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Graboff v. Collern Firm

November 5, 2010

STEVEN R. GRABOFF, PLAINTIFF,
v.
THE COLLERN FIRM, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Slomsky, J.

OPINION

I. INTRODUCTION

Before the Court are Defendants The Colleran Firm and Francis T. Colleran's (collectively "Colleran Defendants") Motion to Dismiss the Complaint Under Rule 12(b)(6) for Failure to State a Claim (Doc. No. 11), and Defendants American Academy of Orthopaedic Surgeons and American Association of Orthopaedic Surgeons' (collectively "AAOS Defendants") Motion to Dismiss the Complaint Under Rule 12(b)(6) for Failure to State a Claim (Doc. No. 14).

This case arises out of an agreement betweenPlaintiff Steven R. Graboff, an orthopaedic surgeon, and Defendant The Colleran Firm. Pursuant to the agreement, Plaintiff was hired as an expert witness in a medical malpractice case, Jones v. Meller. Defendant Francis T. Colleran, served as counsel for the plaintiff in that case. Plaintiff submitted a "draft report" to Francis Colleran summarizing his "preliminary medical conclusions" in the Jones case. (Doc. No. 1 ¶ 15.) Colleran Defendants used this report in settlement negotiations in the Jones case, without Plaintiff's knowledge or consent and without any indication that the report was only a preliminary one. (Id. ¶¶ 34-39.)

The preliminary report was brought to the attention of AAOS Defendants, who initiated proceedings against Plaintiff for violations of their Standards of Professionalism. (Id. ¶¶ 25-27.) After completing a review and appeal process, the Board of Directors of the AAOS voted to suspend Plaintiff for a period of two years. (Id. ¶ 70.) Notice of the suspension was published in an issue of AAOS Now, a publication of AAOS Defendants. (Id. ¶ 74.)

On April 16, 2010, Plaintiff commenced this action by filing a Complaint. (Doc. No. 1.) The Complaint contains eight counts. Counts I, II and III, brought against Colleran Defendants, allege breach of contract, negligence and breach of the duty of confidence and trust, respectively. Counts IV, V, VI, VII and VIII, brought against AAOS Defendants, allege breach of contract, tortious interference with contractual relations, commercial disparagement, defamation and false light invasion of privacy, respectively.

On May 19, 2010, Colleran Defendants filed the Motion to Dismiss. (Doc. No. 11.) Plaintiff filed a Response in Opposition on June 9, 2010. (Doc. No. 12.) On June 21, 2010, AAOS Defendants filed their Motion to Dismiss. (Doc. No. 14.) Plaintiff filed a Response in Opposition on July 12, 2010. (Doc. No. 17.) On July 19, 2010, AAOS Defendants filed a reply memorandum. (Doc. No. 19.)

On September 17, 2010, the Court held oral argument on both Motions. Following oral argument, the parties filed a Supplemental Brief in further support of their positions. (Doc. Nos. 21, 22, 23, 24.) For reasons that follow, the Court will deny Colleran Defendants' Motion to Dismiss (Doc. No. 11) and will deny AAOS Defendants' Motion to Dismiss (Doc. No. 14) in their entirety.

II. FACTUAL BACKGROUND

The Colleran Firm retained Plaintiff as an expert witness in a medical malpractice case, Jones v. Meller, filed in the Philadelphia Court of Common Pleas. (Doc. No. 1 ¶ 12.) On December 5, 2007,*fn1 Plaintiff prepared and submitted what he maintains was a "draft report" (the "Report") of his preliminary conclusions in the Jones case to Mr. Colleran. (Id. ¶ 83.) In the report, Plaintiff concluded that Dr. Meller, defendant in the Jones case, was negligent. (Id. ¶ 16.) Plaintiff contends the report was clearly a draft, as indicated by the words "Draft Report" written at the top of the first page. He also maintains that he verbally instructed Mr. Colleran that the report was not final and that "he would not finalize his report or testify at any deposition, hearing, or trial until he had reviewed all of the medical records and radiologic studies." (Id. ¶ 17.)

