Maryland Physician's Edge, LLC et al v. Behram
Filing
84
MEMORANDUM OPINION. Signed by Judge Deborah K. Chasanow on 9/20/2019. (sat, Chambers)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
MARYLAND PHYSICIAN’S EDGE, LLC,
et al.
:
v.
:
Civil Action No. DKC 17-2756
:
NANCY BEHRAM, M.D.
:
MEMORANDUM OPINION
Presently pending in this employment dispute case are cross
motions for summary judgment and motions to seal.
The issues have
been briefed, and the court now rules, no hearing being deemed
necessary.
Local
Rule
105.6.
For
the
following
reasons,
Plaintiffs/Counter-Defendants’ motion for summary judgment will
granted
and
Defendant/Counter-Plaintiff’s
motion
judgment will be granted in part and denied in part.
for
summary
The motions
to seal will be granted as to all but one exhibit.
I.
Background1
Nancy Behram, M.D., Defendant/Counter-Plaintiff, is “a board-
certified physician specializing in obstetrics and gynecology.”
(ECF No. 72-4, at 2). She co-owned an obstetrics and gynecological
practice,
OB-GYN
Associates,
P.A.
(“OBA”),
with
two
other
physicians, Bradford Kleinman, M.D. and Carolyn Morales, M.D. (ECF
1
Unless otherwise noted, the facts outlined here are
undisputed. Additional facts are discussed in the analysis section
below.
No. 2-1, at 6).
The three owners sold OBA to Maryland Physician’s
Edge, LLC and Advantia Health, LLC (collectively “MPE”), in May,
2014. (Id.). Dr. Behram entered into three contractual agreements
with MPE as part of the sale: (1) an asset purchase agreement
entered jointly with Dr. Behram’s OBA co-owners to dispose of OBA’s
non-medical assets (ECF No. 2-1); (2) a purchase agreement entered
jointly with Dr. Behram’s co-owners to dispose of OBA’s medical
assets (ECF No. 2-2); and (3) a senior physician employment
agreement (“SPEA”) entered independently and providing terms for
Dr. Behram’s employment with MPE following the sale (ECF No. 634).
Per the SPEA, Dr. Behram’s employment with MPE “commence[d]
as of the [e]ffective [d]ate” of the SPEA and would “continue for
a period . . . of five (5) years[.]”
(ECF No. 63-4, at 10).
The
SPEA’s preamble initially defines the “Effective Date” as May 29,
2014.
Id. at 2.
Later in the preamble, however, the SPEA states
that “this Agreement shall be effective as of the closing date of
the
Transaction
(the
“Effective
Date”),
which
date
shall
confirmed by a letter from the Employer to the Physician[.]
The closing date was September 2, 2014.
be
Id.
(ECF No. 64-4, at 316:7-
11).
Nearly three years later, in the spring of 2017, MPE attempted
to renegotiate their employment agreement with Dr. Behram.
Dr.
Behram felt “pressured and bullied into signing a new contract” at
2
this time.
(ECF No. 64-4 at 57:3-4).
Dr. Behram began to consider
her options for alternative employment.
Dr.
Behram’s
husband,
Steve
Id. at 57:9.
Behram,
M.D.,
also
owns
an
obstetrics and gynecology practice named Steve Behram, M.D. &
Associates, PC.
(ECF No. 72-12, at 13:12-13).
Dr. Steve Behram’s
practice goes by the business name “Congressional OB-GYN.”2
No. 72-12, at 14:11).
Congressional OB-GYN became affiliated with
Privia Medical Group (“PMG”) in January 2016.
46:1-20).
(ECF
(ECF No. 72-12, at
In June, 2017, Dr. Behram spoke to Dr. Steve Behram and
the chief financial officer of Privia Health3, David Mountcastle,
about the possibility of employment with Congressional.
72-13, at 2-3).
(ECF No.
As part of these discussions, Dr. Behram sent her
employment agreement as well as certain of her “productivity
reports,” to PMG.
(ECF No. 72-4, 72-11, 72-12).
In mid-July, Dr. Behram reset her Council for Affordable
Quality Healtchare (“CAQH”) password as part of the necessary recredentialing process that would come with a change of employment.
(ECF No. 63-1, at 2). Tracy Moran, an administrator who had worked
with Dr. Behram for years, had, up until that point, been the
primary manager of Dr. Behram’s CAQH account.
(ECF No. 63-20, at
2
Dr. Steve Behram also owns Congressional Ambulatory Surgery
Center, but the OB-GYN practice is “separate and apart” from the
ambulatory surgery center. (ECF No. 72-12, at 17:6).
3
The corporate relationship between PMG and Privia Health is
not spelled out in the material before the court.
3
24).
On discovering that the password had been reset, Ms. Moran
grew suspicious.
(ECF No. 63-20, at 27-28).
Following a series of confused communications which appeared
to link Dr. Behram to her husband’s practice at Congressional OBGYN, Ms. Moran confronted Dr. Behram. In the ensuing conversation,
Ms. Moran “said I assume you are trying to go with Steve and that
is what prompted all of this.”
(ECF No. 72-5, at 217:9-13).
Dr.
Behram responded to Ms. Moran by stating that she had “not done
anything with CAQH” and that she had “not signed anything with
Privia.”
Id.
Ms.
Moran
reported
this
information
executives Brent Westhoven, Sean Glass, and Peter Glass.
72-19, at 88:2-13).
Moran’s report.
to
MPE
(ECF No.
MPE launched an investigation following Ms.
The investigation revealed certain suspicious
statements Dr. Behram had made to patients about potentially
leaving MPE.
(ECF No. 72-11, 30:19-22, 31:1-9).
MPE terminated Dr. Behram on July 31, 2017 for “violation of
section 7(d)(vi)(A) and (F) of the [SPEA.]”
(ECF No. 22-2, at 2).
Section 7(d)(vi)(A) provided MPE the ability to terminate Dr.
