Hall-Hoskins v. CATC Medstaff, P.C.

UNITED STATES DISTRICT COURT FOR THE

NORTHERN DISTRICT OF OKLAHOMA

ADMERLE HALL-HOSKINS, D.O., )

)

Plaintiff, )

)

v. ) Case No. 20-CV-0329-CVE-JFJ

)

CATC MEDSTAFF, P.C. and )

CAREATC, INC., )

)

Defendants. )

OPINION AND ORDER

Now before the Court is Defendants’ Combined Motion for Partial Summary Judgment and

Brief in Support (Dkt. # 24), seeking summary judgment in favor of CareATC, Inc. (CareATC) only.

CareATC argues that it was not a party to either of the employment agreements giving rise to

plaintiff’s breach of contract claims, and CareATC asserts that it cannot be held liable for breach of

contract. Plaintiff responds that CareATC is a proper party, even though it is not named in the

employment agreements, under several theories that permit a plaintiff to bring a claim against a party

who was not a signatory to a contract.

I.

On September 27, 2018, plaintiff Admerle Hall-Hoskins, D.O. entered an employment

agreement with CATC Medstaff, P.C. (CATC) to work as a physician. Dr. Hoskins alleges that she

was hired to work at a medical clinic for employees of the city of Irving, Texas. Dkt. # 2, at 5. The

contract states that the parties to the employment agreement are “CATC Medstaff, P.C., an

Oklahoma professional corporation (“CATC”), and Admerle Hall-Hoskins DO (“Physician”).” Dkt.

# 24-1, at 2. Dr. Hall-Hoskins alleges that the first employment agreement was terminated by

“defendants” because she allegedly lacked the necessary credentials for her job. Dkt. # 2, at 10. Dr.

Hall-Hoskins subsequently entered a second employment agreement with CATC, and the agreement

identified Dr. Hall-Hoskins and “CATC Medstaff, P.C.” as the parties to the agreement. Dkt # 24-2,

at 1. On March 24, 2020, Dr. Hall-Hoskins alleges that she received notice through her attorney that

her employment was being terminated for bad acts and failure to comply with defendants’ policies.

Dkt. # 2, at 15.

On July 9, 2020, Dr. Hall-Hoskins filed this case alleging two breach of contract claims.

Each breach of contract claim concerns Dr. Hall-Hoskins’ termination under a separate employment

agreement, and she could also be alleging that defendants are liable for violating the implied

covenant of good faith and fair dealing. The complaint names CATC and CareATC as defendants,

but there are no specific allegations explaining the legal theory under which CareATC can be held

liable as a party to either employment agreement. The complaint simply states that “Plaintiff entered

into an Agreement with Defendants,” and she does not mention that CareATC is not actually named

as a party in either employment agreement. Dkt. # 2, at 2.

In her response to defendants’ motion for summary judgment, Dr. Hall-Hoskins has

submitted an affidavit stating that she “executed a five-page letter agreement with CATC Medstaff,

P.C. and CareATC, Inc., as [her] employer.” Dkt. # 25-1. However, the agreement she references

is actually a “non-disclosure and protective agreeement,” although it does define the term

“Employer” as “CATC Medstaff, P.C., and its affiliate CareATC, Inc.” Dkt. # 25-1, at 4. The

termination letter for the first employment agreement is on letterhead for CareATC,” and the letter

is signed by CareATC’s human resources manager, Kimberly Hutton. Id. at 10-11. Hutton also

signed the second employment agreement on behalf of CATC. Dkt. # 24-2, at 4. Plaintiff has also

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attached a copy of a letter sent to her attorney in reference to her demand for arbitration in which

defendants’ attorney refers to “CareATC” as plaintiff’s former employer. Dkt. # 25-2.

II.

Summary judgment pursuant to Fed. R. Civ. P. 56 is appropriate where there is no genuine

dispute as to any material fact and the moving party is entitled to judgment as a matter of law.

Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S.

