Schell v. Lifemark Hosps. of Mo.,
No. WD #59826 (Mo. Ct. App. Oct. 31, 2002)
A
physician with an employment contract to provide medical services to patients
provided by the employer hospital sued for breach of contract, alleging that
the hospital did not pay the severance pay owed to him under the contract. The
agreement contained a provision stating that failure to renegotiate the incentive
pay provisions by the annual anniversary of the agreement would constitute termination
of the agreement without cause. In addition, the agreement provided that "without
cause" terminations triggered severance pay provisions. Following protracted
negotiations over the incentive pay provisions which extended three months beyond
the anniversary date, the physician invoked the clause and notified the hospital
that the failure to come to terms constituted termination without cause. The
trial court held that the physician was not entitled to severance pay because
each side had violated the covenant of good faith and fair dealing in the negotiations.
The Missouri Court of Appeals reversed, holding that the physician had not violated
his duty to act in good faith and that he had not acted to hinder or prevent
the hospital from renegotiating the terms. The court held that the mere fact
that the changes that the physician suggested would increase his salary did
not equate to acting in bad faith.