Plaintiff alleges that Mr. Colleran used the Report without Plaintiff's final approval or knowledge as part of settlement negotiations in the Jones case. (Id. ¶ 36.) He asserts that he first learned that Mr. Colleran had used the report when he received a letter from AAOS Defendants. (Id. ¶ 27.) The letter notified him that Dr. Meller had filed a Grievance Report against Plaintiff, alleging that Plaintiff had violated the AAOS Standards of Professionalism when he submitted his Report in the Jones case. (Id.) On May 30, 2008, Plaintiff submitted a response to the grievance, outlining the basis for his findings in regard to Dr. Meller's care. (Id. ¶ 30.) A hearing was scheduled before the Committee on Professionalism (the "Committee") on Friday, October 24, 2008. (Id. ¶ 32.) The parties were given until October 10, 2008 to submit materials in support of their position to the Committee. (Id. ¶ 33.)

While preparing for the hearing, Plaintiff discovered that the copy of the Report submitted as part of Dr. Meller's grievance did not say "Draft Report" on the top. (Id. ¶¶ 34-35.) On September 18, 2008, Plaintiff wrote a letter informing AAOS Defendants of this finding. (Id. ¶ 36.) On October 14, 2008, he had a telephone conference with Mr. Colleran. (Id. ¶ 37.) During the conference, Mr. Colleran admitted he "whited out" the words "Draft Report" before sending the report to Dr. Meller's lawyer for settlement purposes. (Id.) On October 15, 2008, Mr. Colleran sent Plaintiff a letter confirming in writing that he altered the report by deleting the words "Draft Report." He claimed in the letter that the words "Draft Report" were "irrelevant" to his decision to use the report in settlement negotiations and for this reason deleted them. (Id. ¶¶ 38-39.)

On October 24, 2008, Plaintiff and Dr. Meller attended the grievance hearing without representation of counsel. (Id. ¶ 40.) At the hearing, the Committee did not consider the October 15th letter from Mr. Colleran because it was not submitted by the October 10, 2008 deadline. (Id. ¶¶ 45, 47.) Plaintiff alleges the Committee's questions focused on "the substance of Dr. Graboff's report." (Id. ¶ 43.) He asserts that "[t]he Committee was more concerned with the fact that [he] opined that Dr. Meller was negligent, rather than whether [his] methodology for arriving at that preliminary conclusion comported with the Standards of Professionalism." (Id.)

On December 23, 2008, the Committee released the Grievance Hearing Report. (Id. ¶ 50.) The Committee found Plaintiff guilty of all but two of the alleged violations. (Id.) The Committee recommended Plaintiff be suspended from membership in the AAOS for two years.

(Id. ¶ 56.)

On January 5, 2009, Plaintiff informed AAOS Defendants that he would appeal the decision of the Committee. (Id. ¶ 58.) On February 13, 2009, Plaintiff obtained another letter from Mr. Colleran, stating that he redacted the words "Draft Report" to give the appearance that the report was final for purposes of settlement. (Id. ¶ 60.) On February 28, 2009, the Judiciary Committee heard Plaintiff's appeal. (Id. ¶ 61.) Plaintiff was represented by counsel. (Id. ¶ 62.) The Judiciary Committee upheld the decision of the Committee to suspend Plaintiff. (Id. ¶ 67.)

On June 20, 2009, the Board of Directors voted to suspend Plaintiff from the AAOS. Plaintiff resigned on June 24, 2009. (Id. ¶¶ 68, 70.) Notice of his suspension was published in the September 2009 issue of AAOS Now.(Id. ¶ 74.)On October 29, 2009, Plaintiff received notice from Mednick Associates, LLC, a medical legal consulting firm, instructing him to stop working on any Colleran cases.(Id. ¶ 77.)

III. DISCUSSION

A. LEGAL STANDARD

The motion to dismiss standard under Federal Rule of Civil Procedure 12(b)(6) has been the subject of recent examination, culminating with the Supreme Court's Opinion in Ashcroft v. Iqbal, 129 S.Ct. 1937 (2009). After Iqbal it is clear that "threadbare recitals of the elements of a cause of action, supported by mere conclusory statements do not suffice" to defeat a Rule 12(b)(6) motion to dismiss. Id. at 1949; see also Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007). Applying the principles of Iqbal, the Third Circuit in Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009) set forth a two-part analysis that a district court in this Circuit must conduct in evaluating whether allegations in a complaint survive a 12(b)(6) motion to dismiss. See also Edwards v. A.H. Cornell & Son, Inc., 610 F.3d 217, 219 (3d Cir. 2010).

