Case 2:12-cv-00160-NT Document 38 Filed 01/07/13 Page 1 of 24

PageID #: 627

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MAINE PORTLAND DIVISION

JAMES MURTAGH, M.D, Plaintiff, v. ST. MARYS REGIONAL HEALTH CENTER, a/k/a ST. MARYS HOSPITAL, ST. MARYS HEALTH SYSTEM and IRA SHAPIRO, M.D. and JOHN DOE 1 THROUGH 10 and JANE DOE 1 THROUGH 10, Defendants. Case No. 2:12-cv-00160 NT

RESPONSE TO AND MEMORANDUM OF LAW IN OPPOSITION TO DEFENDANTS MOTION TO DISMISS Plaintiff opposes the Defendants Motion to Dismiss for the reasons set forth in the incorporated memorandum of law and accompanying exhibits.

INTRODUCTION: Plaintiff originally filed this cause of action in pro per. Defendants filed a motion to dismiss after service of process was finally completed following new counsels entry into the case. Plaintiff then amended the complaint. The focus of the initial complaint was changed from one addressing the right of a locum tenens physician to the due process rights afforded a staff physician by virtue of Federal Credentialing Regulations (and breach of due process protocol re his termination) to one addressing the rights of the Plaintiff under his own personal contract, the contract between him and the staffing agency and the defamatory comments made by the

Case 2:12-cv-00160-NT Document 38 Filed 01/07/13 Page 2 of 24

PageID #: 628

Defendant about his work and reason for termination. The theory is the same, but the foundation or base for the right to defend against claims of medical incompetence has changed from Federal law to private contract. The cause of action is still one asserting that the termination was required to be preceded by a review on the merits [Breach of Contract], that Plaintiff was terminated illegally because he was an actual or perceived whistleblower [WPA Discrimination] and that communications with other staffing agencies and hospitals asserting a termination for cause are defamatory [Defamation and Tortious Interference] as they are unnecessary and designed to prevent Plaintiff from future staffing retention and locum tenens retentions. While the damage occasioned by the premature termination without any reasonable findings resulted in a direct loss of over $70,000 in income, the publication of the letter issued by the Hospital has created a barrier from Specifically, the new complaint contains a specific claim for Breach of Contract based on the Vista Recruiting Contract with the Hospital 1. The Agreement, Exhibit 1 [Vista Agreement, Murtagh Retention, suspension letter and placement letter], allows for immediate termination of a placement by Vista or the doctor by giving written notice of termination .justifying the reasons for termination. (Emphasis supplied). See Exhibit 1, Vista Contract, Paragraph 7. As consideration for a requirement that the doctor or Vista justify their termination, the hospital is also required to justify its termination decision by making reasonable findings. See Exhibit 1, Vista Paragraph 9. No findings were ever made to support the immediate termination decision by the Hospital as to Murtaghs placement. Under the contract, Murtagh is entitled to his daily rate for the balance of the placement, roughly 60 days [roughly $70,000]. In December of 2010, Dr. Shapiro and St. Marys issued a letter which Murtagh does not argue that the Health System need be retained as a Defendant. He will stipulate to any Order of Dismissal without prejudice.
1

Case 2:12-cv-00160-NT Document 38 Filed 01/07/13 Page 3 of 24

PageID #: 629

appears to be one terminating the Vista contract in a fashion that attempts to avoid payment of the fees for the 90 day term. See Exhibit 2, letter. The letter, however, is written over 6 months after the contract termination. It was sent to Mercy Hospital, not Vista. The submission of this letter to Mercy forms the basis of the Tortious Interference and Defamation claims.

COUNTER STATEMENT OF FACTS: Dr. James Murtagh is a Board Certified pulmonary medicine and critical care medicine physician. He was previously on staff at Emory University in Georgia. In the late 90s, he was contacted by the [Federal Government Agency] concerning fraudulent grant preparation activities at the hospital. He cooperated with the government and blew the whistle. The result was a series of charges against Emory and various individuals employed there. See Exhibit 3, Emory Summary. As a result, Murtagh was forced out in an act of retaliation. Eventually, Murtagh recovered a substantial award against Emory in a sealed settlement. The case file was eventually unsealed by Georgia government agencies investigating the abuses. Since then, Emory has continued to retaliate by tracking Murtagh and infecting his employment opportunities with venom and false accusations concerning his abilities as a physician. He has lost or been terminated from a number of permanent positions and has also been dismissed from several staffing firms, such as Vista in the instant action. The staffing firms are the life blood of a physician who is a career locum tenens physician. At present, the unsatisfactory performance letter from Dr. Shapiro is infecting the files of Alliance, another recruiting firm used by Murtagh. It is blocking job placements. See Exhibit 4, Affidavit of Murtagh and Shapiro Letter of 12/14/2010, Exhibit 2.

