Wittig v. Mount Sinai Medical Center, Inc.
Filing
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OPINION AND ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION FOR JUDGMENT ON THE PLEADINGS re: 7 MOTION for Judgment on the Pleadings filed by Mount Sinai Medical Center, Inc.: Defendants' motion for summary judgment is granted with respect to Plaintiff's breach of contract, quasi-contract, fraudulent misrepresentation, and equitable accounting claims. The motion is denied with respect to Plaintiff's claim for breach of the implied covenant of good faith and fair dealing. Plaintiff is granted leave to amend his complaint, consistent with this opinion, until January 30, 2015. Defendant's amended answer is due by February 20, 2015. The parties shall appear for a status conference on February 6, 2015 at 10:00 AM. The Clerk shall mark the motion (Doc. No. 7) terminated. (Signed by Judge Alvin K. Hellerstein on 12/18/2014) (tn)
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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
--------------------------------------------------------------
)(
DR. JAMES WITTIG,
OPINION AND ORDER
GRANTING IN PART AND
DENYING IN PART
DEFENDANT'S MOTION FOR
JUDGMENT ON THE
PLEADINGS
Plaintiff,
-againstMOUNT SINAI MEDICAL CENTER, INC.,
Defendant.
14 Civ. 5808 (AKH)
-------------------------------------------------------------- )(
ALVIN K. HELLERSTEIN, U.S.D.J.:
Plaintiff Dr. James Wittig is a former Director of Orthopedic Oncology and
Associate Professor of Orthopedic Surgery at the Icahn School of Medicine at Mount Sinai. Dr.
Wittig entered a written employment agreement with Defendant Mount Sinai on September 7,
2007, and worked there from November, 2007 until he voluntarily resigned his employment in
November, 2013. Compl. ~~ 30, 37, 54. Dr. Wittig brought suit against Mount Sinai on July 29,
2014, alleging that Defendant failed to pay him for medical procedures he performed while
employed by Mount Sinai but for which payment had not yet been collected by the time of his
departure. He asserted claims for breach of contract, quasi-contract recovery, breach of the
covenant of good faith and fair dealing, fraudulent misrepresentation, and equitable accounting.
On September 22, 2014, Defendant filed this motion for judgment on the
pleadings pursuant to Fed. R. Civ. P. 12(c). For the following reasons, and the reasons stated on
the record, Defendants' motion is granted in part and denied in part.
LEGAL STANDARD
"After the pleadings are closed-but early enough not to delay trial-a party may
move for judgment on the pleadings." Fed. R. Civ. P. 12(c). In deciding a 12(c) motion, a court
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"applies the same legal standard as that applicable to motions to dismiss pursuant to Federal Rule
of Civil Procedure l 2(b)( 6).
BACKGROUND
Section V of the employment agreement executed between Plaintiff and
Defendant discusses Plaintiffs compensation. It provided for (1) a base salary of $160,000; (2) a
Clinical Supplement of $490,000 per year for the first three years, and $100,000 per year for
years four and five, and (3) a Clinical Productivity Bonus for the first three years, which was to
be calculated as a percentage of revenue from personally-performed physician services. Mufson
Deel. Ex. A. In addition, Section III of the contract reads, in relevant part:
If your employment with Mount Sinai terminates for any reason, all
practice accounts receivable and receipts shall be the property of
Mount Sinai School of Medicine, and no portion will be distributed
to you after your termination date.
Id. Section V also states that the Clinical Supplement is subject to the departmental FP A
guidelines. Id. at 3. Part 9 of those guidelines state that:
FP A participants shall not be entitled to any receipts or other
revenue accruing in their practice accounts or in any personal or
departmental accounts following termination and/or resignation.
Mufson Deel. Ex. D.
On October 16, 2009, an addendum modified the contract to abolish the Clinical
Productivity Bonus and instead calculate Plaintiffs Clinical Supplement on a revenue-minusexpense basis, as the Clinical Productivity Bonus had previously done. Mufson Deel. Ex. B.
Plaintiff now seeks his Clinical Supplement for procedures he performed, but for
which payment was not received by the time Plaintiff resigned. Although against the terms of his
agreement, Plaintiff alleges that, prior to commencing his employment, Dr. Evan Flatow of
Mount Sinai's Department of Orthopedics orally promised Plaintiff that Plaintiff would indeed
be entitled to a share of such receipts. Compl.
~
24.
