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Foster v. Springfield Clinic





APPEAL from the Circuit Court of Sangamon County; the Hon. RICHARD J. CADAGIN, Judge, presiding.


This case concerns a claim that an express one-year contract of employment continued in operation by implication for an additional year because, after the expiration of the first year, the employee continued for a short time to serve the employer as provided by the contract and the employer continued to accept the services.

On October 25, 1977, plaintiff, Michel Susan Foster, brought suit in the circuit court of Sangamon County seeking damages from defendant, Springfield Clinic (Clinic), a partnership, for breach of a contract by which she claimed she was employed as a physician by the Clinic. A jury awarded plaintiff $22,152.80. After hearing defendant's post-trial motion, that court entered an order on November 14, 1979, upholding the determination in favor of plaintiff but reducing the judgment to $15,806.66. Defendant appeals, and plaintiff cross-appeals contesting the reduction.

Defendant asserts (1) the evidence was insufficient to support a finding, inherent in the verdict, that the express one-year contract between the parties was renewed by implication for a subsequent year, (2) plaintiff was shown as a matter of law to have breached the express contract by failing to perform as required, and (3) the court erred in ruling on instructions concerning damages and possible condonation by defendant of any breach of contract by plaintiff.

The testimony in regard to plaintiff's employment can be divided into three periods: the precontract period, the written contract period, and the period subsequent to the expiration of the written contract.

During the precontract period, the plaintiff visited the Springfield Clinic and discussed employment terms with John Montgomery, the Clinic administrator. At this time, the plaintiff explained to Montgomery that, due to the nature of her practice, she might not generate as much money as some other doctors. Montgomery responded that a young physician was not necessarily expected to bring in enough income to cover her salary. No member of the Clinic told plaintiff how many hours she was expected to work or what she was expected to charge. Plaintiff was an internist with a subspecialty of endocrinology. Doctor Henry Rohs, also an internal medicine specialist with the Clinic, testified that he met with plaintiff before her employment and explained to her that because her subspecialty was not a major one, she would also have to care for patients with general medical problems.

The express contract was a written one for one year beginning August 1, 1976. It provided for a salary of $36,000 and fringe benefits. Plaintiff testified that she was informed by an official of the Clinic that it had a practice of considering associates for partnership at the beginning of the first fiscal year after the associate had completed one year of service at the Clinic. The Clinic's fiscal year began on March 1, so the first time plaintiff could have been considered for partnership under the practice would have been March 1, 1978. Plaintiff also testified that the Clinic official told her that the practice was that if the associate was not accepted for partnership, the associate would either leave then "by mutual agreement" or remain as an associate.

Plaintiff testified that while she had no obligation to see a particular number of patients, she understood that she should see a reasonable number. She said that she became aware of the Clinic's concern about her performance when Dr. Rohs met with her, at the direction of the Clinic's plan committee, in March 1977 and mentioned to her that her production was too low. She testified to then telling him that, in an effort to increase her production, she would resume giving general physical examinations. Dr. Rohs testified to telling her at that meeting that, while the Clinic did not necessarily expect her to generate income equal to her salary, they did expect a reasonable effort. He also stated that he told her the committee hoped her production would improve.

Judy Hulett, a Clinic receptionist, testified that after plaintiff had been employed for six to eight weeks she received word from plaintiff's office that plaintiff did not want any cold or headache cases and that plaintiff's nurse told her that plaintiff wished to limit her practice to diabetes cases and the giving of physical examinations. Hulett estimated from memory that from August 1976 to March 1977, plaintiff refused 70% of the cases referred to her. Plaintiff's nurse, Janet Helvey, testified that plaintiff's refusal of patients resulted from plaintiff's having no open time for appointments or because the patients had problems plaintiff was not equipped to handle. Helvey stated that plaintiff never told her she wished to limit the scope of her practice or the number of patients she saw. In rebuttal, plaintiff admitted that on occasion she had told her nurse that she would not see patients with problems like a cold or flu, but had not otherwise tried to limit her practice except to refuse giving physical exams for a period of approximately three months. Plaintiff's patient volume varied from a high of seven patients per day to a low of three or four patients per day. Evidence was presented at trial that the national average of patient volume ranges from 12 to 40 patients seen per day.

Prior to the expiration of the one-year term of the express contract on July 31, 1977, no one from the Clinic contacted plaintiff for the purpose of negotiating a new contract nor did anyone tell her that she would not be permitted to remain. She continued to work at the Clinic beyond that date.

On August 3, 1977, plaintiff received a memorandum from John Montgomery, requesting her presence at the August 15, 1977, plan committee meeting. At the meeting, the committee asked plaintiff to provide reasons for her low productivity. The committee spoke in terms of money generated, gross charges per month, and patient number per month. Plaintiff provided the following reasons: weather which had caused appointment cancellations, new internists at the Clinic who created competition, new endocrinologists in the community, lack of patients coming into the Clinic, and a number of her patients who did not require follow-up visits. At that time, the plan committee recommended that she become involved with a medical school, give seminars and conferences, participate in student teaching, and take every patient possible from whatever source. Employment terms were not discussed at this meeting, nor was the plaintiff asked to take a reduction in salary.

Several days after the meeting, plaintiff received a memo from John Montgomery dated August 15, 1977, which stated that her salary for the coming year was to be reduced to $25,000. This reduction would become retroactively effective on August 1, 1977. Plaintiff sent Montgomery a letter stating that the offered salary was a breach of contract and that she would not accept anything less than $36,000. Soon after this exchange of letters, plaintiff met with Montgomery. He raised substantially the same questions which had been discussed at the August 15 meeting. He offered to help plaintiff, but gave no particulars as to how he would do so. Plaintiff stated that they never did reach an agreement in regard to salary.

On September 22, 1977, plaintiff received a letter from the chairman of the Clinic partnership which stated that her services would be terminated as of October 31, 1977.

Plaintiff claims that by accepting her services after July 31, 1977, defendant impliedly agreed to rehire her for an additional year upon the same conditions as the original contract. Her ...

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