henry-andrew-hansen-ii-md-and-central-texas-vein-center-pa-v-thomas ( 2014 )

NUMBER 13-14-00039-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI – EDINBURG
HENRY ANDREW HANSEN
II, M.D. AND CENTRAL TEXAS
VEIN CENTER, P.A., Appellants,
v.
THOMAS WILLIAM JACKSON,
REGIONAL EMPLOYEE ASSISTANCE
PROGRAM, COLLEGE STATION
MEDICAL CENTER, LLC, AND
COMMUNITY HEALTH SYSTEMS
PROFESSIONAL SERVICES CORPORATION, Appellees.
On appeal from the 85th District Court
of Brazos County, Texas.
MEMORANDUM OPINION
Before Chief Justice Valdez and Justices Garza and Longoria
Memorandum Opinion by Justice Longoria
By five issues, which we address as three, appellant, Dr. Henry Andrew Hansen,
II, M.D.,1 challenges the trial court’s grant of traditional summary judgment in favor of
appellee Regional Employee Assistance Program (REAP), and traditional and no-
evidence summary judgments in favor of appellees College Station Medical Center (the
Hospital), Thomas Jackson (Jackson), and Community Health Systems Professional
Services Corporation (PSC). We affirm in part and reverse and remand in part.
I. BACKGROUND2
A. Factual Background
In early 2007, Jackson, the Chief Executive Officer (CEO) of the Hospital, sought
to hire a board-certified cardiovascular surgeon so that the Hospital could offer heart
surgeries in-house without referring patients to other hospitals or paying to have a
cardiovascular surgeon on call. After extensive negotiations in which appellant was
represented by counsel, appellant signed an employment agreement (the Contract) with
REAP to work at the Hospital. REAP was appellant’s employer because the law prohibits
the Hospital from employing physicians to practice medicine and receiving fees for the
treatment.3
1 The notice of appeal recites that the Central Texas Vein Clinic, an entity run separately by
appellant, is also an appellant in this case. However, all of Hansen’s arguments relate to his own
employment with REAP, and he does not otherwise mention the clinic in his appellate brief. The clinic has
not filed a separate brief.
2This case is before this Court on transfer from the Tenth Court of Appeals in Waco pursuant to a
docket-equalization order issued by the Supreme Court of Texas. See TEX. GOV’T CODE ANN. § 73.001
(West, Westlaw through 2013 3d C.S.).
3 Under the Texas Medical Practice Act, a corporation comprised of lay persons engages in the
unlicensed practice of medicine if it employs licensed physicians to treat patients and the corporation
receives the fee for the treatment. See Gupta v. E. Idaho Tumor Inst., Inc., 140 S.W.3d 747, 752 (Tex.
2
The Contract had the following relevant provisions. The contract term was from
June 1, 2007 to April 30, 2012.4 Section 10.1 of the Contract provided that during the first
three contract years, the Contract could be terminated only for cause. Following the end
of third contract year, either party could terminate the contract without cause with sixty
days’ notice if “annual practice losses” exceeded $500,000 “at the end of years three, four
or five.” The Contract did not define the term “annual practice losses.” The Contract
further provided that in the event of termination without cause, appellant would “not be
entitled to the due process rights established by Employer in its policies and procedures,”
but appellant would “be entitled to such due process rights if this Agreement is terminated
for cause by Employer pursuant to sections 10.2, 10.3 or 10.4 of this Agreement.”5
Shortly after appellant began working at the Hospital, Community Health Systems,
the parent company of PSC,6 purchased the Hospital. On February 11, 2009, Les Luke,
App.—Houston [14th Dist.] 2004, pet. denied) (explaining the “corporate practice of medicine” doctrine and
collecting cases); see also TEX. OCC. CODE ANN. § 162.052(a) (West, Westlaw through 2013 3d C.S.).
However, non-profit health organizations certified by the Texas Medical Board, and which have a board of
directors composed of licensed physicians, may employ physicians to practice medicine. See TEX. OCC.
CODE ANN. § 162.001(b) (West, Westlaw through 2013 3d C.S.) (setting out the general requirements for
that type of organization). REAP is such a non-profit organization.
4 Appellant maintains throughout his briefs on appeal that the termination date of the contract was
May 30, 2012, but the record reflects that appellant and REAP signed an addendum to the contract making
the termination date April 30, 2012.
5 The full text of section 10.1 is as follows:
The Agreement can be cancelled for-cause only during years one through three. Either
party may terminate this Agreement without cause if annual practice losses exceed Five
Hundred Thousand ($500,000.00) at the end of years three, four or five, by providing not
less than Sixty (60) Days prior written notice to the other party stating the intended date of
termination. If Employer terminates this Agreement without cause or if this Agreement
terminates by expiration or mutual consent, Physician shall not be entitled to the due
process rights established by Employer in its policies and procedures. Physician shall be
entitled to such due process rights if this Agreement is terminated for cause by Employer
pursuant to sections 10.2, 10.3 or 10.4 of this Agreement.
6According to PSC’s brief, PSC is a company owned by Community Health Systems that “provides
advice on physician employment and termination decisions” to health care providers owned by Community
Health Systems.
3
a Vice President of PSC, sent a letter to Jackson recommending that the Hospital
terminate appellant’s employment under the Contract at the end of the third contract year
in June of 2010, the time that the Contract first permitted termination without cause.
Luke’s letter cited appellant’s high “clinic losses” relative to his $750,000 base annual
salary as a reason for recommending the termination. The letter also stated that
continuing appellant’s employment until June 2010 despite the losses was acceptable to
permit the Hospital’s associate cardiovascular surgeon to gain more experience.
During his time at the Hospital, appellant’s primary source of patient referrals was
a team of three cardiologists that worked together under the name of BCS Heart.
Throughout 2009, appellant had a series of personal disagreements with two of the
doctors from BCS Heart, Dr. Marcel Lechin, M.D. and Dr. Mario Lammoglia, M.D. The
most prominent disagreement involved the two cardiologists’ decision to place appellant
and the Hospital on “drive-by” status, meaning that they would not refer new patients to
appellant for surgery at the Hospital. Appellant, in turn, refused to accept patients from
the two doctors until they “cleared the air” in a joint meeting. At the meeting, both
cardiologists stated that they were not referring patients to appellant because his patients
were not “doing well” during and after surgery. 7 Several days later, both cardiologists
nevertheless agreed to resume referring patients to appellant for surgery. Appellant,
however, refused to accept referrals from the two doctors until they signed an
advertisement or some other sort of public affirmation of appellant’s skills as a
cardiovascular surgeon. There is no evidence that any affirmation was ever published.
7 Jackson arranged for an independent review of the Hospital’s cardiology program, which
according to appellant, established that his patients’ rates of mortality and morbidity were well within
accepted norms.
4
On November 13, 2009, the REAP Board met for its annual meeting. We
reproduce the following directly from the minutes of the meeting:
Dr. Henry Hansen Situation
Les Luke briefly discussed the situation with Dr. Hansen, a cardiovascular
surgeon in College Station, Texas. Dr. Hansen is refusing to see patients
referred by two of the three cardiologists on the medical staff of College
Station Medical Center, which is not consistent with his employment
agreement with REAP. He did provide emergency assistance to Dr. Chris
Gullett, another College Station cardiovascular surgeon on the medical staff
of College Station Medical Center, but has otherwise not worked since
September. This stems from a falling out with BCS Heart, a three-member
cardiologist team. The purpose of the discussion was to prepare the Board
for a possible termination should Dr. Hansen continue to not see patients
referred by the two cardiologists and fulfill his duties per the employment
agreement.
Appellant alleges that he actually agreed to again accept referrals from the two
doctors at another meeting held on December 21, 2009, but whether appellant actually
accepted patients after that time is a disputed issue that we discuss below. Appellant
further alleges that during this time, he continued to perform procedures on patients
referred to him by Dr. Miller, the third BCS Heart cardiologist.
On February 18, 2010, Ashley Bosshart, Luke’s subordinate at PSC, sent an email
to the Board members to set up a conference call to discuss appellant. The email, in
pertinent part, reads as follows:
As you may recall from our 2009 Annual Board Meeting, we discussed the
possibility of terminating [appellant] due to his high losses and current
behavioral issues. I have attached the 2009 Annual Board Meeting Minutes
for you to review the information regarding [appellant].
[Appellant’s] annual losses are as follows:
2008 Losses: $1,003,138
2009 Losses: $908,609
5
Due to his past behavioral issues and his significant clinic losses, the CEO
of the facility has requested that the 5.01(a) Board terminate [appellant’s]
employment agreement without cause. I have attached a letter drafted by
the CEO, Tom Jackson, intended for [appellant]. Tom will not provide
[appellant] with this letter until May 3, 2010, which is the date REAP
contractually fulfills their part of [appellant’s] agreement with regard to not
terminating his contract without cause.
On February 23, 2010, the Board met via telephone conference call. The minutes
reflect the following:
A. Bosshart was notified by Thomas Jackson, Chief Executive Office
of College Station Medical Center, that REAP wished to terminate
[appellant’s] agreement without cause pursuant to section 10.1 of the
agreement. Thomas Jackson discussed the below reasons with A. Bosshart
as to why they wished to terminate Dr. Hansen.