Behram’s
employment
immediately
if
MPE
made
a
good
faith
determination that she “engaged in any act of personal dishonesty,
gross negligence, or willful misconduct that ha[d] a material
adverse
effect
on
[MPE],
its
business
operations,
condition, assets, prospects or reputation[.]”
12).
financial
(ECF No. 22-1, at
Similarly, section 7(d)(vi)(F) provided MPE the ability to
4
terminate
Dr.
Behram
immediately
if
MPE
made
a
good
faith
determination that she “knowingly disclosed any confidential or
other
similar
competition
information,
or
or
solicitation,
breached
including
restrictive covenants listed in the SPEA.
any
a
covenant
violation
against
of”
the
(ECF No. 22-1, at 12).
Before her termination, Dr. Behram downloaded a filtered and
cultivated list of certain MPE patients.
(ECF No. 22, at 6).
Dr.
Behram also sent the aforementioned “productivity reports” which
contained financial information about MPE, its services, and Dr.
Behram’s work for MPE, to Privia while still employed at MPE. (ECF
No. 64-4, at 74-75).
Subsequently, MPE filed a complaint against Dr. Behram on
September 15, 2017, alleging seven counts: (1) misappropriation of
trade secrets under 18 U.S.C. § 1836, et seq. (“DTSA”); (2)
misappropriation of trade secrets under the Maryland Commercial
Code, §§ 11-201, et seq. (“MUTSA”); (3) breach of employment
agreement
contract;
(4)
breach
of
non-medical
asset
purchase
agreement contract; (5) breach of medical asset purchase agreement
contract; (6) injunctive relief; and (7) breach of implied covenant
of good faith and fair dealing.
response,
(ECF No. 1, at 12-19).
Defendant/Counter-Plaintiff
counterclaim
on
October
19,
2017,
filed
alleging
In
an
answer
and
five
counts:
(1)
declaratory judgment; (2) breach of contract; (3) violation of the
Maryland Wage Payment Collection Law; (4) tortious interference
5
with business expectancy; and (5) injunctive relief and specific
performance.
II.
(ECF No. 22, at 25-36).
Motions to Seal
MPE and Dr. Behram filed motions to seal. A motion to seal
must comply with Local Rule 105.11, which provides:
Any motion seeking the sealing of pleadings,
motions, exhibits or other papers to be filed
in the Court record shall include (a) proposed
reasons
supported
by
specific
factual
representations to justify the sealing and (b)
an explanation why alternatives to sealing
would not provide sufficient protections. The
Court will not rule upon the motion until at
least 14 days after it is entered on the public
docket to permit the filing of objections by
interested parties. Materials that are the
subject of the motion shall remain temporarily
sealed pending a ruling by the Court. If the
motion is denied, the party making the filing
will be given an opportunity to withdraw the
materials.
This rule endeavors to protect the common law right to inspect and
copy judicial records and documents, Nixon v. Warner Commc'ns,
Inc., 435 U.S. 589, 597 (1978), while recognizing that competing
interests sometimes outweigh the public's right of access, In re
Knight Publ'g Co., 743 F.2d 231, 235 (4th Cir.1984).
Before sealing any documents, the court must provide the nonmoving party with notice of the request to seal and an opportunity
to object.
Id.
This notice requirement may be satisfied by either
notifying the persons present in the courtroom or by docketing the
motion “reasonably in advance of deciding the issue.”
6
Id. at 234.
Finally, the court should consider less drastic alternatives to
sealing, such as filing redacted versions of the documents.
If
the court decides that sealing is appropriate, it should also
provide reasons, supported by specific factual findings, for its
decision to seal and for rejecting alternatives. Id. at 235.
Both parties seek to seal certain exhibits in connection with
the
cross-motions
for
summary
judgment.
Both
motions
stand
unopposed after having been on the docket for several months, and
one of the two motions is in fact a consent motion.
All of the
documents the parties wish to seal have been produced under a
stipulated protective order under a “Confidential” designation.
In this case, that designation is mostly fitting.
The exhibits which the parties seek to file under seal are:
1) a draft employee agreement, 2) an actual employee agreement, 3)
a
set
of
PowerPoint
slides
containing
confidential
terms,
conditions, covenants and agreements among the parties, and 4) Dr.
Behram’s 2016 productivity reports, which, as discussed below,
contain sensitive information and may indeed constitute trade
secrets.
Given that this action revolves in large part around
MPE’s efforts to prevent disclosure of these materials, it is
appropriate to seal them here.
Aerospace
Workers
v.
See Int'l Ass'n of Machinists &
Werner–Masuda,
390
F.Supp.2d
479,
485
(D.Md.2005) (sealing materials that went to “heart of th[e] case”
concerning trade secrets); Padco Advisors, Inc. v. Omdahl, 179
7
F.Supp.2d 600, 614–15 (D.Md.2002) (sealing materials in action
“based on enforcing a non-compete clause in an employment contract
in order to protect these trade secrets”).
Redacting, or taking other less restrictive measures, would
defeat the usefulness of the bulk of the exhibits in a case such
as this, where the court must get a complete view of these
materials to understand whether MPE is correct that they never
should have been disclosed.
On the other hand, redaction appears to be more fitting as to
the PowerPoint slides comprising Exhibit 26.
exhibits
are
all,
in
some
form,
the
basis
While the other
of
trade
secret
litigation, the power point slides are not, and the justification
for their being sealed contains only boilerplate recitations.
Neither the motions to seal, nor the information available to the
court
suggest
protection.
that
redaction
would
not
provide
sufficient
The parties shall have 21 days from the date of this
order publicly to file redacted copies of the PowerPoint slides.
III. Motions for Summary Judgment
A.
Standard of Review
A motion for summary judgment will be granted only if “there
is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a); see
Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 250 (1986); Emmett v. Johnson,
8
532 F.3d 291, 297 (4th Cir. 2008).
To prevail on a motion for
summary judgment, the movant generally bears the burden of showing
that there is no genuine dispute as to any material fact.
