Vasilios "Bill" Kalogredis.

On Aug. 15, the U.S. Court of Appeals for the Eighth Circuit affirmed the grant of summary judgment by the District Court for the Western District of Arkansas to Johnson Regional Medical Center (JRMC) in its breach of contract suit against its former employee, Dr. Robert Halterman. Halterman was ordered to pay JRMC $64,931.81 in principal, interest, attorney fees, and additional costs for breaching a recruitment agreement, employment agreement and promissory note entered into with JRMC.

This should be a case worth knowing about to those with an interest in health care because such recruitment arrangements are prevalent in areas where it is difficult to attract, hire and retain physicians due to the locale or subspecialty where there may be a shortage.

RMC recruited Halterman to work as an OB-GYN. Halterman signed a recruitment agreement, a promissory note in JRMC's favor in the amount of $50,000 (plus interest) to be paid in monthly installments, and an employment agreement. JRMC advanced Halterman $50,000 as a “signing advance” to be paid out in monthly installments. Pursuant to the terms of the recruitment agreement, the monthly payments to be made under the promissory note would be forgiven so long as Halterman continued working for JRMC and remained in full compliance with the terms of the recruitment agreement. The recruitment agreement stated that it shall remain in full force and effect until the final payment on the note was either made or forgiven.
Halterman worked for JRMC for a mere five months prior to resigning due to a shoulder injury; however, Halterman later sought and obtained work at another medical facility. JRMC accepted Halterman's resignation, but informed the doctor that the monthly forgiveness of the promissory note would cease and he must begin making payments under the promissory note in the amount of $37,894. Halterman failed to make any payments toward the promissory note balance and JRMC brought a lawsuit against the doctor for breach of contract. The trial court ruled in favor of JRMC and issued a judgment in the amount of $64,931.82 (principal, interest, attorney fees and costs) against Halterman.