Case 2:12-cv-00160-NT Document 38 Filed 01/07/13 Page 4 of 24

PageID #: 630

In the instant action, Vista acted as the staffing company of employment broker for Murtagh to the hospital and for the hospital in the selection and assignment of Murtagh. Vista had a contract with the hospital. (See dkt. no 22-2 Exhibit B). Murtagh had a contract with Vista as the professional. The hospital paid Vista for the services provided by Murtagh. Vista paid Murtagh pursuant to his contract. Vista received more from the hospital than was paid to Murtagh as its compensation for acting as broker. The contracts are part of an integrated hiring package or agreement with overlapping obligations passing through Vista to Murtagh and the Hospital [Agent, Professional and Client respectively]. The employment agreement was for a specific term [90 days] at a rate of $2,000 a day and was terminable as specifically provided for in the two integrated agreements. Defendants maintain that they exercised the termination provision in paragraph 9 of the Vista/Hospital contract because it reasonably found that the performance of the physician was unacceptable for reasons of professional competence or personal conduct despite the fact there are no findings at all to support a claim of unsatisfactory performance, let alone a reasonable finding. The lack of any findings and the corresponding lack of reasonable findings to support the termination decision thus infected all of the hospitals actions and turns what might otherwise be privileged actions into torts as the contractual requirement and implied good faith covenant of reasonable findings was first breached. The Agreement also includes reference to placement letters [the remaining part of the contract between Vista and the Hospital] and attempts to mandate at paragraph 10 that all professionals shall be independent contractors as between the Hospital and Vista as well as the Hospital and the Professional. The Agreement also specifically provides for the termination

Case 2:12-cv-00160-NT Document 38 Filed 01/07/13 Page 5 of 24

PageID #: 631

of the assignment by the professional and how the contractual obligations of the Hospital and Vista are impacted by the professionals termination. See Exhibit 1, paragraph 7. The Hospital also asserts that since Murtagh only had temporary clinical privileges pursuant to its by-laws at 7.5.1 that he was not entitled to any review as to the grounds for termination, let alone due process, based on the Hospitals by-laws as to clinical privileges. See Section 7.5.3 of by-laws. The by-laws are not incorporated into the contract. Instead, the contract mandates a similar requirement called reasonable findings. See Exhibit 1. The by-laws do mandate that in order to suspend or terminate a locum tenens physicians privileges, the CEO must, upon reasonable notice under the circumstances, for any reason but only after consulting with the Chief Medical Officer and Chair of the Medical Staff, take this action. See infra. As to the by-laws, it remains unclear if the Hospital engaged in the appropriate review process. Murtagh was never afforded any evidence that this action was taken. To the contrary, the Medical Chief, Dr. Unsicker, conducted his own investigation and reported to Murtagh that he had exceeded the Hospitals requirements for professional standards. See Exhibit 4. So, while the Vista contract allows for termination for unsatisfactory performance, the by-laws for locum tenens require review and approval by the medical executives which was not obtained and thus no reasonable findings can be made or were made. Since the December 2010 letter announces unsatisfactory performance as the reason, which is contrary to Dr. Unsickers statement to Murtagh and not based on reasonable findings, it is a breach of the contract and seemingly unrelated to the contract termination. The date on the letter and the date of its publication point to another reason for creation and publication. Simply stated, the Hospital did not make any reasonable findings nor did it provide any findings to Murtagh or Vista. The contract mandates that the Hospital make reasonable findings

Case 2:12-cv-00160-NT Document 38 Filed 01/07/13 Page 6 of 24

PageID #: 632

in order to exercise its right to terminate and that the entire Medical Chain of Command approve the termination. Absent either reasonable findings or chain of command approval, the termination was and is a breach of the independent agreement that runs to Murtagh. The letter from Dr. Shapiro announcing termination for unsatisfactory performance simply raises issues as to motivation. Thus, the termination decision was likely made based on defamatory communications from third parties, at the request of third parties for illegal reasons and/or because it learned of Murtaghs whistle blowing history and feared he would blow the whistle on its illegal actions or some other possibly illegal reason, even to fraudulently terminate the contract with Vista and avoid paying fees. In that event, Murtagh was the scape goat for a bad decision by St. Marys management (they did not need him, so dumped him and tried to avoid paying the bill). In fact, Murtagh had complained about up coding or bill coding procedures in a way designed to maximize revenue. After a meeting with HR and medical staff, Murtagh relented and acquiesced in the billing at the Hospital. This is a common occurrence at smaller hospitals in need of increasing their revenue and it is likely that Hospital staff was uneasy having a known whistle blower in their midst. The specific provisions in the by-laws that address locum tenens physicians and their rights are at 4.7, 7.5.1 and 7.5.3 and provide in pertinent part: 4.7 Locum Tenens Staff. The Locum Tenens staff shall consist of physicians and allied health professionals, who meet the qualifications for membership specified in these Bylaws, respectively appointed for the specific purpose of providing coverage in various disciplines where the number of appointed staff is insufficient to meet patient care needs. 7.5.1.3 Locum Tenens. Upon receipt of a written request, an appropriately licensed professional may serve as a locum tenens and be granted temporary privileges as outlined under 7.5.1.1 for ninety (90)
6

Case 2:12-cv-00160-NT Document 38 Filed 01/07/13 Page 7 of 24

PageID #: 633

days with one subsequent 90-day renewal, if necessary.