Lobby, 477 U.S. at 248-50.
Liberty
A dispute about a material fact is
genuine “if the evidence is such that a reasonable jury could
return a verdict for the nonmoving party.”
Id. at 249.
In
undertaking this inquiry, a court must view the facts and the
reasonable inferences drawn therefrom “in the light most favorable
to the party opposing the motion,”
Matsushita Elec. Indus. Co. v.
Zenith Radio Corp., 475 U.S. 574, 587 (1986) (quoting United States
v. Diebold, Inc., 369 U.S. 654, 655 (1962)); see also EEOC v. Navy
Fed. Credit Union, 424 F.3d 397, 405 (4th Cir. 2005), but a “party
cannot create a genuine dispute of material fact through mere
speculation or compilation of inferences.”
Shin v. Shalala, 166
F.Supp.2d 373, 375 (D.Md. 2001) (citation omitted). If a party
“fails to make a showing sufficient to establish the existence of
an element essential to that party’s case ... which that party
will bear the burden of proof at trial[,]” there can be no “genuine
issue as to any material fact, since a complete failure of proof
concerning an essential element of the nonmoving party’s case
necessarily renders all other facts immaterial.”
477 U.S. at 323.
9
Celotex Corp.,
B.
Dr. Behram’s Motion for Partial Summary Judgment
Dr. Behram seeks summary judgment as to four of MPE’s claims.
She does not seek judgment as a matter of law on any of her own
claims, nor does she seek judgment on MPE’s three other claims.
For the following reasons, the court will grant Dr. Behram’s
summary judgment motion as to Counts VI and VII of MPE’s Complaint
as neither state cognizable, independent claims under Maryland
law.
As to Counts I and II – the trade secret claims – the court
will deny Dr. Behram’s motion.
1.
In
Trade Secret Claims (MPE Counts I and II)
their
complaint,
MPE
alleges
that
the
“confidential,
proprietary, and trade secret information” that forms the basis of
their Maryland Uniform Trade Secrets Act (“MUTSA”) claim “relates
to MPE’s patient list.”
(ECF No. 1, at 31).
Likewise, MPE’s
Defend Trade Secrets Act (“DTSA”) claim focuses exclusively on
patient lists.
Id. at 39.
Dr. Behram addresses her motion for
summary judgment not just to the patient lists, but to the SPEA
and certain “productivity reports” which Dr. Behram allegedly
furnished to Privia.
(ECF No. 69-1, at 30).
In their reply in
support of their motion for summary judgment, however, MPE makes
no mention of the SPEA forming any basis of their MUTSA or DTSA
claims, but does allege that the patient lists and productivity
reports are trade secrets.
(ECF No. 73, at 38).
items will be considered.
Under both DTSA and MUTSA, plaintiff
10
Only those two
must prove that the alleged trade secret meets the respective
statutory
definition.
These
definitions
are
similar,
but
distinct.
MUTSA defines as a trade secret as:
information, including a formula, pattern,
compilation,
program,
device,
method,
technique, or process, that:
(1) Derives independent economic value,
actual or potential, from not being generally
known to, and not being readily ascertainable
by proper means by, other persons who can
obtain economic value from its disclosure or
use; and
2) Is the subject of efforts that are
reasonable under the circumstances to maintain
its secrecy.
Md. Code Ann., Com. Law § 11-1201(e).
The DTSA, by contrast,
states:
[T]he term “trade secret” means all forms and
types of financial, business, scientific,
technical,
economic,
or
engineering
information,
including
patterns,
plans,
compilations,
program
devices,
formulas,
designs, prototypes, methods, techniques,
processes, procedures, programs, or codes,
whether tangible or intangible, and whether or
how
stored,
compiled,
or
memorialized
physically,
electronically,
graphically,
photographically, or in writing if-(A)
the
owner
thereof
has
taken
reasonable measures to keep such information
secret; and
(B) the information derives independent
economic value, actual or potential, from not
being generally known to, and not being
readily ascertainable through proper means by,
another person who can obtain economic value
from
the
disclosure
or
use
of
the
information[.]
11
18 U.S.C. § 1839(3).
Both DTSA and MUTSA require not only the existence of a trade
secret, but also “Misappropriation” of that trade secret.
Both
statutes define that term in substantially the same manner:
(1) Acquisition of a trade secret of another
by a person who knows or has reason to know
that the trade secret was acquired by improper
means; or
(2) Disclosure or use of a trade secret of
another without express or implied consent by
a person who:
(i) Used improper means to acquire knowledge
of the trade secret; or
(ii) At the time of disclosure or use, knew or
had reason to know that the person’s knowledge
of the trade secret was:
1. Derived from or through a person who had
utilized improper means to acquire it;
2. Acquired under circumstances giving rise to
a duty to maintain its secrecy or limit its
use; or
3. Derived from or through a person who owed
a duty to the person seeking relief to
maintain its secrecy or limit its use; or
(iii) Before a material change of the person’s
position, knew or had reason to know that it
was a trade secret and that knowledge of it
had been acquired by accident or mistake.
MD. CODE ANN., COM. LAW Com. Law § 11-1201(c). See also, 18
U.S.C.A. § 1839(5)(A), (B)(i), (B)(ii)(I)-(II).
Dr. Behram, in her reply in support of her motion for summary
judgment, argues that the productivity reports did not constitute
trade secrets (ECF No. 72-2, at 52), that the productivity reports
were not misappropriated, Id., and that the patient lists were
never “used or disclosed,” Id. at 43.
12
Dr. Behram concedes,
however, that “the patient list that Dr. Behram downloaded and
kept in July 2017 should, for purposes of this Cross-Motion, be
considered a ‘trade secret.’”
a.
Id. at 54.
The Patient Lists
Because Dr. Behram concedes that the patient lists constitute
trade secrets, the only issue is whether Dr. Behram misappropriated
the patient lists.
