Songcharoen v. Plastic & Hand Surgery Associates, P.L.L.C.

Case: 15-60292 Document: 00513333793 Page: 1 Date Filed: 01/07/2016
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
No. 15-60292 January 7, 2016
Summary Calendar Lyle W. Cayce
Clerk
SOMPRASONG SONGCHAROEN, Doctor; S. SONGCHAROEN, M.D.,
FACS, P.L.L.C.,
Plaintiffs - Appellees
v.
PLASTIC & HAND SURGERY ASSOCIATES, P.L.L.C.,
Defendant - Appellant
Appeal from the United States District Court
for the Southern District of Mississippi
USDC No. 3:11-CV-308
Before STEWART, Chief Judge, and OWEN and COSTA, Circuit Judges.
PER CURIAM:*
This case represents the last remnant of a larger dispute between these
parties. In 2007, Dr. Somprasong Songcharoen withdrew from his medical
practice, Plastic and Hand Surgery Associates, P.L.L.C. (“PHSA”). Several
years later, he filed suit against PHSA under the contracts governing the
rights and obligations of the physicians in the PHSA medical practice. After a
*Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be
published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
Case: 15-60292 Document: 00513333793 Page: 2 Date Filed: 01/07/2016
No. 15-60292
jury trial and subsequent appeal, the only remaining issue is PHSA’s
counterclaim raising breach of contract and quasi-contract theories. The
district court granted Dr. Songcharoen’s summary judgment motion on PHSA’s
counterclaim. We AFFIRM.
I. FACTUAL AND PROCEDURAL BACKGROUND
The facts relevant to this appeal are straightforward and undisputed. 1
The relationship between the parties is governed by two contracts. First, on
January 1, 2002, Dr. Songcharoen and his limited liability company, S.
Songcharoen, M.D., FACS, P.L.L.C. (“Songcharoen P.L.L.C.”), entered into an
Operating Agreement making them members of the PHSA medical practice.
The Operating Agreement is not at issue in this appeal. Second, on the same
day, Songcharoen P.L.L.C. entered into a Physician Professional Services
Contract (the “Service Contract” or “Contract”) under which Dr. Songcharoen
agreed to provide professional services for PHSA.
After executing these agreements, Dr. Songcharoen took “senior status”
pursuant to the terms of the Service Contract. The relevant contractual
provision states:
21.1 Eligibility for Part-Time or Senior Status. At such time as
Physician has practiced medicine in Jackson, Mississippi for at
least fifteen (15) years in the aggregate, Contractor shall be
entitled to provide PHSA with at least six (6) months’ prior written
notice of Physician’s desire to convert to part-time status or senior
status. Part-time status will involve a change in compensation
pursuant to Section 21.3, whereas conversion to senior status
affects only call obligations in accordance with Section 21.4. In
addition, the three original shareholders of Plastic Surgery
Associates, P.A. shall be entitled to convert to part-time or senior
status upon at least six (6) months’ prior written notice. Unless
1We set forth a full recitation of the facts and background of the entire dispute between these
parties in Songcharoen v. Plastic & Hand Surgery Associates, P.L.L.C., 561 F. App’x 327 (5th
Cir. 2014).
2
Case: 15-60292 Document: 00513333793 Page: 3 Date Filed: 01/07/2016
No. 15-60292
PHSA’s Membership unanimously agrees in writing, part-time or
senior status shall be allowed for only up to five (5) years. The
parties shall negotiate and agree in writing on the compensation
and other terms applicable to any extension beyond five years of
part-time or senior status.
By taking senior status, Dr. Songcharoen was largely exempt from
weekend or after-hours “call” responsibilities. Being on “call” means that a
physician is available by phone if needed by a patient or the hospital.
Specifically, the Service Contract provided:
21.4 Call. Physicians who voluntarily convert to senior or part-
time status pursuant to this Article 21 shall not be required to take
weekend or after-hours call responsibilities provided that at least
five (5) full-time and call-taking surgeons remain direct or indirect
members of PHSA.
In January 2007, at the end of his five-year stint of senior status, Dr.
Songcharoen gave written notice of his intent to resign from PHSA. The
parties agreed to set an official resignation date of December 31, 2007. 2
Immediately after resigning from PHSA, Dr. Songcharoen moved his practice
to a new firm, Mississippi Premier Plastic Surgery, P.L.L.C.
On December 30, 2010, Dr. Songcharoen filed suit against PHSA
asserting a number of claims. PHSA filed a counterclaim alleging, amongst
other things, that Dr. Songcharoen was not entitled to the call-time exemption
benefit he received during his senior status because he did not completely
retire from medical practice after leaving PHSA. Specifically, PHSA asserted
breach of contract and quasi-contract theories, seeking repayment of the value
of the call time that Dr. Songcharoen avoided by taking senior status.
