Court Opinion

ID: 4523074
Source: CourtListenerOpinion
Date Created: 2020-04-07 12:07:21.20773+00
Date Added: 2024-06-11T12:08:13.229678
License: Public Domain

IN THE COURT OF APPEALS OF NORTH CAROLINA

                                   No. COA19-395

                                 Filed: 7 April 2020

Mecklenburg County, No. 16 CVS 3613

MOLLY SCHWARZ, Plaintiff,

            v.

ST. JUDE MEDICAL, INC., ST. JUDE MEDICAL, S.C., INC., DUKE UNIVERSITY,
DUKE UNIVERSITY HEALTH SYSTEM, INC., ERIC DELISSIO and TED COLE,
Defendants.

      Appeal by plaintiff from orders entered 10 January 2019 by Judge Karen Eady-

Williams and 17 January 2019 by Judge R. Kent Harrell in Mecklenburg County

Superior Court. Heard in the Court of Appeals 14 November 2019.

      Kennedy, Kennedy, Kennedy and Kennedy, LLP, by Harvey L. Kennedy and
      Harold L. Kennedy, III, for plaintiff-appellant.

      Parker Poe Adams & Bernstein LLP, by Keith M. Weddington, and Seyfarth
      Shaw LLP, by Nancy E. Rafuse and J. Stanton Hill, for defendants-appellees
      St. Jude Medical, Inc., St. Jude Medical S.C., Inc., Eric Delissio, and Ted Cole.

      Ogletree, Deakins, Nash, Smoak & Stewart, P.C., by Robert A. Sar and Andrew
      C. Avram, for defendants-appellees Duke University and Duke University
      Health System.

      DIETZ, Judge.

      Plaintiff Molly Schwarz worked for St. Jude Medical, a medical device

company. In her position, Schwarz visited doctor’s offices and hospitals and

interacted with physicians and patients.
                            SCHWARZ V. ST. JUDE MED., INC.

                                   Opinion of the Court

      Over several years, St. Jude received multiple complaints from doctors and

patients about Schwarz’s unprofessional or inappropriate behavior. Ultimately, St.

Jude fired Schwarz.

      Schwarz then sued St. Jude, one of her co-workers, her direct supervisor, and

Duke University Health System, one of St. Jude’s larger customers in the region. She

asserted claims for retaliatory discharge, sex and age discrimination, libel, and

tortious interference with her employment contract.

      The trial court granted summary judgment for Defendants and against

Schwarz on all claims. On appeal, Schwarz asserts a series of procedural arguments

about the timing of one of the two summary judgment hearings and argues that her

claims should have been sent for trial. We disagree.

      As explained below, the trial court was well within its sound discretion to

conduct the summary judgment hearing when it did, rather than continue it, and

Schwarz’s evidence was insufficient to create a genuine issue of material fact on any

of her claims. Accordingly, the trial court properly entered judgment in Defendants’

favor as a matter of law.

                            Facts and Procedural History

      In 2012, Defendant St. Jude Medical, a medical device company, hired Plaintiff

Molly Schwarz to work as a Clinical Specialist. As part of her duties, Schwarz had to

conduct “patient checks” in doctor’s offices and hospitals to assess and assist with the

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                                 Opinion of the Court

adjustment of implanted medical devices. Schwarz also had to field calls and answer

questions about the devices and provide information at conferences within a defined

territory. During this period, Schwarz worked with Defendant Ted Cole, the Territory

Manager for St. Jude in the Raleigh area. Both Schwarz and Cole were supervised by

Defendant Eric Delissio, St. Jude’s Regional Sales Director.

      Beginning in 2014, St. Jude received several complaints from physicians and

patients about Schwarz, including some complaints so serious that physicians

prohibited St. Jude from sending Schwarz to work with them. For example, in June

2014, a physician banned Schwarz from working with him because Schwarz gave the

doctor an expired medical device to implant. Schwarz received a written warning from

Delissio for this incident. Later, in September 2014, St. Jude received a complaint

from another hospital that Schwarz was “like a bull in a China shop” and agitated a

patient when servicing the patient’s medical device. Then, in January 2015, a

physician in Schwarz’s assigned territory prohibited Schwarz from coming to his

office unless absolutely necessary because he claimed Schwarz had challenged his

medical judgment in front of a patient.

