Stephanie Hutchison, M.D. v. King's Daughters Medical Specialists, Inc. ( 2023 )

RENDERED: JANUARY 27, 2023; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2020-CA-1539-MR
STEPHANIE HUTCHISON, M.D. APPELLANT
APPEAL FROM BOYD CIRCUIT COURT
v. HONORABLE GEORGE DAVIS, JUDGE
ACTION NO. 16-CI-00377
KING’S DAUGHTERS MEDICAL
SPECIALISTS, INC. APPELLEE
OPINION
AFFIRMING IN PART, REVERSING IN PART, AND REMANDING
** ** ** ** **
BEFORE: ACREE, DIXON, AND K. THOMPSON,1 JUDGES.
THOMPSON, K., JUDGE: Stephanie Hutchison, M.D., appeals from the
summary judgment granted in favor of King’s Daughters Medical Specialists, Inc.
(KDMS) on a breach of contract action which also dismissed her claims of
1
Judge Kelly Thompson authored this Opinion before his tenure with the Kentucky Court of
Appeals expired on December 31, 2022. Release of this Opinion was delayed by administrative
handling.
discrimination, retaliation, fraud, and intentional infliction of emotional distress
(IIED). Dr. Hutchison was not able to establish that any factual issues remain on
her counterclaims except as to breach of contract regarding whether KDMS’s
actions improperly shut down her practice during the contractually obligated
ninety-day notice period between when she was informed of the decision to
terminate her employment and when the termination took effect. Therefore, we
affirm the dismissal of Dr. Hutchison’s other claims, but reverse the grant of
summary judgment in KDMS’s favor on the breach of contract claim and remand
as factual issues remain on the narrow issue of whether KDMS thereby violated the
contract and damaged Dr. Hutchison.
FACTUAL AND LEGAL BACKGROUND
Dr. Hutchison is an obstetrician/gynecologist (OB/GYN) who worked
for KDMS for approximately twenty-one months, from September 19, 2011, until
June 7, 2013. Previous to this employment, Dr. Hutchison worked with Dr. Kelsey
James from July 2010 until August 2011. Dr. James was not an employee of
KDMS. During this time, Dr. Hutchison obtained privileges at King’s Daughters
Medical Center (KDMC) and performed surgeries there.
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I. The Agreement
On September 19, 2011, Dr. Hutchison entered into a Physician
Employment Agreement (the Agreement) with KDMS. Dr. Hutchison continued
to have a Wednesday block surgery schedule in operating room 8 (OR 8).
The Agreement specified in relevant part that KDMS is a controlled
subordinate organization of KDMC (also referred to as the hospital). Dr.
Hutchison agreed to work as a full time OB/GYN for KDMS, which made her the
only OB/GYN employed by KDMS at this time. Dr. Hutchison specifically agreed
to provide “professional Obstetrics and Gynecology Services and related services
to the patients of KDMS” and “on call services and call coverage for the practice
and the Hospital[.]” She also agreed that she “shall not during the Term seek
medical staff privileges at any other hospital without KDMS’ prior written consent,
which may be granted or withheld in KDMS’ sole discretion.”
KDMS’s duties to Dr. Hutchison included that “KDMS will provide
appropriate space, staffing, equipment, supplies, furnishings and other resources
(“Resources”) at levels necessary, in KDMS’ reasonable discretion, to operate an
Obstetrics/Gynecology practice.” KDMS was also required to provide Dr.
Hutchison with a salary as set out in Exhibit A, to “use its best efforts to market
Physician’s medical practice,” and to “bill and collect all fees for Physician’s
services provided under this Agreement” with “Physician agree[ing] to work with
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KDMS’ staff to bill all patients and/or third parties promptly for services rendered
and to use her best efforts to help KDMS to collect all patient accounts.” The
Agreement provided that “KDMS, or a third party acting on KDMS’ behalf, shall
bill and collect all charges or fees for Physician’s services provided under this
agreement and such charges or fees shall be the sole and exclusive property of
KDMS.” KDMS was responsible to “use its best efforts to provide
Obstetrics/Gynecology coding education for its billing staff and Physician’s office
staff (as requested), within thirty (30) days of the execution of this agreement.”
As to the effective term of the Agreement, it provided that “[u]nless
otherwise terminated as provided herein, this Agreement shall be for a term of
three (3) years commencing on September 19, 2011 and terminating on September
18, 2014 (the “Term”).” The Agreement provided three ways that it could be
terminated early: (1) termination by KDMS for cause; (2) termination by Dr.
Hutchison for cause; and (3) termination without cause by either party. As to this
third option, other than a heading it only specifies: “Either party may terminate
this Agreement without cause, upon ninety (90) days notice to the other party.”
Exhibit A regarding compensation calculated Dr. Hutchison’s total
annual compensation as follows:
Total compensation shall mean:
[1] Physician’s Professional Fees collected during the
applicable measurement period,
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minus
[2] Physician’s Direct Expenses[2] paid during the
applicable measurement period,
minus
[3] Physician’s Allocable Share of all General
Expenses[3] paid during the applicable measurement
period.
Exhibit A explained that during the first year of the Agreement (the
twelve month period following the start date of the contract) Dr. Hutchison would
be paid a bi-weekly draw equal to $5,128.49.4 Amounts for future draws were
subject to further adjustment, but it was provided that “the amount of the Bi-
Weekly draw may be reduced upon request by Physician from time to time, and
may be increased upon request by Physician from time to time if such increase is
supported by collections of Physician’s Professional Fees.” Further adjustments
2
“Direct expenses” were defined as “those direct expenses of the Practice that are paid during
the applicable measurement period and allocable to a physician in the Practice (including
Physician)[.]” They included things like malpractice insurance, licensure fees, salaries and
benefits of any employed nurse directly supporting that physician, and other expenses “within
the four walls” of the Practice site directly allocable to that physician.
3
“General expenses” were defined as meaning “all expenses of the Practice allocable to the
Practice paid during the applicable measurement period . . . that do not constitute Direct
Expenses that are allocable to any physician in the Practice (including Physician)” and included
things such as “salaries and benefits of any support staff” that did not constitute direct expenses,
office supplies, occupancy expenses, general utilities, medical supplies, and payroll taxes.
4
This draw was contingent upon a second practitioner sharing space with Dr. Hutchison and if
that did not occur “the Bi-Weekly Draw amount is subject to immediate adjustment by KDMS.”
However, although another practitioner never shared her space, Dr. Hutchison’s initial draw was
never reduced.
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were to be made depending upon actual revenues and actual payouts would be
made to Dr. Hutchison if her revenues exceeded her draws or her draws would be
decreased if revenues were too low.5
Exhibit A further stated that if Dr. Hutchison’s employment
terminated for any reason how compensation would be paid out and what would
occur if she owed KDMS for draws after the end of the quarter in the year in which
employment terminated, providing:
If Physician’s compensation for such quarter . . . is less
than the sum of the amounts already paid to Physician for
such quarter . . . then Physician shall repay such
difference to KDMS within ten days after KDMS notifies
Physician in writing of its determination of the amount to
be repaid by Physician to KDMS[.]
5
Draw amounts were to be adjusted within forty-five days after the end of each quarter to
provide a quarterly settlement based on estimates of the actual revenues that would be collected
for professional services each quarter based on billings multiplied by a collection rate of 50%
and the physician’s share of actual expenses. If this amount was in excess of the bi-weekly
draws, the physician would receive the excess, with additional adjustment 120 days after the end
of the first year based on “actual revenues collected during the First Year and within three
months thereafter from services performed during the first year as well as expenses paid during
the First Year.”
