Slaughter-Cooper v. Kelsey Seybold Med

United States Court of Appeals

Fifth Circuit

F I L E D

REVISED AUGUST 17, 2004

July 26, 2004

IN THE UNITED STATES COURT OF APPEALS

Charles R. Fulbruge III

FOR THE FIFTH CIRCUIT Clerk

_____________________

No. 03-20965

_____________________

LILLIE SLAUGHTER-COOPER, M.D.,

Plaintiff - Appellant,

versus

KELSEY SEYBOLD MEDICAL GROUP P.A.,

Defendant - Appellee.

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Appeal from the United States District Court for the Southern

District of Texas, Houston Division

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BEFORE SMITH, WIENER, and BENAVIDES, Circuit Judges.

WIENER, Circuit Judge:

Plaintiff-Appellant Lillie Slaughter-Cooper, M.D., (“Doctor”),

a physician formerly employed by Defendant-Appellee Kelsey-Seybold

Medical Group P.A. (“the Clinic”), appeals from the district

court’s denial of her partial motions for summary judgment and

grant of the Clinic’s motion for summary judgment, dismissing with

prejudice her claims for breach of contract, retaliatory discharge

under the Family Medical Leave Act (“FMLA”),1 defamation, and

tortious interference with business relations. We affirm.

1

29 U.S.C. § 2601, et seq.

I. FACTS AND PROCEEDINGS

The facts underlying this appeal are not in dispute. The

Clinic hired Doctor in September 1997 as a family practice

physician at its Quail Valley Clinic in Missouri City, Texas. In

that month, the parties entered into an agreement which defined the

terms and conditions of Doctor’s employment at the Clinic. This

employment agreement specified several ways that it could be

terminated, three of which are at issue in this appeal.2 First,

either party could terminate the agreement without cause by

providing written notice to the other at least thirty days prior to

Doctor’s “last day of patient care.” Second, the Clinic could

terminate the agreement without cause and without prior notice but

with thirty days pay to Doctor. Third, the agreement would

terminate automatically if, inter alia, Doctor was unable to work,

because of a disability, for a period exceeding three calendar

months:

In any event, this Agreement is automatically terminated

upon . . . your disability lasting longer than three (3)

calendar months that prevents you from performing the

essential functions of your position with or without

accommodation (unless the [Clinic] reviews the

circumstances and grants written waiver of termination).3

2

The fourth ground for termination, gross misconduct on the

part of Doctor, is not relevant to this appeal, as her work

performance has never been at issue.

3

In addition to such a protracted disability, “mutual

consent, the suspension, revocation, restriction, or cancellation

of [Doctor’s] right to practice [her] profession, [or her] death”

would cause the automatic termination of the agreement.

2

Doctor began practicing medicine at the Clinic’s Quail Valley

location in October 1997. On November 7, 2000, she was injured in

a non-work-related accident. She returned to the Clinic on the day

of the accident, but she began to feel disoriented while performing

her duties and left shortly thereafter. Doctor subsequently sought

medical treatment from a fellow Clinic physician who diagnosed her

with a concussion.

After Doctor had been absent from work for almost a month

because of her injury, she received a letter dated December 1,

2001, from the Clinic’s Director of Human Resources, Susan Moore

(“Moore”), outlining the benefits that Doctor was entitled to

receive under the Clinic’s Family Medical Leave (“FML”) policy.

Moore’s letter explained that Doctor’s leave time under the

Clinic’s FML had commenced on November 8, 2000, the first day of

her absence from work because of disability, and would expire

twelve weeks later, on January 31, 2001. Moore’s letter also

cautioned that

[d]uring the FML, your job as a Family Practitioner at a

Kelsey-Seybold Clinic site and your right to your current

benefits are protected; however, at the end of the 12

week period, we cannot commit to any position

reinstatement. (emphasis added)

Soon after receiving Moore’s letter, Doctor applied for and began

receiving benefits under the Clinic’s FML policy.

