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Washington Regional Medical Center v. Raber

United States District Court, W.D. Arkansas, Fayetteville Division

September 24, 2018

WASHINGTON REGIONAL MEDICAL CENTER PLAINTIFF
v.
MICHAEL R. RABER, M.D. DEFENDANT

          OPINION AND ORDER

          P.K. HOLMES, III CHIEF U.S. DISTRICT JUDGE

         Before the Court are Defendant Michael R. Raber, M.D.'s motion for partial summary judgment (Doc. 22), brief in support of his motion (Doc. 23), and a statement of facts in support of his motion (Doc. 24). Plaintiff Washington Regional Medical Center (“WRMC”) filed a response in opposition (Doc. 25), a brief in support (Doc. 26), and a statement of facts in support of its response (Doc. 27). Dr. Raber filed a reply (Doc. 28) to the response in opposition. For the reasons stated herein, the Court will GRANT Dr. Raber's motion for partial summary judgment (Doc. 22) on WRMC's unjust enrichment claim and DENY partial summary judgment on WRMC's consequential damages claim.

         I. Background

         WRMC began recruiting Dr. Michael R. Raber for a neurosurgeon position at its hospital in April of 2016. (Doc. 22-1, ¶ 3). WRMC arranged for Dr. Raber to visit the hospital in Fayetteville, Arkansas, three times between April 2016 and November 2016. (Doc. 26, p. 2). WRMC offered to pay for each trip to introduce Dr. Raber to WRMC Neurosurgical Department staff and the Northwest Arkansas region. (Doc. 22-1, ¶¶ 3-5). All three trips occurred before Dr. Raber signed an employment agreement with WRMC. (Doc. 22-1, ¶ 6). WRMC alleges that Dr. Raber's recruitment expenses were $8, 885.00. (Doc. 26, p. 2). These costs included Dr. Raber's airfare, lodging, and meal costs during the trips. (Doc. 28-1). Dr. Raber contends that he never agreed to reimburse WRMC for the expenses of the recruitment trips if he failed to report to work at WRMC. (Doc. 22-1, ¶ 6). During Dr. Raber's visits to Fayetteville and the remainder of the recruitment process, Dr. Raber claims that no one from WRMC told him it was necessary for WRMC to provide 24-hour, 7-days-a-week neurosurgical coverage. (Doc 22-1, ¶ 9). WRMC on the other hand, contends that J. Larry Shackelford, Vice-President of Outreach, informed Dr. Raber of this requirement during one of his visits. (Doc. 26, p. 3). Dr. Raber also met with neurosurgeons on staff at WRMC and none of them informed him that they were leaving their current position. (Doc. 22-1, ¶ 8).

         After completing the three visits, WRMC and Dr. Raber entered into a 21-page “Employment Agreement” (“the agreement”) on December 7, 2016. (Doc. 27, ¶ 2). The agreement spanned a three-year term beginning on July 1, 2017. (Doc. 22-2, p. 1). The agreement required Dr. Raber to provide a minimum of 90 days of annual neurosurgical on-call coverage for the Emergency Department and provided for Dr. Raber to be paid at a rate of $1, 500 per 24-hour period of Emergency Department coverage he provided in addition to the required 90-day on-call requirement. (Doc. 22-2, pp. 7-8).

         In the “Compensation” section of the agreement, Dr. Raber was awarded a signing bonus conditioned on “relocat[ing] his residence to the Community on or before July 1, 2017 and commenc[ing] Full-Time employment with [the] Hospital . . . .” (Doc. 22-2, p. 9). WRMC paid Dr. Raber the $48, 000 signing bonus, and paid additional payroll taxes in the amount of $3, 672. (Doc. 26, pp. 4-5). To protect itself from losing the $48, 000 signing bonus in the event of Dr. Raber's breach of the agreement, WRMC required Dr. Raber to sign a promissory note and inserted § 2(H)(x) of the agreement, titled “Repayment Obligations” detailing the repayment obligations of the signing bonus, if Dr. Raber failed to comply with the signing bonus conditions. (Doc. 22- 2, p. 9).

         On March 15, 2017, Dr. Raber notified WRMC that he was withdrawing from his commitment to work for WRMC due to personal issues. (Doc. 25-1, p. 2). As a result, WRMC filed this action against Dr. Raber alleging breach of contract and unjust enrichment. (Doc. 1). WRMC was awarded partial summary judgment (Doc. 21) on its breach of contract claim for the $48, 000 signing bonus plus interest as detailed in § 2(H)(x) of the agreement. Thus, WRMC's claims for consequential damages for locum tenens coverage and its unjust enrichment claim for recruitment expenses and payroll taxes remain pending and are the subject of Dr. Raber's motion.

         II. Legal Standard for Summary Judgment

         When a party moves for summary judgment, the party must establish both the absence of a genuine dispute of material fact and that it is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56; Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986); Nat'l Bank of Commerce of El Dorado, Ark. v. Dow Chem. Co., 165 F.3d 602, 606 (8thCir. 1999). In order for there to be a genuine issue of material fact, the nonmoving party must produce evidence “such that a reasonable jury could return a verdict for the nonmoving party.” Allison v. Flexway Trucking, Inc., 28 F.3d 64, 66-67 (8th Cir. 1994) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). Only facts “that might affect the outcome of the suit under the governing law” need be considered. Anderson, 477 U.S. at 248. “[T]he non-movant must make a sufficient showing on every essential element of its claim on which it bears the burden of proof.” P.H. v. Sch. Dist. of Kan. City, Mo., 265 F.3d 653, 658 (8th Cir. 2001). Facts asserted by the nonmoving party “must be properly supported by the record, ” in which case those “facts and the inferences to be drawn from them [are viewed] in the light most favorable to the nonmoving party.” Id. at 656-57.

         III. Analysis

         Because this is a diversity case, the Court applies Arkansas substantive law. Murray v. Greenwich Ins. Co., 533 F.3d 644, 648 (8th Cir. 2008) (citing Erie R.R. v. Tompkins, 304 U.S. 64, 78 (1938)). Under that law, Dr. Raber is entitled to summary judgment on WRMC's unjust enrichment claim. However, summary judgment is inappropriate on WRMC's claim for consequential damages.

         A. Unjust Enrichment

         As an initial matter, Dr. Raber is entitled to judgment on WRMC's unjust enrichment claim. A claim for unjust enrichment relies on the principle that “one person should not unjustly enrich himself at the expense of another.” Dews v. Halliburton Indus., Inc., 708 S.W.2d 67, 69 (1986) (citation omitted). For a claim of unjust enrichment to succeed, the defendant “must have received something of value, to which he was not entitled and which he must restore. There must also be some operative act, intent, or situation to make the enrichment unjust and compensable.” Id.

         With respect to WRMC's claim that its recruiting expenses unjustly enriched Dr. Raber, judgment for Dr. Raber is proper. Where one party gratuitously confers a benefit on another, or does so voluntarily, knowing it has no obligation to do so, enrichment by the receiving party is not unjust. See Restatement (Second) of Restitution § 1, Comment C (Am. Law Inst. 1937); cf. Childs v. Adams, 909 S.W.2d 641, 647 (Ark. 1995) (“[O]ne who officiously confers a benefit upon another is not entitled to restitution therefor.” (citing Restatement (Second) of Restitution § 2)). WRMC's claim that Dr. Raber was unjustly enriched by the expenses WRMC ...


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