Then after the first year, at the end of each quarter, compensation was to be “calculated based on
the actual revenues collected and expenses paid during such quarter, and not on revenues
collected or expenses paid before or after such quarter.” It was specified that KDMS would pay
out compensation exceeding the draws within thirty days after each quarter, and “to the extent
Physician’s Quarterly Compensation for the quarter is less than the sum of the Bi-Weekly Draws
paid to Physician for such quarter, then the difference will be deducted from the calculation of
Physician’s Quarterly Compensation for the next quarter and each quarter thereafter until the full
amount of such difference has been repaid by Physician to KDMS.” KDMS had the option to,
after two quarters of this, reduce the physician’s biweekly draw to avoid future repetition of this
problem.
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II. Staffing Issues
Dr. Hutchison was unhappy with the staff she was given to run her
practice and wanted to share space and work with an OB/GYN nurse practitioner.
Dr. Hutchison testified in her deposition that her staff’s prior experience was
extremely limited, and she did not believe her staff had appropriate training to
work in OB/GYN or to bill for her services, and the thirty days of training
specified in the Agreement were never provided. She alleged she was forced to
pay salaries for incompetent staff who were not permanent staff, with staff not
filling out patient consent forms required to be completed thirty days before
surgery for preauthorization to collect from Medicaid patients, and then having the
forms filled out incorrectly and having to be done a second time. She reported that
KDMS staff told her that the preauthorizations were not done and that billings
were not being made for ultrasounds and other in-office services. She further
testified that her licensed practical nurse (LPN), who did not have training in
obstetrics and gynecology, was emailing her rather than contacting her directly
about “pregnant patients being seen at urgent care with blood pressures 140s over
90s, which could have been a stroke.”
III. The Robots
While working with Dr. James in 2010-2011, Dr. Hutchison used
KDMC’s one da Vinci S Robot (S Robot) to perform robotic surgeries. The S
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Robot was located in KDMC’s OR 8, and Dr. Hutchison had a Wednesday block
surgery schedule in OR 8. She, thus, had unlimited access to the S Robot for her
surgery schedule.
In March 2012, KDMC purchased a second robot, the da Vinci Si
Robot (Si Robot). The Si Robot was a newer model which included advanced
features. KDMC purchased the Si Robot with federal funds for cancer surgeries
for single incision procedures. KMDC promoted that Dr. Eric Smith, a general
surgeon, could perform single incision laparoscopic surgeries with the Si Robot,
and that the OB/GYNs with privileges at KDMC could also perform minimally
invasive surgeries using it.
The S Robot was moved to operating room seven (OR 7) and Dr.
Hutchison’s Wednesday block schedule was moved to OR 7. The Si Robot was
placed in OR 8 and was available to all physicians but was not subject to being
reserved through block scheduling. Instead, all the physicians were supposed to be
given access to the Si Robot on their assigned surgery days based on the need and
complexity of each procedure. Dr. Smith had Monday and Wednesday surgery
days, Dr. Hutchison had Wednesday surgery days, and other OB/GYNs had
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Tuesday and Thursday surgical days. According to Dr. Hutchison, there was a lot
more demand for the Si Robot, because it was a superior machine.6
When there were competing requests for access to the Si Robot,
KDMC’s robotic team lead, Chrystal Lemaster, decided which procedure took
priority based on the complexity and expected duration of the procedure. When a
physician could not have access to the Si Robot, the S Robot continued to be
available for their use in OR 7. Dr. Hutchison began complaining that Dr. Smith
was performing some of his surgeries on Wednesdays which interfered with her
access to the Si Robot on Wednesdays.
Dr. Hutchison testified she was unhappy with the amount of surgery
time she was getting in general and with the Si Robot in particular. She believed
“the Boys” a group of male OB/GYN physicians with privileges at KDMC, did not
want her competing with them for patients and conspired to deprive her of surgical
6
Dr. Hutchison testified that she could perform certain surgeries better with the Si Robot and
was on the cutting edge when it came to performing deep endometriosis resections which
restored fertility. She explained that while the S Robot showed images in 2D, the Si Robot
showed 3D high definition images, allowing her to remove more endometriosis rather than just
what was visualized on the surface. She explained that the S Robot did not offer much of an
advantage over a regular laparoscopic surgery (with someone else operating a camera) as she
could not see any better with it, but it did allow her to always have the camera where she wanted
it, and the S Robot caused less pain to patients because the robotic instruments could move more
ways. Dr. Hutchison noted that she was one of three physicians that used the S Robot, with the
other two also being OB/GYNs (Dr. James and Dr. Brian Frederick), while other physicians, like
Dr. Smith, did not bother to use the S Robot for laparoscopic surgeries. However, the other
physicians saw the advantages offered by the Si Robot and used it. She explained that when only
the S Robot was available, she was performing 75% of all robotic surgeries.
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time and KDMC staff assisted them with this goal.7 Dr. Hutchison claimed that as
a result of having less surgical time, she was running three months behind in her
surgical schedule, which resulted in her losing patients to other physicians.
During the rest of 2012, Dr. Hutchison continued to complain about
her access to the Si Robot. In text messages sent in November 2012, she
7
Dr. Hutchison specifically testified that the OR schedules submitted as exhibits were inaccurate
and that the other surgeons ended up getting two ORs at once, so they could flip back and forth
between surgeries and perform more surgeries, with male surgeons getting more operating rooms
than female surgeons, with the schedule continually being changed. Dr. Hutchison testified that
initially she was supposed to get the Si Robot on all Wednesdays, then she was supposed to get it
on alternating Wednesdays with Dr. Smith, but then her reserved days were taken away. She
stated that if surgeries were not scheduled at least three days in advance, reserved days could be
taken away but said that this rule did not apply when Dr. Smith scheduled surgeries at the last
minute, with her having to give way instead, and that the male surgeons were given preference
over the female surgeons, with the female surgeons getting their surgeries bumped (not just Si
Robot surgeries) while the male surgeons did not. She also complained that she lost access to
outpatient surgery and was not given the NovaSure and other equipment needed because male
surgeons got preference. While Dr. Hutchison acknowledged performing surgeries on the Si
Robot in late 2012, she was not sure if she performed any surgeries with it in 2013. “It was a
concerted effort. They took all my surgery away.” She testified to asking to have her block time
moved to a different day than those assigned to Dr. Smith or Dr. Frederick because those were
the surgeons who got her time, but that her request was refused. She testified she believed Dr.
Smith was receiving preferential treatment from Lemaster regarding scheduling beginning in
September 2012, due to them having an affair, and that he was actually purposefully scheduling
single-port surgeries for which he wanted the Si Robot for Wednesdays rather than Mondays.
She also testified that the three other male gynecologists were making up false accusations
against her, with Dr. Ford calling Dr. Fioret and telling him she had abandoned a patient, which
was untrue, and Dr. Fioret told her “the boys want you gone,” referring to Dr. Frederick, Dr.
Ford, and Dr. Dotson (who shared office space together). She explained that she was told by Dr.
James before she started with him that they did not want a “white homegirl” practicing there
because they did not want the competition and would not even say “hi” to her the first four
months she was there. She stated that Dr. James and Dr. Fioret referred to them as “the boys”
and they were referred to by others that way when discussions were made regarding covering
vacations and on-call. Dr. Hutchison stated she discussed with other female doctors how they
were all subject to sexual discrimination, with Dr. Katrina Briggs agreeing that the OR schedules
were not fair, and Dr. Navita Modi complaining about her time with the Si Robot being limited
because Dr. Boykin apparently told Dr. Modi “it was a man’s world.”
