Lewis-Gale Med. Ctr. v. Alldredge (Full Text)

Present: Kinser, C.J., Lemons, Goodwyn, Millette, and Mims,
JJ., and Lacy and Koontz, S.JJ.

LEWIS-GALE MEDICAL CENTER, LLC

OPINION BY
v. Record No. 100457
SENIOR JUSTICE LAWRENCE L. KOONTZ, JR.

June 9, 2011
KAREN J. ALLDREDGE

FROM THE CIRCUIT COURT OF THE CITY OF ROANOKE
Jonathan M. Apgar, Judge
Lewis-Gale Medical Center, LLC (“Lewis-Gale”) appeals
from a jury verdict awarding Dr. Karen J. Alldredge $900,000
for tortious interference with her contract of employment with
Southwest Emergency Physicians, Inc. (“SWEP”). The
dispositive issue we consider is whether Dr. Alldredge
presented sufficient evidence to permit the jury to find that
Lewis-Gale employed improper methods to induce SWEP to
terminate her employment.

BACKGROUND
Lewis-Gale has assigned three errors to the circuit
court’s judgment approving the jury’s verdict in favor of Dr.
Alldredge, contending that the circuit court erred in
permitting the jury to consider Dr. Alldredge’s alleged
emotional distress as an element of her damages, in failing to
find that the jury’s award of damages was excessive, and in
failing to rule that Dr. Alldredge had not met her burden of
proving that Lewis-Gale employed improper methods to induce
SWEP to terminate Dr. Alldredge’s employment and, thus, had

not proven as a matter of law that this termination was the
result of a tortious interference by Lewis-Gale in her
contract relationship with SWEP. Because we find the
resolution of this last issue to be dispositive, we will limit
our recitation of the facts established in that part of the
voluminous record necessary for our resolution of this appeal.
Union of Needletrades, Industrial & Textile Employees v.
Jones, 268 Va. 512, 514, 603 S.E.2d 920, 921 (2004). Under
familiar principles, we consider those facts in the light most
favorable to Dr. Alldredge, the prevailing party in the
circuit court.
SWEP and Lewis-Gale entered into a contract in 2005 under
which SWEP’s physician-employees exclusively staffed Lewis-
Gale’s Emergency Department. Dr. Alldredge, an emergency room
physician, was a contract participant in SWEP from 2005 until
the termination of her employment in 2008. Her contract
provided for a 12-month term of employment with SWEP and
included an automatic renewal provision. However, the
contract further provided that it could be terminated by
either party without cause subject to a 90-day written notice
of the intent to do so.
In late March 2008, Alldredge attended an informal dinner
with some of the emergency room nursing staff who were
employees of Lewis-Gale. During the dinner, these nurses

discussed a letter addressed to the Lewis-Gale administration
voicing certain work-related concerns. Dr. Alldredge was the
only physician present. A few weeks later, Dr. Alldredge was
shown the letter by one of the nurses and explained to the
nurse that she did not sign the letter because it related to
“a nursing issue, not a physician issue.” She subsequently
conceded that she did not sign this letter because she also
knew that SWEP did not want its physicians involving
themselves in Lewis-Gale’s personnel issues.
Candi Carroll, Lewis-Gale’s chief nursing officer,
received a copy of the letter. Carroll subsequently became
aware of Dr. Alldredge’s involvement with the signatories to
the letter. By email, Carroll contacted Dr. Robert E.
Dowling, SWEP’s president who also served as Medical Director
for the Emergency Department at Lewis-Gale. Carroll informed
him of her belief that Dr. Alldredge had supported the staff
that had sent the letter and inquired “what the plan of [SWEP]
is to deal with Doctor Alldredge.” Carroll and Dr. Dowling
exchanged several emails addressing Carroll’s concerns.
Carroll also advised her superiors of the situation.
After learning that Dr. Alldredge had attended the
dinner, Charlotte Tyson, chief operating officer of Lewis-
Gale, was concerned that Dr. Alldredge, as a non-employee of
Lewis-Gale, had become involved in the hospital’s personnel

