Community Health Systems Professional Services Corporation, et al., Petitioners,
Henry Andrew Hansen, II, M.D., Respondent
March 2, 2017
Petition for Review from the Court of Appeals for the
Thirteenth District of Texas
W. GREEN, JUSTICE
case, we must determine whether the court of appeals erred by
reversing the trial court's order granting summary
judgment in favor of multiple defendants on the
plaintiff's claims for breach of contract and tortious
interference with contract. Because we conclude that the
plaintiff's employer was not required to prove the
reasons it terminated the plaintiff's employment contract
"without cause" and that the relevant provisions of
the contract are not ambiguous, we hold that the employer is
entitled to summary judgment on the plaintiff's breach of
contract claim. We further hold that the hospital and its
chief executive officer are entitled to summary judgment on
the plaintiff's tortious interference claim because the
plaintiff presented no evidence on the element of willful or
intentional inference. Finally, we hold that the
employer's professional services company conclusively
established its justification defense to the plaintiff's
tortious interference claim and is therefore entitled to
summary judgment. Accordingly, we reverse the court of
appeals' judgment and reinstate the trial court's
judgment in favor of the defendants.
action arises from the "without cause" termination
of a cardiovascular surgeon's five-year employment
contract at the end of his third contract year.
2007, Thomas Jackson, the chief executive officer of the
College Station Medical Center (the Hospital), sought to hire
a board-certified cardiovascular surgeon so that the Hospital
could offer heart surgeries without referring patients to
other hospitals or paying to have a cardiovascular surgeon on
call. Dr. Henry Andrew Hansen, II, M.D., a cardiovascular
surgeon, wanted to move his practice from Lubbock to College
Station, Texas, and he arranged a meeting with Jackson to
discuss potential employment in College Station.
as an intermediary between Dr. Hansen and Regional Employee
Assistance Program (REAP), a non-profit corporation certified
by the Texas Medical Board to employ physicians, see
Tex. Occ. Code § 162.001(b), Jackson negotiated the
terms of Dr. Hansen's employment contract with REAP,
under which Dr. Hansen would work at the
Hospital. After extensive negotiations in which
Dr. Hansen was represented by counsel, REAP and Dr. Hansen
entered into a five-year employment contract, which ran from
June 1, 2007, to April 30, 2012. Section 10.1 of the contract
provided that during the first three contract years, the
contract could be terminated only for cause. Following the
end of the third contract year, however, either party could
terminate the contract without cause with sixty days'
notice if Dr. Hansen's "annual practice losses"
exceeded $500, 000 "at the end of years three, four or
five." The contract further provided that in the event
of a termination without cause, Dr. Hansen would "not be
entitled to the due process rights established by [REAP] in
its policies and procedures, " but Dr. Hansen would
"be entitled to such due process rights if . . .
terminated for cause . . . pursuant to sections 10.2, 10.3 or
10.4 of [the contract]."
into Dr. Hansen's employment, Community Health Systems,
Inc. acquired the Hospital and REAP. Community Health Systems
Professional Services Corporation (PSC) is a subsidiary of
Community Health Systems that provides advice on physician
employment and termination decisions to other Community
Health Systems subsidiaries that own health care facilities
and employ physicians.
Hansen's practice at the Hospital was initially
successful. The Hospital aggressively marketed Dr. Hansen and
the new heart program, and Dr. Hansen performed approximately
ten to fifteen procedures each month, including procedures
that had not historically been done at the Hospital. Dr.
Hansen was on pace to perform 100 procedures the first year
and suggested that if another surgeon was hired, the Hospital
could perform 200 procedures per year. At the end of Dr.
Hansen's first contract year, PSC and the Hospital
projected that the number of heart surgeries performed at the
Hospital would continue to increase and yield financial
end of 2008, however, the number of cardiovascular surgeries
performed by Dr. Hansen began to decline significantly due to
a series of personal disagreements with two local
cardiologists, Dr. Marcel Lechin, M.D. and Dr. Mario
Lammoglia, M.D. Dr. Lechin and Dr. Lammoglia were the senior
members of a three-member cardiologist team, BCS Heart, which
was Dr. Hansen's primary source of patient
referrals. PSC's vice president of practice
management, Leslie Luke, became concerned and sent a letter
to Jackson on February 11, 2009, recommending that Dr.