On February 15, 2001, more than two weeks after the expiration

of Doctor’s FML period, Moore sent a second letter to Doctor. In

this letter, Moore informed Doctor that the Clinic had “placed

3

[her] employment in ‘inactive’ status” effective February 1, 2001

(which was after the expiration of her FML period). This

“inactive” status period, advised Moore, was “a benefits

continuation period during which [Doctor] could retain [her] clinic

subsidized health insurance options” but “did not include a

commitment to reinstatement” (emphasis added). Moore concluded by

stating:

Your benefit continuation period (inactive status) can

continue until April 30, 2001. Please understand that the

clinic cannot make a commitment to reinstate you when you

are able to return to work. Should you still be unable

to return to work after April 30, your employment with

the clinic will be terminated (emphasis added).

On March 8, 2001, Doctor’s treating physician notified Dr.

James Hoyle (“Dr. Hoyle”), the Clinic’s medical director of

operations, that Doctor would be able to resume her

responsibilities at the Clinic on April 1, 2001. In response, Dr.

Hoyle sent Doctor a third (and final) letter on March 26, 2001. In

it, Dr. Hoyle stated that, although he was pleased to learn of her

improved condition, “due to patient needs,” the clinic had been

unable to hold her position “beyond the beginning of March” and had

since filled the position. As there would be no position available

for Doctor on the day she was scheduled to return to work, wrote

Dr. Hoyle, her employment would be considered terminated as of that

date:

Under the terms of your employment agreement with the

Clinic, this letter will serve as 30 day written notice

of your termination with [the] Clinic. The effective

4

date of termination will be April 1, 2001 which is

consistent with your release to return to work.

On April 12, 2001, Dr. Hoyle sent a letter to Doctor’s

patients notifying them that she had “resigned from [the] Clinic,

effective April 1, 2001[] . . . to pursue other professional

interests.” This letter identified the Clinic’s physicians who

were available to take over their medical care. Doctor eventually

opened her own family medical practice in August 2001.

On September 28, 2001, Doctor filed suit in Texas state court

alleging, inter alia, that the Clinic had (1) breached the

employment agreement, (2) defamed her by making false statements,

orally and in writing, to her patients regarding the circumstances

surrounding her termination, and (3) tortiously interfered with her

prospective business relations with patients.4 One year later,

Doctor amended her complaint to add a claim for retaliatory

discharge under the FMLA. The Clinic then removed the action to

federal court.

In the district court, Doctor filed separate motions for

partial summary judgment on her claims for breach of contract and

defamation. The Clinic responded to each of her motions and filed

its own cross-motion for summary judgment on all of Doctor’s

4

Doctor’s allegations that the Clinic (1) defamed her in

letters sent to insurance providers, and (2) tortiously interfered

with her existing contracts with patients and insurance providers

and her prospective contracts with insurance providers were not

briefed on appeal and are therefore considered abandoned. See

Sepulvado v. CSC Credit Servs., 158 F.3d 890, 897 n.7(5th Cir.

1998)(claims not briefed on appeal are considered abandoned).

5

claims. In February 2003, the district court referred the matter

to the magistrate judge. After considering the parties’ respective

motions for summary judgment, the magistrate judge recommended that

the district court deny Doctor’s motions for partial summary

judgment and grant the Clinic’s motion as to all of Doctor’s claims

other than her state law slander claim. The magistrate judge

recommended dismissal of that claim without prejudice to Doctor’s

reurging it in state court.5 The district court adopted the

magistrate judge’s recommendation in its entirety and entered an

order of dismissal. Doctor timely filed a notice of appeal.

II. ANALYSIS

A. Standard of Review

We review de novo a district court’s grant of summary

judgment.6

B. Breach of Contract

5

Doctor’s slander claim was premised on four remarks

allegedly made by employees of the Clinic to Doctor’s patients

following her termination. The district court found that all but

one of these remarks were not defamatory as a matter of law and

granted the Clinic’s motion for summary judgment as to Doctor’s

defamation claim insofar as it was premised on those three remarks.

It denied the Clinic’s motion, however, as to the fourth remark

alleged —— a statement attributed to an unnamed Clinic employee

that Doctor had “suffered brain damage” —— and dismissed her

slander claim, insofar as it was based on this remark, without

prejudice to reurge it in state court. The Clinic has not appealed

this ruling, so we do not address it.

6

See Markos v. City of Atlanta, 364 F.3d 567, 570 (5th Cir.

2004).

