Case Title: Lewis-Gale Medical Center v. Alldredge

Citation: 

Docket Number: 

State: virginia

Court: Virginia Supreme Court

Date: 2011-06-09T00:00:00Z

Document:
Present:  Kinser, C.J., Lemons, Goodwyn, Millette, and Mims, 
JJ., and Lacy and Koontz, S.JJ. 
 
LEWIS-GALE MEDICAL CENTER, LLC 
 
 
 
OPINION BY 
v.  Record No. 100457 
SENIOR JUSTICE LAWRENCE L. KOONTZ, JR. 
 
 
 
June 9, 2011 
KAREN J. ALLDREDGE 
 
FROM THE CIRCUIT COURT OF THE CITY OF ROANOKE 
Jonathan M. Apgar, Judge 
 
Lewis-Gale Medical Center, LLC (“Lewis-Gale”) appeals 
from a jury verdict awarding Dr. Karen J. Alldredge $900,000 
for tortious interference with her contract of employment with 
Southwest Emergency Physicians, Inc. (“SWEP”).  The 
dispositive issue we consider is whether Dr. Alldredge 
presented sufficient evidence to permit the jury to find that 
Lewis-Gale employed improper methods to induce SWEP to 
terminate her employment. 
BACKGROUND 
Lewis-Gale has assigned three errors to the circuit 
court’s judgment approving the jury’s verdict in favor of Dr. 
Alldredge, contending that the circuit court erred in 
permitting the jury to consider Dr. Alldredge’s alleged 
emotional distress as an element of her damages, in failing to 
find that the jury’s award of damages was excessive, and in 
failing to rule that Dr. Alldredge had not met her burden of 
proving that Lewis-Gale employed improper methods to induce 
SWEP to terminate Dr. Alldredge’s employment and, thus, had 
not proven as a matter of law that this termination was the 
result of a tortious interference by Lewis-Gale in her 
contract relationship with SWEP.  Because we find the 
resolution of this last issue to be dispositive, we will limit 
our recitation of the facts established in that part of the 
voluminous record necessary for our resolution of this appeal.  
Union of Needletrades, Industrial & Textile Employees v. 
Jones, 268 Va. 512, 514, 603 S.E.2d 920, 921 (2004).  Under 
familiar principles, we consider those facts in the light most 
favorable to Dr. Alldredge, the prevailing party in the 
circuit court. 
SWEP and Lewis-Gale entered into a contract in 2005 under 
which SWEP’s physician-employees exclusively staffed Lewis-
Gale’s Emergency Department.  Dr. Alldredge, an emergency room 
physician, was a contract participant in SWEP from 2005 until 
the termination of her employment in 2008.  Her contract 
provided for a 12-month term of employment with SWEP and 
included an automatic renewal provision.  However, the 
contract further provided that it could be terminated by 
either party without cause subject to a 90-day written notice 
of the intent to do so. 
In late March 2008, Alldredge attended an informal dinner 
with some of the emergency room nursing staff who were 
employees of Lewis-Gale.  During the dinner, these nurses 
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discussed a letter addressed to the Lewis-Gale administration 
voicing certain work-related concerns.  Dr. Alldredge was the 
only physician present.  A few weeks later, Dr. Alldredge was 
shown the letter by one of the nurses and explained to the 
nurse that she did not sign the letter because it related to 
“a nursing issue, not a physician issue.”  She subsequently 
conceded that she did not sign this letter because she also 
knew that SWEP did not want its physicians involving 
themselves in Lewis-Gale’s personnel issues. 
Candi Carroll, Lewis-Gale’s chief nursing officer, 
received a copy of the letter.  Carroll subsequently became 
aware of Dr. Alldredge’s involvement with the signatories to 
the letter.  By email, Carroll contacted Dr. Robert E. 
Dowling, SWEP’s president who also served as Medical Director 
for the Emergency Department at Lewis-Gale.  Carroll informed 
him of her belief that Dr. Alldredge had supported the staff 
that had sent the letter and inquired “what the plan of [SWEP] 
is to deal with Doctor Alldredge.”  Carroll and Dr. Dowling 
exchanged several emails addressing Carroll’s concerns.  
Carroll also advised her superiors of the situation. 
After learning that Dr. Alldredge had attended the 
dinner, Charlotte Tyson, chief operating officer of Lewis-
Gale, was concerned that Dr. Alldredge, as a non-employee of 
Lewis-Gale, had become involved in the hospital’s personnel 
3 
matters.  Tyson contacted Dr. Jeffrey M. Preuss, one of the 
other physicians with SWEP, and “brought to [SWEP] the fact 
that there was a perceived issue with Doctor Alldredge’s 
behavior and they had asked that [SWEP] do something to take 
care of that issue, resolve it one way or another.” 
