breach by St. Joseph's hospital. The
ICAs did not guarantee any period of time beyond sixty days that
the hospital was contractually obligated to plaintiffs, and the
implied terms of the ICAs that plaintiffs claimed the hospital
breached were not ones the hospital was legally or contractually
obligated to retain beyond those sixty days.
Initially, we note that we may conduct plenary review on
appeal regarding matters of contract interpretation. Selective
Ins. Co. of Am. v. Hudson E. Pain Mgmt. Osteopathic Med. &
Physical Therapy, 210 N.J. 597, 605 (2012). In Kieffer v. Best
Buy, 205 N.J. 213 (2011), the Court stated: "The interpretation
of a contract is subject to de novo review by an appellate
court. Accordingly, we pay no special deference to the trial
court's interpretation and look at the contract with fresh
eyes." Id. at 222-23 (citation and footnote omitted); see also
Jennings v. Pinto, 5 N.J. 562, 569-70 (1950) ("general rule that
the construction of a contract is a question of law"). The
court's ultimate goal is to determine the intent of the parties,
as expressed in the language they used in the contract and as
31 A-3017-11T1
determined by the circumstances of the parties' relationship and
their objectives. Celanese Ltd. v. Essex Cnty. Improvement
Auth., 404 N.J. Super. 514, 528 (App. Div. 2009).
On this record, the hospital could not be held liable to
compensate plaintiffs for their financial losses indefinitely
into the future, or through 2010 as allowed by the trial court,
even if the resignations could rationally be deemed to be a
constructive termination of the ICAs by the hospital. That is
so because plaintiffs' claim of breach of contract is entirely
dependent on the hospital's alleged contractual undertaking to
enforce its own bylaws and its prior policy on the responsi-
bilities of attending physicians, and the hospital had no
obligation to retain those allegedly implied terms of its ICAs.
First, with respect to the change in policy that attending
physicians would be responsible for all patients during their
duty hours, nothing in plaintiffs' ICAs restricted defendants'
right to set hospital policy. While the hospital could
voluntarily take into account views of the plaintiffs and other
attending physicians in setting hospital policy, plaintiffs'
contracts gave them no policymaking rights. If plaintiffs were
dissatisfied with a change in hospital policy, they had a right
to terminate their ICAs. Assuming that the jury credited
plaintiffs' allegations and did not accept defendants'
32 A-3017-11T1
contentions, the change in policy nevertheless did not support
plaintiffs' claims of breach of contract.4
Second, with respect to the hospital's failure to enforce
the bylaws, if plaintiffs' February 25, 2006 resignation is
considered to be a constructive termination of their ICAs, the
hospital's breach could only be for a period of sixty days
because the hospital had an absolute right to terminate the ICAs
without cause or justification on sixty days' notice. Had
plaintiffs openly complained to the hospital that they
considered it in breach of the ICAs because it failed to enforce
the bylaws,5 the hospital had a right to terminate the ICAs on
sixty days' notice and to clarify that, thereafter, it would
undertake no obligation to enforce the bylaws at plaintiffs'
urging.
Without a legal or contractual duty to perform as
plaintiffs would have had the hospital perform, the hospital
4
For the same reason, the decision of Kierce to change his
department's policy and that of McDonald to support that change
could not be the basis for plaintiffs' claim of tortious
interference with their contractual rights.
5
We note that plaintiffs' February 25, 2006 resignation letter
from the ICAs did not allege breach of contract by St. Joseph's
hospital for failing to enforce the bylaws. Although the June
8, 2006 resignation from staff privileges may be read to have
done so, the ICAs were no longer in effect at that time, and
plaintiffs' breach of contract claim was based on the ICAs.
33 A-3017-11T1
cannot be held liable for the future consequential or
anticipatory damages that the jury awarded to plaintiffs.6
There is no question that Kierce's conduct violated several
provisions of the bylaws that we previously quoted. Defendants
contend that the hospital was not obligated to do anything about
Kierce's violations. They dispute plaintiffs' contention that
the physician bylaws bound the hospital as well as the plaintiff
physicians and required that the hospital enforce the bylaws.