matters. Tyson contacted Dr. Jeffrey M. Preuss, one of the
other physicians with SWEP, and “brought to [SWEP] the fact
that there was a perceived issue with Doctor Alldredge’s
behavior and they had asked that [SWEP] do something to take
care of that issue, resolve it one way or another.”
On April 29, 2008, at SWEP’s request, Tyson and Carroll
met with members of SWEP’s executive board. During the
meeting, Tyson described Dr. Alldredge’s behavior as that of
an “organizational terrorist,” and told SWEP’s executive board
that when a business has someone like Dr. Alldredge, “they had
to go.” Although the representatives of SWEP repeatedly asked
Tyson how Lewis-Gale wanted the situation addressed, Tyson
maintained that she never expressly told SWEP that Lewis-
Gale’s administration wanted Dr. Alldredge’s employment to be
terminated. Nonetheless, shortly after the meeting Dr.
Dowling informed Tyson in an email that he was going to
recommend the termination of Dr. Alldredge’s employment at a
meeting of the SWEP board on May 1, 2008.
The minutes of SWEP’s board meeting cite additional
concerns about Dr. Alldredge’s “treatment of other partners
and group members” and “her behavior over the years.” The
board was of opinion that “the situation had come to a crisis
point” and that Dr. Alldredge “was not likely to improve her
behavior long-term.” Nonetheless, the principal concern cited

by the board was that not terminating Dr. Alldredge’s
employment could jeopardize SWEP’s contract with Lewis-Gale.
Dr. Alldredge, who was present for part of the meeting,
defended herself and expressed frustration and sadness at
being called an “organizational terrorist.”
Dr. Alldredge arranged a meeting with Tyson and Vincent
Giovanetti, Lewis-Gale’s chief executive officer, on May 5,
2008. SWEP suspended making a decision on whether to
terminate her employment pending the outcome of this meeting.
According to Dr. Preuss, SWEP did not want to terminate Dr.
Alldredge’s employment and would not have done so if “the
outcome was favorable” in her meeting with Tyson and
Giovanetti.
According to Dr. Alldredge, the purpose of the meeting
with Tyson and Giovanetti was that “I was going to try and
save my job, because ultimately it was hospital administration
that wanted me gone,” not SWEP. During the meeting, Dr.
Alldredge was anxious and knew it was a “live or die”
situation. After Dr. Alldredge’s meeting with Tyson and
Giovanetti, Dr. Preuss concluded that Lewis-Gale’s
“administration wanted [SWEP] to proceed with how [its
executive board] had voted” to terminate Dr. Alldredge’s
employment.

SWEP terminated Dr. Alldredge’s employment in accord with
the provision of her contract by providing her with a 90-day
notice period. However, when Dr. Alldredge declined to report
for her next scheduled shift at the emergency room, SWEP
removed her from active employment but continued to pay her
salary for the next three months.
On June 2, 2008, Dr. Alldredge filed in the Circuit Court
of the City of Roanoke a complaint against Lewis-Gale alleging
tortious interference with her contract of employment with
SWEP. Dr. Alldredge did not specifically allege that Lewis-
Gale used “improper methods” in procuring the termination of
her employment, but asserted that Lewis-Gale had used
“threats” and referred to its “illegal interference.” Dr.
Alldredge alleged that in addition to lost income, shareholder
interest and other opportunities as a result of her employment
being terminated from SWEP, she would continue to suffer from
loss of “future employment and employment opportunities [and]
damage to [her] professional reputation.” Dr. Alldredge
sought $10,000,000 in compensatory damages.

Lewis-Gale filed an answer denying liability as well as a
plea in bar 1 asserting that Alldredge could not maintain an
action for tortious interference because she was an employee-
at-will as her contract with SWEP allowed her employment to be
terminated without cause. Lewis-Gale further contended that
because it could likewise terminate its contract with SWEP
without cause, it actions as alleged in Dr. Alldredge’s
complaint did not rise to the level of improper methods
required for establishing a tort action for interference with
an at-will contract. The circuit court rejected Lewis-Gale’s
argument, finding that even if the termination without cause
provision of the SWEP contract made Dr. Alldredge an at-will
employee, the allegations of the complaint were sufficient to
support a cause of action against Lewis-Gale for using
improper methods to interfere with Alldredge’s rights under
that contract.
Following discovery, Lewis-Gale filed a motion for
summary judgment alleging that there were no disputed material