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complained that Lemaster and Dr. Smith were conspiring to limit her access to the
Si Robot on her scheduled days and that robotic team members assigned for her
robotic-assisted surgeries were less experienced. Dr. Hutchison explained in her
deposition that this was an ongoing issue and not having more experienced team
members in each robot room was problematic as they could not troubleshoot the
robots, which led to delays mid-surgery which was dangerous for patients, and that
she simply wanted equally experienced team members divided up between the ORs
equipped with robotics.
Because Dr. Hutchison was not satisfied with the amount of time she
was getting with the Si Robot at KDMC, in late 2012 she began pursuing obtaining
privileges at Our Lady of Bellefonte Hospital (OLBH) and began performing
surgeries there in January 2013. Although it was a breach of her contract for Dr.
Hutchison to obtain privileges at another hospital without getting KDMS’s prior
permission and it appears that Dr. Hutchison did not ask before pursuing privileges
there, Dr. Hutchison and Sara Marks (KDMS’s Executive Director of Integrated
Services at the time Dr. Hutchison worked for KDMS) both stated in their
depositions that KDMS did not object to Dr. Hutchison obtaining privileges at
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OLBH or performing robotic-assisted surgeries there on OLBH’s Si Robot as
KDMS was still receiving Dr. Hutchison’s surgical fees.8
On January 8, 2013, Dr. Hutchison complained in a text message that
all of her surgeries scheduled for the next day, a Wednesday, had been moved to
the S Robot so that Dr. Smith could have the Si Robot. However, surgery records
demonstrate that Dr. Hutchison performed four procedures in operating OR 8 with
the Si Robot on that day.
Dr. Hutchison testified she believed she was being retaliated against
when she made complaints about patient safety with her staff being untrained and
there being insufficient experienced robot staff during surgeries as her access to the
Si Robot was further limited as 2012 went on. However, according to the affidavit
of Deanna Milum (KDMC’s Director of Surgical Services who oversaw the
scheduling of physicians in KDMC’s operating rooms), which summarized
surgical records, Dr. Hutchison continued to have more Si Robot surgeries than
any other OB/GYNs through the end of 2012, and only general surgeon Dr. Smith
had more Si Robot surgeries than she did overall.9
8
Dr. Hutchison testified she continued to perform limited Si Robot surgeries at OLBH through
the end of her contractual period with KDMS, with KDMS continuing to receive this income.
9
Neither party discusses or documents how many surgeries Dr. Hutchison performed with the Si
Robot at KDMC after January 9, 2013; this may be due in part to the fact that by this time Dr.
Hutchison was conducting many such surgeries at OLBH.
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IV. Pay and Profitability
Pursuant to the Agreement with KDMS, Dr. Hutchison was originally
paid a bi-weekly draw of $5,128.49 ($11,111.66 per month). However, given her
initial profitability, and an excess payout of $68,610, Dr. Hutchison requested and
was granted a draw totaling $25,000 a month beginning in May 2012.
After Dr. Hutchison’s draws were increased, she began to have
negative balances. As of June 30, 2012, the end of her third quarter, her total
compensation had fallen below her draws by $2,723.
Despite having agreed to perform OB/GYN services and be on call, in
May 2012, Dr. Hutchison texted her manager, Lydia Horn, that she had decided to
stop seeing obstetrics patients. On July 3, 2012, she sent a letter to KDMC’s
medical executive committee asking to relinquish her call privileges for her OB
practice. The committee granted her request effective August 1, 2012. After that
time, she no longer saw obstetrics patients or provided call coverage for them.10
While this was a breach of her contract with KDMS, it apparently accepted her
decision and did not move to terminate the contract.
10
Dr. Hutchison testified she stopped taking OB patients or providing call coverage for them as
none of the other OB/GYNs provided any call coverage for her and she could not keep working
eighty-hour weeks in which she had both office time and on-call time because it caused her
health problems. Dr. Hutchison testified she wanted to work with a nurse practitioner but
KDMS would not hire her, and she could have shared on-call coverage with her. Dr. Hutchison
stated that after leaving KDMS she has practiced as an OB/GYN as she has been given
appropriate call coverage.
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By the end of September 2012, Dr. Hutchison’s total compensation
for the quarter was $32,845 less than her draws that KDMS had paid her. Dr.
Hutchison continued to be “underwater” from October 2012 through April 2013,
accumulating a balance due KDMS of $122,788 for those months. Between
October 2011 and April 2013, she accumulated $198,069.30 in overpayments.
However, KDMS failed to reduce her draws until March 2013, and did not collect
for these losses out of her salary.11
Also in late 2012, Marks received complaints about Dr. Hutchison’s
unprofessional behavior from KDMC staff.12 However, during this timeframe Dr.
Hutchison also received a patient satisfaction award.
V. Termination
On March 7, 2013, Marks sent Dr. Hutchison a letter on behalf of
KDMS in which it exercised the option to terminate Dr. Hutchison’s employment
early. In the letter, Marks explained KDMS’s decision as follows:
11
No data about or claims regarding overpayments were made from the period after April 2013.
12
In her deposition, Dr. Hutchison admitted to using some inappropriate language in conjunction
with having a robot malfunction (cussing) and having insufficiently trained robot staff to
troubleshoot, resulting in her going to the other OR and having to pull Lemaster in to try to
correct the problem. Dr. Hutchison testified she was frustrated because Lemaster had previously
changed her operating room and time and not supplied her with an adequate team, when Dr.
Hutchison should have been allowed to use the original OR because the other doctor scheduled
for it had not confirmed surgeries for that day three days in advance as required. However, Dr.
Hutchison stated that Lemaster also acted unprofessionally and then made a complaint about her,
when Dr. Hutchison argued she could have appropriately reported Lemaster because she was
“very disrespectful and unprofessional.”
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As you know, King’s Daughters Medical Specialties
(KDMS) entered into an employment agreement with
you on September 19, 2011 to provide
obstetrics/gynecology services to KDMC and KDMS
patients. Since that time, KDMS has worked with you to
develop a successful obstetric/gynecology practice.
However, a year and a half into the agreement it is clear
that neither [of the] parties are satisfied with the current
situation. As such, KDMS believes it is best if we part
ways at this time. Please let this letter serve as KDMS’
90 day notice of termination of this agreement “Without”
cause in accordance with Section VII (D) of the above
reference[d] employment agreement.
According to Marks’s deposition testimony, KDMS was unhappy
with the relationship because of Dr. Hutchison’s declining financial performance,
complaints received about her behavior in the OR, Hutchison’s apparent
dissatisfaction with her operating room assignments and access to the Si Robot,
and concerns about some of her cases.
Dr. Hutchison testified in her deposition that she believed her practice
was shut down in retaliation for her complaining about sexual discrimination in
being allowed to access the Si Robot, her surgeries being limited, and making
complaints regarding patient safety relating to robot staffing, when she had a very
successful practice of 3,000 to 4,000 patients. She also testified she believed her
employment was terminated because she obtained privileges at OLBH.
Dr. Hutchison testified that the termination letter was essentially a
closure notice because after she received the termination letter, she was unable to
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continue her practice as she normally would have, with her practice essentially
being shut down at the beginning of the three-month period just after she received
her termination notice.13 She also believed that KDMS acted to prevent her from
obtaining new employment with OLBH after June 2013, as retaliation.
