Carlisle Medical Group, LLC v. Elhohiri

Filing 25

MEMORANDUM (Order to follow as separate docket entry) (eo)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
CARLISLE MEDICAL GROUP, LLC,
Plaintiff
v.
SALAH ELDOHIRI, M.D.,
Defendant

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No. 1:15-cv-2367
(Judge Kane)

MEMORANDUM
Before the Court is Defendant’s motion to dismiss Plaintiff’s breach of contract claims
pursuant to Federal Rule of Civil Procedure 12(b)(6). (Doc. No. 17.) The motion has been fully
briefed and is ripe for disposition. For the following reasons, the Court will grant Defendant’s
motion to dismiss Plaintiff’s breach of contract claims with prejudice.
I.

BACKGROUND 1
Plaintiff Carlisle Medical Group is a health care service provider with its principal place

of business in Mechanicsburg, Pennsylvania. (Doc. No. 15 ¶¶ 1-2.) On July 20, 2011, Plaintiff
entered into a Physician Employment Agreement (“Agreement”) with Defendant Dr. Salah E.
Eldohiri. (Doc. No. 15-2.) According to the Agreement, Plaintiff was to employ Defendant for
thirty-six months and was to pay Defendant pursuant to the Agreement’s compensation schedule.
(Id. at 2, 4, 7-9, 13-15.) Due to a clerical error, Defendant received both production pay and his
salary from April 1, 2013 to March 1, 2014, which resulted in the overpayment of $350,769.69
to Defendant. (Doc. No. 15 ¶¶ 10, 18.)

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The following background is taken from Plaintiff’s amended complaint. (Doc. No. 15.)
Plaintiff’s allegations are accepted as true for the purpose of the instant motion to dismiss. See
Schuylkill Energy Res., Inc. v. Pa. Power & Light Co., 113 F.3d 405, 417 (3d Cir. 1997)
(explaining that “[w]hen reviewing a Rule 12(b)(6) dismissal, [the court] must accept as true the
factual allegations in the complaint and all reasonable inferences that can be drawn from them”).
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At an unknown time, Defendant was placed on notice of the overpayment. (Id. ¶ 11).
Plaintiff and Defendant attempted to resolve the overpayment issue, and Defendant proposed that
he repay the net income portion of the overpayment for the eleven-month period. (Id. ¶¶ 12-16.)
In addition, Defendant proposed that he repay Plaintiff for the difference between the overpaid
net and gross income for 2013-2014 after he received his federal income tax return. (Id. ¶ 16.)
However, in an August 8, 2014 email, Defendant requested that Plaintiff first draft a repayment
proposal which was to include a provision specifying that Plaintiff would pay the expenses
Defendant incurred as a result of the overpayment. (Doc. No. 15-2 at 28, 38.) Since August 8,
2014, there have been no productive negotiations between the parties, and Defendant has not
repaid any of the overpayment. (Doc. No. 15 ¶¶ 17-18.)
Plaintiff commenced this action by filing a complaint on October 14, 2015, in the Court
of Common Pleas of Cumberland County, Pennsylvania. (Doc. No. 1 at 6.) Plaintiff alleged
breach of contract and unjust enrichment due to Defendant’s failure to reimburse Plaintiff for the
overpayment. (Id. at 8-9.) On December 9, 2015, Defendant removed the action to federal court
pursuant to 28 U.S.C. § 1441 and 28 U.S.C. § 1332. (Id. at 1-3.) Shortly thereafter, Defendant
filed a motion to dismiss on December 15, 2015 pursuant to Federal Rule of Civil Procedure
12(b)(6). (Doc. No. 5.) On May 11, 2016, the Court granted Defendant’s motion to dismiss with
respect to Plaintiff’s breach of contract claim, but denied the motion to dismiss with respect to
Plaintiff’s unjust enrichment claim. (Doc. Nos. 13, 14.) The Court dismissed Plaintiff’s breach
of contract claim without prejudice, and granted Plaintiff the opportunity to file an amended
complaint to address the deficiencies identified in its breach of contract claim. (Doc. No. 14.)
Accordingly, on May 27, 2016, Plaintiff filed an amended complaint against Defendant
alleging (1) breach of express contract, (2) breach of implied contract, and (3) unjust enrichment.

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(Doc. No. 15 ¶¶ 10-11, 17-18.) On June 6, 2016, Defendant again filed a motion to dismiss the
breach of contract claims asserted by Plaintiff. (Doc. Nos. 17, 19.) The motion has been fully
briefed and is now ripe for disposition. (Doc. Nos. 19, 23-24.)
II.

