Obi v. Exeter Health Resources, Inc. et al

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
Loretta Azuka Obi
v. 	Civil No. 18-cv-550-SM
Exeter Health Resources, Inc.; Core
Physicians LLC; and Barton Assocs., Inc.
SUPERSEDING REPORT AND RECOMMENDATION
Before the court is plaintiff Dr. Loretta Azuka Obi’s
original complaint (Doc. No. 2) and complaint addendum entitled,
“Motion for Hearing” (Doc. No. 9). 	The matter came before the
court for preliminary review, pursuant to 28 U.S.C. § 1915(e)(2)
and LR 4.3(d)(2), after which the court issued a Report and
Recommendation (Doc. No. 7) on September 18, 2018 (“September 18
R&R”).
The September 18 R&R appears to have crossed in the mail
with the plaintiff’s complaint addendum (Doc. No. 9).
Accordingly, the court now conducts a further preliminary review
of the claims asserted in both the original complaint and
complaint addendum (Doc. Nos. 2, 9), and issues this Superseding
Report and Recommendation (“Superseding R&R”), which replaces
the September 18 R&R for all purposes, including the
identification of plaintiff’s claims.
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Standard
The court may dismiss claims asserted in a complaint filed
in forma pauperis, if the court lacks jurisdiction, a defendant
is immune from the relief sought, the complaint fails to state a
claim, or the action is frivolous or malicious. 	See 28 U.S.C.
§ 1915(e)(2); LR 4.3(d)(2). 	In determining whether a pro se
complaint states a claim, the court must construe the complaint
liberally. 	See Erickson v. Pardus, 551 U.S. 89, 94 (2007) (per
curiam). 	To survive preliminary review, the complaint must
contain “sufficient factual matter, accepted as true, to ‘state
a claim to relief.’” 	See Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (citation omitted). 	The court treats as true all well-
pleaded factual allegations, and construes reasonable inferences
in plaintiff’s favor. 	See Ocasio-Hernández v. Fortuño-Burset,
640 F.3d 1, 12 (1st Cir. 2011).
Background
Dr. Obi was a contract physician, assigned to work as a
hospitalist at Exeter Hospital pursuant to contracts executed
between her and the defendants named in this action: Exeter
Health Resources, Inc. (“Exeter Health Resources”); Core
Physicians LLC (“Core Physicians”); and Barton Associates, Inc.
(“Barton”). 	Dr. Obi alleges that she provided services at
Exeter Hospital beginning on December 22, 2017, under a contract
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that called for her to provide services through February 25,
2018. 	“Placement Orders,” attached to the original complaint,
bearing Dr. Obi’s signature and a signature for Barton, assign
Dr. Obi to work for Core Physicians at Exeter Hospital. 	An
October 30, 2017 Placement Order (Doc. No. 2, at 13), covers the
period from January 8, 2018 through February 25, 2018; and a
December 27, 2017 Placement Order marked as “Schedule G” (Doc.
No. 2, at 16) (“Schedule G Placement Order”), assigns Dr. Obi to
work at Exeter Hospital from December 22, 2017 through January
1, 2018. 	The original complaint (Doc. No. 2) asserts that Dr.
Obi’s signature on the Schedule G Placement Order was forged.
Dr. Obi asserts that she received a phone call on January
3, 2018, terminating her contract to work at Exeter Hospital,
based on what Dr. Obi characterizes as false staff reports and
“coerced” patient complaints. 	Exhibits to the complaint
indicate that concerns raised by Exeter Hospital staff and
patients, relating to Dr. Obi’s behavior, patient care, and
medical record documentation practices, became the subject of an
internal investigation beginning in January 2018. 	Exeter
Hospital summarily withdrew Dr. Obi’s clinical privileges at
that time, and then reported its withdrawal of Dr. Obi’s
privileges to the National Practitioner Data Bank.1 	Dr. Obi
1The National Practitioner Data Bank (“NPDB”) is “a web-
based repository of reports containing information on medical
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asserts that her inclusion in the National Practitioner Data
Bank was automatically published to all of her employers within
the last three years and triggered a further inquiry by the New
Hampshire Board of Medicine. 	Dr. Obi asserts that the true
motive for withdrawing her privileges was to defame her, through
the National Practitioner Data Bank report, because she had
refused to participate in improper billing practices and unsafe
medical practices at Exeter Hospital.