• Dr. Hansen’s clinic losses were $1,003,138 in 2008 and
$908,609 in 2009.
• As discussed at the annual Board meeting, [appellant]
continues to display several behavioral problems. The most significant
being his unwillingness to see patients referred by two of the three
cardiologists on the medical staff of College Station Medical Center, which
is not consistent with his employment agreement with REAP. This stems
from a falling out with BCS Heart, a three-member cardiologist team.
A member of the Board moved to terminate appellant on the basis of section 10.1
of the Contract. The Board voted unanimously in favor of the motion. Following the vote,
Luke and Bosshart filled out a “Personnel Action Form” to reflect that appellant had been
terminated for “unsatisfactory performance” and was not eligible for rehire.
B. Legal Background
In October of 2010, appellant filed suit against REAP, the Hospital, Jackson, Dr.
Lechin, and Dr. Lammoglia. Appellant alleged causes of action for business
disparagement, tortious interference with contractual relations, conspiracy to commit
6
tortious interference with contractual relations, fraud in the inducement, participatory
liability against Jackson and the Hospital, a claim for equitable accounting against REAP,
and restraint of trade. Appellant later added a claim for breach of contract against REAP.
In his Third Amended Petition, appellant added PSC as a defendant and asserted a claim
for business disparagement against it.
The Hospital and Jackson moved for partial summary judgment on appellant’s
claims for restraint of trade. Dr. Lechin and Dr. Lammoglia filed a separate motion for
summary judgment on all of appellant’s claims. The trial court granted partial summary
judgment to Jackson and the Hospital and granted summary judgment to the two
cardiologists on all of appellant’s claims except those for business disparagement. The
trial court severed the claims against Dr. Lechin and Dr. Lammoglia into a separate
proceeding that is not before us.8 Jackson, the Hospital, and REAP then moved for
summary judgment on all appellant’s remaining claims. REAP moved for traditional
summary judgment only on appellant’s claim for breach of contract, but the motion is a
hybrid motion as to the other claims. PSC filed a separate hybrid motion for summary
judgment on all of appellant’s claims.
While the new motions were pending, the trial court granted appellant’s Second
Motion to Compel, ordering appellees to turn over numerous documents, including the
minutes of the meetings where the Board discussed appellant. Following the production
8 The trial court later rendered judgment for Dr. Lechin and Dr. Lammoglia, and appellant appealed
that judgment to the Tenth Court of Appeals. The parties reached a settlement agreement, and the Tenth
Court of Appeals granted their joint motion to dismiss the appeal without reaching the merits. See Hansen
v. Lechin, No. 10-13-00146-CV, 2013 WL 5952139, at *1 (Tex. App.—Waco Nov. 7, 2013, no pet.) (mem.
op.).
7
of these documents, appellant filed his Sixth Amended Petition. In that petition, Appellant
alleged the following causes of action: breach of contract and “breach of fiduciary and
statutory duties” against REAP; business disparagement against Jackson, the Hospital,
and PSC; tortious interference with contractual relations against Jackson and the
Hospital; tortious interference with existing and prospective contractual relations against
PSC; and restraint of trade against Jackson and the Hospital. PSC filed an amended
motion for summary judgment shortly before the hearing on the motions, but Jackson, the
Hospital, and REAP did not amend their summary judgment motion.
The trial court granted both motions in their entirety without stating the bases for
its ruling. On appeal, appellant challenges the summary judgments only on the claims
for breach of contract, business disparagement, and tortious interference.
II. SUMMARY JUDGMENT STANDARDS OF REVIEW
We review a grant of summary judgment de novo. Travelers Ins. Co. v. Joachim,
315 S.W.3d 860, 862 (Tex. 2010). If the trial court did not specify the grounds on which
it granted summary judgment, we must affirm if any of the grounds asserted in the motion
are meritorious. Provident Life & Acc. Ins. Co. v. Knott, 128 S.W.3d 211, 216 (Tex. 2003).
Where, as here, the motion asserts both no-evidence and traditional grounds, we first
review the summary judgment under the no-evidence standard of review. Ford Motor Co.
v. Ridgway, 135 S.W.3d 598, 600 (Tex. 2004). If the respondent failed to produce more
than a scintilla of evidence under the standard of Rule 166a(i), there is no need to analyze
whether the movant’s summary-judgment evidence satisfied the standard for traditional
summary judgment. Id.
8
By a no-evidence motion, the movant alleges that no evidence exists for one or
more essential elements of a claim on which the respondent bears the burden of proof at
trial. TEX. R. CIV. P. 166a(i); Hamilton v. Wilson, 249 S.W.3d 425, 426 (Tex. 2008) (per
curiam). The trial court must grant the motion unless the respondent produces evidence
that raises a genuine issue of material fact on each of the challenged elements of the
claim. Hamilton, 249 S.W.3d at 426; Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 582
(Tex. 2006). A genuine issue of material fact exists if the respondent produces more than
a scintilla of evidence for each challenged element. Ridgway, 135 S.W.3d at 600.
Evidence is more than a scintilla where it “would enable reasonable and fair-minded jurors
to differ in their conclusions.” Hamilton, 249 S.W.3d at 426; see King Ranch, Inc. v.
Chapman, 118 S.W.3d 742, 751 (Tex. 2003). Conversely, “[l]ess than a scintilla of
evidence exists when the evidence is so weak as to do no more than create a mere
surmise or suspicion of a fact.” Nalle Plastics Family Ltd. P'ship v. Porter, Rogers,
Dahlman & Gordon, P.C., 406 S.W.3d 186, 199 (Tex. App.—Corpus Christi 2013, pet.
denied) (internal quotation marks omitted). Just as with a directed verdict, we view “the
evidence presented by the motion and response in the light most favorable to the party
against whom the summary judgment was rendered, crediting evidence favorable to that
party if reasonable jurors could, and disregarding contrary evidence unless reasonable
jurors could not.” Tamez, 206 S.W.3d at 582.
In a traditional motion, the movant has the burden to show both that no genuine
issue of material fact exists and the movant is entitled to judgment as a matter of law.
TEX. R. CIV. P. 166a(c); Knott, 128 S.W.3d at 216. We take as true all evidence that is
9
favorable to the respondent, and indulge every reasonable inference and resolve any
doubts in favor of the non-movant. Knott, 128 S.W.3d at 215. A defendant moving for
traditional summary judgment has the burden to conclusively disprove at least one of the
essential elements of the plaintiff’s cause of action. Little v. Tex. Dep’t. of Criminal
Justice, 148 S.W.3d 374, 381 (Tex. 2004). If the defendant’s ground for summary
judgment is an affirmative defense, the defendant must conclusively establish each
element of that defense. See Chau v. Riddle, 254 S.W.3d 453, 455 (Tex. 2008) (per
curiam) (holding that a defendant moving for summary judgment on an affirmative
defense has burden to “conclusively establish” each element of its defense); Lam v.
Phuong Nguyen, 335 S.W.3d 786, 789 (Tex. App.—Dallas 2011, pet. denied) (same).
Once the movant shows that it is entitled to summary judgment, the burden shifts to the
respondent to produce evidence that raises a genuine issue of material fact so as to avoid
summary judgment. TEX. R. CIV. P. 166a(c); Rotating Servs. Indus., Inc. v. Harris, 245
S.W.3d 476, 487 (Tex. App.—Houston [1st Dist.] 2007, pet. denied).
III. ISSUE ONE—BREACH OF CONTRACT (REAP)
A. Applicable Law
The elements of a claim for breach of contract are: (1) the existence of a valid
contract; (2) performance or tendered performance by the plaintiff; (3) breach by the
defendant; (4) the plaintiff sustained damages as a result of the breach. Sauceda v.
GMAC Mtg. Corp., 268 S.W.3d 135, 140 (Tex. App.—Corpus Christi 2008, no pet.).
REAP’s motion for summary judgment addressed only the element of breach.
B. Appellant’s Allegations
Appellant first asserted that REAP breached its contract with appellant in three
10
ways. First, REAP allegedly terminated appellant based on “clinic losses,” which is a
measure of losses the Contract does not contemplate for purposes of termination without
cause. Appellant also asserts that the term “practice losses,” the measure of losses
referenced in the Contract, is ambiguous and that determining the meaning of the term
and the extent of appellant’s practice losses, if any, is therefore a fact issue for the jury.
Second, appellant argued that the minutes of the Board meeting indicated that the
only information the Board had before it regarding appellant’s losses (of any sort) was
from 2008 and 2009, while the Contract only permitted termination at the end of a contract
year for “annual” losses. Appellant interprets this term as referring to the losses incurred
during the just-completed year, meaning that he could only be terminated for “practice
losses” accumulated at the end of that year of the Contract. According to appellant,
because the Board voted to terminate appellant with several months remaining in the third
contract year, appellant’s “practice losses,” if any, could not have been calculated at the
time of the meeting.9
Third, appellant argues that the Board represented to appellant that he was
terminated without cause even though the Board allegedly considered appellant’s
supposedly continuing “behavioral problems” at the meeting in which it voted to terminate
appellant’s employment. Two PSC employees later filled out a “Personnel Action Form”
to reflect “unsatisfactory performance” as the reason for termination. Appellant argues
that the language on the form contradicts the representations in the termination letter that
he was terminated without cause. Because he was terminated for cause, REAP breached
9 Appellant maintains on appeal that he was terminated on the date of the vote, but he does not
contest that he continued to receive his salary and all the other benefits of his position until the Board
actually informed him of the termination via letter after the end of the third contract year.
