Dr. Laxmi Challa v. Pinnacle Health Hospitals

J-S94013-16
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
DR. LAXMI CHALLA IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellant
v.
PINNACLE HEALTH HOSPITALS INC.,
PINNACLE HEALTH AT HARRISBURG
HOSPITAL, PINNACLE HEALTH SYSTEM
Appellees No. 370 MDA 2016
Appeal from the Judgment Entered February 25, 2016
In the Court of Common Pleas of Dauphin County
Civil Division at No(s): 06-2765
*****
DR. LAXMI CHALLA IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellee
v.
PINNACLE HEALTH HOSPITALS D/B/A
PINNACLE HEALTH AT HARRISBURG
HOSPITAL AND PINNACLE HEALTH
SYSTEM
Appellants No. 458 MDA 2016
Appeal from the Judgment Entered February 25, 2016
In the Court of Common Pleas of Dauphin County
Civil Division at No(s): 2006 CV 2765
J-S94013-16
BEFORE: LAZARUS, J., RANSOM, J., and FITZGERALD, J.*
MEMORANDUM BY LAZARUS, J.: FILED JANUARY 13, 2017
Doctor Laxmi Challa (Challa) appeals and Pinnacle Health Hospitals,
d/b/a Pinnacle Health at Harrisburg Hospital and Pinnacle Health System
(collectively, Pinnacle Health), cross-appeals from the judgment entered on
the trial court’s order granting a non-suit in favor of Pinnacle Health and
denying Pinnacle Health’s post-verdict motion for fees and costs of suit.
After careful review, we affirm.
Challa, a licensed physician, graduated from medical school in India
and immigrated to the United States in 2000. In October 2002, Challa
applied for a first-year position in Pinnacle Health’s Internal Medicine
Residency Program and was “matched” with that program in March 2003.
On June 16, 2003, Challa relocated from San Jose, California, to Harrisburg,
Pennsylvania, in anticipation of beginning her residency. On June 29, 2003,
during her residency orientation week, Challa informed Pinnacle Health’s
Internal Medicine Department’s program coordinator, Janene Beck, that she
was thirty weeks pregnant and due to give birth in September 2003.
Challa began her residency with Pinnacle Health on July 1, 2003. In
mid-to late July 2003, Challa reported to her program coordinators that she
was having “on and off” dizziness which affected her ability to finish patient
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*
Former Justice specially assigned to the Superior Court.
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notes before rounds. On August 26, 2003, Challa met with Pinnacle Health’s
Internal Medicine Program Director, Dr. Nirmal Joshi, who expressed his
concerns regarding her performance in the program. Specifically, Dr. Joshi
told Challa that he was getting consistent negative feedback from her
residency supervisors regarding her bedside performance with patients. On
August 27, 2003, Challa suffered a premature membrane rupture and was
admitted to Harrisburg Hospital; she gave birth, via C-section, on August 28,
2003. Challa took four weeks’ leave after giving birth.
In October 2003, upon her return to the program following maternity
leave, Challa received a positive performance review for her work in an
emergency room rotation. On November 17, 2003, Challa met again with
Dr. Joshi who told her that he was still receiving reports of her poor
performance from supervisors. On December 1, 2003, Challa was placed on
one-month probation after Dr. Joshi determined that she was not meeting
the educational requirements for the residency program. On December 16,
2003, Dr. Joshi met with Challa to give her a two-week evaluation of her
probation; during the meeting, Challa indicated that she would work during
the Christmas break to demonstrate that she could improve her
performance. On January 6, 2004, Dr. Joshi met with Challa and informed
her that because her program performance continued to be unsatisfactory
she would have to leave the residency program. Challa agreed to resign
from the program. The resignation letter, penned by Challa, states:
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Due to unforeseen personal reasons I would like to resign by the
end of February 2004 from PGY Internal Medicine Residency
Program at Pinnacle Health Hospitals. Thank you for your
cooperation in this matter. Yours sincerely, Lazmi D. Challa
Resignation Letter, 1/8/04.