242, 250 (1986); Kendall v. Watkins, 998 F.2d 848, 850 (10th Cir. 1993). The plain language of

Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon

motion, against a party who fails to make a showing sufficient to establish the existence of an

element essential to that party’s case, and on which that party will bear the burden of proof at trial.

Celotex, 477 U.S. at 317. “Summary judgment procedure is properly regarded not as a disfavored

procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed

‘to secure the just, speedy and inexpensive determination of every action.’” Id. at 327.

“When the moving party has carried its burden under Rule 56(c), its opponent must do more

than simply show that there is some metaphysical doubt as to the material facts. . . . Where the

record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there

is no ‘genuine issue for trial.’” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,

586-87 (1986) (citations omitted). “The mere existence of a scintilla of evidence in support of the

plaintiff’s position will be insufficient; there must be evidence on which the [trier of fact] could

reasonably find for the plaintiff.” Anderson, 477 U.S. at 252. In essence, the inquiry for the Court

is “whether the evidence presents a sufficient disagreement to require submission to a jury or

whether it is so one-sided that one party must prevail as a matter of law.” Id. at 250. In its review,

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the Court construes the record in the light most favorable to the party opposing summary judgment.

Garratt v. Walker, 164 F.3d 1249, 1251 (10th Cir. 1998).

III.

CareATC argues that it was not named as a party to either of the employment agreements

giving rise to plaintiff’s breach of contract claims, and it argues that it cannot be held liable for the

alleged breach of either employment agreement. Dkt. # 24, at 3-4. Plaintiff responds that there are

multiple theories under which an unnamed party can be bound to a contract, and there are genuine

disputes of material fact as to whether both named defendants were acting as plaintiff’s employer.

Dkt. # 25, at 6. In its reply, defendant argues that none of these legal theories plaintiff now invokes

as a basis to hold CareATC liable was even mentioned in the complaint, and plaintiff’s evidence is

insufficient to show that the parties intended for CareATC to be a party to either employment

agreement. Dkt. # 29.

Under Oklahoma law, “[a] breach of contract is a material failure of performance of a duty

arising under or imposed by agreement.” Lewis v. Farmers Ins. Co., 681 P.2d 67, 69 (Okla. 1983).

The three elements of a breach of contract claim are “1) formation of a contract; 2) breach of the

contract; and 3) damages as a direct result of the breach.” Digital Design Grp., Inc. v. Info. Builders,

Inc., 24 P.3d 834, 843 (Okla. 2001). However, “[c]ontracts are binding only upon those who are

parties thereto, and are enforceable only by the parties to a contract or those in privity with it . . . .”

Wells Fargo Bank, N.A. v. Heath, 280 P.3d 328, 334 (Okla. 2012); see also Bjorklund v. Miller,

2009 WL 2901214, *10 (N.D. Okla. Sep. 3, 2009) (dismissing breach of contract claims against

individual defendants who were not party to the contract).

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Plaintiff identifies four legal theories under which a company may be deemed a party to

contract entered into by a subsidiary or related entity. Dkt. # 25, at 5. Plaintiff argues that a contract

may be entered into by an agent on behalf of a principal, and cites Hutchison Lumber Co. v. Lewis,

214 P. 721 (Okla. 1923). Plaintiff also claims that the parent company, CareATC, and the

subsidiary, CATC, acted as a single entity, and she raises a separate argument that the subsidiary is

merely an instrumentality of the principal. Dkt. # 25, at 5. Finally, plaintiff cites the single employer

doctrine utilized by federal courts in the context of employment discrimination claims. See Bristol

v. Bd. of County Commr’s of County of Clear Creek, 312 F.3d 1213, 1220 (10th Cir. 2002). The

Court has subject matter jurisdiction over this case based on diversity jurisdiction, and the Court

must apply Oklahoma substantive law to resolve plaintiff’s claims. Racher v. Westlake Nursing

Home Limited Partnership, 871 F.3d 1152, 1162 (10th Cir. 2017). Plaintiff’s reference to the single

employer doctrine is not supported by any reference to Oklahoma legal authority, and the Court will

not consider this as a basis to hold CareATC liable for breach of contract.

