Peace v. Panorama Orthopedics & Spine Ctr.

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WILLIAM J. PEACE, M.D., an individual, Plaintiff and Counter Defendant, v. PANORAMA ORTHOPEDICS AND SPINE CENTER, INC., d/b/a PANORAMA ORTHOPEDICS & SPINE CENTER, P.C.,^[1] Defendant and Counter Claimant.

Civil Action No. 23-cv-01027-PAB-JPO

United States District Court, D. Colorado

September 9, 2024

ORDER

PHILIP A. BRIMMER, Chief United States District Judge

This matter is before the Court on Plaintiff/Counterclaim Defendant's Fed.R.Civ.P. 12(B)(6) Motion to Dismiss and Fed.R.Civ.P. 12(F) Motion to Strike [Docket No. 35] filed by Dr. William J. Peace. Defendant and counter claimant Panorama Orthopedics and Spine Center, Inc., d/b/a Panorama Orthopedics & Spine Center, P.C. (“Panorama”) filed a response. Docket No. 37. Dr. Peace filed a reply. Docket No. 41. The Court has jurisdiction pursuant to 28 U.S.C. § 1331.

I. BACKGROUND

A. Factual Background^[2]

Dr. Peace is a board-certified orthopedic surgeon and a Lieutenant Colonel in the Colorado Air National Guard. Docket No. 1 at 1, ¶ 1; Docket No. 34 at 1, ¶ 1. Panorama is a Colorado corporation that provides orthopedic, sports medicine, spine care, joint replacement, imaging, physical therapy, and performance training services at various facilities in Colorado. Docket No. 1 at 2, ¶¶ 7, 9; Docket No. 34 at 2, ¶¶ 7, 9. Panorama is plaintiff's employer. Docket No. 34 at 1, ¶ 1.

Panorama's predecessor company, Panorama Orthopedics & Spine Center, P.C. (the “predecessor company”), hired Dr. Peace on October 1, 2012 for a full-time physician position with a base salary of $300,000 per year. Docket No. 1 at 4, ¶¶ 18, 21; Docket No. 34 at 3, ¶¶ 18, 21. On January 1, 2016, Dr. Peace became an employee shareholder in the practice. Docket No. 1 at 4, ¶ 23; Docket No. 34 at 3, ¶ 23. As an employee shareholder, Dr. Peace is required to contribute to overhead costs, proportionate to his ownership interest, and his current overhead contribution amounts to approximately $850,000 per year. Docket No. 1 at 5, ¶ 24; Docket No. 34 at 3, ¶ 24.

In early 2022, the predecessor company merged with another company to become Panorama. Docket No. 1 at 4, 6, ¶¶ 18, 33; Docket No. 34 at 3-4, ¶¶ 18, 33. In June 2022, Panorama re-negotiated Dr. Peace's employment agreement, which superseded his prior agreement from 2012. Docket No. 1 at 6, ¶ 34; Docket No. 34 at 4, ¶ 34.

On June 27, 2022, Dr. Peace signed a Letter of Transmittal for Equity Interests (“Letter of Transmittal”) as part of the Agreement and Plan of Merger (“Merger Agreement”) that Panorama entered into. Docket No. 34 at 8, ¶ 1.^[3]The Letter of Transmittal states

By executing and delivering this Letter of Transmittal, the undersigned hereby acknowledges that he or she hereby approves of the Merger Agreement and the transactions contemplated thereby and is becoming a party to the Merger Agreement as a ‘Seller' for all purposes thereunder. Further, the undersigned hereby acknowledges and agrees to the terms and conditions set forth in the Merger Agreement[.]

Id., ¶ 2; see also Docket No. 35-2 at 6. Dr. Peace appointed Mark J. Conklin, M.D., as “Sellers' Representative to act on the undersigned's behalf pursuant to and in accordance with the Merger Agreement.” Docket No. 35-2 at 7.

On June 29, 2022, Panorama executed the Merger Agreement. Docket No. 34 at 8, ¶ 3. The closing of the Merger Agreement occurred on July 19, 2022. Id., ¶ 4. Dr. Peace is a “Seller” under the Merger Agreement. Id., ¶ 5. Under Section 7.9 of the Merger Agreement, Dr. Peace agreed to release and discharge all potential claims he may have had against Panorama prior to the closing date. Id., ¶ 6. Specifically, Section 7.9(a) states that