The dispute was initially resolved through summary judgment briefing
and a jury trial. In particular, PHSA’s counterclaim for call-time damages was
2 Under the terms of this agreement, Dr. Songcharoen was responsible for his pro rata share
of call duties—i.e., he could no longer claim the senior status call exemption—until his
resignation on December 31, 2007.
3
Case: 15-60292 Document: 00513333793 Page: 4 Date Filed: 01/07/2016
No. 15-60292
dismissed at summary judgment as time-barred. On appeal, we affirmed as to
all issues except PHSA’s counterclaim for call-time damages, which we
remanded for further consideration. See Songcharoen v. Plastic & Hand
Surgery Assocs., P.L.L.C., 561 F. App’x 327 (5th Cir. 2014) (“Songcharoen I”).
On remand, Dr. Songcharoen filed a renewed motion for summary judgment
as to PHSA’s counterclaim. The district court granted Dr. Songcharoen’s
motion and PHSA now appeals.
II. STANDARD OF REVIEW
We review a district court’s grant of summary judgment de novo,
applying the same standard as the district court. Am. Family Life Assurance
Co. of Columbus v. Biles, 714 F.3d 887, 895 (5th Cir. 2013). Summary
judgment is proper “if the movant shows that there is no genuine dispute as to
any material fact and the movant is entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56(a). “A genuine dispute of material fact means that evidence
is such that a reasonable jury could return a verdict for the nonmoving party.”
Royal v. CCC & R Tres Arboles, L.L.C., 736 F.3d 396, 400 (5th Cir. 2013)
(citation and internal quotation marks omitted).
As this appeal only involves state law claims, Mississippi substantive
law and federal procedural law apply. See Songcharoen I, 561 F. App’x at 332
(citing Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938)). 3
3 A note on jurisdiction: as we explained in Songcharoen I, Dr. Songcharoen originally
asserted claims for breach of contract, hostile work environment, and age discrimination. See
Songcharoen I, 561 F. App’x at 332. PHSA invoked federal subject matter jurisdiction under
28 U.S.C. § 1331 and 28 U.S.C. § 1367 and removed the action to federal district court.
Although Dr. Songcharoen’s claims under federal law were later voluntarily dismissed, the
district court continued to exercise supplemental jurisdiction over the state law claims under
28 U.S.C. § 1367. We now have jurisdiction over the appeal pursuant to 28 U.S.C. § 1291.
4
Case: 15-60292 Document: 00513333793 Page: 5 Date Filed: 01/07/2016
No. 15-60292
III. DISCUSSION
A.
PHSA’s primary argument on appeal is that Dr. Songcharoen was
required, under the Service Contract, to retire from the medical profession
following his completion of five years in senior status. In other words, PHSA
claims that retirement was a necessary condition under the contract for Dr.
Songcharoen to receive the benefit of avoiding call duty for five years. We
disagree, as PHSA’s argument is not supported by the clear and unambiguous
terms of the Service Contract.
Under Mississippi law, a party asserting a breach of contract claim must
prove (1) the existence of a valid and binding contract, and (2) that the
defendant breached that contract. Bus. Commc’ns, Inc. v. Banks, 90 So. 3d
1221, 1224–25 (Miss. 2012). The parties agree that the Service Contract is a
valid and binding contract; the only issue is whether Dr. Songcharoen breached
the contract by not retiring from the medical profession after his five-year
period of senior status.
In interpreting the meaning of a contract, Mississippi courts first “look
to the ‘four corners’ of the agreement and review the actual language the
parties used in their agreement.” West v. West, 891 So. 2d 203, 210–11 (Miss.
2004). “When the language of the contract is clear or unambiguous, [a
reviewing court] must effectuate the parties’ intent.” Id. at 210.
Here, Section 21.1 of the Service Contract sets out the terms and
conditions for taking senior status. The provision explains who can take senior
status (the three original shareholders of PHSA upon at least six months’ prior
written notice, amongst others), how long senior status lasts (up to five years),
and the process for granting an extension to senior status (the PHSA’s
membership must unanimously agree to the extension in writing, and the
parties must agree in writing on the compensation and other terms applicable
5
Case: 15-60292 Document: 00513333793 Page: 6 Date Filed: 01/07/2016
No. 15-60292
to any extension). Section 21.1 also contains a cross-reference to Section 21.4,
and together the two provisions largely exempt individuals on senior status
from weekend and after-hours call duty. PHSA does not argue that Dr.
Songcharoen failed to comply with these express terms. Further, these
provisions are clear and unambiguous, and nothing in their language suggests
that Dr. Songcharoen was required to retire from the medical profession after
five years of senior status.
