An Alger County judge has dismissed six of eight parts of Dr. Chelsea Ray’s wrongful termination lawsuit against Munising Memorial Hospital Association after a written opinion was issued Thursday, Dec. 22. The doctor was publicly terminated from the hospital in April of 2021.
Ray sued the hospital for breach of contract, third party beneficiary, invasion of privacy and both fraudulent and innocent misrepresentation regarding how the hospital enacted the termination. According to court documents, the hospital fired Ray without cause, requiring a 90-day period of employment before the termination was finalized. Ray claims that her work schedule and opportunities to work during that time were impeded by the hospital, her performance- based bonuses were arbitrarily decided and that the termination violates an employee benefit for repayment of education loans with the Michigan Department of Health and Human Services.
The hospital moved for summary judgement before oral arguments on Dec. 7. While admitting to certain factual aspects like dates and contracts, the hospital has admitted no wrongdoing. According to court documents, the hospital says the claims are false or an incorrect interpretation of facts.
Judge Brian Rahilly of the 11th Circuit Court wrote the opinion after the most recent arguments. He denied the breach of contract claims due to language in the contract and lack of supporting evidence regarding the bonuses. Rahilly however supported Ray’s claim of violation of the MDHHS contract, as there is no apparent clause for the hospital to fire a doctor in the program.
Rahilly also tossed out two of the three parts regarding invasion of privacy. Ray claimed that the disclosure of her salary through press releases on Facebook violated her privacy, but Rahilly agreed with the defense that the information would be public record through non-profit requirements. There was also not enough evidence to support posting the information in false light, which is used to discredit a person.
Appropriation claims made by Ray were upheld by Rahilly. Documentation provide by Ray proved that the hospital sent letters using Ray’s name in September, almost six months after the doctor was terminated. This was during the time that Ray was opening up her current office in Harvey. Rahilly agreed that the sending of these letters would result in some financial benefit for the hospital.
The case will remain open to address issues not resolved by summary judgement. This includes the third-party beneficiary claim regarding the loan repayment and the invasion of privacy cause of action as appropriation.
Ray’s termination was widely panned by the community, resulting in a Change.org petition receiving over 9,000 signatures. That’s more people than the entire population of Alger County. The termination was part of numerous independent changes in physician contracts at rural hospitals across the country after a controversial judicial ruling regarding referrals when doctors serve multiple positions at one healthcare facility.
Daniel Mead, partner of Marquette-based Graybill & Mead represents Ray while Richard Suhrheinrich of the Okemos office of Kitch Law Firm represents the hospital.
