Masterson-Carr v. Anesthesia Services P.A., et sl. ( 2015 )

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
EILEEN MASTERSON-CARR, )
)
Plaintiff, )
)
v. ) C.A. No. N12C-11-107 MJB
)
ANESTHESIA SERVICES, P.A., )
MARK SCHNEIDER, M.D., and )
KEN SILVERSTEIN, M.D., )
)
Defendants. )
Submitted: May 14, 2015
Decided: August 28, 2015
SUPPLEMENTAL DECISION AFTER TRIAL
Michele D. Allen, Esq., Law Office of Michele D. Allen, LLC, 724 Yorklyn Road, Suite 300,
Wilmington, Delaware 19707; Gerald R. Clarke, Esq., Clarke and Associates, 119 S. Easton
Road, Suite 207, Glenside, Pennsylvania 19038, Attorneys for Plaintiff.
Laurence V. Cronin, Esq., Smith, Katzenstein & Jenkins LLP, 800 Delaware Avenue, 10th
Floor, P.O. Box 410, Wilmington, Delaware 19899, Attorney for Defendants.
BRADY, J.
1
I. INTRODUCTION
On November 3, 2012, Eileen Masterson-Carr (“Plaintiff”) filed suit against her
former employer, Anesthesia Services P.A. (“ASPA”), ASPA’s Chairman of the Board Mark
Schneider M.D. (“Schneider”), and ASPA’s CCO Ken Silverstein M.D. (“Silverstein”)
(collectively “Defendants”). Plaintiff initially alleged six claims: (1) ASPA breached her
Employment Contract; (2) ASPA breached the implied covenant of good faith and fair
dealing; (3) Plaintiff was defamed by members of ASPA, including Silverstein and Schneider;
(4) ASPA violated the Delaware Wage Payment and Collection Act by failing to pay Plaintiff
her 6.5% bonus for time worked in 2012; (5) Silverstein and Schneider tortuously interfered
with Plaintiff’s Employment Contract; and (6) ASPA acted in a way justifying promissory
estoppel. On March 21, 2013, upon Defendant’s motion, the Court dismissed Plaintiff’s
promissory estoppel claim. Subsequently, on March 18, 2014, Plaintiff stipulated to the
dismissal of her claim for breach of the implied covenant of good faith and fair dealing.
The parties elected to have a bench trial on the remaining four claims. Trial began on
April 3, 2014 and ended on April 7, 2014. 1 Following closing arguments, the Court ruled that
Plaintiff was entitled to her 6.5% bonus for time worked in 2012 but reserved decision
regarding the specific amount to which Plaintiff is entitled. The Court also reserved decision
on Plaintiff’s allegation that she was wrongfully terminated. In a post-trial decision dated
September 25, 2014, the Court ruled that Plaintiff was not terminated but resigned.
At trial, Plaintiff suggested that even if the Court found that Plaintiff technically
resigned, Plaintiff might still recover on the theory that she had been “constructive[ly]
1
The parties submitted a Joint Exhibit Binder. Exhibits from the Joint Exhibit Binder shall be cited as “Joint
Ex.” The transcript of April 3, 2014 will be cited as “T1.” The transcript of April 4, 2014 will be cited as “T2.”
The transcript of April 7, 2014 will be cited as “T3.”
2
discharged.” 2 The Court reserved decision on the constructive discharge issue until it had
made its finding of fact on the issue of whether Plaintiff was actually discharged or resigned. 3
In its post-trial decision, the Court determined that Plaintiff resigned and permitted the parties
additional briefing on the constructive discharge issue. Because the Court found that the issue
of Plaintiff’s alleged constructive termination was intertwined with the remaining claims for
tortious interference and defamation, the Court also reserved decision on these issues pending
supplemental briefing.
Plaintiff filed her post-trial opening brief on January 20, 2015. 4 Defendants filed their
answering brief on March 23, 2015. 5 Plaintiff filed a reply on April 22, 2015. 6 Defendants
requested oral argument, and oral argument was held on May 14, 2015, at which time the
Court reserved decision on the pending matters. 7 Having heard oral argument and reviewed
all of the parties’ submissions, the Court now finds that Plaintiff’s constructive termination
claim is barred and that Plaintiff has failed to establish tortious interference or defamation.
II. BACKGROUND
A. The Structure of ASPA
ASPA is a professional services corporation, organized under the laws of Delaware,
that is involved in the practice of medicine. 8 ASPA is comprised of approximately thirty-one
physicians, some of whom are shareholders, as well as other medical personnel, including
nurses. The company’s Board of Directors (“Board”) is composed of shareholder-members of
2
T3 at 197.
3
T3 at 234.
4
Opening Brief, Item 79.
5
Answering Brief, Item 81.
6
Reply Brief, Item 82.
7
Judicial Action Form, Item 85.
8
Employment Agreement, Joint Ex. 4, at 1.
3
ASPA. 9 ASPA’s governance structure initially included a Chief Executive Officer (“CEO”),
Chief Financial Officer (“CFO”), and Chief Clinical Officer (“CCO”). 10 However, in
approximately 2011, ASPA modified its governance structure, changing the executive
positions.11 The CEO became the Chairman of the Board (“Chairman”), the CCO remained,
the CFO became the Treasurer, and ASPA created a new position, the Chief People Officer
(“CPO”). 12 Like under the former structure, all executive members were elected by the
13
Board.
ASPA’s corporate structure also includes an Executive Committee. 14 The Executive
Committee has the responsibility, on behalf of the Board, “for managing the business and
affairs of [ASPA] between meetings of the Board in order to provide an efficient,
expeditiously assembled forum to investigate, discuss, analyze, oversee and make decisions
regarding day-to-day operations of the Corporation.” 15 Additionally, a critical part of the
Executive Committee’s function is to “make recommendations to the Board with respect to
corporate policies and practices and on all matters requiring Board action.” 16 At all times
relevant to the instant matter, the Executive Committee was comprised of the Chairman,
CCO, CPO, Treasurer, two at-large members, who were elected by the Board, and the
Executive Director, who was responsible for overseeing ASPA’s administration. 17
9
ASPA Bylaws, Joint Ex. 5, at 2.
10
ASPA Bylaws, Joint Ex. 5, at 42.
11
ASPA Bylaws, Joint Ex. 5, at 7.
12
ASPA Bylaws, Joint Ex. 5, at 7.
13
ASPA Bylaws, Joint Ex. 5, at 7.
14
ASPA Bylaws, Joint Ex. 5, at 5.
15
ASPA Bylaws, Joint Ex. 5, at 5.
16
ASPA Bylaws, Joint Ex. 5, at 7.
17
ASPA Bylaws, Joint Ex. 5, at 7.
4
Dr. Schneider joined ASPA in 1988 and has served as a board member since 1989. 18
Schneider became CEO (later titled Chairman) in 2010 and was integral to managing
ASPA. 19 Dr. Silverstein currently serves as ASPA’s CCO and, like Schneider, is a
shareholder-board member. 20 Because he is the CCO, Silverstein also sits on the Executive
Committee.
B. Plaintiff’s Employment with ASPA
In 2008, Plaintiff was hired as Executive Director of ASPA. 21 Plaintiff’s primary
duties as Executive Director included “overseeing billing and collection by [ASPA’s] third
party billing company, assisting with billing compliance issues, negotiating managed care
contracts, monitoring the performance of vendors providing services to [ASPA], overseeing
[ASPA’s] malpractice and other insurance carriers, and addressing health and benefit plan
administration.” 22 Plaintiff signed an employment contract with ASPA, providing that either
party could terminate “without stated cause by giving the other party at least ninety (90) days’
advance written notice of intent to terminate.” 23
Under her contract, Plaintiff is eligible to receive severance compensation in the event
of termination of the employment contract “(i) by [ASPA] without cause . . . ; or (ii) by
[Plaintiff] with cause (but only if [Plaintiff] has properly fulfilled all other contractual
obligations).” 24 The contract provides that, after the Plaintiff’s first year of employment with
18
T2 at 38-39. Schneider left ASPA for a few years around 1999 to 2001 but subsequently returned to the
practice. T2 at 38-39.
19
T2 at 41-44.
20
T2 at 142.
21
T1 at 25.
22
Employment Agreement, Joint Ex. 4, at 1.
23
ASPA Bylaws, Joint Ex. 5, at 3.
24
Employment Agreement, Joint Ex. 4, at 7.
5
ASPA, “a sum equal to ninety (90) days salary shall be payable to [Plaintiff] as severance.” 25
The parties agree that Plaintiff would not be entitled to severance if she (i) was terminated by
ASPA with cause or (ii) resigned from ASPA without cause.