VI. Complaint and Counterclaims
In May 2016, after having contacted Dr. Hutchison’s counsel about its
demand for repayment and not receiving repayment, KDMS filed its complaint
against Dr. Hutchison for breach of contract and unjust enrichment. It sought to
recover $198,069.30 against Dr. Hutchison based on its advancement of payments
to her that she did not earn and failed to repay, along with pre-judgment and post-
judgment interest.
Dr. Hutchison answered and filed counterclaims against KDMS,
seeking to be excused from having to repay the money owed. She argued she was
wrongfully terminated from her employment “with discriminatory and retaliatory
13
Dr. Hutchison testified that in “April 2013, the first of April, they cancelled all my surgeries
that had been scheduled out to June. I had discovered that April 3 or April 5 that all of my
surgeries were being cancelled without my knowledge.” She also testified that after her clinic
was closed she was told she would be able to assist in contacting her cancer patients and other
patients to ensure they had follow-ups, but was not allowed to do this and staff was giving out
prescriptions in her name after the clinic was closed, specifically for eight patients “using my
name on April the 18th [2013]” and wanting medication sample packages back so they could
give them out even though “[t]here was no one in that office medically able to give out
medications[.]” She also indicated that during this time period she could not follow up on high
risk patients and “was locked out of computers.” She was unhappy that her patients were sent
letters that she had closed her clinic during this time period, when it had not been her choice.
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intent and illegal, non-legitimate reasons.” Dr. Hutchison argued that KDMS
breached the contract by: failing to provide competent billing staff and coding
education for billing staff who engaged in improper billing practices, with KDMS
failing to timely submit charges for reimbursement, and failing to make adequate
space, equipment, supplies, and staffing available to her. She also alleged she was
subject to systematic discrimination as compared to similarly situated male
employees. She alleged KDMS took away and rearranged her operating time with
patients because of her gender and in retaliation for various legally protected
actions and comments; switched her surgeries “so that a lessor-trained [sic] or
experienced male counterpart would replace her in the operating room”; her male
colleagues received preferential treatment regarding scheduling and opportunities
to grow their practices; she received disparate treatment as compared to similarly
situated male counterparts regarding her employment including on multiple
occasions cancelling her scheduled surgeries without any valid reason; she was
denied access to the Si Robot; and was told “the boys want you gone.” She also
argued that in January 2013, without any reason or explanation her income was cut
in half and she was asked by Marks why she had not quit yet. Dr. Hutchison also
argued that when her termination letter was issued on March 7, 2013, she was
locked out of her office and the hospital computer system, which denied her access
to patient medical records, prevented her from being able to continue caring for
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patients until June 7, 2013 (when her termination became effective), and she was
unable to follow up with patients who had serious conditions.
Dr. Hutchison’s specific counts on her counterclaim were that KDMS:
(1) breached its contract with her; (2) violated the Kentucky Health Care
Whistleblower Statute, Kentucky Revised Statutes (KRS) 216B.165; (3)
committed gender discrimination against her, KRS 344.040; (4) wrongfully
terminated her based on gender discrimination; (5) retaliated against her; (6)
retaliated against her by terminating her; (7) committed fraud against her by
engaging in irregular billing practices by allowing Dr. James to bill for her services
as his own; and (8) committed IIED. Dr. Hutchison sought compensatory
damages, back pay and front pay, punitive damages, attorney fees, pre- and post-
judgment interest, and taxable costs.
The parties engaged in extensive discovery, which included taking the
depositions of Dr. Hutchison and Marks and the submission of numerous
accompanying exhibits.
In April 2020, KDMS filed a motion for summary judgment on all
claims. Dr. Hutchison requested more time to complete discovery, which the
circuit court denied. In July 2020, Dr. Hutchison then filed her own motion for
partial summary judgment, seeking judgment in her favor on KDMS’s breach of
contract and unjust enrichment claims and her counterclaims. On November 4,
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2020, the circuit court granted KDMS’s motion for summary judgment and denied
Dr. Hutchison’s motion for partial summary judgment.
APPEAL
Pursuant to the Kentucky Rules of Civil Procedure (CR) 56.03,
summary judgment shall be rendered “if the pleadings, depositions, answers to
interrogatories, stipulations, and admissions on file, together with the affidavits, if
any, show that there is no genuine issue as to any material fact and that the moving
party is entitled to a judgment as a matter of law.”
“The standard of review on appeal of a summary judgment is whether
the trial court correctly found that there were no genuine issues as to any material
fact and that the moving party was entitled to judgment as a matter of law.” Scifres
v. Kraft, 916 S.W.2d 779, 781 (Ky. App. 1996). Summary judgment “should only
be used ‘to terminate litigation when, as a matter of law, it appears that it would be
impossible for the respondent to produce evidence at the trial warranting a
judgment in his favor and against the movant.’” Steelvest, Inc. v. Scansteel Service
Center, Inc., 807 S.W.2d 476, 483 (Ky. 1991) (quoting Paintsville Hospital Co. v.
Rose, 683 S.W.2d 255, 256 (Ky. 1985)).
I. Breach of Contract
KDMS and Dr. Hutchison each argued that the other party breached
the terms of the Agreement. KDMS argued that Dr. Hutchison breached the
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Agreement by failing to pay it back money it advanced to her through draws that
she had not earned, while Dr. Hutchison sought to avoid having to repay these
funds, claiming that KDMS breached the Agreement first by depriving her of
adequate staff, adequate billing, adequate access to the Si Robot, and cutting off
her access to the computer system and patients immediately after giving her notice
of termination.
In its factual findings, the circuit court found that under the terms of
the Agreement Dr. Hutchison was required to pay KDMS back if her draws
exceeded her total compensation; her increased draws continued to exceed her total
compensation; KDMS exercised its option to terminate the employment
relationship without cause; and when the employment relationship ended, Dr.
Hutchison’s account with KDMS exceeded her actual total compensation by
$198,069.30. The circuit court specifically found:
Hutchison has offered no evidence to challenge the
accuracy of this amount owed under the Agreement. As
stated above, the accuracy of this amount is established
by the Affidavit of Sara Marks and by the spreadsheet
summary of Hutchison’s financial performance submitted
with KDMS’s motion.
The circuit court considered Dr. Hutchison’s primary defense to
KDMS’s claims – that she was given inadequate or inferior access to a da Vinci Si
Robot for her operating room procedures during her employment – and made
factual findings that undisputed record evidence disproved that, including: the Si
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Robot was not purchased for the gynecologists or Dr. Hutchison; and Dr.
Hutchison was incorrect that her access to the Si Robot was limited based upon the
affidavit of Milum, who summarized operating room schedules and robotic
procedures performed during 2012 based on KDMC’s records, establishing that:
[F]rom March 2012 until the end of 2012, Hutchison
performed more procedures on the Si Robot than any of
the other OB/GYN physicians, male or female.
Hutchison had more, not less, access to this equipment
than the other OB/GYNs. . . . Hutchison performed 66
procedures on the Si Robot in 2012. Only one physician,
Dr. Eric Smith, performed more procedures (76) on the
Si robot during that time. Dr. Smith is a general surgeon
who performed a large volume of single-site procedures
that required the Si Robot. Thus, Hutchison had more
access to the Si Robot than all but one of the other
physicians.
The circuit court also pointed out that Hutchison offered no evidence to challenge
the accuracy of this evidence.