Importantly, disclosure to a third party is
not essential to misappropriation: “Even if an employee does not
disclose trade secrets to a third party, he can misappropriate
those trade secrets if he knows or has reason to know he acquired
them ‘by improper means.’”
Airfacts, Inc. v. de Amezaga, 909 F.3d
84, 98 (4th Cir. 2018); see also, LeJeune v. Coin Acceptors, Inc.,
381 Md.288 (2004).
Dr. Behram argues that without use or disclosure, there can
be no misappropriation.
(ECF No. 69-1, at 30).
This is an
incorrect statement of the law. MPE’s claim sounds under the first
listed definition of misappropriation: “Acquisition of a trade
secret of another by a person who knows or has reason to know that
the trade secret was acquired by improper means.”
MD. CODE ANN.,
COM. LAW Com. Law § 11-1201(c)(1). Maryland courts have made clear
that acquisition alone is enough to give rise to a MUTSA claim.
See Bond v. PolyCycle, Inc., 127 Md. App. 365, 379 (1999) (“In
order to qualify as misappropriation under MUTSA, one must either
acquire the trade secret by improper means or disclose the trade
13
secret without express or implied consent”) (quoting Diamond v. T.
Rowe Price Assocs., 852 F.Supp. 372, 412 (D.Md. 1994)).
That Dr. Behram “acquired” the patient list is conceded.
Dr.
Behram claims that she did not use “improper means” to acquire the
patient list.
Dr. Behram’s motion for summary judgment, however,
also concedes her improper motive for acquiring the patient list:
“Dr. Behram saved the Patient List as an Excel spreadsheet file
onto her personal laptop so that she would have this information
if and when it became clear that her covenant against solicitation
(as set forth in the SPEA) no longer applied.”
(ECF No. 69-1, at
12-13).
Dr. Behram’s non-solicitation agreement is not related to
MPE’s trade secret claim.
agreement
does
not
The expiration of a non-solicitation
constitute
the
expiration
obligation not to misappropriate trade secrets.
of
a
party’s
LeJeune makes
clear that transferring files to one’s personal computer for the
purposes of future personal use constitutes “improper means.”
LeJeune, 381 Md. at 315.
While Dr. Behram would be correct to say
she can freely solicit former MPE patients on the expiration of
her non-solicitation agreement, she cannot use something that she
admits constitutes a trade secret to aid her in doing so.
In sum, Dr. Behram 1) concedes that the patient list is a
trade secret, 2) concedes that she acquired that trade secret, and
3) concedes that she intended to put that trade secret to personal
14
use on the expiration of her non-solicitation agreement – a
nonevent for the purposes of resolving this issue.
Accordingly, the motion for summary judgment on this aspect
of MPE’s trade secret claims is denied.
b.
The Productivity Reports
As with the patient lists, only one prong of the DTSA/MUTSA
claim is contested: Dr. Behram concedes that she “disclosed” the
productivity reports, so the only issue is whether the productivity
reports constitute trade secrets.
In Maryland, “the six part test
of the Restatement of Torts has continued to be applied in defining
trade secrets” for the purposes of MUTSA.
NaturaLawn of America,
Inc. v. West Group, LLC, 484 F.Supp.2d 392, 399 (D.Md. 2007). Those
six parts are: 1) the extent to which the information is known
outside of the employer’s business; 2) the extent to which it is
known by employees and others involved in the employee’s business;
3) the extent of measures taken by the employer to guard the
secrecy of the information; 4) the value of the information to the
employer and the employer’s competitor; 5) the amount of effort or
money expended by the employer in developing the information; and
6) the ease or difficulty with which the information could be
properly acquired or duplicated by others.
Torts
§
757
statutorily
(1939).
requires
Under
that
the
the
DTSA,
employer
Restatement (First) of
trade
has
secret
“taken
status
reasonable
measures to keep such information secret,” 18 U.S.C. § 1839(3)(A),
15
a requirement which tracks prongs two and three of the Restatement
test.
In her motion for summary judgment and her reply in support
of that motion, Dr. Behram advances two arguments against the
productivity report constituting a trade secret: 1) MPE “did not
label the . . . productivity reports as ‘Confidential,’”; and 2)
MPE “neither instructed nor advised Dr. Behram that she was
prohibited from disclosing or sharing the contents of the . . .
productivity reports.”
(ECF No. 72-2, at 52).
arguments
to
go
strictly
the
premise
that
Both of these
MPE
never
took
“reasonable measures” to keep the productivity reports secret.
MPE attempts to refute that premise by pointing out that 1)
MPE only shares each physician’s productivity report with that
physician, and 2) MPE requires, through its employment agreements,
that physicians not share company information, “which includes
business and financial information[.]”
(ECF No. 73, at 42-43).
MPE also addresses the other prongs of the Restatement test,
arguing that a “productivity report provides extensive insight
into MPE’s business and financial information” as it contains
information such as the number of procedures performed, certain
information about the cost of those procedures, Dr. Behram’s
earnings from these procedures, as well as some essentially oblique
patient information – how many patients were first time vs.
16
returning, and how many were telemedicine patients.
Id. at 39-
40.
MPE relies on LeJeune for the proposition that “pricing
information can constitute trade secrets.” Id. at 40.
In LeJeune,
however, the trade secrets at issue contained “a vast amount of
information related to [the employer’s] manufacturing costs and
profit margins,” and dealt with an industry that was “highly
competitive
and
dominated
by
only
two
companies.
Therefore,
Coinco’s cost and profit information, if available to Mars, could
allow Mars to undercut all of Coinco’s prices.” LeJeune, 361 Md.,
at 309-10. It was the “unique, competitive nature of the currency
acceptor industry,” that the court found decisive in LeJeune.
Id.
Unlike in LeJeune, the productivity reports at issue here do
not contain “a vast amount of information.”
Each is only one page
long and contains a limited amount of information about pricing
and overhead.