11
the Contract by not affording him those protections before terminating his employment.
According to appellant, REAP represented that he was terminated without cause to avoid
affording him certain due process protections that the Contract provided must be followed
in the event of termination for cause.10
C. REAP’s Traditional Motion for Summary Judgment
REAP argued two theories in support of its argument that it conclusively
demonstrated that it did not breach the Contract. First, the term “practice losses” is
unambiguous and the references to “clinic losses” were unintentional mistakes that clearly
and unambiguously referred to “practice losses.” REAP argued that it showed appellant’s
practice losses exceeded the $500,000 contractual threshold both at the time that the
Board voted to terminate appellant’s contract and in June of 2010, when the Board
informed appellant of the decision to terminate his employment. See Mary Kay Inc. v.
Woolf, 146 S.W.3d 813, 819 (Tex. App.—Dallas 2004, pet. denied) (“There can be no
breach of contract when the manner of termination of the relationship is the manner
contemplated by the contract's own terms.”). Second, REAP alleged that prior to
termination, appellant committed a material breach of the contract that excused REAP
from further performance of the Contract. See Mustang Pipeline Co., Inc. v. Driver
10 Appellant also asserts on appeal that REAP was required by law to follow certain due process
procedures whether he was terminated for cause or without cause. Appellant argues that the Contract
expressly incorporated the Texas Medical Board’s regulations that require non-profit organizations such as
REAP to afford all physicians due process procedures prior to termination. See 22 TEX. ADMIN. CODE
§ 177.4(2)(F) (West, Westlaw through 39 TEX. REG. 7830 (Sept. 26, 2014)). However, the first time
appellant first raised this issue was in his motion for new trial. The respondent in a summary judgment
proceeding may not seek to raise a fact issue in a motion for new trial unless the motion is based on newly
discovered evidence that was not available at the time the trial court ruled on the motion. See Risner v.
McDonald's Corp., 18 S.W.3d 903, 908 (Tex. App.—Beaumont 2000, pet. denied). Appellant did not
present this argument to the trial court in the response to the summary judgment motion, and we may not
overturn summary judgment on a basis not expressly presented to the trial court in written response or
other answer. TEX. R. CIV. P. 166a(c); Brookshire Katy Drainage Dist. v. Lily Gardens, LLC, 333 S.W.3d
301, 307 (Tex. App.—Houston [1st Dist.] 2010, pet. denied).
12
Pipeline Co., Inc., 134 S.W.3d 195, 196 (Tex. 2004) (per curiam) (observing that the
material breach of one party to a contract discharges or excuses the other party from
further performance on the contract).
D. Discussion
We begin our discussion with the general rule that our goal in construing a contract
is to ascertain the true intentions of the parties as expressed in the writing itself. Italian
Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323, 333 (Tex. 2011).
To achieve this goal “we must examine and consider the entire writing in an effort to
harmonize and give effect to all the provisions of the contract so that none will be rendered
meaningless.” J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003).
Regarding REAP’s first ground for summary judgment, we are not convinced that
REAP conclusively showed that there is no genuine issue of material fact regarding
whether it breached the contract. See Little, 148 S.W.3d at 381. Assuming without
deciding that REAP is correct that the contractual term “practice losses” is unambiguous
and that appellant’s “practice losses” exceeded the contractual threshold at all relevant
times, REAP has established, at most, that the contractual conditions for termination
without cause were met at the time of the meeting where the Board voted to terminate
appellant. REAP’s motion did not address appellant’s contention that REAP actually
terminated appellant for cause.11 The distinction matters because the express language
of the Contract required REAP to afford appellant certain due process procedures if it
11 REAP makes several arguments on appeal regarding why the Board clearly voted to terminate
appellant without cause and at a time permitted by the Contract, but we may not address any of them
because REAP did not present them to the trial court in its motion. We may not uphold summary judgment
on a ground that was not presented to the trial court in the motion for summary judgment. McConnell v.
Southside Indep. Sch. Dist., 858 S.W.2d 337, 341 (Tex. 1993); Mercier v. Sw. Bell Yellow Pages, Inc., 214
S.W.3d 770, 774 (Tex. App.—Corpus Christi 2007, no pet.); see TEX. R. CIV. P. 166a(c).
13
sought to terminate appellant for cause but did not require the same if REAP sought to
terminate appellant without cause. To uphold summary judgment for REAP without
REAP having first established on which grounds it terminated appellant would effectively
require us to read that language out of the Contract. We must adopt a reading of the
Contract that gives effect to all of its provisions if at all possible, and we see no reason
not to do so here. See Italian Cowboy Partners, 341 S.W.3d at 333; J.M. Davidson, 128
S.W.3d at 229.
REAP argues that it was nevertheless entitled to summary judgment on appellant’s
entire claim because REAP established that it terminated his employment in a way that
was envisioned by the Contract, and “[i]n the absence of fraud, a contract that authorizes
cancellation without penalty will be enforced as it is written.” Tiger Truck, LLC v. Bruce's
Pulp & Paper, LLC, 282 S.W.3d 176, 183–34 (Tex. App.—Beaumont 2009, no pet.); see
Mary Kay, 146 S.W.3d at 819. However, the contract at issue in this case does not
authorize termination without penalty.12 Here, the contractual language expressly
distinguishes between different grounds for termination and provides different procedures
that must be followed depending on the ground. As we already explained, we may not
read that language out of the Contract. See Italian Cowboy Partners, 341 S.W.3d at 333;
J.M. Davidson, 128 S.W.3d at 229. Because REAP did not conclusively establish the
grounds on which it terminated appellant’s employment, the trial court could not have
properly granted summary judgment on this ground.
12 Mary Kay is inapplicable because it addressed a dispute over Woolf’s status as an independent
contractor or an employee. Mary Kay Inc. v. Woolf, 146 S.W.3d 813, 817 (Tex. App.—Dallas 2004, pet.
denied). Woolf argued the contractual provision permitting either party to terminate the agreement after
thirty days’ notice was evidence that she was an employee rather than an independent contractor. Id. at
819. The court of appeals held that provision could not overcome the other evidence from the contract
indicating that Woolf was an independent contractor. Id.
14
REAP’s second ground for summary judgment was that appellant committed a
material breach of the Contract that excused REAP from further performance. See
Mustang Pipeline Co., 134 S.W.3d at 196; see also Chau, 254 S.W.3d at 455 (holding
that a defendant moving for summary judgment on an affirmative defense has the burden
to “conclusively establish” each element of the defense). REAP asserted that appellant
agreed to abide by the Hospital’s Code of Conduct (the Code), and that he breached the
provision of the Code where he agreed that he “must not use the organization’s electronic
media to distribute or transmit any threatening, malicious, false, or obscene materials.”13
According to REAP, on December 28, 2008, appellant sent an email from his work
computer to a retired cardiologist in Dallas containing fifty pictures of naked Playboy
centerfolds. On May 6, 2009, appellant sent another email from his work computer to
forty-one recipients that contained a picture of male genitalia.14 One of the recipients was
a nurse in appellant’s office. On April 3, 2010, appellant sent an email from his work
computer to a female nurse in Dallas which contained a pornographic video of an actress
performing oral sex on a male actor. Appellant admitted in his deposition in response to
a question that the emails were “obscene.” Appellant also admitted during his deposition
that he sent similar emails from his work computer throughout his time at the Hospital.
On appeal, appellant characterizes the emails as “off-color jokes.” REAP asserts that
13 Appellant expressly agreed in the Contract that he: read the Code prior to executing the Contract;
would comply with the Code; knew that compliance was “an integral and essential requirement of” the
Contract; and knew that failure to comply with the Code would result in “disciplinary action” that could
include termination.
14 The exhibit REAP references is an email with the following text, which we reproduce in whole:
“My wife was always after me to go shopping with her. Then I began wearing my favorite shirt . . . She
doesn’t want me to go shopping with her anymore.” Below the text is a picture of a person wearing a shirt
that displays an image of a penis that is designed to appear as if it is coming out of the top of the wearer’s
pants.
15
appellant’s agreement shows that REAP conclusively established that there is no
question of fact that appellant materially breached the Contract.