Effective as of the Closing, each Seller on such Seller's own behalf and on behalf of such Seller's past, present and future Affiliates, agents, attorneys, administrators, heirs, executors, Related Parties, trustees, beneficiaries, representatives, successors and assigns claiming by or through such Seller (collectively, the “Related Persons”), hereby absolutely, unconditionally and irrevocably RELEASES and FOREVER DISCHARGES each Target Company and their respective past, present and future directors, managers, members, equity holders, officers, employees, agents, Subsidiaries, Affiliates, attorneys, representatives, successors and assigns (each, a “Released Party” and collectively, the “Released Parties”) from the following (collectively, the “Releasing Party Claims”): all claims (including any derivative claim on behalf of any Person), actions, causes of action, suits, arbitrations, proceedings, debts, liabilities, obligations, sums of money, accounts, covenants, contracts, controversies, agreements, promises, damages, fees, expenses, judgments, executions, indemnification rights, claims and demands arising out, relating to, against or in any way connected with a Released Party, including any and all actions, activities, assets, liabilities and the ownership of any securities, whether known or unknown, suspected or unsuspected, absolute or contingent, direct or indirect or nominally or beneficially possessed or claimed by such Seller, whether the same be in administrative proceedings, in arbitration, at law, in equity or mixed, which such Seller ever had, now has or hereafter may have against any or all of the Released Parties, in each case, in respect of any and all agreements, liabilities or obligations entered into or incurred on or prior to the Closing, or in respect of any event occurring or circumstances existing on or prior to the Closing, whether or not relating to claims pending on, or asserted after, the Closing; provided, however, the foregoing release does not extend to, include or restrict or limit in any way, and such Seller hereby reserves such Seller's rights, if any, to pursue any and all Releasing Party Claims that such Seller may now or in the future have solely on account of (i) rights of such Seller under this Agreement and (ii) any rights or claims for benefits (other than any severance or deferred compensation) under benefit plans of any Target Company.

Docket No. 35-1 at 1-2. Section 7.9(b) further provides that

Effective as of the Closing, each Seller hereby expressly waives any rights such Seller may have under applicable Laws to preserve Releasing Party Claims which such Seller does not know or suspect to exist in such Seller's favor at the time of executing the release provided in Section 7.9(a). Each Seller understands and acknowledges that such Seller may discover facts different from, or in addition to, those which such Seller knows or believes to be true with respect to the claims released herein, and agrees that the release provided in Section 7.9(a) shall be and remain effective in all respects notwithstanding any subsequent discovery of different or additional facts.

Id. at 2. Under Section 7.9(c), Dr. Peace agreed to refrain from commencing any suit against Panorama based on the released claims. Docket No. 34 at 8, ¶ 7; see also Docket No. 35-1 at 2.

Dr. Peace received substantial monetary compensation in consideration for signing the Letter of Transmittal and agreeing to the terms of the Merger Agreement. Docket No. 34 at 8, ¶ 8. The consideration that Dr. Peace received in return for signing the Letter of Transmittal exceeds the damages he seeks in this case and exceeds the value of any claims he released in the Merger Agreement. Id. at 9, ¶ 9. Panorama has performed its obligations under the Merger Agreement. Id., ¶ 13. Panorama has incurred damages. Id., ¶ 16.

B. Procedural Background

On April 24, 2023, Dr. Peace filed this case. Docket No. 1. Dr. Peace asserts two claims against Panorama: (1) a claim for discrimination under the Uniform Services Employment and Reemployment Rights Act (“USERRA”), 38 U.S.C. § 4311 et seq.; and (2) a claim for a permanent injunction. Id. at 7-9, ¶¶ 39-56.^[4] Specifically, Dr. Peace alleges that Panorama violated USERRA by (i) charging Dr. Peace for overhead contributions while he was on military leave; and (ii) informing Dr. Peace that he would be limited to eight weeks of military leave per year. Id. at 5-7, ¶¶ 28-29, 31-32, 36-37, 42-43. On July 28, 2023, Dr. Peace filed a notice of computation of damages, stating that he is seeking economic damages for overhead contributions from 2016 to the present. Docket No. 29 at 2.

On September 6, 2023, Panorama filed an amended answer, asserting the affirmative defense of laches, Docket No. 34 at 7, ¶ 1, as well as a counterclaim against Dr. Peace for breach of contract. Id. at 8-9, ¶¶ 1-16. Panorama alleges that Dr. Peace breached his contractual obligations under the Letter of Transmittal and Merger Agreement when he filed this lawsuit because Dr. Peace released any claims against Panorama that arose prior to the closing date, July 19, 2022. Id. at 9, ¶¶ 10, 12, 15. On September 27, 2023, Dr. Peace filed a motion requesting that the Court dismiss Panorama's counterclaim under Fed.R.Civ.P. 12(b)(6) and strike Panorama's affirmative defense of laches under Fed.R.Civ.P. 12(f). Docket No. 35.

II. LEGAL STANDARD

A. Fed. R. Civ. P. 12(b)(6)

To survive a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a complaint must allege enough factual matter that, taken as true, makes the plaintiff's “claim to relief . . . plausible on its face.” Khalik v. United Air Lines, 671 F.3d 1188, 1190 (10th Cir. 2012) (citing Bell Atl. Corp. v Twombly, 550 U.S. 544, 570 (2007)). “The ‘plausibility' standard requires that relief must plausibly follow from the facts alleged, not that the facts themselves be plausible.” RE/MAX, LLC v. Quicken Loans Inc., 295 F.Supp.3d 1163, 1168 (D. Colo. 2018) (citing Bryson v. Gonzales, 534 F.3d 1282, 1286 (10th Cir. 2008)). Generally, “[s]pecific facts are not...