Moreover, the OBGYN industry is markedly different
from the currency acceptor industry in LeJeune. Where the industry
at issue cannot be reduced to a zero-sum battle between only two
competitors, and where insurance compromises the usefulness of raw
pricing data, it is safe to say that LeJeune is inapposite on the
point of the value of the productivity reports to a competitor.
The burden, however, is on the moving party to establish that
there is no genuine dispute as to any material fact.
Dr. Behram
has not shown – as a matter of law – that MPE failed to take
17
reasonable measures to keep the report secret.
Dr. Behram argues
that “Plaintiffs did not label . . . the productivity reports as
‘Confidential’ in contrast to other documents in this case which
the Practice chose to so label,” (ECF No. 23, at 28), and that
“Plaintiffs neither instructed nor advised Dr. Behram that she was
prohibited from disclosing or sharing the contents of the . . .
productivity reports, with the notable exception of Section 3(e)
of the SPEA (which sets forth the terms and conditions governing
the Retention Bonus.)”
Id.
There are other notable exceptions, too.
Section 3(d) of the
SPEA states that:
[a]ll files and records of every type
pertaining to patients of the Employer for
whom the Physician shall render services
hereunder shall belong to the Employer, and
the Physician shall not, during or after the
Employment period, without the express written
consent of the Employer and the patient,
remove them from the Employer’s office, copy
them, allow them to be removed from the
Employer’s office, or allow them to be copied,
except as reasonably required[.]
(ECF No. 63-4, at 4-5)(emphasis added).
Section 7(d)(vi)(F) puts
Dr. Behram on notice that she could be terminated for cause if she
“knowingly
disclosed
information.”
any
Id. at 12.
confidential
or
other
similar
§ 8(C) of the SPEA states that:
The Physician covenant and agrees that during
the
Employment
Period
and
after
the
termination or expiration thereof, he will not
use,
reveal,
report,
copy,
publish
or
otherwise disclose to any person, firm,
18
corporation or other entity certain valuable
and confidential information of the Employer,
including but not limited to patient lists,
referral lists, employee lists, trade secrets,
technical information, plans, files, records.
. . fee schedules, contracts, personnel
information,
business
and
financial
information of the Employer or any secret or
confidential information of any kind used by
the Physician during her employment.
Id. at 12-13.
There is nothing in either DTSA or MUTSA case law which
suggests that marking something “confidential” is an irreducible
requirement of finding an employer has taken reasonable measures
to keep the alleged trade secrets secret.
Dr.
Behram
does
not
address
–
much
less
dispute
–
the
provisions pertaining to the confidentiality of records “of every
type”
and
of
Employer[.]”
“business
and
financial
information
of
the
Again, Dr. Behram’s lone argument is that MPE did
nothing to keep the productivity reports secret because they
neither
marked
the
productivity
reports
confidential
instructed Dr. Behram that she was not to disclose them.
69-1, at 28).
nor
(ECF No.
The above-referenced provisions of the SPEA plainly
dispute that contention.
Accordingly, Dr. Behram’s motion for summary judgment as to
this aspect of MPE’s trade secret claims is denied.
19
2.
Breach of the Covenant of Good Faith and Fair Dealing
(MPE Count VII)
Next, Dr. Behram asks for judgment as a matter of law on Count
VII of MPE’s complaint, breach of the covenant of good faith and
fair dealing.
this motion.
MPE does not, based on their opposition, oppose
As Dr. Behram correctly argues, Maryland recognizes
that every contract imposes a duty of good faith and fair dealing
in its performance.
Food Fair Stores, Inc. v. Blumberg, 234 Md.
521, 534 (1964). However, Maryland courts have not explicitly
recognized a separate cause of action for breach of this duty. Abt
Associates, Inc. v. JHPIEGO Corp., 104 F.Supp.2d 523, 534 (D.Md.
2000); see also Baker v. Sun Co., 985 F.Supp. 609, 610 (D.Md.1997)
(“Maryland does not recognize an independent cause of action for
breach of the implied contractual duty of good faith and fair
dealing.”)
Because MPE has failed to state a claim, this Count
will be dismissed.
3.
Injunctive Relief (MPE Count VI)
Finally, Dr. Behram moves for summary judgment on Count VI,
“Injunctive Relief.”
of action.
judgment.
Once again, this is not a standalone cause
Rather, it is a remedy which may be accorded after
MPE now concedes as much, arguing that “should MPE
prevail on the breach of contract claims contained in Counts III,
IV and V, injunctive relief should comprise part of the remedy.”
20
(ECF No. 73, at 46-47).
this court.
C.
Those Counts are not currently before
Count VI will be dismissed.
MPE’s Motion for Summary Judgment
MPE, through its motion for summary judgment, seeks judgment
on
Dr.
Behram’s
counter
complaint
in
its
entirety.
For
the
following reasons, MPE’s motion will be granted.
1.
Declaratory
Judgment
and
Maryland
Wage
Collection Law (Behram Counts I and III)
Payment
Dr. Behram seeks a declaration that her termination was
“without cause on July 31, 2017.”
She further asks that court
declare her entitled to both 90 days (the notice period required
for “without case” termination) of salary, and to her retention
bonus.
Alternatively, she seeks a declaration that, if the
termination was with cause, MPE “did not abide by the plain
language of Section 7(d)(vi)(A) or 7(d)(vi)(F) . . . after a good
faith determination by the employer and after notice has been
provided to the physician.”
The Declaratory Judgment Act, 28 U.S.C. § 2201, grants federal
district courts the discretionary power to entertain declaratory
judgment actions. See, Wilton v. Seven Falls Co., 515 U.S. 277
(1995). A federal court has discretion to entertain a declaratory
judgment action if the relief sought (i) “‘will serve a useful
purpose in clarifying and settling the legal relations in issue’”
and (ii) “‘will terminate and afford relief from the uncertainty,
21
insecurity,
and
controversy
Continental
Casualty
Co.
v.
giving
rise
Fuscardo,
to
35
the
F.3d
proceeding.’”
