APPEAL FROM THE CIRCUIT COURT OF THE SECOND JUDICIAL CIRCUIT MINNEHAHA COUNTY, SOUTH DAKOTA THE HONORABLE PATRICIA C. RIEPEL Judge
The opinion of the court was delivered by: Gilbertson, Chief Justice
[¶1.] A medical practice filed suit against a surgeon formerly employed at that practice, alleging breach of contract by failing to give required notice of resignation and breach of an implied contract resulting in unjust enrichment. The implied contract claim was dismissed by summary judgment, which the practice appeals. The jury subsequently found the surgeon did not breach the contract. We affirm.
[¶2.] Dr. Matthew Sorrell was an employee, director, and shareholder at the Surgical Institute (the Institute) in Sioux Falls, South Dakota. Dr. Sorrell began practicing general surgery at the Institute in 2000. In 2002, he became a shareholder. Dr. Sorrell signed an Employment Agreement and Shareholders' Agreement (collectively, "the contracts") in 2006. Neither contract addressed extended leave for additional training.
[¶3.] In 2007, Dr. Sorrell expressed an interest in applying for a fellowship to receive training as an intensivist, specializing in critical care. At the time, the Institute had six surgeons. Dr. Sorrell's proposed leave would burden the other five surgeons, who would have to cover trauma calls for a full year with five surgeons instead of six. The Shareholders' Agreement only permitted military leave. After meeting, the shareholders approved Dr. Sorrell's requested leave and amended the Shareholders' Agreement accordingly. The amendment allowed a doctor to have extended leave for a fellowship and to receive deferred compensation. The amendment did not address fringe financial benefits such as malpractice coverage or health insurance.
[¶4.] Dr. Sorrell obtained a one-year fellowship, beginning in July 2007.
The fellowship included a stipend, but Dr. Sorrell also obtained a forgivable fellowship loan from Avera-McKennan Hospital. The loan would not have to be repaid so long as Dr. Sorrell returned to Sioux Falls and practiced surgery, trauma, and critical care medicine for two years. As a condition for the loan, Dr. Sorrell could not be subject to a covenant not to compete. The Institute agreed by written amendment to his Employment Agreement to suspend Dr. Sorrell's covenant not to compete until the loan was repaid.
[¶5.] Dr. Sorrell returned to Sioux Falls in April 2008 and attended a shareholders' meeting. There was testimony that the practice was having some internal problems and that Dr. Sorrell did not feel as though the meeting solved many of them. Dr. Sorrell was friends with another surgeon at the Institute, Dr. Don Wingert. The two men had previously discussed problems with the practice. On June 10, 2008, Dr. Sorrell called Dr. Wingert and indicated he did not intend to return to the Institute permanently. Dr. Wingert told other members at the Institute about the conversation. Dr. Sorrell did not respond to an email from the executive director asking if he was leaving. On June 13, 2008, the Institute sent Dr. Sorrell a letter confirming his voluntary termination of employment without cause. There were other subsequent communications indicating Dr. Sorrell's willingness to return for nine months, to cover weekend call, or "help out."
[¶6.] The Institute sued Dr. Sorrell in September 2008, asserting two claims. First, the Institute claimed Dr. Sorrell breached his Employment
Agreement by failing to give nine-month notice before leaving. Second, the
Institute alleged that Dr. Sorrell breached an implied contract by receiving financial benefits from the Institute during his fellowship and then not returning, resulting in unjust enrichment. Dr. Sorrell counterclaimed, demanding payment for his stock; claiming the Institute violated a confidentiality provision and wrongfully interfered with a prospective business advantage; and that the Institute owed him compensation under his employment contract. Thereafter, Dr. Sorrell voluntarily dismissed his breach of confidentiality claim. The circuit court dismissed his counterclaim for tortious interference and dismissed the Institute's claim for breach of an implied contract resulting in unjust enrichment. The Institute then filed an amended complaint in August 2010. The Institute alleged breach of a written contract, which was the same as the original complaint, and replaced the implied contract equitable claim with breach of an oral contract, i.e., not returning to the practice even though he promised he would.*fn1
[¶7.] At trial, the primary issues were the Institute's claim for breach of contract for failure to give required notice and Dr. Sorrell's counterclaim for the value of his shares and unpaid wages. The jury found by special interrogatory verdict form that Dr. Sorrell did not terminate his employment without giving the required notice. Dr. Sorrell was awarded a sum of money ...