On June 23, 2006, Challa filed a discrimination complaint against
Pinnacle Health under the Pennsylvania Human Relations Act (PHRA). 1 In
her complaint, Challa alleged that she was unlawfully discriminated against
on the basis of her pregnancy,2 gender, and disability. On January 12,
2012, Pinnacle Health filed a motion for summary judgment, which the court
denied.
A non-jury trial was held on October 7, 2015, before the Honorable
Bruce F. Bratton. At trial, Pinnacle Health conceded that Challa suffered an
adverse employment action; however, it argued Challa was terminated for a
legitimate, non-discriminatory reason. At the close of Challa’s case, Pinnacle
Health moved for a non-suit.3 N.T. Non-Jury Trial, 10/7/15, at 192. On
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1
43 P.S. §§ 951-963.
2
The PHRA itself prohibits pregnancy discrimination and the PHRA is read in
pari materia with Title VII’s Pregnancy Discrimination Act, 42 U.S.C. §
2000e, et seq.
3
Although Pinnacle Health and the court refer to the motion as a motion for
a directed verdict, it is properly termed a motion for non-suit. Compare
Rachlin v. Edmison, 813 A.2d 862 (Pa. Super. 2002) (en banc) (entry of
compulsory nonsuit is proper if trial on the case has begun and the plaintiff
has presented evidence) with Pa.R.C.P. 226 (trial court may grant motion
for directed verdict at close of all evidence). Therefore, the appeal is taken
from the court’s entry of a non-suit, not a directed verdict.
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October 8, 2015, in open court, the court granted Pinnacle Health’s motion
for non-suit. N.T. Proceedings, 10/8/15, at 203-205. On October 16, 2015,
Challa filed post-trial motions. Ten days later, on October 26, 2016,
Pinnacle Health filed post-trial motions. After more than 120 days had
elapsed from the filing of her post-trial motions, Challa filed a praecipe to
enter judgment, pursuant to Pa.R.C.P. 227.4(1)(b), on February 25, 2016.
On that same day, the court entered final judgment.
On March 2, 2016, Challa filed a timely notice of appeal from the final
judgment.4 On March 8, 2015, the trial court ordered Challa to file a
statement of errors complained of on appeal pursuant to Pa.R.A.P. 1925(b).
On March 17, 2016, Pinnacle Health filed a timely notice of appeal. 5 On
March 25, 2016, Challa filed her Rule 1925(b) statement. On March 31,
2016, the trial court ordered Pinnacle Health to file a Rule 1925(b)
statement; Pinnacle Health complied and filed its statement on April 20,
2016.
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4
See Conte v. Hahnemann Univ. Hosp., 707 A.2d 230 (Pa. Super. 1997)
(once requisite 120-day period runs after filing post-trial motions and party
opts to praecipe for entry of judgment, judgment becomes final, and
immediately appealable, when it is entered on docket); see also Pa.R.C.P.
227.4(1)(b).
5
On May 23, 2016, by order of Court, we sua sponte consolidated the two
appeals at 307 MDA 2016 (Challa appeal) and 458 MDA 2016 (Pinnacle
Health appeal). See Pa.R.A.P. 513 (when more than one appeal is from
same order, appellate court may order them to be consolidated).
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On appeal, Dr. Challa raises the following issues for our review:
(1) Whether the court below erred in granting a directed
verdict against [Challa].6
(2) Whether the court below erred in granting a nonsuit
against Plaintiff-Appellant.
(3) Whether the court below erred in finding that [Challa] had
not established a prima facie case for discrimination under
the PHRA.
(4) Whether the court below erred in finding that [Pinnacle
Health] established a legitimate non-discriminatory reason
for any adverse employment actions in this case.
(5) Whether the court below erred in finding that [Challa] had
not put forward evidence of pretext for any adverse
employment actions in this case.
(6) Whether, to the extent it did not [do] so, the court below
erred in failing to give proper weight to the admissible
hearsay admissions by [Pinnacle Health’s] agents.