LEGAL STANDARD
A motion filed pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the sufficiency

of the complaint’s factual allegations. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A complaint
must contain “a short and plain statement of the claim showing that the pleader is entitled to
relief,” in order to “give the defendant fair notice of what the … claim is and the grounds upon
which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotation marks
omitted) (interpreting Fed. R. Civ. P. 8(a)). Generally, a court considering a motion to dismiss
pursuant to Federal Rule of Civil Procedure 12(b)(6) must determine whether the complaint
contains sufficient factual matter, accepted as true, to “state a claim to relief that is plausible on
its face.” Iqbal, 556 U.S. at 678.
Consistent with the Supreme Court’s rulings in Twombly and Iqbal, the Third Circuit
requires district courts to engage in a two-part analysis when reviewing a Rule 12(b)(6) motion:
(1) first, a court should separate the factual and legal elements of a claim, accepted well-pleaded
factual matter and disregarding legal conclusions; (2) second, a court should determine whether
the remaining well-pled facts sufficiently demonstrate that a plaintiff has a “plausible claim for
relief.” Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009) (quoting Iqbal, 556
U.S. at 679). Facial plausibility exists when the plaintiff pleads factual content “that allows the
court to draw a reasonable inference that the defendant is liable for the misconduct alleged.”
Iqbal, 556 U.S. at 678 (internal citations omitted).

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In conducting its analysis, a court must accept all well-pleaded factual allegations in the
complaint as true for purposes of determining whether the complaint states a plausible claim for
relief, and must view the factual allegations in the light most favorable to the plaintiff. Phillips
v. Cnty of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008). The court’s determination on a Rule
12(b)(6) review is not whether the non-moving party “will ultimately prevail,” but whether that
party is “entitled to offer evidence to support the claims.” United States ex rel. Wilkins v. United
Health Grp., Inc., 659 F.3d 259, 302 (3d Cir. 2011) (internal citations omitted). The court’s
analysis is a context-specific task requiring the court “to draw on its judicial experience and
common sense.” Iqbal, 556 U.S. at 663-64.
In ruling on a 12(b)(6) motion to dismiss for failure to state a claim, “a court must
consider only the complaint, exhibits attached to the complaint, matters of public record, as well
as undisputedly authentic documents if the complainant’s claims are based upon these
documents.” Mayer v. Belichick, 605 F.3d 223, 230 (3d Cir. 2010) (citing Pension Ben. Guar.
Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993)). A court may also
consider “any ‘matters incorporated by reference or integral to the claim, items subject to judicial
notice, matters of public record, orders, [and] items appearing in the record of the case.’” Buck
v. Hampton Twp. Sch. Dist., 452 F.3d 256, 260 (3d Cir. 2006) (quoting 5B Charles A. Wright &
Arthur R. Miller, Federal Practice & Procedure s. 1357 (3d ed. 2004)).
III.

DISCUSSION
Defendant contends that Plaintiff’s breach of express contract claim should be dismissed

because Plaintiff fails to sufficiently allege the existence of a contract incorporating the
provisions of Plaintiff’s Employee Handbook. (Doc. No. 19 at 11.) Defendant also asserts that
Plaintiff fails to allege sufficient facts to establish breach of express contract. (Id. at 12-14.)

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With regard to Plaintiff’s breach of implied contract claim, Defendant argues that Plaintiff fails
to sufficiently allege the existence of an implied contract between Plaintiff and Defendant. (Id.
at 15-16.)
A. Breach of Express Contract
In order for Plaintiff’s breach of express contract claim to survive a motion to dismiss
under Federal Rule of Civil Procedure 12(b)(6), Plaintiff must allege sufficient facts to plausibly
establish the following elements: “(1) the existence of a contract, including its essential terms,
(2) a breach of a duty imposed by the contract, and (3) resultant damages.” Ware v. Rodale
Press, Inc., 322 F.3d 218, 225 (3d Cir. 2003) (quoting CoreStates Bank v. Cutillo, 723 A.2d 1053
(Pa. Super. Ct. 1999)).
Plaintiff alleges the existence of an express contract of the Agreement, which
incorporates provisions of Plaintiff’s Employee Handbook (“Handbook”). (Doc. No. 15 ¶ 21.)
Specifically, in Section 3.9 of the Agreement, Defendant agreed to “observe and comply with
[Plaintiff’s] policies and procedures, including those in [Plaintiff’s] Employee Handbook.”
(Doc. 15-2 at 3.) The Handbook, which is attached as Exhibit F to Plaintiff’s amended
complaint, states that “[t]heft or any form of dishonesty” violates Plaintiff’s policies and
procedures. (Id. at 45.) Plaintiff claims that Defendant breached the “dishonesty” provision of
the Handbook, and thus, the Agreement, by accepting and failing to notify Plaintiff of the
overpayment. (Doc. No. 15 ¶¶ 22-24.) In addition, Plaintiff alleges that Defendant breached his
duty of good faith and fair dealing implicit in the Agreement. (Id. ¶¶ 25-28.) Plaintiff claims
that the breach resulted in damages to Plaintiff of $350,769.69, plus attorneys’ fees and costs.
(Id. ¶ 29.)