A letter from Dan Doran, Core Physicians Senior Human
Resources Partner, to Caley Thompson, Barton Associates Group
Manager, dated January 26, 2018 (Doc. No. 2, at 18) reports that
because Exeter Hospital had suspended Dr. Obi’s clinical
privileges, Dr. Obi was unable to fulfill the terms of her
assignment at Exeter Hospital. 	Doran’s letter further reports
that Core Physicians was cancelling Dr. Obi’s placement due to
“provider breach,” and that Core did not intend to assign her to
work again with Core Physicians or at Exeter Hospital.
Dr. Obi asserts that she has been unable to secure
employment as a doctor since January 2018. 	An email to Dr. Obi
malpractice payments and certain adverse actions related to
health care practitioners, providers, and suppliers,” and is “a
workforce tool that prevents practitioners from moving state to
state without disclosure or discovery of previous damaging
performance.” 	U.S. Dep’t of Health & Human Servs., NPDB, About
Us, https://www.npdb.hrsa.gov/topNavigation/aboutUs.jsp (last
accessed Oct. 1, 2018).
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from a third party, Weatherby Healthcare, dated February 21,
2018 (Doc. No. 2, at 19), asked Dr. Obi to provide full
documentation regarding Exeter Hospital’s suspension of her
clinical privileges. 	Other documents in the record indicate
that Dr. Obi has fallen behind in paying her bills.
Claims
In Document Nos. 2 and 9, Dr. Obi asserts the following
claims:
1. 	Defendants, Exeter Health Resources, Core Physicians,
and Barton, breached their contractual obligations to Dr.
Obi by:
a. 	Failing to conduct an adequate orientation of Dr.
Obi with regard to her placement as a hospitalist at
Exeter Hospital;
b. 	Failing to provide Dr. Obi with timely access to
information, material, and login access she needed to
perform her duties at Exeter Hospital;
c. 	Requiring Dr. Obi to work excess hours at Exeter
Hospital without compensation;
d. 	Causing her clinical privileges at Exeter
Hospital to be withdraw based on false allegations;
and
e. 	Terminating her from her position at Exeter
Hospital without notice, based on false allegations.
2. 	By causing Exeter Hospital to withdraw Dr. Obi’s
clinical privileges there based on reports that Exeter
Hospital staff knew were false, Exeter Health Resources
intentionally interfered with:
a. 	Dr. Obi’s contractual relationship with Barton;
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b. 	Dr. Obi’s contractual relationship with Core
Physicians; and
c. 	Dr. Obi’s business relationship with Weatherby
Healthcare and others.
3. 	Exeter Health Resources defamed Dr. Obi, in that
Exeter Hospital reported the withdrawal of Dr. Obi’s
clinical privileges, and the false reports upon which that
withdrawal was based, to the National Practitioner Data
Bank, which republished those reports to Dr. Obi’s previous
employers and the New Hampshire Board of Medicine.
4. 	Defendants engaged in criminal conduct.
5. 	Defendants engaged in fraud in contract negotiations
with Dr. Obi, by failing to disclose as a condition of Dr.
Obi’s contract, that Exeter Hospital would require her to
chart false diagnoses and upgrade billing codes for
patients she did not manage, with the aim of improperly
generating revenue for Exeter Hospital.
Discussion
I. 	Breach of Contract (Claim 1)
Liberally construed, the complaint and complaint addendum
allege the existence of a series of contracts between Dr. Obi
and defendants, and defendants’ breach of the terms of those
contracts. 	In an Order issued this date, the court directs
defendants Exeter Health Resources, Core Physicians, and Barton
to answer or otherwise plead in response to Dr. Obi’s breach of
contract claims, Claim 1(a)-1(e), as numbered in this
Superseding R&R.
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II. 	Tortious Interference (Claim 2)
Liberally construed, the original complaint (Doc. No. 2)
asserts that Exeter Health Resources intentionally induced Core
Physicians and Barton not to perform their duties under
contracts with Dr. Obi. 	The order issued this date directs
Exeter Health Resources to answer or otherwise plead in response
to Claim 2(a) and 2(b), as numbered in the Superseding R&R.
