WD64853: Steven L. Clinch, Appellant, v. Heartland Health, Heartland Regional Medical Center, Midwestern Health Management, Inc., Lowell C. Kruse, and Michael E. Nellestein, Respondents.

This slip opinion is subject to revision and may not reflect the final opinion adopted by the Court.

Opinion
Missouri Court of Appeals Western District

Case Style: Steven L. Clinch, Appellant, v. Heartland Health, Heartland Regional Medical Center, Midwestern Health Management, Inc., Lowell C. Kruse, and Michael E. Nellestein, Respondents.

Case Number: WD64853

Handdown Date: 09/13/2005

Appeal From: Circuit Court of Buchanan County, Hon. Randall Jackson

Counsel for Appellant: John Kent Thomas

Counsel for Respondent: George Edward Leonard and Todd Henry Bartels

Opinion Summary:
Steven L. Clinch sued Michael E. Nellestein for tortious interference after Clinch was released from his position as director of cardiac surgery at Heartland Regional Medical Center. Clinch also sued his former employer, Midwestern Health Management, Inc., the hospital and the hospital's chief executive officer, Lowell C. Kruse, for conspiring to restrain his trade as a surgeon by keeping him from practicing on the hospital staff. The circuit court granted defendants' motions for summary judgment on all claims. Clinch appeals.
AFFIRMED IN PART AND REVERSED IN PART. REMANDED.
Division holds: 1) The elements of tortious interference with a business relationship are: (1) The plaintiff was involved in a valid business relationship; (2) the defendant was aware of the relationship; (3) the defendant intentionally interfered with the 1) The elements of tortious interference with a business relationship are: (1) The plaintiff was involved in a valid business relationship; (2) the defendant was aware of the relationship; (3) the defendant intentionally interfered with the relationship, inducing its termination; (4) defendant acted without justification; and (5) plaintiff suffered damages as a direct result of defendant's conduct. Nazeri v. Missouri Valley College , 860 S.W.2d 303, 316 (Mo. banc 1993). A third party's interference with contracts terminable at will is actionable. Hensen v. Truman Medical Center, Inc. , 62 S.W.3d 549, 553 (Mo. App. 2001).
First, Although Clinch framed his cause of action as tortious interference with contract, a contract is a business relationship and, therefore, Clinch is not presenting a new issue on appeal even though he now phrases his claim as one of tortious interference with business relationship. See Fischer, Spuhl, Herzwurm and Associates, Inc. v. Forrest T. Jones and Company , 586 S.W.2d 310, 315 (Mo. banc 1979)
Next, Clinch needed to establish that Nellestein acted with the intention of "doing . . . a harmful act without justification or excuse[.]" Downey v. United Weatherproofing, Inc., 253 S.W.2d 976, 980 (Mo. 1953). And for the fourth element, Nellestein's motive is at issue. Community Title Company v. Roosevelt Savings and Loan Association , 796 S.W.2d 369, 372 (Mo. banc 1990). There is a genuine issue of material fact as to Nellestein's actions and motive. Summary judgment, therefore, was improper.
2) Clinch's antitrust claims fail because he lacks standing as an antitrust plaintiff. Clinch needed to show that he was a competitor or consumer who suffered a direct antitrust injury. Hamilton v. Spencer, 929 S.W.2d 762, 767 (Mo. App. 1996); Duvall v. Silvers, Asher, Sher and McLaren, M.D.'s , 998 S.W.2d 821, 825-27 (Mo. App. 1999); Zipper v. Health Midwest , 978 S.W.2d 398, 417-18 (Mo. App. 1998). Clinch also needed to prove that the defendants' anti-competitive behavior injured consumers or competition in the relevant market. Brown Shoe Company v. United States, 370 U.S. 294, 320 (1962); Atlantic Richfield Company v. USA Petroleum Company , 495 U.S. 328, 344 (1990); Zipper, 978 S.W.2d at 418.
The defendants entered into an exclusive arrangement with their cardiac surgeons, but this is not a per se antitrust injury. Clinch needed to show that the defendants' actions injured competition. Although Clinch's departure meant that few off-pump cardiac bypass surgeries would be performed, Clinch himself was performing very few off-pump surgeries before he left. His departure, therefore, did not impact significantly the quality or quantity of services offered in the market. Additionally, Clinch failed to establish that the defendants' actions increased the prices in the market to an anticompetitive level. Summary judgment, therefore, was proper on Clinch's antitrust claims.