(7) Whether the court below erred in allowing [Pinnacle
Health] to argue that it would have terminated [Challa]
regardless of whether she resigned when it took a
contradictory position throughout the litigation with prior
counsel.
On cross-appeal, Pinnacle Health raises the following issue for our
consideration: Did the trial court err in failing to award attorneys’ fees and
costs to Pinnacle Health where Challa failed to produce any evidence at trial
to support her claim?
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6
As previously noted, see supra n.3, the trial court entered a non-suit at
the close of Challa’s case, not a directed verdict, in favor of Pinnacle Health.
Therefore, the appeal is taken from the court’s entry of a non-suit, not a
directed verdict, making the first issue moot.
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Challa’s Appeal
Challa contends that the trial court improperly granted a non-suit in
Pinnacle Health’s favor where, in pleadings, it denied that it forced Challa to
resign and then, at trial, admitted that it terminated her. Challa contends
that by permitting Pinnacle Health to take these different positions she was
prejudiced and, in the end, Pinnacle Health failed to advance a non-
discriminatory reason for the adverse employment action.
A compulsory non-suit can only be granted in cases where it is clear
that a cause of action has not been established. The plaintiff must be given
the benefit of all favorable evidence along with all reasonable inferences of
fact arising from that evidence. Smith v. King’s Grant Condominium,
614 A.2d 261, 263 (Pa. Super. 1992) (citation omitted). Any conflict in the
evidence must be resolved in favor of the plaintiff. Id.7
Under the PHRA, the plaintiff has the burden of establishing a prima
facie case of discrimination. General Electric Corp. v. Pennsylvania
Human Relations Commission, 365 A.2d 649, 655-56 (Pa. 1976),
adopting the holding of McDonnell Douglas Corp. v. Green, 411 U.S. 792
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7
We note that prior case law only permitted an appeal from a final order
denying an appellant’s motion to remove a non-suit. See Billig v. Skvarla,
853 A.2d 1042, 1048 (Pa. Super. 2004) (“in a case where non-suit was
entered, the appeal properly lies from the judgment entered after denial of a
motion to remove nonsuit.”). Here, Challa filed a post-trial motion alleging
that the trial court erred in granting a non-suit against her. Because a
motion for post-trial relief replaces a motion to remove a non-suit, she has
preserved this allegation on appeal. See Pa.R.C.P. 227.1(a) (Note).
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(1973). A prima facie case is established by showing that the plaintiff is a
member of a protected class, has suffered an adverse employment action,
and, others not in the protected class have been treated differently.
Kryeski v. Schott Glass Technologies, Inc., 626 A.2d 595, 597-98 (Pa.
Super. 1993).
Once the plaintiff has established a prima facie case, the burden shifts
to the employer to establish a legitimate, non-discriminatory reason for the
discharge. Winn v. Trans World Airlines, Inc., 484 A.2d 392, 402 (Pa.
1984); Jenks v. Avco Corp., 490 A.2d 912, 915 (Pa. Super. 1985). The
employer’s burden is one of production, not persuasion, and thus involves no
credibility assessment. Kroptavich v. Pa. Power & Light Co., 795 A.2d
1048, 1055 (Pa. Super. 2002) (citation omitted). If the employer articulates
a legitimate business explanation, then the presumption of discriminatory
intent created by the employee’s prima facie case is rebutted and the
presumption simply drops out of the picture. Id. If a defendant meets this
burden, then a plaintiff has the opportunity to prove, by a preponderance of
the evidence, that the legitimate reasons offered by the employer were not
its true reasons, but, rather, a pretext for discrimination. Bailey v.
Storlazzi, 729 A.2d 1206, 1212 (Pa. Super. 1999). Thus, the ultimate
burden of proving intentional discrimination returns to the plaintiff after the
employer offers its legitimate, non-discriminatory reasons for the
employment action. Id.
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Pinnacle Health does not contest that Challa meets the first two prongs
of a prima facie case. In fact, it conceded at trial that Challa suffered an
adverse employment action when she was terminated from Pinnacle Health.
