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El-Khalil v. Oakwood Healthcare, Inc.

Supreme Court of Michigan

July 10, 2019

ALI A. EL-KHALIL, Plaintiff-Appellant,
v.
OAKWOOD HEALTHCARE, INC., OAKWOOD HOSPITAL-SOUTHSHORE, OAKWOOD HOSPITAL-DEARBORN, DR. RODERICK BOYES, M.D., and DR. IQBAL NASIR, M.D., Defendants-Appellees.

          Chief Justice: Bridget M. McCormack Chief Justice Pro Tem: David F. Viviano Justices: Stephen J. Markman Brian K. Zahra Richard H. Bernstein Elizabeth T. Clement Megan K. Cavanagh

         Ali A. El-Khalil brought an action in the Wayne Circuit Court against Oakwood Healthcare, Inc.; Oakwood Hospital-Southshore; Oakwood Hospital-Dearborn; Dr. Roderick Boyes, M.D.; and Dr. Iqbal Nasir, M.D., alleging breach of contract based on an alleged breach of medical staff bylaws that were part of plaintiff's employment agreement. Plaintiff amended the complaint, adding a claim of unlawful retaliation in violation of the Elliott-Larsen Civil Rights Act (ELCRA), MCL 37.2101 et seq. Plaintiff alleged that defendants unlawfully retaliated against him by failing to renew his hospital privileges because of a previous lawsuit that plaintiff had brought in August 2014 in which plaintiff had alleged racial discrimination on the basis of his Arabic ethnicity in violation of the ELCRA, tortious interference with an advantageous business relationship, and defamation. Defendants moved for summary disposition under MCR 2.116(C)(7) and (C)(8), and the court, Annette J. Berry, J., granted summary disposition to defendants without specifically identifying which rule supported its decision. Plaintiff appealed, and the Court of Appeals, Stephens, P.J., and Servitto and Shapiro, JJ., affirmed in an unpublished per curiam opinion issued on April 4, 2017 (Docket No. 329986) (El-Khalil I). The Court of Appeals determined that the trial court reviewed the summary disposition motion under MCR 2.116(C)(10), affirmed the decision under that subrule, and found it unnecessary to reach the issues of immunity or release under Subrule (C)(7). Plaintiff sought leave to appeal in the Supreme Court, and the Supreme Court vacated the Court of Appeals opinion and remanded for review under MCR 2.116(C)(7) and (C)(8). 501 Mich. 940 (2017). On remand, the Court of Appeals held in an unpublished per curiam opinion issued on April 17, 2018 (Docket No. 329986) (El-Khalil II), that summary disposition of plaintiff's ELCRA-retaliation and breach-of-contract claims was appropriate under MCR 2.116(C)(8) and found it unnecessary to address whether summary disposition of either claim was appropriate under MCR 2.116(C)(7) based on immunity or release. Plaintiff again sought leave to appeal in the Supreme Court.

         In a unanimous per curiam opinion, the Supreme Court, in lieu of granting leave to appeal and without hearing oral argument, held:

         A motion under MCR 2.116(C)(8) tests the legal sufficiency of a claim based on the factual allegations in the complaint. While the lack of an allegation can be fatal under MCR 2.116(C)(8), the lack of evidence in support of the allegation cannot.

         1. The distinction between MCR 2.116(C)(8) and (C)(10) is one with an important difference: a claim's legal sufficiency as opposed to a claim's factual sufficiency. A motion under MCR 2.116(C)(8) tests the legal sufficiency of a claim based on the factual allegations in the complaint. When considering a motion under MCR 2.116(C)(8), a trial court must accept all factual allegations as true, deciding the motion on the pleadings alone. A motion under MCR 2.116(C)(8) may only be granted when a claim is so clearly unenforceable that no factual development could possibly justify recovery. On the other hand, a motion under MCR 2.116(C)(10) tests the factual sufficiency of a claim. When considering a motion under MCR 2.116(C)(10), a trial court must consider all evidence submitted by the parties in the light most favorable to the party opposing the motion. A motion under MCR 2.116(C)(10) may only be granted when there is no genuine issue of material fact.

         2. To establish a prima facie case of unlawful retaliation under the ELCRA, a plaintiff must show (1) that he engaged in a protected activity; (2) that this was known by the defendant; (3) that the defendant took an employment action adverse to the plaintiff; and (4) that there was a causal connection between the protected activity and the adverse employment action. In this case, there was no dispute that plaintiff's first amended complaint sufficiently pleaded the first two elements, and defendants did not dispute that suspension of or failure to renew plaintiff's hospital privileges in retaliation for the prior lawsuit was materially adverse to plaintiff. The disputed element was whether plaintiff adequately pleaded a causal connection between his 2014 lawsuit and the nonrenewal of his hospital privileges. Plaintiff's allegation in his first amended complaint that defendants violated the ELCRA because they denied his reappointment in retaliation for the lawsuit he previously filed against defendants under the ELCRA was sufficient under MCR 2.116(C)(8) to satisfy the fourth element of an ELCRA-retaliation claim. While the lack of an allegation can be fatal under MCR 2.116(C)(8), the lack of evidence in support of the allegation cannot. Plaintiff's allegation that the adverse employment action resulted from his protected activity was enough to withstand challenge under MCR 2.116(C)(8). The Court of Appeals' conclusion that summary disposition was appropriate because plaintiff "failed to present a prima facie case of retaliation" showed that it applied the wrong standard. Accordingly, the Court of Appeals erroneously evaluated plaintiff's causation allegations under MCR 2.116(C)(10).