We will accept the jury's apparent finding that the bylaws bound
the hospital as well as the physicians. We will also accept the
jury's apparent finding that the hospital was obligated to
enforce the bylaws and to discipline a physician who violated
them. Granting plaintiffs the favorable findings of the jury on
these disputed issues, we also accept for purposes of our
analysis the jury's apparent finding that, by failing to enforce
its bylaws, the hospital breached the ICAs.
A material breach of a contract relieves an aggrieved party
of its obligations under the contract. Nolan v. Lee Ho, 120
N.J. 465, 472 (1990); Magnet Res., Inc. v. Summit MRI, Inc., 318
6
Plaintiffs claimed loss of profits from resignation of their
staff privileges as consequential loss of future profits on
their breach of contract claim and as damages attributable to
the individual defendants' alleged tortious interference with
economic advantage. However, neither the court's instructions
nor the jury verdict sheet delineated what the jury's damage
award of $423,026.33 against each defendant encompassed.
34 A-3017-11T1
N.J. Super. 275, 285 (App. Div. 1998). Here, such a right was
explicitly stated as a term of the ICAs. Plaintiffs exercised
their right to cease performing under their ICAs when they
resigned their attending physician positions by their letter of
February 25, 2006.
Another right or remedy resulting from a breach of contract
is the recovery of monetary damages that resulted from the
breach. In Preston v. Claridge Hotel & Casino, Ltd., 231 N.J.
Super. 81, 88 (App. Div. 1989), we stated that:
The recovery of damages in breach of
contract actions is limited by the general
principles that:
(1) the damages are those arising naturally
according to the usual course of things from
the breach of the contract, or such as may
fairly and reasonably be supposed to have
been in the contemplation of the parties to
the contract at the time it was made, as a
probable result of the breach; and (2) there
must be reasonably certain and definite
consequences of the breach as distinguished
from the mere quantitative uncertainty.
[(citing Tessmar v. Grosner, 23 N.J. 193,
203 (1957))].
The issue here is what damages arose naturally from the
hospital's breach of the ICAs, or what obligations and potential
damages in the event of a breach were reasonably in the
contemplation of the parties when they entered into the ICAs.
Plaintiffs claim they are entitled to recover their anticipated
35 A-3017-11T1
net income that would have been derived from continuing
indefinitely their ICAs and staff privileges because that was
their intent when they executed their ICAs. Defendants contend
that plaintiffs are not entitled to any such recovery for an
indefinite period because the ICAs were "at will" contracts that
either party could terminate on sixty days' notice.
Analogizing plaintiffs' ICAs to employment contracts, "an
employer may fire an employee for good reason, bad reason, or no
reason at all under the employment-at-will doctrine." Wade v.
Kessler Inst., 172 N.J. 327, 338 (2002). "An employment
relationship remains terminable at the will of either an
employer or employee, unless an agreement exists that provides
otherwise." Ibid. (citing Witkowski v. Thomas J. Lipton, Inc.,
136 N.J. 385, 397 (1994)).
In Shebar v. Sanyo Business Systems Corp., 111 N.J. 276,
285 (1988), the Court confirmed the long-standing at-will
employment doctrine. The Court quoted as follows from Savarese
v. Pyrene Manufacturing Co., 9 N.J. 595, 600-01 (1952), which in
turn was quoting Eilen v. Tappin's, Inc., 16 N.J. Super. 53, 55
(Law Div. 1951):
[I]n the absence of additional express or
implied stipulations as to duration, a
contract for permanent employment, for life
employment or for other terms purporting
permanent employment, where the employee
furnishes no consideration additional to the
36 A-3017-11T1
services incident to the employment, amounts
to an indefinite general hiring terminable
at the will of either party, and therefore,
a discharge without cause does not
constitute a breach of such contract
justifying recovery of money damages
therefor.
There are exceptions, however, to the at-will employment
doctrine. "For example, an employer's grounds for termination
cannot be contrary to public policy, or based on impermissible
factors such as race." Wade, supra, 172 N.J. at 338-39 (citing
Pierce, supra, 84 N.J. at 71-72; Witkowski, supra, 136 N.J. at
398). In addition, bad faith interference with the other
party's right to benefit from the "fruits of the contract" may
constitute breach of the implied covenant of good faith and fair
dealing that is implied in every contract, and may result in
compensable damages despite the right of the party that acted in
bad faith to terminate an at-will contract. Sons of Thunder,
Inc. v. Borden, Inc., 148 N.J. 396, 420-21, 424-25 (1997).
