Provenzano v. Ohio Valley Gen. Hosp.

121 A.3d 1085

2015 PA Super 179

David A. PROVENZANO, M.D., Appellee

v.OHIO VALLEY GENERAL HOSPITAL, Mark R. Scholl, Gene M. Battistella, D.O., Mark S. Brennan, Joseph C. Cirelli, David W. Scott, Jane A. Dixon, Kurt R. Gingrich, Michael E. Lally, M.D., Anthony F. Lisanti, Daniel B. Long, Victoria Mell, Tadessa Tefera, Appellants.

No. 1270 WDA 2013

Superior Court of Pennsylvania.

Argued April 2, 2014.

Filed Aug. 26, 2015.

Joseph F. McDonough, Pittsburgh, for appellants.

Katherine E. Koop, Pittsburgh, for appellee.

BEFORE: GANTMAN, P.J., FORD ELLIOTT, P.J.E., and OLSON, J.

Opinion

OPINION BY GANTMAN, P.J.:

Appellants, Ohio Valley General Hospital (“Hospital”), Mark R. Scholl, Gene M. Battistella, D.O., Mark S. Brennan, Joseph C. Cirelli, David W. Scott, Jane A. Dixon, Kurt R. Gingrich, Michael E. Lally, M.D., Anthony F. Lisanti, Daniel B. Long, Victoria Mell, and Tadessa Tefera (collectively “Board”) appeal from the order entered in the Allegheny County Court of Common Pleas, which overruled Hospital's and the Board's preliminary objections (based on the existence of an arbitration provision in the parties' employment agreement as well as a prior, pending arbitration proceeding) to the civil complaint of Appellee, David A. Provenzano, M.D. For the following reasons, we reverse and remand for referral of all of Appellee's claims to the pending arbitration proceeding.¹

The relevant facts and procedural history of this case are as follows. Appellee and Hospital entered into an employment agreement on May 27, 2008, for Appellee to perform medical services, subject to the terms and conditions set forth in the agreement. The agreement was effective retroactive to September 19, 2007, and included various terms governing Appellee's professional representations, warranties, and covenants, general professional duties, fees and third party reimbursements, additional professional obligations, compensation, benefits, working facilities, and set-offs. The agreement also addressed special circumstances, including disability or death of Appellee during the term of the agreement, and included numerous other miscellaneous provisions. Of particular relevance to the present case are paragraphs 6 and 13. Paragraph 6 states:

6. TERM AND TERMINATION.

(a) Initial Term. TERM AND TERMINATION. The initial term of this Agreement shall begin on the Effective Date and shall continue in effect for a period of thirty-six (36) months (the “Initial Term”) unless Employee dies or becomes disabled pursuant to the provisions of Section 12, this Agreement expires or this Agreement is terminated earlier as provided for herein. Employee may terminate this agreement within 120 days' notice to employer.

(b) Renewal. Unless either party provides written notice of its intent not to renew this Agreement at least one hundred twenty (120) days prior to the end of the Initial Term or any Renewal Term (as defined herein), upon expiration of the Initial Term, this Agreement will automatically renew for successive three year terms, which such terms may expire or be terminated earlier as provided for herein (the “Renewal Terms”; the Initial Term and the Renewal Terms are hereinafter referred to as the “Term”).

(c) Termination. In addition to termination rights set forth elsewhere in this Agreement, the parties shall have the following rights to terminate this Agreement.

(i) Employee shall have the right to terminate this Agreement at any time for any reason upon 120 days prior written notice, provided that, no such termination be effective before September 19, 2009. The Hospital shall have the right to terminate this Agreement at any time for any reason upon one hundred twenty (120) days prior written notice to the other party. In the event the Hospital terminates this Agreement pursuant to this Section 6(c)(i) or 6(b) or in the event Employee terminates this Agreement due to a change in control or commitment specified in Section 6(d) or (e), the Hospital shall pay Employee two years' annual base salary (or twice the amount of the most recent year in which Employee was employed full time, if Employee has elected to enter private practice pursuant to subsection (f) of this section), as severance pay (including Medical Director stipend under Section 7(c)), and shall reimburse Employee's legal fees if Employee deems it necessary to file legal action to enforce this provision. The parties have agreed that said amount is reasonable.