Claim 2(c) above summarizes Dr. Obi’s claims that Exeter
Health Resources intentionally induced Weatherby Healthcare and
other businesses not to perform their duties under contracts
with Dr. Obi, or not to enter into any new contracts with Dr.
Obi. 	Under New Hampshire law, which applies here, an element of
intentional interference with prospective or existing
contractual relations is the defendant’s knowledge of the
business relationship. 	See Hughes v. N.H. Div. of Aero., 152
N.H. 30, 40, 871 A.2d 18, 28 (2005); M & D Cycles, Inc. v. Am.
Honda Motor Co., 208 F. Supp. 2d 115, 119, 2002 DNH 127 (D.N.H.
2002), aff’d, 70 F. App’x 592 (1st Cir. 2003).2 	Nothing alleged
2Exeter Hospital, Core Physicians, and Exeter Health
Resources are entities located in New Hampshire. 	Plaintiff
resides in New York. 	New York law is consistent with New
Hampshire law. 	See also Hassan v. Deutsche Bank A.G., 515 F.
Supp. 2d 426, 429 (S.D.N.Y. 2007), aff’d, 336 F. App’x 21 (2d
Cir. 2009); Kronos, Inc. v. AVX Corp., 81 N.Y.2d 90, 94, 612
N.E.2d 289, 292 (1993). 	Barton is located in Massachusetts, but
the record presently before the court does not reveal any basis
for applying Massachusetts law in this case.
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here suggests that Exeter Health Resources was aware of Dr.
Obi’s business relationship with Weatherby Healthcare, or any
other entity that is not a party to this case. 	Accordingly, the
district judge should dismiss Claim 2(c), as numbered in this
Superseding R&R.
III. Defamation (Claim 3)
Dr. Obi alleges that defendants defamed her. 	Plaintiff’s
allegations, summarized in Claim 3 above, state a claim upon
which relief can be granted for defamation under New Hampshire
law, against Exeter Health Resources. 	See Vention Med. Advanced
Components, Inc. v. Pappas, 188 A.3d 261, 271 (N.H. 2018) (“‘A
plaintiff proves defamation by showing that the defendant failed
to exercise reasonable care in publishing a false and defamatory
statement of fact about the plaintiff to a third party, assuming
no valid privilege applies to the communication.’” (citation
omitted)); Chagnon v. Union Leader Corp., 103 N.H. 426, 441, 174
A.2d 825, 835 (1961) (libel per se).3 	The Order issued this date
directs Exeter Health Resources to answer or otherwise plead in
response to Dr. Obi’s defamation claim, Claim 3, as numbered in
this Superseding R&R.
3The law in New York is consistent. 	See D’Amico v. Corr.
Med. Care, Inc., 120 A.D.3d 956, 962, 991 N.Y.S.2d 687, 694
(N.Y. App. Div. 2014).
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Nothing alleged in the complaint or complaint addendum
indicates that any other defendant failed to exercise reasonable
care in publishing a false statement of fact about Dr. Obi to
any third party, without a valid privilege. 	Accordingly, the
district judge should dismiss Dr. Obi’s defamation claim to the
extent she asserts it against Core Physicians or Barton.
IV. 	Criminal Conduct (Claim 4)
Dr. Obi alleges that defendants are liable for engaging in
criminal conduct. 	A private party has no standing to seek
relief upon allegations of criminal conduct. 	See Linda R.S. v.
Richard D., 410 U.S. 614, 619 (1973) (individual has no
“judicially cognizable interest in the prosecution or
nonprosecution of another”). 	Dr. Obi’s allegations of criminal
conduct fail to state a claim upon which she can seek damages or
initiation of a prosecution. 	Accordingly, the district judge
should dismiss Claim 4, as numbered in the Superseding R&R.
V. 	Fraud (Claim 5)
New Hampshire law recognizes that the procuring of a
contract by means of fraud is an actionable tort. 	Van Der Stok
v. Van Voorhees, 151 N.H. 679, 681, 866 A.2d 972, 975 (2005).
The party seeking to prove fraud must establish that the
other party “made a representation with knowledge of its
falsity or with conscious indifference to its truth with
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the intention to cause another to rely upon it.” . . .