Citation:

Opinion Author: Paul M. Spinden, Judge

Opinion Vote: AFFIRMED IN PART AND REVERSED IN PART. REMANDED. White Hardwick, P.J., and Breckenridge, J., concur.

Opinion:

Steven L. Clinch has sued a fellow surgeon for tortious interference with his business relationship after losing his position as a medical director at a St. Joseph hospital, allegedly because the other surgeon complained to hospital administrators about Clinch's proficiency. Clinch also sued his former employer, Midwestern Health Management, Inc., and Heartland Regional Medical Center, where he was on staff, and Heartland Regional's chief executive officer, Lowell C. Kruse, for conspiring to restrain his trade as a surgeon by keeping him from practicing on the hospital staff. Midwestern Health Management contracted with Heartland Regional to provide Clinch's services to the hospital.
The circuit court granted summary judgment for the defendants on both causes of action. We affirm summary judgment of Clinch's antitrust claims but reverse summary judgment of his tortious interference claim and remand for further proceedings.
The basis for this dispute apparently began fomenting during 1999 when the director of vascular surgery at Heartland Regional, Michael Nellestein, expressed concern that the hospital's heart program was not "moving forward effectively." Clinch was medical director of cardiac surgery at the hospital. Nellestein mentioned some of his concerns to Curtis Kretzinger, the hospital's chief operating officer, and to Steven McCamy, who oversaw the hospital's physicians. When Nellestein met with Kruse during Spring 1999 to discuss his pay, he presented data comparing his and Clinch's productivity. He met with Kruse again--sometime during late 1999 or early 2000--to discuss extension of his contract and removal of Scott Koellicker, the administrator who oversaw cardiac surgery at the hospital, from his chain of command.
During June 2000, while Nellestein was on leave from his duties, Clinch performed 17 surgeries. When Nellestein returned to his duties, someone told him that complications had beset Clinch's surgeries. Nellestein reviewed Clinch's surgeries, but he did not try to determine the complications' causes. At some point, apparently after November 2000, Nellestein recorded that Clinch's surgeries had a "35% major complication rate."
Charles Mullican, the hospital's chief medical officer, became aware of complications with Clinch's surgeries. Nellestein acknowledged that he may have told Mullican of the complications, but he did not give Mullican a written analysis or complain about Clinch's performance.
Sometime during July or August 2000, Nellestein told Kretzinger during a hallway conversation that he was unhappy at Heartland Regional and was considering leaving the hospital's staff. Surprised, Kretzinger later summoned Nellestein to his office where Nellestein expressed concerns that the hospital's heart program was "not moving forward effectively." Nellestein noted problems with infection rates, referrals, volume, and results. He expressed specific concerns about Clinch's performance, which Kretzinger characterized as "vague" and as part of Nellestein's general critique of the heart program.
Kretzinger told Heartland Health's Clinical Business Strategy Group that Nellestein had threatened to leave and that he was discussing a list of issues with Nellestein. Asked whether or not Nellestein had conditioned his staying at Heartland Regional on Clinch's removal, Nellestein responded, "Absolutely not."
During August and September 2000, Kretzinger initiated a review of Heartland Regional's cardiac program. He ordered Cindy McCoy, a former infectious disease nurse manager at the hospital, to prepare a report of Clinch's infection rates. McCoy testified that Kretzinger told her that "Heartland wanted to terminate the contract of Dr. Steven Clinch and use his high infection rates as a reason," but Kretzinger denied telling her this. From his review, Kretzinger found no problems with Nellestein's or Clinch's morbidity, mortality, or infection rates.
On August 9, 2000, Kruse, Kretzinger, and Nellestein met for dinner. Kruse and Kretzinger offered Clinch's position as medical director of cardiac surgery to Nellestein, and Nellestein accepted. They discussed Clinch's future with the hospital, but whether or not Kruse and Kretzinger decided to remove staff privileges from Clinch entirely at that meeting is disputed.