On April 16, 2012, Plaintiff’s employment with ASPA ended. At trial, Plaintiff
maintained that she was terminated without cause by the Executive Committee. Defendants
maintained that Plaintiff voluntarily resigned when she was told that the Executive Committee
would recommend her termination to the Board. Both parties agreed, and it is clear from the
record, that the relationship between Plaintiff and ASPA had been eroding for some time
before Plaintiff’s employment ended. Defendants alleged that the erosion was caused by
Plaintiff’s labor law violations and other misconduct including gossiping about doctors’
personal lives. 26 Plaintiff denied any misconduct and attributed the erosion of the relationship
to disagreement concerning the direction that the company was taking and alleged personal
animus from Dr. Schneider and Dr. Silverman. 27
III. STANDARD OF REVIEW
The Court is the finder of fact in a bench trial. 28 The plaintiff must prove each
element of her claim by a preponderance of the evidence, meaning that the Court shall find in
favor of the party upon whose side “the greater weight of the evidence is found.” 29 Because
the Court is the finder of fact, it is up to the Court to weigh the credibility of witnesses and
resolve conflicts in witness testimony. 30
25
Employment Agreement, Joint Ex. 4, at 7.
26
T2 at 90-91; T2 at 126.
27
T2 at 45-50.
28
Pencader Associates, LLC v. Synergy Direct Mortg. Inc., 2010 WL 2681862, at *2 (Del. Super. June 30,
2010).
29
Id. (quoting Pouls v. Windmill Estates, LLC, 2010 WL 2348648, at *4 (Del. Super. June 10, 2010)).
30
Id. at *3.
6
IV. THE COURT FOUND THAT PLAINTIFF RESIGNED
A. Trial Testimony
Plaintiff testified that she had a “confrontation” with Silverstein in late March 2012. 31
Plaintiff testified that after this confrontation, she texted her husband to tell him that she
thought that she had just lost her job. 32 Silverstein confirmed that he had had a hostile
interaction with Plaintiff in late March. 33 Silverstein testified that he apologized two days
after the incident, but he did not feel like the issue was completely resolved. 34 Nonetheless,
Silverstein testified that “so far as [he] knew, that was the end of it.” 35
Plaintiff testified that the week before her employment with ASPA ended, on April 11,
2012, she received a phone call from Dr. Nick Gagliano, who was one of the ASPA
partners. 36 According to Plaintiff, Dr. Gagliano, who did not testify at trial, asked Plaintiff if
she was aware that Dr. Schneider, who was then Chairman of the Board, and Dr. Lucente,
who was then HR Officer, had been meeting behind closed doors. 37 Schneider confirmed in
his trial testimony that he had a private conversation with Dr. Lucente on April 10, 2012,
concerning alleged misconduct by Plaintiff. 38 Plaintiff testified that she told Dr. Gagliano that
she was not aware of these meetings. 39 Plaintiff testified that Dr. Gagliano expressed concern
that Plaintiff, as Executive Director, was unaware of these meetings between the Chairman
31
T1 at 50-51.
32
T1 at 51.
33
T3 at 149-52.
34
T3 at 151.
35
T3 at 151.
36
T1 at 52
37
T1 at 52.
38
T3 at 56-57.
39
T1 at 52.
7
and the HR Officer. 40 Plaintiff testified that she concluded that she had been excluded from
these meetings because they concerned her. 41
Plaintiff testified that, a couple days later, on Friday, April 13, 2012, Plaintiff heard
that “a serious HR issue was going to be announced next week.” 42 Plaintiff also testified that
she received a “very odd text [message]” from Tina Smith, who handled general HR issues,
saying that she would not be in that day and would not be available by phone. 43 Plaintiff
testified that, under these circumstances, she further concluded that the HR announcement
would involve her. 44
Plaintiff testified that, on Monday, April 16, 2012, she contacted Schneider and Dr.
Lucente in two separate phone calls to ask them what was going on. 45 Plaintiff maintains that
she confronted both Schneider and Lucente, telling both of them that Plaintiff knew
something was going on that involved her. 46 Plaintiff alleges that neither Schneider nor
Lucente would provide her with any details, but Lucente finally told Plaintiff that Mary
Quinn, an HR consultant who had been working with ASPA, was scheduling a meeting
concerning the issue. 47 In his trial testimony, Dr. Lucente confirmed that he did speak by
phone with Plaintiff that morning and that he told Plaintiff that he could not discuss the details
of the upcoming meeting. 48 Plaintiff testified that she then asked Mary Quinn, who told her
40
T1 at 52.
41
T1 at 53.
42
T1 at 54.
43
T1 at 54. Tina Smith also did not testify at trial.
44
T1 at 54.
45
T1 at 55.
46
T1 at 55.
47
T1 at 55.
48
T3 at 17.
8
that the meeting was scheduled for around 11:30 a.m. that morning. 49 Plaintiff testified that
she thought that she was being terminated and began to pack up her office. 50
The parties agreed that sometime after 11:00 a.m., Dr. Schneider, Dr. Lucente, Mary
Quinn, and Dr. Chua 51 came into Plaintiff’s office. Plaintiff alleges that Schneider opened the
meeting by telling her that the Executive Committee had made a unanimous decision to
terminate Plaintiff for cause. 52 Schneider, Lucente, and Quinn allege that Schneider only told
Plaintiff that the Committee was recommending termination with cause. 53 Dr. Chua also
confirmed that the position that Schneider communicated to Plaintiff was that the Executive
Committee was going to make a “termination recommendation.” 54
Plaintiff testified that she asked Schneider what the cause was, and he would not go
into detail, but told her that the cause was related to a comment Plaintiff made about other
physicians in the group in front of staff as well as Plaintiff’s speaking about employee health
issues in front of the staff. 55 Plaintiff testified that at the time she did not know what the
comment was. 56 In his trial testimony, Schneider confirmed that he gave Plaintiff “a couple
of examples” of the issues that were the basis for the Executive Committee’s decision, but
Schneider did not specifically identify at trial what these examples were. 57
Schneider alleged that he explicitly told Plaintiff that she was not being terminated.58
According to Schneider’s testimony, they told her, “We’re not terminating you. We’re
49
T1 at 55. The issue of this conversation confirming the meeting time was not explored in Mary Quinn’s trial
testimony.
50
T1 at 56.
51
Dr. Chua was another member of the Executive Committee.
52
T1 at 56.
53
T1 at 70-71; T3 at 17-18; T3 at 79.
54
T3 at 208.
55
T1 at 57.
56
T1 at 57.
57
T2 at 71.
58
T2 at 70-71.
9
recommending this termination. But the issues are significant, and we don’t think they’re
recoverable.” 59 Schneider testified that he then told Plaintiff that she could resign instead. 60
Schneider, Lucente, and Quinn all testified that there was some additional discussion
after which Plaintiff said, “I resign.” 61 Schneider testified that Plaintiff agreed to follow up
with a written letter confirming her resignation. 62 Plaintiff did not dispute that she said the
words “I resign.” However, Plaintiff alleged that she only said these words in response to the
question of what she wanted to tell the staff. 63
The parties agreed that, at some point in the meeting, Schneider recommended that
Plaintiff leave the office. Plaintiff said that she wanted to say goodbye to the staff. Plaintiff
testified that Schneider asked her what she was going to tell the staff. 64 Plaintiff testified that
because she did not know why she was being terminated and because she did not want to
place the administrative staff in an uncomfortable position, Plaintiff told Schneider, “I will tell
them that I resigned.” 65 Plaintiff testified that she then proceeded to go out and say goodbye
to the administrative staff. Plaintiff told some of them that she had resigned. 66
It was undisputed that Plaintiff received a follow-up email from Dr. Schneider on
April 19, 2012. 67 Plaintiff subsequently received a letter from Dr. Schneider on behalf of
ASPA, stating that Plaintiff had resigned and presenting a proposed severance agreement. 68 It
59
T2 at 70-71.
60
T2 at 70.
61
T2 at 71; T3 at 18 ; T3 at 79.
62
T2 At 71.
63
T1 at 59.
64
T1 at 59.
65
T1 at 59.
66
T1 at 59. However, according to Plaintiff’s testimony, she told all of the physicians that she had been
terminated. T1 at 60.
67
Schneider Email, Joint Ex. 34,
68
The letter, dated April 30, 2012, stated, “[a]s you stated on Monday, April 16, 2012, and as we discussed, you
have voluntarily resigned your employment with Anesthesia Services, P.A., (“ASPA”) effective April 16, 2012.”
Letter to Masterson-Carr, Joint Ex. 29. Plaintiff acknowledged receipt of this letter in her testimony at trial. T1
at 60-61.
10
was undisputed that Plaintiff never submitted a written termination letter and never signed a
separation agreement. 69 On May 3, 2012, Plaintiff sent a letter to the Executive Committee as
well as to numerous members of the Board. 70 In the May 3 letter, Plaintiff stated that she had
been terminated “for cause” but that she did not understand what the cause was. 71 Plaintiff
testified that she sent this letter in response to the correspondence she had received from
ASPA saying that she had resigned, and she wanted to make clear that this was untrue. 72
B. The Court Found that Plaintiff Resigned from ASPA
Considering the totality of the evidence presented, the Court found it more likely than
not that Plaintiff resigned from ASPA. In reaching this determination, the Court found three
factors particularly compelling. First, the Court found compelling Plaintiff’s deposition
testimony in which she made it clear that, when confronted with the dissatisfaction of the
Executive Committee, she saw herself as having “a choice” to resign, and she “chose that
choice [i.e., to resign].” 73 When asked the clarificatory question, “What you then in response
chose was to resign?”, Plaintiff answered, “I did.” 74
The Court also found compelling Plaintiff’s subsequent correspondence with ASPA.