963,
965
(4th
Cir.1994) (quoting Nautilus Ins. Co. v. Winchester Homes, 15 F.3d
371, 375 (4th Cir.1994)).
Likewise, under Maryland's Uniform
Declaratory Judgment Act “[a]ny person interested under a . . .
written contract . . . are affected by a . . . contract . . . may
have determined any question of construction or validity under the
. . . contract and obtain a declaration of rights, status, or other
legal relations under it.”
M D.
CODE. ANN.,
CTS &
JUD.
PROC. § 3-406.
See also, Johnson v. Wheeler, 492 F. Supp. 2d 492, 513 (D. Md.
2007) (“a federal court, insofar as it otherwise has jurisdiction
over the parties, is equally authorized to entertain a declaratory
judgment action involving the construction of a [contract]”).
Regardless of which side prevails on the breach of contract
issues,
the
court
is
authorized
to
issue
an
appropriate
declaration: “[t]he fact that the side which requested declaratory
judgment did not prevail in court does not render a written
declaratory of the parties’ rights unnecessary.” 22 Am. Jur. 2d
Declaratory Judgments § 240. Harford Mutual v. Woodfin, 344 Md.
399, 414-415(1997) is instructive on this point:
[W]hen a declaratory judgment action is
brought, and the controversy is appropriate
for resolution by declaratory judgment, ‘the
trial
court
must
render
a
declaratory
judgment.’ Christ v. Department, 335 Md. 427,
435, 644 A.2d 34, 38 (1994). ‘[W]here a party
22
requests a declaratory judgment, it is error
for a trial court to dispose of the case simply
with oral rulings and a grant of ... judgment
in favor of the prevailing party.’ Ashton v.
Brown, 339 Md. 70, 87, 660 A.2d 447, 455
(1995), and cases there cited.
The fact that the side which requested the
declaratory judgment did not prevail in the
circuit court does not render a written
declaration
of
the
parties’
rights
unnecessary. As this Court stated many years
ago, ‘whether a declaratory judgment action is
decided for or against the plaintiff, there
should be a declaration in the judgment or
decree defining the rights of the parties
under the issues made.’ Case v. Comptroller,
219 Md. 282, 288, 149 A.2d 6, 9 (1959). See
also, e.g., Christ v. Department, supra, 335
Md. at 435-436, 644 A.2d at 38 (‘[t]he court's
rejection of the plaintiff’s position on the
merits furnishes no ground for’ failure to
file a declaratory judgment); Broadwater v.
State, 303 Md. 461, 467, 494 A.2d 934, 937
(1985) (‘the trial judge should have declared
the rights of the parties even if such
declaration might be contrary to the desires
of the plaintiff’); East v. Gilchrist, 293 Md.
453, 461 n. 3, 445 A.2d 343, 347 n. 3 (1982)
(‘where a plaintiff seeks a declaratory
judgment ..., and the court's conclusion ...
is exactly opposite from the plaintiff’s
contention, nevertheless the court must, under
the plaintiff’s prayer for relief, issue a
declaratory judgment’); Shapiro v. County
Comm., 219 Md. 298, 302-303, 149 A.2d 396, 399
(1959) (‘even though the plaintiff may be on
the losing side of the dispute, if he states
the existence of a controversy which should be
settled, he states a cause of suit for a
declaratory decree’).
See also, PRSC, LLC v. Admiral, Inc., No. CV DKC 2008-1379, 2009
WL 10685578, at *6 (D.Md. Mar. 10, 2009) (citing Maryland Ass'n of
23
Health Maint. Org. v. Health Serv. Cost Review Com'n, 356 Md. 581,
603-604 (Md. 1999)).
Pursuant to the SPEA, Dr. Behram could be terminated for cause
if MPE made a good faith determination that Dr. Behram engaged in
“act[s]
of
personal
dishonesty,
gross
misconduct.” (ECF No. 63-1, at 10).
negligence,
or
willful
MPE argues that the record is
undisputed that “MPE made a good-faith determination under the
SPEA that Dr. Behram had engaged in personal dishonesty.”
Id.
Under settled Maryland law, in the employment context, courts
are not to “act as super personnel officers, overseeing and secondguessing the company’s decision.”
Maryland,
Inc.,
77
Md.App.
613,
MacGill v. Blue Cross of
620
(Md.Ct.Spec.App.
1989).
Further, “courts should be reluctant to overturn an employer’s
decision to discharge an employee when the employer has complied
with its own procedures for resolving matters such as this.”
Elliott v. Bd. Of Trustees of Montgomery Cty. Cmty. Coll., 104
Md.App. 93, 108-09 (1995).
Perhaps most importantly, the question here is not whether
Dr. Behram engaged in “acts of personal dishonesty.”
Rather, the
question
good
before
the
court
is
whether
determination that Dr. Behram did so.
MPE
made
a
faith
See Towson Univ. v. Conte,
384 Md. 68, 87 (2004) (holding that the finder of fact is not “to
reexamine in all its factual detail the triggering cause of the
24
decision to dismiss – including the retrospective accuracy of the
employer’s comprehension of that event[.]”)
In determining whether MPE acted in good or bad faith, a few
points are essential to keep in mind. First, “mere negligence or
error does not constitute bad faith.”
Inc., 62 F.3d. 634, 641 (4th Cir. 1995).
Wheeler v. Dynamic Eng’g.
Dr. Behram makes much of
the MPE’s alleged negligence in carrying out its brief – and, as
Dr. Behram would have it, too brief – investigation which led to
their determination.
(ECF No. 72-2, at 29).
To mandate a length
of time that an employer must devote to an investigation of an
“act of personal dishonesty” would be to engage in exactly the
judicial second-guessing of employment decisions that Maryland
courts have repeatedly prohibited.
As Wheeler makes clear, even
if MPE was negligent in its determination, that by no means
signifies bad faith.
