Physician, fired over pre-signed prescription forms, loses case at Supreme Court

By Nathan Bass | Dec 3, 2012

CHARLESTON - The state Supreme Court of Appeals on Nov. 26 affirmed a circuit court’s ruling in favor of an employer in a breach of contract case brought by a terminated physician.

The court also affirmed the finding of defamation against the doctor.

In 2008, Dr. James H. Henick entered into an employment contract with Fast-Track Anesthesia Associates, LLC. The sole owner and director of Fast-Track was Dr. Jessica Palumbo-Peretin, and the contract was for the period of July 1, 2008, to June 30, 2009.

On July 1, 2009, Henick and Palumbo agreed to modify the contract for six more months, with Henick’s employment ending on Dec. 31, 2009.

“A dispute arose between the parties in August of 2009, when Dr. Palumbo learned that petitioner had pre-signed fifty-four blank prescription forms ('signed blank script') and left them with his pain management nurse before he left for vacation. When petitioner returned to the office on Aug. 31, 2009, Dr. Palumbo met with petitioner to discuss the signed blank script and then placed petitioner on a paid suspension pending further investigation,” according to the opinion.

“On Sept. 2, 2009, petitioner discussed his suspension with Martinsburg surgeon, Dr. Joseph Cincinnati, who owned Tri-State Surgical Center. During their conversation, petitioner told Dr. Cincinnati that Dr. Palumbo had asked petitioner to pre-sign blank script before he left for vacation. Tri-State and Fast-Track were located in the same office building. Fast-Track was the exclusive provider of anesthesia services to Tri-State’s patients, and Tri-State was Fast-Track’s only client.”

Henick’s employment with Fast Track was terminated later in September 2009 and he filed an action against Fast Track and Palumbo for breach of contract and failure to reimburse his accrued vacation time in March 2010.

“Respondents counterclaimed for breach of contract, defamation per se, and insulting words, but later dismissed the insulting words claim.”

After a bench trial, the judge dismissed Henick’s breach of contract and failure to reimburse claims and found Henick’s statement to Dr. Cincinnati was “defamatory per se because it imputed incapacity in Dr. Palumbo’s profession.” The court awarded Palumbo $100,000 in general damages but “specifically denied a separate award of punitive damages.”

The court also “awarded respondents $87,167 in damages on their counterclaim for breach of contract.”

Henick appealed on seven assignments of error, all of which the Court rejected.

Notably, Henick claimed that since the contract did not state how to handle accrued vacation time then “any ambiguity in the contract should be resolved in his favor” and he should be given his accrued vacation pay.

To this argument the Court wrote, “[P]etitioner’s wife drafted petitioner’s employment contract. Thus, any ambiguity in the contract should be construed against petitioner.”

The Court also rejected Henick’s claim that the circuit court erred in finding his statement to Dr. Cincinnati to be defamatory on its face. Henick argued that the statement had to have been “defamatory on its face to a person of common understanding without the use of innuendo or extrinsic evidence.”

“Petitioner contends that the circuit court ruled that extrinsic evidence–in this case, a physician’s knowledge of rules regarding the practice of medicine–was necessary for petitioner’s statement to be defamatory," the court wrote.

“The circuit court did not abuse its discretion in finding petitioner’s statement to Dr. Cincinnati to be defamatory on its face. Dr. Cincinnati is a fellow physician who, without explanation, understood the inflammatory nature of petitioner’s statement.”

The memorandum opinion was concurred in by all of the justices of the court.

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