Pinnacle Health, however, disagrees with Challa’s claim that it treated her
differently than other non-pregnant residents in its program. Other than her
self-serving testimony that a chief resident asked for volunteers to take her
on-call shift and rotations prior to her termination, Challa has produced no
evidence to suggest that she was treated less favorably than her non-
pregnant resident counterparts due to her pregnancy. Kryeski, supra.
Therefore, she failed to establish a prima facie case of discrimination.
However, even if the court found that Challa established a prima facie
case of discrimination, Pinnacle Health clearly articulated a legitimate non-
discriminatory motive for its actions.
Based on the evidence presented at trial, the court concluded that
Challa was terminated because she was unable to communicate effectively
with patients. Specifically, Dr. Joshi testified that he had a one-on-one
meeting with Challa in August 2003 to address consistent concerns raised by
several supervisors regarding her negative bedside performance. N.T. Non-
Jury Trial, 10/7/15, at 124. Doctor Joshi made a notation in Challa’s file to
reflect his concerns with her having difficulty progressing in her residency
training. Id. at 126-28. Prior to placing Challa on probation, Dr. Joshi again
noted that “when . . . evaluated against her peers at that time in training
and with other peers, she was clearly not making it, so . . . to that extent
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she was not competent.” Id. at 134. Specifically, he testified that Challa
was not meeting the educational requirements for the residency program.
Id. This evidence proves that Pinnacle Health had a legitimate, non-
discriminatory reason for terminating Challa. Therefore, the burden then
shifted to Challa to prove, by a preponderance of the evidence, that Pinnacle
Health’s alleged legitimate reasons were pretexual. Bailey, supra.
We first note that whether Challa voluntarily resigned or was forced to
resign (terminated) is of no moment in the court’s ultimate judgment in
favor of Pinnacle Health where Challa failed to produce any evidence of
pretext to rebut Pinnacle Health’s legitimate, non-discriminatory reason to
terminate her. There was ample documentary evidence supporting Dr.
Joshi’s testimony that Challa consistently failed to meet the standards
required of Pinnacle Health’s residency program.
Challa’s testimony that a program coordinator questioned how she was
going to manage her pregnancy and residency and told her “it was not time
to be pregnant,” simply does not establish, by a preponderance of the
evidence, that her pregnancy was a motivating or determinative factor in
Pinnacle Health’s employment decision. Kroptavich v. Pa. Power & Light
Co., 795 A.2d 1048, 1061 (Pa. Super. 2002) (quoting Simpson v. Kay
Jewelers, 142 F.3d 639, 644-45 (3d Cir. 1998)). The record supports the
finding that Challa was warned several times prior to her probationary period
that supervisors had a “regular pattern of concerns related to her
performance at the bedside,” N.T. Non-Jury Trial, 10/7/15, at 124, and that
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she simply failed to meet the educational requirement of the residency
program. Moreover, the fact that Dr. Joshi gave Challa a favorable letter of
recommendation following her resignation also does not establish pretext
where Dr. Joshi testified that it is common practice to write such letters so
that residents are given an opportunity to “start somewhere else in a
different discipline. . . [and] allow them to have a second chance.” Id. at
142, 146.
In sum, the evidence bears out the fact that the trial court, as fact
finder, could determine that Pinnacle Health’s alleged legitimate reason,
Challa’s poor job performance, was not motivated by animus. Kroptavich,
supra (quoting Fuentes v. Perskie, 32 F.3d 759, 764-65 (3d Cir. 1994))
(to prove pretext, plaintiff must point to “weaknesses, implausibilities,
inconsistencies, incoherencies, or contradictions in the employer's proffered
legitimate reasons [such] that a reasonable factfinder could rationally find
them ‘unworthy of credence’” and infer that proffered non-discriminatory
reason “did not actually motivate” employer’s action). Therefore, we find
no merit to Challa’s claim that the court improperly entered non-suit in
Pinnacle Health’s favor where it is clear that she failed to establish a cause of
action for discrimination under the PHRA.
