Talley, D.O. v. Christiana Care Health System et al

Filing 63

MEMORANDUM OPINION re D.I. 22 Motion to Dismss. Signed by Judge Christopher J. Burke on 10/17/2018. (dlb)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
LYNNE. TALLEY, D.O.,
Plaintiff,
V.

)
)
)
)
)

Civil Action No. 17-926-CJB

)
CHRISTIANA CARE HEALTH SYSTEM, )
)
MATTHEW K. HOFFMAN, MD, and
)
KENNETH L. SILVERSTEIN, MD,
)
Defendants.
)

Michele D. Allen and Catilyn E. Quinn, LAW OFFICES OF MICHELE D. ALLEN, LLC,
Hockessin, DE, Attorneys for Plaintiff.
Joanna J. Cline and James H. S. Levine, PEPPER HAMILTON LLP, Wilmington, DE; Barbara
T. Sicalides, Barak A. Bassman, and Megan Morley, PEPPER HAMILTON LLP, Philadelphia,
PA, Attorneys for Defendants.

MEMORANDUM OPINION

October 17, 2018
Wilmington, Delaware

B~i~ateJudge
Plaintiff Lynn Talley ("Plaintiff') filed this action alleging violations of the Sherman Act
(Count I), breach of contract (Count II), lack of procedural due process (Counts III and VIII),
defamation (Count IV), intentional infliction of emotional distress (Count V), interference with
prospective economic advantage (Count VI), tortious interference with contractual relations
(Count VII), and breach of the covenant of good faith and fair dealing (Count IX). (D.I. 17)
Presently before the Court is Defendants Christiana Care Health System ("Christiana Care"),
Matthew K. Hoffman, M.D. ("Dr. Hoffman"), and Kenneth L. Silverstein, M.D. 's ("Dr.
Silverstein") (collectively, "Defendants") motion to dismiss Counts I-VIII of the operative First
Amended Complaint ("FAC"), filed pursuant to Federal Rule of Civil Procedure 12(b)(6) (the
"Motion"). (D.I. 22) In a separate Memorandum Opinion issued on October 11, 2018 (the
"October 11 Opinion"), (D.I. 61; D.I. 62), the Court addressed the Motion as to Count I's
Sherman Act claim, and found that Count I should be dismissed with prejudice. This opinion
addresses the portion of Defendants' Motion that seeks dismissal of claims other than the
Sherman Act claim, and GRANTS-IN-PART and DENIES-IN-PART Defendants' Motion in
that regard.
I.

BACKGROUND AND STANDARD OF REVIEW

The Court incorporates by reference the factual and procedural background and the legal
standard ofreview for Rule 12(b)(6) motions, which were set out in the October 11 Opinion.

(D.,I. 61 at 2-8)
II.

DISCUSSION

In dispute here is Defendants' request to dismiss the asserted state law claims contained
in Counts II, IV, V, VI, and VIL 1 The Court will address them in tum.

Plaintiff brought a claim for violation of her due process rights in Counts III and
VIII of the FAC, (D.I. 17 at 19-21, 26), and Defendants' Motion also sought dismissal of those
two counts. However, Plaintiffs counsel advised at oral argument that Plaintiff was not moving
2

A.

Count II

Plaintiff brings a claim for breach of contract in Count II against only Defendant
Christiana Care. (D .I. 17 at 18-19) This claim is based on Christiana Care's failure "to follow
the process [for terminating Plaintiffs privileges at Christiana Care] outlined in the Credentials
Manual[ and the Christiana Care Bylaws.]" (D.I. 31 at 14; see D.l. 17 at ,i,i 139-43) 2 In the
FAC, Plaintiff alleges that: (1) "Christiana Care's Bylaws ... provide[] the procedure for
corrective action and appeal rights regarding issues related to physician competence and
behavior"; (2) the "Christiana Care Credentials Manual ... provides additional procedures for
corrective action and appeal rights[;]" and (3) "Christiana Care breached its contractual
obligations to Plaintiff by failing to adhere to the processes set out in its own Bylaws and
Credentials Manual before restricting and then terminating Plaintiffs clinical privileges." (D.I.
17 at ,i,i 140-43)
Defendants respond by arguing that "the Credentials Manual precludes physicians,
including Plaintiff, from suing Christiana Care or members of its medical staff for any matters
relating to a physician's credentialing[.]" (D.I. 23 at 13) In other words, Defendants argue that
"Plaintiff has waived her ability to sue [for breach of contract]" and that this is made sufficiently
clear in the Credentials Manual itself. (Jd.) 3 They point for support to Article 2.C.2(1) of the
Credential Manual, titled "Immunity" (the "Immunity subsection"), which provides:
To the fullest extent permitted by law, the individual releases from
any and all liability, extends immunity to, and agrees not to sue
forward on those due process-related claims. (Tr. at 82) As such, the Court will dismiss Counts
III and VIII.
2