1 Though styled a plea in bar, Lewis-Gale’s pleading was

more properly a demurrer. The asserted failure of the
complaint to allege use of improper methods in the intentional
interference with the at-will employment contract would not
have created a jurisdictional bar to the suit, but merely
would have resulted in a failure to state a viable claim.
Regardless of how a pleading is styled, we review the judgment
of the circuit court on that pleading under the standard
appropriate to its substance. See Chesterfield County v.
Stigall, 262 Va. 697, 701 n.2, 554 S.E.2d 49, 52 n.2 (2001).
7

facts and that Dr. Alldredge could not establish that Lewis-
Gale acted improperly in its dealings with SWEP in seeking the
termination of Dr. Alldredge’s employment. Lewis-Gale
conceded that Tyson’s abrasive manner and intemperate language
may have been “unsavory,” “careless,” and “harsh,” but
maintained that because Tyson and the other Lewis-Gale
administrators were pursuing what they perceived as the best
commercial interests of the hospital and were within their
rights under the hospital’s contract with SWEP, Alldredge
could not establish that any improper method had been used to
procure the termination of Dr. Alldredge’s employment.
Dr. Alldredge responded to the motion for summary
judgment asserting that Lewis-Gale had fabricated a pretext of
“smoke and mirrors” to procure the termination of her contact
with SWEP. Dr. Alldredge maintained that the response of
Lewis-Gale’s “all-mighty chain of command” to the employees’
letter and her involvement in its drafting was “irrational and
disproportionate” and led to Tyson and others threatening to
cancel SWEP’s contact and making defamatory statements
concerning Dr. Alldredge. She contended that these
allegations were in dispute and, if proven, were sufficient to
establish that Lewis-Gale’s actions exceeded that permissible
in its commercial relations with SWEP and, thus, were improper
and rendered its interference in the contract between SWEP and

Dr. Alldredge tortious. During a pre-trial hearing covering
numerous motions, the circuit court took Lewis-Gale’s motion
for summary judgment under advisement.
A jury trial commenced in the circuit court on September
8, 2009. At the conclusion of Dr. Alldredge’s case-in-chief
following three days of testimony presented by witnesses for
Dr. Alldredge during which evidence in accord with the above
recited facts was adduced, Lewis-Gale moved to strike Dr.
Alldredge’s evidence and for summary judgment. Lewis-Gale
again asserted that, because the termination of Dr.
Alldredge’s employment was authorized under the at-will
provision of her contract with SWEP, Dr. Alldredge had not met
her burden of proving that any action by Lewis-Gale that
resulted in SWEP’s decision to terminate Dr. Alldredge’s
employment was illegal, tortious, or otherwise improper.
The circuit court denied the motion to strike. In doing
so the court did not expressly find what actions by Lewis-Gale
could form the basis for the jury finding that the hospital’s
administrators had employed improper methods in procuring
SWEP’s termination of Dr. Alldredge’s employment. Rather, the
court focused on whether Lewis-Gale was aware that Dr.
Alldredge had an expectancy of continued employment and
whether “the members of SWEP felt pressured to respond to
[Lewis-Gale’s] statements and actions.”

The case was submitted to the jury, which was instructed
that Dr. Alldredge had the burden of proving that Lewis-Gale
“use[d] improper methods to interfere with the contractual
relationship or expectancy” between Dr. Alldredge and SWEP.
The jury returned its verdict for Dr. Alldredge, awarding her
$900,000 in compensatory damages. Lewis-Gale filed a post-
trial motion to set aside the verdict, for a new trial, or
remittitur. The circuit court denied this motion without
further comment in a final order dated December 10, 2009 and
confirmed the jury’s verdict. This appeal followed.
DISCUSSION
In Chaves v. Johnson, 230 Va. 112, 120, 335 S.E.2d 97,
102 (1985), we recognized that the tort of intentional
interference with performance of a contract by a third party
is a permissible cause of action in Virginia. “The elements
required for a prima facie showing of the tort are: (i) the
existence of a valid contractual relationship or business
expectancy; (ii) knowledge of the relationship or expectancy
on the part of the interferor; (iii) intentional interference
inducing or causing a breach or termination of the
relationship or expectancy; and (iv) resultant damage to the
party whose relationship or expectancy has been disrupted.”
DurretteBradshaw, P.C. v. MRC Consulting, L.C., 277 Va. 140,

