Hospital of Central Connecticut v. Neurosurgical Associates, P.C. ( 2015 )

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HOSPITAL OF CENTRAL CONNECTICUT v.
NEUROSURGICAL ASSOCIATES, P.C.
(AC 36272)
Gruendel, Prescott and Bishop, Js.
Argued March 5—officially released August 4, 2015
(Appeal from Superior Court, judicial district of New
Britain, Wiese, J.)
Robert D. Tobin, with whom were Emily Casey and,
on the brief, Thomas J. Riley and Paul Ciarcia, for the
appellant (plaintiff).
Edward T. Lynch, Jr., with whom was Stephanie P.
Antone, for the appellee (defendant).
Opinion
PRESCOTT, J. For several years, the plaintiff, the
Hospital of Central Connecticut, paid for emergency
neurosurgical coverage pursuant to a contract with the
defendant, Neurosurgical Associates, P.C. The central
issue in this case is whether, by continuing to make
monthly payments to the defendant after the plaintiff
had terminated the parties’ contract, the plaintiff
unjustly enriched the defendant or the defendant prop-
erly retained all sums paid by the plaintiff following the
termination because the defendant’s physicians contin-
ued to be placed on the plaintiff’s on call schedule and
provided the same on call coverage posttermination as
they had done during the pendency of the contract.
Following a one day bench trial, the trial court rendered
judgment in favor of the defendant on the plaintiff’s
unjust enrichment claim, from which judgment the
plaintiff now appeals.1
The plaintiff claims on appeal that the trial court
improperly concluded that the defendant was not
unjustly enriched in light of the fact that the defendant
continued to receive monthly payments from the plain-
tiff after the parties’ contract was terminated. More
specifically, the plaintiff challenges the court’s determi-
nation that, by continuing to place the defendant’s phy-
sicians on the on call schedule and continuing to pay
the defendant for services provided posttermination,
the plaintiff effectively agreed to continue the parties’
arrangement regarding payment for on call coverage.
The plaintiff also argues that the court failed to construe
properly a requirement in the plaintiff’s medical staff
bylaws, which mandates that all physicians with active
medical staff privileges are to provide emergency room
coverage, as creating a separate contractual obligation
that required the defendant’s physicians to provide on
call coverage without compensation. We conclude that
the plaintiff has failed to show that the court abused
its discretion in determining that the defendant was not
unjustly enriched and, accordingly, affirm the judgment
of the court.
The following facts, as found by the court in its memo-
randum of decision, and procedural history are relevant
to this appeal. The plaintiff has approximately 550 phy-
sicians on its staff, approximately one quarter of whom
are the plaintiff’s employees.
Beginning in the spring of 2004, one of the plaintiff’s
staff neurosurgeons retired, leaving the plaintiff with
only one neurosurgeon on its active medical staff. To
ensure that a neurosurgeon was always available to
attend to any urgent situation that might arise in its
emergency room or during inpatient care, the plaintiff
entered into a year long contract with the defendant
beginning on April 19, 2004.
Pursuant to the contract, the defendant agreed to
provide, through its physicians, on call neurological
services coverage for the plaintiff’s emergency depart-
ment and other areas of the hospital for two out of every
three days in accordance with a schedule maintained
by the plaintiff’s chief of surgery. The contract further
provided that, ‘‘[a]t no additional cost to the [plaintiff]
and at its sole discretion, the [plaintiff] may increase
[the defendant’s] on-call coverage obligations under this
[a]greement to twenty-four (24) hours per day, seven
(7) days per week (i.e. 3 out of 3 days) upon fifteen
(15) days prior written notice to the [defendant].’’ In
exchange for providing the specified on call coverage,
the plaintiff agreed to pay the defendant $8958.33 per
month. The contract also provided that each of the
defendant’s physicians ‘‘must apply for, receive, and
maintain a [m]edical [s]taff appointment and appro-
priate clinical privileges in accordance with the [m]edi-
cal [s]taff [b]ylaws, [r]ules and [r]egulations.’’