On April 29, 2008, at SWEP’s request, Tyson and Carroll 
met with members of SWEP’s executive board.  During the 
meeting, Tyson described Dr. Alldredge’s behavior as that of 
an “organizational terrorist,” and told SWEP’s executive board 
that when a business has someone like Dr. Alldredge, “they had 
to go.”  Although the representatives of SWEP repeatedly asked 
Tyson how Lewis-Gale wanted the situation addressed, Tyson 
maintained that she never expressly told SWEP that Lewis-
Gale’s administration wanted Dr. Alldredge’s employment to be 
terminated.  Nonetheless, shortly after the meeting Dr. 
Dowling informed Tyson in an email that he was going to 
recommend the termination of Dr. Alldredge’s employment at a 
meeting of the SWEP board on May 1, 2008. 
The minutes of SWEP’s board meeting cite additional 
concerns about Dr. Alldredge’s “treatment of other partners 
and group members” and “her behavior over the years.”  The 
board was of opinion that “the situation had come to a crisis 
point” and that Dr. Alldredge “was not likely to improve her 
behavior long-term.”  Nonetheless, the principal concern cited 
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by the board was that not terminating Dr. Alldredge’s 
employment could jeopardize SWEP’s contract with Lewis-Gale.  
Dr. Alldredge, who was present for part of the meeting, 
defended herself and expressed frustration and sadness at 
being called an “organizational terrorist.” 
Dr. Alldredge arranged a meeting with Tyson and Vincent 
Giovanetti, Lewis-Gale’s chief executive officer, on May 5, 
2008.  SWEP suspended making a decision on whether to 
terminate her employment pending the outcome of this meeting.  
According to Dr. Preuss, SWEP did not want to terminate Dr. 
Alldredge’s employment and would not have done so if “the 
outcome was favorable” in her meeting with Tyson and 
Giovanetti. 
According to Dr. Alldredge, the purpose of the meeting 
with Tyson and Giovanetti was that “I was going to try and 
save my job, because ultimately it was hospital administration 
that wanted me gone,” not SWEP.  During the meeting, Dr. 
Alldredge was anxious and knew it was a “live or die” 
situation.  After Dr. Alldredge’s meeting with Tyson and 
Giovanetti, Dr. Preuss concluded that Lewis-Gale’s 
“administration wanted [SWEP] to proceed with how [its 
executive board] had voted” to terminate Dr. Alldredge’s 
employment. 
5 
SWEP terminated Dr. Alldredge’s employment in accord with 
the provision of her contract by providing her with a 90-day 
notice period.  However, when Dr. Alldredge declined to report 
for her next scheduled shift at the emergency room, SWEP 
removed her from active employment but continued to pay her 
salary for the next three months. 
On June 2, 2008, Dr. Alldredge filed in the Circuit Court 
of the City of Roanoke a complaint against Lewis-Gale alleging 
tortious interference with her contract of employment with 
SWEP.  Dr. Alldredge did not specifically allege that Lewis-
Gale used “improper methods” in procuring the termination of 
her employment, but asserted that Lewis-Gale had used 
“threats” and referred to its “illegal interference.”  Dr. 
Alldredge alleged that in addition to lost income, shareholder 
interest and other opportunities as a result of her employment 
being terminated from SWEP, she would continue to suffer from 
loss of “future employment and employment opportunities [and] 
damage to [her] professional reputation.”  Dr. Alldredge 
sought $10,000,000 in compensatory damages. 
6 
Lewis-Gale filed an answer denying liability as well as a 
plea in bar1 asserting that Alldredge could not maintain an 
action for tortious interference because she was an employee-
at-will as her contract with SWEP allowed her employment to be 
terminated without cause.  Lewis-Gale further contended that 
because it could likewise terminate its contract with SWEP 
without cause, it actions as alleged in Dr. Alldredge’s 
complaint did not rise to the level of improper methods 
required for establishing a tort action for interference with 
an at-will contract.   The circuit court rejected Lewis-Gale’s 
argument, finding that even if the termination without cause 
provision of the SWEP contract made Dr. Alldredge an at-will 
employee, the allegations of the complaint were sufficient to 
support a cause of action against Lewis-Gale for using 
improper methods to interfere with Alldredge’s rights under 
that contract. 
Following discovery, Lewis-Gale filed a motion for 
summary judgment alleging that there were no disputed material 
                                                 