(ii) Hospital may terminate this Agreement, effective immediately upon written notice to Employee, for “good cause” or pursuant to Hospital's authority to terminate this Agreement as expressly provided for in other provisions of this Agreement. “Good cause” means any of the following events:

(A) Employee's medical license or any related license, certification, or registration expires or is revoked, suspended or limited for any reason, provided that such suspension or limitation substantially impairs Employee's performance of the terms of this Agreement and is pending an appeal by Employee;

(B) Employee is convicted of any offense punishable as a felony or is convicted of a misdemeanor involving moral turpitude or immoral conduct, or Employee commits any act for which civil money penalties or other sanctions may be imposed under Medicare, Medical Assistance or any other governmental health reimbursement system, including but not limited to, suspension from the program;

(C) Employee commits fraud, embezzlement, misappropriation or the like with respect to Hospital's business or assets;

(D) Employee is sanctioned by the Medical Board of Pennsylvania, or its equivalent, or by any state or local peer review or quality assurance organization, or by Medicare, Medicaid or any third-party payer, provided that such sanction is final and not pending appeal;

(E) Employee breaches any of Employee's representations, warranties or covenants under this Agreement, and such breach is material;

(F) Employee breaches any of the applicable terms of the Exclusive Agreement for pain services at the Hospital;

(G) Employee fails to perform any of the Employee's duties and obligations under this Agreement as determined by the Hospital in its sole discretion and such failure continues for a period of fifteen (15) days after the Hospital notifies Employee of such failure;

(H) Employee commits any intentional or willful conduct that is, in the sole opinion of the Hospital, acting reasonably, injurious to the Hospital, including, but not limited to, violation of Hospital policies on sexual or other harassment;

(I) Employee commits any instance of insobriety or drug abuse while rendering services hereunder; Employee has an addictive disease which, in the Hospital's reasonable judgment, could impair Employee's ability to perform Employee's duties hereunder, or Employee has diverted a controlled substance; or

(J) Employee fails to perform Employee's professional duties in a manner commensurate with the prevailing standard of performance in the field of chronic pain management.

Excluding the following above items; A, B, C, D, G AND I, if a breach occurs, the Hospital will notify employee of said breach and provide for a cure period no greater than 30 days from the date of the notification. Should the employee cure the breach, the agreement remains in effect and the employee continues his duties as outlined.

(d) Change of Control. In addition to termination rights set forth elsewhere in this Agreement, the Employee shall have the right to terminate this Agreement upon 30 days written notice in the event that there is a change in control of the Hospital. As used in this Agreement, the term “change of control” means: (i) merger or consolidation of the Hospital with or into any other entity; (ii) transfer of all or substantially all of the Hospital's assets to any other entity; or (iii) any transaction pursuant to which the right to elect, appoint or designate 50% or more of the directors of the Hospital is vested in another entity.

(e) Change in Commitment. In addition to termination rights set forth elsewhere in this Agreement, the Employee shall have the right to terminate this Agreement upon 90 days written notice if there has been a substantial change in the Hospital's commitment to support the growth of the Pain Management Program. If Employee seeks to terminate the Agreement on this basis, he shall first seek a meeting of the officers of the Hospital; and both parties shall in good faith use their best efforts to resolve such dispute.

(f) Private Practice. In addition to termination rights set forth elsewhere in this Agreement, if Employee decides to enter into private practice, Employee shall provide the Hospital with 30 days written notice, and, on the date specified in the notice on which Employee shall enter private practice, the provisions of this Agreement that relate to services as the Medical Director of the Pain Management Clinics shall remain in full force and effect, and all other provisions of this Agreement (i.e., those related to employment status for professional services) shall be terminated, and of no further force and effect, including, but not limited to, the employment benefits in Section 8 and the base salary and additional compensation provisions set forth in Section 7(a). So long as Employee remains Medical Director of the Pain Management Clinics, he will be entitled to conduct his private practice at Hospital facilities as the exclusive provider of pain management services and will be entitled to the relevant medical records. However, Employee shall remain eligible to receive the annual stipends set forth in Section 7(c).

(Physician Employment Agreement at ¶ 6, pages 4–7; R.R. at 14a–17a). Paragraph 13 of the agreement states:

13. DISPUTES: REIMBURSEMENT OF ATTORNEY'S FEES AND COSTS.

(a) Any disputes regarding the interpretation or application of this Agreement shall be settled by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration As

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