Challa also contends that the court failed to give proper weight to
admissible hearsay statements. Specifically, she claims that her testimony
about statements made by the hospital’s supervising staff were admissible
under Pa.R.E. 803(25)(C) or (D), as opposing parties’ statements.
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Moreover, she contends that the comments made by the staff established
pretext and support her discrimination case.
Pursuant to Rule 803:
(25) An Opposing Party's Statement. The statement is offered
against an opposing party and:
(A) was made by the party in an individual or
representative capacity;
(B) is one the party manifested that it adopted or believed
to be true;
(C) was made by a person whom the party
authorized to make a statement on the subject;
(D) was made by the party's agent or employee on a
matter within the scope of that relationship and
while it existed; or
(E) was made by the party's coconspirator during and in
furtherance of the conspiracy.
Pa.R.E. 803(25)(C), (D) (emphasis added).
Challa cites to no case law to support her empty claim that the court
erred “to the extent [that it] failed to give the proper weight to the
admissible hearsay admissions.” Appellant’s Brief, at 28. Instantly, the trial
court concluded that any reference to Dr. Dida, Challa’s attending physician,
was only to be considered “to the extent it is offered only that these
statements occurred, not that the content was in any way . . . being offered
for the truth of the matter within these conversations.” N.T. Non-Jury Trial,
10/7/15, at 29. The fact remains that while Dr. Dida supervised Challa’s
residency, she did not have the power to make ultimate decisions regarding
the retention or termination of residents from the program. Thus, we see no
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error in the court’s limited consideration of Challa’s testimony regarding Dr.
Didia.
Pinnacle Health’s Cross-Appeal
On cross-appeal, Pinnacle Health asserts that the trial court improperly
denied its post-trial motion seeking attorneys’ fees and costs under the
PHRA.
The trial court concluded that while Challa did not produce evidence to
support a prima facie claim of discrimination, her conduct did not rise to the
level of bad faith to support an award of attorneys’ fees and costs under
section 962(c.3) of the PHRA. See 43 Pa.C.S. § 962(c.3) (“court may award
attorney fees and costs to the prevailing defendant if the defendant proves
that the complaint was brought in bad faith.”). We agree. See Hoy v.
Angelone, 691 A.2d 485 (Pa. Super. 1997) (where nothing suggested that
defense was not undertaken and conducted in good faith, trial court’s denial
of counsel fees and costs under section 962 of PHRA was not manifestly
unreasonable or clearly erroneous).
Moreover, Pinnacle Health was not entitled to the counsel fees under
42 Pa.C.S. § 2503, which states:
§ 2503. Right of participants to receive counsel fees.
The following participants shall be entitled to a reasonable
counsel fee as part of the taxable costs of the matter:
* * *
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(9) Any participant who is awarded counsel fees because
the conduct of another party in commencing the matter or
otherwise was arbitrary, vexatious or in bad faith.
(10) Any other participant in such circumstances as may
be specified by statute heretofore or hereafter enacted.
42 Pa.C.S. § 2503(9), (10). As we previously concluded, Challa’s actions in
bringing her discrimination lawsuit against Pinnacle Health did not rise to the
level of bad faith, nor were they arbitrary or vexatious. See Thunberg v.
Strause, 692 A.2d 295 (Pa. 1996) (where there is no basis in law or fact for
commencement of action, action is arbitrary). Therefore, the trial court did
not abuse its discretion in denying Pinnacle Health’s post-verdict motion.8
Judgment affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 1/13/2017
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8
Although Pinnacle Health did not file its post-verdict motion until October
26, 2015, more than 10 days after the trial court entered its directed
verdict/non-suit, pursuant to Pa.R.C.P. 227.1(c) “[i]f a party has filed a
timely post-trial motion, any other party may file a post-trial motion within
ten days after the filing of the first post-trial motion.” Because Pinnacle
Health’s post-verdict motion was filed within 10 days of the date that Challa
filed her post-trial motion, it was timely filed.
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