Hansen's employment be terminated "without
cause" at the end of the third contract year. Luke
explained that: (1) Dr. Hansen's high salary-$750, 000
per year-was disproportionate to the number of hospital
procedures he performed; (2) Dr. Hansen's "clinic
practice lost $1 million"; and (3) Luke predicted no
future growth in the number of procedures. In June 2009, the
chief financial officer of the Hospital approached Dr. Hansen
to discuss his decreased billings and how to increase his
billings. Nevertheless, the relationship between Dr. Hansen
and the cardiologists continued to deteriorate and affect Dr.
August 2009, Dr. Hansen had another dispute with Dr. Lechin,
causing Dr. Lechin and Dr. Lammoglia to place Dr. Hansen and
the Hospital on "drive-by" status, meaning that
they would not refer new patients to Dr. Hansen for surgery
at the Hospital. As a result of the ongoing disagreement,
which Dr. Hansen described as a "turf battle, " Dr.
Hansen similarly refused to accept patients from the two
doctors until they "cleared the air" in a joint
meeting. After the meeting just one week later, Dr. Lechin
and Dr. Lammoglia agreed to resume referring patients to Dr.
Hansen, but Dr. Hansen refused to accept the referrals until
they issued a public affirmation of his skills as a
cardiovascular surgeon. Ultimately, Dr. Hansen declined Dr.
Lechin's and Dr. Lammoglia's referrals for
approximately four months-from August 2009 to December 2009.
Consequently, from August 5, 2009, to June 1, 2010, Dr.
Hansen performed only eight heart surgeries.
annual meeting of REAP's board of directors in November
2009, Luke discussed Dr. Hansen's refusal to accept Dr.
Lechin's and Dr. Lammoglia's referrals and stated
that, except for providing emergency assistance, Dr. Hansen
had not worked since September 2009. The meeting minutes
noted that the purpose of the discussion "was to prepare
the Board for a possible termination" if Dr. Hansen
continued to refuse referrals and not fulfill his employment
duties. On February 18, 2010, a PSC administrator, Ashley
Bosshart, sent an email notifying the members of the REAP
Board that Jackson had requested that REAP terminate Dr.
Hansen's contract without cause due to his "past
behavioral issues and his significant clinic losses."
The email also attached the minutes from the November 2009
meeting and noted that Dr. Hansen's "annual
losses" were $1, 003, 138 in calendar year 2008 and
$908, 609 in calendar year 2009. A few days later, but before
the end of the third contract year, the REAP Board voted to
terminate Dr. Hansen without cause at the end of his third
contract year under section 10.1. Following the vote, Luke
and Bosshart completed a "Personnel Action Form"
reflecting that Dr. Hansen had been terminated for
"unsatisfactory performance" and was not eligible
for rehire. Subsequently, on June 1, 2010, REAP sent Dr.
Hansen a letter providing sixty days' notice that it was
terminating the contract without cause.
Dr. Hansen sued numerous parties alleging multiple causes of
action. In his sixth amended petition, Dr. Hansen alleged
that: (1) REAP is liable for breach of contract and breach of
fiduciary duties; (2) the Hospital and Jackson are liable for
business disparagement, tortious interference with contract,
and restraint of trade; and (3) PSC is liable for business
disparagement and tortious interference with
contract. In response, PSC filed an amended
no-evidence and traditional motion for summary judgment.
REAP, the Hospital, and Jackson, however, rested on their
previously filed traditional and no-evidence motion for
summary judgment. The trial court granted the defendants'
summary-judgment motions without explaining the basis for its
Hansen appealed, challenging only the trial court's
summary-judgment order rendering a take-nothing judgment on
his claims for breach of contract, tortious interference with
an existing contract, and business disparagement. The court
of appeals reversed in part, reversing the trial court's
dismissal of the claims for breach of contract and tortious
interference but leaving intact the trial court's
dismissal of Dr. Hansen's business disparagement claims.