Nellestein signed a new contract with Heartland Regional on October 4, 2000. The contract's terms made Nellestein medical director of cardiac surgery. Hospital administrators terminated Clinch's contract the next day. McCamy later told Clinch that his contract had been terminated "without cause." Although Heartland Regional administrators expressed willingness for Clinch to continue his staff membership and clinical privileges, Midwestern Health Management refused to release Clinch from a covenant not to compete. On October 6, Heartland Regional contracted with another cardiac surgeon, Jane Schwabe, and hospital administrators removed Koelliker from the heart program chain of command, as Nellestein had requested.
During Spring 2001, Heartland Regional's administrators realized that, because Clinch's privileges extended beyond expiration of his covenant not to compete, he would be eligible to return to Heartland Regional as a staff surgeon at the end of the year. Administrators asked an attorney to develop an exclusive contract arrangement for cardiac surgery at Heartland Regional that would prevent Clinch from returning to Heartland Regional after his non-compete covenant expired.
During July 2001, Clinch notified Heartland Regional that he intended to return to an independent practice at Heartland Regional after his non-compete covenant expired. Mullican informed him that the hospital's board was considering an exclusive arrangement with its current cardiac surgeons. In September, the board decided temporarily to exclude non-employed physicians from providing cardiovascular services at the hospital, and the board made the exclusion permanent during March 2002. This exclusion prohibited Clinch from performing services at the hospital.
Clinch sued the defendants for various antitrust violations and several common law claims, including a claim for tortious interference against Nellestein. The circuit court granted defendants' motion for summary judgment on all counts, and Clinch appeals. Clinch did not appeal the circuit court's order granting summary judgment on his claims for promissory estoppel, fraudulent misrepresentation, and negligent misrepresentation.
Our review of the circuit court's summary judgment is essentially de novo . ITT Commercial Finance Corporation v. Mid- America Marine Supply Corporation , 854 S.W.2d 371, 376 (Mo. banc 1993). To enter summary judgment, the circuit court had to determine that the parties were not disputing any issue of material fact and that the party seeking summary judgment was entitled to judgment as a matter of law. Rule 74.04(c)(6); ITT , 854 S.W.2d at 377. "The key to summary judgment is the undisputed right to judgment as a matter of law; not simply the absence of a fact question." ITT, 854 S.W.2d at 380.
[A] "defending party" may establish a right to judgment by showing (1) facts that negate any one of the claimant's elements facts, (2) that the non-movant, after an adequate period of discovery, has not been able to produce, and will not be able to produce, evidence sufficient to allow the trier of fact to find the existence of any one of the claimant's elements, or (3) that there is no genuine dispute as to the existence of each of the facts necessary to support the movant's properly-pleaded affirmative defense.
Id. at 381 (emphasis omitted). We must "sustain the trial court's award of summary judgment if the judgment can be sustained under any theory" supported by the summary judgment record. Rodgers v. Czamanske, 862 S.W.2d 453, 458 (Mo. App. 1993) (citing Zafft v. Eli Lilly and Company , 676 S.W.2d 241, 243 (Mo. banc 1984)). Because summary judgment is "an extreme and drastic remedy" that cuts off the opposing party's day in court, we are cautious in affirming it. ITT, 854 S.W.2d at 377.
In considering Clinch's assertion that the circuit court erred in granting summary judgment for Nellestein on Clinch's claim for tortious interference, we first address Nellestein's argument that Clinch is raising a new issue on appeal. Nellestein asserts that Clinch averred to the circuit court that Nellestein interfered with his contract , but now, on appeal, he asserts that Nellestein interfered with his business relationship . Clinch labeled his cause of action against Nellestein as "tortious interference with contract" in both his petition and responses to defendants' motion for summary judgment. The circuit court also labeled Clinch's cause of action as "tortious interference with contract." Clinch's suggestions in opposition to defendants' motion for summary judgment mentioned interference with Clinch's employment relationship. On appeal, Clinch argues that Nellestein tortiously interfered with his business relationship with Midwestern Health Management.
