Sheridan Co. Health Complex v. Parsons ( 2022 )

NOT DESIGNATED FOR PUBLICATION
No. 125,057
IN THE COURT OF APPEALS OF THE STATE OF KANSAS
SHERIDAN COUNTY HEALTH COMPLEX,
Appellant,
v.
JEFFREY PARSONS,
Appellee.
MEMORANDUM OPINION
Appeal from Sheridan District Court; KEVIN BERENS, judge. Opinion filed December 9, 2022.
Affirmed in part, reversed in part, and remanded with directions.
Quentin M. Templeton and Frankie J. Forbes, of Forbes Law Group, LLC, of Overland Park, for
appellant.
Jeffrey Parsons, appellee pro se.
Before HURST, P.J., MALONE and BRUNS, JJ.
PER CURIAM: The Sheridan County Health Complex (Hospital)—which is located
in Hoxie—appeals the district court's granting of summary judgment in favor of Jeffrey
Parsons in this breach of contract action. This action arises out of a written agreement
under which the Hospital loaned Parsons $42,000 in exchange for his promise to practice
in Hoxie upon completion of an Advanced Practice Registered Nurse (APRN) program in
which he was enrolled. Prior to completing the program, Parsons notified the Hospital of
his intent to move to and practice in another community.
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Viewing Parsons' actions to be a default of the written agreement, the Hospital
filed a lawsuit seeking to recover the amount it had loaned to him plus interest at the
contract rate. In its petition the Hospital asserted a claim for breach of contract or, in the
alternative, for unjust enrichment. Ultimately, the district court denied the Hospital's
motion for summary judgment. Instead, the district court granted judgment as a matter of
law to Parsons even though he had not moved for summary judgment. Finding that there
are genuine questions of material fact that preclude the entry of judgment as a matter of
law on behalf of either party, we affirm in part, reverse in part, and remand to the district
court for further proceedings.
FACTS
The Hospital entered into a written agreement with Parsons—which became
effective on January 1, 2016—in which it agreed to loan him $1,000 per month for a
period of 12 months in exchange for him agreeing to "commence and continue the
practice of medicine in Hoxie, Kansas for a period of 18 continuous months." Parsons
was to commence practicing in Hoxie within 90 days after completion of an APRN
program in which he was enrolled. The loan agreement further provided that if Parsons
fulfilled his obligation to practice in Hoxie, the Hospital would forgive the loan plus the
interest. However, in the event of his default under the terms of the agreement, Parsons
would be obligated to repay the outstanding balance of the loan plus interest at the rate of
10 percent per annum.
Subsequently, the loan agreement was modified and extended in 2017, 2018, and
2019 by way of a series of written addendums. In consideration for the receipt of the
additional monthly loans, Parsons agreed to extend the time in which he would practice
in Hoxie by an additional 12 months. Moreover, each of the addendums clarified that
Parsons would "practice full time medicine in Hoxie, Kansas for the Sheridan County
Health Complex."
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It is undisputed that the Hospital continued to loan Parsons $1,000 per month up
until May 2019, and that he accepted the funds. It is also undisputed that between January
2016 and May 2019, the Hospital loaned to Parsons a total of $42,000 in exchange for his
commitment to practice as an APRN for the Hospital. Furthermore, it is undisputed that
Parsons has never commenced the practice of medicine at the Hospital, in Hoxie or
anywhere else in Sheridan County. Likewise, it is undisputed that Parsons has not repaid
any of the funds loaned to him by the Hospital to complete his APRN program.
In January 2019, the Hospital sent Parsons a "sample employment agreement" in
anticipation of the upcoming completion of his APRN program. Because it is not
included in the record on appeal, we do not know what was and was not included in this
document. However, it does not appear from the record that Parsons responded to the
Hospital at that time. Instead, Parsons notified the Hospital in June 2019 that he was
relocating to Smith County and had signed a letter of intent to practice as an APRN at
Smith County Memorial Hospital. Viewing Parsons actions to be a default of the terms of
the loan agreement, the Hospital sent a written notice indicating that he was in breach of
contract. It does not appear that Parsons responded to the notice of default or subsequent
demands sent to him by the Hospital.