Appellant argues that even if appellant’s conduct was a material breach, the
Contract still required REAP to afford appellant certain due process procedures before
terminating his employment for cause. REAP replies that this argument is circular
because REAP did not discover the breach until it demanded that appellant return his
work computer after appellant filed this lawsuit.15
Assuming without deciding that the emails appellant sent through his work
computer did breach the Contract, we conclude that REAP provided no evidence that the
breach was material. See Mustang Pipeline Co., 134 S.W.3d at 198 (observing that a
party is only released from performance if it can show both a breach and that the breach
was material). Texas courts have adopted the Restatement factors for determining
whether a breach is material: (1) the extent to which the injured party will be deprived of
the benefit which the injured party reasonably expected; (2) the extent to which the injured
party can be adequately compensated for the part of the benefit of which the injured party
will be deprived; (3) the extent to which the party failing to perform or to offer to perform
will suffer forfeiture; (4) the likelihood that the party failing to perform or to offer to perform
will cure the failure, taking into account of the circumstances including any reasonable
assurances; and (5) the extent to which the behavior of the party failing to perform or to
offer to perform comports with standards of good faith and fair dealing. Id. at 199. The
first consideration is the most important, and “the less the non-breaching party is deprived
of the expected benefit, the less material the breach.” Hernandez v. Gulf Group Lloyds,
15
Appellant testified at his deposition that he mistakenly took the CPU of his work computer with
him when he moved the furniture out of his offices at the Hospital.
16
875 S.W.2d 691, 693 (Tex. 1994); see Crump v. Frenk, 404 S.W.3d 146, 151 n.7 (Tex.
App.—Texarkana 2013, no pet.) (citing Hernandez and observing that “whether a breach
is material hinges in large part upon whether, as a result of the breach, the nonbreaching
party will be deprived of the benefit that it could have reasonably anticipated from full
performance”).
In this case, REAP does not attempt to show the nature of the benefit appellant’s
emails deprived them. See Hernandez, 875 S.W.2d at 693; Crump, 404 S.W.3d at 151
n.7. Moreover, REAP did not even discover the breach until after REAP terminated
appellant’s contract, appellant filed the lawsuit that is the subject of this appeal, and
REAP’s counsel demanded the return of appellant’s work computer. Because REAP did
not establish that appellant’s emails deprived it of a benefit it expected under the Contract,
we conclude that REAP cannot show that the breach was material. See Hernandez, 875
S.W.2d at 693; Crump, 404 S.W.3d at 151 n.7; see also Action Bail Bonds v. Vela, No.
13-13-00015-CV, 2013 WL 6730047, at *6 (Tex. App.—Corpus Christi Dec. 19, 2013, no
pet.) (mem. op.) (holding that appellants could not survive summary judgment on their
material breach affirmative defense because they showed no evidence “they were or
could be deprived of an expected benefit of the collateral agreement” once the other
party’s case had been dismissed). Because REAP has not conclusively established that
appellant committed a material breach, summary judgment for REAP was not appropriate
on this basis. See Hernandez, 875 S.W.2d at 693; Crump, 404 S.W.2d at 151 n.7; see
also Action Bail Bonds, 2013 WL 6730047, at *6.
In sum, we conclude that summary judgment for REAP was improper because
REAP’s traditional motion for summary judgment did not conclusively establish that it did
17
not breach the Contract. See Little, 148 S.W.3d at 381. We also conclude that REAP
failed to establish that appellant committed a material breach. See Hernandez, 875
S.W.2d at 693; see also Action Bail Bonds, 2013 WL 6730047, at *6. We accordingly
sustain appellant’s first issue.
IV. ISSUE TWO—BUSINESS DISPARAGEMENT (JACKSON, HOSPITAL, AND PSC)
By his second issue, appellant argues that the trial court erred when it granted
traditional and no-evidence summary judgments in favor of the Hospital, Jackson
(collectively, “Jackson”), and PSC on appellant’s claims for business disparagement.
A. Applicable Law
A plaintiff asserting business disparagement must prove: (1) the defendant
published false and disparaging information about the plaintiff; (2) with malice; (3) without
privilege; and (4) the plaintiff suffered special damages as a result. Forbes Inc. v.
Granada Biosciences, Inc., 124 S.W.3d 167, 170 (Tex. 2003); Prudential Ins. Co. of Am.
v. Fin. Review Servs., Inc., 29 S.W.3d 74, 82 (Tex. 2000). Business disparagement is
both a means of tortiously interfering with a contract and an independent tort. Prudential
Ins. Co., 29 S.W.3d at 82.
A claim for business disparagement is similar in many respects to a claim for
defamation, except that business disparagement protects the plaintiff’s specifically
economic interests. Forbes, 124 S.W.3d at 170. The law also imposes three more
stringent pleading requirements on a plaintiff asserting business disparagement: “falsity
of the statement, fault of the defendant and proof of damage.” Hurlbut v. Gulf Atl. Life
Ins. Co., 749 S.W.2d 762, 766 (Tex. 1987) (internal quotation marks omitted). Regarding
falsity, the plaintiff must show that the statements at issue are false and disparaging
18
because only defamatory statements are actionable as business disparagement.
Prudential Ins. Co., 29 S.W.3d at 82; Rehak Creative Servs., Inc. v. Witt, 404 S.W.3d 716,
728 (Tex. App.—Houston [14th Dist.] 2013, pet. denied). Regarding fault, a defendant
may be held liable only if he “knew of the falsity or acted with reckless disregard
concerning it, or if he acted with ill will or intended to interfere in the economic interest of
the plaintiff in an unprivileged fashion.” Forbes, 124 S.W.3d at 170; Newspaper Holdings,
Inc. v. Crazy Hotel Assisted Living, Ltd., 416 S.W.3d 71, 87 (Tex. App.—Houston [1st
Dist.] 2013, pet. denied) (op. on reh’g). Regarding damages, the plaintiff must prove
special damages, which in this case means that “the disparaging communication played
a substantial part in inducing third parties not to deal with the plaintiff, resulting in a direct
pecuniary loss that has been realized or liquidated, such as specific lost sales, loss of
trade, or loss of other dealings.” Astoria Indus. of Iowa, Inc. v. SNF, Inc., 223 S.W.3d
616, 628 (Tex. App.—Fort Worth 2007, pet. denied).
B. Discussion
1. The Hospital and Jackson
Appellant asserted that Jackson, acting as an agent of the Hospital, “intentionally
and knowingly” communicated two false and disparaging statements to the Board: (1)
that appellant could be terminated for the “clinic losses,” instead of “practice losses,” and
for years other than the third year of the Contract; and (2) that appellant was still exhibiting
“behavioral problems” by continuing to refuse to take referrals from the two BCS Heart
cardiologists. Jackson’s no-evidence motion challenged whether appellant could
produce evidence raising an issue of material issue of fact on any element of business
disparagement. See TEX. R. CIV. P. 166a(i).
19
We first address whether appellant successfully raised a material issue of fact on
whether the statements were false and disparaging. Whether a statement is capable of
a defamatory meaning is initially a question of law for the court. Turner v. KTRK Tel.,
Inc., 38 S.W.3d 103, 114 (Tex. 2000). A statement is defamatory if it “tends to injure a
living person's reputation and thereby expose the person to public hatred, contempt or
ridicule, or financial injury or to impeach any person's honesty, integrity, virtue, or
reputation.” Neely v. Wilson, 418 S.W.3d 52, 60 (Tex. 2013); see Allied Mktg. Grp., Inc.,
v. Paramount Pictures Corp., 111 S.W.3d 168, 176 (Tex. App.—Eastland 2003, pet.
denied) (observing, in a business-disparagement case, that a statement is defamatory if
it “would ordinarily tend to injure a plaintiff's business reputation, resulting in financial
injury”). We determine whether a statement is defamatory by construing the statements
as a whole in light of the surrounding circumstances based upon how a person of ordinary
intelligence would perceive the statements. Turner, 38 S.W.3d at 114. A statement may
be “false, abusive, unpleasant, or objectionable to the plaintiff and still not be defamatory
in light of the surrounding circumstances.” MKC Energy Inv., Inc. v. Sheldon, 182 S.W.3d
372, 377 (Tex. App.—Beaumont 2005, no pet.).
Taking Jackson’s statements to the Board as a whole, we conclude that appellant
failed to raise an issue of material fact regarding whether Jackson’s statements were
defamatory. Appellant argues that Jackson misrepresented the Contract’s provisions on
termination without cause16 and falsely told the Board that appellant was still refusing to
16 On appeal, Jackson interprets appellant as arguing that Jackson’s representations regarding the
dollar amounts of his “clinic losses” for 2008 and 2009 were false. However, appellant specifically argued
in this section of his brief that Jackson’s statements were false because the “[C]ontract could not be
terminated based on ‘clinic losses’ for the years 2008 and 2009. The ‘without cause’ provisions of the
contract, of which Jackson had specific knowledge, expressly provide[d] that the contract could only be
terminated, without cause, for annual ‘practice losses’ as calculated for year three” of the Contract. We
interpret this language as challenging Jackson’s representations regarding the contractual provisions on
20
accept patient referrals from the two BCS Heart cardiologists. But, even if we accept that
Jackson was wrong about the Contract’s provisions on termination without cause, a
reasonable listener would not have interpreted statements incorrectly describing
contractual provisions as affecting appellant’s “business reputation,” negatively or
otherwise.17 See Neely, 418 S.W.3d at 60; Allied Mktg. Grp., 111 S.W.3d at 176.
Regarding the statement on appellant’s behavioral problems, both appellant and Jackson
agree that Jackson told the Board that appellant’s behavioral problems were “ongoing.”
