## Facts

- Uintah Basin Medical Center (UBMC), a county-owned hospital operated by a board of trustees, employed Dr. Leo W. Hardy as a pathologist and laboratory director under a written agreement (1994).
- UBMC agreed to refer certain laboratory work to Hardy and to pay a $400 monthly laboratory director fee; Hardy agreed to serve as laboratory director and make weekly hospital visits.
- The agreement had no fixed end date and allowed termination only after 90 days’ written notice “for just cause”; the contract did not define “just cause.”
- UBMC sent Hardy a termination notice in July 1996 and later hired a replacement.
- UBMC filed a declaratory action seeking a ruling that it had terminated for “just cause”; Hardy counterclaimed for breach, asserting termination lacked just cause.
- In earlier proceedings, the Utah Supreme Court held a successor governmental board is bound by proprietary contracts of reasonable duration and remanded for development of the “reasonable duration” question.
- After remand, the trial court granted summary judgment to UBMC, finding the contract reasonably durable and finding just cause as a matter of law, in part by disregarding Hardy’s later affidavit as a “sham.”
- Hardy appealed the post-remand summary judgment.

## Issues

1. Whether the contract’s “just cause” termination clause was ambiguous and, if not, what “just cause” means under its ordinary meaning.
2. Whether the trial court properly disregarded Hardy’s post-remand affidavit under the sham-affidavit doctrine.
3. Whether the agreement was of reasonable duration such that a successor board remained bound by it.
4. Whether genuine disputes of material fact existed as to whether UBMC terminated Hardy for “just cause,” making summary judgment improper.

## Decision

- The court held the “just cause” provision was unambiguous and should be given its ordinary meaning.
- The court held the sham-affidavit doctrine did not justify excluding Hardy’s post-remand affidavit.
- The court agreed the agreement was of reasonable duration, so the successor board was bound by it.
- The court reversed summary judgment because disputed facts existed on whether UBMC’s stated justification was legitimate or pretextual, and remanded for further proceedings.

## Legal Principles

- Unambiguous contract terms are interpreted as a matter of law from their plain meaning, without redefining them through extrinsic evidence.
- In an employment agreement lacking a specialized definition, “just cause” generally permits termination for legitimate, good-faith business reasons aimed at improving services, but not for reasons that are pretextual, capricious, in bad faith, or illegal.
- The sham-affidavit doctrine is limited; a court should not disregard an affidavit at summary judgment absent a clear, direct contradiction intended to create a false factual dispute.
- Summary judgment is improper where evidence creates a genuine dispute about the employer’s motive and whether asserted business reasons are pretext for an impermissible termination.

## Conclusion

The court clarified that an undefined “just cause” clause carries its ordinary employment-law meaning, required consideration of Hardy’s affidavit, and held that disputed evidence about UBMC’s motives and justification for termination must be resolved by a fact-finder rather than on summary judgment.


Uintah Basin Med. Ctr. v. Hardy, 110 P.3d 168 (Utah Ct. App. 2005)