Hagen v. Siouxland Obstetrics & Gynecology, P.C. – March 2013 (Summary)

GROUP EMPLOYMENT TERMINATION

Hagen v. Siouxland Obstetrics & Gynecology, P.C., No. C 11-4047-MWB (N.D. Iowa Mar. 20, 2013)

The United States District Court for the Northern District of Iowa partially denied a medical group’s motion to strike evidence submitted by a physician (and former equity owner, president and director of the group) and denied the medical group’s motion for partial summary judgment.  However, the court also cautioned the physician from taking his claims to trial, because the court anticipated that the physician would come across to the jury as an “arrogant jerk” and would be unlikely to recover alleged damages from a jury verdict.

The following facts spurred the court’s biting evaluation of the physician and his dim prospects for success in this legal proceeding.  The physician was a shareholder in a medical group that eventually had four physician shareholders.  He had a long history of berating and threatening nurses, being intoxicated while on call, and conducting himself in an unprofessional manner.  When the physician asked a staff member of the medical group to fill out his medical license applications for the various state medical licensing boards, the staff member filled out the forms incorrectly and forged notarized signatures on the applications, and because of the inconsistencies in the applications, one state eventually requested that the physician withdraw his application for medical licensure.  In addition, the physician stated that he believed that one of the medical group’s shareholders and a hospital where the medical group practiced had committed malpractice, and he threatened to report the malpractice.

The three remaining shareholders of the medical group lost all tolerance for the physician’s bad behavior, and they held a secret meeting during which they decided to terminate the physician’s employment with the medical group.  The physician then sued for a host of claims that can be categorized into the three general categories of negligence, licensure application (vicarious liability) claims, and wrongful termination claims.  The medical group moved for summary judgment of the licensure application and wrongful termination claims.

The court denied the motion for summary judgment of the licensure application claims on the basis that factual questions still existed as to whether the medical group was vicariously liable for the allegedly fraudulent conduct of the employee who filled out the physician’s application forms.  Likewise, the court denied the motion for summary judgment of the wrongful termination claims because the court concluded that genuine issues of material fact existed.  Thus, although the court’s opinion discouraged the physician from taking his case to trial, the opinion itself concluded that all of the physician’s claims had issues of material fact that had to be resolved by a jury.