Opinion
Civil No. 99-1091-JO
February 15, 2001
Stephen L. Brischetto Portland, OR., Attorney for Plaintiff.
Alison Elizabeth Brody, Melissa Lehane Rawlinson, Peter C. Richter, MILLER NASH Portland, OR., Attorneys for Defendants.
OPINION AND ORDER
Plaintiff brings this action against his former employer, defendant Starr-Wood Cardiac Group of Corvallis, P.C., asserting claims for breach of contract and misrepresentation surrounding two alleged oral employment agreements. Defendant now moves for summary judgment (#37) on both claims. After considering the arguments of the parties and the evidence submitted, defendant's motion for summary judgment is DENIED.
FACTS
This case arises out of a dispute over an employment relationship between plaintiff Dwight Hand, a cardiac surgeon, and defendant Starr-Wood Cardiac Group of Corvallis, P.C., a medical services corporation. Starr-Wood Cardiac Group ("Starr-Wood") is a group of professional corporations linked together through a management company deploying cardiac surgeons at multiple sites throughout the United States. Starr-Wood Cardiac Group of Bend ("Starr-Wood Bend") and defendant Starr-Wood Cardiac Group of Corvallis ("Starr-Wood Corvallis") are two of these professional corporations. Starr-Wood Bend is located at St. Charles Medical Center in Bend, Oregon, ("St. Charles"), and Starr-Wood Corvallis is located at Good Samaritan Hospital in Corvallis, Oregon ("Good Samaritan").
Many of the facts are not in dispute. In March of 1997, due to an increase in the program at St. Charles, Starr-Wood began a search for a second primary surgeon at Starr-Wood Bend. Plaintiff applied for the position and was hired. Thereafter, plaintiff began negotiating the terms of his employment with Dr. Albert Starr, an authorized representative of Starr-Wood Bend. On July 1, 1997, plaintiff entered into a written employment agreement with Starr-Wood Bend ("the written agreement"), which contained the following terms: 1) Plaintiff would be employed by Starr-Wood Bend from July 15, 1997 to June 30, 1999; 2) Plaintiff would receive a salary of $150,000 per year; and 3) Plaintiff would receive benefits, including health insurance, professional liability insurance and participation in a retirement plan. The written agreement also included an integration clause and provided the manner in which plaintiff could be terminated. In reliance on this agreement, plaintiff purchased a home in Bend, Oregon and relocated himself and his family from St. Louis, Missouri.
After plaintiff arrived in Bend, he discovered that the primary surgeon, Dr. Robert Lazarra, M.D. ("Dr. Lazarra"), did not wish to have a second surgeon assist him at that location. In addition, St. Charles informed Dr. Starr that it would not renew its contract with Starr-Wood Bend if plaintiff were hired against Dr. Lazarra's wishes. For these reasons, Dr. Starr informed plaintiff that Starr-Wood Bend could not provide him with the position at Starr-Wood Bend as promised in the written agreement.
The events that followed are hotly in dispute. According to defendant, Starr-Wood Bend did not terminate the written agreement, as it had the right to do under the contract. Rather, defendant contends that the written agreement remained in place, and plaintiff and Dr. Starr simply agreed that Starr-Wood Bend would assign its rights under the contract to Starr-Wood Corvallis. Defendant maintains that plaintiff continued to work at Starr-Wood Corvallis in this capacity, under the terms of the original written contract, until he was terminated in November of 1998.
The written agreement included an option for either party to terminate without cause with 90 days written notice. See Written Agreement, attached as Exhibit 5 to Decl. of Peter C. Richter, at IV.2.3 (hereinafter "Exhibit 5").
Defendant recently clarified its position that the written agreement was assigned to Starr-Wood Corvallis in its Supplemental Memorandum in Support of Its Motion for Summary Judgment.
