STEVEN F. LIPSON, M.D. APPELLANT
UNIVERSITY OF LOUISVILLE AND UNIVERSITY MEDICAL CENTER, INC. APPELLEES
APPEALS FROM FRANKLIN CIRCUIT COURT HONORABLE THOMAS D.
WINGATE, JUDGE ACTION NO. 12-CI-01269
FOR APPELLANT: Thomas J. Schulz Alton D. Priddy Louisville,
FOR APPELLEE, UNIVERSITY OF LOUISVILLE: Craig C. Dilger
Joseph A. Bilby Louisville, Kentucky.
FOR APPELLEE, UNIVERSITY MEDICAL CENTER, INC.: John B. Moore
BEFORE: KRAMER, NICKELL AND THOMPSON, JUDGES.
case involves a dispute between Steven F. Lipson, the
University of Louisville (the University), and the University
Medical Center Inc. (UMC) regarding Lipson's pay for
serving as Medical Director of the Outpatient Surgery Center
(OSC), a UMC facility. Lipson appeals from three separate
opinions and orders of the Franklin Circuit Court: (1) a
March 2, 2015 opinion and order granting the University's
motion for summary judgment on Lipson's claims and
partial summary judgment on the University's
counterclaims (Appeal No. 2015-CA-000487-MR); (2) an April 9,
2015 opinion and order granting UMC's motion for summary
judgment (Appeal No. 2015-CA-000631-MR); and (3) an October
20, 2015 opinion and order granting the University's
motion for entry of judgment (Appeal No. 2015-CA-001743-MR).
Appeal No. 2015-CA-000487-MR, Lipson asserts the University
should be liable for: (1) breach of contract; (2) failing to
pay him appropriately based on the equitable remedy of unjust
enrichment; (3) violating KRS 337.060, part of the Wage and
Hour Act; and (4) depriving him of property without due
process. He further argues that the circuit court erred when
it summarily found him liable to the University for unjust
enrichment and conversion.
Appeal No. 2015-CA-000631-MR, Lipson argues that the circuit
court erred when it dismissed his unjust enrichment claim
Appeal No. 2015-CA-001743-MR, Lipson argues that questions of
fact precluded summary judgment regarding the net amount he
owed the University. He further takes issue with the circuit
court's award of prejudgment and post-judgment interest.
reasons explained below, we affirm the balance of the circuit
court's judgments except for its determination regarding
post-judgment interest in Appeal No. 2015-CA-001743-MR. As to
that appeal, we reverse and remand with directions.
is an anesthesiologist. In 2010, he received a job offer from
the University and University Anesthesia Associates, PSC
(UAA). The terms of his employment were derived from a March
2010 letter of intent from the University, an April 2010
written agreement with UAA, and other documents
(collectively, the written employment contract). In the
letter of intent, Lipson was offered the position of
Supervisor of UMC's Healthcare Outpatient Center (HCOC)
also known as the OSC,  a full-time position which would not
include being on call or working weekends. Lipson was also
informed he would receive an annual work assignment outlining
expectations for teaching, research, clinical service, and
community or school service, and that he could expect a
fiscal year salary increase of between 0-5% annually. The
written agreement stated Lipson would be employed part time
as an anesthesiologist for UAA and perform duties as
assigned. Both the letter of intent and written agreement
explained that Lipson would be employed by both the
University and UAA and receive a salary from both entities
totaling $277, 000. However, the written documentation of how
his salary was allocated differed.
began his employment on July 1, 2010, and received his salary
as specified by the written employment contract. In March
2011, Lipson met with Dr. Boswell, Chair of the Department of
Anesthesiology and Perioperative Medicine, and others to
discuss his proposed upcoming service as OSC Director and a
proposed agreement between the University and UMC regarding
his service in that position. Boswell then submitted a
proposed Medical Director Agreement (Proposed 2011 Agreement)
to Lipson, which detailed that UMC would pay the University
an hourly amount for each documented hour of service by the
OSC Director up to $50, 000 per year and that up to an
additional $50, 000 would be provided contingent upon
achieving specific metrics, for a total possible payment to
the University of $100, 000. The proposed agreement was
silent on whether any of the payment the University received
for Lipson's services would be passed through to Lipson.
the same Medical Director Agreement was executed in previous
years between UMC and the University with the
University's employee anesthesiologist, Dr. Gary Loyd,
who served as OSC Director from September 2008 through
December 2010. Loyd, unlike Lipson, was specifically
informed in his letter of intent when he was hired that
he would be paid a $65, 000 supplement from UAA for serving
as OSC Director and an additional $100, 000 supplement from
UMC for being OSC Director.