7.5.3 Termination. The Chief Executive Officer may at any time upon reasonable notice under the circumstances and for any reason after consultation with the Chief Medical Officer of the Medical Staff and the Department Chair terminate any or all temporary privileges granted

These by-law provisions are not specifically referenced in the Vista/Hospital contract. They do, however, require consultation amongst the Senior Medical Staff. In conjunction with this requirement, the Hospital was obligated to make findings were made as required by the Vista/Hospital contract. ARGUMENT: Defendant Hospital argues that Murtagh has failed to state a claim for breach of contract or for breach of a promise to make reasonable findings or conduct due process hearings pursuant to a third party beneficiary obligation. The other arguments also address the merits of the claims, not whether the claims state valid causes of action. Defendants arguments are more in the nature of a motion for Summary Judgment as valid claims have been stated. Rather than address whether valid claims have been asserted, Defendants proceed to attack the claims on the merits. The Defendants motion must thus be seen as one brought pursuant to FRCP 56, not 12 (b). The applicable standard and burden on the movant and the lack of any meaningful discovery are both applicable. It is well understood in all Federal Circuits that such a motion at the very onset of the case is inappropriate. See, for example, Whiting v Maiolini, 925 F 2d 5, 18 Fed R. Serv. 1303 (1st Cir 1991):
"Rule 12(b)(6) and Rule 56 of the Federal Rules of Civil Procedure place different burdens on the parties, and the two motions may be appropriate at different stages of the 7

Case 2:12-cv-00160-NT Document 38 Filed 01/07/13 Page 8 of 24

PageID #: 634

litigation." Aldahonda-Rivera v. Parke Davis & Co., 882 F.2d 590, 591 (1st Cir.1989). Consequently, we have not looked with favor when allowance of the motion through which summary judgment is obtained "follow[s] hard on the heels of the complaint or answer." Condon v. Local 2944, United Steelworkers of America, 683 F.2d 590, 593-94 (1st Cir.1982). When discovery has barely begun and the non-movant has had no reasonable opportunity to obtain and submit additional evidentiary materials to counter the movant's affidavits, conversion of a Rule 12 motion to a Rule 56 motion is inappropriate. Gay v. Wall, 761 F.2d 175, 177-78 (4th Cir.1985). Murtagh will not further burden the court with decisions that detail the essential differences between a motion to dismiss pursuant to FRCP 12 (b) and a motion for Summary Judgment under FRCP 56. The Defendants are, however, improperly labeling a summary judgment motion as one to dismiss. See, Clorox of Puerto Rico v Proctor and Gamble Commercial Co., 228 F 3d 24 (1st Cir 2000). DIRECT CONTRACT AND THIRD PARTY BENEFICIARY CLAIMS Murtagh claims that a contract exists between him and the hospital running through Vista, the broker for both. He also argues that the elements of each claim are set forth in the complaint. Defendant argues that no contract claim can exist because there is a separate contract in writing between Murtagh and Vista and one between Vista and the Hospital. The existence of these agreements does not eliminate the existence of another agreement between the parties nor does it preclude the claim that these contracts are part of an integrated whole. These arguments, however, go to the merit of the claims, not to whether a viable claim is stated. The direct contract claim is based on the integration of the several agreements concerning Murtaghs retention at the hospital. The terms of the agreement(s) supersedes the by-laws which are not part of the contract. The third party claim is based directly on the Vista/Hospital written agreement. Defendant does not contest that if the Vista agreement requiring reasonable findings applies that Murtagh was entitled to some form of hearing resulting in findings. It does not contest the fact that its own by-laws mandated consultation and agreement amongst the
8

Case 2:12-cv-00160-NT Document 38 Filed 01/07/13 Page 9 of 24

PageID #: 635

medical staff which was not obtained. Rather, it argues that this provision does not apply to Murtagh and there can be no contract because writing exists between Murtagh and Vista and another exists between Murtagh and the Hospital. 2 The argument is without merit because the writings can be combined to form one unified contract as alleged and because Murtagh is an intended beneficiary of the Vista/Hospital contract. Finally, even in the absence of a contract, pursuant to the Hospitals By-Laws and the definition of a locum tenens physician, Murtagh is entitled to some form of due process review regarding his termination. Under either analysis, a review was required. However, none was given. The absence of any review, due process or reasonable findings, is a breach of the tri party agreement and/or the Vista/Hospital agreement pursuant to which Murtagh is a direct and intended beneficiary as alleged in the complaint. Thus, as to the contract claim, it is validly pled. A contract existed between Murtagh and the Hospital based on the integration of the separate Vista/Murtagh contract and the Vista/Hospital contract to form one unified agreement. Defendant cites no law to suggest that the two agreements cant be combined to form and integrated whole. But even if no writing is deemed to exist as between the Hospital and Murtagh, an oral contract arises by virtue of his employment or performance of services at the Hospital and the Hospitals by-laws. As to the reasonable findings requirement and the specific provision in the Vista/Hospital contract, the Hospital argues that only parties who are signatories to contracts can enforce them as direct contract beneficiaries. It cites the decision in Amburgey v. Atomic Ski USA, Inc., Civil No. 06-149-P-S, 2007 WL 4468707 (D. Me. 2007) in support of its argument. The decision in Amburgery dealt with the defendant Ski Binding manufacturers claim that is was also released by the ski equipment rental agreement release. The release, however, did not mention the defendant This does not remedy the breach of the by-law claim as to section 7.5.3. If required to be more specific, Murtagh can and will amend his complaint.
2

