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Nemickas v. Linn County Anesthesiologists, P.C.

Court of Appeals of Iowa

May 16, 2018

RIMAS NEMICKAS, M.D., Plaintiff-Appellant,

          Appeal from the Iowa District Court for Linn County, Mary E. Chicchelly, Judge.

         An anesthesiologist appeals (1) the dismissal of his action alleging his former practice group violated the Iowa Competition Law and (2) the grant of summary judgment on his claims for breach of contract, fraudulent inducement, and tortious interference.

          Michael M. Sellers of Sellers, Galenbeck & Nelson, Des Moines, for appellant.

          Mark L. Zaiger and Kerry A. Finley for Shuttleworth & Ingersoll, P.L.C., Cedar Rapids, for appellee.

          Heard by Doyle, P.J., and Tabor and McDonald, JJ.

          TABOR, JUDGE.

         When Dr. Rimas Nemickas was practicing with Linn County Anesthesiologists, P.C. (LCA), the group entered into exclusive contracts with two Cedar Rapids hospitals. After the practice group terminated his employment contract, Dr. Nemickas sued LCA under Iowa's anti-monopoly statute, Iowa Code section 553.5 (2015). Dr. Nemickas also accused LCA of breach of contract, fraudulent inducement, and tortious interference. The district court granted LCA's motion to dismiss the section 553.5 action, finding the doctor lacked standing to bring a state antitrust claim. The district court issued summary judgment for LCA on the remaining claims. Dr. Nemickas now challenges the district court's rejection of his amended pleadings, the dismissal of his antitrust suit, and the grant of summary judgment. We find no abuse of discretion in the district court's handling of the myriad of amended pleadings filed by Dr. Nemickas. And we find no legal error in the district court's dismissal of the antitrust action or its grant of summary judgment on the contract-related claims. Accordingly, we affirm.

         I. Facts and Prior Proceedings

         Dr. Nemickas is a board-certified doctor of medicine and anesthesiology. He joined LCA in 1999 and became a shareholder of the practice in 2005. In 2012, LCA entered into separate contracts with two Cedar Rapids hospitals, Mercy Medical Center and St. Luke's Hospital, to be their exclusive provider of anesthesiology services. Two years later, in July 2014, LCA notified Dr. Nemickas that the officers of the practice would recommend his contract not be renewed as of December 2014. In August 2014, Dr. Nemickas filed a petition at law and requested a temporary restraining order against LCA's employment action. The petition also alleged a breach of contract by LCA.

         The district court restrained LCA from holding its board meeting to consider Dr. Nemickas's employment status until after the parties conducted mediation as spelled out in the employment agreement. In September, the court expanded its injunction, ordering mediation occur within thirty days as set out in amendments to the agreement and that LCA provide Dr. Nemickas with ten days' written notice of the mediation and a list of specific events contributing to its decision not to renew his contract.

         LCA provided Dr. Nemickas with notice on October 1 of the grievance committee meeting set for October 14. The practice also provided reasons for its proposed action, a series of complaints dating from 2000 to 2014 "demonstrating a lack of diligence regarding patient care." The list included: "complaints and reports from charge nurses at both Mercy and St. Luke's of a routine failure to review patient charts prior to administering anesthetic, " "making social plans on phone while patient moving on table, " "several incidents of falling asleep, " and "inattentiveness to patients during general anesthesia while talking on phone". LCA also provided reports and complaints dating from 2000 to 2013 reflecting "disruptive and inappropriate conduct" by Dr. Nemickas, including "multiple events centered around explosive personality and inappropriate conversations in front of awake patients and Dr. Nemickas denying having any problem at follow up meeting." LCA summarized: "Based on chronic and recurring issues the Practice did not find Dr. Nemickas's behavior and performance consistent with the Practice's mission statement." Dr. Nemickas submitted a ten-page response to LCA's concerns to the grievance committee.