The circuit court found that Marks decided to terminate the
employment relationship without cause based on various factors including Dr.
Hutchison’s poor financial performance, complaints from operating room
employees about her unprofessional language and behavior, Dr. Hutchison’s
dissatisfaction with her operating room schedules, and the parties’ mutual
dissatisfaction with the employment relationship.
The circuit court found that Marks’s unrefuted affidavit established
that Hutchison had appropriate office staff consistent with that provided to other
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KDMS physicians and that KDMS appropriately billed and collected for
Hutchison’s professional services, billing over $2.38 million and collecting over
$812,000, equating to a 34% collection rate which is within the normal range for a
surgery specialty physician billing at KDMS.
Based on these factual findings, the circuit court determined that Dr.
Hutchison breached the Agreement by failing to reimburse KDMS; KDMS did not
breach the contract by failing to provide her sufficient support staff, office space,
access to the Si Robot, and not billing for her services appropriately; and “[a]s a
matter of law, there is no admissible evidence to support Hutchison’s claim that
KDMS breached its obligations under the employment agreement”; and therefore
as a matter of law “Hutchison breached the employment agreement” by failing to
reimburse KDMS and KDMS is entitled to judgment as a matter of law to recover
the amounts owed by Hutchison. It determined because there was a written
contract and breach of that contract, that KDMS’s claim for unjust enrichment was
moot.
Dr. Hutchison argues that the circuit court erred in granting summary
judgment to KDMS. She argues that as to the breach of contract claim, KDMS
was not entitled to a judgment as KDMS breached the Agreement first by not
providing her with adequate staffing and endangering patients as a result; not
providing adequate billing staff; and not providing her with adequate space,
-22-
equipment, supplies, or resources necessary to operate her practice including
denying her access to the Si Robot in favor of her male colleagues, due to her
gender. Dr. Hutchison argues that KDMS’s material breaches and discriminatory
actions effectively precluded her from practicing medicine, and rendered her
performance of the Agreement futile and/or impossible. She also argues that
despite stating in the March 7, 2013, termination notice that June 7, 2013, would
be her last day of employment, KDMS immediately denied her access to her
patients and the computer system, effectively ending her employment early.
“To prove a breach of contract, the complainant must establish three
things: 1) existence of a contract; 2) breach of that contract; and 3) damages
flowing from the breach of contract.” Metro Louisville/Jefferson Cnty.
Government v. Abma, 326 S.W.3d 1, 8 (Ky. App. 2009).
We are confident that KDMS established conclusively that Dr.
Hutchison breached her contract with it by failing to repay the excess money she
received through her draws and that the circuit court correctly found that this was
so based on the undisputed evidence. The only question is whether Dr. Hutchison
established there were factual disputes as to the breaches of the contract that she
alleged and damages following from those breaches which might mitigate this
total.
-23-
Having reviewed the evidence, it is evident that Dr. Hutchison has
failed in her burden to establish that there is a factual dispute that KDMS did not
provide her with adequate staffing; did not provide her with adequate billing staff;
and did not provide her with adequate space, equipment, supplies, or resources
necessary to operate her practice including denying her access to the Si Robot.
While Dr. Hutchison may have been unhappy that at times she did not have a full
complement of staff, or with the amount of training they had prior, the Agreement
does not require that she always have full staffing or any mandatory prior
experience they should have had, and Dr. Hutchison has failed to raise a factual
dispute that she was thereby harmed. While Dr. Hutchison made many claims
about inadequate billing, she has failed to identify any claims in which inadequate
billing led to non-collection of her fees.14
While it is obvious that Dr. Hutchison would have preferred to have
“first-dibs” on all Si Robot time during her scheduled surgery slot, she has not
established that access to the Si Robot some of the time and access to the S Robot
14
We recognize it is difficult to establish a non-event, especially years after the fact, but Dr.
Hutchison has also failed to present any affidavits from any people who she references as having
informed her of deficits in billing or provide any documentation that she made any complaints
about this to KDMS so that it could correct the situation. Specific claims regarding non-billing
of the ultrasounds she provided were refuted by KDMS records indicating that more than 500
ultrasounds were billed during her tenure at KDMS as related in Marks’s affidavit. Dr.
Hutchison was also unable to identify any procedures which were not collected upon due to lack
of proper prior consent and authorization, while Marks asserts that she searched the appropriate
records and was unable to find any instances when this occurred.
-24-
some of the time was inadequate where previously she had only access to the S
Robot. While we can certainly understand that all surgeons would prefer the best
equipment to deliver the best results possible for all of their patients, Dr. Hutchison
has failed to establish that the S Robot was an inadequate option or if it was that
having a surgery delayed so that the Si Robot could be used was not a sufficient
solution, given that the Si Robot was a limited resource that had to be shared by all
of the surgeons.
However, Dr. Hutchison’s unrefuted argument that despite stating in
the March 7, 2013, termination notice that June 7, 2013, would be her last day of
employment, KDMS immediately denied her access to her patients and the
computer system, effectively ending her employment early, merits further
consideration. Dr. Hutchison has repeatedly raised this argument, in her
counterclaim, in her motion for summary judgment, and in her appellate brief. We
note that KDMS did not address this argument and neither did the circuit court.
The Agreement is silent as to what is supposed to occur in the ninety
days between when notice of termination is given and the actual termination of
employment. While certainly patients would need to be given notice so that they
could seek continuing care elsewhere, it is unclear whether Dr. Hutchison should
not have been allowed to continue to treat patients to the extent possible during
that period and to continue to earn income. The Agreement also does not provide
-25-
an exception to the non-compete clause during that time. We believe that Dr.
Hutchison is certainly a proper witness as to the lack of such access and that if true
she would be damaged as it would limit her ability to produce income during the
last three months of her employment with KDMS while also preventing her from
working elsewhere.
Therefore, while we affirm that Dr. Hutchison breached the
Agreement with KDMS by failing to pay it back the money she owed it, it was not
proper for summary judgment to be granted to KDMS on the breach of contract
issue without first resolving this issue regarding whether it may have also breached
the contract by effectively prematurely terminating her employment sooner than
ninety days by cutting off her access to the computer system and her patients,
preventing her from performing her employment between March 7, 2013, and June
7, 2013. As factual issues remain regarding what occurred in this limited period of
time, and the contract is ambiguous as to what should have occurred, summary
judgment cannot be granted to KDMS on its breach of contract claim. Whether
Dr. Hutchison may thereby be excused from having to repay any portion of the
$198,069.30 that it has been established she owes KDMS as a set off, if KDMS’s
actions during that time were indeed a breach of the contract, is an issue that
cannot be resolved at this time. Therefore, we reverse and remand on this issue.
-26-
II. Gender Discrimination
Dr. Hutchison argued she was discriminated against for her gender by
being denied access to the Si Robot and being terminated. The circuit court
rejected that Dr. Hutchison could establish gender discrimination where she had no
direct evidence of gender discrimination and could not present a prima facie case
of gender discrimination under the burden-shifting analysis of McDonnell Douglas
Corporation v. Green, 411 U.S. 792, 802, 93 S. Ct. 1817, 36 L. Ed. 2d 668 (1973),
as she failed to prove a similarly situated male received more favorable treatment.