Appellant thus had the burden to produce more than a scintilla of evidence that he was
no longer refusing to see patients referred by the two cardiologists at the time of the Board
meeting in February of 2009, where the Board voted to terminate appellant. Appellant
argues that he met this burden because Jackson admitted in his deposition that the
dispute was resolved after a second meeting between appellant and the two BCS Heart
cardiologists in December of 2009. However, Jackson testified only that appellant and
the BCS Heart doctors agreed to resume working together at the December of 2009
meeting. At that time, the agreement was that all of them would publish some sort of
affirmation of appellant’s skills as a surgeon after a “few months” of working together
again.18 In none of the excerpts from Jackson’s deposition that are in the record does he
termination without cause rather than the truth of the dollar amounts of the “clinic losses” presented to the
Board.
17 We reiterate that appellant does not argue that the amount of the “clinic losses” conveyed to the
Board is disparaging, but rather the representation that he could be terminated for “clinic losses” at all.
Appellant specifically argues in his brief that the statements were disparaging because: “[a]s discussed in
detail, supra, [appellant’s] contract could not be terminated based on ‘clinic losses’ for the years 2008 and
2009. The ‘without cause’ provisions of the contract, of which Jackson had specific personal knowledge,
expressly provides that the contract can only be terminated, without case, for annual ‘practice losses’ as
calculated for year three” of the Contract.
18 Jackson specifically testified that the cardiologists agreed that they:
would work together for a few months. It was December, so they said the spring, and they
would do some joint marketing together. Whether it be a marketing affirmation or
21
discuss the status of the dispute at or around the time of the February Board meeting.
Appellant directs us to no other evidence that raises an issue of fact as to whether
Jackson’s statements were false.19 This evidence is no more than a mere scintilla of
evidence that Jackson’s statements were false. See Nalle Plastics, 406 S.W.3d at 199.
Having concluded that there was not sufficient evidence of one the elements of
appellant’s claim for business disparagement, we need not address the other elements.
See TEX. R. APP. P. 47.1. We hold that the trial court did not err in granting no-evidence
summary judgment for Jackson and the Hospital on appellant’s claims for business
disparagement. See Hamilton, 249 S.W.3d at 426; Tamez, 206 S.W.3d at 582.
2. PSC
PSC’s no-evidence motion for summary judgment specifically challenged the
evidence supporting each essential element of a claim for business disparagement.
Appellant argues that the following statements or omissions by PSC employees
Les Luke and Ashley Bosshart, taken together, constitute business disparagement:
Luke’s statements to the Board at the November 19, 2009 meeting that we reproduced
above; the failure of Luke and Bosshart to advise the Board that appellant wanted to
speak to them concerning his dispute with the two cardiologists; Bosshart’s email to the
Board reminding them of the agenda of the meeting; and the completion of the “personnel
action form” and its placement in appellant’s personnel file with both the Hospital and
PSC.
something that would meet [appellant’s] expectations, they would do something together
after they worked together for a while.
19Appellant argues that Bosshart’s email to the REAP Board and the REAP Board minutes showed
that Jackson knew that these statements were false, but appellant cites only to the statements themselves.
He does not direct us to any evidence of falsity.
22
We address the element of malice first because it is dispositive. For these
purposes, a party acts with malice in publishing false statements if the party “knew of the
falsity or acted with reckless disregard concerning it, or if he acted with ill will or intended
to interfere in the economic interest of the plaintiff in an unprivileged fashion.” Hurlbut,
749 S.W.2d at 766; see Newspaper Holdings, 416 S.W.3d at 87. In this case, appellant
specifically alleged that Luke and Bosshart knew the statements were false and
misleading when they published them to the Board.20 Appellant argues on appeal that
he raised a fact issue regarding whether Luke and Bosshart made these statements with
the required mental state because he demonstrated that Luke had wanted to terminate
appellant’s employment since at least February of 2009, the time when Luke sent the
letter to Jackson recommending termination. According to appellant, all of Luke’s conduct
after that date was part of his plan to terminate appellant’s employment.
Viewing the evidence in the light most favorable to appellant, we conclude that
appellant has not produced evidence raising a fact issue regarding whether Luke and
Bosshart acted with malice. We agree that appellant has produced some evidence that
he did perform some surgeries (other than the single emergency surgery) on patients
referred by Dr. Miller, the third BCS Heart cardiologist, and thus raised an issue that
Luke’s statements that appellant “had not worked since September” were false in that
respect. However, even assuming that these statements were not substantially true,
20 We note that apart from a reference to the fact that Luke was “angry at [appellant] and intended
to cause him harm by publishing these false statements,” appellant alleged only that Luke and Bosshart
acted with actual malice, i.e., that they knew the statements were false or were reckless as to their truth at
the time they made them. Because both parties agree that the “actual malice” standard applies, we will
evaluate appellant’s claim under the standard. See Forbes, Inc. v. Granada Biosciences, Inc., 124 S.W.3d
167, 170–71 (Tex. 2003) (applying the actual malice standard to a business-disparagement claim brought
by a public figure against a media defendant where neither side contested the applicability of that standard
to the case).
23
appellant’s evidence does not raise an issue of fact that Luke and Bosshart knew the
statements were false at the time they made them. To reach the level of actual malice, it
is not enough that the speaker be mistaken as to the truth of the statements, even
negligently so. Freedom Newspapers of Tex. v. Cantu, 168 S.W.3d 847, 855 (Tex. 2005).
The speaker must make the statements either with knowledge of their falsity “or in
circumstances so improbable that only a reckless publisher would have made the
mistake.” Id. Appellant does not explain how the mere fact that Luke made the
statements appellant cites at a time after Luke recommended terminating appellant’s
employment shows that Luke knew the statements were false. See id. at 858 (observing
that evidence of the defendant’s “ill will or desire to injure” is not evidence of actual
malice); Huckabee v. Time Warner Entm't Co. L.P., 19 S.W.3d 413, 424–25 (Tex. 2000)
(same). Similarly, the mere fact that Bosshart and Luke filled out the “personnel action
form” to reflect “unsatisfactory performance” also does not establish that they knew this
statement was false. See Cantu, 168 S.W.3d at 858. Regarding Bosshart’s email to the
Board to set up the conference call, appellant presented no evidence that Bosshart knew
of the statements’ falsity, was reckless regarding the truth of the statements, or that the
email did anything but remind the Board of the statements Jackson already made
regarding termination.21 We hold that this evidence is no more than a mere scintilla of
evidence supporting the element of malice. See Nalle Plastics, 406 S.W.3d at 199.
Having concluded that there was not sufficient evidence of one the elements of
appellant’s claim for business disparagement, we need not address the other elements.
21 Appellant’s brief points out that Bosshart’s email used the term “current” where Jackson used
the term “continuing” to describe appellant’s “behavioral issues,” and used the term “high” to describe
appellant’s losses, but does not explain how this shows that her email did anything other than summarize
Jackson’s statements.
24
See TEX. R. APP. P. 47.1. We hold that the trial court did not err in granting PSC’s no-
evidence motion for summary judgment. See Hamilton, 249 S.W.3d at 426; Tamez, 206
S.W.3d at 582.
3. Summary
In summary, we hold that the trial court did not err in granting the no-evidence
summary judgment for Jackson, the Hospital, and PSC on appellant’s claim for business
disparagement. See Hamilton, 249 S.W.3d at 426. Because no-evidence summary-
judgment for Jackson, the Hospital, and PSC was appropriate, we need not review the
merits of the motions for traditional summary judgment on this claim. See Ridgway, 135
S.W.3d at 600. We overrule appellant’s second issue.
V. ISSUE THREE—TORTIOUS INTERFERENCE WITH AN EXISTING CONTRACT
By his third issue, appellant challenges the trial court’s traditional and no-evidence
summary judgments on his claims against Jackson, the Hospital, and PSC for tortious
interference with an existing contract.
A. Applicable Law
A plaintiff alleging tortious interference with an existing contract must prove the
following elements: (1) the existence of a contract subject to interference; (2) a willful and
intentional act that interfered with the contract; (3) that proximately caused the plaintiff’s
injury; and (4) caused actual damage or loss to the plaintiff. Prudential Ins. Co., 29
S.W.3d at 77.
Regarding the “willful and intentional interference” prong, the plaintiff must produce
some evidence of a willful act of interference by the defendant. SJW Prop. Commerce,
Inc. v. Sw. Pinnacle Props., Inc., 328 S.W.3d 121, 150 (Tex. App.—Corpus Christi 2010,
25
pet. denied) (op. on reh’g) (citing Browning-Ferris, Inc., v. Reyna, 865 S.W.2d 925, 927
(Tex. 1993)). The defendant must have been “more than a willing participant; he must
knowingly induce one of the contracting parties to breach its obligations.” Id. at 152. In
the words of the Austin Court: “[a] necessary element of the plaintiff’s cause of action is
a showing that the defendant took an active part in persuading a party to a contract to
breach it.” John Paul Mitchell Sys. v. Randalls Food Mkts., Inc., 17 S.W.3d 721, 731
(Tex. App.—Austin 2000, pet. denied).