Second, while bad faith may be “evidenced by an intentional
advancement of a baseless contention . . . made for ulterior
purposes,” Childers v. MedStar Health, Inc., 289 F.Supp.2d 714,
718 (D.Md. 2003), a bare allegation of ulterior motive is not
enough to withstand a motion for summary judgment. See, e.g., Banks
v. Bethlehem Steel Corp., 870 F.2d 1438, 1445 (9th Cir. 1989).
Dr.
Behram makes just such a bare allegation, alluding to her belief
that she was unjustly – even baselessly - pushed out, and that
MPE’s real reason for terminating her had nothing to do with an
25
act of personal dishonesty and everything to do with her refusal
to renegotiate her employment agreement.
(ECF No. 22, at 21-23).
The record does not support this allegation.
In her own
deposition, Dr. Behram recalls Ms. Moran’s first confrontation
regarding the change in the CAQH password as follows: “I told her
that I have not done anything with CAQH.
She said I assume you
are trying to go with Steve and that is what prompted all of this.
And I said I have not signed anything with Privia.”
(ECF No. 64-
4, at 217).
Even if certain assumptions or interpretations of events in
the course of MPE’s investigation turned out to be wrong, it is
clear
from
this
conversation
that
MPE’s
and
its
employees’
contemporaneous understanding prior to Dr. Behram’s termination
was that Dr. Behram was contemplating leaving MPE for Congressional
OB-GYN, and that she was not being forthright about this potential
move.
What is more, Dr. Behram’s own deposition testimony points
to an “act of personal dishonesty” which MPE was right to be
skeptical of: Dr. Behram told Ms. Moran that she had “not done
anything with CAQH.”
Id.
In fact, Dr. Behram had modified her
CAQH password in the process of seeking out – or at least exploring
the possibility of – employment with another practice.
(ECF No.
72-2, at 20-21).
There is nothing in the record aside from Dr. Behram’s
baseless suspicions which suggests MPE operated with an ulterior
26
motive.
Rather, the record makes clear that they believed Dr.
Behram to be acting dishonestly with regard to her seeking a new
job at Privia.
MPE did not need the benefit of hindsight to
realize this; the evidence available to them was enough, at the
time, to form a good faith determination.
Even when taken in the light most favorable to Dr. Behram,
the undisputed facts show that 1) MPE terminated Dr. Behram for
acts
of
personal
dishonesty
and
2)
MPE
made
a
good
faith
determination that Dr. Behram had actually engaged in acts of
personal dishonesty.
Accordingly, the court will grant summary
judgment on Count I of Dr. Behram’s counter complaint by declaring
that MBE terminated her with cause.
Further, there is no genuine dispute of material fact as to
whether MPE somehow breached the SPEA by failing explicitly to
tell Dr. Behram that it had made a good faith determination or by
failing to provide her “notice” of her termination.
The SPEA
states simply that MPE may terminate Dr. Behram after making “[a]
good faith determination. . . and after notice to the Physician[.]”
(ECF No. 22-1, at 11).
Dr. Behram makes a confusing and conclusory
argument that she could only be terminated “after a good faith
determination by the employer and after notice has been provided
to the physician, neither of which occurred here.”
at 27) (emphasis in original).
(ECF No. 22,
She suggests that her termination
letter “does not identify or describe the extent or nature of Dr.
27
Behram’s alleged violation(s) . . . of the SPEA, and does not state
that Plaintiffs conducted an investigation or otherwise made a
‘good faith determination’ as required by § 7(d)(vi) of that
Agreement.”
(ECF No. 72-2, at 29).
There is nothing in the SPEA which requires MPE to detail any
investigation and MPE’s July 31, 2017 letter to Dr. Behram did
provide Dr. Behram notice of the grounds for her termination:
“violation of Section 7(d)(vi)(A) and (F) of the [SPEA.]”
No. 69-26, at 2).
(ECF
Further, the SPEA is explicit that MPE “may
terminate the Physician’s employment immediately for any of the
reasons listed below[.]”
(ECF No. 22-1, at 10).
To the extent
Dr. Behram seems to imply that the SPEA required MPE to provide
notice to her sooner – or that she was somehow terminated before
her
actual
Immediately
receipt
means
of
notice
immediately,
-
her
and
argument
Dr.
Behram
is
was
unavailing.
terminated
immediately after receipt of notice in the form of MPE’s July 31,
2017 letter.
As discussed above, there is no genuine dispute of material
fact that MPE did in fact make a good faith determination.
The
SPEA simply does not require MPE to explain to Dr. Behram the
details of their good faith determination to Dr. Behram.
Dr. Behram’s claim for violation of the Maryland Wage Payment
Collection Law also hinges on the “for cause” determination.
Because the court finds that the termination followed a good faith
28
determination of cause, MPE had no obligation to provide 90 days’
notice to Dr. Behram of her termination, and subsequently no
obligation to pay Dr. Behram 90 days’ of wages.
2.
Breach of Contract (Behram Count II)
MPE next challenges Dr. Behram’s claim for breach of contract.
That claim arises out of MPE’s failure to pay her the $150,000
retention bonus owed her “on the third (3rd) anniversary of the
Effective Date of the Employment Agreement.”
1).
(ECF No. 63-4, at
Again, the Effective Date is defined twice in the SPEA’s
preamble: first as May 29, 2014, and second as “the closing date
of the Transaction” which the parties agree to be September 2,
2014.
Critically, Dr. Behram’s termination fell in between these
two dates, meaning that she is owed $150,000 if the Effective Date
is the former, and owed nothing if the Effective Date is the
latter.
Under
unambiguous
the
objective
contract
theory
terms
of
are
contract
given
their
interpretation,
plain
meaning,
regardless of the parties’ intentions at the time the contract was
formed. See Nova Research, Inc. v. Penske Truck Leasing Co., 405
Md. 435, 448, (2008). The interpretation of a written contract is
ordinarily a question of law for the court. Suburban Hosp. v.
Dwiggins, 324 Md. 294, 306 (1991).