In contrast, plaintiff contends that when the Bend position was dissolved, the parties terminated the written agreement and formed a new oral contract. According to plaintiff, he and Dr. Starr negotiated a new contract in September of 1997 (the "September 1997 agreement"), which contained the following terms: 1) Plaintiff would be the Director of Cardiac Surgery at Starr-Wood Corvallis; 2) Plaintiff would receive a base salary of $150,000 per year, with an incentive for productivity of $1,000 per case for every case over 150 per year; 3) Starr-Wood Corvallis would reimburse plaintiff for his expenses while he lived in a motel in Corvallis; and 4) After a fixed term of five years, plaintiff would have majority control over accounts receivable, and responsibility for hiring and firing personnel. Plaintiff claims that after the terms of the agreement were settled, he moved into a Corvallis motel and received reimbursement for his living expenses. According to plaintiff, the September 1997 agreement remained in effect until July 1998, when a second oral contract was negotiated.
The parties disagree as to whether the alleged oral contracts are best characterized as a series of negotiations relating to one principal oral agreement, as plaintiff contended at the hearing, or whether, as defendant argues, they should be understood as two distinct agreements. Plaintiff himself, however, refers to them as two separate agreements in the complaint and does not significantly alter this characterization in his memorandum in opposition to summary judgment. Therefore, I treat them as distinct agreements here.
In June of 1998, plaintiff became unhappy with the terms of his employment at Starr-Wood Corvallis. While he was receiving the same compensation in Corvallis that he would have received in Bend, his duties were significantly greater. As Director of Cardiac Services, he was required to oversee the general practice of the office, including scheduling staff and attending committee meetings. Further, unless he arranged relief ahead of time, he was required to be on call 24 hours per day, seven days per week. Had he stayed in Bend, receiving the same salary, he would have shared on-call duties evenly with another surgeon. This posed a substantial hardship for him, given that his family remained in Bend. Finally, plaintiff contends that he began to doubt his future at Starr-Wood Corvallis, because Dr. Starr began to refer to him as the "acting" or "trial" director, rather than the actual director of cardiac surgery.
For these reasons, plaintiff approached Dr. Starr in or about June of 1998 to either renegotiate his contract or to obtain a newly-available position at Starr-Wood Bend. According to plaintiff, Dr. Starr refused to hire him at Starr-Wood Bend. However, he claims that he and Dr. Starr did reach a second oral agreement (the "June 1998 agreement"), which replaced the September 1997 agreement and promised plaintiff: 1) A salary of $250,000, payable retroactive to October of 1997, when his period of employment at Starr-Wood Corvallis began; and 2) Full hiring and firing authority after five years; and 3) 51% of the profits of the Corvallis practice after five years. Plaintiff states that Dr. Starr also agreed to move him from his motel to an apartment near the hospital, print and issue stationery that listed plaintiff as the director of cardiac surgery, and remove a staff member who was causing dissension.
At approximately the same time, two meetings were held between Dr. Starr and the administration of Good Samaritan. According to plaintiff, Good Samaritan informed Dr. Starr that it was considering terminating its contract with Starr-Wood Corvallis in the fall of 1998, when the contract was set to expire. It explained that it wanted a more senior surgeon than plaintiff and that it wanted two surgeons in the program. While negotiations were ongoing between Dr. Starr and Good Samaritan, Good Samaritan requested that Dr. Starr have plaintiff stay on as director of cardiac surgery.
According to plaintiff, Dr. Starr did not inform Good Samaritan that he had offered the position of director of cardiac surgery to plaintiff, and also did not inform plaintiff that Starr-Wood Corvallis's contract was in jeopardy. In September of 1998, plaintiff informed Larry Mullins, the CEO of Good Samaritan, that Dr. Starr had offered him the permanent director position. Mr. Mullins informed plaintiff at that time that Good Samaritan would likely not support plaintiff in that capacity because it preferred a more senior surgeon, and was negotiating with another provider to supply cardiac surgery services.
Finally, in November of 1998, Dr. Starr told plaintiff that he did not intend to make plaintiff the director at Starr-Wood Corvallis. Plaintiff responded with a letter stating that unless he received a salary increase to $350,000, he would quit. Dr. Starr informed plaintiff that he had hired another surgeon to serve as the director at Starr-Wood Corvallis. He gave plaintiff 60 days notice of his intent to terminate plaintiff's employment, pursuant to the termination clause in the written agreement.