Plaintiff alleges that "[t]he Bylaws and Credentials Manual creates a contract
between [her] and Defendant Christiana Care." (D.I. 17 at ,i 18)
3

Defendants correctly note that the Court can consider the Credentials Manual
without converting the instant Motion into a motion for summary judgment because the
Credentials Manual was "integral to or explicitly relied upon in the" F AC. See In re Burlington
Coat Factory Secs. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997) (internal quotation marks, citation,
and emphasis omitted). Defendants attached a copy of the Credentials Manual to their opening
brief. (D.I. 23, ex. B)
3

Christiana Care, any member of the Medical-Dental Staff, their
authorized representatives, and third parties who provide
information for any matter relating to appointment, reappointment,
clinical privileges, or the individual's qualifications for the same.
This immunity covers any actions, recommendations, reports,
statements, communications, and/or disclosures involving the
individual that are made, taken, or received by Christiana Care, its
authorized agents, or third parties in the course of credentialing
and peer review activities.
(D.I. 23, ex.Bat 14-15 (emphasis omitted)) Defendants are interpreting the first sentence of the
above provision to extend immunity from suit to Christiana Care without any further
qualification, and the second sentence to further explain that this immunity grant relates to "any
actions ... involving [Plaintiff] that are made, taken or received by Christiana Care ... in the
course of credentialing and peer review activities." (Tr. at 61-64) Since this suit relates to the
termination of Plaintiffs privileges, which is a part of the credentialing process, Defendants
assert that the above subsection of the Credentials Manual provides Christiana Care with
immunity from suit as to Count II. (D.I. 32 at 6-7)
Plaintiff counters that Defendants overstate the intent of the Immunity subsection. She
asserts that the subsection only applies to "information that may have been discussed or
disclosed during any alleged purported 'peer review' process." (D.I. 31 at 14) And Plaintiff
argues that her claims, instead, are centered on the failure to "follow the procedures laid out in
the Credentials Manual for the revocation of her privileges." (Id.) In other words, Plaintiff reads
the above contractual language as only extending immunity to people or entities (including
Christiana Care) "who provide information for any matter relating to appointment." (Tr. at 76
(emphasis added); see also D.l. 31 at 13)4 Plaintiff also notes that this reading is supported by

4

Defendants' response is that the contractual language "who provide information
for any matter relating to appointment, reappointment, clinical privileges, or the individual's
qualifications for the same" is meant to modify only the term "third parties" in the first sentence
of the Immunity subsection; Defendants claim that this language is not meant to also relate to the
actions of all of the other actors (including Christiana Care) referenced earlier in that sentence.
(Tr. at 62)
4

the title of the portion of the Credentials Manual in which the Immunity subsection is found:
"Grant oflmmunity and Authorization to Obtain/Release Information[.]" (D.I. 31 at 13)
Because Plaintiffs breach of contract claim is about the failure to implement a peer review
process prior to her termination, Plaintiff is asserting that her claims have nothing to do with the
provision of information by one entity/person to another as part of such a process. 5

Thus, the dispute here is clearly over the scope of the above-referenced contractual
language. (Tr. at 61-63, 76) Defendants asserted that Delaware law applies to the issue, (see
D.I. 23 at 14; D.I. 32 at 7), and Plaintiff did not argue to the contrary. Therefore, the Court will
rely on Delaware state law governing the interpretation of contracts (and indeed will assume, as
the parties do, that Delaware's law applies to all of the claims at issue in this opinion).
The interpretation of a contract under Delaware law "is a question of law; thus, where the
terms of a contract are unambiguous, the meaning thereof is suitable for determination on a
motion to dismiss." Huff Energy Fund, L.P. v. Gershen, C.A. No. 11116-VCS, 2016 WL
5462958, at *6 (Del. Ch. Sept. 29, 2016); see also Monier, Inc. v. Baral Lifetile, Inc., C.A. No.
3117-VCN, 2008 WL 2168334, at *5 (Del. Ch. May 13, 2008). However, "[w]here there are
two (or more) reasonable interpretations of a contract, ... it is ambiguous, and the Court may
not, on a Rule 12(b)(6) motion to dismiss, choose between two differing reasonable