         3. A party asserting a breach of contract must establish by a preponderance of the evidence that (1) there was a contract (2) which the other party breached (3) thereby resulting in injury to the party claiming breach. In this case, plaintiff argued that defendants breached the medical staff bylaws by denying him a renewal of staff privileges for reasons unrelated to the efficient delivery of quality patient care and professional ability and judgment. The Court of Appeals concluded that plaintiff's colleagues' complaints against him served as a sufficient basis to deny him a renewal of staff privileges under the bylaws and therefore held that dismissal of plaintiff's breach-of-contract claim under MCR 2.116(C)(8) was appropriate. Summary disposition under MCR 2.116(C)(8) was improper for the breach-of-contract claim for the same reasons summary disposition was improper for the ELCRA claim. Plaintiff's assertion that denial of his privileges was in breach of the bylaws was legally sufficient for his breach-of-contract claim to survive MCR 2.116(C)(8). Accordingly, the Court of Appeals erroneously conducted what amounted to analysis under MCR 2.116(C)(10) in deciding a motion under MCR 2.116(C)(8) by requiring evidentiary support for plaintiff's allegations rather than accepting them as true.

         Reversed and remanded to the Court of Appeals for consideration of plaintiff's ELCRA and breach-of-contract claims under MCR 2.116(C)(7).

         BEFORE THE ENTIRE BENCH

          OPINION

          Per Curiam.

         The issue in this case is the proper analysis of a motion for summary disposition under MCR 2.116(C)(8). We emphasize that a motion for summary disposition under MCR 2.116(C)(8) must be decided on the pleadings alone and that all factual allegations must be taken as true. In this case, the Court of Appeals erroneously conducted an MCR 2.116(C)(10) analysis instead of a (C)(8) analysis because it considered evidence beyond the pleadings and required evidentiary support for plaintiff's allegations rather than accepting them as true. We reverse the judgment of the Court of Appeals, which had affirmed under MCR 2.116(C)(8) the trial court's order granting summary disposition of plaintiff's Elliott-Larsen Civil Rights Act (ELCRA) and breach-of-contract claims, and we remand to that Court for consideration of those claims under MCR 2.116(C)(7).

         I. FACTS AND PROCEDURAL HISTORY

         A. PLAINTIFF'S FIRST LAWSUIT

         Plaintiff Ali El-Khalil, a podiatrist, was employed by Oakwood Hospital-Dearborn (Oakwood Dearborn) from 2008 until 2011, when he was granted staff privileges at various Oakwood hospitals. His privileges were renewed for one- or two-year periods thereafter until June 2015. In August 2014, plaintiff sued Oakwood Healthcare, Inc., Dr. Roderick Boyes, and others, alleging racial discrimination on the basis of his Arabic ethnicity in violation of the ELCRA, tortious interference with an advantageous business relationship, and defamation. Plaintiff claimed that Oakwood and various physicians made false allegations against him in retaliation for his allegations of incompetency and criminality against other physicians. As a result of these allegations, the hospital had initiated administrative proceedings against plaintiff, and after a peer-review process, plaintiff was required to attend an anger-management program, which he successfully completed. Plaintiff asserted that the peer-review process and resulting actions were conducted with malice and in bad faith.

         The trial court granted defendants summary disposition of the discrimination and tortious-interference claims under MCR 2.116(C)(7) and (C)(8), and plaintiff later stipulated to dismissal of his defamation claim.[1] After plaintiff's claims were dismissed, the vice chief of staff at Oakwood Dearborn notified plaintiff that the Medical Staff Peer Review Committee had recently reviewed complaints from plaintiff's peers about plaintiff's behavior. Several e-mails, dated February through May 2015, were attached to the notice. Plaintiff was required to attend the committee's next meeting. Plaintiff responded to the hospital that the complaints were part of an organized plan against him because of racial prejudice and because of his 2014 lawsuit.

         On June 2, 2015, Oakwood Dearborn denied plaintiff's reappointment application, citing the complaints about his behavior. The same month, Oakwood Dearborn, Oakwood Hospital-Southshore, and Oakwood Hospital-Wayne followed suit. At that time, ...


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