According to the plaintiff’s bylaws and the rules and
regulations promulgated thereunder, ‘‘courtesy staff’’
are ‘‘practitioners qualified for staff membership who
admit fewer than six patients to the hospital or to the
ambulatory surgery unit each year. Members of the
courtesy staff must be an active staff member of an
accredited hospital in the [s]tate of Connecticut.’’2
‘‘Active medical staff,’’ on the other hand, are permitted
to admit an unlimited number of patients and have
additional responsibilities as set forth in the rules and
regulations, including that they are ‘‘expected to cover
the emergency room for both staff service and unas-
signed private patients on a rotational basis as
assigned.’’
Prior to the execution of the contract in April, 2004,
none of the defendant’s physicians had ‘‘active medical
staff’’ privileges with the plaintiff; they all maintained
only ‘‘courtesy staff’’ privileges. To comply with the
defendant’s contractual obligations that its physicians
obtain active medical staff status with the plaintiff, the
defendant’s physicians each executed individual
agreements (staffing privileges agreements) with the
plaintiff, in which they agreed to abide by the plaintiff’s
bylaws, rules and regulations.3
The plaintiff, as a matter of policy, generally did not
pay its active medical staff for on call coverage because
it believed that on call coverage is a requirement of the
‘‘active medical staff’’ designation and that a physician’s
opportunity to bill directly those patients seen at the
hospital is adequate compensation. Additional compen-
sation for on call coverage, however, above and beyond
the other privileges associated with active medical staff
status, was not expressly prohibited under the medical
staff bylaws, rules and regulations or any provision of
the individual staffing privileges agreements.
On June 6, 2005, the parties entered into a second
year long contractual agreement in which the plaintiff
agreed to pay the defendant a monthly fee of $8333.33
for continued neurosurgical on call coverage. At the
end of August, 2006, the parties again renewed their
agreement for an additional one year period, subject
thereafter to automatic renewal unless terminated by
written notice.
At the beginning of August, 2007, the plaintiff, who
recently had hired an additional staff neurosurgeon,
sent the defendant notice that it wished to terminate
the on call agreement effective October 8, 2007. The
notice stated that the plaintiff would welcome the
defendant’s physicians’ ‘‘continued active participation
on our [m]edical [s]taff.’’ After taking action to termi-
nate the agreement, the plaintiff nevertheless continued
to put the defendant’s physicians on the monthly on
call schedule, the defendant’s physicians performed all
on call duties as assigned, and the plaintiff continued
to pay the defendant the same monthly fee it had paid
for on call coverage under the most recent contract.
Sometime in late 2007 or early 2008, the plaintiff’s
chief medical officer met with the defendant’s represen-
tative to discuss the defendant’s role in providing on call
coverage to the plaintiff. The defendant’s representative
made it clear that the defendant’s physicians would not
perform on call coverage without compensation, noting
that other hospitals, including the defendant’s primary
hospital, Saint Francis Hospital, paid it for on call work.
The plaintiff took the position that it was its policy not
to compensate its staff physicians for on call services.
Nevertheless, even after this meeting, the plaintiff con-
tinued to schedule the defendant’s physicians for on call
work and made monthly payments for those services for
several additional months. The defendant received its
last monthly payment on June 13, 2008. In total, from
the stated termination date of October 8, 2007, until
June 13, 2008, the defendant received $66,666.64 in pay-
ments from the plaintiff.
The plaintiff’s chief financial officer sent the defen-
dant a letter dated September 2, 2008, indicating that
the plaintiff had inadvertently paid the defendant from
October, 2007 through May, 2008, and demanding that
the defendant return $66,666.64 to the plaintiff. The
defendant refused to return the money, indicating in a
return letter: ‘‘We have provided coverage throughout
that time, having been placed on the [on] call schedule,
and have been appropriately reimbursed by the [plain-
tiff] for this service.’’ The plaintiff took the position
that, pursuant to its existing rules and regulations, the
defendant’s physicians’ continued participation as
members of the active medical staff came with an
expectation that the defendant’s physicians would pro-
vide on call coverage without compensation.