The circuit court explained Dr. Hutchison “failed to produce any evidence of a
similarly situated employed male physician whose employment agreement was not
terminated under similar circumstances as Hutchison’s employment was
terminated” and could not establish denial of access to the Si Robot compared to a
similarly situated male OB/GYN physician employee, requiring dismissal of her
discrimination claims as a matter of law. The circuit court determined that even if
Dr. Hutchison could make out a prima facie case of gender discrimination, she
failed to identify any admissible evidence that KDMS’s stated reason for
terminating her employment was pretext for gender discrimination. It further
indicated that her subjective belief now was insufficient, noting that “during her
deposition, Hutchison testified that she believed she was terminated because she
had applied for privileges at OLBH, not because of gender discrimination.” The
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circuit court specifically rejected that Dr. Hutchison could properly qualify or
soften her damaging deposition testimony via her later affidavit, explaining “an
affidavit that contradicts earlier sworn testimony cannot be used to defeat a motion
for summary judgment.”15
Dr. Hutchison argues that she has established a prima facie case for
gender discrimination because: as a woman she is a member of a protected group,
it is undisputed that her employment was terminated early even though she was
objectively qualified for the position and KDMS’s only female OB/GYN, male
doctors were treated better than she was at KDMS with OB/GYN Dr. Richard Ford
being hired after she was terminated and then being promoted to Chief Medical
Officer, and Dr. James also being hired by KDMS. She states that the burden of
production thus shifted to KDMS to articulate a non-discriminatory reason for her
termination, but that KDMS’s shifting reasons for why it terminated her makes all
of these justifications suspicious, and “[t]here is significant evidence that KDMS
15
In Dr. Hutchison’s affidavit, she stated the following:
7. I stated in my deposition that KDMS terminated me due to my seeking hospital
privileges at Our Lady of Bellefonte Hospital among other reasons. To clarify,
this was not the only reason that I believe that KDMS terminated my
employment. More specifically, I think that KDMS terminated my employment
because I raised concerns about my working conditions, specifically, that KDMS
increasingly denied me access to the Si Robot based on my gender, that KDMS
did not provide me adequate staff for my procedures or for my billing purposes,
and that KDMS endangered patients by cancelling my procedures on the Si Robot
on short notice.
-28-
terminated Hutchison’s employment because she raised concerns about her
working conditions and about KDMS denying her access to the Si Robot based on
her gender,” which was “also the reason that she was afforded fewer opportunities
than ‘the Boys’ at KDMS.”
KRS 344.040(1)(a) provides in relevant part that: “It is an unlawful
practice for an employer: . . . to discharge any individual, or otherwise to
discriminate against an individual with respect to compensation, terms, conditions,
or privileges of employment, because of the individual’s . . . sex[.]” To establish a
prima facie discrimination action on the basis of gender, Dr. Hutchison must
provide proof that: “(1) she was a member of a protected group; (2) she was
subjected to an adverse employment action; (3) she was qualified for the position;
and (4) similarly situated males were treated more favorably.” The Board of
Regents of Northern Kentucky University v. Weickgenannt, 485 S.W.3d 299, 306
(Ky. 2016) (footnote omitted). If Dr. Hutchison can establish a prima facie case of
discrimination, then the burden shifts to KDMS to offer a “legitimate,
nondiscriminatory reason” for its actions, then the burden shifts a final time, with
Dr. Hutchison then needing to “be afforded a ‘fair opportunity’ to show that [the
adverse employment action] was ‘in fact pretext’ for discrimination.” Id. (citation
omitted).
-29-
We agree with the circuit court that Dr. Hutchison cannot establish a
prima facie case because she cannot establish that similarly situated males received
better treatment. The problem for Dr. Hutchison is that the male OB/GYNs were
not employees of KDMS; instead, they only had privileges at KDMC. They were
thus not similarly situated, and their employment could not be terminated by
KDMS. However, even had she established a prima facie case of gender
discrimination, KDMS provided several reasonable explanations as to why it
decided to terminate her employment and we are confident that her objective
failure to continue to perform well in generating income for KDMS was a
legitimate reason to terminate her.
The circuit court incorrectly characterized Dr. Hutchison’s deposition
testimony to indicate that she believed she was terminated for seeking privileges at
OLHB, as her deposition testimony provided this as one reason she believed she
was terminated while she had also testified earlier that she believed her termination
was in retaliation for complaining about her lack of access to the Si Robot, changes
in her surgery schedule, and inadequate staffing for the Si Robot and her clinic,
with her obtaining privileges elsewhere essentially being “the straw that broke the
camel’s back” and causing KDMS to finally decide to terminate her. Dr.
Hutchison’s deposition testimony was sufficiently clear on this point and her
-30-
affidavit simply reiterated this position. However, this characterization by the
circuit court was not dispositive.
While seeking privileges at OLBH without prior permission was
indeed a violation of the Agreement, this was not listed as a basis for the
termination. Just because KDMS had a variety of bases to choose from when it
came to deciding to terminate her, and its agents may not have been entirely
consistent when explaining its reasoning, does not imply that in fact her
termination was discriminatory.
As to access to the Si Robot, the unrefuted evidence shows that Dr.
Hutchison’s subjective perception that she was granted less time with the Si Robot
than similarly situated physicians was incorrect based on the KDMC records which
indicate that she performed more procedures with the Si Robot than any other
physicians with privileges at KDMC other than general surgeon Dr. Smith.16 Dr.
16
This is according to Milum’s affidavit. As to the Si Robot, Milum summarized that from
April 1, 2012, through December 31, 2012, only general surgeon Dr. Smith (who had Monday
and Wednesday surgery days) performed more procedures on the Si Robot, 76 to Dr.
Hutchison’s 66, but Dr. Hutchison performed 57 Si Robot surgeries on Wednesdays compared to
33 for Dr. Smith on Wednesdays. In comparing the rates of using the Si Robot by all the
OB/GYN physicians in that same period, Milum stated that Hutchison’s rate was 66 compared to
her next closest OB/GYNs of Dr. Modi at 37, Dr. Dodi at 34, and Dr. Frederick at 29.
In contrast, Dr. Hutchison made claims in her affidavit that were not objectively
verifiable and were in contradiction of the records and Marks’s testimony but failed to explain
why the records or Marks’s testimony was incorrect. These included Dr. Hutchison’s statement
that: “At the end of 2011, I performed seventy-five percent (75%) of all robotic procedures at
KDMS. At the end of 2012, this number decreased to less than ten percent (10%).”
-31-
Hutchison cannot be considered similarly situated to a general surgeon who simply
performed more operations than she. Assuming she was similarly situated to the
OB/GYNs who had privileges at KDMC regarding her right to access the Si Robot
on her surgery days, the undisputed evidence was that she performed more
operations using the Si Robot than those male OB/GYNs.
While Dr. Hutchison repeatedly states her belief that she was not
given equal access to the Si Robot, KDMC records belie that belief. As explained
in Humana of Kentucky, Inc. v. Seitz, 796 S.W.2d 1, 3 (Ky. 1990), “‘[b]elief’ is not
evidence and does not create an issue of material fact. A plaintiff must present
affirmative evidence in order to defeat a properly supported motion for summary
judgment.” However, Dr. Hutchison has not been able to present any evidence that
her belief that she had less access than similarly situated male physicians is in fact
true and she does not challenge the accuracy of the records establishing otherwise.
We do not dispute that Dr. Hutchison may indeed have been subjected
to sexual animus by some male physicians that had privileges at KDMC, but
KDMS’s ability to control the actions of these physicians who were not its
employees was severely limited. Additionally, while they may have made
complaints about her and treated her differently, Dr. Hutchison has not established
that KDMS acted on unfounded complaints to her detriment or that these
physician’s actions caused KDMS to discriminate against her and provide her with
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decreased access to surgical resources. Dr. Hutchison has failed to connect any
alleged sexism by these physicians to a deprivation of access to the Si Robot by
KDMC staff or to her termination by KDMS.