An appellant cannot raise an issue for the first time on appeal, but Clinch is not raising a new issue. The cause of action that Clinch asserts is tortious interference with a business relationship. The protected relationship can occur in several forms. As the Supreme Court has noted, the protected relationship can be a "contract or a valid business relationship or expectancy." Fischer, Spuhl, Herzwurm and Associates, Inc. v. Forrest T. Jones and Company , 586 S.W.2d 310, 315 (Mo. banc 1979) (emphasis omitted). In a case relied on by Nellestein-- Rice v. Hodapp , 919 S.W.2d 240, 245 (Mo. banc 1996)--the Supreme Court referred to the cause of action as "[t]ortious interference with contract or business expectancy." Indeed, virtually all contracts are business relationships. When Clinch referred on appeal to his business relationship with Midwestern Health Management, he obviously was referring to the same relationship that he described during circuit court proceedings as a contractual relationship.
We conclude that the circuit court erred in granting summary judgment for Nellestein. Although the facts concerning Nellestein's conduct are not in significant dispute, his motives for his actions are.
The elements of tortious interference with a business relationship are: (1) The plaintiff was involved in a valid business relationship; (2) the defendant was aware of the relationship; (3) the defendant intentionally interfered with the relationship, inducing its termination; (4) defendant acted without justification; and (5) plaintiff suffered damages as a direct result of defendant's conduct. Nazeri v. Missouri Valley College , 860 S.W.2d 303, 316 (Mo. banc 1993). We find no genuine dispute in the record concerning the first two elements: that Clinch had a valid, ongoing business relationship with Midwestern Health Management and with Heartland Regional and that Nellestein was aware of that relationship. This business relationship ended after Nellestein raised concerns about Regional Heartland's cardiac surgery record--concerns about morbidity, infection, and complication rates and the program's overall efficiency.
In establishing the third element, Clinch's burden is not to show that Nellestein acted with actual malice--that is, with spite or ill will--but with the intention of "doing . . . a harmful act without justification or excuse[.]" Downey v. United Weatherproofing, Inc., 253 S.W.2d 976, 980 (Mo. 1953). In other words, to establish that a defendant engaged in actionable interference, a plaintiff need show only that the defendant knew of, and interfered intentionally with, the plaintiff's interests. Mere intermeddling for no other reason than a desire to interfere is actionable.
As for the fourth element--whether or not Nellestein acted without justification--the fact-finder must consider Nellestein's motive. As the Supreme Court has instructed:
It is not justification to knowingly procure the breach of a contract where the defendant acts with an improper purpose and seeks not only to further his own interests, but in doing so employs improper means. But there is no impropriety of self-interested interference when a defendant has a legitimate economic interest in the contract or expectancy. One who has a present existing economic interest, such as a prior contract of his own or a financial interest in the affairs of the person persuaded not to enter into a contract, is privileged to interfere with another's business expectancy to protect one's own economic interest. No liability arises for interfering with a contract or business expectancy if the action complained of was an act which the defendant had a definite legal right to do without any qualification.
Community Title Company v. Roosevelt Savings and Loan Association , 796 S.W.2d 369, 372 (Mo. banc 1990) (citations omitted). If, for example, the fact-finder concludes that Nellestein was seeking to protect the health of Heartland Regional's heart patients, Nellestein should prevail because his conduct was justified.