The plaintiff thereafter commenced the present
action. Following a one day trial, the court issued a
memorandum of decision finding in favor of the defen-
dant on the sole remaining count of the complaint,
which alleged unjust enrichment. See footnote 1 of this
opinion. The court stated that it reached its decision
on the basis of its examination of the circumstances
and the conduct of the parties and reasoned as follows:
‘‘The court finds that the payments made to the defen-
dant were not in error and were part and parcel of the
parties’ payment arrangement. Namely, the [plaintiff]
received the benefit of [the defendant’s] work and avail-
ability in exchange for paying it a monthly fee, in addi-
tion to allowing the use of its facilities and direct patient
billing. This is the same arrangement [the defendant]
operated under during the previous contract.
‘‘The credible evidence demonstrates the following.
The [plaintiff] continued to place the [defendant’s] phy-
sicians on call after the notice of termination. Addition-
ally, the [plaintiff’s] claim that it no longer needed [the
defendant’s] services is not credible. The [plaintiff]
knew that the [defendant’s] physicians obtained [active
medical] staff privileges only because of the contract
and for the sole purpose of being paid for their profes-
sional services. The [defendant’s] physicians did not
induce the [plaintiff] into making these assignments or
the continuing monthly payments. The [plaintiff] chose
to continue to assign the physicians to on call duty and
extend the mutually beneficial paid on call arrangement
that the parties previously agreed to. In the meeting
between [the parties] held in late 2007 or early 2008,
[the defendant’s principal] set forth [the defendant’s]
unequivocal position that no services would be per-
formed without financial compensation. Nevertheless,
the payments continued and the [plaintiff] continued
to put [the defendant] on its schedule, fully aware of
[the defendant’s] payment demands in accordance with
the previous arrangement. In so doing, the [plaintiff]
received all the benefits of [the defendant’s] work.’’
The plaintiff filed a motion for reargument in which
it contended that (1) the court’s conclusion that the
payments were ‘‘part and parcel of the parties’ payment
arrangement’’ was inconsistent with the undisputed fact
that the payment arrangement had been terminated, (2)
the court’s conclusion that the plaintiff intended or
chose to extend the ‘‘mutually beneficial paid on call
arrangement’’ was not supported by any evidence in
the record, and (3) the court’s finding that the plaintiff’s
claim that it no longer needed the defendant’s services
lacked credibility was inconsistent with its own factual
findings. The court issued an order on October 28, 2013,
stating that, after reviewing the motion for reargument
and the objection thereto, the court reconsidered its
decision, and the decision would ‘‘remain as articu-
lated.’’ This appeal followed.4
The plaintiff claims on appeal that the trial court
improperly concluded that the defendant was not
unjustly enriched, despite the fact that the defendant
kept payments that the plaintiff contends it inadver-
tently made to the defendant after the plaintiff had
terminated the parties’ contract for on call services,
and despite an independent contractual obligation of
the defendant’s physicians to provide emergency room
coverage without compensation pursuant to the individ-
ual staffing privileges agreements with the plaintiff. The
defendant responds that the court correctly determined
that it was not unjustly enriched because the payments
that it received from the plaintiff following the termina-
tion of their contract amounted to reasonable compen-
sation for the on call services that the defendant
continued to provide for the plaintiff, services that the
court specifically found the defendant’s physicians had
no independent obligation to provide free of charge.
We agree with the defendant.