      In February 2015, St. Jude’s human resources department suggested to

Schwarz’s supervisors that she be placed on a performance improvement plan based

upon her “pattern of behavior that needed to be addressed with [Schwarz] from a

customer standpoint.” One week later, Schwarz’s supervisors received a verbal

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                                  Opinion of the Court

complaint from a patient who alleged that Schwarz was unprofessional, lacked

compassion, and appeared to lack knowledge of how St. Jude’s medical devices

functioned. The patient refused future care from Schwarz.

       Finally, in late February 2015, another patient complained that Schwarz

exposed the patient to unnecessary radiation, was argumentative, refused to listen,

and “kept referring to the [x-ray] films backwards.” Cole received a copy of the email

containing these claims and he forwarded the email to Delissio, who in turn

forwarded it to high-level managers at St. Jude.

       After considering other, less drastic disciplinary measures, St. Jude ultimately

decided to terminate Schwarz’s employment based on the pattern of behavior

revealed by the repeated physician and patient complaints. In March 2015, St. Jude

notified Schwarz that her employment was terminated. Schwarz then filed this

lawsuit, asserting claims for wrongful termination, defamation, and tortious

interference with contract.

       Schwarz does not dispute the existence of the long series of physician and

patient complaints against her. But she insists that these complaints were used as a

pretext to fire her.

       She contends that the real reason she was fired was because she informed her

supervisors that a physician at Duke University Health System, with whom St. Jude

worked, was engaged in an extra-marital affair with one of Schwarz’s co-workers at

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                                     Opinion of the Court

St. Jude. Schwarz asserted claims for wrongful discharge based on public policy, sex

discrimination, and age discrimination against St. Jude; libel claims against Cole and

Delissio, the co-workers who forwarded certain patient complaints to superiors within

the company; and tortious interference claims against Cole and Delissio, as well as

against Duke University and Duke University Health System, the employer of the

physician who allegedly had an extra-marital affair with Schwarz’s co-worker.

        After full discovery, Defendants moved for summary judgment. The trial court

entered summary judgment for Defendants and against Schwarz on all claims.

Schwarz timely appealed.

                                         Analysis

   I.       Notice of the St. Jude summary judgment hearing

        Schwarz first argues that the trial court improperly ruled on the St. Jude

defendants’ summary judgment motion because Schwarz did not receive adequate

notice of the hearing on that motion.1 We reject this argument.

        Under Rule 56(c), the party seeking summary judgment must serve the motion

on the adverse party “at least 10 days before the time fixed for the hearing.” N.C. R.

Civ. P. 56(c). “Although Rule 56 makes no direct reference to notice of hearing, this

Court has held that such notice also must be given at least ten (10) days prior to the

hearing.” Wilson v. Wilson, 191 N.C. App. 789, 791, 666 S.E.2d 653, 654 (2008).

        1  We refer to the St. Jude Medical companies and the two St. Jude employees, Cole and
Delissio, collectively as “St. Jude.”

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                                   Opinion of the Court

“Failure to comply with this mandatory 10 day notice requirement will ordinarily

result in reversal of summary judgment obtained by the party violating the rule.”

Zimmerman’s Dep’t Store, Inc. v. Shipper’s Freight Lines, Inc., 67 N.C. App. 556, 557–

58, 313 S.E.2d 252, 253 (1984).

      Here, St. Jude complied with this 10-day notice rule. St. Jude served the

motion by fax on 27 December 2018, ten days before the 7 January 2019 hearing on

the motion. This service by fax is permitted by Rule 5 of the Rules of Civil Procedure.

N.C. R. Civ. P. 5(b)(1)(a). Thus, St. Jude notified Schwarz of the summary judgment

hearing at least ten days in advance.

      But Schwarz argues that she was entitled to thirteen days advance notice, not

ten. This is so, she reasons, because St. Jude also served its notice by mail. Under the

“mail rule” for service contained in Rule 6(e), Schwarz argues, “three days shall be

added to the prescribed period” of notice, thus meaning she was entitled to a 13-day

notice period rather than a 10-day one. See N.C. R. Civ. P. 6(e); see also Planters Nat’l

Bank and Tr. Co. v. Rush, 17 N.C. App. 564, 566, 195 S.E.2d 96, 97 (1973).

      We reject this argument. The purpose of the 10-day mandatory notice

requirement in Rule 56(c) is to ensure that the non-moving party is aware of the

upcoming hearing at least ten days in advance. That occurred here because St. Jude

faxed the notice ten days before the hearing in conformity with the procedural

requirements of both Rule 5 and Rule 56(c).

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                                   Opinion of the Court

   II.      Motion for continuance

         Next, Schwarz contends that the trial court erred by denying her motion to

continue the 7 January 2019 summary judgment hearing. Again, we reject this

argument.

