Janson v. Summit Med. Group, Inc. (Summary)

EMPLOYMENT – BREACH OF CONTRACT

Janson v. Summit Med. Group, Inc., No. 2012-CA-000587 (Ky. Ct. App. May 17, 2013)

The Court of Appeals of Kentucky affirmed the lower court’s holdings that a medical group terminated a physician within the provisions of his employment contract and that the hospital was barred from asserting a claim for unjust enrichment related to overpayment of the physician’s severance pay.

The physician sued the medical group claiming breach of contract.  The physician argued that termination of his employment contract with the medical group required a vote of 2/3 of the medical group’s board of directors, which did not occur.   The court disagreed, finding that the 2/3 voting requirement only pertained to termination prior to the completion of the agreement’s initial five-year term.  The court also affirmed the trial court’s dismissal of the medical group’s counterclaim for unjust enrichment based on the affirmative defenses of estoppel and waiver.  Even though the court agreed that the medical group incorrectly computed the physician’s severance pay and overpaid him, it held that it was estopped from asserting the claim because it had complete control over the physician’s severance benefit, paid him the severance amount, and the physician relied upon that payment.  In the alternative, the court reasoned that the medical group waived the unjust enrichment claim because it did not demand restitution until four years after the severance payment was made.