This correspondence included an April 19 confirmation email from Dr. Schneider, stating that
Plaintiff had resigned. 75 Plaintiff confirmed that she made no effort to contact Dr. Schneider
or dispute his characterization of her as having resigned. 76 When Dr. Schneider subsequently
sent Plaintiff a letter, dated April 30, once again confirming her resignation and asking for a
69
T1 at 60.
70
Masterson-Carr Letter, Joint Ex. 7.
71
Masterson-Carr Letter, Joint Ex. 7, at 1.
72
T1 at 63.
73
Masterson-Carr Deposition, Joint Ex. 30, at 97-98.
74
Masterson-Carr Deposition, Joint Ex. 30, at 98.
75
Schneider Email, Joint Ex. 34.
76
T1 at 134.
11
written resignation letter, Plaintiff did not respond directly. 77 Instead, a couple weeks later,
after retaining counsel in this matter, Plaintiff sent a letter to various ASPA board members
stating that she had been terminated. 78 Finally, the Court found compelling Plaintiff’s
testimony concerning her general willingness to resign her job in the event of certain sorts of
disagreement, including statements that she would “walk away graciously” from ASPA “if
there was ever a time that anyone did not think [Plaintiff] was right for the job.” 79
V. POST-TRIAL BRIEFING
A. Plaintiff’s Opening Brief
i. Constructive Termination
Plaintiff argues that her resignation was given in response to a situation that amounted
to an ultimatum—either resign or be fired—and that such resignations have been found to
constitute “constructive discharge” under Delaware law. 80 Plaintiff maintains that there was
no cause for her termination under the circumstances, and hence she is entitled to the remedy
under her employment contract for termination “without cause.” 81 Plaintiff further alleges
that she is entitled to damages for Dr. Schneider and/or Dr. Silverstein’s tortiuous interference
with her employment contract and for alleged defamatory statements by Dr. Schneider. 82
Plaintiff argues that Delaware recognizes the concept of constructive discharge as set
forth by the United States Supreme Court in Pennsylvania State Police v. Suders, where the
Court held that “under the constructive discharge doctrine, an employee’s reasonable decision
77
T1 at 138-39.
78
Masterson-Carr Letter, Joint Ex. 7.
79
Masterson-Carr Deposition, Joint Ex. 30, at 147.
80
Opening Brief, Item 79, at 14.
81
Opening Brief, Item 79, at 15.
82
Opening Brief, Item 79, at 15.
12
to resign because of unendurable working conditions is assimilated to a formal discharge for
remedial purposes.” 83 Plaintiff argues that constructive discharges in Delaware fall into two
categories: (1) ultimatums to resign or (2) poor working conditions, the former of which
applies to the instant case. 84 In the case of an ultimatum, it is necessary that the individual
conveying the information to the employee must have sufficient authorization by the
employer for the ultimatum to carry sufficient weight. 85 The individual relaying the message
must be in a position of authority in the company. 86 Plaintiff argues that the party issuing the
ultimatum in the instant case, Dr. Schneider, was in such a position of authority as he was the
Chair of the Board and hence “clearly has sufficient authority to bind the corporation.” 87
Plaintiff argues that constructive termination has been found in cases of much less dire
ultimatums than the one Plaintiff faced. Plaintiff cites PAL of Wilmington v. Graham, a case
in which the employee resigned rather than agree to the employer’s proposed plan, which
included a reevaluation after thirty days. 88 The employee in Graham interpreted the plan as
an ultimatum, which “implied the intention to terminate [the employee] at the end of 30
days.” 89 Plaintiff argues that her situation was clearly more serious than that in Graham.
Whereas the employee in Graham at least had the possibility that things could change after
thirty days, Plaintiff was told that her situation was not “recoverable.” 90 Plaintiff further
argues that “[w]hen faced with the prospect of imminent or immediate termination, Delaware
83
Opening Brief, Item 79, at 16 (quoting Pennsylvania State Police v. Suders, 124 S. Ct. 2342, 2344 (2004)).
84
Opening Brief, Item 79, at 16 (citing Ingleside Homes v. Gladden, 2003 WL 22048205,*8 (Del. Super. Ct.
Aug. 27, 2003) (explaining that of the two constructive discharge situations, “[t]he first, more traditional, and
common situation involves an employer giving an employee an ultimatum with regard to the employment”)).
85
Opening Brief, Item 79, at 16 (citing State v. Potter, 2011 WL 5966720, *2 (Del. Super. Ct. Nov. 29., 2011).
86
Opening Brief, Item 79, at 17 (citing Anchor Motor Freight v. Unemployment Ins. Appeal Bd., 325 A.2d 374
(Del. Super. Ct. 1974)).
87
Opening Brief, Item 79, at 17.
88
Opening Brief, Item 79, at 17 (citing PAL of Wilmington v. Graham, 2008 WL 2582986 (Del. Super. Ct. June
18, 2008).
89
Opening Brief, Item 79, at 17 (citing Graham, 2008 WL 2582986, at *2).
90
Opening Brief, Item 79, at 17-18.
13
courts have found that decisions to resign in order to preserve future employment
opportunities or for other personal reasons are consistent with a finding of constructive
discharge.” 91 Plaintiff argues that she reasonably realized that termination was imminent and,
as the Court found, Plaintiff was preserving “her future employment opportunities and self-
image by her resignation.” 92
Plaintiff says that she is entitled to the remedies under her employment contract for
termination without cause because a “for cause” termination requires the employer to follow
certain procedural requirements, including providing written notice and some effort at
corrective action. 93 As neither of these requirements was met, Plaintiff argues that her
termination must be considered to be without cause. 94 Plaintiff further argues that the
employment agreement was not actually terminated until the June 8, 2012 correspondence
from Defendants’ attorney to Plaintiff’s attorney. 95 Plaintiff argues that she is entitled to her
prorated salary from April 16, 2012 until June 8, 2012, which is approximately $32,700. 96 As
the employment agreement provides for 90 days’ advance written notice, Plaintiff argues that
she is also entitled to her salary during the 90-day notice period beginning on June 8, 2012
(approximately $56,250). 97
In addition to her prorated salary during the time leading up to the June 8, 2012 letter
and the subsequent 90-day notice period, Plaintiff contends that she is entitled to the
following: (1) severance equal to 180 days of compensation ($112,500); (2) a bonus for the
91
Opening Brief, Item 79, at 18 (citing Thompkins v. Franciscan Elder Care, 2008 WL 2602171, *2 (Del. Super.
Ct. June 27, 2008) (The UIAB found constructive discharge where the employee chose to resign to avoid
“tarnish(ing) his employment history with a termination” when told he was going to be “let go”).
92
Opening Brief, Item 79, at 18 (quoting Decision After Trial, Item 71, at 18).
93
Opening Brief, Item 79, at 18.
94
Opening Brief, Item 79, at 18-19.
95
Opening Brief, Item 79, at 19.
96
Opening Brief, Item 79, at 19.
97
Opening Brief, Item 79, at 19.
14
period of time her contract was in force in 2012 (though the end of the 90-day notice period);
(3) pension contributions (made at the same rate as were made for senior board members
during the plan year) for 270 days after June 8, 2012 (the notice period plus the severance
period); (4) long term care insurance for Plaintiff and her husband; and (5) all legal fees and
costs in bringing this action. 98
ii. Tortious Interference
Plaintiff cites the elements of tortious interference with contract as: (1) the existence
of a contractual relation between the plaintiff and a third party; (2) purposeful action by the
defendant intended to harm the existing contractual relation; (3) the absence of privilege or
justification on the part of the defendant; and (4) resulting actual damages. 99
Regarding the second prong of the elements of tortious interference, Plaintiff alleges
that Dr. Schneider “took very specific, unilateral, and often secretive action to ensure the
termination of the Plaintiff’s contract.” 100 Plaintiff argues that, at each step in the process, the
specific reasons and the depth of the investigation into Plaintiff’s alleged misconduct were
obscured from other parties that were supposed to be involved in the decision. 101 Plaintiff
alleges that Schneider fostered the impression among members of the Executive Committee
that (a) a more complete investigation would be conducted regarding the alleged inappropriate
comment by Plaintiff; (b) Plaintiff would have the opportunity to respond to the individual
who reported the alleged comment; and (c) there were other performance issues about which
Plaintiff have been counseled in the past. 102 Plaintiff alleges that none of these impressions
98
Opening Brief, Item 79, at 19-20.
99
Opening Brief, Item 79, at 20 (citing UbiquiTel v. Sprint, 2005 WL 3533697, *5 (Del. Ch. Dec. 14, 2005)).
100
Opening Brief, Item 79, at 20.
101
Opening Brief, Item 79, at 20-21.
102
Opening Brief, Item 79, at 21.