Additionally, despite Dr. Hutchison’s repeated conflating of KDMS as
encompassing KDMC, these are separate (although related) entities. KDMC is not
a party to this suit and it was responsible for providing the Si Robot (not KDMS),
and KDMC was not Dr. Hutchison’s employer or the employer of the male
physicians at issue.
Therefore, we agree with the circuit court that it was appropriate to
grant summary judgment to KDMS on Dr. Hutchison’s gender discrimination
claim.
III. Patient Safety Act
Dr. Hutchison argued that a report she made while employed by Dr.
James about another physician and not having sufficient staff in relation to robotic
surgery and reporting that should be protected pursuant to KRS 216B.165, the
Patient Safety Act, and that she was terminated in retaliation for reporting these
concerns about patient safety. The circuit court determined that this claim failed as
a matter of law for failure to present a prima facie case because Dr. Hutchison
failed to prove she engaged in a protected activity under the Act. The circuit court
rejected Dr. Hutchinson’s claim that her complaint on December 20, 2012, over
-33-
her access to the Si Robot could qualify, explaining that the “complaint was not
related to patient safety or care, but rather to what she believed to be unfair
scheduling changes and her access to the Si Robot.”17 The circuit court noted that
even if that complaint “could be considered protected activity, Hutchison’s own
testimony regarding the reason for her termination precludes the Court from
finding pretext” as she believed she was terminated because she applied for
privileges at OLBH rather than in retaliation for making complaints relating to
patient safety. Accordingly, the circuit court dismissed these claims as a matter of
law.
Dr. Hutchison argues she established a prima facie case that she
engaged in a protective activity by reporting her safety concerns to KDMS
regarding its failure to provide her with a sufficient number of adequately trained
staff members, which went unaddressed, and she was retaliatorily terminated by
KDMS just weeks after she made these reports.
KRS 216B.165 states in relevant part that:
(1) Any . . . employee of a health care facility or service
licensed under this chapter who knows or has reasonable
cause to believe that the quality of care of a patient,
patient safety, or the health care facility’s or service’s
safety is in jeopardy shall make an oral or written report
of the problem to the health care facility or service . . .
17
We do not address the circuit court’s rejection of Dr. Hutchison’s prior claim regarding
protected activity in reporting another physician’s endangerment of patient safety prior to her
being employed by KDMS because she waived that argument by not renewing it on appeal.
-34-
...
(3) No health care facility or service licensed under this
chapter shall by policy, contract, procedure, or other
formal or informal means subject to reprisal, or directly
or indirectly use, or threaten to use, any authority or
influence, in any manner whatsoever, which tends to
discourage, restrain, suppress, dissuade, deter, prevent,
interfere with, coerce, or discriminate against any agent
or employee who in good faith reports, discloses,
divulges, or otherwise brings to the attention of the health
care facility or service the circumstances or facts to form
the basis of a report under subsections (1) or (2) of this
section.
“KRS 216B.165(1) requires employees of a health care facility to report quality of
care and safety problems” and “KRS 216B.165(3) states that health-care facilities
shall not hinder the ability of employees to make these reports.” Foster v. Jennie
Stuart Medical Center, Inc., 435 S.W.3d 629, 635 (Ky. App. 2013).
The problem for Dr. Hutchison is that even if we assume that her
reports about inadequate staffing of the Si Robot in that the staff were not able to
troubleshoot the robot which could have been problematic for patient care
constituted a prima facie case for violation of the Patient Safety Act, KDMS amply
established a myriad of objective reasons for her termination. Furthermore, it
appears that her reports were buried and subsumed within a variety of complaints
having to do with her supposed lack of access to the Si Robot and her disagreement
with how that resource was allocated and cannot be connected with her discharge.
Therefore, this claim was appropriately dismissed.
-35-
IV. Retaliation
Dr. Hutchison brought a claim that she was wrongfully retaliated
against for the complaints she made regarding gender discrimination and patient
safety, as is prohibited under the Civil Rights Act, KRS 344.280(1), by rearranging
her operating times and discharging her. The circuit court found these were
restatements of her rejected gender discrimination claims, which must also be
dismissed as a matter of law.
Dr. Hutchison argues that she was retaliated against for raising
concerns about gender discrimination and patient safety by being denied
opportunities to use the Si Robot, by being sent a termination letter and then
immediately denied access to her patients, and then by being terminated. She
states that the causal connection between her complaints and termination is
undeniable because she made her complaints to Marks, Marks was aware she made
complaints to others as they had a meeting regarding her concerns, and Marks
testified that Dr. Hutchison’s complaints played a role in the decision to terminate
her.
KRS 344.280 states in relevant part:
It shall be an unlawful practice for a person, or for two
(2) or more persons to conspire:
(1) To retaliate or discriminate in any manner against a
person because he has opposed a practice declared
unlawful by this chapter, or because he has made a
-36-
charge, filed a complaint, testified, assisted, or
participated in any manner in any investigation,
proceeding, or hearing under this chapter[.]
We note that the Patient Safety Act does not fall within this chapter
and, thus, KRS 344.280 cannot apply to such a claim. As to gender discrimination,
we agree with the circuit court that the prior disposal of such claim precludes the
application of KRS 344.280(1).
V. Fraud
Dr. Hutchison argued that KDMS participated in Dr. James’s fraud
toward her and was legally responsible for it. The circuit court rejected this claim,
determining that “Hutchison has neither alleged nor identified any
misrepresentation made by KDMS that could support a claim for fraud” as these
were claims involving Dr. James’s billing for her professional services when she
was employed by him.18 It found that Dr. James was not an employee of KDMC
or KDMS while Dr. Hutchison worked for him, and KDMS was not involved in
billing for Dr. Hutchison’s services during that time.19 The circuit court rejected
18
Dr. Hutchison denied being employed by Dr. James; instead, in her deposition she described a
recruiting agreement by King’s Daughters (which appears to refer to the hospital) to set up a
practice there, and that she had an office sharing arrangement with Dr. James and Dr. Modi in
which they would share expenses and paid a third party to do billing, with her functioning more
like a partner to Dr. James. However, the exact nature of their relationship is immaterial.
19
Dr. Hutchison specifically denied in her deposition testimony that Dr. James worked for
KDMC or KDMS or that the person doing billing for those three doctors worked for either
entity.
-37-
the ostensible agency could apply here as “Hutchison has cited no case where a
hospital was held responsible to an independent physician’s employee for conduct
between the independent physician and that employee.” It also noted that
Hutchison’s deposition testimony established she understood that Dr. James was
not an employee of KDMS. Therefore, it dismissed that claim.
Dr. Hutchison again alleges that Dr. James was KDMS’s Chief of its
OB/GYN department at the time he engaged in fraud against her, and KDMS
should be liable as it “not only held James out to be an agent of KDMS, but as a
leader of one of its clinical departments.” She argues this is shown by
contemporaneous KDMS advertising material from the
time, listing James, along with Hutchison, on KDMS
advertising materials with KDMS’ logo. As a
department chair, James was more than just a physician
with privileges at KDMS and had specific authority from
KDMS to set policy for the OB/Gyn Department and,
thus, to ostensibly act as an agent of KDMS, its board,
and its leadership.