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In his motion to dismiss, Defendant contends that Plaintiff fails to sufficiently allege the
existence of a contract provision incorporating the Handbook, as Plaintiff never alleges that
Defendant received the Handbook. (Doc. 19 at 11.) In addition, Defendant argues that Plaintiff
did not allege dishonest conduct sufficient to allege a breach of the Handbook or of the implied
duty of good faith and fair dealing. (Id. at 12.)
As to the first element of the breach of express contract claim, the Court agrees with
Defendant that Plaintiff has failed to plausibly allege the existence of a contract that included the
“dishonesty” provision of the Handbook, as Plaintiff’s amended complaint fails to allege that it
provided Defendant with a copy of the Handbook. (Doc. Nos. 15 ¶¶ 22-24, 19 at 11.) In
Pennsylvania, a provision in an employee handbook cannot be binding on employees “if that
policy is never actually communicated . . . by ensuring that the handbooks are distributed to [the]
employees.” Quiles v. Fin. Exch. Co., 879 A.2d 281, 286 (Pa. Super. Ct. 2005); see also
Morosetti v. La. Land & Exploration Co., 564 A.2d 151, 152-53 (Pa. 1989) (holding that
employees could not enforce a severance policy contained in their company’s handbook because
the company “never made known to their employees the policy for severance pay,” so there was
no offer for employees to accept). Without this communication, the employee cannot accept the
terms of the handbook and, therefore, no contract can be formed. See Quiles, 879 A.2d at 288.
Consequently, in order to plausibly allege the existence of a contract binding Defendant to the
provisions of the Handbook, Plaintiff has to allege that it gave Defendant the Handbook.
Because Plaintiff’s amended complaint fails to do so, Plaintiff has not sufficiently alleged the
existence of a contract.
However, even assuming the existence of a contract binding Defendant to the provisions
of the Handbook, Plaintiff’s amended complaint fails to allege facts from which the Court could

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plausibly infer that Defendant breached either the express terms or the implied duties of the
contract. With regard to the alleged breach of the express terms of the contract, namely, the
Handbook’s prohibition on “dishonesty,” the amended complaint simply alleges that Defendant
was dishonest because he accepted and retained double his salary for eleven months without
notifying Plaintiff. (Doc. No. 15 ¶ 24.) Plaintiff does not allege when or how Defendant learned
of the overpayment, which is necessary to plausibly allege dishonesty. (Id.) In addition, the
exhibits attached to Plaintiff’s amended complaint indicate that Defendant made a repayment
offer that Plaintiff ignored. (Doc. No. 15-2 at 34, 38.) Therefore, Plaintiff’s amended complaint
simply fails to allege sufficient facts to nudge Plaintiff’s claim of dishonesty from conceivable to
plausible, and Plaintiff thus fails to allege that a breach of the Handbook’s provisions occurred.
See Twombly, 550 U.S. at 547.
Similarly, Plaintiff fails to sufficiently allege that Defendant breached the implied duty of
good faith and fair dealing. The implied duty of good faith and fair dealing has been found to
apply to employment contracts in Pennsylvania. See Somers v. Somers, 613 A.2d 1211, 1213
(Pa. Super. Ct. 1992). Good faith generally refers to honesty in fact, while examples of bad faith
include: “evasion of the spirit of the bargain, lack of diligence and slacking off, willful rendering
of imperfect performance, abuse of a power to specify terms, and interference with or failure to
cooperate in the other party’s performance.” Id. (quoting Restatement (Second) of Contracts §
205(d) (1981) (updated in Oct. 2016)). Plaintiff alleges that “inappropriate conversations” took
place between Defendant and his patients, during which Defendant told his patients that they
were being overcharged and that “the overpayment of his salary was affecting him negatively.”
(Doc. No. 15 ¶ 27.) However, the exhibits attached to the amended complaint also indicate that
the reasons for Defendant’s conversations with his patients were “all very innocent.” (Doc. No.