Therefore, when interpreting
a contract, the court’s task is to “determine from the language of
the agreement itself what a reasonable person in the position of
29
the parties would have meant at the time it was effectuated.”
Calomiris v. Woods, 353 Md. 425, 436 (1999), (quoting Gen. Motors
Acceptance v. Daniels, 303 Md. 254, 261 (1985)). “The true test of
what is meant is not what the parties to the contract intended it
to mean, but what a reasonable person in the position of the
parties would have thought it meant.” Id.
In its interpretation, the court must look to the entire
language of the agreement, not merely a portion thereof, Jones v.
Hubbard, 356 Md. 513, 534–35 (1999), but parol evidence of the
parties’ intent or meaning should not be considered unless there
is an ambiguity. See Beale v. Am. Nat'l Lawyers Ins. Reciprocal,
379 Md. 643, 660 (2004); Bushey v. N. Assurance, 362 Md. 626, 632
(2001); see also Higgins v. Barnes, 310 Md. 532, 537 (1987)
(“[E]vidence is inadmissible to vary, alter, or contradict a
contract that is complete and unambiguous.”)
The first question, then, is to determine whether the contract
is ambiguous.
“A contract is ambiguous if, when read by a
reasonably prudent person, it is susceptible of more than one
meaning.”
Sky Angel U.S., LLC v. Discovery Commc'ns, LLC, 885
F.3d 271, 277 (4th Cir. 2018). In determining whether the contract
is ambiguous, the court must also examine “the character of the
contract, its purpose, and the facts and circumstances of the
parties at the time of execution.” Diamond Point Plaza Ltd. P’ship
v. Wells Fargo Bank, N.A., 400 Md. 718 (2007).
30
Taken as a whole, the contract cannot be said to be ambiguous
on the basis of what reasonably appears to be a scrivener’s error.
To do so would be to render moot or nonsensical portions of the
contract.
The SPEA defines the “Employment Period” as starting on
the “Effective Date.”
(ECF No. 63-4, at 9).
The restrictive
covenants Dr. Behram agreed to would make no sense if the Effective
Date was May 29, 2014.
As of that date, and in the ensuing months,
Dr. Behram was running an independent, competing practice.
In
other words, she was “engag[ing] directly or indirectly in the
practice of medicine in competition with the Employer[.]”
Even if
the court were to find an ambiguity in what all signs indicate is
a scrivener’s error, the parol and extrinsic evidence allows for
no genuine dispute of material fact.
Parol evidence regarding the
parties’ intent as of a week prior to the signing of the contract
shows that the Effective Date was intended to be the closing date
(ECF No. 63-6).
And extrinsic evidence regarding the parties’
understanding of the contract overwhelmingly demonstrates that the
parties viewed September 2 as the Effective Date for the purposes
of determining when Dr. Behram would be compensated.
Dr. Behram’s alleged extrinsic evidence in contradiction of
this amounts to no evidence at all:
she points to a conversation
with a non-party as well as her own declaration, given on October
29, 2018, that she “considered [her]self bound by the material
31
terms of this agreement as soon as it was signed on May 29, 2014.”
Neither of these create a genuine dispute of material fact.
3.
Tortious Interference with Business Expectancy (Behram
Count IV)
Finally, MPE challenges Dr. Behram’s claim that MPE has
tortiously interfered with Dr. Behram’s business expectancy by
failing to inform patients regarding Dr. Behram’s relocation. (ECF
No.
22,
at
31-32).
In
Maryland,
the
elements
of
tortious
interference are 1) intentional and willful acts; 2) calculated to
cause damages to the plaintiffs in their lawful business; 3) done
with the unlawful purpose to cause such damage and loss, without
right or justifiable cause on the part of the defendants; and 4)
actual damage and loss resulting. See Nat. Design, Inc. v. Rouse
Co., 302 Md. 47, 70–71 (1984).
The conduct that Dr. Behram puts forward as tortious is not
an act, but an omission: MPE has failed to inform her former
patients about her new practice.
Dr. Behram attempts to turn an
AMA ethical opinion into an affirmative duty to act.
at 31-32).
(ECF No. 22,
That opinion holds that “[t]he patients of a physician
who leaves a group practice should be notified that the physician
is leaving the group.
Patients of the physician should also be
informed of the physician’s new address . . . It is unethical to
withhold such information upon request of a patient.”
AMA Ethical
Opinion 7.03 (“Records of Physician Upon Retirement or Departure
32
from a Group”) (emphasis added).
to
suggest
that
MPE
has
There is nothing in the record
refused
any
information regarding Dr. Behram.
patient’s
request
for
Thus, there is no indication
that MPE has even acted unethically, much less tortiously.
The issue of whether an AMA ethical opinion can give rise to
an affirmative duty to act is not before the court.
The sole issue
here is whether this particular AMA ethical opinion creates an
affirmative duty, the breach of which gives rise to a tort claim
under Maryland law, under these circumstances.
The
kind
of
conduct
which
gives
It does not.
rise
to
a
tortious
interference claim “must be conduct that is independently wrongful
or unlawful, quite apart from its effect on the plaintiff’s
business relationships.”
Baltimore Sports & Social Club, Inc. v.
Sport & Social, LLC, 228 F.Supp.3d 544 (D.Md. 2017).
Simply
failing to proactively inform former patients of a doctor’s new
address is not sufficiently wrongful under this rubric, especially
when the AMA does not even go so far as to proscribe such conduct
as “unethical.”
IV.
Conclusion
For
the
foregoing
reasons,
Defendant/Counter-Plaintiff’s
motion to seal will be granted, Plaintiff/Counter-Defendant’s and
Defendant/Counter-Plaintiff’s
consent
motion
to
seal
will
be
granted in part and denied in part, Plaintiff/Counter-Defendants’
motion for summary judgment will be granted and Defendant/Counter33
Plaintiff’s motion for summary judgment will be granted in part
and denied in part.
A separate order will follow.
/s/
DEBORAH K. CHASANOW
United States District Judge
34
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