6

Doctor argues that the Clinic breached the employment

agreement by failing to provide her either thirty-days’ written

notice prior to her last day of patient care or thirty-days’ pay

following her termination. In response, the Clinic asserts that

neither written notice nor termination pay was required in this

instance, as the employment agreement terminated ipso facto on

February 8, 2001, by virtue of the automatic termination provision;

specifically, as a result of Doctor’s “disability lasting longer

than three (3) calendar months [that] prevent[ed] her from

performing the essential functions of [her] position.”

Although Doctor concedes that her extended absence would

normally have triggered the employment agreement’s automatic

termination provision, she contends that the Clinic waived its

right to assert automatic termination of the employment agreement

through its own words and conduct —— more specifically, its

representations to Doctor in its February 15, 2001 and March 26,

2001 letters regarding her termination date. Doctor emphasizes the

fact that both letters refer to the termination of her employment

as occurring sometime in April 2001, well over a month after the

automatic termination date of February 8, 2001:7 In the February

7

In the district court, the parties disputed the precise date

on which the agreement would terminate automatically —— in the

absence of waiver —— as a result of Doctor’s inability to return to

work for a period exceeding three months: The Clinic maintained

that the employment agreement terminated automatically on February

1, 2001, the day after Doctor’s twelve week FML period expired;

Doctor argued that the date of automatic termination would have

been February 6, 2001. The district court assumed, without

7

15, 2001 letter, Moore cautioned Doctor that her employment “will

be terminated” if she is “still unable to work after April

30.”(emphasis added) Likewise, in the March 26, 2001 letter, Dr.

Hoyle advises her that “[t]he effective date of termination will be

April 1, 2001 . . . .” (emphasis added) These statements, asserts

Doctor, show that the Clinic still considered her an employee of

the Clinic after the date for automatic termination of the

employment agreement had passed, thereby evidencing the Clinic’s

intent to waive the automatic termination provision.

Doctor is correct that the element of “intent” is typically

the “prime factor” in determining whether a waiver of a contractual

right has occurred.8 It is unnecessary to reach the question of

intent in this case, however, as we conclude that Doctor has failed

to show, as a matter of law, that there was still “an existing

right” susceptible of being waived by The Clinic at the time the

alleged acts of waiver occurred. Under Texas law, “waiver is a

voluntary, intentional relinquishment of a known right or

deciding, that February 6, 2001 was the date of automatic

termination, reasoning —— correctly —— that the five-day

discrepancy did not affect the outcome of its decision. On appeal,

however, the Clinic has made clear that it accepts February 8, 2001

(the date asserted by Doctor on appeal as the date of automatic

termination in the absence of waiver) as the date of automatic

termination, for purposes of this appeal only. Thus, we assume,

arguendo, that, absent waiver, the employment agreement terminated

automatically on February 8, 2001 —— three calendar months from the

first day that Doctor was absent from work because of her injury.

8

Id.

8

intentional conduct inconsistent with claiming the right.”9 The

party claiming waiver (Doctor) must show, as to the party asserting

a right (the Clinic), “(1) an existing right, benefit, or

advantage; (2) knowledge, actual or constructive, of its existence;

and (3) actual intent to relinquish the right, which can be

inferred from conduct.”10 Here, the facts surrounding the alleged

acts of waiver —— i.e., the contents of the February 15 and March

26 letters —— are not in dispute, so the issue of waiver of the

automatic termination provision is a pure question of law for us to

decide.

The Clinic’s “right” —— automatic termination of the

employment agreement when Doctor’s absence exceeded three calendar

months —— was contractual in nature, stemming solely from the terms

of the agreement. Once that agreement terminated automatically, on

its terms, all rights and obligations arising from that agreement

—— including the Clinic’s right either to rely on or waive the

automatic termination provision —— evaporated along with the

agreement. That occurred on February 8, 2001, at the latest.

9

First Interstate Bank, N.A. v. Interfund Corp., 924 F.2d

588, 595 (5th Cir. 1991)(citing Edwin M. Jones Oil Co. v. Pend

Oreille Oil & Gas Co., 794 S.W.2d 442, 447 (Tex. App. —— Corpus

Christi 1990, writ denied)).

