Cleveland Hearing & Balance Ctr., Inc. v. N.E. Ohio Med. Univ.
100 N.E.3d 1074
| Ohio Ct. App. | 2017Background
- CHBC (a dissolved corporate practice) and Dr. Mohamed Hamid contracted with SACM to provide a three-year fellowship to Dr. Fuad Alghamdi; CHBC subcontracted with NEOMED to provide the research component for $12,500/year.
- Alghamdi stopped clinical training with CHBC in March 2014; his attorney sent a March 24, 2014 letter indicating he would not authorize further payments to CHBC and sought final certification.
- CHBC/Dr. Hamid informed NEOMED in late April/early May 2014 they would terminate Alghamdi’s clinical fellowship in June 2014; SACM suspended payment for the third year.
- NEOMED, Alghamdi’s J-1 visa sponsor, sent CHBC a 60-day termination notice on May 7, 2014, and on May 9, 2014 agreed to provide the remaining training so Alghamdi could remain in the U.S.
- CHBC and Dr. Hamid sued NEOMED (and SACM) in the Court of Claims asserting tortious interference and breach of an implied duty of good faith; SACM was dismissed; the Court of Claims granted NEOMED summary judgment and appellants appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether NEOMED breached an implied duty of good faith in the subcontract by arranging for Alghamdi to finish training at NEOMED | NEOMED opportunistically arranged to take Alghamdi and thus breached the implied covenant to act in good faith and resolve disputes per the contract | NEOMED acted reasonably after CHBC/Dr. Hamid and Alghamdi made clear the original fellowship would not proceed; NEOMED had no duty to mediate and legitimately acted to fulfill the training purpose and satisfy visa obligations | Court affirmed summary judgment for NEOMED: no breach of implied good-faith duty |
| Whether NEOMED acted in bad faith by refusing to join CHBC in a negative performance report on Alghamdi | CHBC claimed NEOMED should have supported a critical report, which would have preserved CHBC’s contractual position | NEOMED reasonably declined to alter reports because it did not find the negative evaluation justified | Held for NEOMED: refusal to join negative report was not bad faith |
| Whether communications between NEOMED and Alghamdi created an actionable opportunistic conspiracy | CHBC suggested undisclosed communications evidenced conspiratorial bad faith | NEOMED argued it could and should communicate with its own trainee and visa holder; no evidence of bad-faith communications was presented | Court found no evidence of bad-faith communications; summary judgment affirmed |
| Whether the trial court abused discretion by denying a longer extension to respond to summary judgment | CHBC sought more time (until March 15) to obtain an affidavit from Dr. Hamid who was abroad | NEOMED noted it already had Hamid’s deposition and objected to excessive delay given trial scheduling | Court did not abuse discretion in granting only a short extension (response due Feb 23); appellants failed to show what additional affidavit evidence would create a genuine issue |
Key Cases Cited
- Coventry Twp. v. Ecker, 101 Ohio App.3d 38 (standard of appellate review for summary judgment)
- Koos v. Cent. Ohio Cellular, 94 Ohio App.3d 579 (summary judgment review principles)
- State ex rel. Grady v. State Emp. Relations Bd., 78 Ohio St.3d 181 (Civ.R. 56 standards)
- Dresher v. Burt, 75 Ohio St.3d 280 (moving party’s initial burden under Civ.R. 56)
- Vahila v. Hall, 77 Ohio St.3d 421 (nonmoving party’s response requirements under Civ.R. 56)
- Skivolocki v. E. Ohio Gas Co., 38 Ohio St.2d 244 (contract construction focuses on parties’ intent)
- Ed Schory & Sons, Inc. v. Soc. Natl. Bank, 75 Ohio St.3d 433 (definition of good faith in contract law)
- Blakemore v. Blakemore, 5 Ohio St.3d 217 (abuse of discretion standard)
- Jarupan v. Hanna, 173 Ohio App.3d 284 (elements required to prove breach of contract)