 
1 Though styled a plea in bar, Lewis-Gale’s pleading was 
more properly a demurrer.  The asserted failure of the 
complaint to allege use of improper methods in the intentional 
interference with the at-will employment contract would not 
have created a jurisdictional bar to the suit, but merely 
would have resulted in a failure to state a viable claim.  
Regardless of how a pleading is styled, we review the judgment 
of the circuit court on that pleading under the standard 
appropriate to its substance.  See Chesterfield County v. 
Stigall, 262 Va. 697, 701 n.2, 554 S.E.2d 49, 52 n.2 (2001). 
7 
facts and that Dr. Alldredge could not establish that Lewis-
Gale acted improperly in its dealings with SWEP in seeking the 
termination of Dr. Alldredge’s employment.  Lewis-Gale 
conceded that Tyson’s abrasive manner and intemperate language 
may have been “unsavory,” “careless,” and “harsh,” but 
maintained that because Tyson and the other Lewis-Gale 
administrators were pursuing what they perceived as the best 
commercial interests of the hospital and were within their 
rights under the hospital’s contract with SWEP, Alldredge 
could not establish that any improper method had been used to 
procure the termination of Dr. Alldredge’s employment. 
Dr. Alldredge responded to the motion for summary 
judgment asserting that Lewis-Gale had fabricated a pretext of 
“smoke and mirrors” to procure the termination of her contact 
with SWEP.  Dr. Alldredge maintained that the response of 
Lewis-Gale’s “all-mighty chain of command” to the employees’ 
letter and her involvement in its drafting was “irrational and 
disproportionate” and led to Tyson and others threatening to 
cancel SWEP’s contact and making defamatory statements 
concerning Dr. Alldredge.  She contended that these 
allegations were in dispute and, if proven, were sufficient to 
establish that Lewis-Gale’s actions exceeded that permissible 
in its commercial relations with SWEP and, thus, were improper 
and rendered its interference in the contract between SWEP and 
8 
Dr. Alldredge tortious.  During a pre-trial hearing covering 
numerous motions, the circuit court took Lewis-Gale’s motion 
for summary judgment under advisement. 
A jury trial commenced in the circuit court on September 
8, 2009.  At the conclusion of Dr. Alldredge’s case-in-chief 
following three days of testimony presented by witnesses for 
Dr. Alldredge during which evidence in accord with the above 
recited facts was adduced, Lewis-Gale moved to strike Dr. 
Alldredge’s evidence and for summary judgment.  Lewis-Gale 
again asserted that, because the termination of Dr. 
Alldredge’s employment was authorized under the at-will 
provision of her contract with SWEP, Dr. Alldredge had not met 
her burden of proving that any action by Lewis-Gale that 
resulted in SWEP’s decision to terminate Dr. Alldredge’s 
employment was illegal, tortious, or otherwise improper. 
The circuit court denied the motion to strike.  In doing 
so the court did not expressly find what actions by Lewis-Gale 
could form the basis for the jury finding that the hospital’s 
administrators had employed improper methods in procuring 
SWEP’s termination of Dr. Alldredge’s employment.  Rather, the 
court focused on whether Lewis-Gale was aware that Dr. 
Alldredge had an expectancy of continued employment and 
whether “the members of SWEP felt pressured to respond to 
[Lewis-Gale’s] statements and actions.” 
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The case was submitted to the jury, which was instructed 
that Dr. Alldredge had the burden of proving that Lewis-Gale 
“use[d] improper methods to interfere with the contractual 
relationship or expectancy” between Dr. Alldredge and SWEP.  
The jury returned its verdict for Dr. Alldredge, awarding her 
$900,000 in compensatory damages.  Lewis-Gale filed a post-
trial motion to set aside the verdict, for a new trial, or 
remittitur.  The circuit court denied this motion without 
further comment in a final order dated December 10, 2009 and 
confirmed the jury’s verdict.  This appeal followed. 
DISCUSSION 
In Chaves v. Johnson, 230 Va. 112, 120, 335 S.E.2d 97, 