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15-2 at 49.) Therefore, considering Plaintiff’s pleadings as a whole, Plaintiff fails to allege
sufficient facts plausibly establishing that Defendant acted in bad faith while carrying out the
Agreement. In addition, even if Defendant’s behavior could plausibly constitute an “evasion of
the spirit” of the Agreement, Plaintiff fails to allege how this behavior resulted in damages to
Plaintiff. Therefore, Plaintiff’s amended complaint fails to sufficiently allege the third element
of a breach of contract claim.
In summary, Plaintiff’s amended complaint fails to sufficiently allege (1) that Plaintiff
and Defendant had an agreement that included the terms of the Handbook, and (2) that
Defendant breached an express or implied duty of the Agreement. Therefore, the Court will
grant Defendant’s motion to dismiss Plaintiff’s breach of express contract claim. The Court next
turns to Plaintiff’s claim for breach of implied contract.
B. Breach of Implied Contract
In Pennsylvania, a “contract implied in fact is an actual contract which arises where the
parties agree upon the obligations to be incurred, but their intention, instead of being expressed
in words, is inferred from acts in the light of the surrounding circumstances.” Liss & Marion,
P.C. v. Recordex Acquisition Corp., 983 A.2d 652, 659 (Pa. 2009) (quoting Elias v. Elias, 237
A.2d 215, 217 (Pa. 1968)). An actual “meeting of the minds” is not necessary, as it is the
parties’ “outward and objective manifestations of assent, as opposed to their undisclosed and
subjective intentions, that matter.” Ingrassia Constr. Co., Inc. v. Walsh, 486 A.2d 478, 482-83
(Pa. Super. Ct. 1984).
Plaintiff alleges that an implied contract was created when Defendant “continually
expressed his intent to pay back the amount he was overpaid.” (Doc. No. 15 ¶¶ 31-32.) Plaintiff
claims Defendant breached this contract by failing to repay Plaintiff and by insisting on

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“inappropriate conditions” of repayment. (Id. ¶ 33.) In addition, Plaintiff argues that Defendant
breached his duty of good faith and fair dealing with regard to this implied contract. (Id. ¶¶ 3435.)
Defendant contends that Plaintiff fails to allege sufficient facts to plausibly establish that
the parties reached an agreement with respect to Defendant’s repayment of Plaintiff, as
Plaintiff’s amended complaint and exhibits do not contain promises to pay Plaintiff a certain
amount. (Doc. No. 19 at 15.) Instead, Defendant alleges that Plaintiff’s exhibits merely show an
attempt by Defendant to resolve the dispute. (Id.)
The Court agrees with Defendant that Plaintiff has not sufficiently alleged the existence
of an implied contract between Plaintiff and Defendant. To create an implied contract, the parties
must express an intention to contract through their actions. See Liss & Marion, P.C., 983 A.2d at
659. Here, Plaintiff has not alleged any actions on the part of Defendant through which Plaintiff
could have inferred an agreement. Plaintiff’s exhibits to its amended complaint show that
Plaintiff asked Defendant to repay the gross overpayment, whereas Defendant proposed that he
repay the net overpayment first, and later repay the difference between the net and gross
overpayment.2 (Doc. Nos. 15 ¶ 16, 15-2 at 38). In addition, Plaintiff’s exhibits show that
Defendant’s offer of repayment was conditioned on Plaintiff’s development of a suitable
repayment plan, a request which Plaintiff seems to have ignored. (Doc. No. 15-2 at 34, 38.)
Therefore, Plaintiff has not sufficiently alleged that it reached an agreement with Defendant
regarding repayment, nor has Plaintiff alleged any acts through which Plaintiff could infer such

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As discussed above, in ruling on a 12(b)(6) motion to dismiss, a court can consider the
complaint, “exhibits attached to the complaint, matters of public record, as well as undisputedly
authentic documents if the complainant’s claims are based upon these documents.” Mayer v.
Belichick, 605 F.3d at 230 (citing Pension Ben. Guar. Corp. v. White Consol. Indus., Inc., 998
F.2d 1192, 1196 (3d Cir. 1993)).
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an agreement. The amended complaint and exhibits attached to it instead show that Plaintiff and
Defendant attempted to reach an agreement as to repayment, but had not yet concluded their
negotiations. Because Plaintiff’s amended complaint fails to allege the creation of an implied
contract, Plaintiff’s claim of a breach of the duty of good faith and fair dealing with regard to an
implied contract necessarily fails as well. Accordingly, Plaintiff’s breach of implied contract
claim will be dismissed.
IV.

CONCLUSION
For the foregoing reasons, the Court will grant Defendant’s motion to dismiss Plaintiff’s

breach of contract claims with prejudice.3 An order consistent with this memorandum follows.

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The Court dismisses Plaintiff’s breach of contract claims with prejudice, given that the
amended complaint represents Plaintiff’s second attempt to plead a breach of contract claim
against Defendant, and further, given that Plaintiff did not request leave to amend in the event
the Court granted Defendant’s motion to dismiss. See Fletcher-Harlee Corp. v. Pote Concrete
Contractors, Inc., 482 F.3d 247, 252 (3d Cir. 2007) (outside of civil rights cases, district courts
need not sua sponte grant leave to amend before dismissing a complaint for failure to state a
claim).
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