10

Id.(citing Missouri-Kansas-Texas R.R. v. Heritage

Cablevision of Dallas, Inc., 783 S.W.2d 273, 280 (Tex. App. ——

Dallas 1989, no writ)(emphasis added). “Although waiver is

ordinarily a question of fact, when the facts and circumstances are

admitted or clearly established, the question becomes one of law.”

Motor Vehicle Bd. of the Texas Dept. of Transp. v. El Paso Indep.

Auto. Dealers Ass’n, Inc., 1 S.W.3d 108, 111 (Tex. 1999).

9

Thus, by February 15, 2001, the date of the Clinic’s first

purported act of waiver, neither party possessed rights under the

employment agreement, without which there was nothing susceptible

of waiver. It follows that the Clinic did not —— because it could

not —— waive its right to rely on automatic termination of the

employment agreement by the representations in its February 15 and

March 26, 2001 letters to Doctor. As those representations were

made after the agreement had terminated automatically by or before

February 8, 2001, the contractual right to rely on automatic

termination no longer existed, making waiver of that right a legal

impossibility.

Once the employment agreement had thus terminated, no

subsequent behavior on the Clinic’s part, regardless of how

inconsistent with reliance on the right such behavior might appear,

could breathe life back into the dead contract.11 True, the parties

could have overtly acted to create a new contract, but they must

have done so in clear, express, and unequivocal language of

novation. They could not, however, resuscitate the terminated

employment agreement. We hold that the district court correctly

granted summary judgment in favor of the Clinic on this claim.12

11

Indeed, the Clinic’s actions to which Doctor refers as

waiver clearly appear to be gratuitous acts of kindness in

unilaterally extending her medical coverage—— yet another example

of the maxim that no good deed goes unpunished.

12

For essentially the same reason, Doctor’s assertion that the

Clinic waived its right to assert automatic termination of the

employment agreement in its responses to her interrogatories is

10

C. Retaliatory Discharge, Defamation, and Tortious Interference

with Prospective Business Relations

Doctor’s remaining claims are equally unavailing. To

establish a prima facie case of retaliatory discharge, a plaintiff

must show, inter alia, that a “causal link” exists between the

protected activity and the discharge.13 Although she asserts that

the Clinic discharged her in retaliation for the exercise of her

rights under the FMLA,14 Doctor has produced no probative evidence

of a “causal link” between her exercise of those FMLA rights and

the termination of her employment, much less any evidence that the

Clinic’s proffered reason for firing Doctor —— the automatic

termination of her employment agreement —— was a pretext for

unlawful discrimination.

without merit. The interrogatories were asked and answered long

after the employment agreement terminated on its own terms.

13

Hunt v. Rapides Healthcare Sys. LLC, 277 F.3d 757, 769 (5th

Cir. 2001)(McDonnell-Douglas framework applies to claims for

retaliatory discharge under the FMLA). An internal Clinic email

offered by Doctor as evidence of pretext, when considered in

context, establishes nothing more than the Clinic’s desire to

follow proper procedures in handling the circumstances surrounding

Doctor’s extended absence.

14

FMLA requires employers to provide up to twelve weeks’

unpaid leave to any eligible employee who suffers from “a serious

health condition that makes the employee unable to perform the

functions of the position of such employee.” Chaffin v. John H.

Carter Co., 179 F.3d 316, 319 (5th Cir. 1999)(citing 29 U.S.C. §

2612(a)(1)(D)); see also Hunt, 277 F.3d at 762-63. After a

qualifying absence, the employer must restore the employee to the

same position or a position comparable to that held by the employee

before the leave. See id. The employer may not “interfere with,

restrain, or deny the exercise of . . . any right provided under

the FMLA.” 29 U.S.C. § 2615(a)(2).

11

Likewise, Doctor’s defamation claim based on the Clinic’s

representations to her former patients cannot succeed. This claim

is premised, in part, on statements allegedly made by some of the

Clinic’s employees, in response to patient inquiries, that Doctor

(1) had quit the practice of medicine, (1) was unable to practice

medicine, and (3) had moved out of the state. Because, at the time

of her termination, Doctor entertained no other professional

interests, she also grounds her defamation claim in part on Dr.

Hoyle’s statement in the April 12, 2001 letter to her patients that

Doctor had “resigned from [the] Clinic, effective April 1, 2001 .