On July 30, 1999, plaintiff filed his complaint, alleging 1) breach of the June 1998 oral contract, and 2) fraudulent inducement to enter into both the September 1997 agreement and the June 1998 agreement. On October 31, 2000, defendant filed the instant motion, seeking summary judgment with respect to both counts.
DISCUSSION
1. Breach of Contract
Plaintiff asserts the following breach of contract claim in his complaint: Defendant breached the July, 1998 verbal contract by failing to increase plaintiff's
salary to $250,000, failing to pay plaintiff the agreed-upon amount of $250,000 per year
as a base salary retroactive to October, 1997; and, by terminating the five year contract without just cause. Complaint ¶ 21.
Defendant challenges plaintiff's breach of contract claim on four grounds. I will address each in turn.
a. Are the Oral Contracts Barred by the Written Agreement?
Defendant first contends that enforcement of the July 1998 agreement is barred by the written agreement. According to this argument, the written agreement may be terminated only by taking one of a list of actions, and none were taken in this case. Because the written agreement was not terminated, the parties are bound by its final paragraph, which provides that only written amendments may be made to the agreement. Thus, because the written agreement was not terminated, and because it prohibits oral amendments, any of the additional terms and conditions allegedly included in the July 1998 agreement are unenforceable.
That section provides: "As of the date of execution hereof, the provisions contained in this Agreement set forth the entire agreement of the parties with respect to the subjects of this Agreement. No other document, agreement, or understanding addressing those subjects, oral or otherwise, shall be of any effect with respect to the parties unless specifically made a part of this Agreement by means of a writing signed by both parties. Except as expressly provided herein, this Agreement may be amended only by a writing signed by both parties." Exhibit 5 at V.9.
In general, the construction of a contract is a legal determination for the court. Stuart v. Tektronix, Inc. 83 Or. App. 139, 142, 730 P.2d 619 (1986). However, "[w]hen there is disagreement as to the content and meaning of an oral transaction or a transaction consisting of both written and spoken words, the meaning of the agreement is a question of fact." Stuart, 83 Or. App. at 142 (citing Howland v. Iron Fireman Mfg. Co., 188 Or. 230, 213 P.2d 177 (1949)).
In this case, there are both written and oral agreements between the parties. Defendant does not deny, nor can it, that at least three terms of the written agreement were either amended or added orally. First, although defendant was originally hired as a second surgeon, he was the director of cardiac surgery at Starr-Wood Corvallis — a much more demanding and time-consuming position. Second, to accommodate plaintiff's relocation in Corvallis, Dr. Starr arranged for him to receive reimbursement for his motel costs, and eventually for the costs of an apartment.
Most significantly, defendant states in its Supplemental Memorandum in Support of Its Motion for Summary Judgment that Starr-Wood Bend assigned its rights under the written agreement to Starr-Wood Corvallis. According to defendant, this assignment was made orally, in spite of the clear language in the written agreement stating that "no assignment of this agreement or any rights or obligations under the agreement shall be valid without the written consent of both parties." Exhibit 5 at V.3. Defendant thus concedes, as it must, that the written agreement was orally modified, at least to the extent that it was allegedly assigned.
Defendant insists, however, that the assignment was a permissible change because the parties performed unequivocal acts that manifested their intent to waive the writing requirement. See Bank of E. Or. v. Griffith, 101 Or. Ct. App. 528, 536, 792 P.2d 1210 (1990) (stating that an intent to waive an existing right under a contract must be manifested by unequivocal acts). Defendant insists that this assignment was evidenced by the parties' acts, and did not affect any other terms of the written agreement, and urges me to conclude as a matter of law that the written agreement remained in effect.