Defendants argue that plaintiff failed to include any allegations in her complaint concerning

these theories under which CareATC can allegedly be held liable under the employment agreements,

and the new legal theories raised in response to the motion for summary judgment are simply a

belated attempt to amend plaintiff’s complaint. Dkt. # 29. The Court has reviewed plaintiff’s

complaint and does not find any allegations concerning the legal basis to hold CareATC liable as a

party to either employment agreement. Plaintiff argues that defendants’ motion for summary

judgment is “incomplete,” because defendants failed to advance alternative arguments under which

CareATC could have been deemed a party to the employment agreements. Dkt. # 25, at 6.

However, defendants are correct that CareATC is not named as a party to either employment

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agreement, and plaintiff has the burden to show that CareATC can be held liable for breach of

contract. See Wells Fargo Bank, N.A., 280 P.3d at 334 (“privity of contract is an essential element

of a cause of action on a contract”). As a procedural matter, defendants have met their burden to

show that CareATC was not a party to either employment agreement, and the burden shifts to

plaintiff to “set forth specific facts from which a rational trier of fact for the nonmovant” on the issue

of CareATC’s liability under the employment agreements. See Savant Homes, Inc. v. Collins, 809

F.3d 1133 (10th Cir. 2016).

Plaintiff cites general principles of agency law in an attempt to show that CATC and

CareATC were both parties to the employment agreements, and plaintiff's response makes no

attempt to apply the evidence to any specific legal theory. Plaintiff cites Hutchison Lumber Co. for

the general principle that a disclosed principal who enters an agreement under the name of his agent

and causes the contract to be reduced to writing may be identified by parol evidence and held liable

under the contract. Hutchison Lumber Co., 214 P. at 714. Hutchison has not been cited by any

Oklahoma court for this principle since it was issued, and the Court does not find that Hutchison in

any way limits the freedom of a parent corporation to conduct business using a subsidiary. Plaintiff

cites Warner v. Hillcrest Med. Ctr., 914 P.2d 1060 (Okla. Civ. App. 1995), for the proposition that

a parent and subsidiary company can be treated as one entity if they “were so closely linked and so

inextricably intertwined ....” Id. at 1067. Plaintiff fails to note that the Oklahoma Court of Civil

Appeals found “no convincing evidence” that such a link existed between Hillcrest Health Care

Corporation and its subsidiaries, and “the showing of a common board of directors and a unity of

corporate purpose is insufficient to pierce the corporate veil.” Id. at 1067. There is no evidence in

this case that CATC and CareATC are so closely linked that they are effectively one entity. Finally,

plaintiff argues that a parent company may be held liable if a subsidiary is “organized and controlled

and its affairs so conducted that it is merely an instrumentality or adjunct” of the parent company.

Wallace v. Tulsa Yellow Cab Taxi & Baggage Co., 61 P.2d 645, 648 (Okla. 1936). Plaintiff’s

citation to Wallace is misleading and Wallace has no application to this case. Wallace stands for the

general principle that the corporate separateness of a parent and subsidiary corporation may be

disregarded when “one corporation is merely a dummy or sham,” and there is no evidence in this

case that CATC was created to perpetrate a fraud on plaintiff. Instead, CATC is willing to defend

against plaintiff’s claims and there is no evidence that CATC would be unable to pay a judgment

should plaintiff prevail on her claims.

The Court has reviewed the evidence and finds that CareATC is not a proper party to

plaintiff’s breach of contract claims. The plain language of the employment agreements identify

plaintiff and CATC as the parties to the contracts, and the evidence produced by plaintiff provides

no basis for the Court to disregard the corporate separateness of CareATC and CATC.

IT IS THEREFORE ORDERED that Defendants’ Combined Motion for Partial Summary

Judgment and Brief in Support (Dkt. # 24) is granted, and summary judgment is entered in favor

of defendant CareATC, Inc. only. CareATC, Inc. is terminated as a party to this action.

DATED this 4th day of August, 2021.

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