Director position, which consisted of about 40 hours of work
per month, was rigorous; it entailed highly specific duties
and increased responsibilities not typical of medical
director positions. Lipson told Boswell, his department
chair, that he expected additional pay for these additional
responsibilities, but the details of their exchange varied
between the two of them. According to Boswell's affidavit
and deposition, Lipson said he wanted the same arrangement as
Loyd for serving as OSC Director. However, Boswell told
Lipson the University would not pay him an additional salary,
especially in light of his already reduced responsibilities
compared to others in similar anesthesiology positions.
Lipson denied these statements occurred.
on the other hand, recounted in his affidavit that he told
Boswell "looks like I'm getting a raise."
Boswell responded, "you'll have to share it with
me." Lipson responded, "that's fine."
Lipson claims that Boswell later told him that he would keep
the money for himself, to which Lipson replied that he would
not perform as OSC Director unless he was paid to do so.
Lipson received a letter from Boswell outlining his duties
for the year including being OSC Director, his personal
attorney revised the Proposed 2011 Agreement (Revised 2011
Agreement) so there was no question that he would be the
person paid for performing work as the OSC Director; the
agreement was also revised to allow Lipson to sign as a party
rather than a University representative. Lipson submitted the
Revised 2011 Agreement to Boswell, who told him he would
"pass it on." Lipson followed up on the
agreement's status on April 20, 2011, but he received no
to Lipson, after he signed the Revised 2011 Agreement, he
served as OSC Director from April 2011 through his
resignation in September 2012, in addition to performing his
other duties. However, he was never advised that the Revised
2011 Agreement was accepted. While he kept time records, he
never submitted any timesheets because he was never
instructed to do so. When Lipson began receiving larger
paychecks in July 2011 (the start of the University's
fiscal year), he believed his increased compensation was due
to the acceptance of the Revised 2011 Agreement and was
payment for his service as OSC Director.
fact, the University and UMC never finalized a Medical
Director Agreement for the 2011 calendar year. During the
2011 calendar year, no one submitted timesheets to UMC for
the services of the OSC Director; and, UMC did not make any
payments to the University.
February 2012, a Medical Director Agreement (2012 Agreement)
was ultimately signed by representatives of UMC and the
University. It was substantially the same as all the prior
Medical Director Agreements between UMC and the University.
Lipson was among those signing for the University. Lipson
stated in his affidavit that he signed the 2012 Agreement
"because I was getting paid for the additional work load
and responsibilities of Medical Director and believed that
the new contract was merely to cover the new calendar
in February 2012, Lipson began submitting monthly time
records accounting for the forty hours he expended each month
as OSC Director. These time records covered January 2012
through July 2012.
May 24, 2012 letter to Lipson from Boswell on behalf of UAA
discussing the proposed terms of Lipson's contract for
the 2012-2013 fiscal year, Boswell stated that Lipson's
current annual salary was a base of $243, 271.24,
supplemented by a $100, 000 stipend for being OSC Director
and also supplemented by $65, 000 from UAA for taking a full
call load, for total compensation of $408, 271.24. The letter
indicated that Lipson's $65, 000 supplement would be
eliminated going forward if he did not take a full call load.
letter dated June 15, 2012, Lipson responded that he was not
supposed to take a full call load, as his 2010 letter of
intent indicated his position would not include call or
weekends. He recognized that the terms of his employment
could be altered prospectively and opted to continue in a
non-call capacity despite the financial penalty.
18, 2012, Boswell emailed Lipson stating:
Regarding my letter to you dated May 24, 2012, outlining the
proposed terms of your contract for the 2012-2013 fiscal
year, I must inform you that due to budgetary errors, the
letter contains several inaccuracies. Therefore, I am
withdrawing the offer of compensation made in the letter of
May 24, 2012.
21, 2012, Boswell and other University officials met with
Lipson and informed him he had been overpaid $10, 472.25 per
paycheck beginning July 2011 and continuing through May 2012,
for a total overpayment of $115, 194.75 and that the
University would recoup that amount from his prospective pay
in accordance with its policy. Lipson disputed there was an
overpayment. He claimed he was entitled to the additional
salary for serving as OSC Director, and he demanded proof of
the alleged error. However, there was no executed contract
outlining his compensation for serving as the OSC Director
during that time period.
same date, Boswell drafted a letter to Lipson proposing that
Lipson receive a base salary of $217, 604.20, a supplement
from UAA for OSC Director of $70, 000, and a potential $65,
000 supplement from UAA for a full call load.