On August 15, 2019, Parsons finally completed his APRN program. Shortly
thereafter, Parsons began working as an APRN at Smith County Memorial Hospital as he
had previously informed the Hospital that he intended to do. Several months later, in
November 2019, Parsons sent an email to the Hospital claiming that it was in default of
the loan agreement for failing to adequately advise him of the requirements necessary to
fulfill his practice obligations. Evidently, Parsons was receptive to the possibility of
working on weekdays in Smith County and working on weekends in Sheridan County. In
response, the Hospital contended that it had made several attempts to finalize the details
of Parson's employment but that those efforts had proved to be unsuccessful.
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The Hospital filed this action against Parsons on June 5, 2020. In its petition, the
Hospital claimed that Parsons had breached the terms of the loan agreement. In the
alternative, the Hospital asserted that Parsons should have to repay the loan under a
theory of unjust enrichment. Although Parsons filed a pro se answer to the petition, he
did not assert a counterclaim against the Hospital.
In November 2020, the Hospital moved for summary judgment as a matter of law.
Parsons filed a response to the motion for summary judgment but did not file his own
motion. The district court held a hearing on the Hospital's summary judgment motion in
April 2021. At the end of the hearing, the district court took the motion under
advisement. On December 23, 2021, the district court entered an order denying the
Hospital's motion for summary judgment. Additionally, the district court concluded sua
sponte that the Hospital had breached the terms of the loan agreement by prematurely
declaring default. According to the district court, Parsons had not made "a clear and
unequivocal refusal to perform under the Agreement."
At a status conference held on February 7, 2022, the district court attempted to
explain its previous order. In particular, the district court stated that it had "found . . . as a
matter of law [the Hospital does not] have any cause of action against Mr. Parsons
because the [H]ospital's the one that breached the contract." The district court also found
that the Hospital was not entitled to recover under an unjust enrichment or quantum
meruit theory. Finally, the district court concluded that Parsons did not have a remedy
against the Hospital "because he didn't seek any remedy in this Court, and the matter is
resolved." Later that day, the district court entered a journal entry of judgment in favor of
Parsons.
Thereafter, the Hospital filed a timely notice of appeal.
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ANALYSIS
On appeal, the Hospital contends that the district court erred by denying its motion
for summary judgment and in sua sponte granting Parsons judgment as a matter of law. In
response, Parsons contends that the district court did not err either by denying the
Hospital's summary judgment motion or by granting him judgment as a matter of law.
Based on our review of the record, we conclude that there are genuine issues of material
fact that prevented the entry of summary judgment on behalf of either party.
The standard for considering motions for summary judgment is the same for
district courts and appellate courts:
"Summary judgment is appropriate when the pleadings, depositions, answers to
interrogatories, admissions on file, and supporting affidavits show that no genuine issue
exists as to any material fact and the moving party is entitled to judgment as a matter of
law. The district court must resolve all facts and reasonable inferences drawn from the
evidence in favor of the party against whom the ruling is sought. When opposing
summary judgment, a party must produce evidence to establish a dispute as to a material
fact. In order to preclude summary judgment, the facts subject to dispute must be
material to the conclusive issue in the case. Appellate courts apply the same rules and,
where they find reasonable minds could differ as to the conclusions drawn from the
evidence, summary judgment is inappropriate. Appellate review of the legal effect of
undisputed facts is de novo. [Citation omitted.]" (Emphases added.) GFTLenexa, LLC v.
City of Lenexa, 310 Kan. 976, 981-82, 453 P.3d 304 (2019).
We exercise unlimited review over the interpretation and legal effect of written
instruments such as the loan agreement entered into by the Hospital and Parsons, and we
are not bound by the district court's rulings. See Born v. Born, 304 Kan. 542, 554, 374
P.3d 624 (2016). Whether a contract was formed is a question of fact. U.S.D. No. 446 v.
Sandoval, 295 Kan. 278, 282, 286 P.3d 542 (2012). The question of whether a contract
was breached is also a question of fact. Peterson v. Ferrell, 302 Kan. 99, 104, 349 P.3d
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1269 (2015). Similarly, "[w]hether any action of one party is sufficient to constitute a
repudiation of the contract and amount to an anticipatory breach is a question of fact for
the jury." Stephens v. Trust for Public Land, 479 F. Supp. 2d 1341, 1354 (N.D. Ga.
2007); see Young v. Hefton, 38 Kan. App. 2d 846, Syl. ¶ 9, 173 P.3d 671 (2007).
In interpreting the provisions of a written agreement, we do not isolate a particular
word, sentence, or provision. Instead, we are to construe and consider the language used
in the whole agreement. Thoroughbred Assocs. v. Kansas City Royalty Co., 297 Kan.
