The opinion of the court was delivered by: SUSAN WRIGHT, District Judge
MEMORANDUM OPINION AND ORDER
Before the Court are plaintiff's motions for summary judgment
to which defendants have responded and plaintiff has replied. For
the reasons stated below, the motions are denied.
Plaintiff Arkansas Methodist Hospital Corporation d/b/a
Arkansas Methodist Medical Center ("Methodist") owns and operates
a hospital in Paragould, Arkansas. In November 2001, defendants
Craig W. Forbes, M.D., and Eugene M. Finan, M.D., both signed
Recruitment Agreements with Methodist, whereby they agreed to
engage in the specialty of obstetrics and gynecology ("OB/GYN")
on a full time basis in Paragould. In exchange, Methodist agreed
to advance them money in the form of an "Income Guarantee Loan." Under the terms of the contract,
the doctors are obligated to repay Methodist the total
outstanding balance due on the Income Guarantee Loan, except as
otherwise provided by the contract. If the contract is terminated
for any reason other than Methodist's breach or the doctor's
death or disability, the entire outstanding balance of the Income
Guarantee Loan is due and payable immediately and in cash upon
demand by Methodist. Under the terms of the contract, Methodist
was obligated to forgive 1/48 of the outstanding balance of the
loan for each month that the doctor remained in Paragould as an
appointee of Methodist's medical staff, during the period
beginning three months after the conclusion of the guarantee
Dr. Forbes signed his contract on or about November 16, 2001.
Dr. Finan signed his contract on or about November 12, 2001. On
or about October 17, 2002, both Drs. Forbes and Finan agreed to
amend their contracts so as to extend the contract's "guarantee
period" for an additional year, thereby entitling them to borrow
more money from Methodist.
Methodist performed all of its obligations under the contract.
On or about June 25, 2004, Forbes ceased to be a member of
Methodist's medical staff, and ceased practicing medicine in
Paragould, thereby defaulting on the contract. Dr. Finan ceased
being a member of Methodist's medical staff and ceased practicing
medicine in Paragould on or about August 1, 2004. On or about
September 9, 2004, Methodist notified Drs. Forbes and Finan in
writing that they had committed "events of default" specified in
the contract, and that they had potentially committed other, then
unknown, events of default. Methodist further notified Drs.
Forbes and Finan of its decision to terminate the contracts and
demanded immediate payment of the total outstanding balance of
$529,399.13 owed by Dr. Forbes to Methodist under the contract,
and $388,553.64 owed by Dr. Finan. Both defendants have refused to repay Methodist the total amounts
due under the Income Guarantee Loans.
On September 10, 2004, and September 14, 2004, Methodist filed
complaints against Drs. Forbes and Finan, respectively, in state
court, alleging breach of contract and unjust
enrichment.*fn1 The doctor defendants separately removed the
actions to federal court based upon diversity of citizenship, and
filed counterclaims alleging fraudulent inducement and breach of
fiduciary duty.*fn2 The complaints were consolidated for
trial, set for the week of November 14, 2005.
Methodist moves the Court for summary judgment on its breach of
contract claims and on the counterclaims of fraud, asserting
there are no genuine issues of material fact in dispute.
Defendants contend genuine issues of fact exist as to whether
they were fraudulently induced to sign the recruitment contracts.
Summary judgment is appropriate when "the pleadings,
depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving party
is entitled to judgment as a matter of law." Fed.R.Civ.P.
56(c). As a prerequisite to summary judgment, a moving party must
demonstrate "an absence of evidence to support the non-moving
party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 325
(1986). Once the moving party has properly supported its motion
for summary judgment, the non-moving party must "do more than
simply show there is some metaphysical doubt as to the material
facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 586 (1986). The non-moving party may not rest on mere
allegations or denials of his pleading but must "come forward
with `specific facts showing that there is a genuine issue for
trial.'" Id. at 587 (quoting Fed.R.Civ.P. 56(e)).
"[A] genuine issue of material fact exists if: (1) there is a
dispute of fact; (2) the disputed fact is material to the outcome
of the case; and (3) the dispute is genuine, that is, a
reasonable jury could return a verdict for either party." RSBI
Aerospace, Inc. v. Affiliated FM Ins. Co., 49 F.3d 399, 401
(8th Cir. 1995). The inferences to be drawn from the
underlying facts must be viewed in the light most favorable to
the party opposing the motion. Matsushita, 475 U.S. at 587
(citations omitted). Further, summary judgment is particularly
appropriate where an unresolved issue is primarily legal, rather
than factual. Mansker v. TMG Life Ins. Co., 54 F.3d 1322, 1326
(8th Cir. 1995).
Defendants do not dispute the execution of the contract between
themselves and Methodist. They contend, however, that they are
not legally required to honor the terms of the contract because
they were fraudulently induced to enter into the contract by
representations made by Ron Rooney, the CEO of
Methodist.*fn3 Methodist argues that defendants failed to
plead fraud with specificity as required by Fed.R.Civ.P. 9(b),
and that none of the factual averments upon which they base their
counterclaim constitutes a false representation of material
facts. 1. Federal Rule of Civil Procedure 9(b)
Fed.R.Civ.P 9(b) provides: "In all averments of fraud or
mistake, the circumstances constituting fraud or mistake ...