Heather Hedstrom v. Compass Properties LLC
334305
| Mich. Ct. App. | Dec 19, 2017Background
- Plaintiff was a neurosurgeon who worked for Centis Health, P.C. under employment agreements from 2007–2010, became a Centis shareholder in Nov. 2010, and later a founding member/shareholder of Compass Healthcare, PLC in 2011.
- Compass’s operating agreement designated plaintiff as an A Member and a B Member of the neurology division and barred members from employment by competing entities.
- In 2014–2015 Compass reviewed neurosurgeon outcomes; plaintiff had substantially higher rates of readmissions, post-operative complications, and infections than her peers.
- Compass’s neurology members recommended expulsion; plaintiff was expelled from Compass on June 1, 2015 and sued July 10, 2015 asserting ELCRA claims (gender and marital-status discrimination), a breach-of-contract claim against Centis, and a demand for an accounting. A Compass breach claim was sent to arbitration and dropped from the amended complaint.
- Defendants moved for summary disposition under MCR 2.116(C)(10). The trial court granted summary disposition for defendants, denied leave to amend to add a public-accommodation claim, and dismissed the breach and accounting claims; the Court of Appeals affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether ELCRA employment-discrimination claims (sex, marital status) survive | Hedstrom: she was subject to ELCRA protection and was unlawfully expelled for gender/marital status | Defendants: Hedstrom was a member/owner, not an employee, and her adverse action resulted from poor performance, not discrimination | Court: Summary disposition affirmed — plaintiff not similarly situated; poor performance is legitimate nondiscriminatory reason; comments insufficient to show pretext |
| Whether leave to amend to add a public-accommodation claim should be allowed | Hedstrom: expulsion also denied full and equal enjoyment of public accommodation | Defendants: Amendment would be futile because no proof of discrimination or pretext | Court: Denial affirmed — amendment would be futile given failure to show discriminatory motive |
| Whether Centis employment agreement remained enforceable (breach of contract) | Hedstrom: Compass operating agreement contemplates employment contracts; Centis contract required written termination, so it survived | Defendants: Operating agreement converted physicians to members and barred employment by competing entity, evidencing termination of Centis contract | Court: Dismissal affirmed — operating agreement terminated/overrode employment contract; plaintiff could not be both member and employed by competing Centis |
| Whether an accounting remedy remains | Hedstrom: seeks accounting tied to contract damages | Defendants: No breach, so no sums to account for | Court: Dismissal affirmed — no breach means no equitable accounting remedy owed |
Key Cases Cited
- Hill v. Sears, Roebuck and Co., 492 Mich 651 (Michigan 2012) (standard of review for summary disposition under MCR 2.116(C)(10))
- Auto-Owners Ins. Co. v. Seils, 310 Mich App 132 (Mich. Ct. App. 2015) (summary disposition standard; view evidence in light most favorable to nonmoving party)
- Hazle v. Ford Motor Co., 464 Mich 456 (Mich. 2001) (plaintiff’s burden to establish prima facie disparate-treatment claim)
- Town v. Michigan Bell Tel. Co., 455 Mich 688 (Mich. 1997) (requirement that comparators be similarly situated)
- Lytle v. Malady, 458 Mich 153 (Mich. 1998) (burden-shifting framework and pretext analysis)
- Diem v. Sallie Mae Home Loans, Inc., 307 Mich App 204 (Mich. Ct. App. 2014) (futility as basis to deny leave to amend)
- Haynes v. Neshewat, 477 Mich 29 (Mich. 2007) (elements required to state public-accommodation discrimination claim)
- Basinger v. Provident Life & Accident Ins. Co., 67 Mich App 1 (Mich. Ct. App. 1976) (accounting is an equitable remedy to determine amounts due)