In this case, since remedies against discrimination or
other protected activity are not at issue, the exception to the
at-will employment doctrine that comes closest to plaintiffs'
claims is an implied contractual exception established by the
Supreme Court in Woolley v. Hoffmann-La Roche, Inc., 99 N.J.
284, modified on other grounds, 101 N.J. 10 (1985). The Court
held that an employer may be bound by an implied promise
37 A-3017-11T1
contained in an employee handbook that an at-will employee would
not be terminated without cause and without adhering to
procedural protections. Id. at 297-98. Such "job security
provisions" of a handbook, id. at 297, without a clear and
prominent disclaimer, id. at 309, would be deemed a promise that
the employer made to the employee to induce the employee to
continue in that employment. Id. at 302. The employer could
not promise job security and later withdraw it. See id. at 299-
300.
The holding of Woolley, however, focused on enforceable
termination and job security provisions of a unilateral offer of
employment made by the employer and upon which the employee
relied. Ibid. Neither Woolley nor any of the cases that have
applied its holding and guiding principles were intended to
prevent the parties from altering other terms of a contract that
were not job security provisions.
In this case, the ICAs contained no job security provision.
The hospital did not promise that it would not terminate
plaintiffs' ICAs without good cause or for no reason. In fact,
the contract explicitly gave the parties mutual rights to
terminate the ICAs on sixty days' notice without good cause and
for no reason or justification.
38 A-3017-11T1
The bylaws that plaintiffs alleged the hospital violated
and the policy that defendants changed are not job security
provisions of the ICAs. Assuming they are implied terms of the
contracts between the parties, they could be altered or
modified, just as, for example, the $100 hourly rate of the ICAs
could be modified with proper notice. If the hospital wished to
modify the ICAs to clarify that it did not consider itself bound
to enforce the bylaws, the hospital could terminate the existing
ICAs and add an explicit modifying term to a renewed ICA.
Plaintiffs could then accept or reject the new terms of the ICA.
In the absence of a legal or contractual obligation to
retain a specific term of the contract, plaintiffs could not
reasonably expect that they would be indefinitely entitled to a
contract with such a term, and thus be entitled to recover their
losses because the hospital declined to abide by that term.
Nor does the covenant of good faith and fair dealing
convert all terms of an at-will employment contract into an
immutable and binding contract for an indefinite time. The
facts of this case are distinguishable from Sons of Thunder,
supra, 148 N.J. at 401-02, 427, where the Court permitted
recovery of anticipated future profits for a defined time period
although the contract contained an at-will termination clause
similar to the one in this case. In Sons of Thunder, the jury
39 A-3017-11T1
actually found that the defendant had breached the implied
covenant of good faith and fair dealing by encouraging the
plaintiff to invest in assets to carry out a five-year contract
and then the defendant's new executives completely cut off the
plaintiff's ability to earn income from the contract. Id. at
402-06, 412-13.
In this case, St. Joseph's hospital did not represent to
plaintiffs that the ICAs would endure for any longer than sixty
days, and moreover, plaintiffs were not deprived of the ability
to earn income as they had before through their association with
the hospital. The implied terms of the ICAs that the hospital
allegedly breached, enforcement of the bylaws and change of the
policy pertaining to the responsibilities of attending
physicians, may have affected plaintiffs' work conditions, but
the breach did not destroy the right of plaintiffs "to receive
the fruits of the contract." See id. at 420. Every breach of
contract is not a breach of the implied covenant of good faith
and fair dealing that converts an open-ended at-will contract
into one that binds the parties indefinitely to all its terms.
Where a contract has been breached, "[c]ompensatory damages
are designed 'to put the injured party in as good a position as
he would have had if performance had been rendered as
promised.'" 525 Main St. Corp. v. Eagle Roofing Co., 34 N.J.