         “Rule 56(f) allows the trial court to deny a motion for summary judgment or

order a continuance to permit additional discovery, if the party opposing the motion

cannot present facts essential to justify his opposition.” Fla. Nat’l Bank v. Satterfield,

90 N.C. App. 105, 109, 367 S.E.2d 358, 361 (1988). “The chief consideration to be

weighed in passing upon the application is whether the grant or denial of a

continuance will be in furtherance of substantial justice.” Bowers v. Olf, 122 N.C. App.
421, 426, 470 S.E.2d 346, 350 (1996). The decision of whether to grant a request for a

continuance under Rule 56(f) is left to the sound discretion of the trial court. Fla.

Nat’l Bank, 90 N.C. App. at 109, 367 S.E.2d at 361. This Court cannot override that

determination unless the trial court abused its discretion through a ruling “so

arbitrary that it could not have been the result of a reasoned decision.” Manning v.

Anagnost, 225 N.C. App. 576, 579, 739 S.E.2d 859, 861 (2013).

         Here, Schwarz argues that the trial court should have granted a continuance

because her attorneys “were on vacation during the Christmas holidays,” giving them

little time to prepare for the hearing. She also contends that St. Jude’s motion relied

on witnesses that St. Jude failed to disclose during the discovery period. Thus, she

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                                   Opinion of the Court

contends, the interests of justice required the trial court to continue the hearing to

provide Schwarz and her counsel with additional time to prepare.

      The trial court’s analysis of this question is a paradigmatic example of a

discretionary decision to which this Court must defer. Schwarz argued the

continuance was necessary in the interests of justice. St. Jude disagreed. Both sides

offered reasonable arguments for their positions. The trial court considered the

parties’ arguments and elected, in its discretion, to proceed with the hearing.

Although the trial court properly could have granted a continuance, the court’s

decision not to do so was a reasoned, non-arbitrary one and thus was well within the

trial court’s sound discretion. Fla. Nat’l Bank, 90 N.C. App. at 109, 367 S.E.2d at 361.

   III.   Wrongful discharge – retaliation

      Schwarz next argues that the trial court erred by granting summary judgment

in favor of St. Jude on her wrongful discharge claim based on unlawful retaliation.

Schwarz contends that her termination was retaliation for her report of adultery by

a co-worker and that this retaliation violates North Carolina public policy. We reject

this argument.

      Schwarz was an at-will employee. “Although at-will employment may be

terminated for no reason, or for an arbitrary or irrational reason,” the employer

cannot terminate an employee for a “reason or purpose that contravenes public

policy.” Imes v. City of Asheville, 163 N.C. App. 668, 670, 594 S.E.2d 397, 398 (2004).

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                                   Opinion of the Court

Put another way, employers generally are free to “retaliate” against their at-will

employees by firing them for conduct of which they disapprove. But they cannot fire

an at-will employee for a reason that contravenes North Carolina public policy.

      “Public policy has been defined as the principle of law which holds that no

citizen can lawfully do that which has a tendency to be injurious to the public or

against the public good.” Id. at 670, 594 S.E.2d at 399. Public policy is violated “when

an employee is fired in contravention of express policy declarations contained in the

North Carolina General Statutes.” Id.

      Here, Schwarz contends that she engaged in conduct protected by North

Carolina public policy because she “reported adultery” by one of her co-workers.

Adultery, Schwarz contends, is an illegal act and a report of this illegal activity to the

employer is a protected act under North Carolina public policy.

      There are several flaws in this argument. First, it is far from clear that

adultery is a criminal act in North Carolina. To be sure, there is an aging statute

titled “Fornication and Adultery” which provides that “[i]f any man and woman, not

being married to each other, shall lewdly and lasciviously associate, bed and cohabit

together, they shall be guilty of a Class 2 misdemeanor.” N.C. Gen. Stat. § 14-184.

But this Court has examined this statute and observed that “the State has chosen not

to use it, at least in modern times.” Malecek v. Williams, 255 N.C. App. 300, 305 n.2,

804 S.E.2d 592, 597 n.2 (2017). Indeed, in 2006, a trial court declared Section 14-184

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facially unconstitutional. The court entered a permanent injunction providing that

the State was “hereby permanently enjoined from enforcing N.C.G.S. § 14–184 in any

manner.” Hobbs v. Smith, No. 05 CVS 267, 2006 WL 3103008, at *1 (N.C. Super. Aug.