145, 670 S.E.2d 704, 706 (2009) (citing Chaves, 230 Va. at
120, 335 S.E.2d at 102).
“Additionally, when a contract is terminable at will, a
plaintiff, in order to present a prima facie case of tortious
interference, must allege and prove not only an intentional
interference that caused the termination of the at-will
contract, but also that the defendant employed improper
methods.” Dunn, McCormack & MacPherson v. Connolly, 281 Va.
553, 559, ___ S.E.2d ___, ___ (2011) (internal quotation marks
omitted) (emphasis in original); see also Jae-Woo Cha v.
Korean Presbyterian Church of Washington, 262 Va. 604, 613,
553 S.E.2d 511, 515 (2001); Perk v. Vector Resources Group,
253 Va. 310, 314, 485 S.E.2d 140, 143 (1997); Restatement
(Second) of Torts § 766, cmt. g (1979). However, the
plaintiff need not prove that “the ‘improper methods’ used
were inherently illegal or tortious,” but “only that the
interference was intentional and improper under the
circumstances” of the particular case. Maximus, Inc. v.
Lockheed Info. Mgmt. Sys. Co., 254 Va. 408, 414, 493 S.E.2d
375, 379 (1997).
An employment contract is terminable at-will if the plain
terms of the contract provide that the employer may terminate
the contact prior to the designated period of time of the
employment without being required to establish a just cause

for doing so. Cave Hill Corp. v. Hiers, 264 Va. 640, 646, 570
S.E.2d 790, 793 (2002). Although such a contract may place
conditions of notice and timing of the termination, when the
employer complies with these conditions the termination does
not constitute a breach of the employment contract. Id.
In the present case, regardless of any expectancy that
Dr. Alldredge may have had with regard to her continued
employment by SWEP, because her contract provided for
termination by SWEP after giving 90 days notice, Dr.
Alldredge’s contract was for employment at-will. Accordingly,
Dr. Alldredge was required to prove not only that Lewis-Gale
intentionally interfered with her contract relationship with
SWEP, but also that in doing so Lewis-Gale employed “improper
methods.”
The thrust of Lewis-Gale’s assertions is that when Dr.
Alldredge’s evidence adduced at trial is viewed in its
totality, it was insufficient as a matter of law to permit the
jury to find that Lewis-Gale’s dealings with SWEP with regard
to its employment of Dr. Alldredge constituted improper
methods that would sustain her cause of action for
interference with her at-will employment contract. Thus,
Lewis-Gale contends that the court erred in not striking her
evidence and submitting the case to the jury. We agree.

Our recent decision in Dunn, McCormack & MacPherson
reiterated the contours of what constitutes the types of
“improper methods” that a third party may not undertake when
it intends for those actions to result in the termination of
an at-will contract between others. Quoting from Duggin v.
Adams, 234 Va. 221, 227-28, 360 S.E.2d 832, 836-37 (1987), we
said:

“Methods of interference considered improper
are those means that are illegal or independently
tortious, such as violations of statutes,
regulations, or recognized common-law rules.
Improper methods may include violence, threats or
intimidation, bribery, unfounded litigation, fraud,
misrepresentation or deceit, defamation, duress,
undue influence, misuse of inside or confidential
information, or breach of a fiduciary
relationship. . . .”

“Methods also may be improper because they
violate an established standard of a trade or
profession, or involve unethical conduct. Sharp
dealing, overreaching, or unfair competition may
also constitute improper methods.”

Dunn, McCormack & MacPherson, 281 Va. at 559, ___ S.E.2d at
___. We declined, however, to expand the parameters of
“improper methods” to include “actions solely motivated by
spite, ill will and malice” toward the plaintiff. Id.
Dr. Alldredge did not allege or present any evidence
tending to prove that Lewis-Gale’s actions were “illegal or
independently tortious.” Nor was there any fiduciary duty
owed to Dr. Alldredge that Lewis-Gale could have violated.

Dr. Alldredge did not assert that Lewis-Gale’s motivation in
seeking to have SWEP terminate her employment involved a
desire to gain some competitive advantage, violated an
established standard of the dealings between hospitals and
their independent medical contractors, or involved unethical
conduct in the form of sharp dealing, overreaching, or unfair
competition.
Rather, Dr. Alldredge maintains that Lewis-Gale’s actions
were improper in that it used intimidation, duress, and undue
influence based upon Lewis-Gale’s ability to bring “financial
ruin” on SWEP by canceling its contract to provide emergency
room services to Lewis-Gale, which was SWEP’s principal source
of revenue. However, while the evidence supported the
inference that SWEP was concerned about the continuation of
its contract with Lewis-Gale, the at-will contract between
Lewis-Gale and SWEP allowed termination of the contract upon
due notice and without cause at any time. This status required
that SWEP be continually sensitive to the possibility of
termination for any reason or no reason, regardless of any
specific action or comment made by Lewis-Gale officers or
personnel. Thus, the inherent intimidation or duress
experienced as a result of the very nature of this at-will
contract cannot rise to the level of improper methods
necessary to establish a cause of action for tortious