102 (1985), we recognized that the tort of intentional 
interference with performance of a contract by a third party 
is a permissible cause of action in Virginia.  “The elements 
required for a prima facie showing of the tort are:  (i) the 
existence of a valid contractual relationship or business 
expectancy; (ii) knowledge of the relationship or expectancy 
on the part of the interferor; (iii) intentional interference 
inducing or causing a breach or termination of the 
relationship or expectancy; and (iv) resultant damage to the 
party whose relationship or expectancy has been disrupted.”  
DurretteBradshaw, P.C. v. MRC Consulting, L.C., 277 Va. 140, 
10 
145, 670 S.E.2d 704, 706 (2009) (citing Chaves, 230 Va. at 
120, 335 S.E.2d at 102). 
“Additionally, when a contract is terminable at will, a 
plaintiff, in order to present a prima facie case of tortious 
interference, must allege and prove not only an intentional 
interference that caused the termination of the at-will 
contract, but also that the defendant employed improper 
methods.”  Dunn, McCormack & MacPherson v. Connolly, 281 Va. 
553, 559, ___ S.E.2d ___, ___ (2011) (internal quotation marks 
omitted) (emphasis in original); see also Jae-Woo Cha v. 
Korean Presbyterian Church of Washington, 262 Va. 604, 613, 
553 S.E.2d 511, 515 (2001); Perk v. Vector Resources Group, 
253 Va. 310, 314, 485 S.E.2d 140, 143 (1997); Restatement 
(Second) of Torts § 766, cmt. g (1979).  However, the 
plaintiff need not prove that “the ‘improper methods’ used 
were inherently illegal or tortious,” but “only that the 
interference was intentional and improper under the 
circumstances” of the particular case.  Maximus, Inc. v. 
Lockheed Info. Mgmt. Sys. Co., 254 Va. 408, 414, 493 S.E.2d 
375, 379 (1997). 
An employment contract is terminable at-will if the plain 
terms of the contract provide that the employer may terminate 
the contact prior to the designated period of time of the 
employment without being required to establish a just cause 
11 
for doing so.  Cave Hill Corp. v. Hiers, 264 Va. 640, 646, 570 
S.E.2d 790, 793 (2002).  Although such a contract may place 
conditions of notice and timing of the termination, when the 
employer complies with these conditions the termination does 
not constitute a breach of the employment contract.  Id. 
In the present case, regardless of any expectancy that 
Dr. Alldredge may have had with regard to her continued 
employment by SWEP, because her contract provided for 
termination by SWEP after giving 90 days notice, Dr. 
Alldredge’s contract was for employment at-will.  Accordingly, 
Dr. Alldredge was required to prove not only that Lewis-Gale 
intentionally interfered with her contract relationship with 
SWEP, but also that in doing so Lewis-Gale employed “improper 
methods.” 
The thrust of Lewis-Gale’s assertions is that when Dr. 
Alldredge’s evidence adduced at trial is viewed in its 
totality, it was insufficient as a matter of law to permit the 
jury to find that Lewis-Gale’s dealings with SWEP with regard 
to its employment of Dr. Alldredge constituted improper 
methods that would sustain her cause of action for 
interference with her at-will employment contract.  Thus, 
Lewis-Gale contends that the court erred in not striking her 
evidence and submitting the case to the jury.  We agree. 
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Our recent decision in Dunn, McCormack & MacPherson 
reiterated the contours of what constitutes the types of 
“improper methods” that a third party may not undertake when 
it intends for those actions to result in the termination of 
an at-will contract between others.  Quoting from Duggin v. 
Adams, 234 Va. 221, 227-28, 360 S.E.2d 832, 836-37 (1987), we 
said: 
“Methods of interference considered improper 
are those means that are illegal or independently 
tortious, such as violations of statutes, 
regulations, or recognized common-law rules.  
Improper methods may include violence, threats or 
intimidation, bribery, unfounded litigation, fraud, 
misrepresentation or deceit, defamation, duress, 
undue influence, misuse of inside or confidential 
information, or breach of a fiduciary 
relationship. . . .” 
 