In light of the numerous unresolved factual issues, I decline to do so. According to plaintiff, the written agreement was not assigned, but terminated, and a new agreement was formed with Starr-Wood Corvallis. While it is true that plaintiff's relocation may have evidenced the assignment of the written agreement to Starr-Wood Corvallis, as defendant urges, plaintiff's conduct is also consistent with the termination of the written agreement and the formation of a new oral agreement. Therefore, plaintiff's relocation of his duties in Corvallis were not unequivocal acts evidencing an intent to assign the written agreement to Starr-Wood Corvallis, as defendant asserts.
Moreover, the existence of this clear change, whether viewed as an assignment of the written agreement or evidence of its complete termination, demonstrates the general uncertainty surrounding the status of the written agreement. According to plaintiff, he and Dr. Starr agreed to terminate the written agreement and replace it entirely with a new agreement that contained completely new terms. Dr. Starr claims, on the other hand, that they agreed to continue under the written agreement, but that plaintiff would relocate to Corvallis and assume some additional duties at that location. The degree to which the written agreement remained in effect thus rests largely on a determination of the credibility of the only two parties who were present during the negotiations: plaintiff and Dr. Starr. This determination I leave for the trier of fact.
b. Is Enforcement of the Oral Agreements Barred by the Statute of Frauds?
Defendant also contends that the July 1998 agreement is barred by the statute of frauds. The statute of frauds provides that an agreement must be in writing if it "is not to be performed within a year from the making." Or. Rev. Stat. § 41.580. Because plaintiff alleges that the July 1998 agreement provided for a five-year period of employment with Starr-Wood Corvallis, defendant claims that this had to be in writing in order to be enforceable.
It is important to note here that the correct term of the oral agreement is an unresolved question that rests on numerous disputed issues. If the trier of fact finds that written agreement remained in place, as defendant contends, then plaintiff was under a two-year term of employment. Alternatively, plaintiff contends that he and Dr. Starr negotiated a five-year term of years contract. Finally, if the negotiations failed to form a term of years agreement, then the parties would be left with an at-will employment contract, which would not be subject to the statute of frauds at all. Therefore, the analysis in this section assumes that the contract was for a term of years, recognizing that this question, too, must be resolved by a fact finder.
Oregon law recognizes an exception to the statute of frauds, allowing enforcement of a contract where the parties have partially performed under the agreement. Stevens v. Good Samaritan Hosp. Med. Ctr., 264 Or. 200, 504 P.2d 749 (1972). "[T]he terms of an oral agreement will be enforced (1) if there is conduct corroborating and unequivocally referable to the oral agreement sufficient to satisfy the policy of the statute designed to minimize perjured claims and the opportunities for fraud, and (2) if there are equitable grounds for enforcing the contract whether those grounds are found in facts establishing the basis for a true estoppel or in facts justifying the avoidance of unjust enrichment or relief from fraud." Stevens, 264 Or. at 206 (quoting Luckey v. Deatsman, 217 Or. 628, 633, 343 P.2d 723, 725 (1959)). On the facts of this case, plaintiff has put forth sufficient evidence to create a jury question with respect to these issues.
First, there is clearly evidence of "conduct corroborating and unequivocally referable to the oral agreement." Stevens, 264 Or. at 206. To meet this requirement, the acts of partial performance "must be referable to and induced by the contract relied upon, and must have been done with a view to its complete performance." Clark v. Portland Trust Bank, 221 Or. 339, 355, 351 P.2d 51 (1960). Here, plaintiff relocated from Bend to Corvallis, despite the fact that his new home and his wife and family remained in Bend. He lived in a hotel, which was paid for by defendant. Plaintiff claims that the agreement included a promotion to director of cardiac surgery; defendant denies this. On its website, however, Starr-Wood Corvallis listed plaintiff as director. Eventually, when the June 1998 agreement allegedly became effective, Starr-Wood Corvallis moved plaintiff into an apartment and paid his living expenses. It also printed stationery listing plaintiff as director of cardiac surgery. None of these actions were provided for in the written agreement. In the absence of an assignment, the existence of which is a disputed question, these acts are clearly "referable to and induced by" a new agreement between the parties. Clark, 221 Or. at 355.
