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Tidikis v. Network for Medical Communications & Research LLC5/6/2005
RUFFIN, C. J., JOHNSON, P. J., BARNES, J.
After he was terminated from his employment, Frank Tidikis filed suit against his former employer, Network for Medical Communication & Research LLC ("NMCR"), its two founders, and American Capital Strategies, Ltd., asserting multiple causes of action. The defendants moved for judgment on the pleadings, and the trial court granted the motion. Tidikis appeals. For reasons that follow, we affirm in part and reverse in part.
"On motion for judgment on the pleadings, the trial court is required to accept all well pleaded material allegations of fact as true, but need not adopt a party's legal conclusions based on these facts." And, in considering such motion, the trial court may consider an exhibit contained within the pleading. The granting of judgment on the pleadings "is proper only where there is a complete failure to state a cause of action or defense[,] and the movant is thus entitled to judgment as a matter of law."
Viewed in this manner, the complaint alleges that in July 2001, Frank Tidikis became President and Chief Executive Officer of Network for Medical Communication & Research, LLC, ("NMCR"), a company founded by Dr. Joe Allegra and Dr. Stanley Winokur. Tidikis signed an employment contract, which provided for an initial three year term, after which the contract would automatically renew for one year terms.
The contract also set forth the manner in which Tidikis could be terminated. In pertinent part, the contract stated that NMCR could terminate Tidikis without cause by giving 30 days notice, but that if Tidikis was terminated in this manner, he "shall continue to receive his full base salary and . . . benefits for twelve (12) months following termination." Tidikis also could be fired for cause, which the contract defined as:
(i) Employee shall commit a felony or other act involving moral turpitude, which other act is materially detrimental to NMCR, (ii) Employee shall knowingly commit any act of prohibited conduct as set forth in Item 3 of this Agreement, (iii) Employee shall commit any act, specifically including but not limited to drug or alcohol abuse, which act is materially harmful to NMCR; (iv) intentional or gross neglect of Employee's duties, or (v) breach of any other material provision of this Agreement.
After becoming president and CEO, Tidikis received the highest possible rating in all categories of his performance evaluations.
In January 2002, American Capital Strategies ("ACS") recapitalized NMCR, thereby obtaining over 50 percent ownership interest in the company. The five person board of managers was reconstituted to give ACS a majority of managers, and ACS appointed two of its principals as well as Tidikis to serve in this capacity. Allegra and Winokur also served on the board.
As a result of the change, Tidikis signed an amendment to his employment contract that gave him various investment opportunities with NMCR. After the recapitalization, Tidikis obtained certain stock options. Tidikis also was given both the opportunity to purchase "membership units" and the right to participate in "clawback shares." Under the amended employment contract, NMCR retained the right to repurchase Tidikis' equity interest in the company for $1 per share if Tidikis either voluntarily resigned or was fired for cause.
Beginning in 2002, NMCR began negotiating with Cardinal Health for the purchase of NMCR. According to the complaint, the sale was scheduled to close in August 2003. Upon closing, Tidikis' stock options would vest, his membership units would remain intact, and he would receive full value for his "clawback shares," or appr
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