Case 2:12-cv-00160-NT Document 38 Filed 01/07/13 Page 10 of 24

PageID #: 636

manufacturer, Atomic, specifically nor did it mention any manufacturer or distributor of any of the equipment being rented even generically. Before analyzing the release based on a third party beneficiary theory and rejecting the argument the release also covered Atomic, primarily because there is no expressed intent to benefit ANY manufacturer of the equipment, the court noted that Atomic was not named and did not sign the release but also noted that some contracts can indeed be binding on parties who did not sign the agreement per se. The court noted an exception identified in McCarthy v Azure, 22 F 3d 351 (1st Cir 1994). In McCarty, id, the court addressed the issue of the execution of a contract by a disclosed principal and the binding effect of the signature upon both the agent and principal in some instances. The issue before the court was the scope of an arbitration clause in a purchase agreement. The court rejected the agency argument because the agent could refuse to arbitrate claims against a principal or third party pursuant to established law but by granting his claim the court would allow agents the protection of arbitration as to claims against him. In addition to this lack of mutuality, the court found that there was nothing in the language of the agreement to suggest that the agent intended to bind himself and his principal to arbitration. The agent is not mentioned specifically or generically in the agreement or in the arbitration clause. As a result, the court rejected the claim that the arbitration clause also applied to claims against the agent. In the instant action, Vista is the Agent for both Murtagh [Professional] and the Hospital [Client]. It is the broker between the two contracting parties. The two agreements describe the Hospital as one party and the professional as another to the same agreement. The rights and obligations of each are specifically addressed in the same document, the Vista/Hospital contract, Exhibit 1. Vista is acting for Murtagh in his capacity of professional in the Vista/Hospital contract. Vista and Hospital act to bind themselves to various obligations that they both owe to
10

Case 2:12-cv-00160-NT Document 38 Filed 01/07/13 Page 11 of 24

PageID #: 637

Murtagh and vice versa. Pursuant to the authority cited by the Hospital, both the scope of the language in the agreement and the essential agency relationship of Vista to both principals grants direct contract rights to both the Hospital and Murtagh through Vista. The instant action demonstrates the exception to the argument that contract rights cant be afforded a party who is not a signatory to the agreement itself. Amburgery and McCarthy, supra. The tri-party agreement is directly enforceable by Murtagh. The Hospital breached the contract by failing to provide him with reasonable findings or due process. As to the Third Party Beneficiary claim, the complaint demonstrates that according to Maine law provides a valid claim has been stated. The requisite elements of a claim for being a Third Party Beneficiary of a contract seeking to enforce some or all of its provisions requires sufficient allegations that the Plaintiff was the intended beneficiary of the contractual provision sought to be enforced by the third party against one or both of the parties to another contract. 3Devine v Roche Biomedical Laboratories, 659 A. 2d 868, 10 IER Cases 1196 (Maine 1995). This decision and its progeny set forth the essential allegations and proof is required to maintain a third party contract claim pursuant to Maine law. The Restatement of Contracts and its requirements has also been adopted in Maine. Pursuant to both, the essential question for purposes of a motion to dismiss is whether the Plaintiff alleges that he is the intended beneficiary of the promise sought to be enforced. Intent is derived from the language of the document in the case of writing or from the circumstances surrounding the situation or the writing or both. The Restatement of Contracts 2d, Section 302 (1981) provides in pertinent part: (1) Unless otherwise agreed between promisor and promisee, a beneficiary of a promise is an intended beneficiary if recognition of a right to performance in the beneficiary is appropriate to effectuate the intention of the parties and either (a) the performance of the promise will satisfy an obligation of the
3

In the instant contract, Murtagh is named. He is the Professional.

11

Case 2:12-cv-00160-NT Document 38 Filed 01/07/13 Page 12 of 24

PageID #: 638

promisee to pay money to the beneficiary; or (b) the circumstances indicate that the promisee intends to give the beneficiary the benefit of the promised performance. (2) An incidental beneficiary is a beneficiary who is not an intended beneficiary.

The Hospital does not dispute that the requisite allegations are contained in the complaint. Rather, it argues that it not possible for such a claim to exist in the circumstances of this case. Again, this is an argument on the merits under FRCP 56. Even so, both the Vista/Hospital contract and the circumstances demonstrate that Murtagh is an intended beneficiary of the requirement that reasonable findings be made as to termination for inadequate performance. As noted above, the contract itself contains detailed provisions that mention the professionals rights under the agreement. Specifically, Murtagh is entitled to terminate the assignment only according to a specific process to protect the hospital from being short staffed. Specific notice and reasons must be given by the professional to Vista and the Hospital. See Exhibit 1, paragraph 7. It cant be logically argued that Murtagh is bound by these provisions in the contract as to Vista and the Hospital, but only Vista is bound to Murtagh. Clearly, Murtaghs obligation to give notice is intended to benefit the Hospital, not Vista. By combination of its by-laws and the contract, the Hospital thus has the reciprocal obligation to provide reasonable findings and corroboration and agreement as between the Senior Medical Staff as to any termination decision other than one not for cause (i.e. strictly economic with 60 days notice). Other provisions in the contract also mention the professional and his or her rights and obligations. Thus, the Murtagh is an intended beneficiary of the contractual obligation to provide reasonable findings just as the Hospital is the intended beneficiary of his promise to provide rational reasons for a decision to abandon or terminate the assignment.