Defendant argues that this conduct occurred at least ten months prior to the June 1998 agreement, and it therefore cannot be corroborative of that agreement. There are two problems with this claim. First, there is evidence on the record of conduct that did occur around June of 1998: Plaintiff relocated to an apartment near Good Samaritan, defendant began paying living expenses to plaintiff, and defendant printed stationery listing plaintiff as its director of cardiac surgery. This conduct could certainly be considered corroborative of a new agreement. Second, even conduct taken ten months prior to the formation of the alleged June 1998 agreement might be relevant to whether the June 1998 agreement was formed. According to plaintiff, he relocated to Corvallis pursuant to an oral agreement formed in September of 1997. Were a jury to see the evidence and hear plaintiff's testimony, and find them credible, this finding may be relevant in determining whether the subsequent oral agreement, which allegedly contained many of the same terms, was formed as well. Therefore, the conduct corroborative of the June 1998 agreement, both prior to and contemporaneous with the formation of that alleged agreement, is sufficient to satisfy the first prong of the test for partial performance under Oregon law.
To take the agreement out of the statute of frauds under the partial performance doctrine, plaintiff must also establish that "there are equitable grounds for enforcing the contract whether those grounds are found in facts establishing the basis for a true estoppel or in facts justifying the avoidance of unjust enrichment or relief from fraud." Stevens, 264 Or. at 206. To determine whether an act taken in reliance on a promise renders the promise enforceable, Oregon courts have looked to three factors: 1) whether the plaintiff actually relied on the promise; 2) whether the plaintiff suffered a substantial change in position; and 3) foreseeability by the promisor that the promise would induce conduct of the kind that occurred. Schafer v. Fraser, 206 Or. 446, 472, 290 P.2d 190, 202 (1956).
There is sufficient evidence in this case to satisfy these factors. Plaintiff relocated from Bend to Corvallis, living alone in a motel, and eventually an apartment, rather than with his family in his home in Bend. He also remained out of the job market, where he likely would have found another, higher-paying job relatively quickly. Also, at Good Samaritan, he was paid as a second surgeon, but performed the work of a director, generally a more demanding and lucrative position. Relocating to the town where his new position was located, living in a motel and remaining out of the job market would all be actions foreseeable to Dr. Starr. Finally, this also supports the theory that defendant was unjustly enriched, because defendant allegedly received the services of a director, but paid the salary of a second surgeon.
The day after plaintiff finally left Starr-Wood Corvallis, he started work as a cardiac surgeon in California, earning higher wages than he received at Starr-Wood Corvallis.
In sum, assuming the parties formed a contract for a term of years, there is sufficient evidence of partial performance to take this case out of the statute of frauds. Plaintiff has presented evidence of both conduct corroborating the alleged promise and equitable factors making enforcement of the statute of frauds unjust.
c. Can the June 1998 Agreement be Enforced as a Term of Years Contract?
As I discussed briefly above, defendant argues that even if the June 1998 agreement is valid and enforceable, it is at most an at-will employment contract and not a contract for a term of years. According to defendant, there was no term of years contract because neither party was bound to the employment contract for a five-year period. Rather, it argues that plaintiff's assertion — that certain benefits would accrue after five years — is insufficient to describe a term of years contract. Accordingly, defendant submits that plaintiff cannot seek damages for defendant's decision to terminate plaintiff's employment without cause.
An enforceable employment contract for a term of years requires that the term be specifically agreed upon by the parties. See Gaswint v. Case, 265 Or. 248, 509 P.2d 19 (1973). In this case, whether such a term was agreed upon by the parties is disputed. According to plaintiff, he and Dr. Starr agreed that he would be employed for a period of five years, after which certain benefits would accrue. According to Dr. Starr, he simply painted a picture of what the future would look like after five years if plaintiff were to remain with Starr-Wood. Whether Dr. Starr's statements were like commitments, as plaintiff urges, or speculations, as defendant urges, is, again, a question for the trier of fact.
d. Is the June 1998 Agreement Unenforceable due to Lack of Agreement on Essential Terms?
