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Supreme Court Reverses and Remands Employment Case to Court of Appeals to Decide under Proper Evidentiary Standard

Posted on Friday, October 11, 2019

Background Information

Dr. Ali El-Khalil is a podiatrist who was formerly employed by the Oakwood Hospital in Dearborn, with his employment beginning in 2008. Through this employment, Dr. El-Khalil received privileges at several other hospitals. Dr. El-Khalil’s privileges were renewed for one- or two- year periods, until June 2015. In August 2014, Dr. El-Khalil had sued Oakwood Healthcare, Inc., alleging racial discrimination in violation of the Elliott-Larsen Civil Rights Act (ELCRA), as well as tortious interference with an advantageous business relationship and defamation, claiming that Oakwood and various physicians had made false allegations against him in retaliation. Dr. El-Khalil also asserted that the peer review process and the resulting actions were conducted with malice and bad faith. Because of these allegations, the hospital had required that Dr. El-Khalil attend an anger management program, which he successfully completed.

The trial court granted Oakwood’s summary disposition of the discrimination and tortious interference claims under MCR 2.116(C)(7) and (C)(8). After the claims were dismissed, the vice chief of staff of Oakwood notified Dr. El-Khalil that the Medical Staff Peer Review Committee had recently received complaints about him from several of the other physicians, citing emails dated February through May 2015. Dr. El-Khalil was required to attend the committee’s next meeting, where Dr. El-Khalil again stated that the complaints were motivated by racial prejudice and the suit he had filed in 2014. Oakwood-Dearborn subsequently denied Dr. El-Khalil’s reappointment application, followed shortly by Oakwood-Southshore and Oakland-Wayne also denying his reappointment application. Dr. El-Khalil still had privileges at seven other hospitals.

Dr. El-Khalil filed suit once again against Oakwood in June 2015, initially alleging breach of contract based on the Medical Staff Bylaws of Dr. El-Khalil’s employment agreement, stating that his privileges did not expire until November 2015 and thus his privileges had been suspended without procedures nor notice. Dr. El-Khalil amended his complaint in July 2015 to add a claim of unlawful retaliation in violation of ELCRA (MCL37.2101). Dr. El-Khalil had attached the emails that sparked the allegations to his original complaint. Instead of filing an answer, Oakwood moved for summary disposition under MCR 2.116(C)(7) and (C)(8). The trial court granted Oakwood’s motion without specifying which rule support its decision. In terms of the ELCRA claim, the trial court concluded that Oakwood had established sufficient evidence demonstrating that Dr. El-Khalil had committed “a series of abusive, hostile and otherwise unprofessional behaviors” and that the denial of his reappointment application was not related to his protected activity. The trial court also held that while the bylaws were enforceable, Dr. El-Khalil had not presented any evidentiary support other than his bare allegations. Thus, the trial court dismissed Dr. El-Khalil’s suit. Dr. El-Khalil appealed.

The Court of Appeals

The Court of Appeals issued an unpublished, per curiam opinion in April 2017 affirming the trial court’s ruling of summary disposition. The Court of Appeals determined that the trial court reviewed the summary disposition under MCR 2.116(C)(10) and affirmed that under (C)(10), it was not necessary for the trial court to reach the (C)(7) issues of immunity or release. Dr. El-Khalil appealed this decision to the Michigan Supreme Court, which reversed the Court of Appeals opinion and remanded for review under MCR 2.116(C)(7) and (C)(8). On remand, the Court of Appeals found once again that summary disposition of Dr. El-Khalil’s ELCRA-retaliation and breach of contract claims was appropriate under MCR 2.116(C)(8) and that the analysis under (C)(7) was not necessary. Dr. El-Khalid once again appealed to the Supreme Court, asking for peremptory reversal of the Court of Appeals judgment.

Final Supreme Court Ruling

In its opinion, the Supreme Court explained that the difference between legal sufficiency and factual sufficiency was the key in deciding Dr. El-Khalil’s case. The Supreme Court held that summary disposition of the ELCRA and breach of contract claims was improper under MCR 2.116(C)(8). It was premature for the Court of Appeals to affirm the dismissal Dr. El-Khalil’s ELCRA claim under MCR 2.116(C)(8) because Dr. El-Khalil had adequately pleaded causation by alleging that Oakwood had decided not to reappoint him because of the 2014 lawsuit, making the claim factually sufficient and thus could pass muster under MCR 2.116(C)(8) at this stage.  Dr. El-Khalil’s assertion that the denial of his privileges was a breach in the bylaws was also legally sufficient for a breach of contract claim to survive MCR 2.116(C)(8). The factual dispute between Oakwood and Dr. El-Khalil’s assertions was to be decided under an MCR 2.116(C)(10) analysis. Because the Court of Appeals erroneously conducted what amounted to an analysis under MCR 2.116(C)(10) in deciding a motion under MCR 2.116(C)(8) by requiring evidentiary support for Dr. El-Khalil’s allegations rather than accepting them as true, the Supreme Court reversed the Court of Appeals ruling and remanded for consideration of the ELCRA retaliation and breach of contract claims under MCR 2.116(C)(7).

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