Undaunted, PHSA argues that two other provisions in the Service
Contract—Sections 8.A and 9.A—support the proposition that Dr.
Songcharoen was contractually required to retire from medical practice after
taking senior status. We disagree. Section 8.A explains that: (1) the parties
may terminate or continue the Service Contract by mutual consent; otherwise
(2) the Service Contract terminates upon the earlier of Dr. Songcharoen
reaching age 70 or five years from the date Dr. Songcharoen commenced senior
status. Section 9.A sets out the payments owed to Dr. Songcharoen upon the
termination of the Service Contract. Specifically, Section 9.A states that
“[u]pon termination by retirement at age 70 or upon five years of senior or part-
time status pursuant to Section 8.A, . . . PHSA shall make termination
payments” according to a specified formula. Section 9.A then states that if the
Contract is terminated by mutual consent or unilaterally with one year’s
notice, and Dr. Songcharoen decides to practice medicine after the Service
Contract terminates, he receives a reduced termination payment. 4 In other
words, Section 9.A creates a disincentive for Dr. Songcharoen to compete with
PHSA after the Service Contract terminates, but only when the Contract is
terminated by mutual consent or unilaterally with one year’s notice; Dr.
4 In fact, Dr. Songcharoen was awarded the reduced termination payment under Section 9.A
in Songcharoen I.
6
Case: 15-60292 Document: 00513333793 Page: 7 Date Filed: 01/07/2016
No. 15-60292
Songcharoen would not be punished for continuing to practice if the Contract
terminates because of his age or because he completed five years of senior
status. In short, nothing in these provisions mandates Dr. Songcharoen’s
retirement from the practice of medicine following senior status; they simply
state that, following the completion of the five-year period of senior status, the
Service Contract automatically terminates unless further agreement between
the parties is reached.
The final arrow in PHSA’s quiver is parol evidence that it claims proves
that the parties intended that Dr. Songcharoen would retire from medical
practice after five years of senior status. However, “[p]arol evidence may be
considered only if the contract is unclear or ambiguous and if the court is
unable to translate a clear understanding of the parties’ intent.” In re Estate
of Fitzner, 881 So. 2d 164, 171 (Miss. 2003). As previously explained, the
relevant provisions of the Service Contract are clear and unambiguous;
accordingly, PHSA’s parol evidence cannot alter the Contract’s plain meaning.
Because Dr. Songcharoen complied with the express terms of the Service
Contract as it relates to taking senior status, PHSA has failed to raise a
genuine issue of material fact in relation to its breach of contract claim for call-
time damages.
B.
PHSA next turns to the implied covenant of good faith and fair dealing
and the quasi-contractual theories of unjust enrichment and restitution in an
attempt to recover call-time damages. These arguments have no force.
PHSA’s quasi-contractual theories fail because the Service Contract
governs the propriety of Dr. Songcharoen taking senior status and his
subsequent decision not to retire from the medical profession. As the district
court explained, quasi-contractual claims will not lie under Mississippi law
where, as here, there is an existing legal contract governing the dispute
7
Case: 15-60292 Document: 00513333793 Page: 8 Date Filed: 01/07/2016
No. 15-60292
between the parties. See Barriffe v. Estate of Nelson, 153 So. 3d 613, 627 (Miss.
2014) (“The doctrine of unjust enrichment or recovery in quasi contract applies
to situations where there is no legal contract . . . .” (quoting Dew v. Langford,
666 So. 2d 739, 745 (Miss. 1995)); Miss. Dep’t of Envtl. Quality v. Pac. Chlorine,
Inc., 100 So. 3d 432, 442 (Miss. 2012) (“Unjust enrichment only applies to
situations where there is no legal contract . . . .” (quoting Powell v. Campbell,
912 So. 2d 978, 982 (Miss. 2005)); Ellis v. Anderson Tully Co., 727 So. 2d 716,
719 (Miss. 1998) (“To collect under an unjust enrichment or quasi-contract
theory, the claimant must show there is no legal contract . . . .” (internal
quotation marks omitted)).
Similarly, PHSA cannot use the implied covenant of good faith and fair
dealing to write an additional condition for taking senior status into the
Service Contract. Simply put, a party has not breached the implied covenant
of good faith and fair dealing when, as here, the party “took only those actions
which were duly authorized by the contract.” Limbert v. Miss. Univ. for Women
Alumnae Ass’n, Inc., 998 So. 2d 993, 999 (Miss. 2008) (quoting GMAC v.
Baymon, 732 So. 2d 262, 269 (Miss. 1999)).
Accordingly, PHSA’s claims under the implied covenant of good faith and
fair dealing and the quasi-contractual theories of unjust enrichment and
restitution cannot withstand summary judgment.
IV. CONCLUSION
For the foregoing reasons, we AFFIRM.
8