Defendant's final argument against the breach of contract claim is that there was no meeting of the minds on essential terms, and therefore there can be no enforceable contract. I disagree. It is well-settled in Oregon that the parties need not agree on all terms of the contract, but only those that are essential to the agreement. Pacificorp v. Lakeview Power Co., 131 Or. App. 301, 307 884 P.2d 897 (1994). The essential terms of a contract include "(1) the parties; (2) the subject matter; (3) the mutual promises; and (4) the price and consideration and terms of payment." U.S. Employees of Lane County Credit Union v. Royal, 44 Or. App. 275, 281, 605 P.2d 754 (1980).
In this case, plaintiff alleges that the oral agreement included agreement on all of the following terms: 1) the parties; 2) plaintiff's title as director of cardiac surgery, as well as his duties in accordance with that title; 3) salary; 4) a bonus plan for cases over 150; and 5) a 51% ownership interest for plaintiff in the practice's profits. While these may not be all the terms of the contract, they are sufficient to constitute a meeting of the minds with respect to essential terms.
In sum, I conclude that defendant's motion for summary judgment with respect to the breach of contract claim rests on disputed issues of material fact and therefore must be denied.
2. Fraud
In addition to his claim for breach of the alleged June 1998 agreement, defendant asserts a claim of fraud with respect to both the September 1997 and June 1998 oral agreements. He contends that the defendant induced him to enter into these agreements "with false representations which were intentionally, or recklessly, made." Complaint ¶ 22. Defendant challenges plaintiff's fraud claim on two grounds. First, it contends that plaintiff cannot produce sufficient evidence of fraud to survive summary judgment. Second, it argues that if the court construes the oral agreements as terminable at-will, plaintiff's claim cannot stand because he continued to work for Starr-Wood Corvallis after he discovered the alleged fraud.
a. Has Plaintiff put forth Sufficient Evidence of Fraud to Survive Summary Judgment?
As a preliminary matter, plaintiff fails to sustain his fraud claim with respect to the September 1997 agreement. While in his complaint, plaintiff alleges fraud with respect to both oral agreements, in neither his complaint nor his memorandum in opposition to defendant's motion does he identify any fraudulent conduct or statements that induced him to enter into the September 1997 agreement. Rather, he focuses on statements allegedly made in May of 1997 that induced him to sign the written agreement, and statements made in summer of 1998 that induced him to enter into the June 1998 agreement. Given the absence of any specific allegations of fraud specifically relating to the September 1997 agreement, the claim must fail.
The remaining claim for fraudulent inducement focuses on the June 1998 agreement. Plaintiff alleges that in early summer of 1998, Dr. Starr told plaintiff that he was authorized to offer him the position of director of cardiac surgery at Starr-Wood Corvallis. He also avers that Dr. Starr offered him a salary increase, payable retroactive to October of 1997, as well as a 51% ownership interest in the practice after five years. Finally, plaintiff asserts that when Dr. Starr made these promises to plaintiff, he either knew that contractual problems with Good Samaritan would make it impossible to perform on the agreement, or he acted with reckless indifference as to whether it could perform.
Under Oregon law, a claim of fraud requires proof of the following elements: (1) a material representation; (2) the representation was false; (3) the defendant either knew it was false or made it recklessly without any knowledge of its truth; (4) defendant made it intending to induce the plaintiff to act upon it; (5) plaintiff acted in reliance upon it; and (6) plaintiff suffered injury. Amort v. Tupper, 204 Or. 279, 286, 282 P.2d 660 (1955). Further, while the failure to perform a promise in the future is not a basis for an action for fraud, making a promise with the knowledge that it cannot be performed or with reckless disregard as to whether it can be performed can be the basis for a claim of fraud. Elizaga v. Kaiser Foundation Hosp., Inc., 259 Or. 542, 548, 487 P.2d 870 (1971).