12

Case 2:12-cv-00160-NT Document 38 Filed 01/07/13 Page 13 of 24

PageID #: 639

Moreover, the circumstances surrounding the relationship suggest that the parties intended Murtagh to be the beneficiary of the obligation to provide reasonable findings. Murtagh is working at the Hospital, not at Vista. He is serving its patients. His professional reputation and ability to obtain further assignments is dependent upon performing well and if he does not in the eyes of the Hospital, then he is entitled to understand the claim and seek to correct it or defend it, just as any other doctor in the Hospital would. A locum tenens physician standing in the shoes of a full time doctor must be afforded the same rights as their reputation and successful performance is the essential element or ingredient to the next assignment. Under the circumstances, it is clear that the Hospital could exit the assignment with notice without giving a reason. It could not exit the assignment once it began on an immediate basis absent cause or reasonable findings. Vista had an interest in knowing why a particular doctor was unsatisfactory, but its interest pales to the vested interest of the physician. The court in Devine, at p.870, supra, noted: In order for Devine to survive a summary judgment motion and proceed as a third party beneficiary on a contract theory, he must generate a genuine issue of material fact on the issue of BIWs intent that he receive an enforceable benefit under the contract. See F.O. Bailey Co., Inc. v. Ledgewood, Inc., 603 A.2d 466, 468 (Me.1992). This he fails to do. It is not enough that he benefitted or could have benefitted from the performance of the contract. The intent must be clear and definite, whether it is expressed in the contract itself or in the circumstances surrounding its execution. Id. If BIW did not intend to confer upon Devine an enforceable right, any benefit enjoyed by him as a result of the performance of the contract renders him a mere incidental beneficiary. An incidental beneficiary cannot sue to enforce third party beneficiary rights. Id.1 No language in the contract indicates BIWs intent to benefit third parties. The contract provides that NorDx will provide courier service and that Roche will provide clinical laboratory services and report the results orally and in writing. While the contract acknowledges that BIW is relying on NorDxs special skills, knowledge and ability regarding the type of work to be performed, we read this language neither to expand the work contracted for nor to indicate an intent that the performance of that work benefit BIW employees.

13

Case 2:12-cv-00160-NT Document 38 Filed 01/07/13 Page 14 of 24

PageID #: 640

In the instant action, the language in the contract announces a clear intent by Murtagh to benefit the hospital by giving a reason for terminating the assignment and the reciprocal intent by the Hospital to afford Murtagh the same intended benefit. As to the circumstances indicating the beneficiary was intended, the court in Devine noted: In the absence of contract language, there must be circumstances that indicate with clarity and definiteness that BIW intended to give an employee such as Devine an enforceable benefit under the contract. In assessing the relevant circumstances, courts must be careful to distinguish between the consequences to a third party of a contract breach and the intent of a promisee to give a third party who might be affected by that contract breach the right to enforce performance under the contract. If consequences become the focus of the analysis, the distinction between an incidental beneficiary and an intended beneficiary becomes obscured. Instead, the focus must be on the nature of the contract itself to determine if the contract necessarily implies an intent on the part of the promisee to give an enforceable benefit to a third party. In the instant action, the circumstances also indicate intent to benefit. At the time the contract was entered into, both the Hospital and Murtagh wanted to be able to count on a commitment for a full engagement. If either was not going to receive the full contract term of performance from the other, both wished to know why. The Hospital needed to know in order to be able to obtain future assignments and eliminate issues that might prevent it from obtaining qualified doctors. Murtagh needed and was being afforded the same commitment by the Hospital. Based on the circumstances and the actual language of the writings, Murtagh is an intended beneficiary and the claim is adequately pled to withstand this motion since the claim alleges the essential elements of the claim based on a contract of third party beneficiary theory. Further examination has revealed that the claims must also survive summary judgment based on the reciprocal obligations of Murtagh as the professional identified in the Vista agreement.

14

Case 2:12-cv-00160-NT Document 38 Filed 01/07/13 Page 15 of 24

PageID #: 641

WHISTLEBLOWER CLAIMS: The Hospital asserts Murtagh has failed to plead the requisite elements of a 1) protected activity and 3) causation. The protected activity is described in Exhibit 4, Murtagh Affidavit (objection to up coding or services for increased fees). Murtagh backed away from his concern after discussion with the Hospital staff, but the fear of reporting and the need to paint Murtagh as incredible or disgruntled was the motivation for termination. If required, this can be pled in detail, but the pleadings meet the requirements of a cause of action. As to causation, the Hospital claims that the lack of detail precludes it from defending the case by knowing the facts it must defend. Murtagh claims that the Hospital quickly dispensed with him [retaliation] for having raised the issue and fearing he would report medical up coding. Thus, as to causation, he lost the $70,000 on this contract. He was then maligned with a for cause termination letter and no opportunity to defend himself to paint him as an incredible witness. Without due process, reasonable findings or even minimal discovery, Murtagh cant assert more details. Until discovery is at least begun and Murtagh learns from the CEO, the CMO and the Chief of Staff, he can only speculate on the true motives, but the actions of the Hospital demonstrate a prime facie case or retaliation. The elements of a primae facie case of WPA retaliation are that the Plaintiff engaged in protected activity and that the employer took adverse employment action and that a causal connection between the adverse action and the protected activity exists. The nature of the causal connections need not be alleged in detail in the complaint. Rather, the basic elements are alleged and the parties then proceed through the classic Burdine burden shifting analysis following discovery. See, DiCentes v Michaud, 719 A 2d 509 (Maine 1988) where the court described the burden shifting in the course of granting a motion for summary judgment following discovery:

