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Shannon v. Mississippi Coast Urology, Pllc

United States District Court, Fifth Circuit

December 30, 2013

MISSISSIPPI COAST UROLOGY, PLLC; MARK S. LYELL, individually and as sole member of Mississippi Coast Urology, PLLC; SMS MANAGEMENT, LLC, individually and as agent for Mississippi Coast Urology, PLLC; DONALD S. DAVENPORT; and JOHN AND JANE DOES D, E, F, G, H, and I, Defendants.


LOUIS GUIROLA, Jr., Chief District Judge.

BEFORE THE COURT are the Motion for Summary Judgment [92] filed by Mark S. Lyell and Mississippi Coast Urology, PLLC ("MCU"), and the Motion for Summary Judgment [94] filed by Donald S. Davenport and SMS Management, LLC. After reviewing the submissions of the parties and the applicable law, the Court finds that the defendants' Motions should be denied.


In 2008, the plaintiff Dr. Paul Shannon entered into an Agreement of Employment with MCU. The Agreement provided that Dr. Shannon would receive a base salary of $325, 000 in addition to incentive compensation based on production. The Agreement stated:

This Agreement shall be for a period of eighteen months, commencing on the Effective Date, with an option for an additional six months as an employee at the same salary and incentive basis as provided for herein. Thereafter, this [A]greement will continue automatically from year to year, subject however, to the termination provisions hereinafter contained in Paragraph 18 of this Agreement.

(Agreement, Ex. A to MCU Memo. at 1, ECF No. 93-1). Paragraph 18 of the Agreement provided that the Agreement may be terminated by, among other things, delivery of thirty days' written notice by either party, by mutual written agreement, or by MCU's delivery of written notice of immediate termination for good cause. The parties agreed, "This Agreement contains the entire agreement of the parties and may not be changed except by an agreement in writing signed by the party against whom the enforcement of any waiver, change, extension, modification or discharge is sought." ( Id. at 12).

Dr. Shannon claims that the defendants breached the Agreement by unilaterally reducing his base salary to $180, 000, because no written amendment was ever made to the Agreement. The defendants counter that Dr. Shannon assented to this reduction in salary by failing to object to the reduction and by continuing to work at MCU. Nevertheless, Dr. Shannon claims that he could not terminate his employment with MCU, because he was contractually obligated to continue to maintain his medical practice in Jackson County, Mississippi, for an additional twelve months pursuant to a Physician Recruitment Agreement with Singing River Hospital System that was negotiated by the defendants. Dr. Shannon claims that he would have been required to repay Singing River over $260, 000 if he had left his position at MCU at the time when his salary was reduced.

On December 1, 2011, Dr. Shannon gave MCU thirty-days written notice that he was resigning his position. (Notice, ECF No. 94-8). He admits that he had signed an employment agreement with a New York clinic well before he provided notice of his resignation.

Dr. Shannon filed this lawsuit against MCU and Mark S. Lyell, the sole member of MCU. He also sued SMS Management LLC, which is an entity that provided contracted administrative services to MCU, and SMS's employee, Donald S. Davenport. Dr. Shannon has asserted the following claims against all of the defendants: breach of contract, unjust enrichment, conversion, constructive trust, fraudulent concealment, and fraudulent inducement. He also seeks a full accounting, because he claims that the defendants have converted and retained funds that are owed to him.


A motion for summary judgment may be filed by any party asserting that there is no genuine issue of material fact that the movant is entitled to prevail as a matter of law on any claim. Fed.R.Civ.P. 56. The movant bears the initial burden of identifying those portions of the pleadings and discovery on file, together with any affidavits, which it believes demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). Once the movant carries its burden, the burden shifts to the non-movant to show that summary judgment should not be granted. Celotex Corp., 477 U.S. at 324-25. The nonmovant may not rest upon mere allegations or denials in its pleadings but must set forth specific facts showing the existence of a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256-57 (1986).


All of the defendants argue that, pursuant to the doctrine of quasi-estoppel, Dr. Shannon is estopped from asserting a claim for breach of contract by continuing to work for MCU after his salary was reduced. The Mississippi Supreme Court has described the doctrine of quasi-estoppel as follows:

It is axiomatic that estoppel forbids one from both gaining a benefit under a contract and then avoiding the obligations of that same contract. "A party cannot claim benefits under a transaction or instrument and at the same time repudiate its obligations." Wood Naval Stores Export Assn. v. Gulf Naval Stores Co., 71 So.2d 425, 430 (Miss. 1954). This doctrine, termed "quasi-estoppel, " "precludes a party from asserting, to another's disadvantage, a right inconsistent with a position [it has] previously taken, " and "applies when it would be unconscionable to allow a person to maintain a ...

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