15
turned out to be the case. 103 Plaintiff alleges that Schneider was well aware of the economic
and non-economic damage that termination would cause to Plaintiff, including loss of salary,
reduced future job prospects, and damage to Plaintiff’s self-esteem. 104
Plaintiff argues that Schneider and Silverstein “acted in concert,” motivated by
personal animus, to ensure the termination of Plaintiff’s contract. 105 Plaintiff alleges that Dr.
Schneider was angry at Plaintiff for pointing out inconsistencies in his communications with
the Board, and Dr. Silverstein was motivated by a recent personal clash with Plaintiff.106
Plaintiff additionally argues that neither Schneider nor Silverstein are immunized from
corporate officer liability because they used “wrongful means” in terminating Plaintiff for
personal reasons. 107
Plaintiff states that although she held a consulting position for 15 months after her
separation from ASPA, she has been unemployed for the majority of her post-ASPA time.108
Accordingly, Plaintiff asks that damages be measured “from the day separated forward,
offsetting the compensation received from [Plaintiff’s] consulting assignment.” 109
iii. Defamation
Plaintiff cites the four elements of a cause of action for defamation in Delaware (1) a
false and defamatory statement concerning another; (2) unprivileged publication to a third
party; (3) at least negligence on the part of the publisher; and (4) either actionability
103
Opening Brief, Item 79, at 21.
104
Opening Brief, Item 79, at 21.
105
Opening Brief, Item 79, at 22.
106
Opening Brief, Item 79, at 22.
107
Opening Brief, Item 79, at 21-22 (citing Smith v. Hercules, 2002 WL 499817, *3 (Del. Super. Ct. Mar. 28,
2002)).
108
Opening Brief, Item 79, at 23.
109
Opening Brief, Item 79, at 23.
16
irrespective of special harm or the existence of special harm caused by publication.110
Plaintiff argues that she was falsely portrayed by Dr. Schneider as “an individual who is
uncooperative in the face of necessary improvements” to the business. 111 Plaintiff says that
Dr. Schneider was quick to tell the physician members of the Executive Committee that
Plaintiff had made the alleged statement about another physician member of ASPA having an
affair, and that Dr. Schneider did so without conducting a reasonable investigation into
whether Plaintiff actually made the statement. 112 Plaintiff argues that while the full extent of
the damages from these statements is not presently known, “it is a reasonable presumption
that the small healthcare community in Delaware would take notice when the top non-
physician employee of such a large physician group in the state is unceremoniously
displaced.” 113
B. Defendants’ Answering Brief
i. Constructive Termination
Defendants argue that Plaintiff is precluded from now arguing constructive discharge
because constructive discharge requires that the employee resigned her position, and Plaintiff
maintained throughout the pleadings and at trial that she did not resign, but was terminated. 114
Defendants argue that while a plaintiff may advance alternative theories of recovery, a
plaintiff cannot advance to different claims once trial has begun when the claims depend on
110
Opening Brief, Item 79, at 23 (citing Stevens v. Independent Newspapers, 1988 WL 25377, *2 (Del. Super.
Ct. Mar. 10, 1988)).
111
Opening Brief, Item 79, at 23.
112
Opening Brief, Item 79, at 23-24.
113
Opening Brief, Item 79, at 24.
114
Answering Brief, Item 81, at 6.
17
contradictory factual assertions. 115 Defendants maintain that in order to claim constructive
discharge, the plaintiff must admit that she resigned. 116 Defendants argue that it is
inappropriate for Plaintiff, having lost on her termination claim at trial, to now be permitted to
argue that she was forced to resign. 117 Defendants also contend that the constructive
discharge claim should be barred as it was not pled in the complaint and the possibility of a
constructive termination theory was not raised until the pretrial conference. 118
Defendants further argue that allowing Plaintiff to now claim that she resigned, when
she maintained throughout trial that she was terminated, runs afoul of the well-established
doctrine of judicial admissions.119 Judicial admissions are “[v]oluntary and knowing
concessions of fact made by a party during judicial proceedings (e.g., statements contained in
pleadings, stipulations, depositions, or testimony; responses to requests for admissions;
counsel’s statements to the court).” 120 Judicial admissions “are traditionally considered
binding upon the party against whom they operate, and upon the court.” 121 Defendants
maintain that Plaintiff is now bound by her trial testimony (i.e., “I did not resign”). 122
Defendants argue that the cases cited by Plaintiff in her opening brief lack precedential
value because they are all Superior Court appellate review decisions of Unemployment
Insurance Appeals Board (“UIAB”) decisions, and Delaware courts have consistently rejected
attempts to apply termination precedent from UIAB appeal cases to other types of termination
115
Answering Brief, Item 81, at 6 (citing Schwartzkopf v. Brunswick Corp., 833 F. Supp. 2d 1106, 1121 (D.Minn.
2011) (“Constructive discharge is necessarily inconsistent with termination, because it requires the employee to
resign his position” (emphasis in original))).
116
Answering Brief, Item 81, at 7 (citing Smith v. Delaware State University, 47 A.3d 472, 476 (Del. 2012)).
117
Answering Brief, Item 81, at 7.
118
Answering Brief, Item 81, at 8.
119
Answering Brief, Item 81, at 12.
120
Answering Brief, Item 81, at 12 (quoting Merritt v. United Parcel Service, 956 A.2d 1196, 1201 (Del. 2008)).
121
Answering Brief, Item 81, at 12 (quoting Merritt, 956 A.2d at 1201-02).
122
Answering Brief, Item 81, at 13 (quoting T1 at 139).
18
claims. 123 Defendants also argue that these cases are all distinguishable from the instant case
because in each case the employee admitted they resigned, whereas Plaintiff consistently
maintained at trial that she was terminated. 124 Finally, Defendants argue that even if Plaintiff
has decided to resign, the decision would not have been a reasonable response to an imminent
threat as would be required to show constructive discharge. 125 Assuming, arguendo, that
Plaintiff resigned, Defendants argue that Plaintiff’s action was unreasonably premature and
that she should have waited to see how the ASPA Board would respond to the
recommendation of the Executive Committee. 126
ii. Tortious Interference
Defendants first argue that there can be no tortious interference with Plaintiff’s
employment contract unless the contract was actually breached by ASPA. 127 Defendants
maintain that as Plaintiff resigned, ASPA did not breach the contract. 128 Specifically,
Defendants argue that the tortious interference requires that the alleged tortfeasor(s) use
wrongful means “to induce a third party to terminate a contract.” 129 Defendants maintain that
the third party in the instant case, ASPA, did not terminate the contract.
Additionally, Defendants argue that Schneider and Silverstein are shielded from
liability as officers or directors of ASPA. 130 Personal liability of an officer or director
123
Answering Brief, Item 81, at 14 (citing Meades v. Wilmington Housing Authority, 2003 WL 939863, *6 (Del.
Ch. Mar. 6, 2003)).
124
Answering Brief, Item 81, at 15.
125
Answering Brief, Item 81, at 16.
126
Answering Brief, Item 81, at 16. Defendants cite Rizzitiello v. McDonald’s, 868 A.2d 825 (Del. 2005) in
support of their contention that a reasonable employee would have waited “to allow her employer to make the
decision as to her continued employment.”
127
Answering Brief, Item 81, at 18.
128
Answering Brief, Item 81, at 18.
129
Answering Brief, Item 81, at 19 (quoting ASDI, Inc. v. Beard Research, 11 A.3d 749, 751 (Del. 2010)).
130
Answering Brief, Item 81, at 17.
19
requires that the officer or director exceeded the scope of his authority. 131 Further,
Defendants argue that even when directors act, in part, with adverse motives this does not
necessarily mean that they acted outside the scope of their authority. 132 Defendants argue that
there is no evidence that Schneider or Silverstein did anything other than appropriately
present their sincere concerns to the Executive Committee and properly vote to recommend to
the Board that Plaintiff be terminated for cause. 133 Defendants maintain that Plaintiff has not
established that the actions taken by Dr. Schneider or Dr. Silverstein exceeded the scope of
their responsibilities as employees, officers, and directors of the company, or that Schneider
or Silverstein acted out of personal animus. 134
iii. Defamation
Defendants argue that Plaintiff has only identified four specific allegedly defamatory
statements, in either summary judgment briefing or argument: (1) Dr. Schneider told members
of the Executive Committee that Plaintiff “had engaged in labor law violations”; (2) Dr.
Schneider “falsely informed members of the Executive Committee that [Plaintiff] had
previously been counseled on these issues and failed to make the necessary corrections”; (3)
Dr. Schneider falsely informed the board that Plaintiff “had unilaterally changed a physician
contract[,] which damaged the company”; and (4) Dr. Silverstein told Dr. Richard Stern,
another ASPA physician, that Plaintiff “was involved with an HR situation that exposed the
corporation to liability.” 135 However, Defendants argue that it is notable that no specific
131
Answering Brief, Item 81, at 17-18 (citing MCG Capital Corp. v. Maginn, 2010 WL 1782271, *12, n.66
(Del. Ch. May 5, 2010)).