First, the factual and legal elements of a claim should be separated, meaning "a District Court must accept all of the complaint's well-pleaded facts as true, but may disregard any legal conclusions." Fowler, 578 F.3d at 210-11. Second, the Court must determine whether the facts alleged in the complaint demonstrate that the plaintiff has a "plausible claim for relief." Id. at 211. In other words, a complaint must do more than allege a plaintiff's entitlement to relief, it must "show" such an entitlement with its facts. Id. (citing Phillips v. County of Allegheny 515 F.3d 224, 234-35 (3d Cir. 2008)). "Where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged--but it has not 'shown'-- 'that the pleader is entitled to relief.'" Iqbal, 129 S Ct. at 1950; Jones v. ABN Amro Mortg. Group, Inc., 606 F.3d 119, 123 (3d Cir. 2010). This "plausibility" determination under step two of the analysis is a "context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal, 129 S Ct. at 1950.

B. CLAIMS AGAINTS COLLERAN DEFENDANTS

1. Count I - Breach of Contract*fn2

Plaintiff alleges that he entered into a contract with Colleran Defendants to serve as an expert medical witness in the Jones case. (Doc. No. 1 ¶ 81.) In Count I of the Complaint, he alleges that Colleran Defendants breached the duty of good faith and fair dealing implicit in this contract when Mr. Colleran "whited out" the words "Draft Report" on his report, and used it in settlement negotiations without his approval or knowledge. (Id. ¶¶ 86-87.) Plaintiff argues this breach was the direct and proximate cause of his suspension from the AAOS, which lead to lost income and revenue for his expert services. (Id. ¶ 88.) Plaintiff claims damages in excess of $75,000. (Id.)

To state a claim for breach of contract under Pennsylvania law, Plaintiff must show: "(1) the existence of a contract, including its essential terms, (2) a breach of a duty imposed by the contract, and (3) resultant damages." Ware v. Rodale Press, Inc., 322 F.3d 218, 225 (3d Cir. 2003). "Pennsylvania law imposes a duty of good faith and fair dealing in every contract." Clark Motor Co. v. Mfrs. & Traders Trust, Co., No. 07-856, 2007 WL 2155528, at *5 (M.D. Pa. July 26, 2007). Good faith means "honesty in fact in the conduct or transaction concerned." S & C Rest. Corp. v. Sofia's Diner Rest., Inc., No. 98-5972, 1999 WL 627914, at *6 (E.D. Pa. Aug. 18, 1999) (citingKaplan v. Cablevision of Pa., Inc., 671 A.2d 716, 722 (Pa. Super. Ct. 1996)). "However, the breach of the obligation to act in good faith cannot be precisely defined in all circumstances." Id.

Because facts and circumstances amounting to a breach of the duty of good faith and fair dealing cannot always be precisely defined, whether the conduct of a defendant constitutes a breach is frequently a question of fact. At the motion to dismiss stage, the Court will accept as true the facts as contained in the Complaint. If the Complaint contains facts that could amount to a breach of this duty, it will survive the Motion to Dismiss. Sofia's Diner Rest., 1999 WL 627914, at *6 ("Whether the Defendants' conduct in placing the advertisements at issue amounts to bad faith sufficient to constitute a breach of the implied duty of good faith and fair dealing is a question of fact. At this stage of the proceedings, therefore, Count V of the First Amended Complaint will withstand the Defendants' motion to dismiss.").

Colleran Defendants argue there was no breach of the duty of good faith and fair dealing because they did nothing to injure Plaintiff under the alleged contract. They submit that they paid Plaintiff, provided him with all the materials necessary to complete the report and did not interfere with his preparation of the report. Consequently, Colleran Defendants argue the contract was fulfilled in good faith. They dispute that Plaintiff ever mentioned that the report was not finalized. Further, they argue that Plaintiff cannot show foreseeable ...


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