25, 2006) (unpublished). The State did not appeal that permanent injunction and it

appears to be in effect today. Thus, Schwarz has not identified any currently

applicable statutory basis for asserting that adultery is a criminal act.

         In any event, we find no support in either the General Statutes or our case law

for the principle that reporting to one’s employer the private sexual activity of a co-

worker is protected by any “express policy declarations contained in the North

Carolina General Statutes.” Imes, 163 N.C. App. at 670, 594 S.E.2d at 399. The

alleged consensual affair between Schwarz’s co-worker and a married physician is

simply not conduct so “injurious to the public or against the public good” that

reporting it to Schwarz’s employer could be considered a part of the core public policy

of our State. Id. The trial court therefore properly concluded that Schwarz’s wrongful

discharge claim based on public policy grounds failed as a matter of law.

   IV.      Wrongful discharge - sex and age discrimination

         Schwarz next argues that St. Jude committed sex and age discrimination by

firing her and hiring a male employee who was 39 years old. This wrongful discharge

argument, like Schwarz’s previous one, is fatally flawed.

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                                   Opinion of the Court

      North Carolina has adopted the legal standard for sex and age discrimination

that was developed through federal employment discrimination doctrine. Johnson v.

Crossroads Ford, Inc., 230 N.C. App. 103, 111, 749 S.E.2d 102, 108 (2013). Under this

standard, the claimant must first establish a prima facie case of disparate treatment

by showing that: (1) she is a member of a protected class; (2) she was qualified for her

job and her performance was satisfactory; (3) she suffered an adverse employment

action; and (4) other similarly situated employees who are not members of the

protected class did not suffer the same adverse employment action. Head v. Adams

Farm Living, Inc., 242 N.C. App. 546, 555, 775 S.E.2d 904, 910 (2015).

      Once the claimant meets this standard, the burden shifts to the employer to

articulate some legitimate, nondiscriminatory reason for the adverse employment

action. North Carolina Dep’t of Correction v. Gibson, 308 N.C. 131, 137, 301 S.E.2d
78, 82 (1983). Then, the burden shifts back to the employee to show that the proffered

reason for the adverse employment action was merely a pretext for discrimination.
Id.

      Here, even assuming Schwarz’s evidence satisfied her initial burden to show a

prima facie case of sex and age discrimination, her claim fails because the record

contains evidence of a legitimate, nondiscriminatory reason for Schwarz’s

termination—repeated, consistent complaints from physicians and patients about

Schwarz’s inappropriate or unprofessional conduct. Indeed, even a core part of

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                                   Opinion of the Court

Schwarz’s retaliatory discharge claim—that she revealed an extra-marital affair

between a co-worker and a customer—demonstrates that St. Jude’s reason for

terminating Schwarz concerned her conduct toward the patients and physicians on

whom St. Jude depends for its business.

        In response, Schwarz did not offer any evidence that these reasons for her

termination were merely a pretext and that St. Jude’s real reason for her termination

was her sex or age. Hodge v. North Carolina Dep’t of Transp., 246 N.C. App. 455, 474,

784 S.E.2d 594, 607 (2016); Head, 242 N.C. App. at 561, 775 S.E.2d at 914. Without

that evidence, Schwarz cannot survive a motion for summary judgment. Accordingly,

the trial court properly entered judgment on this claim as a matter of law.

   V.      Libel claim

        Schwarz next argues that the trial court improperly entered summary

judgment on her libel claim. Schwarz contends that Defendants Ted Cole and Eric

Delissio committed libel per se by forwarding an email up the chain of command at

St. Jude. The email alleged that Schwarz mistreated a patient by misreading an x-

ray and exposing a patient to unnecessary radiation. We reject Schwarz’s argument.

        “[L]ibel per se is a publication by writing, printing, signs or pictures which,

when considered alone without innuendo, colloquium, or explanatory circumstances:

(1) charges that a person has committed an infamous crime; (2) charges a person with

having an infectious disease; (3) tends to impeach a person in that person’s trade or

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                                  Opinion of the Court

profession; or (4) otherwise tends to subject one to ridicule, contempt or disgrace.”

Renwick v. News and Observer Pub. Co., 310 N.C. 312, 317, 312 S.E.2d 405, 408–09

(1984).