132
Answering Brief, Item 81, at 18 (citing Goldman v. Pogo.com, 2002 WL 1358760, *8 (Del. Ch. June 14,
2014)).
133
Answering Brief, Item 81, at 19.
134
Answering Brief, Item 81, at 19-20.
135
Answering Brief, Item 81, at 20-21.
20
allegedly defamatory statements are identified in Plaintiff’s post-trial briefing. 136 Instead,
Plaintiff refers generally to remarks by Dr. Schneider about “labor issues” related to Plaintiff
and Plaintiff’s “alleged statement against Dr. Silverstein’s interest.” 137 Further, Plaintiff only
vaguely alleges publication to a third party and damages, stating only that “[t]he full impact of
these damaging statements [is] not yet known since it is impossible to know to whom the
statements were made.” 138
With respect to the four specific statements previously identified, Defendants argue
that Plaintiff did not present any evidence that the first two statements were ever actually
made—“nobody testified that Dr. Schneider told the other members of the Committee that
Plaintiff had ‘engaged in labor law violations’ or that she had been ‘previously counseled on
these issues and failed to make the necessary corrections.’” 139 With respect to the third
statement, Dr. Schneider admitted making a comment concerning his subjective belief that
Plaintiff had changed a physician contract and testified that he continues to believe that this is
true. 140 Defendants argue that there is no evidence that the statement was false or that it was
made with negligence or ill intent.141 Regarding the fourth statement, Defendants point out
that the only person who is alleged to have heard the statement (Dr. Stern) testified at trial that
he did not consider the remark as intended to disparage Plaintiff. 142
Finally, Defendants argue that even if these statements were made and published as
Plaintiff contends, they were all made in the context of an employer-employee relationship
136
Answering Brief, Item 81, at 21.
137
Answering Brief, Item 81, at 21.
138
Answering Brief, Item 81, at 21 (citing Opening Brief, Item 79, at 24).
139
Answering Brief, Item 81, at 22.
140
Answering Brief, Item 81, at 22 (citing T2 at 73-74).
141
Answering Brief, Item 81, at 22.
142
Answering Brief, Item 81, at 23 (citing T1 at 208-209).
21
and hence are presumptively subject to a qualified privilege. 143 This means that not only must
Plaintiff prove each of the ordinary elements of defamation, but Plaintiff must also show that
the statements were made with actual malice, which Defendants contend the evidence does
not support. 144
C. Plaintiff’s Reply Brief
In her reply brief, Plaintiff addresses Defendants’ counterarguments concerning the
main claim for constructive discharge and the related claim for tortious interference. 145
Plaintiff does not further address the defamation claim. Plaintiff reasserts that she can now
make a constructive discharge claim even though her original claim was for actual discharge
and argues that the doctrine of judicial admission does not apply under the present
circumstances. Plaintiff suggests that the judicial admission doctrine only applies where one
party has made a statement of fact that has not been subsequently challenged by the other
party. 146 Plaintiff distinguishes two cases in which the court applied the doctrine of judicial
admission from the instant case.
In Merritt v. United Parcel Service, the defendant conceded the partial disability of the
plaintiff, and the plaintiff, in reliance on the defendant’s admission, did not present any
medical expert testimony. 147 As Plaintiff characterizes the holding, the Merritt Court found
that the defendant had made a binding admission “since there was no other evidence offered
on the subject” and because a finding to the contrary allowing the defendant to disavow his
143
Answering Brief, Item 81, at 23.
144
Answering Brief, Item 81, at 23 (citing Gilliland v. St Joseph’s at Providence Creek, 2006 WL 258259, *9
(Del. Super. Ct. Jan 27, 2006)).
145
Reply Brief, Item 82.
146
Reply Brief, Item 82, at 5.
147
Reply Brief, Item 82, at 5 (citing Merritt v. United Parcel Service, 956 A.2d 1196 (Del. 2008)).
22
admission would prejudice the plaintiff who had relied on it in deciding not to present a
medical expert. 148 Similarly, in Krauss v. State Farm, one of two co-plaintiffs admitted that
the two plaintiffs were part of the same household for insurance purposes. 149 There was no
other evidence offered regarding this issue. 150 In this context, the court found that in light of
this uncontroverted admission by a plaintiff, the insurance company was relieved from having
to prove the issue at trial. 151 Plaintiff argues that the instant case is very different from either
Merritt or Krauss as the issue of whether Plaintiff was terminated or resigned was disputed by
the parties and testimony was offered on both sides. 152
Plaintiff argues that Defendants are incorrect in their contention that the UIAB cases
cited by Plaintiff have no precedential value to the instant case. 153 Instead, Plaintiff argues
that in defining constructive discharge in Delaware, courts have included Delaware
unemployment decisions as support and have made no distinction between unemployment
cases and cases that do not involve unemployment benefits. 154
Plaintiff also argues that Defendants are incorrect to suggest that a reasonable
employee would have waited before resigning when confronted by the Executive
Committee’s findings. 155 Plaintiff says that Defendants were incorrect to conclude that
Plaintiff would have had the opportunity to go before the Board or to challenge the Executive
Committee’s decision; “[t]o the contrary, Plaintiff was repeatedly told that the Executive
148
Reply Brief, Item 82, at 5.
149
Reply Brief, Item 82, at 6 (citing Krauss v. State Farm Mut. Auto. Ins., 2004 WL 2830889 (Del. Super. Ct.
Apr. 23, 2004)).
150
Reply Brief, Item 82, at 6 (citing Krauss, 2004 WL 2830889).
151
Reply Brief, Item 82, at 6 (citing Krauss, 2004 WL 2830889, at *5.)
152
Reply Brief, Item 82, at 7.
153
Reply Brief, Item 82, at 8. Plaintiff argues that the case cited by Defendants, Meades v. Wilmington Housing
Authority, 2003 WL 939863, *6 (Del. Ch. Mar. 6, 2003), is not applicable to the instant case as it concerns the
issue of willful misconduct rather than constructive discharge.
154
Reply Brief, Item 82, at 9 (citing Bali v. Christiana Care Health Services, 1998 WL 685380 (Del Ch. Sept.
22, 1998)).
155
Reply Brief, Item 82, at 10.
23
Committee unanimously [decided] that she was being terminated for cause.” 156 Plaintiff
maintains that she was never provided with any information about how to challenge the
Executive Committee’s decision and that “the circumstances presented at [the April 16]
meeting made it clear to the Plaintiff that her days at ASPA were done.” 157 Dr. Schneider told
Plaintiff that the issues were “non-recoverable.” 158 Plaintiff maintains that resignation would
be a reasonable response in the face of what appeared to be imminent and unavoidable
termination.
Concerning tortious interference, Plaintiff suggests that Defendant Schneider should
be held liable for “spearhead[ing]” the action leading to Plaintiff’s separation from the
company. 159 Plaintiff says that Defendants are wrong to suggest that Schneider was simply
acting within the scope of his duties as CEO. Instead, Plaintiff says that Dr. Schneider
purposely concealed the findings of his investigation of Plaintiff from the other decision
makers and/or often provided them with information that was not truthful, and that the
Executive Committee relied on these false representations in making its decision to
recommend termination of Plaintiff. 160
VI. DISCUSSION
A. Plaintiff’s Constructive Termination Claim is not Barred
Defendants argue that Plaintiff’s constructive termination claim is barred as (a)
constructive termination requires that the employee resigned, and (b) it was Plaintiff’s
156
Reply Brief, Item 82, at 10.
157
Reply Brief, Item 82, at 10.
158
T2 at 71.
159
Reply Brief, Item 82, at 12.
160
Reply Brief, Item 82, at 12.
24
considered position in the pleadings and at trial that she did not resign but was terminated.161
After an extensive review of the briefings and the case law, the Court finds that the claim is
not barred under the specific circumstances of this case. While it is a general principle that a
litigant is bound by her factual assertions, particularly in the pleadings, 162 the Delaware
Supreme Court has made clear that the rule only holds where the court relied on the factual
assertions. 163 Particularly where there has been a judicial determination to the contrary of
previously alleged facts, the litigant is permitted to adopt the judicial determination going
forward. 164
In Siegman, the plaintiff, a stockholder of the defendant corporation brought suit
challenging the validity of the issuance of series preferred stock. 165 After the initiation of the
suit, the defendant filed Certificates of Correction, which defendant argued cured the original
deficiencies in the issuance of the stock. 166 The plaintiff maintained that the Certificates of
Correction did not cure the original invalid issuances of the series preferred because the
Certificates could not operate retroactively under the circumstances. 167 Nonetheless, the court
161
See, e.g., Complaint, Item 1, at 2 (In the “Factual Background” section, there is a subsection entitled
“Plaintiff’s Termination from A.S.P.A.” ); T3 at 163 (In Plaintiff’s closing argument, counsel stated, “the
evidence is very clear and that what was conveyed to Miss Masterson-Carr on that day during that meeting is
that she was terminated. She was absolutely terminated[,] and she was told that she had to leave the building,
that she would not be permitted to return, all of her belongings were taken that day that belonged to ASPA, and
she was required to pack up her office and leave”).