15

Case 2:12-cv-00160-NT Document 38 Filed 01/07/13 Page 16 of 24

PageID #: 642

To prevail on a claim of unlawful retaliation pursuant to the WPA, an employee must show (1) that she engaged in activity protected by the WPA, (2) that she experienced an adverse employment action, and (3) that a causal connection existed between the protected activity and the adverse employment action. See Bard v. Bath Iron Works Corp., 590 A.2d 152, 154 (Me.1991). The trial court appropriately analyzed DiCentes's WPA claims through the use of the shifting burdens analysis articulated in McDonnell Douglas v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973).10 We review the trial court's factual findings for clear error, see M.R. Civ. P. 52(a), and will set aside such a finding only where there is no competent evidence in the record to support it. See Calaska Partners, Ltd. v. Corson, 672 A.2d 1099, 1104 (Me.1996).

In the instant action, Murtagh did indeed observe the up charging or overbilling of services being provided. He reported it. He even discussed it with staff. He decided to adopt the Hospitals position. The Hospital, however, terminated him proactively to prevent reporting and attempting to avoid an obligation to correct the actions. Under these circumstances, Murtagh complied with any requirement to report the alleged wrongful activity and allow the Hospital a chance to remedy it. See, 26 MRS Section 833 (2). The Hospital retaliated once Murtagh backed off in order to prevent a credible whistle blowing. Thus, Murtagh has stated a valid cause of action under the WPA. See, 26 MRS Section 833 (2) and Currie v Industrial Security, 915 A. 2d 400 (Maine 2006) [termination based on fear of repercussion from whistle blowing states cause of action]. As to the protected activity, it is adequately pled, but if not, Murtaghs affidavit supplies sufficient detail. See Exhibit 4, Affidavit. A Whistle Blower claim does not require the detail that a fraud claim does. Moreover, a former whistle blower is entitled to protection from retaliation by the employer where the employer terminates in anticipation of a whistle blowers

16

Case 2:12-cv-00160-NT Document 38 Filed 01/07/13 Page 17 of 24

PageID #: 643

potential revelations or past history of doing so. King v Dept. of Army, 2011 MSPB 83 (2011) (copy attached). There is no decision interpreting the Maine Act that precludes protection for past whistle blowing activities that are the basis for termination or retaliation. In addition to Murtaghs activities at the Hospital, Murtagh claims this history of blowing the whistle at Emory is what motivated his termination from St. Marys. This type of proactive or preemptive termination out of fear of whistleblowing is itself a violation of the various See, Currie, supra; US ex rel Gobble v Forest Industries, 729 F.Supp.2d 446 (D Mass 2010). This claim is sufficiently pled and factually supported to require St. Marys to proceed with discovery and explain why it took the action it did. TORTIOUS INTERFERENCE/FRAUD: The Hospital claims that Murtagh has failed to sufficiently identify an actual or anticipated contract or expectancy that was interfered with by the Hospital for improper reasons resulting in termination or failure to engage or hire. The Hospital claims that because the complaint alleges fraudulent activity that the wrongful activity must be fraud and that the fraud must be pled with specificity. This argument is without merit. The intimidation element of the tort encompasses a wide range of conduct including that which is alleged in the complaint:

Tortious interference with a prospective economic advantage requires a plaintiff to prove: (1) that a valid contract or prospective economic advantage existed; (2) that the defendant interfered with that contract or advantage through fraud or intimidation; and (3) that such interference proximately caused damages. Rutland v. Mullen, 2002 ME 98, 13, 798 A.2d 1104, 1110. In Pombriant v. Blue Cross/Blue Shield of Maine, 562 A.2d 656 (Me.1989), we held that intimidation is not restricted to frightening a person for coercive purposes, but rather exists wherever a defendant has procured a breach of contract by making it clear to the party with which the plaintiff had contracted that the only manner in which that party could avail itself of a particular benefit of working with defendant would be to breach its contract with plaintiff. Id. at 659.

17

Case 2:12-cv-00160-NT Document 38 Filed 01/07/13 Page 18 of 24

PageID #: 644

See, Currie v Industrial Sec., Inc., 915 A 2d 400, 408 (Maine 2007).