___ S.W.3d ___, ___ (Tex. App.-Corpus Christi-Edinburg 2014,
pet. granted) (mem. op.).
the defendants seek review of the court of appeals'
decision, raising a number of issues, including: (1) whether
REAP was required to prove on summary judgment that it
terminated Dr. Hansen's contract on without-cause
grounds; (2) whether the contract's stipulation for
"annual practice losses" is ambiguous and, if not,
whether REAP established the condition to terminate the
contract without cause; (3) whether Dr. Hansen presented
evidence raising a fact issue on the element of willful and
intentional interference to overcome a no-evidence motion for
summary judgment on his tortious interference claims; (4)
whether the Hospital, Jackson, and PSC conclusively
established the affirmative defense of legal justification to
bar Dr. Hansen's tortious interference claims; (5)
whether PSC waived its qualified-privilege defense by raising
it only as a defense to business disparagement in its motion
for summary judgment; and (6) whether the Restatement
(Second) of Torts' truthful-information defense
should be adopted in this case and, if so, whether fact
issues nonetheless preclude summary judgment for the
defendants. As explained below, we hold that the trial court
did not err in granting summary judgment in favor of REAP on
Dr. Hansen's breach of contract claim or in granting
summary judgment in favor of the Hospital, Jackson, and PSC
on Dr. Hansen's tortious interference claims.
Standard of Review
review a trial court's order granting summary judgment de
novo, taking "as true all evidence favorable to the
nonmovant, " and "indulg[ing] every reasonable
inference and resolv[ing] any doubts in the nonmovant's
favor." Provident Life & Accident Ins. Co. v.
Knott, 128 S.W.3d 211, 215 (Tex. 2003) (citing Sw.
Elec. Power Co. v. Grant, 73 S.W.3d 211, 215 (Tex.
2002); FM Props. Operating Co. v. City of Austin, 22
S.W.3d 868, 872 (Tex. 2000); Sci. Spectrum, Inc. v.
Martinez, 941 S.W.2d 910, 911 (Tex. 1997)). Where, as
here, a trial court does not specify the grounds on which it
granted the motion for summary judgment, we must affirm if
any of the grounds asserted in the motion are meritorious.
Id. at 216. Further, when the motion asserts both
no-evidence and traditional grounds, we first review the
no-evidence grounds. Ford Motor Co. v. Ridgway, 135
S.W.3d 598, 600 (Tex. 2004). If the nonmovant fails to
produce more than a scintilla of evidence on the essential
elements of a cause of action challenged by a no-evidence
motion, there is no need to analyze the movant's
traditional grounds for summary judgment. Id.;
see Tex. R. Civ. P. 166a(i). To prevail on a
traditional motion for summary judgment, however, the movant
must "show that no genuine issue of material fact exists
and that it is entitled to judgment as a matter of law."
See Provident Life, 128 S.W.3d at 216 (citations
omitted); Tex.R.Civ.P. 166a(c). An issue is conclusively
established "if reasonable minds could not differ about
the conclusion to be drawn from the facts in the
record." Childs v. Haussecker, 974 S.W.2d 31,
44 (Tex. 1998).
Breach of Contract
reasons explained below, we hold that the court of appeals
erred by reversing the trial court's order granting
REAP's motion for summary judgment on Dr. Hansen's
breach of contract claim.
Grounds for a "Without Cause" Termination
court of appeals assumed REAP had established that Dr.
Hansen's "practice losses" exceeded the
contractual threshold but nevertheless reversed the trial
court's summary-judgment order, reasoning that REAP
proved only that the contractual condition for a
without-cause termination was met, not that it actually
terminated Dr. Hansen on "without cause" grounds.