162
See, e.g., Krauss, 2004 WL 2830889; Merritt, 956 A.2d 1196; John B. Conomos, Inc. v. Sun Co., 831 A.2d
696, 712 (Pa. Super. 2003) (quoting Wills v. Kane, 2 Grant 60, 63 (Pa. 1853)) (“When a man alleges a fact in a
court of justice for his advantage, he shall not be allowed to contradict it afterwards. It is against good morals to
permit such double dealing in the administration of justice”).
163
Motorola v. Amkor Technology, 958 A.2d 852, 859-60 (Del. 2008) (explaining that “[J]udicial estoppel…
prevents a litigant from advancing an argument that contradicts a position previously taken that the court was
persuaded to accept as the basis for its ruling. The doctrine is not appropriate in all situations; parties raise many
issues throughout a lengthy litigation such as this, and only those arguments that persuade the court can form the
basis for judicial estoppel. Judicial estoppel operates only where the litigant’s [new position] contradicts another
position that the litigant previously took and that the Court was successfully induced to adopt in a judicial
ruling”) (internal quotation, citation omitted).
164
Siegman v. Palomar Medical Technologies, 1998 WL 409352, *3 (Del. Ch. July 13, 1998).
165
Id. at *1
166
Id.
167
Id. at *2.
25
held that the Certificates did retroactively validate the series preferred; and the plaintiff filed
for an award of attorney’s fees and expenses, despite having lost on the merits, on the ground
that the lawsuit induced the defendants to file the Certificates of Correction, thereby creating
the benefit of curing the deficiencies with the stock. 168 The defendants, citing the doctrine of
“judicial estoppel,” 169 argued that plaintiff was precluded from arguing that she was entitled
to fees for creating the curative benefit when it had been her position throughout the litigation
that filing the Certificates of Correction would not fix the problem. 170 The court found that
the doctrine of judicial estoppel prevents a litigant from advancing an argument that
contradicts a position previously taken by the same litigant only when the court was
persuaded to accept the previous position as the basis for its ruling. 171 The Delaware
Supreme Court approvingly quoted Siegman in Motorola v. Amkor Technology. 172
Like in Siegman, Plaintiff originally advanced one position, but now there has been a
judicial determination to the contrary. Thus, the Court finds that Plaintiff is entitled to avail
herself of the Court’s previous finding that she resigned going forward, and that Plaintiff may
now argue a constructive termination claim premised on the contention that she resigned.
B. Plaintiff has not Established Constructive Termination
The Court agrees with Plaintiff that the concept of constructive termination is well-
established in Delaware law, and that one of the two constructive termination scenarios is the
“ultimatum to resign.” 173 The concept of constructive termination is typically invoked in
168
Id. at *3
169
Judicial estoppel is the same principle as “judicial admission” as cited by Defendants in our instant case.
170
Siegman, 1998 WL 409352 at *3.
171
Id.
172
Motorola, 958 A.2d at 859-60.
173
Ingleside Homes v. Gladden, 2003 WL 22048205, *8 (Del. Super. Ct, Aug. 27, 2003).
26
unemployment insurance cases, where the claimant argues that he is entitled to unemployment
benefits because his apparent resignation was in fact constructive termination. 174 The Court
disagrees with Defendants’ assessment that the unemployment insurance cases are not useful
because of the different standard of review in these cases. The Court finds that these cases are
still instructive in defining the parameters of what may reasonably qualify as constructive
termination. 175
In Anchor Motor Freight, the court affirmed the Unemployment Insurance Appeals
Board (“UIAB”) decision finding that the claimant was constructively discharged without just
cause. 176 The claimant, who was pregnant at the time and due in July, was absent from work
for two weeks due to illness in January. When she returned to work, she was told that she
would no longer work the day shift as she had previously but would be assigned to rotating
shifts instead. 177 Throughout the two months after her return to work, the claimant was
constantly asked by representatives of her employer when she would be leaving. 178 Upon the
advice of her doctor, the claimant told her employer that she would be able to work until the
174
Under 19 Del. C. §3315, reasons that an individual will be disqualified from unemployment benefits include
leaving work “voluntarily without good cause attributable to such work...” and being “discharged from the
individual’s work for just cause.” The reason why an employee would want to argue constructive termination
rather than resignation with good cause in the context of unemployment insurance benefits is that in the case of
termination, the burden is on the employer to show just cause, whereas in the case of resignation, the burden is
on the employee to show just cause. Gladden, 2003 WL 22048205 at *7.
175
The standard of review for an Unemployment Insurance Appeals Board (UIAB) decision upon appeal to
Superior Court is that the UIAB’s decision must be “supported by substantial evidence” and “free from legal
error.” Gladden, 2003 WL 22048205 at *4. The decision of the UIAB will only be overturned if there is an error
of law, abuse of discretion, or the decision “exceeds the bounds of reason.” PAL of Wilmington v. Graham, 2008
WL 2582986, *4 (Del. Super. Ct. June 18, 2005). Thus, it is instructive to see in which cases the court has found
the Board’s determination on the issue of constructive termination to be within the “bounds of reason” such as to
require upholding the UIAB’s decision.
176
Anchor Motor Freight v. Unemployment Ins. Appeal Bd., 325 A.2d 374, 375 (Del. Super. Ct. 1974).
177
Id.
178
Id.
27
end of June. 179 However, the changes in the claimant’s work schedule eventually prompted
her to ask for a leave of absence in March. 180
On the day the claimant requested the leave of absence, the claimant’s supervisor, who
was also her brother, presented her with a letter of resignation prepared by the employer. 181
Her supervisor told her that if she did not sign the letter, she would not receive her last
paycheck or her vacation checks and would be fired as well. 182 He urged her to sign the letter
lest a discharge blemish her employment record. 183 The Board found that the claimant had
been constructively terminated, and the court agreed, finding that the claimant’s signing the
resignation letter was not “voluntary,” defined as “proceeding from one’s own choice or full
consent.” 184
In PAL of Wilmington v. Graham, the claimant originally worked as an administrator
for her employer, PAL of Wilmington, and then subsequently accepted a position as Director
of Programs. 185 After she had begun working as Director of Programs, the claimant received
a performance evaluation, which said that the claimant demonstrated deficiencies in areas
essential to her position. 186 The employer created a 60 day “performance plan” to address
these alleged deficiencies, which included a reevaluation of the claimant’s progress after the
first 30 days. 187 The objective of the plan was “to present again to [claimant] the tasks for
which she is responsible, evaluate progress toward successful completion of these tasks, and
determine what, if any, role [claimant] will have in the [employer] organization going
179
Id.
180
Id.
181
Id.
182
Anchor Motor Freight, 325 A.2d at 375.
183
Id.
184
Id. at 376.
185
PAL of Wilmington v. Graham, 2008 WL 2582986, *1 (Del. Super. Ct. June 18, 2005).
186
Id.
187
Id.
28
forward.” 188 During the 60 days, the claimant was to “provide a weekly written status of her
work and meet weekly with the Executive Director [of the organization] to review progress
with these assignments.” 189 At the end of the first 30 days, the claimant’s performance was to
be “reviewed, at which time [the employer would] take corrective action if necessary[,] up to
and including termination.” 190
Before implementing the plan, the employer asked the claimant to sign it.191 The
claimant refused to sign, interpreting the plan as addressing her duties in her previous lower
position rather than her current position, and submitted her resignation. 192 The claimant
maintained that she interpreted the performance plan as an ultimatum. 193 The employer
accepted the resignation, but disputed in writing the very next day that claimant was given an
ultimatum. 194 However, at the hearing before the UIAB, the same representative of employer
who wrote that there was no ultimatum testified that claimant was in fact given an ultimatum
to sign to evaluation. 195 The Board concluded that the performance plan “was clearly an
ultimatum, which at least implied the intention to terminate the claimant at the end of 30
days.” 196 Because the employer produced “no competent evidence of misconduct” such as
would constitute just cause for termination, the Board concluded that the claimant was
constructively terminated without just cause. 197
The court affirmed, finding the UIAB’s decision was supported by substantial
evidence. The court explained, that while the claimant “was not explicitly forced to sign the
188
Id.
189
Id.
190
Id.
191
Graham, 2008 WL 2582986 at *1.
192
Id.
193
Id.
194
Id. at *1-2.
195
Id. at *2.
196
Id.
197
Graham, 2008 WL 2582986 at *2.
29
evaluation plan, the wording of the plan was laden with implicit threats that [the claimant]
would be terminated.” 198 The court found that “[t]he language of the plan suggested, at least
implicitly, that [the claimant] must either accept the new evaluation, which mainly addressed
her old position, or risk termination.” 199 The threat of termination was supported by the
testimony of the employer’s representative who testified that the claimant “exhausted her
administrative remedies” by voicing disagreement with the plan and documenting her
disagreement. 200
The Court finds that Plaintiff has not established that she was presented with an
ultimatum to resign such as would constitute constructive termination. At trial, Dr. Schneider
testified that during the April 16, 2012 meeting, he explicitly told Plaintiff that she was not
being terminated but only that the Executive Committee was recommending termination.201
Schneider’s account was confirmed by the testimony of the other three employer
representatives present at the meeting, Dr. Lucente, Mary Quinn, and Dr. Chua, all of whom
testified that Plaintiff was told that the Executive Committee would be making the
recommendation that she be terminated. 202 The Court finds the consistent testimony of Dr.
