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Beckley Oncology Associates, Inc. v. Abumasmah

United States District Court, S.D. West Virginia, Beckley Division

June 28, 2019

RAMI ABUMASMAH, M.D., Defendant.



         The Court has reviewed the Complaint to Vacate Arbitration Awards (Document 1), the Defendant's Motion to Dismiss Complaint to Vacate Arbitration Awards (Document 6), the Plaintiff's Response in Opposition to Defendant's Motion to Dismiss (Document 8), and all attached exhibits. After careful consideration, the Court finds that the motion to dismiss should be granted.


         The Plaintiff, Beckley Oncology Associates (BOA), is a Beckley medical facility offering cancer therapy and ancillary patient care services. In 2012, BOA recruited the Defendant, Dr. Rami Abumasmah, to join BOA as a physician specializing in hematology/medical oncology. The parties entered into the Employment Agreement on May 30, 2012, setting forth the terms of Dr. Abumasmah's employment. The Agreement provided for an initial two-year term, which was automatically renewable. Following that two-year term, Dr. Abumasmah was eligible for partnership consideration if he wished to buy in to BOA as a shareholder. The Agreement sets a base salary of $275, 000 per year, with an incentive bonus calculated based on the gross receipts for the “initial two-year term of this agreement.” (Employment Agreement at ¶ 5(b), att'd as Ex. B to the Complaint) (Document 1-2). The Agreement provides that “[t]he specific terms of this incentive bonus are provided only for the initial term of this agreement and are subject to renegotiation in subsequent renewals of this agreement.” (Id.)

         The Agreement also contains an arbitration clause requiring that any disputes “shall be decided by binding and compulsory arbitration under the Commercial Arbitration Rules of the American Arbitration Association” and “[t]he decision of such arbitrator(s) shall be final and conclusive and enforceable in any court of competent jurisdiction without any right of judicial review or appeal.” (Id. at ¶ 16.)

         Dr. Abumasmah completed the initial two-year term of employment. He declined to seek partnership but continued working at BOA. In early 2015, he advised BOA that he intended to return to Jordan to care for his mother, who had become ill. His last day at BOA was June 25, 2015. He filed a Demand for Arbitration on November 9, 2017, asserting a variety of claims. The Arbitrator decided in his favor as to a claim that BOA wrongfully denied payment of an incentive bonus for his third year of employment.

         The Arbitrator's first decision concluded: “As for the plain language of the Employment Agreement, it is plain that the Parties expected there would be an incentive bonus of some sort for Dr. Abumasmah during his third year - which is why the terms of that bonus were ‘subject to renegotiation.'” (Nov. 12, 2018 Arb. Order at 6, att'd as Ex. E to Complaint) (Document 1-5.) The Arbitrator further found that “the Employment Agreement is built on the erroneous assumption that both Parties would come to an understanding as to the terms for the third year bonus plan and does not provide for any procedure to set those terms in the absence of an understanding - aside, of course, from the mandatory arbitration clause.” (Id. at 7.) He rejected both BOA's position that no incentive bonus was provided in the contract after the first two years and Dr. Abumasmah's position that the specific terms of the incentive bonus applicable to the initial two-year term automatically renewed. He directed the parties to confer regarding the bonus and provide him additional information regarding the incentive bonus structure BOA used as to other employee physicians and the incentive bonus structures commonly applicable in the medical field.

         On December 21, 2018, the Arbitrator issued a second Award and Order granting Dr. Abumasmah an incentive bonus in the amount of $167, 030, together with interest and various fees for a total of $227, 224.57. He reached the incentive bonus amount by awarding Dr. Abumasmah half of the 5% of his gross revenue that was not attributable to chemotherapy drugs, which BOA argued provided a low margin used for overhead, including salaries, and found the amount reasonable, as it fell between the incentive bonus awards earned in the first two years.

         BOA filed its complaint to vacate the arbitration award on December 31, 2018. Dr. Abumasmah filed his motion to dismiss on March 14, 2019. That motion is now fully briefed and ripe for a ruling.


         A. Rule 12(b)(1)

         A motion to dismiss pursuant to Rule 12(b)(1) raises the fundamental question of whether a court is competent to hear and adjudicate the claims brought before it. “In contrast to its treatment of disputed issues of fact when considering a Rule 12(b)(6) motion, a court asked to dismiss for lack of jurisdiction may resolve factual disputes to determine the proper disposition of the motion.” Thigpen v. United States, 800 F.2d 393, 396 (4th Cir. 1986) rejected on other grounds, Sheridan v. United States, 487 U.S. 392 (1988) (but explaining that a court should accept the allegations in the complaint as true when presented with a facial attack that argues insufficiency of the allegations in the complaint). Reasonable discovery may be necessary to permit the plaintiff to produce the facts and evidence necessary to support their jurisdictional allegations. Id. The plaintiff has the burden of proving that subject matter jurisdiction exists. See Richmond, Fredericksburg & Potomac R. Co. v. United States, 945 F.2d 765, 768 (4th Cir.1991). Dismissal for lack of subject matter jurisdiction is proper only if there is no dispute regarding the material jurisdictional facts and the moving party is entitled to prevail as a matter of law. Evans v. B.F. Perkins Co., a Div. of Standex Int'l Corp., 166 F.3d 642, 647 (4th Cir. 1999).

         B. 12(b)(6)

         A motion to dismiss filed pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted tests the legal sufficiency of a complaint or pleading. Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. 2009); Giarratano v. Johnson,521 F.3d 298, 302 (4th Cir. 2008). Federal Rule of Civil Procedure 8(a)(2) requires that a pleading contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). Additionally, allegations “must be simple, concise, and direct.” Fed.R.Civ.P. 8(d)(1). “[T]he pleading standard Rule 8 announces does not require ‘detailed factual allegations,' but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal,556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp v. Twombly, 550 U.S. 544, 555 (2007)). In other words, “a complaint must contain “more than labels and conclusions, and a formulaic recitation of the elements of a cause of ...

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