The mere fact that a contract may be terminated at will or terminated with notice is
generally not a defense to a claim for tortious interference. See Juliette Fowler Homes,
Inc. v. Welch Assocs., Inc., 793 S.W.2d 660, 666 (Tex. 1990) (terminable-with-notice
contract); Sterner v. Marathon Oil Co., 767 S.W.2d 686, 689 (Tex. 1989) (terminable-at-
will contract). However, the protection provided by the holdings of those cases is limited
because the Supreme Court of Texas has also held that a party cannot be held liable for
inducing another party “to do what it had a right to do” under the contract. ACS Invs., Inc.
v. McLaughlin, 943 S.W.2d 426, 430 (Tex. 1997); see AKB Hendrick, LP v. Musgrave
Enterps., Inc., 380 S.W.3d 221, 236 (Tex. App.—Dallas 2012, no pet.). Thus, “merely
inducing one of the parties to exercise his right to terminate contractual relations after
giving the required notice does not necessarily constitute tortious interference with
contract under Texas law.” Faucette v. Chantos, 322 S.W.3d 901, 914 (Tex. App.—
Houston [14th Dist.] 2010, no pet.).
Regarding the causation prong of the analysis, we apply the classic proximate-
cause tests for cause-in-fact and foreseeability. Richardson-Eagle, Inc. v. William M.
Mercer, Inc., 213 S.W.3d 469, 474 (Tex. App.—Houston [1st Dist.] 2006, pet. denied); Hill
26
v. Heritage Res., Inc., 964 S.W.2d 89, 126 (Tex. App.—El Paso 1997, pet. denied). The
cause-in-fact test requires the plaintiff to show that the interference was a “substantial
factor” in bringing about the injury without which the injury would not have occurred.
Richardson-Eagle, 213 S.W.3d at 474.
Regarding the “actual loss” prong of the analysis, damages for tortious interference
with an existing contract are the same as the measure of damages for breach of contract:
damages sufficient to put the plaintiff in the same position as if the contract had been fully
performed. Am. Nat. Petroleum Co. v. Transcon. Gas Pipe Line Corp., 798 S.W.2d 274,
278 (Tex. 1990); Palla v. Bio-One, Inc., 424 S.W.3d 722, 726 (Tex. App.—Dallas 2014,
no pet.).
Even if a plaintiff is able to establish these elements, a defendant may still avoid
liability by asserting the affirmative defense of justification. Prudential Ins. Co., 29 S.W.3d
at 77–78. A defendant may show the interference was justified if it “was done in a bona
fide exercise of [the interferer's] rights or that the interferer has an equal or superior right
in the subject matter to that of the other party.” Tex. Beef Cattle Co. v. Green, 921 S.W.2d
203, 215 (Tex. 1996) (internal citations omitted, alterations in the original). The defense
of exercising a legal right can be based on either: (1) a bona fide exercise of the
defendant’s own legal rights, or (2) a good faith claim to a colorable legal right that
eventually turns out to be mistaken. Gulf Liquids New River Project, LLC v. Gulsby Eng'g,
Inc., 356 S.W.3d 54, 77 (Tex. App.—Houston [1st Dist.] 2011, no pet.).
If the trial court finds as a matter of law that the defendant had the legal right to
interfere with a contract, then the defense is established and the defendant’s motive is
irrelevant. Prudential Ins. Co., 29 S.W.3d at 80. Alternatively, a defendant who fails to
27
establish justification as a matter of law can still avoid liability if: (1) the trial court
determines that the defendant interfered while exercising a colorable legal right; and (2)
the jury finds that the defendant exercised that colorable right in good faith. Tex. Beef
Cattle Co., 921 S.W.2d at 211. If the trial court determines that the defendant was
exercising a colorable legal right, determining whether the defendant acted in good faith
under the second prong is a jury question. Id.; see Gulf Liquids, 356 S.W.3d at 77.
B. Discussion
1. The Hospital and Jackson
a. No-Evidence Motion
By their no-evidence motion, Jackson and the Hospital challenged the evidence
supporting the essential elements of willful and intentional interference, causation, and
actual loss.
We begin with the element of a willful and intentional act of interference. Appellant
had the burden to produce evidence raising a genuine issue of fact regarding whether
Jackson knowingly induced REAP to breach its contract with appellant. See SJW Prop.,
328 S.W.3d at 152. Appellant argues that Jackson interfered with the Contract by
misrepresenting its terms regarding termination and by falsely informing the Board that
appellant’s dispute with the cardiologists was ongoing. Jackson does not contest that he
“intentionally” induced REAP to terminate the Contract, but responds that: (1) appellant
has not raised an issue of material fact on whether Jackson acted entirely out of his own
interests, and (2) Jackson merely induced REAP to do what it had the right to do under
the Contract. See ACS Invs., 943 S.W.2d at 430.
We first address the argument that appellant was required to produce evidence
28
raising an issue of material fact regarding whether Jackson acted entirely out of his own
interests and not the Hospital’s. The general rule is that a corporate agent cannot be held
liable for tortious interference with the principal’s contract as long as the agent acted in
good faith on the principal’s behalf. Id. at 432. Thus, a plaintiff suing a corporate agent
for tortious interference must prove that the agent acted solely to further the agent’s
personal interests “so as to preserve the logically necessary rule that a party cannot
tortiously interfere with its own contract.” Latch v. Gratty, Inc., 107 S.W.3d 543, 545 (Tex.
2003) (per curiam) (internal quotations marks omitted). Jackson reasons that because
he was an agent of both REAP and the Hospital, appellant had to raise a genuine issue
of fact that Jackson acted entirely out of his own interests but that appellant failed to do
so. We agree that Jackson acted as an agent of REAP for the purposes of drawing up
suggested terms for appellant’s employment contract.22 However, the minutes of the
meeting in which the Board terminated appellant recite that “Thomas Jackson, Chief
Executive Office[r] of [the Hospital]” made the Hospital’s request to REAP to terminate
appellant. One of Bosshart’s emails to the Board referred to Jackson as “the CEO of the
[Hospital].” We find no indication that Jackson acted as REAP’s agent when he requested
the termination or for any purpose other than negotiating appellant’s contract with REAP.
We accordingly reject Jackson’s argument that appellant was required to raise a genuine
issue of material fact on whether Jackson acted entirely out of his own interests and not
in good faith on behalf of the Hospital.
We turn next to the argument of the Hospital and Jackson (collectively, “Jackson”)
22Jackson testified at his deposition that part of his duties as CEO of the Hospital is to suggest
terms on which physicians would be hired by REAP, and that he acted as REAP’s agent for this purpose.
Jackson was not separately compensated by REAP for this role.
29
that there is no evidence that he tortiously interfered in the Contract because he merely
induced REAP to exercise its contractual right to terminate appellant without cause as the
Contract permitted. See ACS Invs., 943 S.W.2d at 430. In other words, Jackson’s actions
cannot be tortious because REAP did not breach its contractual obligations. However,
appellant produced evidence that Jackson requested the Board to terminate appellant for
“clinic losses,” while the contractual language does not contemplate termination for “clinic
losses.” Jackson does not attempt to rebut appellant’s evidence by showing that “clinic
losses” are the same as the “practice losses” mentioned in the Contract or that the term
“practice losses” is unambiguous. By presenting evidence that Jackson requested the
termination and explained the reasons for it, we conclude that appellant produced more
than a scintilla of evidence supporting the element of an intentional act of interference.
See SJW Prop., 328 S.W.3d at 152; Randalls Food Mkts., 17 S.W.3d at 731. Therefore,
summary judgment could not be properly granted on this basis.
We next address the element of causation. See Prudential Ins. Co., 29 S.W.3d at
77. Appellant had the burden to produce some evidence raising an issue of fact on
whether Jackson’s acts or omissions were a substantial factor in bringing about his injury
without which the harm would not have occurred. See Richardson-Eagle, 213 S.W.3d at
474. Jackson argues that appellant did not carry this burden because he did not present
testimony from members of the Board on the reason for their vote or introduce into
evidence any official REAP documents establishing that the Board terminated appellant
because of Jackson’s statements. Appellant responds that he met this burden by
showing that Jackson requested that REAP terminate appellant’s employment and
explained the Hospital’s reasons for making the request.
30
Jackson’s brief cites the rule that “[p]roximate cause cannot be satisfied by mere
conjecture, guess, or speculation,” Columbia Med. Ctr. of Las Colinas, Inc. v. Hogue, 271
S.W.3d 238, 246 (Tex. 2008), and argues that appellant’s evidence is nothing more than
such conjecture without testimony from Board members or documents from REAP
explaining the official reason for the termination. However, appellant was only required
to produce more than a scintilla of evidence that would allow reasonable people to
conclude that Jackson’s actions were a proximate cause of the injury. See Hamilton, 249
S.W.3d at 426. And it is uncontested that Jackson requested that the Board terminate
appellant’s contract and explained the reasons behind that request. Jackson does not
direct us to any case law requiring that a specific type of evidence is needed to raise a
fact issue on proximate cause, and we have found none. Circumstantial evidence will
suffice so long as it is more than “conjecture, guess, or speculation.” Viewing the
foregoing evidence in the light most favorable to appellant as we must, we hold that
appellant produced more than a scintilla of evidence supporting the essential element of
causation. See Richardson-Eagle, 213 S.W.3d at 474; Hill, 964 S.W.2d at 126.
Therefore, summary judgment could not be properly granted on this basis.