Schneider, Dr. Lucente, Mary Quinn, and Dr. Chua credible, and finds that the employer
representatives clearly communicated to Plaintiff that their recommendation to the Board was
merely that.
The instant case is clearly distinguishable from the UIAB cases in which the Court has
upheld a finding of constructive termination. In Anchor Motor Freight, the employer
representative presented the claimant with an employer-prepared resignation letter and
198
Id. at *7.
199
Id.
200
Id.
201
T2 at 70-71.
202
T3 at 17-18; T3 at 79; T3 at 208.
30
suggested that she sign it. 203 The employer representative urged the claimant to sign the
resignation letter in order to receive her last paycheck and her vacation checks, and to avoid
having a blemish on her employment record. 204 In the instant case, the members of the
Executive Committee did not present Plaintiff with any letter of resignation to sign at the time
of the alleged ultimatum, instead asking that Plaintiff follow up with a written letter
confirming her resignation. 205 There was no testimony that Plaintiff was urged to resign in
order to receive paychecks or to preserve her future employment prospects as was the
claimant in Anchor Motor Freight. Dr. Chua testified that Dr. Schneider only mentioned the
need for Plaintiff to sign paperwork in order to receive her severance pay after Plaintiff had
already said that she resigned. 206 It is undisputed that nothing was signed by Plaintiff at the
April 16, 2012 meeting, which was what necessitated Dr. Schneider’s subsequent email and
April 30, 2012 letter, trying to get Plaintiff to put her resignation in writing. 207
Unlike in Graham, Plaintiff was not presented with a “performance plan,” created by
her employer to address deficiencies in her job performance. 208 The performance plan was an
official communication on behalf of the employer, which made clear the employer’s
dissatisfaction with the claimant’s job performance, hence operating as an ultimatum. The
employer’s representative even confirmed in testimony before the UIAB that the performance
plan was an ultimatum. 209 The instant case is different. It was clear from the beginning that
members of the Executive Committee present at the April 16, 2012 meeting were acting only
as members of the Executive Committee and not on behalf of the employer. It was also clear
203
Anchor Motor Freight, 325 A.2d a7 375.
204
Id.
205
T2 at 71.
206
T3 at 208.
207
Schneider Email, Joint Ex. 34; Letter to Masterson-Carr, Joint Ex. 29.
208
See Graham, 2008 WL 2582986, at *1.
209
Id. at *2.
31
that the members of the Executive Committee were communicating a mere recommendation,
rather than a final decision. The Court accepts Dr. Schneider’s trial testimony that he
unequivocally told Plaintiff that it was the recommendation of the Executive Committee that
she be terminated, but that this decision would be put before the Board. 210 With a few days
after the meeting, Schneider sent a follow-up email restating that termination was the
recommendation of the Executive Committee, but that Plaintiff had been given the option to
resign. 211
As an ASPA administrator, Plaintiff clearly understood the respective powers of the
Board and the Executive Committee and was familiar with ASPA termination procedure. 212
When asked who could terminate her employment contract, Plaintiff testified that it was her
understanding that it was the Board of Directors. 213 In this context, the Court finds that
Plaintiff could not have reasonably interpreted the content of the April 16, 2012 meeting as an
ultimatum. Plaintiff was aware that the Executive Committee could merely make a
recommendation. While Plaintiff may have decided, based on her own speculation about how
the Board would react to the Executive Committee’s recommendation, that she would
probably face termination in the near future, this is not tantamount to an ultimatum from her
employer. An employee is not constructively terminated merely because she sees the writing
on the wall and decides to avoid the perceived likelihood of termination by resigning.
210
T2 at 70-71.
211
Schneider Email, Joint Ex. 34
212
Plaintiff testified that she participated with all terminations, including those of physicians, nursing staff, and
administrative staff. T1 at 65. Plaintiff also testified that the termination policy was the same for all ASPA
employees regardless of their classification. T1 at 67.
213
T1 at 28.
32
C. Plaintiff has failed to Establish Tortious Interference or Defamation
The Court finds that Plaintiff has not established tortious interference with contract or
defamation. First, regarding tortious interference, the Court notes ASPA is not a proper
defendant as a party to a contract cannot be held liable for tortious interference with that
contract. 214 Plaintiff appears to be aware of this fact and to only be alleging tortious
interference against Dr. Schneider and Dr. Silverstein individually. 215 Regarding Defendants
Schneider and Silverstein, Plaintiff makes only vague allegations they “acted in concert to
ensure that [Plaintiff’s] employment with ASPA would be terminated.” 216 However, Plaintiff
alleges no specific actions by Dr. Silverstein towards this alleged nefarious purpose, aside
from his alleged statement to the Executive Committee that he felt that he would no longer be
able to work with Plaintiff. 217 Regarding Dr. Schneider, Plaintiff makes the general claim that
Schneider “took very specific, unilateral, and often secretive action to ensure the termination
of Plaintiff’s contract.” 218 Plaintiff also alleges, with only slightly more specificity but
without any supporting evidence, that Schneider fostered misimpressions among members of
the Executive Committee concerning the extent of his investigation of Plaintiff’s alleged
214
See, e.g., Tenneco Automotive v. El Paso Corp., 2007 WL 92621, *5 (Del Ch. Jan. 8, 2007) (“After all, a
defendant cannot interefere with its own contract”) (internal quotation, citation omitted).
215
Complaint, Item 1, at 10; Opening Brief, Item 79, at 20.
216
Opening Brief, Item 79, at 22. Plaintiff is correct that Dr. Schneider and Dr. Silverstein are not shielded from
liability for tortious interference as officers or directors of ASPA if, as Plaintiff alleges, they used wrongful
means. Smith v. Hercules, 2002 WL 499817, *3 (Del. Super. Ct. Mar. 28, 2002) (holding that a CEO may be
liable for inducing breach if the plaintiffs can establish that his actions “were not motivated by, and for, his
corporate responsibilities, but were instead principally executed to further his personal investments”). The Court
also notes that, contrary to Defendants argument, a claim for tortious interference does not require that breach of
contract actually result. ASDI, Inc. v. Beard Research, 11 A.3d 749, 751 (Del. 2010). Courts have found
tortious interference where the actions of a defendant cause third parties to lawfully terminate a contract with the
plaintiff. Id. Nonetheless, the Court finds Plaintiff’s claim for tortious interference insufficient on other
grounds.
217
Opening Brief, Item 79, at 22.
218
Opening Brief, Item 79, at 20.
33
misconduct, whether Plaintiff would be given an opportunity to confront the individual who
reported the alleged misconduct, and whether Plaintiff had performance issues in the past. 219
Dr. Schneider testified that he perceived problems with Plaintiff’s job performance.
Schneider said that he found Plaintiff “to be very difficult to work with in some situations[,]
and she did not receive feedback very well around certain issues.” 220 Schneider further
testified that Mary Quinn communicated concerns that Plaintiff was responsible for “[HR]
practices in the office… that would potentially expose the company to liability,” and that he
discussed these concerns at length with Mary Quinn. 221 Schneider also confirmed that Tina
Smith reported that Plaintiff had gossiped about a doctor’s alleged affair, and that Schneider
discussed this matter with members of the Executive Committee. 222 The Court finds that
while the trial testimony unequivocally establishes that Dr. Schneider had concerns with
Plaintiff’s job performance, Plaintiff presented no evidence that Schneider’s concerns
regarding her job performance were not sincere or that he mislead the other members of the
Executive Committee with regard to the existence of these issues, the extent of his
investigation into these issues, or whether Plaintiff would be permitted to confront
individual(s) who reported alleged misconduct.
The Delaware Supreme Court confronted similar facts in Nye v. University of
Delaware. 223 In Nye, the executrix of the estate of a former university dean filed suit for
breach of contract and tortious interference with contract based on the university’s failure to
reappoint the dean to a third term. Per university policy, the dean was evaluated by a review
committee, which in turn made a recommendation to the Provost, who made a
219
Opening Brief, Item 79, at 21.
220
T2 at 49.
221
T2 at 52-53.
222
T2 at 56-58.
223
Nye v. University of Delaware, 897 A.2d 768 (Table), 2006 WL 25003 (Del. 2006).
34
recommendation to the university President. 224 The ultimate decision on a dean’s
reappointment rested with the President. 225 The plaintiff accused the Provost of “improperly
influencing the committee’s decision to recommend [the dean] not serve a third term as
Dean.” 226 The trial court granted summary judgment to the defendants on tortious
interference, and the Supreme Court affirmed.