The record supports either of contradictory conclusions: either that Nellestein acted intentionally to interfere with Clinch's business relationship without justification or that Nellestein either acted unintentionally or with justification. Hence, a genuine issue of material fact exists, and the circuit court erred in granting summary judgment. It should have denied the motion and proceeded with the case so that a jury could resolve the issue. We, therefore, reverse its summary judgment for Nellestein on Clinch's claim of tortious interference with a business relationship.
In defending the circuit court's summary judgment for Nellestein, Nellestein argues that, as a matter of law he could not be deemed to have intentionally induced or caused Midwestern Health Management to breach its contract with Clinch. Nellestein argues that Midwestern Health Management could not be deemed to have breached the contract because it had a right to terminate the contract at will for any reason.
Nellestein's argument is wrong. A third party's interference with contracts terminable at will is actionable. Hensen v. Truman Medical Center, Inc. , 62 S.W.3d 549, 553 (Mo. App. 2001). This is because, until one of the parties terminates the contract, it is a subsisting relation that presumably will continue and is of value to the plaintiff. That Midwestern Health Management did not breach its contract with Clinch in the technical sense is of no consequence. The issue is whether or not Midwestern Health Management would have persisted in the contractual relationship with Clinch but for Nellestein's conduct. We conclude that Clinch presented evidence from which a reasonable juror could conclude that Midwestern Health Management would not have terminated its contract with Clinch but for Nellestein's intentional conduct.
Nellestein further asserts that summary judgment was proper because the circuit court correctly adjudged, as a matter of law, that his conduct did not cause Midwestern Health Management and Heartland Regional to terminate its relation with Clinch. In reviewing the circuit court's judgment, we view the record in a light most favorable to Clinch, the nonmoving party. Lough v. Rolla Women's Clinic, Inc., 866 S.W.2d 851, 852 (Mo. banc 1993).
Cast in this light, we conclude that a fact-finder could conclude reasonably that Nellestein sought to interfere intentionally with Clinch's employment by presenting productivity statistics to Kruse, by telling Heartland Regional administrators that Clinch's August 2000 surgeries had a 35 percent complication rate, and by telling Heartland Regional administrators that Clinch had high infection rates and poor clinical outcomes. Although Nellestein argues that he presented statistics to Kruse simply to support his request for a contract extension and not to influence Kruse to terminate Clinch, a fact-finder reasonably could conclude otherwise, especially in light of Kretzinger's independent investigation into Clinch's performance. Instigated by Nellestein's comments, the investigation revealed no problems with Clinch's surgeries. Yet, the hospital terminated its relation with him.
As to Clinch's anti-trust claims against Heartland Health, Heartland Regional, Midwestern Health Management, and Kruse, we affirm the circuit court's granting summary judgment for the defendants. The circuit court found that Clinch lacked standing as an antitrust plaintiff. We agree.
Clinch first argues that the defendants' answer did not allege substantive facts to support their affirmative defense that he lacked standing. Clinch did not raise this argument before the circuit court, so we do not address the issue except to point out that defendants raised the affirmative defense in their answer, putting Clinch on notice of their claim and thoroughly argued the issue in their motions to dismiss and for summary judgment.