We next turn to the element of damages. Jackson challenged this element of
appellant’s claim in the no-evidence motion for summary judgment, but Jackson did not
address it in his brief on appeal. Appellant nevertheless had the burden to produce
evidence raising a material issue of fact that he suffered “actual damage or loss.” See
Prudential Ins. Co., 29 S.W.3d at 77. Appellant produced uncontested evidence that if
his employment had not been terminated he would have received approximately
$1,500,000 in base salary for the remainder of the contractual term, plus his annual
31
$100,000 directorship fee and the monetary value of the other benefits he was entitled to
under the Contract. Because appellant showed approximately the amount of money that
he would have received if the Contract was fully performed, we agree that appellant
produced more than a scintilla of evidence on the essential element of damages. See
Am. Nat. Petroleum Co., 798 S.W.2d at 278; Palla, 424 S.W.3d at 726. Therefore,
summary judgment could not be granted on this basis.
b. Traditional Motion
Having concluded that appellant successfully carried his burden to produce
evidence raising a genuine issue of material fact on all the challenged elements of his
claim, we turn now to Jackson’s traditional motion for summary judgment. See TEX. R.
CIV. P. 166a(c). We first address whether Jackson moved for summary judgment on this
cause of action, and we conclude that the trial court erred by granting summary judgment
on a claim that was not addressed in the motion.
The general rule is that it is reversible error for a trial court to grant summary
judgment on a new claim that the movant did not address in the motion. Nall v. Plunkett,
404 S.W.3d 552, 555 (Tex. 2013) (per curiam); Lehmann v. Har-Con Corp., 39 S.W.3d
191, 200 & n.49 (Tex. 2001). The source of this law is Rule 166a(c), which requires a
traditional motion for summary judgment “to state the specific grounds therefor.” TEX. R.
CIV. P. 166a(c); see Lampasas v. Spring Ctr., Inc., 988 S.W.2d 428, 436 (Tex. App.—
Houston [14th Dist.] 1999, no pet.). The courts of appeals have recognized three limited
circumstances in which reversal is not necessary: (1) if a claim in an amended petition
essentially reiterates a previously pleaded cause of action; (2) if a ground asserted in the
motion conclusively negates an element common to the new and previously pleaded
32
claims; or (3) if the original motion is “broad enough” to encompass the newly asserted
claims. Coterill-Jenkins v. Tex. Med. Ass'n Health Care Liab. Claim Trust, 383 S.W.3d
581, 592 (Tex. App.—Houston [14th Dist.] 2012, pet. denied); Rotating Servs., 245
S.W.3d at 487. However, if a plaintiff “asserts a new cause of action based on facts not
alleged in the original petition, a court cannot say the defendant's motion for summary
judgment contemplated and embraced the additional claim in the amended petition.”23
Espeche v. Ritzell, 123 S.W.3d 657, 664 (Tex. App.—Houston [14th Dist.] 2003, pet.
denied); accord DeWoody v. Rippley, 951 S.W.2d 935, 942 (Tex. App.—Fort Worth 1997,
writ dismissed by agreement) (holding that summary judgment was improper on causes
of action not addressed in the motion and based on facts not originally pleaded).
At the time Jackson moved for summary judgment, appellant’s Fourth Amended
Petition was still his live petition. In that petition, appellant alleged that Jackson, Dr.
Lechin, and Dr. Lammoglia tortiously interfered with his contract with REAP by jointly
working to drive up his losses to the Hospital and cause his termination. The two
cardiologists allegedly did this by refusing to refer patients needing surgery to appellant
and by demanding that Jackson instruct appellant that he could no longer conduct a clinic
23We addressed the merits of Jackson’s no-evidence motion on this same claim because a no-
evidence motion is generally “broad enough” to encompass new factual allegations so long as the
respondent still asserts a claim with the same essential elements as those challenged in the no-evidence
motion. See Keszler v. Mem'l Med. Ctr. of E. Tex., 105 S.W.3d 122, 128–29 (Tex. App.—Corpus Christi
2003, no pet.); Lampasas v. Spring Ctr., Inc., 988 S.W.2d 428, 436–37 (Tex. App.—Houston [14th Dist.]
1999, no pet.).
For example, in Lampasas, after the defendant moved for no-evidence summary judgment, the
plaintiff amended his petition to allege new variations on his multiple negligence claims. 988 S.W.2d at
437. The court of appeals held that the defendant’s motion was broad enough to encompass the new
variations on the claims because each still sounded in negligence and thus had the same essential
elements challenged in the motion. Id. By contrast, in Keszler, where the plaintiff originally asserted a
claim for breach of contract, this Court held that the no-evidence motion was not broad enough to
encompass newly-asserted claims for fraud, slander, “constitutional deprivations” and violations of the
Sherman Anti-Trust Act because those claims had different essential elements than a claim for breach of
contract. 105 S.W.3d at 129.
33
in Buffalo, Texas, but had to spend all of his time at the Hospital. As part of this plan,
Jackson allegedly deliberately hired an associate cardiovascular surgeon to eventually
replace appellant at a lesser salary.
After the trial court granted summary judgment in favor of the two cardiologists and
REAP produced discovery that included the minutes of the meeting in which the Board
voted to terminate appellant, appellant filed his Sixth Amended Petition.24 In this petition,
appellant alleged that Jackson tortiously interfered with appellant’s contract by making
the statements to the Board that we discussed above. Appellant did not reassert his
original theory of tortious interference, and the new claim did not rely on any of the facts
supporting the original theory. On appeal, Jackson asserts that amending the motion was
unnecessary because the Sixth Amended Petition reiterated the same cause of action
but “with an alteration to the underlying facts.” We disagree.
In contrast to the cases appellant relies on,25 the Sixth Amended Petition did not
amend an already-existing cause of action by providing additional or alternative factual
allegations. Appellant’s new claim for tortious interference arose from facts that were
completely absent from his original and earlier amended petitions and did not have any
facts in common with the original theory. Appellant, in effect, pleaded a new cause of
action for tortious interference. See Espeche, 123 S.W.3d at 664; DeWoody, 951 S.W.2d
at 942. Because Jackson’s motion did not address this cause of action, we hold that the
trial court erred in granting summary judgment on it. See Nall, 404 S.W.3d at 555;
24 The Fifth Amended Petition continued to allege substantially the same theories as the Fourth
Amended Petition.
25 See Larson v. Family Violence & Sexual Assault Prevention Ctr. of S. Tex., 64 S.W.3d 506, 510
n.2 (Tex. App.—Corpus Christi 2001, pet. denied); see also Barth v. Royal Ins. Co., No. 13-02-00688-CV,
2004 WL 2904306, at *2 (Tex. App.—Corpus Christi Dec. 16, 2004, no pet.) (mem. op.).
34
Lehmann, 39 S.W.3d at 200.
Jackson further asserts that appellant’s claim is barred by the affirmative defense
of limitations. We may not consider this ground because Jackson raised it for the first
time in a supplemental reply filed on the day of the hearing on the motions for summary
judgment. A movant may not raise a new ground for summary judgment in a reply without
the consent of the respondent, and Jackson does not argue that appellant consented.
ADT Sec. Servs., Inc. v. Van Peterson Fine Jewelers, 390 S.W.3d 603, 606 (Tex. App.—
Dallas 2012, no pet.); Reliance Ins. Co. v. Hibdon, 333 S.W.3d 364, 378 (Tex. App.—
Houston [14th Dist.] 2011, pet. denied); Garcia v. Garza, 311 S.W.3d 28, 36 (Tex. App.—
San Antonio 2010, pet. denied). We hold that we may not uphold summary judgment for
Jackson on this ground because Jackson did not make this claim in a motion for summary
judgment. See TEX. R. CIV. P. 166a(c) (providing that a motion for summary judgment
must state the specific grounds); see also Nall, 404 S.W.3d at 555; Lehmann, 39 S.W.3d
at 200.
2. PSC
a. No-Evidence Motion
PSC asserts on appeal that its no-evidence motion challenged the elements of
intentional interference and damages. See Prudential Ins. Co., 29 S.W.3d at 77.
However, regarding the element of interference, PSC’s no-evidence motion actually
challenged whether appellant produced any evidence raising a material issue of fact that
PSC “engaged in unlawful interference with the contract.” Interference by an unlawful
means is not an essential element of the tort of interference with an existing contract.
See SJW Prop., 328 S.W.3d at 152; see also Faucette, 322 S.W.3d at 914 (distinguishing
35
the interference required for tortious interference with prospective contracts, which must
be “independently tortious or unlawful,” with the elements of tortious interference with an
existing contract). A motion under Rule 166a(i) must challenge the specific elements for
which there is no evidence. See TEX. R. CIV. P. 166a(i); Timpte Indus., Inc. v. Gish, 286
S.W.3d 306, 310 (Tex. 2009). Because PSC’s motion challenged the existence of
evidence of “unlawful” interference, we conclude that PSC’s motion did not specifically
challenge the essential element of intentional interference. See Timpte Indus., 286
S.W.3d at 310; Johnson v. Felts, 140 S.W.3d 702, 706 (Tex. App.—Houston [14th Dist.]