Lipson's June 2012 paycheck, the alleged overpayment
amount was eliminated. In July 2012, the University demanded
repayment and informed Lipson that the overpayment would be
recouped from his future paychecks at a rate of $10, 472.25
each month for a year. Lipson again disputed that there was
an overpayment necessitating recoupment.
August 2012, Lipson informed the University he was
effectively resigning September 10, 2012. The University then
seized $17, 688.89 from Lipson's August 2012 payroll
check and $4, 088.64 from his September 2012 payroll check.
Lipson then filed a complaint against the University and UMC
ultimately alleging: (1) breach of contract by the University
in failing to pay Lipson's full salary; (2) unjust
enrichment by the University for failing to pay him
appropriately for the benefit he conferred on it; (3)
violation of KRS 337.060 and KRS 337.385 by the University
because, in his view, it had unlawfully recouped funds from
his salary; (4) deprivation of his salary by the University
without due process; and (5) unjust enrichment by UMC for
failing to pay him working as OSC director. Lipson further
requested compensatory and punitive damages, including a
refund of all sums seized and liquidated damages pursuant to
answered arguing it had no direct agreement with Lipson, and
Lipson could not recover against it on equitable grounds. UMC
ultimately moved for summary judgment and asserted the same.
University's answer, it raised a number of defenses,
including that the complaint in whole or in part was barred
by sovereign immunity and/or governmental immunity. The
University also counterclaimed, based upon what it alleged
was Lipson's failure to repay the excess funds he had
received, for unjust enrichment and conversion. The
University also sought punitive damages.
the University moved for summary judgment as to Lipson's
claims of breach of contract, unjust enrichment, violation of
procedural due process, and violation of Kentucky's wage
and hour statutes; and, it moved for partial summary judgment
as to liability on its unjust enrichment and conversion
claims. The University argued the undisputed facts
established it never entered into a contract with Lipson
agreeing to pay him additional amounts for the OSC Director
position. Instead, any such additional amounts were the
product of administrative error.
to the affidavit of Linda J. Wilson, the University's
Manager of Position Management, during fiscal year 2011 (July
1, 2010 through June 30, 2011), Lipson received compensation
of $17, 666.67 per month from the University. His monthly
salary was received based on the position numbers assigned to
him, including $1, 721 a month under position number
90008064. For that fiscal year, position number
90008064 was also used to pay Boswell.
affidavit further established that in fiscal year 2012 (July
1, 2011 through June 30, 2012), the University changed its
policy to require that position numbers be exclusive to each
employee. As of July 2011, only Boswell was to be compensated
under position number 90008064; however, Lipson erroneously
continued to receive monthly compensation under that same
position number, in the monthly amount of $10,
472.25. As a result, according to Wilson, Lipson
was overcompensated by $10, 472.25 for each of the months
between July 2011 and May 2012, for an overpayment totaling
a hearing and a lengthy period of discovery, on March 2,
2015, the circuit court granted the University's motion
for summary judgment on Lipson's claims and partial
summary judgment as to liability on the University's
claims. The circuit court ruled that because Lipson was
adequately compensated for his services under his written
employment contract, the University did not breach its
contract with Lipson. Lipson had no due process claim because
he had no legitimate property interest in the overpaid
amounts and, regardless, he had received notice and an
opportunity to be heard. There was no wage and hour violation
because Kentucky law authorized the University to withhold
wages that are owed. The circuit court did not directly
address Lipson's unjust enrichment claim against the
University. The circuit court found Lipson was unjustly
enriched and converted the University's money when he
retained money that was paid to him in error.
April 9, 2015, the circuit court granted UMC's motion for
summary judgment on Lipson's claims against it. The
circuit court determined that because it had already ruled
Lipson was adequately compensated for his work under the
terms of his employment contract with the University, he
could not recover from UMC under unjust enrichment.
October 20, 2015, the circuit court awarded the University
judgment on "a principal balance of $93, 417.22,
effective March 2, 2012." The circuit court also awarded
the University pre-judgment and post-judgment interest.
previously mentioned, Lipson appealed from each of these
judgments. This Court designated the three appeals to be
standard of review on appeal of a summary judgment is whether
the [circuit] court correctly found that there were no
genuine issues as to any material fact and that the moving
party was entitled to judgment as a matter of law."
Scifres v. Kraft, 916 S.W.2d 779, 781 (Ky. App.
1996). Summary judgment "should only be used 'to
terminate litigation when, as a matter of law, it appears
that it would be impossible for the respondent to produce
evidence at the trial warranting a judgment in his favor and
against the movant.'" Steelvest, Inc. v.