‘‘A right of recovery under the doctrine of unjust
enrichment is essentially equitable, its basis being that
in a given situation it is contrary to equity and good
conscience for one to retain a benefit [that] has come
to him at the expense of another. . . . With no other
test than what, under a given set of circumstances, is
just or unjust, equitable or inequitable, conscionable or
unconscionable, it becomes necessary in any case [in
which] the benefit of the doctrine is claimed, to examine
the circumstances and the conduct of the parties and
apply this standard. . . . Unjust enrichment is, consis-
tent with the principles of equity, a broad and flexible
remedy. . . . Recovery [for unjust enrichment] is
proper if the defendant was benefited, the defendant
did not [perform in exchange] for the benefit and the
failure [to perform] operated to the detriment of the
plaintiff.’’ (Internal quotation marks omitted.) BHP
Land Services, LLC v. Seymour, 137 Conn. App. 165,
170, 47 A.3d 950, cert. denied, 307 Conn. 927, 55 A.3d
569 (2012); see also National CSS, Inc. v. Stamford,
195 Conn. 587, 597, 489 A.2d 1034 (1985) (‘‘it is contrary
to equity and good conscience for the defendant to
retain a benefit which has come to him at the expense
of the plaintiff’’ [internal quotation marks omitted]).
Our review of a trial court’s conclusion regarding
whether a defendant has been unjustly enriched is def-
erential. See New Hartford v. Connecticut Resources
Recovery Authority, 291 Conn. 433, 452, 970 A.2d 592
(2009). As explained by our Supreme Court, ‘‘[t]he
court’s determinations of whether a particular failure
to [perform] was unjust and whether the defendant was
benefited are essentially factual findings . . . that are
subject only to a limited scope of review on appeal.
. . . Those findings must stand, therefore, unless they
are clearly erroneous or involve an abuse of discretion.
. . . This limited scope of review is consistent with the
general proposition that equitable determinations that
depend on the balancing of many factors are committed
to the sound discretion of the trial court.’’ (Internal
quotation marks omitted.) Id.
‘‘We will reverse a trial court’s exercise of its equita-
ble powers only if it appears that the trial court’s deci-
sion is unreasonable or creates an injustice. . . .
[E]quitable power must be exercised equitably . . .
[but] [t]he determination of what equity requires in a
particular case, the balancing of the equities, is a matter
for the discretion of the trial court. . . . In determining
whether the trial court has abused its discretion, we
must make every reasonable presumption in favor of
the correctness of its action. . . . Our review of a trial
court’s exercise of the legal discretion vested in it is
limited to the questions of whether the trial court cor-
rectly applied the law and could reasonably have
reached the conclusion that it did.’’ (Citation omitted;
internal quotation marks omitted.) Croall v. Kohler, 106
Conn. App. 788, 791–92, 943 A.2d 1112 (2008).
Having carefully reviewed the record in the present
case, we conclude that the court reasonably could have
concluded, on the basis of the facts and circumstances
presented, including the actions of the parties, that the
defendant was not unjustly enriched. Although the
plaintiff would have us view the present situation as a
simple matter of overpayment for which it should be
entitled to restitution; see 1 Restatement (Third), Resti-
tution and Unjust Enrichment, Benefits Conferred by
Mistake § 6, p. 59 (2011) (‘‘[p]ayment by mistake gives
the payor a claim in restitution against the recipient to
the extent payment was not due’’); such a view is not
borne out by the record as a whole.
It is undisputed that the plaintiff continued to make
monthly payments to the defendant, totaling $66,666.64,
for eight months after the plaintiff had terminated its
contractual obligation to make such payments in
exchange for on call coverage. Although the court made
no findings as to precisely why the plaintiff continued
to make those payments despite having terminated its
contract with the defendant, the court found that the
payments ‘‘were not in error and were part and parcel
of the parties’ payment arrangement.’’ We construe this
finding as an acknowledgement that the plaintiff contin-
ued to pay the defendant in the same manner that it had
done for years because the physicians of the defendant
continued to be placed on the schedule and provided
on call coverage as requested. As the court expressly
found, the defendant had done nothing to induce the
plaintiff to make the additional payments nor had it
sought to have its physicians placed on the monthly on
call schedules following the termination of the contract.