5

The Court also notes that further down in Article 2.C.2 (the portion of the
Credentials Manual containing the Immunity subsection), it states "that the hearing and appeal
procedures set forth in this Credentials Manual will be the sole and exclusive remedy with
respect to any professional review action taken by Christiana Care." (D.I. 23, ex.Bat 15) Those
hearing and appeal procedures are set forth in Article 7, which contains detailed procedures that
start with allowing the individual (here, Plaintiff) to request a hearing when the Medical
Executive Committee makes a recommendation to, inter alia, deny or revoke clinical privileges.
(Id. at 51) As discussed at oral argument, it seems possible to interpret the contract in a way that
would allow: (1) that if the sole way to dispute the termination of privileges is via the
procedures set out in Article 7, but Christiana Care entirely fails to follow those procedures, (see
D .I. 17 at ~ 141 (asserting that the breach of contract claim is "based on ... the failure of
Defendants to follow the process outlined in the Credentials Manual")); (2) then Plaintiff should
be allowed to sue for breach of contract, (Tr. at 66-68, 78-80). This further adds to the
ambiguous nature of the Immunity subsection.
5

interpretations of ambiguous provisions." Monier, Inc., 2008 WL 2168334, at *5 (internal
quotation marks and citation omitted). When "determining whether disputed terms ar:e subject to
more than one reasonable interpretation, 'Delaware courts are obligated to confine themselves to
the language of the document and [may] not[] look to extrinsic evidence to find ambiguity."'
Huff Energy Fund, L.P., 2016 WL 5462958, at *6 (first alteration in original) (citation omitted).
Both Plaintiffs and Defendants' interpretations are plausible and reasonable. The text of
the Immunity subsection is thus ambiguous on this point, and so it would be inappropriate to
resolve this dispute at the pleading stage. Defendants' Motion is denied as to Count II.

B.

Count IV

Plaintiff brings a claim for defamation (and more specifically, slander) against only
Christiana Care in Count IV. In order to establish a claim for defamation under Delaware law, a
plaintiff must plead: "(l) the defamatory character of the communication; (2) publication; (3)
that the communication refers to the plaintiff; (4) the third party's understanding of the
communication's defamatory character; and (5) injury." Essounga v. Del. State Univ., C.A. No.
K16C-01-027 WLW, 2016 WL 1613206, at *3 (Del. Super. Ct. Apr.18, 2016) (internal
quotation marks and citation omitted). Defendants argue that Plaintiff has failed to sufficiently
plead the fourth element. (D.I. 23 at 15) The Court disagrees.
In the FAC, Plaintiff does describe at least one instance where a third party is plausibly
alleged to have understood the defamatory nature of a communication made by Christiana Care.
This comes when Plaintiff pleads that a patient's ("Patient D") spouse was informed that Plaintiff
had been removed from the Christiana Care staff, and that the spouse understood that Plaintiff
was thus "not permitted" to practice at the hospital. (D.I. 17 at ,r,r 62-63, 157-58) Plaintiff
alleges that after hearing that information, the spouse went to Plaintiffs office "and became
belligerent in her office waiting room." (Id at ,r,r 63, 158) Plaintiff further pleads that the
spouse "began yelling and telling all of the other patients in the waiting room that [Plaintiff] had
been removed from staff at Christiana Care." (Id at ,r,r 64, 15 8)
6

Defendants' position as to why these allegations are insufficient to meet the fourth
element of a defamation claim is that, although Plaintiff alleged that the spouse "bee[a]me very
upset,[] it is not pleaded why he was upset." (D.I. 23 at 16 (emphasis added); see also Tr. at 6970) Yet it is clear from the context of Plaintiffs allegations that the patient's spouse was
extremely upset because he was informed that Plaintiff was no longer on Christiana Care's staff.
And because the spouse is alleged to have understood that Plaintiff was "not permitted" to
practice at Christiana Care after being "removed from staff," it is a fair inference that the spouse
understood that this "remov[al]" was the result of Christiana Care's negative evaluation of some
aspect of Plaintiffs performance. See Spence v. Funk, 396 A.2d 967, 969 (Del. 1978) (noting
that a defamatory communication is one that tends to lower a person in the estimation of the
community or to deter third persons from associating or dealing with the person). Thus, it is at
least plausible that the spouse of Patient D understood the communication to be defamatory.
Plaintiff has therefore adequately pleaded a claim for defamation.