In this case, there is evidence on the record that Dr. Starr either knew Starr-Wood Corvallis could not perform or acted with reckless indifference to whether it could perform. Plaintiff avers that Dr. Starr promised him the position of director, presenting it as a long-term employment opportunity with eventual bonuses and ownership interest. Plaintiff further states that plaintiff performed the functions of director of cardiac services. Starr-Wood listed him as such on its website and printed stationery. Plaintiff claims that at or around that time, Dr. Starr was conducting ongoing contract negotiations with Good Samaritan and that Dr. Starr knew that Good Samaritan would not continue its contract with Starr-Wood Corvallis if plaintiff were hired as director. He allegedly continued to misrepresent the circumstances, however, because he needed a temporary surgeon to fill in until the negotiations were complete and a replacement had been found.
The facts of this case are remarkably similar to those in Elizaga, 259 Or. 542. In Elizaga, the plaintiff was applying for a surgical preceptorship with the defendant, a hospital. The defendants offered the job to the plaintiff on July 1, 1969, but he was not actually permitted to begin his employment, because the position was terminated before his start date. There was evidence on the record that the defendants knew when they made the offer that the board of medical examiners was terminating the position of surgical preceptorship. The court concluded that a fact question existed as to whether the defendant made the offer with reckless indifference to the truth regarding the actual availability of the position.
Based on the law and the evidence in the record, I conclude that there is sufficient evidence to survive summary judgment on plaintiff's claim of fraud with respect to the June 1998 agreement.
b. Is Plaintiff's Fraud Claim barred because he Discovered the Alleged Fraud and Continued to Work for Defendant?
Finally, defendant contends that if the June 1998 agreement is construed as an at-will employment contract, plaintiff's fraud claim with respect to that agreement is barred. This argument asserts that plaintiff had no right to rely on the alleged statements, because he discovered evidence of the alleged fraud as early as fall of 1997, and yet he continued to work for defendant despite this knowledge. In support of its claim, defendant cites Fish v. Trans-Box Sys., Inc., 140 Or. App. 255, 914 P.2d 1107 (1996). In Fish, an employee brought a fraud claim against its former employer, alleging that it had promised to provide health insurance to the plaintiff at the end of a 90-day probationary period. After 90 days, the plaintiff did not receive the insurance, and yet continued to work for the defendant. The court held that because he continued his employment with the defendant after he learned that he would not receive these benefits, he no longer had a right to rely on the defendant's initial representations.
In this case, it appears that the plaintiff also had knowledge that defendant's alleged promises would not be fulfilled. First, in the fall of 1997, plaintiff learned that Starr-Wood did not generally pay the bonuses that Dr. Starr had allegedly promised him. By the end of that year, plaintiff knew that he himself had not received these bonuses. Furthermore, while plaintiff contends that Dr. Starr promised him a salary increase from $150,000 to $250,000, and that the increase would be retroactive to October 1997, plaintiff never received the salary increase.
Finally, plaintiff admits that by November of 1998, he had discovered that Dr. Starr did not intend to make him the permanent director of cardiac surgery as he had promised to do under the June 1998 agreement.
Thus, if plaintiff was an at-will employee, based on the Fish analysis, he had no right to rely on Dr. Starr's representations after fall of 1997, when he discovered facts that should have alerted him to the alleged fraud. Therefore, the key issue becomes whether plaintiff was an at-will employee or an employee for a term of years. As I have reviewed above, this question rests on disputed issues of fact that cannot be resolved here. Accordingly, defendant's motion for summary judgment on this basis is also denied.
If plaintiff is found credible, a jury may conclude that Dr. Starr told him he would be employed for a period of five years, at which point he would receive additional benefits. Alternatively, if a trier of fact deemed defendant more credible, it may conclude that the written agreement was never terminated because the negotiations alleged by plaintiff never amounted to binding agreements. In that case, the two-year term of years would govern. Finally, if it is concluded that oral agreements were formed, but Dr. Starr did not actually agree to a fixed employment term for plaintiff, plaintiff would properly be characterized as an at-will employee.
CONCLUSION
For the foregoing reasons, defendant's motion for summary judgment is hereby DENIED.