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Hussain v. Ascension Sacred Heart-St. Mary's Hospitals, Inc.

United States District Court, W.D. Wisconsin

June 5, 2019



          William M. Conley District Judge.

         Dr. Mohammed Hussain filed this suit against Ascension Sacred Heart - St. Mary's Hospital, alleging defamation and negligence. In answering the complaint, Ascension asserted a counterclaim alleging that Hussain breached his contract with the hospital when he (1) refused to execute a release of claims against the hospital and (2) initiated the present lawsuit. Presently before the court is plaintiff's motion to dismiss the counterclaim for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). (Mot. to Dismiss (dkt. #17) 1.) For the reasons stated below, that motion will be denied. Also before the court is defendant's motion for the sanction of dismissal and fees following plaintiff's failure to appear for his deposition in Wisconsin on April 16, 2019. As discussed below, that motion will also be largely denied.


         I. Plaintiff's Motion to Dismiss the Counterclaim

         A motion to dismiss under Rule 12(b)(6) is designed to test the complaint's legal sufficiency. See Fed. R. Civ. P. 12(b)(6). Dismissal is warranted only if no recourse could be granted under any set of facts consistent with the allegations. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 563 (2007). To survive a motion to dismiss, a plaintiff must allege sufficient facts to state a plausible claim for relief. Spierer v. Rossman, 789 F.3d 502, 510 (7th Cir. 2015) (citing Twombly, 550 U.S. at 570). The same standard applies to a motion to dismiss a counterclaim. See Firestone Fin. Corp. v. Meyer, 796 F.3d 822, 826-27 (7th Cir. 2015).

         Because subject matter jurisdiction is based on diversity of citizenship in this case, the court looks to the law of Wisconsin to determine which state's law should be applied.[1]Klaxon Co. v. Stentor Electric Manufacturing Co., 313 U.S. 487, 497 (1941); Nichols v. National Union Fire Insurance Co., 509 F.Supp.2d 752, 756 (W.D. Wis. 2007). Since neither party raises a conflict of law issue, and the case was filed in federal court in Wisconsin, the court will apply Wisconsin law. RLI Insurance Company v. Conseco, Inc., 543 F.3d 384, 390 (7th Cir. 2008) (“When neither party raises a conflict of law issue in a diversity case, the applicable law is that of the state in which the federal court sits.”).

         To overcome a motion to dismiss, a claim or counterclaim for breach of contract under Wisconsin law must allege: (1) a valid contract exists; (2) the defendant breached the contract; and (3) damages stemmed from that breach. Matthews v. Wis. Energy Corp., 534 F.3d 547, 553 (7th Cir. 2008) (citing N.W. Motor Car, Inc. v. Pope, 51 Wis.2d 292, 187 N.W.2d 200 (1971)). There is no dispute that the parties had a valid contract. (See Mot. to Dismiss Br. (dkt. #18) 8; Opp'n (dkt. #27) 9.) So, the only questions are whether defendant's counterclaim has adequately alleged a breach causing damages.

         Defendant alleges that when Dr. Hussain completed the Statement of Application for Appointment to St. Mary's Hospital's Medical Staff, he agreed to “acknowledge and abide by any Medical Staff Bylaws requirement for release and immunity from civil liability.” (Ans. (dkt. #15) 16.) In support, Ascension provided a copy of Hussain's Application and full copy of the Hospital's Medical Bylaws.[2] Section 7.1 of the Bylaws, titled “Immunity from Liability, ” states, in relevant part:

The following shall be conditions to any individual's application for Medical Staff membership or exercise of clinical privileges at the Hospital:
(c) there shall, to the fullest extent permitted by law, be absolute immunity from civil liability arising from such act, communication, report, recommendation, or disclosure, even where the information involved would otherwise be deemed privileged;
(d) such immunity shall apply to all acts, communications, reports, recommendations, or disclosures performed or made in connection with this or any other health care institution's activities related but not limited to:
(1) applications for appointment or clinical privileges;
(5) medical care evaluations
(f) in furtherance of the foregoing, each individual shall, upon request of the Hospital, execute releases in accordance with the tenor and import of this Section . . . . Execution of such releases is not a ...

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