“Methods also may be improper because they 
violate an established standard of a trade or 
profession, or involve unethical conduct.  Sharp 
dealing, overreaching, or unfair competition may 
also constitute improper methods.” 
 
Dunn, McCormack & MacPherson, 281 Va. at 559, ___ S.E.2d at 
___.  We declined, however, to expand the parameters of 
“improper methods” to include “actions solely motivated by 
spite, ill will and malice” toward the plaintiff.  Id. 
Dr. Alldredge did not allege or present any evidence 
tending to prove that Lewis-Gale’s actions were “illegal or 
independently tortious.”  Nor was there any fiduciary duty 
owed to Dr. Alldredge that Lewis-Gale could have violated.  
13 
Dr. Alldredge did not assert that Lewis-Gale’s motivation in 
seeking to have SWEP terminate her employment involved a 
desire to gain some competitive advantage, violated an 
established standard of the dealings between hospitals and 
their independent medical contractors, or involved unethical 
conduct in the form of sharp dealing, overreaching, or unfair 
competition. 
Rather, Dr. Alldredge maintains that Lewis-Gale’s actions 
were improper in that it used intimidation, duress, and undue 
influence based upon Lewis-Gale’s ability to bring “financial 
ruin” on SWEP by canceling its contract to provide emergency 
room services to Lewis-Gale, which was SWEP’s principal source 
of revenue.  However, while the evidence supported the 
inference that SWEP was concerned about the continuation of 
its contract with Lewis-Gale, the at-will contract between 
Lewis-Gale and SWEP allowed termination of the contract upon 
due notice and without cause at any time. This status required 
that SWEP be continually sensitive to the possibility of 
termination for any reason or no reason, regardless of any 
specific action or comment made by Lewis-Gale officers or 
personnel.  Thus, the inherent intimidation or duress 
experienced as a result of the very nature of this at-will 
contract cannot rise to the level of improper methods 
necessary to establish a cause of action for tortious 
14 
interference with contract expectancy.  Furthermore, in this 
case neither Dr. Alldredge’s allegations nor her evidence 
demonstrated a specific threat or other action by Lewis-Gale 
that it was going to cancel its contract with SWEP if SWEP did 
not terminate Dr. Alldredge’s employment. 
We also reject Dr. Alldredge’s allegations that Tyson’s 
statements, such as her use of the term “organizational 
terrorist” to describe Dr. Alldredge, were independently 
tortious and therefore rose to improper methods.  These 
statements were certainly unwise, unprofessional hyperbole, 
and may even indicate a personal animus toward Dr. Alldredge.  
In the context of Tyson's discussions with SWEP, however, the 
statements did not rise to the level of fraud, 
misrepresentation, deceit, or defamation that could constitute 
improper methods of interference with the contract between Dr. 
Alldredge and SWEP.  Likewise, we find no significant support 
in the record for Dr. Alldredge’s assertion that Lewis-Gale 
violated its contract with SWEP or its own internal personnel 
policies by bringing its complaints directly to SWEP’s 
executive board.  
We disagree with Dr. Alldredge that the actions of Lewis-
Gale’s administrators, particularly Tyson, which Lewis-Gale’s 
counsel concedes were “unsavory,” “careless,” and “harsh,” 
rose to the level of the “improper methods” required to prove 
15 
Lewis-Gale’s actions exceeded that permissible in normal 
business relations in order to give rise to a cause of action 