2004, pet. denied) (observing that when reviewing a no-evidence motion, “[a]n appellate
court cannot read between the lines, infer or glean from the pleadings or proof any
grounds for summary judgment other than those grounds expressly set forth before the
trial court in the motion”).
PSC’s motion also challenged the evidence to support the essential element of
damages, but PSC does not address this element in its brief on appeal. We conclude
that appellant carried his burden on that element by showing the amount of money he
would have received under the Contract if his employment had not been terminated. See
Am. Nat. Petroleum Co., 798 S.W.2d at 278; Palla, 424 S.W.3d at 726.
b. Traditional Motion
Having concluded that appellant successfully produced more than a scintilla of
evidence on all the elements challenged in PSC’s no-evidence motion, we now address
PSC’s traditional motion. See TEX. R. CIV. P. 166a(c). PSC moved for traditional
summary judgment on the grounds that it conclusively established: (1) it did not
intentionally interfere with appellant’s contract; (2) the affirmative defense of justification;
36
and (3) the affirmative defense of privilege based on truthful information.26 As a defendant
moving for summary judgment, PSC had the burden to conclusively disprove at least one
of the essential elements of the appellant’s cause of action. Little, 148 S.W.3d at 381.
PSC also had the initial burden to conclusively establish each element of its affirmative
defenses. See Chau, 254 S.W.3d at 455; Lam, 335 S.W.3d at 789. If PSC meets that
burden, the burden shifts to the respondent to present evidence raising a genuine issue
of material fact on one or more elements of the affirmative defense so as to preclude
summary judgment. Id.
We begin with PSC’s assertion that traditional summary judgment was proper
because it conclusively negated the element of willful and intentional interference. PSC
asserted in its motion that every statement appellant alleged as a basis for the claim was
“made to advise REAP to take action expressly contemplated by the Contract.” According
to the motion, it is undisputed that appellant’s practice losses actually exceeded the
$500,000 contractual threshold at the time of the meeting where the Board voted to
terminate appellant.
26 In its traditional motion for summary judgment on appellant’s claim for business disparagement,
PSC asserted that the claim was barred by a qualified privilege. The privilege PSC raises is the privilege
of an employer “that attaches to communications made in the course of an investigation following a report
of employee wrongdoing.” Randall's Food Mkts., Inc. v. Johnson, 891 S.W.2d 640, 646 (Tex. 1995). The
privilege remains so long as the communications “pass only to persons having an interest or duty in the
matter to which the communications relate.” Id.; see Henriquez v. Cemex Mgmt., Inc., 177 S.W.3d 241,
253 (Tex. App.—Houston [1st Dist.] 2005, pet. denied) (collecting cases).
We did not reach the privilege argument because we concluded that appellant did not raise a fact
issue on the element of malice. However, PSC now argues that the same qualified privilege bars appellant’s
claims for tortious interference because those claims are based on the same statements. We reject this
argument because even if we had reached PSC’s traditional motion on appellant’s claim for business
disparagement, PSC’s privilege argument would have failed. The privilege in Randall’s Food Markets and
the other cases appellee cites attaches to communications by the employer to other persons, not
communications by other people to the employer. See 891 S.W.2d at 646; Henriquez, 177 S.W.3d at 253.
In this case, REAP, and not PSC or the Hospital, was appellant’s employer. See Gupta, 140 S.W.3d at
752.
37
We hold that PSC has not conclusively negated that it willfully and intentionally
interfered in the Contract. PSC asserted that the calculations it used to arrive at a figure
for appellant’s “practice losses” is uncontroverted. We agree, but only to the extent that
appellant does not contest that if the revenue appellant brought in during the third contract
year is subtracted from the expenses associated with his role at the Hospital, the resulting
figure exceeds $500,000. However, PSC’s motion for summary judgment did not attempt
to establish that the meaning of the term “practice losses,” as it is used in the Contract, is
unambiguous. Moreover, Luke provided the Board with loss figures from the years 2008
and 2009. Appellant argues, and PSC does not contest, that appellant could only be
terminated for losses sustained during the third contract year, which was not complete at
the time the Board voted to terminate appellant.27 In sum, because PSC has not
established that it induced REAP to do what it had the right to do under the Contract, we
conclude that PSC has not conclusively disproved the element of willful and intentional
interference. See Little, 148 S.W.3d at 381.
We next turn to the affirmative defense of justification. See Chau, 254 S.W.3d at
455 (holding that a defendant moving for summary judgment on an affirmative defense
has the burden to “conclusively establish” each element of the defense). As we explained
above, a defendant proves the affirmative defense of justification by showing that the
interference “was done in a bona fide exercise of [the interferer's] rights or that the
interferer has an equal or superior right in the subject matter to that of the other party.”
27 However, we agree that Bosshart’s email to the Board reminding them of the agenda for the
meeting does not constitute actionable interference. Bosshart’s email simply reminded them of the subject
of the meeting, Jackson’s request to terminate appellant, and Jackson’s stated reasons for it. See SJW
Prop., 328 S.W.3d at 152 (observing that the element of intentional interference requires that the defendant
“knowingly induce[s]” a contract party to break its contract).
38
Tex. Beef Cattle Co., 921 S.W.2d at 215. A defendant generally establishes justification
as a matter of law “when the acts the plaintiff complains of as tortious interference are
merely the defendant's exercise of its own contractual rights.” Prudential Ins. Co., 29
S.W.3d at 81; ACS Invs., 943 S.W.2d at 431. PSC asserted that it was justified as a
matter of law because it had “the legal right to provide input and advice to the REAP
Board regarding the employment of physicians,” and because it only gave truthful
information to the Board.
Regarding the first ground, we agree that the evidence is undisputed that PSC
provided advice regarding the financial performance of physicians in Community Health
Systems’ hospitals. The evidence showed that Luke’s role at PSC was to analyze the
financial performance of physicians at hospitals owned by Community Health Systems
and to make recommendations regarding their employment status, and this included
making recommendations to the REAP Board. However PSC does not direct our
attention to a contract or other basis of a legal right to interference except for stating
generally that PSC had a business relationship with REAP.28 See Prudential Ins. Co., 29
S.W.3d at 81. We accordingly may not uphold summary judgment on this basis. See id.;
ACS Invs., 943 S.W.2d at 431.
Regarding the second ground, PSC asserts that it conclusively established the
defense of privilege based on truthful information. Neither this Court, the transferor court,
28 PSC’s argument regarding its business relationship with REAP is more akin to the qualified
privilege against defamation for statements “made in good faith on any subject matter in which the author
has an interest, or with reference to which he has a duty to perform to another person having a
corresponding interest or duty.” TRT Dev. Co.-KC v. Meyers, 15 S.W.3d 281, 286 (Tex. App.—Corpus
Christi 2000, no pet.). PSC asserts this argument on appeal, but it is not included in its motion for summary
judgment. Even if we assume that a privilege against a claim for defamation is applicable in this context,
we may not uphold summary judgment on a ground not presented in the motion. See McConnell, 858
S.W.2d at 341; Mercier, 214 S.W.3d at 774.
39
nor the Supreme Court of Texas have ever recognized that a person is privileged to
intentionally interfere with an existing contract by proffering truthful information to a
contract party.29 PSC provides us no reason to recognize this defense to tortious
interference with an existing contract, and we decline to do so here.
3. Summary
In sum, we conclude that the trial court erred in granting no-evidence summary
judgment in favor of Jackson because appellant successfully raised an issue of material
fact on all of the challenged elements of his claim. See Hamilton, 249 S.W.3d at 426;
Tamez, 206 S.W.3d at 582. The trial court erred in granting traditional summary judgment
because the motion did not address appellant’s new cause of action for tortious
interference. See Nall, 404 S.W.3d at 555; Lehmann, 39 S.W.3d at 200. The trial court
erred in granting the no-evidence and traditional summary judgments in favor of PSC
because PSC did not establish its entitlement to judgment as a matter of law. See
Hamilton, 249 S.W.3d at 426; Little, 148 S.W.3d at 381.
VI. CONCLUSION
We overrule appellant’s second issue and affirm the no-evidence summary
judgment for Jackson, the Hospital, and PSC on appellant’s claims for business
disparagement. We sustain appellant’s first issue and reverse summary judgment for
REAP on appellant’s claim for breach of contract. We sustain appellant’s third issue and
reverse the traditional and no-evidence summary judgments rendered in favor of Jackson,
29 Only the Fourteenth Court of Appeals has recognized this defense to a claim for tortious
interference with an existing contract. See Robles v. Consol. Graphics, Inc., 965 S.W.2d 552, 561 (Tex.
App.—Houston [14th Dist.] 1997, pet. denied) (op. on reh’g) (citing RESTATEMENT (SECOND) OF TORTS § 772
(1979)). The court mentioned this defense again in Financial Review Services, Inc. v. Prudential Insurance
Company of America, but the Supreme Court of Texas affirmed without mentioning it. 50 S.W .3d 495, 505
(Tex. App.—Houston [14th Dist.] 1998), aff'd, 29 S.W.3d 74 (Tex. 2000).
40
the Hospital, and PSC on appellant’s claims for tortious interference with an existing
contract. We remand this case to the trial court for further proceedings consistent with
this opinion.
NORA L. LONGORIA
Justice
Delivered and filed the
6th day of November, 2014.
41