As an antitrust plaintiff, Clinch's obligation was to show that he was a competitor or consumer who suffered a direct antitrust injury. Hamilton v. Spencer, 929 S.W.2d 762, 767 (Mo. App. 1996); Duvall v. Silvers, Asher, Sher and McLaren, M.D.'s , 998 S.W.2d 821, 825-27 (Mo. App. 1999); Zipper v. Health Midwest , 978 S.W.2d 398, 417-18 (Mo. App. 1998). Because the purpose of antitrust laws is to protect competition and not individual competitors, an antitrust plaintiff must prove that a defendant's anti-competitive behavior injured consumers or competition in the relevant market. Brown Shoe Company v. United States, 370 U.S. 294, 320 (1962); Atlantic Richfield Company v. USA Petroleum Company , 495 U.S. 328, 344 (1990); Zipper , 978 S.W.2d at 418. An antitrust plaintiff must point to some impact a defendant's decision had on price, quality, or quantity of service in the relevant geographic market. Robles v. Humana Hospital Cartersville , 785 F. Supp. 989, 998 n.7 (N.D. Ga. 1992) (cited with approval in Zipper , 978 S.W.2d at 417-18) (citing several cases indicating that impact on pricing or quality of service is strong indicator that anti-competitive actions have affected the market).
Clinch argues that he had standing because the defendants excluded him as a competitor from the marketplace. Even assuming arguendo that the defendants excluded Clinch from the market and that competitors can be proper plaintiffs, Clinch must demonstrate that the defendants injured competition by revoking his privileges.
Clinch argues that the defendants injured competition by entering into an exclusive contractual arrangement with its cardiac surgeons, thereby preventing him and those doctors without contracts with Heartland Regional from practicing at Heartland Regional. Loss of employment is not an antitrust injury, and entering into an exclusive contractual arrangement is not an antitrust violation per se. See Jefferson Parish Hospital District Number 2 v. Hyde , 466 U.S. 2 (1984).
Clinch also argues that Heartland Regional's excluding him injured competition because it virtually eliminated the availability of off-pump bypass surgery, which Nellestein and Schwabe rarely performed. Clinch contends that a "precipitous decline in the quantity of off-pump bypasses" occurred after he left Heartland Regional. Indeed, the number of off-pump bypasses dropped from 82 during his tenure to less than five in the four to five years after he departed; however, the number of off-pump bypasses that Clinch performed dropped considerably between August 1997 and August 2000. Clinch performed 43 off-pump surgeries from August 1997 to July 1998, but he performed only three off-pump surgeries during the 14 months before his termination in 2000. Thus, Clinch had himself "virtually eliminated" off-pump surgery before the defendants revoked his hospital privileges. Even assuming arguendo that Clinch's relevant geographic market is correct, defendants' actions had little impact on the quantity of off-pump surgeries performed at Heartland Regional. In addition, we note that the overall number of surgeries did not decline after Clinch left.
Moreover, consumers still had the option of obtaining off-pump bypass surgery at Heartland Regional after Clinch's removal from the staff. Nellestein performed several off-pump surgeries before and after Clinch departed. Nellestein performed off-pump surgery when on-pump surgery was not viable.
Clinch also cannot establish that the defendants' decision harmed pricing in an anti-competitive way. Even assuming that off-pump surgery costs less than on-pump surgery, the defendants' decision to revoke Clinch's hospital privileges had little impact on cost. By the end of Clinch's tenure, few off-pump surgeries were being performed. Thus, terminating the privileges of the surgeon who preferred off-pump surgery impacted the price of bypass surgery in the market only minimally. But, even assuming arguendo that the cost of bypass surgery rose at Heartland Regional, Clinch has not demonstrated that it rose to an anti-competitive level, which is required to establish that defendants' actions had an anticompetitive impact. Zipper, 978 S.W.2d at 418.
Hence, Clinch cannot establish that he suffered an "injury of the type the antitrust laws were intended to prevent." Brunswick Corporation v. Pueblo Bowl-O- Mat, Inc. , 429 U.S. 477, 489 (1977). Because Clinch did not satisfy the test for antitrust standing, the circuit court did not err in granting summary judgment on Clinch's antitrust claims.
We, therefore, affirm the circuit court's summary judgment for the defendants on Clinch's antitrust claims. We reverse and remand the circuit court's summary judgment for Nellestein on Clinch's claim for tortious interference with business relationships.
Separate Opinion:
None

This slip opinion is subject to revision and may not reflect the final opinion adopted by the Court.