40 A-3017-11T1
251, 254 (1961) (quoting 5 Corbin, Contracts § 992 at 5 (1951);
citing 1 Restatement, Contracts § 329, comment a (1932)); accord
In re Liquidation of Integrity Ins. Co., 147 N.J. 128, 136
(1996); Donovan v. Bachstadt, 91 N.J. 434, 444 (1982). So the
question here is what would plaintiffs have derived from their
ICAs and staff privileges if the hospital had not breached the
contract by failing to enforce the bylaws. The hospital's
promise did not assure plaintiffs of any period that their ICAs
would remain in effect beyond sixty days or, more important for
purposes of the issue in dispute, any period of time beyond
sixty days during which the bylaws and prior policy would remain
in effect and bind the hospital to enforce them.
If the hospital materially breached the ICAs by failing to
enforce the bylaws and by changing a policy, plaintiffs could
stop performing their duties, as they did. They could then file
suit for their lost income or profits. But their damages would
not extend indefinitely into the future. If the breach was a
unilateral modification of terms of the contract, plaintiffs
could recover their losses arising from the hospital's failure
to give them sixty days' notice of termination of the existing
contract and substitution of a new one with the altered terms.
"When a wrongful discharge of an employee occurs the
measure of damages is usually the employee's salary for the
41 A-3017-11T1
remainder of the employment period." Goodman v. London Metals
Exch., Inc., 86 N.J. 19, 34 (1981) (citing Moore v. Central
Foundry Co., 68 N.J.L. 14, 15 (Sup. Ct. 1902)). The "employment
period" in this case was sixty days, that is, the durational
limit of each party's promise to the other that it would perform
in accordance with the terms of the ICAs. In effect, the
enforceable at-will term of the ICAs, as modified by a sixty-day
notice provision, defined the expectations of the parties with
respect to the obligations of each to the other. Concomitantly,
it capped the potential anticipatory damages of the parties to
losses incurred during that sixty-day period.
Plaintiffs presented no evidence that they suffered any
losses during the sixty-day period before or after their
February 25, 2006 resignation as attending physicians. They
were paid for the hours they worked. Their expert accounting
evidence commenced calculation of their lost income in calendar
year 2007, some ten months after they terminated their ICAs.
Plaintiffs' resignation from staff privileges provided even
less ground for recovery of future income and profits from the
hospital. The hospital had made no promise that the bylaws and
policies upon which plaintiffs agreed to be associated with the
hospital would be retained indefinitely. Plaintiffs were not
required to continue their relationship with the hospital any
42 A-3017-11T1
more than the hospital was required to retain plaintiffs' staff
privileges on the same terms that applied when those privileges
were initially granted. Plaintiffs simply had no enforceable
expectation of income and profits from continuation of their
staff privileges on terms that they desired and demanded.
In short, plaintiffs did not have a viable breach of
contract claim against St. Joseph's hospital because the
hospital had limited obligations to them under the ICAs and
their staff privileges, and the termination of the relationship,
even if caused by the hospital's actions, was within the rights
retained by the hospital. Consequently, as a matter of law,
plaintiffs' loss of future income and profits outside the sixty-
day obligations of the parties pursuant to the ICAs could not be
attributed to wrongful termination of their ICAs or staff
privileges. Plaintiffs presented no evidence that they suffered
any compensable damages as a result of the acts of the
hospital's agents. The trial court should have granted the
hospital's motions to dismiss count one of the complaint.7
7
In their several motions for summary judgment and judgment
during and after the trial, defendants made multiple arguments
as to why plaintiffs' evidence was not sufficient to recover the
damages they claimed. Our analysis as discussed in this opinion
was not clearly and articulately presented to the trial court in
defendants' arguments, but the argument that plaintiffs were not
entitled to damages for an indefinite period was made and
(continued)
43 A-3017-11T1
V.
Because we have determined that all defendants were
entitled to judgment in their favor, plaintiffs' cross-appeal is
moot, and it will be dismissed.
The judgment awarding damages against defendants is
reversed.
(continued)
defendants' expert testified that plaintiffs could not have been
damaged beyond the sixty-day notice period of their ICAs.
44 A-3017-11T1