in tort.  In Chaves, we noted that where the defendant has its 
own contractual or commercial relationship with the other 
party to the plaintiff’s contract, a balance must “be struck 
between the social desirability of protecting the business 
relationship [of the plaintiff and the other party], on one 
hand, and the interferor’s freedom of action [with the other 
party] on the other.”  230 Va. at 121, 335 S.E.2d at 103.  In 
Chaves, we addressed this observation to the availability of 
an affirmative defense of privilege or justification, but we 
are of opinion that it applies with equal force to determining 
what the law will deem to be an improper method by the 
interferor when there is an existing commercial relationship 
between it and the other party to the contract with the 
plaintiff.  See, e.g., Charles E. Brauer Co. v. NationsBank of 
Va., N.A., 251 Va. 28, 36, 466 S.E.2d 382, 387 (1996); see 
also Frank Brunckhorst Co. v. Coastal Atlantic, Inc., 542 
F.Supp.2d 452, 464 (E.D. Va. 2008). 
Under Virginia law, a threat to perform an act one is 
legally entitled to perform is not a wrongful act.  Goode v. 
Burke Town Plaza, Inc., 246 Va. 407, 411, 436 S.E.2d 450, 452-
53 (1993); Bond v. Crawford, 193 Va. 437, 444, 69 S.E.2d 470, 
475 (1952).  Thus, in Charles E. Brauer Co. we held that “the 
16 
lawful exercise of [defendant’s] statutory and contractual 
rights which incidentally may have interfered with the 
[plaintiff’s] negotiations for sale of the inventory . . . is 
not actionable and will not support recovery for tortious 
interference with contractual relations.”  251 Va. at 36, 466 
S.E.2d at 387. 
As we have previously observed, “the law will not provide 
relief to every disgruntled player in the rough-and-tumble 
world comprising the competitive marketplace.”  Williams v. 
Dominion Tech. Partners, L.L.C., 265 Va. 280, 290, 576 S.E.2d 
752, 758 (2003) (internal quotation marks omitted).  The fact 
that Virginia recognizes the existence of the tort of 
intentional interference with a contract does not mean that 
every contract relationship which is terminated or disrupted 
through the interference of a third party promoting its own 
interests will result in tort liability for that party.  
Rather, the law provides a remedy in tort only where the 
plaintiff can prove that the third party’s actions were 
illegal or fell so far outside the accepted practice of that 
“rough-and-tumble world” as to constitute improper methods. 
In sum, Lewis-Gale’s actions in this case involving at-
will contracts did not rise as a matter of law to the level of 
the “improper methods” required for Dr. Alldredge to prove 
that Lewis-Gale’s purposeful interference in her contract 
17 
relationship with SWEP was tortious.  Accordingly, we hold 
that the circuit court erred in not striking Dr. Alldredge’s 
evidence and in not granting summary judgment to Lewis-Gale. 
CONCLUSION 
For the reasons stated, we will reverse the judgment of 
the circuit court confirming the jury verdict in favor of 
Alldredge and enter final judgment for Lewis-Gale.2 
Reversed and final judgment. 
                                                 
2 Having found that Dr. Alldredge failed to meet her 
burden of proof to establish tortious interference in her 
contract relationship with SWEP by Lewis-Gale, its remaining 
assignments of error and the assignment of cross-error raised 
by Dr. Alldredge, all concerning the elements and quantum of 
her damages, are now moot. 
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