___ S.W.3d at ___. According to the court of appeals, to
"uphold summary judgment for REAP without REAP having
first established on which grounds it terminated [Dr. Hansen]
would effectively require [the court of appeals] to read [the
due process requirements of a for-cause termination] out of
the Contract." Id. Thus, the court of appeals
concluded that REAP did not disprove Dr. Hansen's breach
of contract claim because it "did not conclusively
establish the grounds on which it terminated [Dr.
Hansen's] employment." Id. at ___. We hold
that the court of appeals erred on this point.
case requires that we interpret the termination provisions in
Dr. Hansen's employment contract. We construe unambiguous
contracts as a matter of law. Coker v. Coker, 650
S.W.2d 391, 393 (Tex. 1983). "An unambiguous contract
will be enforced as written, and parol evidence will not be
received for the purpose of creating an ambiguity or to give
the contract a meaning different from that which its language
imports." David J. Sacks, P.C. v. Haden, 266
S.W.3d 447, 450 (Tex. 2008). A court may consider the
parties' interpretation of the contract and admit
extrinsic evidence to determine the true meaning of its terms
only after the court has determined that the contract is
ambiguous. Id. at 450-51 (quoting Nat'l
Union Fire Ins. Co. of Pittsburgh, Penn. v. CBI Indus.,
Inc., 907 S.W.2d 517, 520 (Tex. 1995) (per curiam)).
When the controversy can be resolved by proper construction
of an unambiguous document, rendition of summary judgment is
appropriate. Lopez v. Munoz, Hockema & Reed,
L.L.P., 22 S.W.3d 857, 862 (Tex. 2000). "On the
other hand, if the contract is subject to two or more
reasonable interpretations after applying the pertinent rules
of construction, the contract is ambiguous, creating a fact
issue on the parties' intent." J.M. Davidson,
Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003) (citing
Columbia Gas Transmission Corp. v. New Ulm Gas,
Ltd., 940 S.W.2d 587, 589 (Tex. 1996)).
general rule is that, "absent a specific agreement to
the contrary, employment may be terminated by the employer or
the employee at will, for good cause, bad cause, or no cause
at all." Montgomery Cty. Hosp. Dist. v. Brown,
965 S.W.2d 501, 502 (Tex. 1998) (citing Fed. Express
Corp. v. Dutschmann, 846 S.W.2d 282, 283 (Tex. 1993)
(per curiam); Schroeder v. Tex. Iron Works, 813
S.W.2d 483, 489 (Tex. 1991); Winters v. Hous. Chronicle
Pub. Co., 795 S.W.2d 723, 723 (Tex. 1990); Sabine
Pilot Serv., Inc. v. Hauck, 687 S.W.2d 733, 734-35 (Tex.
1985); E. Line & R. R. R. Co. v. Scott,
10 S.W. 99, 102 (Tex. 1888)). Further, a contract can modify
an employee's at-will status and alter the procedural
rights to which an employee is entitled if termination
occurs. See City of Odessa v. Barton, 967
S.W.2d 834, 835 (Tex. 1998) (citing Hathaway v. Gen.
Mills, Inc., 711 S.W.2d 227, 229 (Tex. 1986)). A
contract can also stipulate that it is terminable without
cause during one time period and is only terminable for cause
at another time. See Evan's World Travel,
Inc. v. Adams, 978 S.W.2d 225, 230 (Tex.
App.-Texarkana 1998, no pet.).
the relevant contractual provision, section 10.1, states:
The Agreement can be cancelled for-cause only during years
one through three. Either party may terminate this Agreement,
without cause if annual practice losses exceed Five Hundred
Thousand ($500, 000) at the end of years three, four or five,
by providing not less than Sixty (60) days prior written
notice to the other party stating the intended date of
termination. If Employer terminates this Agreement without
cause . . . Physician shall not be entitled to the due
process rights established by Employer in its policies and
procedures. Physician shall be entitled to such due process
rights if this Agreement is terminated for cause by Employer
pursuant to sections 10.2, 10.3 or 10.4 of this Agreement.