. . to pursue other professional interests.” Even though these

statements may not be literally true, they are, at the very least,

substantially true, and therefore not defamatory.15

Furthermore, Texas law provides that statements made by

employees of a medical employer to the patients of a former

employee-physician for the purpose of explaining the whereabouts of

such former employee are protected by a qualified privilege that

15

See Dolcefino v. Randolph, 19 S.W.3d 906, 917 (Tex. App. ——

Houston [14th Dist.] 2000, pet. denied)(statement substantially

true when not more damaging to claimant’s reputation, in mind of

average listener, than truthful statement would have been); Gulf

Constr. Co. v. Mott, 442 S.W.2d 778, 784 (Tex. Civ. App. —— Houston

[14th Dist.] 1969, no writ)(under Texas law, “[s]ubstantial truth

of the statements complained of is a complete defense to an action

[for defamation]”). See also Wehling v. Columbia Broad. Sys., 721

F.2d 506, 509 (5th Cir. 1983)(“[A] statement that is substantially

true is not defamatory.”).

12

can only be overcome by a showing of actual malice.16 As Doctor has

offered no probative evidence that would tend to show that the

alleged defamatory statements were made with actual malice, the

district court was correct in granting summary judgment in favor of

the Clinic on this claim.

Finally, Doctor’s claim of tortious interference with

prospective business relations fails as a matter of law. To state

such a cause of action under Texas law, a claimant must show, inter

alia, that (1) “the defendant’s conduct was independently tortious

or wrongful” and (2) “[she] suffered actual harm or damage as a

result of the defendant’s interference.”17 Although we agree with

Doctor that the Clinic’s conduct was “independently tortious,”18 we

16

See E. Tex. Med. Ctr. Cancer Inst. v. Anderson, 991 S.W.2d

55, 61 (Tex. App. —— Tyler 1998, pet. denied)(statements made by

clinic employees to patients of physician who had recently had his

clinic staff privileges revoked were subject to a qualified

privilege; clinic “had an interest in explaining [the physician’s]

absence to his patients [and] patients . . . had a corresponding

interest in learning the same information about their doctor”); see

also Duffy v. Leading Edge Prods., 44 F.3d 308, 312 (5th Cir.

1995)(showing of actual malice required to overcome qualified

privilege).

17

Allied Capital Corp. v. Cravens, 67 S.W.3d 486, 490 (Tex.

App. —— Corpus Christi 2002, no pet.)(citing Baty v. ProTech Ins.

Agency, 63 S.W.3d 841, 859-60 (Tex. App. —— Houston [14th Dist.]

2001, pet. denied)).

18

As noted above, the district court denied the Clinic’s

motion for summary judgment as to Doctor’s claim for slander

insofar as it was based on the alleged statement by employees of

the Clinic that Doctor had “suffered brain damage,” and dismissed

it without prejudice to Doctor’s reurging it in state court. This

surviving claim for slander, which the Clinic chose not to appeal,

thus provides an adequate basis for Doctor’s tortious interference

claim.

13

nevertheless conclude that Doctor has failed to demonstrate actual

harm resulting from this remark. Her argument is that, were it not

for this remark, many of her patients would have “sought her out”

once she opened her own practice. Given the lapse of time between

the date in April 2001 on which the statement was purportedly made

and the time in August of that year when Doctor resumed the

practice of medicine, her contention is simply too speculative to

raise a genuine issue of material fact on the element of actual

harm. Accordingly, we affirm the district court’s grant of summary

judgment dismissing Doctor’s tortious interference claim.

III. CONCLUSION

As a matter of law, the Clinic could not waive its right to

the automatic termination of the employment agreement by acts after

that agreement had already terminated automatically in accordance

with its express terms. We therefore affirm the district court’s

grant of summary judgment in favor of the Clinic, dismissing

Doctor’s claim for breach of the employment agreement. We also

affirm the district court’s grant of summary judgment dismissing

Doctor’s claims for retaliatory discharge under the FMLA,

defamation, and tortious interference with prospective business

relations, because she failed to establish that a genuine issue of

material fact exists as to each of these claims. Accordingly, the

district court’s decision is, in all respects,

AFFIRMED.

14

15