      Although this claim can arise in a workplace setting, there are special rules for

libel and defamation claims that occur within a healthcare institution. Healthcare

professionals generally have a qualified privilege to report to management any

employee work performance issues that implicate patient care. Troxler v. Carter

Mandala Ctr., Inc., 89 N.C. App. 268, 272, 365 S.E.2d 665, 668 (1988). This privilege

exists because the “health care industry plays a vital and important role in our

society” and encouraging employees to share concerns about healthcare services

ensures the “quality and trustworthiness of the care which the medical community

provides.” Id.

      Here, even taking all the evidence in the light most favorable to Schwarz, her

libel allegations fall squarely within the qualified privilege for healthcare

professionals. Cole and Delissio received an email indicating that Schwarz provided

improper care to a patient. Cole forwarded the email to Delissio, his supervisor, and

Delissio forwarded it to higher-ranking employees at St. Jude. Neither defendant sent

the email to anyone outside this chain of command within St. Jude. This sort of

internal reporting of an allegation of improper patient care is protected from libel

claims by the qualified privilege applicable in the healthcare field. Accordingly, the

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                                    Opinion of the Court

trial court properly entered summary judgment on Schwarz’s libel claims.

   VI.      Tortious interference

         Finally, Schwarz argues that Defendants Cole, Delissio, and Duke University

Health System tortiously interfered with her employment contract by inducing St.

Jude to terminate her employment. Again, this argument is meritless.

         To establish a claim for tortious interference with contract, there must be “(1)

a valid contract between the plaintiff and a third person which confers upon the

plaintiff a contractual right against a third person; (2) the defendant knows of the

contract; (3) the defendant intentionally induces the third person not to perform the

contract; (4) and in doing so acts without justification; (5) resulting in actual damage

to plaintiff.” Brodkin v. Novant Health, Inc., __ N.C. App. __, __, 824 S.E.2d 868, 874

(2019).

         We begin with Schwarz’s claim against Cole and Delissio, her two co-employees

at St. Jude. When a tortious interference claim based on an employment contract is

brought against the plaintiff’s co-employees, “the plaintiff must show that the alleged

interference was unrelated to a ‘legitimate business interest’ of the employee.” Id.

         Here, unrebutted evidence in the record indicates that the alleged

interference—that is, these two employees’ involvement in St. Jude’s decision to

terminate Schwarz—was related to their legitimate business interests. Cole was one

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                                  Opinion of the Court

of Schwarz’s co-workers and interacted with the same clients and patients as

Schwarz. Delissio is the mutual supervisor for both Cole and Schwarz.

      Cole reported to Delissio that a number of clients and patient had complaints

and other concerns about Schwarz’s work. Delissio then investigated those concerns

and ultimately provided disciplinary recommendations to St. Jude that included

possible termination.

      Reporting and investigating repeated complaints by patients and healthcare

professionals about a co-employee’s work performance is a legitimate business

interest. Id. Accordingly, the trial court properly concluded that undisputed evidence

in the record defeated Schwarz’s tortious interference claim against her two co-

employees at St. Jude as a matter of law.

      Schwarz next contends that Duke University Health System tortiously

induced St. Jude to fire Schwarz because she reported a sexual relationship between

a co-worker and a Duke employee. But this claim fails because, even taking all

evidence in the light most favorable to Schwarz, she has not forecast any evidence

that Duke sought her termination from St. Jude. Esposito v. Talbert & Bright, Inc.,

181 N.C. App. 742, 745, 641 S.E.2d 695, 697 (2007).

      Duke was, in effect, a customer of St. Jude. One of Duke’s physicians refused

to work with Schwarz. At most, Duke requested that St. Jude not send Schwarz to

work with them, and to use other St. Jude employees instead. There is no evidence

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                                   Opinion of the Court

that Duke “intentionally induced” St. Jude to terminate its employment contract with

Schwarz. Brodkin, __ N.C. App. at __, 824 S.E.2d at 874. Indeed, there is no evidence

that Duke had any interest at all in whether Schwarz remained employed at St. Jude.

Even taking all inferences in Schwarz’s favor, Duke, at most, requested not to work

with Schwarz anymore. There is no evidence that this would have forced St. Jude to

end its employment contract with Schwarz, nor any evidence that Duke believed this

to be true. This, in turn, means Schwarz failed to forecast any evidence that “the

defendant intentionally induce[d] the third person not to perform the contract.” Id.

Accordingly, the trial court properly determined that Schwarz’s tortious interference

claim failed as a matter of law.

                                     Conclusion

      For the reasons stated above, we affirm the trial court’s orders granting

summary judgment in favor of Defendants.

      AFFIRMED.

      Judges DILLON and ARROWOOD concur.

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