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DISCUSSION
Plaintiff seeks to introduce evidence of a separate, oral agreement between
Plaintiff and Dr. Flatow. However, the parol evidence rule ordinarily bars the introduction of
extrinsic evidence to vary or contradict the terms of a writing. Schron v. Troutman Sanders, 20
N.Y. 3d 430, 436 (2013) (internal quotations omitted). And under New York law, oral promises
to pay compensation cannot support a breach of contract claim where, as here, contrary writings
addressing the plaintiffs compensation exist. E.g. Baron v. Port Auth. of NY & NJ, 271F.3d81,
85 (2d Cir. 2001). In this case, the alleged "oral promise" from Dr. Flatow flatly contradicts the
subsequent written employment agreement that Plaintiff signed. Accordingly, Plaintiffs claim
for breach of contract fails as a matter of law, and is dismissed.
Plaintiff also seeks recovery under quasi-contract, alleging theories of implied
contract, promissory estoppel, and unjust enrichment. But Plaintiffs claims for quasi-contract
recovery suffer the same fate. New York law "does not recognize promissory estoppel in the
employment context." Deutsch v. Kroll Assocs., Inc., No. 02-cv-2892 (JSR), 2003 WL 22203740
(S.D.N.Y. 2003); Shapira v. Charles Schwab & Co., 225 F. Supp. 2d 414, 419 (S.D.N.Y. 2002).
And "unjust enrichment [and] quantum meruit ... are non-contractual, equitable remedies that
are inapplicable if there is an enforceable contract governing the subject matter." R.B. Ventures,
Ltc. V Shane, 112 F.3d 54, 60 (2d Cir. 1997). Quasi-contract cannot co-exist with an express
agreement, Clark-Fitzpatrick, Inc. v. Long Island R.R. Co., 70 N.Y. 2d 382, 388 (1987), and an
express agreement governing the issue in this case clearly exists. Plaintiffs quasi-contract claims
are therefore dismissed.
Plaintiffs fraudulent misrepresentation claim alleges that Dr. Flatow knew that
the oral promise was false, but made the promise anyway in order to induce Plaintiffs
employment. However, the Second Circuit has held that, where "a fraud claim arises out of the
same facts as Plaintiffs breach of contract claim, with the addition only of an allegation that
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defendant never intended to perform the precise promises spelled out in the contract between the
parties, the fraud claim is redundant and plaintiffs sole remedy is for breach of contract."
Telecom Int'/ Am., Ltd v. AT&T Corp., 280 F.3d 175, 196 (2d Cir. 2001). That description fits
Plaintiffs allegation of fraudulent misrepresentation perfectly, and the fraud claim is therefore
dismissed.
Plaintiffs claim under the implied covenant of good faith and fair dealing is not
as easily dispensed, however. In New York, the covenant prevents either party to a contract from
doing anything to destroy the other party's right to receive the fruits of the contract. See Kirke La
She/le Co. v. Paul Armstrong Co., 263 N.Y. 79, 87 (1933). "Integral to a finding of a breach of
the implied covenant is a party's action that directly violates an obligation that may be presumed
to have been intended by the parties." MIA-COM Sec. Corp. v. Galesi, 904 F.2d 134, 136 (2d
Cir. 1990). In this case, Plaintiff has alleged that Defendant failed to judiciously seek payment
for the medical services that Plaintiff rendered. Plaintiff had a legitimate expectation that
Defendant would exercise reasonable diligence in collecting those receipts, and if Plaintiffs
allegations are true, then Defendant's conduct may have unjustly deprived Plaintiff of duly
earned revenue. This will not be an easy showing. See Van Valkenburgh, Nooger & Neville, Inc.
v. Hayden Pub. Co., 30 N.Y.2d 34, 45 (1972) (explaining that a publisher's actions which
incidentally lessen an author's royalties does not breach the covenant unless the "activity is so
manifestly harmful to the author ... as to justify the court in saying there was a breach of the
covenant to promote the author's work."). However, limited discovery will be necessary to
determine the merits of this claim. Accordingly, judgment is denied with respect to the implied
covenant of good faith and fair dealing.
Plaintiffs equitable accounting claim, although not an independent claim in a
breach of contract lawsuit, may be pleaded as an ancillary remedy to allow Plaintiff to elicit the
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facts relevant to the alleged slow billing. Plaintiff may allege this claim as part of an implied
covenant claim.
CONCLUSION
Defendants' motion for summary judgment is granted with respect to Plaintiffs
breach of contract, quasi-contract, fraudulent misrepresentation, and equitable accounting claims.
The motion is denied with respect to Plaintiffs claim for breach of the implied covenant of good
faith and fair dealing. Plaintiff is granted leave to amend his complaint, consistent with this
opinion, until January 30, 2015. Defendant's amended answer is due by February 20, 2015. The
parties shall appear for a status conference on February 6, 2015 at 10:00 AM.
The Clerk shall mark the motion (Doc. No. 7) terminated.
SO ORDERED.
Dated:
December (CO, 2014
New York, New York
AL VIN K. HELLERSTEIN
United States District Judge
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