1193, 1206, 308 P.3d 1238 (2013). The law also favors a reasonable interpretation of
written agreements, and we are to avoid an interpretation that invalidates the purpose of
the agreement. Waste Connections of Kansas, Inc. v. Ritchie Corp., 296 Kan. 943, 963,
298 P.3d 250 (2013). Additionally, we are not to find a disputed term in a written
agreement to be ambiguous unless the intent of the parties cannot be determined under a
reasonable interpretation. Geer v. Eby, 309 Kan. 182, 192, 432 P.3d 1001 (2019).
Here, we find the terms of the written loan agreement to be plain and
unambiguous. On the one hand, the Hospital agreed to loan Parsons money to complete
his APRN program so he could practice his profession in a full-time capacity to serve
patients at its health care facility in Hoxie. On the other hand, Parsons agreed to
commence full-time employment as an APRN with the Hospital upon completing his
studies and ultimately agreed to continue do so for a period of 30 months. As a result, the
question is not whether terms of the loan agreement are unclear but whether one or both
parties breached their obligations and, if so, what is the appropriate remedy. These types
of questions can rarely—if ever—be decided by way of summary judgment.
One of the primary disputed issues of material fact precluding summary judgment
in this case is whether Parsons' notice to the Hospital that he was moving to Smith
County and had signed a letter of intent to practice at Smith County Community Hospital
constituted an anticipatory breach of his obligations under the terms of the loan
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agreement. In particular, it should be left to the finder of fact to determine whether these
actions rise to the level of "'a clear and unequivocal refusal to perform'" his contractual
obligations. See Burcham v. Unison Bancorp, Inc., 276 Kan. 393, 408, 77 P.3d 130(2003); see also Barnett v. Oliver, 18 Kan. App. 2d 672, 683, 858 P.2d 1228 (1993)
(person commits an anticipatory breach by clearly showing an intention not to perform
before the performance is due). If the trier of fact determines that there has been an
anticipatory breach, it is to be treated the same as a completed breach of contract. See
Hawkinson v. Bennett, 265 Kan. 564, 602, 962 P.2d 445 (1998) (when one party has been
notified of an anticipatory breach by the other party, the notified party has the right to
treat the repudiation as an immediate breach of contract and sue for damages).
Of course, the Hospital was also required to provide Parsons with a job as an
APRN as part of its contractual obligations. Perhaps—depending on what the finder of
fact determines regarding the alleged anticipatory breach of the agreement by Parsons—
the Hospital was relieved of this obligation. Even if it was not, the parties still dispute
whether the Hospital actually offered him a position as an APRN. Parsons claims that he
requested an employment contract several times and sought clarification regarding his job
description and salary. But the Hospital disputes this allegation and asserts that it was
prepared to move forward with Parsons' employment as an APRN. Again, this is a
question for the trier of fact to resolve.
Although the Hospital argues that the district court erred in failing to grant it
summary judgment as a matter of law, we do not find this to be true. In this case, the
disputed issues of material fact preclude both parties from receiving judgment as a matter
of law. Certainly, there are a number of facts that are undisputed. But—as discussed
above—there are genuine issues of material fact regarding whether one or both parties
breached their obligations under the terms of the loan agreement. In particular, as it
relates to the Hospital's motion for summary judgment, there is a dispute of material fact
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about whether the Hospital's actions were sufficient to fulfill its obligation to provide
Parsons with a full-time position as an APRN.
In summary, it is undisputed that the Hospital conferred a significant benefit on
Parsons by loaning him $42,000 to complete his APRN program. It is also undisputed
that Parsons accepted these payments, completed his APRN program, and never
commenced employment with the Hospital. Regardless, there are also disputed issues of
material fact that preclude the entry of summary judgment on behalf of either party.
These factual issues include—but are not necessarily limited to—whether Parsons'
actions constituted an anticipatory breach of contract; whether the Hospital fulfilled its
obligations under the terms of the loan agreement; and, whether the Hospital prevented
Parsons from fulfilling his obligations under the agreement. Consequently, we affirm the
district court's decision denying the Hospital's motion for summary judgment, we reverse
the district court's decision granting Parsons judgment as a matter of law, and we remand
this matter to the district court for further proceedings.
Affirmed in part, reversed in part, and remanded with directions.
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