D.

CountV

In Count V, Plaintiff brings a claim against all Defendants for intentional infliction of
emotional distress. Under Delaware law, "[o]ne who by extreme and outrageous conduct
intentionally or recklessly causes severe emotional distress to another is subject to liability for
such emotional distress, and if bodily harm to the other results from it, for such bodily harm."
Goode v. Bayhealth Med Ctr., Inc., 931 A.2d 437, 2007 WL 2050761, at *2 (Del. 2007)
(internal quotation marks and citation omitted). Plaintiff must establish that "the conduct has
been so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of
decency, and to be regarded as atrocious, and utterly intolerable in a civilized community" such
that "the recitation of the facts to an average member of the community would arouse his
resentment against the actor, and lead him to exclaim, 'Outrageous!"' Mattern v. Hudson, 532
A.2d 85, 86 (Del. Super. Ct. 1987) (internal quotation marks and citation omitted). "[M]ere

7

insults, indignities, threats, annoyances, petty oppression_s, or other trivialities" are not enough to
rise to this level. Id. (citation omitted).
In the FAC, there are three substantive paragraphs in the body of Count V. The first two
reiterate the allegations made with regard to the claim for defamation. That is, Plaintiff there
alleges that Defendants discredited her reputation in front of her patients by making false
statements to members of the public concerning Plaintiff. (D .I. 17 at ,r,r 162-63) Yet "an
independent action for intentional infliction of emotional distress does not lie where [] the
gravamen of the complaint sounds in defamation." Barker v. Huang, 610 A.2d 1341, 1351 (Del.
1992).
The only other substantive allegation in Count V comes in the third of the Count' s three
substantive paragraphs. There, Plaintiff alleges that Defendants terminated Plaintiff "with
insufficient opportunity for Plaintiff to prepare her patients or staff for such a significant shift in
her practice" and thus "further subjected Plaintiff to the severe humiliation, embarrassment[,]
and degradation oflosing much of her patient base." (D.I 17 at ,r 164) To some extent, this
sounds a lot like Plaintiff re-casting her breach of contract claim as a claim for intentional
infliction of emotional distress. And "[a]llegations of a breach of contract rarely constitute
outrageous conduct." Khushaim v. Tullow Inc., C.A. No. Nl5C-l 1-212-PRW, 2016 WL
3594752, at *9 (Del. Super. Ct. June 27, 2016). Moreover, to the extent that there are facts and
circumstances surrounding Plaintiffs "los [s] [of] much of her patient base" and the "insufficient
opportunity" Plaintiff was given to prepare for that loss that could possibly equate to conduct
that goes "beyond all possible bounds of decency" and that was "atrocious, and utterly
intolerable in a civilized community[,]" Plaintiff has not made it clear in Count V what those
facts and circumstances are said to be. See e.g., Shiyanbola v. Amazon, LLC, No. NI 7C-08-302
CEB, 2018 WL 1216098, at *1-2 (Del. Super. Ct. Mar. 8, 2018) (granting a motion to dismiss a
claim of intentional infliction of emotional distress where the factual allegations in the
complaint, which detailed how an employee was terminated after being forced to take a drug test,
8

"simply do not come close to rising to the level of 'extreme and outrageous conduct"'); see also
O'Leary v. Telecom Resources Serv., LLC, Civil Action No. IOC-03-108-JOH, 2011 WL
379300, at *6 (Del. Super. Ct. Jan. 14, 2011).
Therefore, Plaintiff has failed to adequately plead her infliction of emotional distress
claim against Defendants.

C.

Counts VI and VII

Defendants argue that Count VI ("Interference with Prospective Economic Advantage")
and Count VII ("Tortious Interference with Contractual Relations") are insufficiently pleaded
against all Defendants. (D.I. 23 at 16) Defendants explain that both claims require a predicate
act of"intentional interference[,]" (id; D.I. 32 at 8-9), and argue that the sole form of intentional
interference set out in the FAC (i.e., the act said to give rise to these claims) is the claim for
defamation, (D.L 17 at ,r,r 172, 179). 6 And because Defendants argued that the defamation claim
should fail, they assert that if they were right on that score, then this means that Counts VI and
VII should fail as well. (D.I. 23 at 16)