The plaintiff does not challenge those findings.
The continuation of payments by the plaintiff
undoubtedly amounted to a benefit conferred on the
defendant. For purposes of resolving the plaintiff’s
unjust enrichment claim, however, the court properly
focused its consideration not on the benefit conferred
by the plaintiff, but on whether the defendant had pro-
vided some reciprocal benefit to the plaintiff. In other
words, it considered whether the defendant was justi-
fied in retaining the benefit conferred by the plaintiff
because the defendant performed in exchange for that
benefit by continuing to provide the same on call ser-
vices that it had provided to the plaintiff for years pursu-
ant to the parties’ express contract. The court found
that the plaintiff’s argument that it no longer needed
the defendant’s services was not credible, and that find-
ing is supported by the simple and undisputed fact that
the defendant’s physicians continued to be placed on
the on call schedule. In sum, the court reasonably found
that the defendant’s physicians provided valuable and
necessary on call coverage as scheduled, and, therefore,
the plaintiff’s continued payments could not reasonably
be viewed as inequitable because they simply extended
the parties’ mutually beneficial relationship, a relation-
ship that was initiated by the plaintiff at the bargained
for rate.
The plaintiff nevertheless argues that it was entitled
to the very same on call services from the defendant’s
physicians without compensation and, thus, that any
payments retained by the defendant enriched the defen-
dant to the detriment of the plaintiff. In support of
its argument, the plaintiff references portions of the
individual staffing privileges agreements executed by
the defendant’s physicians in conjunction with the on
call agreement between the plaintiff and the defendant.
The staffing privileges agreements were not terminated
at the same time as the parties’ on call agreement and
remained in effect until the defendant’s physicians vol-
untarily terminated those agreements by reverting to
courtesy staff status when the dispute over on call com-
pensation arose. According to the plaintiff, the court
incorrectly concluded that there was no express
requirement in the plaintiff’s medical staff bylaws or
rules and regulations that mandated that all physicians
with active medical staff privileges had to provide on
call coverage without compensation, and that whether
a physician was compensated was a matter of policy,
not a contractual obligation. We agree with the
court’s conclusions.
‘‘The intent of the parties as expressed in a contract
is determined from the language used interpreted in
the light of the situation of the parties and the circum-
stances connected with the transaction. . . . [T]he
intent of the parties is to be ascertained by a fair and
reasonable construction of the written words and . . .
the language used must be accorded its common, natu-
ral, and ordinary meaning and usage [if] it can be sensi-
bly applied to the subject matter of the contract. . . .
[If] the language of the contract is clear and unambigu-
ous, the contract is to be given effect according to its
terms. . . . It is well established that [if] there is defini-
tive contract language, the determination of what the
parties intended by their contractual commitments is
a question of law. . . . It is axiomatic that a matter of
law is entitled to plenary review on appeal.’’ (Citations
omitted; emphasis omitted; internal quotation marks
omitted.) Crews v. Crews, 295 Conn. 153, 162, 989 A.2d
1060 (2010).
Pursuant to the staffing privileges agreements, the
defendant’s physicians unambiguously agreed to com-
ply with the plaintiff’s medical staff bylaws, rules and
regulations. Article III, section 3 (d) of the bylaws
requires that all applications for staff appointment con-
tain an acknowledgement of ‘‘every medical staff mem-
ber’s obligations . . . to participate in staffing the
emergency service area and other special care units.’’
Article IV, section 5 of the bylaws provides that all
active medical staff will ‘‘assume all the functions and
responsibilities of membership on the active medical
staff, including, where appropriate, emergency service
care and consultation assignments.’’ (Emphasis added.)
Finally, section II, subsection H of the medical staff
rules and regulations provides: ‘‘Each member of the
active [medical] staff is expected to cover the emer-
gency room for both staff service and unassigned pri-
vate patients on a rotational basis as assigned.’’