Dr. Hutchison argues as a department leader Dr. James should be considered an
agency of the hospital and “[b]ecause there is no material dispute that James was
the chair of KDMS’s OB/GYN Department when he took fraudulent actions,
KDMS was not entitled to summary judgment on Hutchison’s Counterclaim for
fraud.”
“In a Kentucky action for fraud, the party claiming harm must
establish six elements of fraud by clear and convincing evidence as follows: a)
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material representation b) which is false c) known to be false or made recklessly d)
made with inducement to be acted upon e) acted in reliance thereon and f) causing
injury.” United Parcel Service Co. v. Rickert, 996 S.W.2d 464, 468 (Ky. 1999).
However, it does not matter if Dr. Hutchison has established a prima facie case of
fraud against Dr. James when he is not a party to this action and his actions cannot
be imputed against KDMS. Because Dr. Hutchison knew Dr. James was not an
employee of KDMS, it does not matter if advertising material might have implied
that he was an employee of it.
Additionally, Dr. Hutchison again conflates KDMC with KDMS. The
advertisements in which she states that KDMS held out Dr. James as its agent were
in fact advertisements for KDMC which simply listed that he practiced at KDMC,
the same as advertisements it made for Dr. Hutchison while she was working with
Dr. James. None of these documents identifies Dr. James as being a department
leader, chief, or chair of KDMC’s or KDMS’s OB/GYN department. It is most
certainly disputed that he had such a role, especially as Dr. Hutchison specifically
admits that when she was hired by KDMS, she was their only OB/GYN employee.
Nothing but Dr. Hutchison’s subjective belief that Dr. James had such a connection
to KDMS appears to support this claim. This was insufficient to defeat the motion
for summary judgment and this claim was appropriately dismissed against KDMS.
-39-
VI. Intentional Infliction of Emotional Distress
Finally, Dr. Hutchison argued she was entitled to damages for IIED
due to her wrongful termination. The circuit court concluded that Dr. Hutchison
had not identified any admissible evidence that met the high standard required to
make out a prima facie case of IIED and “[m]ore importantly, it is settled that IIED
claims are subsumed by claims under the Kentucky Civil Rights Act and must be
dismissed when brought with claims under the Act.” It dismissed this claim.
Dr. Hutchison argues that she suffered from retaliation and
discrimination, which were by definition outrageous and intolerable, as she was
sexually discriminated against by “the Boys,” told that “the boys want you gone,”
and then Marks asked her “why haven’t you quit yet?” She also argues she
suffered significant financial hardship and severe emotional distress as a result
because she lost her home and could not afford to send her son to a world premiere
school.
“[T]he elements [of IIED] are: (1) intentional or reckless conduct; (2)
that was outrageous or intolerable and offends against the generally accepted
standards of decency and morality; (3) which caused emotional distress; and (4)
the distress was severe.” McDonald’s Corp. v. Ogborn, 309 S.W.3d 274, 293-94
(Ky. App. 2009). Not every case in which a wrong has been committed is
sufficient to establish IIED.
-40-
Kentucky courts have found plaintiffs’ proof of
outrageous conduct sufficient to support an outrage/IIED
claim in cases where the defendants: (1) harassed the
plaintiff “by keeping her under surveillance at work and
home, telling her over the CB radio that he would put her
husband in jail and driving so as to force her vehicle into
an opposing lane of traffic”; (2) intentionally failed to
warn the plaintiff for a period of five months that
defendant’s building, in which plaintiff was engaged in
the removal of pipes and ducts, contained asbestos; (3)
engaged in “a plan of attempted fraud, deceit, slander,
and interference with contractual rights, all carefully
orchestrated in an attempt to bring [plaintiff] to his
knees”; (4) committed same-sex sexual harassment in the
form of “frequent incidents of lewd name calling coupled
with multiple unsolicited and unwanted requests for
homosexual sex”; (5) was a Catholic priest who “used his
relationship [as marriage counselor for] the [plaintiff]
husband and the wife to obtain a sexual affair with the
wife”; (6) agreed to care for plaintiff’s long-time
companion-animals, two registered Appaloosa horses,
and then immediately sold them for slaughter; and (7)
subjected plaintiff to nearly daily racial indignities for
approximately seven years.
Outrageousness has been found lacking, however,
in less-egregious cases where the defendant: (1) refused
to pay medical expenses arising out of an injured
worker’s compensation claim; (2) wrongfully converted
the plaintiff’s property in a manner that breached the
peace; (3) negligently allowed his vehicle to leave the
road and struck and killed a child; (4) committed
“reprehensible” fraud during divorce proceedings by
converting funds belonging to his spouse for the benefit
of defendant and his adulterous partner; (5) wrongfully
terminated the plaintiff; (6) displayed a lack of
compassion, patience, and taste by ordering plaintiff,
who was hysterical over the fact that she had just
delivered a stillborn child in her hospital room, to “shut
up” and then informing her that the stillborn child would
-41-
be “disposed of” in the hospital; (7) erected a billboard
referencing defendant’s status as a convicted child
molester; (8) wrongfully garnished plaintiff’s wages
pursuant to a forged agreement; and (9) impregnated
plaintiff’s wife. Courts have found other elements of the
prima facie case missing, or have otherwise found
recovery pursuant to § 46 unavailable, in cases where the
defendant: (1) a Catholic priest, sexually abused a ten-
year-old boy; (2) breached a promise to marry; (3)
chained a high school student to a tree by his ankle and
neck; and (4) shot and killed a beloved family pet, which
had been misidentified as a stray dog.
Stringer v. Wal-Mart Stores, Inc., 151 S.W.3d 781, 789-91 (Ky. 2004), overruled
on other grounds by Toler v. Süd-Chemie, Inc., 458 S.W.3d 276, 287 (Ky. 2014)
(citations omitted).
Typically, a wrongful discharge, even if based on discrimination, is
not outrageous enough to qualify as IIED. See Benningfield v. Pettit
Environmental, Inc., 183 S.W.3d 567, 572 (Ky. App. 2005) (and cases cited
within); Bednarek v. United Food and Commercial Workers Intern. Union, Local
Union 227, 780 S.W.2d 630, 632 (Ky. App. 1989).
As we have previously explained, Dr. Hutchison cannot establish any
discrimination took place; therefore, that alone is an appropriate basis for affirming
the dismissal of this claim. We also emphasize that even if the discrimination
claim was established, the evidence could not show that KDMS’s conduct was so
outrageous as to establish IIED.
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CONCLUSION
Accordingly, we affirm the Boyd Circuit Court’s grant of summary
judgment to KDMS dismissing all of Dr. Hutchison’s counterclaims, reverse the
grant of summary judgment to KDMS regarding the breach of contract claim to the
extent that Dr. Hutchison has established there is a question of fact as to whether
KDMS breached the contract by effectively terminating her without proper notice
where she alleged she was immediately denied access to the computer system and
her patients upon notice of termination but affirm that KDMS has established Dr.
Hutchison’s debt to it in the amount of $198,069.30 subject to a possible claim for
set off if Dr. Hutchison can establish that this specific breach occurred and
prevented her from earning money during the ninety days in which she was to
continue in her employment under the terms of the Agreement.
ACREE, JUDGE, CONCURS IN RESULT ONLY.
DIXON, JUDGE, CONCURS IN RESULT ONLY.
BRIEF FOR APPELLANT: BRIEF FOR APPELLEE:
Christopher B. Congeni W. Mitchell Hall, Jr.
Akron, Ohio Olivia Holbrook Gilkison
Ashland, Kentucky
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