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Freese v. Sunbury Primary Care, P.A.

Superior Court of Maine, Penobscot

July 28, 2014

JENNIFER FREESE, Plaintiff,
v.
SUNBURY PRIMARY CARE, P.A., Defendant

DECISION ON MOTION FOR SUMMARY JUDGMENT

Ann M. Murray, Justice, Maine Superior Court.

Plaintiff, Dr. Jennifer Freese, moves for summary judgment under M.R. Civ. P. 56 on her (1) Breach of Employment Contract claim; and (2) Maine Wage Statute claim pursuant to 26 M.R.S. § 626 filed against Defendant, Sunbury Primary Care, P.A. After consideration of the Parties' respective arguments and the summary judgment record, the Court grants summary judgment insofar as it finds that Sunbury breached the employment contract as a matter of law, but it denies summary judgment insofar as the measure of damages for that breach remains a genuine issue. Both parties waived oral argument.

BACKGROUND

The salient facts with respect to the motion for summary judgment are as follows:

Dr. Freese was employed as a physician with Defendant Sunbury Primary Care, P.A. (" Sunbury") beginning November 26, 2008. The relevant employment agreement was modified by addendum effective February 2, 2012, setting forth an adjusted base salary of $157, 599.92 beginning in 2013. By all accounts, the employment relationship was positive and Dr. Freese was a valued employee. However, beginning in 2013, Sunbury contends that it began to suffer from financial hardships. Sunbury entered into an asset sale agreement with Eastern Maine Medical Center and notified Dr. Freese by e-mail in early September of 2013 that her employment with the company would terminate for cause effective September 30, 2013. The e-mail also stated that in the event that the termination was not " for cause, " the letter would serve as notification of without cause termination.

The employment agreement between Sunbury and Dr. Freese provided a list of " for cause" reasons that Dr. Freese could be terminated, as well a provision concerning " without cause" termination.

Dr. Freese contends that because Sunbury did not provide her with six months notice of her termination it breached the employment agreement. She further contends that the requirement in Section 13(a) that Sunbury pay her the base salary then in effect for the entire six month period if she is suspended constitutes a liquidation damages clause in the event that she is terminated without six months notice. Finally, she argues that the money allegedly owed her under Section 13(a) constitutes " earned wages" for purposes of the Maine Wage Statute. Sunbury counters that it did not breach the agreement because the termination was for cause due to business difficulties making its continued operation impossible. It also contends that Section 13(a) is not a liquidation damages clause and that the Court must look to Dr. Freese's actual damages. Finally, it argues that money Dr. Freese is due under Section 13(a), if any, does not qualify as " earned wages" under the wage statute.

ANALYSIS

1. Standard of Review

In Maine, summary judgment is appropriate when review of the parties' statements of material facts and the record evidence to which the statements refer, considered in a light most favorable to the non-moving party, demonstrate that there is " no genuine issue of material fact [] in dispute, " thereby meriting judgment as a matter of law for the moving party. Lougee Conservancy v. CitiMortgage, Inc., 2012 ME 103, ¶ 12, (Aug. 2, 2012); Dyer v. Dep't of Transp., 2008 ME 106, ¶ 14, 951 A.2d 821. A contested fact is material if it is " one that can affect the outcome of the case, " and a fact issue is genuine " when there is sufficient evidence for a fact-finder to choose between competing versions of the fact." Lougee Conservancy, 2012 ME 103, ¶ 12, (Aug. 2, 2012). In assessing ambiguities regarding the existence of a genuine issue of material fact, the Court views the summary judgment record in the light most favorable to the non-moving party, drawing all reasonable inferences in its favor. See Cookson v. Brewer Sch. Dep't, 2009 ME 57, ¶ ¶ 11-12, 974 A.2d 276.

2. Breach of Contract

First, Dr. Freese asserts that Sunbury breached the employment contract she had with it by failing to provide her with 60-days of notice as was required by Section 13(a) of that agreement, entitled, " Termination Without Cause, " and by failing to pay her six months salary for suspending her employment without adequate notice. Section 13(a) states:

Termination Without Cause. Either CORPORATION or PHYSICIAN may terminate this agreement at any time by giving not less than six (6) months advance written notice to the other party specifying the date of termination. CORPORATION reserves the right to suspend PHYSICIAN'S employment duties hereunder for all or part of said six (6) months provided that CORPORATION continues to pay PHYSICIAN the base salary then in effect for the entire six (6) month period and accepts responsibility for PHYSICIAN'S share of reporting endorsement (tail insurance) and recruitment fee costs. Notwithstanding ...

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