The contracts and prospective employment all relate to either broker retentions such as with Vista or potential contracts with entities like Vista or direct contracts with hospitals. In this instance, the specific contract is the Vista broker arrangement. It was terminated by Vista based on the letter sent to it by St. Marys and Shapiro and also as a result of other communications. The letter, dated December 2010, was sent months after the contract termination. See Exhibit 2, letter. The letter and termination caused Murtagh to lose Vista as an agency. Thus, Murtaghs contract with Vista was terminated because of the wrongful conduct of Shapiro and the Hospital. It is unclear if Murtagh was a victim of a fraudulent termination by the Hospital [a fraudulent claim to avoid paying fees by asserting unsatisfactory performance without any basis] or out of fear of potential whistle blowing and the need to discredit Murtagh. Either way, somehow the Hospital made it clear to Vista that it needed to end its relationship with Murtagh if Vista was going to place doctors at the Hospital. Until Murtagh is allowed to obtain additional information through discovery, he will never know what Shapiro told Vista to cause his termination. In a case that is nearly identical to the instant action, this court refused to grant summary judgment to a hospital that a locum tenens physician had brought a tortious interference action. In Landsberg v Maine Coast Regional Health Facilties, CV-08-59-BW (D Maine), this court rejected the Defendants motion for Summary Judgment based on a nearly identical fact pattern [in Landsberg it was a false claim of inappropriate sexual contact]. The court found questions of fact existed as to both the fraud arm of the claim and the intimidation component of the claim because the inference that the doctor should be let go of his assignment if the firm wished to do business with the hospital was implicit in the communication. See Exhibit 1, suspension letter,

18

Case 2:12-cv-00160-NT Document 38 Filed 01/07/13 Page 19 of 24

PageID #: 645

Murtagh contract and Exhibit 2. See also, Exhibit 5, Landsberg Opinion of 8/5/2009. Arguing insufficient detail at this stage is bootstrapping. If the Hospital had provided reasonable findings, Murtagh could challenge them and specify them in his complaint. It is the Hospital that creates its own insufficient detail. At this stage in the litigation, Murtagh claims that Shaprios statement re unsatisfactory performance was false, not based on any reasonable findings as required by his contract and therefore illegal and improper. The communication had its intended effect and caused the termination of the Murtagh/Vista listing agreement. Murtagh has received no further assignments or placements through Vista. He lost his job at Mercy. He lost other jobs as detailed in his affidavit, Exhibit 4. Again, this detail is not required for a tortious interference claim. In sum, Murtagh asserts that the Hospital and Shaprio terminated him in retaliation for his potential whistle blowing and/or perceived ongoing whistleblowing and soinformed Vista, contributing to Murtagh being blackballed in the locum tenens profession.

DEFAMATION: The Hospital knowingly disclosed false or deliberately misleading information with malicious intent. Initially, this communication violates the Maine work records privilege. Maine Revised Statutes, 26 Section 598. Thus, it is not privileged in any sense. In the instant action, Murtagh claims that is exactly what the Hospital did. It disclosed a false claim of unsatisfactory performance without any basis, including affirmation that the by-laws had been complied with, despite having an obligation to make reasonable findings to support its claim. Murtagh has asserted that the Hospital and Shapiro made the negative statement to punish him and insure he received no further locum tenens assignments from Vista or any other broker. Moreover, the statement is not mere opinion. In Ballard v Wagner, 877 A. 2d 1083 (D.

19

Case 2:12-cv-00160-NT Document 38 Filed 01/07/13 Page 20 of 24

PageID #: 646

Maine 2005), the court held that a statement that may appear to be opinion may be a statement of fact based on how the average or ordinary person would likely understand it: [ 11] Wagner contends that because his statements on the website reflected his opinion, they are not libelous and are protected by the First Amendment. We disagree. The determination whether an allegedly defamatory statement is a statement of fact or opinion is a question of law ... [but if] the average reader could reasonably understand the statement as either fact or opinion, the question of which it is will be submitted to the [fact-finder]. Caron v. Bangor Publ'g Co., 470 A.2d 782, 784 (Me.1984). Such a determination by the fact-finder of whether the alleged defamatory statement is fact or opinion is subject to review for clear error. See True, 513 A.2d at 262; Wells v. Powers, 2005 ME 62, 2, 873 A.2d 361, 363. In assessing whether a statement expresses fact or opinion, we look to the *1088 totality of the circumstances and to whether the statement was intended to state an objective fact or a personal observation. Lester, 596 A.2d at 71. 910 [ 12] [T]he crucial difference between statement[s] of fact and opinion depends upon whether ordinary persons hearing or reading the matter complained of would be likely to understand it as an expression of the speaker's or writer's opinion, or as a statement of existing fact. Caron, 470 A.2d at 785 (citations omitted). A statement of opinion may be actionable if it implies the existence of undisclosed defamatory facts. Lester, 596 A.2d at 71; see also Caron, 470 A.2d at 784. Moreover, in assessing whether words are defamatory, they must be taken in their ordinary and usual meaning. Judkins v. Buckland, 149 Me. 59, 64, 98 A.2d 538, 541 (1953). In the instant action, given the requirement of reasonable findings by the Hospital, a reasonable person reading Dr. Shapiros letter would conclude that the writer was asserting that facts existed that supported the conclusion and that the services were of poor quality or incompetent. While this is a matter of law for decision on motion for Summary Judgment, the claim has been pled and the cause of action exists. It is well settled that negative claims about an individual as to his or her profession are per se defamatory under Maine law. See, Picard v Brennan, 307 A 2d. 833, 834 (Maine 1973). No allegation of malice is required. Thus, the claim states a valid cause of action for both false light and defamation per se. Defendant Hospital relies on two decisions to support its claim that assertions about job performance cant state a valid claim of defamation. In Cook, Heyward, et al v Trump