interference with contract expectancy. Furthermore, in this
case neither Dr. Alldredge’s allegations nor her evidence
demonstrated a specific threat or other action by Lewis-Gale
that it was going to cancel its contract with SWEP if SWEP did
not terminate Dr. Alldredge’s employment.
We also reject Dr. Alldredge’s allegations that Tyson’s
statements, such as her use of the term “organizational
terrorist” to describe Dr. Alldredge, were independently
tortious and therefore rose to improper methods. These
statements were certainly unwise, unprofessional hyperbole,
and may even indicate a personal animus toward Dr. Alldredge.
In the context of Tyson’s discussions with SWEP, however, the
statements did not rise to the level of fraud,
misrepresentation, deceit, or defamation that could constitute
improper methods of interference with the contract between Dr.
Alldredge and SWEP. Likewise, we find no significant support
in the record for Dr. Alldredge’s assertion that Lewis-Gale
violated its contract with SWEP or its own internal personnel
policies by bringing its complaints directly to SWEP’s
executive board.
We disagree with Dr. Alldredge that the actions of Lewis-
Gale’s administrators, particularly Tyson, which Lewis-Gale’s
counsel concedes were “unsavory,” “careless,” and “harsh,”
rose to the level of the “improper methods” required to prove

Lewis-Gale’s actions exceeded that permissible in normal
business relations in order to give rise to a cause of action
in tort. In Chaves, we noted that where the defendant has its
own contractual or commercial relationship with the other
party to the plaintiff’s contract, a balance must “be struck
between the social desirability of protecting the business
relationship [of the plaintiff and the other party], on one
hand, and the interferor’s freedom of action [with the other
party] on the other.” 230 Va. at 121, 335 S.E.2d at 103. In
Chaves, we addressed this observation to the availability of
an affirmative defense of privilege or justification, but we
are of opinion that it applies with equal force to determining
what the law will deem to be an improper method by the
interferor when there is an existing commercial relationship
between it and the other party to the contract with the
plaintiff. See, e.g., Charles E. Brauer Co. v. NationsBank of
Va., N.A., 251 Va. 28, 36, 466 S.E.2d 382, 387 (1996); see
also Frank Brunckhorst Co. v. Coastal Atlantic, Inc., 542
F.Supp.2d 452, 464 (E.D. Va. 2008).
Under Virginia law, a threat to perform an act one is
legally entitled to perform is not a wrongful act. Goode v.
Burke Town Plaza, Inc., 246 Va. 407, 411, 436 S.E.2d 450, 452-
53 (1993); Bond v. Crawford, 193 Va. 437, 444, 69 S.E.2d 470,
475 (1952). Thus, in Charles E. Brauer Co. we held that “the

lawful exercise of [defendant’s] statutory and contractual
rights which incidentally may have interfered with the
[plaintiff’s] negotiations for sale of the inventory . . . is
not actionable and will not support recovery for tortious
interference with contractual relations.” 251 Va. at 36, 466
S.E.2d at 387.
As we have previously observed, “the law will not provide
relief to every disgruntled player in the rough-and-tumble
world comprising the competitive marketplace.” Williams v.
Dominion Tech. Partners, L.L.C., 265 Va. 280, 290, 576 S.E.2d
752, 758 (2003) (internal quotation marks omitted). The fact
that Virginia recognizes the existence of the tort of
intentional interference with a contract does not mean that
every contract relationship which is terminated or disrupted
through the interference of a third party promoting its own
interests will result in tort liability for that party.
Rather, the law provides a remedy in tort only where the
plaintiff can prove that the third party’s actions were
illegal or fell so far outside the accepted practice of that
“rough-and-tumble world” as to constitute improper methods.
In sum, Lewis-Gale’s actions in this case involving at-
will contracts did not rise as a matter of law to the level of
the “improper methods” required for Dr. Alldredge to prove
that Lewis-Gale’s purposeful interference in her contract

relationship with SWEP was tortious. Accordingly, we hold
that the circuit court erred in not striking Dr. Alldredge’s
evidence and in not granting summary judgment to Lewis-Gale.
CONCLUSION
For the reasons stated, we will reverse the judgment of
the circuit court confirming the jury verdict in favor of
Alldredge and enter final judgment for Lewis-Gale. 2
Reversed and final judgment.

2 Having found that Dr. Alldredge failed to meet her
burden of proof to establish tortious interference in her
contract relationship with SWEP by Lewis-Gale, its remaining
assignments of error and the assignment of cross-error raised
by Dr. Alldredge, all concerning the elements and quantum of
her damages, are now moot.