         After its October 14 meeting, the grievance committee recommended LCA's concerns be considered by all shareholders in December 2014. Some data findings gathered by the grievance committee were sent late to Nemickas, but he received them before the scheduled meeting. Dr. Nemickas filed a request to enjoin any meeting to address his employment status which the district court denied. Dr. Nemickas was not present when the grievance committee presented to the LCA, but was able to make his own presentation and participate in the shareholder vote. After hearing presentations from both sides, twenty-four shareholders voted to issue Dr. Nemickas a ninety-day notice of "voluntary termination"; four opposed the motion and one abstained. On December 12, LCA sent Dr. Nemickas written notice of termination effective March 14, 2015. The doctor filed a fourth request for injunctive relief on March 2, asking the court to set aside LCA's decision to terminate his contract. The court denied the request. On March 14, Dr. Nemickas resigned his position with LCA. Both Mercy and St. Luke's advised Dr. Nemickas that he could not provide anesthesia services because of their exclusive contracts with LCA. But Dr. Nemickas continued to provide anesthesia services at the Surgery Center of Cedar Rapids under his St. Luke's privileges.

         In April 2015, Dr. Nemickas filed an amended and substituted petition alleging three counts: breach of contract, fraudulent inducement, and antitrust violations under chapter 553. In May 2015, the court granted leave to amend. In June 2015, LCA filed a partial motion to dismiss, asserting Dr. Nemickas lacked standing to pursue the state antitrust claim.

         During the summer of 2015, Dr. Nemickas tried repeatedly to amend his amended and substituted petition. On July 24, 2015, Dr. Nemickas filed a motion for leave to amend his petition to add a count of tortious interference. The motion also sought to change the caption to assert he was bringing the action "on behalf of himself and consumers of anesthesia services." LCA resisted the proposed amendment, arguing Dr. Nemickas lacked third-party standing to assert the chapter 553 action on behalf of unidentified consumers. In a third motion to amend filed August 12, Dr. Nemickas sought permission to add Mercy and St. Luke's hospitals as defendants in his antitrust action. LCA resisted.

         The district court granted LCA's partial motion to dismiss on October 5, 2015. In that same ruling, the court denied Dr. Nemickas's motion to file a second amended and substituted petition. After a series of filings by Dr. Nemickas seeking reconsideration, the district court confirmed the dismissal on December 10. Dr. Nemickas sought interlocutory review of that ruling, which our supreme court denied.

         LCA filed a motion for summary judgment in May 2016 with respect to Dr. Nemickas's claims for breach of contract, tortious interference, and fraudulent inducement. The motion noted the court had not granted Dr. Nemickas express permission to amend his petition to include the tortious interference claim but asserted LCA did not resist the motion to amend with respect to that claim. In August 2016, the district court granted LCA's motion for summary judgment in its entirety and ordered Dr. Nemickas to resign his clinical privileges and to "cease and desist" practicing anesthesia at St. Luke's Hospital. Dr. Nemickas appeals.

         II. Scope and Standards of Review

         Dr. Nemickas contends because he requested remedies in equity regarding the antitrust claim, our review should be de novo. See Iowa R. App. P. 6.907. LCA disagrees, arguing appellate review of dismissals for lack of standing in antitrust suits is for the correction of legal error. See Southard v. Visa U.S.A. Inc., 743 N.W.2d 192, 194 (Iowa 2007). We agree with LCA. We review the dismissal for errors at law. Comes v. Microsoft Corp., 646 N.W.2d 440, 442 (Iowa 2002). We will affirm "if the petition shows no right of recovery under any state of the facts." Id. (citing Barnes v. State, 611 N.W.2d 290, 292 (Iowa 2000)). We consider the petition's allegations in the light most favorable to the plaintiff. Id.

         Dr. Nemickas asks us to review the district court's denial of his motions to amend for the correction of errors at law. LCA argues our review is for abuse of discretion. See Rife v. D.T. Corner, Inc., 641 N.W.2d 761, 766 (Iowa 2002). ("We afford district courts considerable discretion in ruling on motions for leave to amend pleadings." (citing Davis v. Ottumwa YMCA, 438 N.W.2d 10, 14 (Iowa 1989))). LCA is again correct, we will only reverse "when a clear abuse of discretion has been shown." See Davis, 438 N.W.2d at 14 (citing B & B Asphalt Co. v. T.S. McShane Co., 242 N.W.2d 279, 284 (Iowa 1976)).

         The parties agree we review the grant of summary judgment for the correction of legal error. See Baker v. City of Iowa City, 867 N.W.2d 44, 51 (Iowa 2015).

         III. Analysis

         A.Did the District Court Properly Dismiss the ...

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