20

Case 2:12-cv-00160-NT Document 38 Filed 01/07/13 Page 21 of 24

PageID #: 647

Acquisitions, 2012 WL 1898616 an unpublished memorandum decision, the court held that a statement by a client about the law firms services that it was very disappointed with the services was not a factual claim that could rise to the level of a defamation. Both cases are distinguishable based on the requirement of factual findings in the instant action and because a reasonable person could understand that such a statement was based on inherent or implicit findings of fact by the Hospital. In the instant action, the letter to Vista that the Hospital found Murtaghs performance unsatisfactory is presumably based on reasonable findings not given to Murtagh or perhaps based on no findings in violation of the contract. The complete absence of any findings does not eliminate the claim as the statement implies they exist. At this point, Murtagh does not know what reasonable findings were made by the Hospital to allow Vista to terminate the contract without making additional payments to Vista, but the claim of unsatisfactory performance must be supported by some factual findings.

STATUTORY FAILURE TO PROVIDE EXPLANTION FOR TERMINATION: The Hospital claims that 26 MRSA Section 630 does not apply because Murtagh is not an employee under the statute. Thus, it has no obligation to provide him with a statement as to the reason for his termination. While the Hospitals refusal to do so suggests that the real reason is something quite different from unsatisfactory performance else it would have been a simple matter to provide the information, the argument is one on the merits, not based on the pleadings. Murtagh has alleged he is an employee within the meaning of the statute. Whether he is an employee or a contractor is NOT determined by the label applied to his Vista contract. Interestingly, the Hospital now seeks to enforce the Vista contract to its advantage by asserting

21

Case 2:12-cv-00160-NT Document 38 Filed 01/07/13 Page 22 of 24

PageID #: 648

the independent contractor status claimed in the document. If Murtagh is a contractor by virtue of the contract, then the Hospital is estopped [equitable estoppel or judicial estoppel] to assert the contract is not binding on it, mandating reasonable findings to be afforded to Murtagh. The law of Maine looks to the economic reality to determine the nature of the relationship, not the label. In Scovil v FedEx Ground Package System Inc., ____ F Supp. ______ (D Maine 2012), the court addressed the issue based on Maine common law:

Maine has followed a similar approach in reading the common law right-tocontrol test into section 626's definition of employee. There is every reason to believe that it would do the same for the section 663 definition for section 664 employees and for the definition-less section 629. State Farm Mut. Auto. Ins. Co. v. Koshy, 995 A.2d 651, 663 (Me.2010) (stating that an ambiguous statute will only be read in derogation of the common law if the legislative history demonstrates the Legislature's intent to do so); Town of Baldwin v. Carter, 794 A.2d 62, 68 (Me.2002); Davis v. State, 306 A.2d 127, 131 (Me.1973).8 *5 For the common law definition of employee, the seminal case is the 1931 decision in Murray's Case, 130 Me. 181, 154 A. 352 (Me.1931), although Murray's Case itself was not a common law decision. There the Law Court had to decide whether a worker was an employee within the meaning of the Workmen's Compensation Act, or an independent contractor. The statute defined employee as a person in the service of another under any contract of hire, express or implied, oral or written. Id. at 353. The Court quoted earlier decisions that an independent contractor is one who carries on an independent business, and in the line of his business is employed to do a job of work, and in doing it does not act under the direction and control of his employer, but determines for himself in what manner the work shall be done. Id. The Court listed the following eight tests of the relationship, saying that they were not necessarily concurrent or each in itself controlling: (1) the existence of a contract for the performance by a person of a certain piece or kind of work at a fixed price;(2)the independent nature of his business or his distinct calling; (3) his employment of assistants with the right to supervise their activities; (4) his obligation to furnish necessary tools, supplies, and materials; (5) his right to control the progress of the work except as to final results: (6) the time for which the workman is employed; (7) the method of payment, whether by time or by job; (8) whether the work is part of the regular business of the employer.

22

Case 2:12-cv-00160-NT Document 38 Filed 01/07/13 Page 23 of 24

PageID #: 649

In the instant action, it is likely Murtagh will be found to be an employee at trial or pursuant to a Motion for Summary Judgment. Murtagh was not performing one operation, he was on staff. A pulmonary critical care doctor is hospital bound, not one who has an independent practice. The Hospital supplies all his tools pursuant to the Vista contract. The time he was to be employed was fixed and his work was part of the regular work of the Hospital. Thus, it is likely that the Hospital will be deemed Murtaghs employer and required to comply with the statute. CONCLUSION For the reasons set forth above, the Defendants Motion to Dismiss pursuant to FRCP 12 (b) should be denied. If the court finds any component of any pleading inadequate, Murtagh seeks leave to file an amended complaint. Respectfully Submitted /s/ Joseph C Bird 1/05/2013 CERTIFICATE OF SERVICE I certify in accordance with Local Rules that I have served or caused to be served a copy of this Motion Response and Brief in Support and all accompanying Exhibits upon counsel of record through the ecf system and also by separate e-mail to their registered e-mail addresses. I further certify that I am submitting this in response to a request from the clerks office for compliance with ecf filing requirements. Respectfully, /s/ Joseph C Bird 1/5/2013
23

Case 2:12-cv-00160-NT Document 38 Filed 01/07/13 Page 24 of 24

PageID #: 650

24