contract thus modifies Dr. Hansen's at-will status by
allowing only "for-cause" termination during the
first three years. See id.; Brown, 965
S.W.2d at 502. But in the last two years of the
contract's term, the contract authorizes "without
cause" termination of the contract "if annual
practice losses exceed [$500, 000], " and in the event
of a without-cause termination, Dr. Hansen is not
contractually entitled to the due process he would receive if
terminated for cause. See Barton, 967 S.W.2d at
that the second sentence of section 10.1 clearly signifies a
condition subsequent based on annual practices losses that
enables either party to terminate the contract without cause;
it does not state that the amount of annual practice losses
is the only basis upon which the contract can be terminated
without cause. A condition subsequent is "a condition
referring to a future event, upon the happening of which the
obligation becomes no longer binding upon the other party, if
he chooses to avail himself of the condition."
E.g., Rincones v. Windberg, 705 S.W.2d 846,
848 (Tex. App.-Austin 1986, no writ) (citation omitted);
cf. Restatement (Second) of Contracts § 224
cmt. e (Am. Law Inst. 1981). A condition subsequent excuses
an already binding agreement. Rincones, 705 S.W.2d
at 848. Although "no particular words are necessary for
the existence of a condition, " terms such as
"'if, ' 'provided that, ' 'on
condition that, ' or some other phrase that conditions
performance, usually connote an intent for a condition rather
than a promise." Hohenberg Bros. Co. v. George E.
Gibbons & Co., 537 S.W.2d 1, 3 (Tex. 1976). Section
10.1 states that either party may terminate the contract with
sixty days' written notice "if annual practice
losses exceed Five Hundred Thousand ($500, 000) at the end of
years three, four or five." This is undoubtedly a
Hansen construes the contract as requiring a certain
procedure for a without-cause termination-that the REAP Board
receive certain evidence of annual practice losses and that
the REAP Board then terminate the contract on that basis
alone. The contract's language, however, does not require
the REAP Board to make a without-cause termination decision
based solely on annual practice losses; rather, it provides
that once the condition subsequent occurs, a without-cause
termination can be premised on any reason, or no reason at
all, and can be accomplished simply by providing sixty
days' written notice. In other words, assuming the
condition subsequent has occurred, section 10.1's
without-cause language is merely a termination-upon-notice
provision, requiring only that REAP provide sixty days'
written notice to Dr. Hansen stating the intended date of
termination. See 14 Tex. Jur. 3d Contracts §
285 (2006) ("When a contract expressly provides that it
is subject to termination upon notice, each party to the
contract has the legal right to cancel the contract.").
The notice need not state the ground, the fact that the
condition subsequent has occurred, or anything beyond the
requirements of the contractual provision. All that is
required is (1) sixty days' written notice to the other
party (2) stating the intended date of termination. Thus,
because section 10.1 creates a condition subsequent
authorizing without-cause termination, REAP did not need to
prove that it terminated Dr. Hansen on "without
cause" grounds-"without cause" signifies that
the reason for the termination is irrelevant.
absent from section 10.1 is any requirement that the REAP
Board prove that it knew the annual practice losses condition
had been satisfied at the time it voted to exercise its right
to terminate the contract without cause. But Dr. Hansen
argues the opposite: "The contract, as written, required
the REAP Board to have evidence before it that Hansen's
'annual practice losses' exceeded $500, 000 at the
'end of years three, four or five' before it could
terminate the contract without cause and avoid having to
provide due process." First, as discussed in more detail
in the sections that follow, Dr. Hansen's third-year
practice losses had already mounted to $686, 888 in February
2010-when the REAP Board voted on Dr. Hansen's future
termination. Furthermore, despite Dr. Hansen's argument
that he was terminated on the date of the vote, he does not
contest that he continued to receive his salary and all the
other benefits of his position until July 31, 2010-sixty days
after REAP informed him of the without-cause termination at
the end of the third contract year. Finally, Dr. Hansen's
interpretation of this additional requirement is incorrect
because section 10.1 does not require REAP to prove that it
knew Dr. Hansen's third-year practice losses had exceeded
$500, 000 at the time it voted on the without-cause
termination in February 2010 or when it provided notice of
the termination in June 2010. Rather, section 10.1 simply
requires REAP to prove that, when it exercised its right to
terminate the contract without cause in June 2010: (1) the
third year of Dr. Hansen's contract had ended; (2) Dr.