The Nye Court explained that the plaintiff had failed to make a prima facie case of
tortious interference, offering only “vague out-of-court statements of [the Provost,] which [the
plaintiff] suggests, a finder of fact could interpret to find [that the Provost] intended to
interfere with [the dean’s] contract.” 227 Because the Provost was an agent of the university,
finding him liable required a showing that the Provost acted outside the scope of his authority,
interfering for a motive separate from his duties to the university. 228 The Court found that
plaintiff had made no such showing and explained that summary judgment is proper where “a
plaintiff opposing a motion for summary judgment has had fair opportunity to conduct
discovery to explore the defendant’s subjective state of mind, yet cannot point to any evidence
indicating that the defendant intended to deceive or to interfere.” 229
Like in Nye, the defendants Dr. Schneider and Dr. Silverstein were agents of the
employer, meaning that Plaintiff must demonstrate that they acted outside the scope of their
authority in interfering with Plaintiff’s contract. Plaintiff has presented only vague allegations
that Schneider and/or Silverstein improperly influenced the Executive Committee by their
statements and suggests reasons why Schneider and Silverstein may have acted out of
224
Id. at *1.
225
Id.
226
Id.
227
Id. at *3.
228
Id.
229
Id.
35
personal animus (namely that Schneider “did not appreciate the Plaintiff pointing out
inconsistencies in his communication with the Board,” and Silverstein “has a recent clash
with [Plaintiff],” presumably over allegations that she had been gossiping about his
extramarital affair). 230 The Court finds Plaintiff’s generalized allegations, unsupported by any
evidence, insufficient to establish that Defendants engaged in purposeful action, in excess of
their authority as officers or directors, with the intent to harm the contractual relation. 231
Plaintiff’s allegations of defamation are similarly deficient. It is difficult to identify
the specific alleged defamatory statements that Plaintiff is claiming. In her post-trial briefing,
Plaintiff identifies two allegedly defamatory acts by Dr. Schneider: (1) that he “portrayed”
Plaintiff “as an individual who is uncooperative in the face of necessary improvements” and
did so without adequately investigating whether this portrayal was accurate; and (2) that he
“was quick to let the physician members of the Executive Committee know that Plaintiff had,
indeed, made the alleged statement against Dr. Silverstein’s interest” before conducting a
reasonable investigation. 232 Plaintiff alleges that Dr. Silverstein “supported” Dr. Schneider’s
second defamatory act by telling members of the Executive Committee that he could no
longer work with Plaintiff knowing what she had said about him. 233 In their post-trial brief,
Defendants cite four additional alleged statements that Plaintiff had previously identified as
defamatory: (1) Dr. Schneider advised the Executive Committee that Plaintiff had engaged in
labor law violations; (2) Dr. Schneider told the Executive Committee that Plaintiff had been
counseled on these violations and had failed to make the necessary corrections; (3) Dr.
Schneider told the Board that Plaintiff had unilaterally changed a physician contract, thus
230
Opening Brief, Item 79, at 22.
231
UbiquiTel v. Sprint, 2005 WL 3533697, *5 (Del. Ch. Dec. 14, 2005).
232
Opening Brief, Item 79, at 23
233
Opening Brief, Item 79, at 24.
36
damaging the company; and (4) that Silverstein told Dr. Stern that Plaintiff was involved with
an HR situation that exposed the company to liability. 234
It is well-established that there are four elements of a cause of action for defamation
under Delaware law: (1) a false and defamatory statement concerning another; (2)
unprivileged publication to a third party; (3) at least negligence on the part of the publisher;
and (4) either actionability irrespective of special harm or special harm caused by
publication. 235
The two alleged acts of defamation cited by Plaintiff in her post-trial brief are
strikingly thin. The first alleged act is not even a statement precisely, but rather a vague
allegation that Dr. Schneider “portrayed” Plaintiff in a certain way. However, while there is
no evidence in the trial record regarding particular statements, Dr. Schneider’s testimony
confirms that he did have concerns about Plaintiff’s cooperativeness and ability to respond to
criticism. 236 Regarding the second alleged act, Plaintiff does not argue that the statement was
false, focusing instead on it having allegedly been made without adequate investigation.
While this may be meant to suggest negligence on the part of Dr. Schneider, Plaintiff has
certainly not demonstrated that Schneider’s discussion of the allegation was improper. The
Court accepts as credible Schneider’s testimony that he was merely discussing the allegation
made by Tina Smith, who claimed to have witnessed Plaintiff making the comment.237
Regarding the other four alleged statements, there is evidence in the record that Dr. Schneider
did, in fact, discuss these issues with other members of the Executive Committee.238
However, there is no evidence in the record that Schneider’s discussion of these issues was
234
Answering Brief, Item 81, at 20-21.
235
Stevens v. Independent Newspapers, 1988 WL 25377, *2 (Del. Super. Ct. Mar. 10, 1988).
236
T2 at 49.
237
T2 at 58-59.
238
T2 at 49, 52-53, 56-58.
37
improper, negligent, malicious, or not otherwise in keeping with his role as Chairman of the
Board.
The Court finds all of these alleged instances of defamation (both the two instances
alleged in Plaintiff’s post-trial briefing and the four previous statements cited by Defendants)
subject to qualified privilege, as they were allegedly made in the context of Executive
Committee official business and directly concerned Plaintiff’s job performance. “A qualified
privilege extends to communications made between people who have a common interest for
the protection of which the allegedly defamatory statements that are made or which are
disclosed to any person who has a legitimate expectation in the subject matter.” 239
When qualified privilege applies, a plaintiff must demonstrate actual malice, not just
negligence, to succeed in a defamation claim. 240 Delaware courts have recognized qualified
privilege allowing employers “to make communications regarding the character,
qualifications, or job performance of an employee or former employee to those who have a
legitimate interest in such information.” 241 In Lipson v. Anesthesia Services, another case
involving a claim for constructive termination from ASPA, the plaintiff physician alleged
defamation against various agents of ASPA for comments concerning his professional
competence, including that the plaintiff “nearly killed a kid” through his incompetence and
“was having a mental breakdown.” 242 At the summary judgment stage, the court held that the
qualified privilege applied to the alleged comments because “all of the participants in the
discussions and correspondence… did possess a legitimate expectation in the subject matter.
All were either directors, shareholders, employees, or agents of ASPA who would have an
239
Gilliland v. St. Joseph’s at Providence Creek, 2006 WL 258259, *9 (Del. Super. Ct. Jan. 27, 2006) (internal
quotations, citations omitted).
240
Id.
241
Id. (quoting Lipson v. Anesthesia Services, 790 A.2d 1261, 1281 (Del. Super. Ct. 2001)).
242
Id. at 1283.
38
‘expectation’ (or interest) in [the plaintiff’s] behavior as a representative of ASPA, or they
were physicians involved in [the same hospital health system] who would have an
‘expectation’ in the quality of care and competency of a physician with whom they were
expected to practice medicine.” 243 The court denied summary judgment because it found a
factual question as to whether the plaintiff could demonstrate actual malice, the showing
required to defeat the qualified privilege. 244
The standard for actual malice is high. A hostile relationship between the plaintiff and
the defendant is not sufficient. Once qualified privilege is established, it “is not forfeited by
the mere addition of the fact that a defendant feels indignation and resentment towards the
plaintiff and enjoys making such statements. 245 The plaintiff bears the burden of showing
“that the statements were made primarily to further interests other than those protected by the
qualified privilege and that the chief motive for making such statements was the defendant’s
ill will. 246
In the instant case, it is undisputed that the Executive Committee was charged with the
day-to-day running of ASPA and with making recommendations to the Board on issues
concerning employee performance. 247 Concerns about Plaintiff’s ability to cooperate and
allegations that Plaintiff gossiped about coworkers were matters of legitimate interest to the
other members of the executive committee. Plaintiff has not demonstrated any actual malice
on the part of either Dr. Schneider or Dr. Silverstein. The closest that Plaintiff comes is to
suggest that the two doctors may have had motives for personal animus as previously
243
Id. at 1282 (internal quotation, citation omitted).
244
Id. at 1283-84.
245
Battista v. Chrysler, 454 A.2d 286, 291 (Del. Super. Ct. 1982) (citing Coleman v. Newark Morning Ledger
Co., N.J.Supr., 29 N.J. 357, 149 A.2d 193, 202 (1959)).
246
Id. (citing Sokolay v. Edlin, N.J.Super., 65 N.J.Super. 112, 167 A.2d 211 (1961)).
247
ASPA Bylaws, Joint Ex. 5, at 5, 7.
39
discussed. However, Plaintiff’s mere suggestion of a possible motive is far from sufficient to
demonstrate actual malice. The Court finds that that the alleged statements are protected by
qualified privilege; since Plaintiff has not demonstrated actual malice, the statements do not
qualify as defamatory.
Because the Court has found there is no legal basis to hold Defendants liable for
damages on any of the asserted grounds, the Court will not address issues raised regarding the
sufficiency of the pleadings or evidence regarding same.
VII. CONCLUSION
For the foregoing reasons, the Court finds that Plaintiff has failed to establish her
claims for constructive discharge, tortious interference with contract, and defamation.
IT IS SO ORDERED.
__________/s/____________________
M. JANE BRADY
Superior Court Judge
40