[T]he party seeking to prove fraud “must demonstrate
justifiable reliance.”
Id., 151 N.H. at 682, 866 A.2d at 975 (citations omitted).
“Damage is an element of fraud in the law.” 	Record v. Rochester
Tr. Co., 89 N.H. 1, 8, 192 A. 177, 182 (1937). 	Fraud may
consist of the intentional concealment of a material fact.4
Batchelder v. N. Fire Lites, Inc., 630 F. Supp. 1115, 1118
(D.N.H. 1986). 	For “a failure to disclose to be actionable
fraud, there must be a duty arising from the relation of the
parties to so disclose.” 	Id.
Claims of fraud are subject to special pleading rules under
the Federal Rules of Civil Procedure. 	Rule 9(b) requires
plaintiffs to state with particularity the circumstances
constituting the fraud with respect to elements not bearing on
the conditions of a person’s mind. 	See Fed. R. Civ. P. 9(b).
That rule “requires plaintiffs to specifically plead ‘the time,
place, and content of an alleged false representation.’” 	Mulder
4The law in New York is consistent. 	See Pasternack v. Lab.
Corp. of Am. Holdings, 27 N.Y.3d 817, 827, 59 N.E.3d 485, 491
(2016) (“The elements of a fraud cause of action consist of a
misrepresentation or a material omission of fact which was false
and known to be false by [the] defendant, made for the purpose
of inducing the other party to rely upon it, justifiable
reliance of the other party on the misrepresentation or material
omission, and injury.” (internal quotation marks and citations
omitted)).
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v. Kohl’s Dep’t Stores, Inc., 865 F.3d 17, 22 (1st Cir. 2017)
(citation omitted).
Liberally construed, Dr. Obi’s allegations of fraud,
summarized in Claim 5, are that defendants failed to disclose
that, as a condition of her contract to work at Exeter Hospital,
Exeter Hospital would require her to chart false diagnoses and
upgrade billing codes for patients she did not manage, to
generate more revenue, and that if she failed to meet those
requirements, she would be terminated summarily. 	Dr. Obi
alleges that because she was unaware that Exeter Hospital would
impose those illegal and unsafe requirements upon her, she
accepted the hospitalist contract position and was thereafter
terminated summarily.
Dr. Obi’s allegations of fraudulent omissions occurring in
contract negotiations are not particularized as to who owed her
a duty of disclosure, or who had knowledge of the alleged
undisclosed job requirements and the terms and manner in which
she would be terminated if she did not meet those alleged
requirements. 	Accordingly, the district judge should dismiss
Dr. Obi’s claims of fraudulent omissions in contract
negotiations, Claim 5, as numbered in this Superseding R&R,
without prejudice to her ability to move to amend the complaint
within thirty days, pursuant to Fed. R. Civ. P. 9 and 15, to
state her claims of fraud with the requisite particularity.
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Conclusion
For the foregoing reasons the district judge should direct
as follows:
1. 	Claims 2(c) and 4, as identified in the Superseding
R&R, are dismissed as to all defendants;
2. 	Dr. Obi’s defamation claims are dismissed to the
extent that they are asserted against Core Physicians or
Barton, without prejudice to Dr. Obi’s ability to move to
amend the complaint to add a defamation claim against
either or both of those defendants, pleading facts
sufficient to state a defamation claim against those
defendants; and
3. 	Dr. Obi’s fraud claims are dismissed as to all
defendants, without prejudice to Dr. Obi’s ability to move
to amend the complaint to add a claim of fraud against any
defendant, pleaded with the particularity required by Fed.
R. Civ. P. 9(b).
Any objections to this Report and Recommendation must be filed
within fourteen days of receipt of this notice. 	See Fed. R.
Civ. P. 72(b)(2). 	The objection period may be extended upon
motion. 	Failure to file objections within the specified time
waives the right to appeal the district court’s order. 	See
Santos-Santos v. Torres-Centeno, 842 F.3d 163, 168 (1st Cir.
2016).
__________________________
Andrea K. Johnstone
United States Magistrate Judge
October 2, 2018
cc: 	Loretta Azuka Obi, pro se
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