6

Defendants are correct that an intentional interference is an element of the claims
of interference with prospective economic advantage and tortious interference with contractual
relations. A claim for interference with prospective economic advantage requires the plaintiff to
establish "(a) the reasonable probability of a business opportunity, (b) the intentional interference
by defendant with that opportunity, (c) proximate causation, and (d) damages[.]"
DeBonaventura v. Nationwide Mut. Ins. Co., 428 A.2d 1151, 1153 (Del. 1981); see also
Organovo Holdings, Inc. v. Dimitrov, 162 A.3d 102, 122 (Del. Ch. 2017). The elements ofa
claim for tortious interference with a business relationship are "the existence of a valid business
relation ... or expectancy; knowledge of the relationship or expectancy on the part of the
interferer; an intentional interference inducing or causing a breach or termination of the
relationship or expectancy; and [] damage to the party whose relationship or expectancy has been
disrupted." Bowl-Mor Co. v. Brunswick Corp., 297 A.2d 61, 65 (Del. Ch. 1972) (internal
quotation marks and citations omitted); cf Bhole, Inc. v. Shore Invs., Inc., 67 A.3d 444, 453
(Del. 2013).

9

As the Court explained above, Plaintiff has in fact alleged a sufficient defamation claim
against Defendant Christiana Care. As a result, the Court can conclude that Defendants' above
argument fails as to Christiana Care without engaging in any further analysis.
However, Plaintiffs defamation claim was not brought against Dr. Hoffman or Dr.
Silverstein. Thus, Plaintiff must have intended for something other than the defamatory acts set
out in Counts VI and VII to be deemed as the acts of intentional interference taken by both of
these Defendants. (D .I. 17 at 21) And, indeed, Plaintiff argues that the two tortious interference
claims are not solely predicated on the defamation claim; she asserts that she alleged sufficient
additional facts to set out plausible tortious interference claims against Dr. Hoffman and Dr.
Silverstein. (D .I. 31 at 19 ("While the defamatory statement of Defendant's agent is one basis
for Plaintiffs tortious interference claims, it is far from the only basis."))
In Count VI ("Interference with Prospective Economic Advantage"), Plaintiff alleges that
"she was required on a monthly basis to send over in advance her expected obstetric patients for
delivery and surgery along with their charts." (D.I. 17 at ,r 170) As a result, she pleads that
"Defendant Christiana Care was well aware of the prospective opportunities, economic
advantages[,] and contractual relationships Plaintiff anticipated with her patients[.]" (Id.)
Notably absent is any specific allegation that Drs. Hoffman or Silverstein were sent the monthly
disclosures and/or that they were made aware of Plaintiffs prospective opportunities. Therefore,
Plaintiff has failed to plausibly allege an interference with prospective economic advantage claim
against the individual Defendants.
Count VII ("Tortious Interference with Contractual Relations") fails for largely the same
reasons as Count VI. That is, Plaintiff there alleges that "Defendant Christiana Care was aware
of' the "large volume of patients scheduled for surgery within the next several months
proceeding Plaintiffs termination" and of "Plaintiffs contractual obligation to perform [those]
surgeries." (Id. at ,i,r 180-81) But there are no specific allegations that either Drs. Hoffman or
Silverstein knew of those surgeries. The Count also makes allegations generally about what
10

"Defendant" or "Defendants" were "aware" of as it relates to Plaintiffs contracts with patients,
(id. at,r,r 178, 184), or as to the provisions of Plaintiffs lease, (id. at ,r,r 187, 190-91). But these

allegations also say nothing particularly specific about Dr. Hoffman or Dr. Silverstein. The facts
pleaded there are far too general to make it plausible that these two physicians had the requisite
knowledge and intent. Therefore, Plaintiffs claim for tortious interference with contractual
relations fails as to the individual Defendants.

III.

CONCLUSION
For the reasons set out above, the Court GRANTS Defendants' Motion to the extent it

seeks dismissal of Counts III and VIII as to all Defendants, Count V as to all Defendants, and
Counts VI and VII as to Defendants Dr. Hoffman and Dr. Silverstein. This denial is with
prejudice as to Counts III and VIII, and without prejudice to Plaintiffs ability to seek later
amendment with regard to Counts V, VI, and VII. The Court DENIES the Motion as to Count II
as to Defendant Christiana Care, and as to Counts IV, VI, and VII as to Defendant Christiana
Care. An appropriate Order follows.

11