Compensation, however, is not addressed in any of
the previously quoted provisions. The plaintiff has
pointed to no language that reasonably can be con-
strued as creating a contractual obligation on the part
of the defendant or its physicians to provide emergency
on call coverage free of charge. Indeed, the bylaws are
silent as to how often an active medical staff member
would be obligated to provide on call services at the
hospital, a fact that any physician with a busy private
practice would undoubtedly wish to know before com-
mitting to such an agreement. As the court found in its
decision, and as acknowledged by the plaintiff’s chief
medical officer at trial, nothing in the staff privileges
agreements addresses whether a physician will be paid
for providing on call services; that is a matter of policy
left to the discretion of the plaintiff. The plaintiff was
well aware of the defendant’s position that it expected
to be paid for on call coverage. Prior to execution of
the on call agreement, the defendant’s physicians were
members of the plaintiff’s courtesy staff and had no
emergency coverage obligations with the plaintiff. They
joined the hospital’s active medical staff in order to be
able to fulfill their staffing obligations under the on call
agreement, pursuant to which they were to be paid
for on call coverage. The plaintiff had no reasonable
expectation that the defendant’s physicians would
remain on the active medical staff if they were no longer
compensated for on call services and, in fact, when the
plaintiff stopped paying for those services, the defen-
dant’s physicians immediately reverted to courtesy
status.
We conclude that the plaintiff has failed to show that,
in balancing the equities, the court abused its discretion
by concluding that the defendant had not been unjustly
enriched. Although, as a general rule, ‘‘one who pays
money to another by mistake as to the existence of the
obligation or the validity of it, in such circumstances
that the payment does not amount to a waiver, is entitled
to recover the amount paid’’; 66 Am. Jur. 2d 779, Restitu-
tion and Implied Contracts § 124 (2011); the trial court
did not abuse its discretion by determining that the
defendant in the present case did not enrich itself to the
detriment of the plaintiff by retaining what the plaintiff
alleged were inadvertent payments, because it provided
a return benefit of equal value to the plaintiff in the
form of continued on call coverage.
The judgment is affirmed.
In this opinion the other judges concurred.
1
This matter previously was before us on an appeal by the plaintiff from
the trial court’s granting of summary judgment on the two count complaint
in favor of the defendant. We affirmed the court’s decision to grant summary
judgment with respect to the plaintiff’s count alleging statutory theft pursu-
ant to General Statutes § 52-564. See Hospital of Central Connecticut v.
Neurosurgical Associates, P.C., 139 Conn. App. 778, 788, 57 A.3d 794 (2012).
We reversed, however, the court’s decision to grant summary judgment with
respect to the plaintiff’s unjust enrichment count. See id.
2
The trial court found that the defendant’s physicians were all active
medical staff members of Saint Francis Hospital in Hartford.
3
The staffing privileges agreements comprise a reapplication for appoint-
ment to the medical staff signed by the physician and a letter signed by the
plaintiff’s agent accepting the application for a specified appointment period.
The reapplication contains a provision in which the physician agrees ‘‘to
abide by the [m]edical [s]taff [b]ylaws and [r]ules and [r]egulations of the
[plaintiff] and to comply with the requirements of my medical staff appoint-
ment for meeting attendance, continuing education credits, participation in
teaching activities and committee assignments as outlined in those doc-
uments.’’
4
We note that on June 12, 2014, the plaintiff filed a motion for articulation
asking the trial court to answer (1) whether the parties’ on call agreement
was terminated by the plaintiff’s August, 2007 notice letter, (2) whether
coverage of the emergency room as set forth in the plaintiff’s bylaws, rules
and regulations was solely a matter of policy or a contractual obligation
that a doctor assumed under the staffing privileges agreement, and (3)
whether the staffing privileges agreement survived the termination of the
on call agreement. The court denied the motion, stating that its ‘‘memoran-
dum of decision is fully articulated.’’ The plaintiff did not file a motion
pursuant to Practice Book § 66-7 asking this court to review that decision.