Hansen's third-year annual practice losses exceeded $500,
000; and (3) sixty days' notice was provided. We decline
Dr. Hansen's request to add language to the contract.
See Republic Nat'l Life Ins. Co. v. Spillars,
368 S.W.2d 92, 94 (Tex. 1963) (explaining that a contract
must be enforced as written when the language of the contract
is plain and unambiguous).
that section 10.1 simply provides that either party may
terminate the contract without cause on sixty days'
written notice if Dr. Hansen's annual practices losses
exceed $500, 000 in his third, fourth, or fifth year, we
conclude that the court of appeals erred. Indeed, we
interpreted a similar provision in Juliette Fowler Homes,
Inc. v. Welch Associates, Inc., 793 S.W.2d 660 (Tex.
1990), which stated, "This agreement may be cancelled by
either party with the cancellation to be effective sixty days
after the mailing or personal delivery of a written notice of
cancellation . . . ." Id. at 665 n.8. The
plaintiff did not contest that written notice of termination
was properly given; rather, it claimed that the termination
constituted a breach of contract because there was no
good-faith reason for the termination. Id. at 665.
We disagreed, explaining:
When a contract provides expressly that it is subject to
termination upon notice, the general rule is that each party
to the contract has the legal right to cancel the contract. .
. . [T]he parties bargained for the flexibility of
terminating the contract upon tender of the requisite notice.
Neither party should be denied the benefit of its bargain. We
hold that Fowler properly terminated the . . . contract
pursuant to its express terms; therefore, Welch's breach
of contract claim . . . must fail.
Id. (internal citation omitted). Aside from the
condition subsequent, section 10.1 of Dr. Hansen's
contract is virtually identical to the provision in
Juliette Fowler. The provisions in both contracts
are effectively "termination-upon-notice"
provisions, and "[a] contract that a party may terminate
under such a clause is terminable at will." 14 Tex. Jur.
3d Contracts § 263 (2006).
short, the court of appeals' decision conflicts with the
longstanding precedent cited above,  which holds that a
party does not need "grounds" to terminate a
contract in accordance with a without-cause or
termination-upon-notice provision. REAP was not required to
prove or disprove any "grounds" for termination; it
was required only to establish that: (1) the condition
subsequent occurred at the end of the third year of the
contract; and (2) it provided sixty days' written notice
to Dr. Hansen. Given the court of appeals' assumption
that the annual practices losses condition was satisfied, the
court was left with a provision allowing for the
contract's termination with sixty days' written
Propriety of the Trial Court's Summary-Judgment Order
explained above, to prevail on summary judgment, REAP had to
present conclusive evidence that: (1) the "annual
practice losses" condition subsequent was satisfied when
REAP exercised its right; and (2) REAP provided Dr. Hansen
with sixty days' written notice specifying the date on
which his termination would become effective. We hold that
REAP satisfied this burden.
it is undisputed that REAP complied with the notice
requirement. The third year of the contract ended on April
30, 2010. On June 1, 2010, REAP sent Dr. Hansen a termination
letter stating that REAP was terminating Dr. Hansen
"without cause, pursuant to Section 10.1" and that
"the effective date of termination shall be July 31,
2010." Thus, REAP's summary-judgment evidence
conclusively establishes that it complied with the notice
"Annual Practice Losses" Condition Subsequent
conclude that REAP conclusively established that Dr.
Hansen's third-year annual practice losses exceeded $500,
000, such that the trial court's summary-judgment order
dismissing Dr. Hansen's breach of contract claim was
supported its motion for summary judgment with the following
evidence: (1) affidavit testimony from the Hospital's
chief financial officer, Benjamin Cluff; (2) trend reports
prepared by Cluff's office during the time of Dr.
Hansen's employment; and (3) deposition testimony from
Leslie Luke, PSC's vice president of practice management.
Cluff testified that he was in charge of calculating the