Mid-Ohio Emergency Physicians, L.L.P. v. Trinity Hosp. Twin City

[Cite as Mid-Ohio Emergency Physicians, L.L.P. vs. Trinity Hosp. Twin City, 2015-Ohio-4813.]
COURT OF APPEALS
TUSCARAWAS COUNTY, OHIO
FIFTH APPELLATE DISTRICT
MID-OHIO EMERGENCY JUDGES:
PHYSICIANS, LLP Hon. William B. Hoffman, P. J.
Hon. Sheila G. Farmer, J.
Plaintiff-Appellee Hon. John W. Wise, J.
-vs- Case No. 2015 AP 03 0013
TRINITY HOSPITAL TWIN CITY, et al.
OPINION
Defendants-Appellants
CHARACTER OF PROCEEDING: Civil Appeal from the Court of Common
Pleas, Case No. 2013 CV 12 0868
JUDGMENT: Reversed and Remanded
DATE OF JUDGMENT ENTRY: November 23, 2015
APPEARANCES:
For Plaintiff-Appellee For Defendant-Appellant Trinity
KEVIN M. NORCHI ROBERT R. STEPHENSON II
STEVEN J. FORBES JAMES M. CARROTHERS
NORCHI FORBES LLC STEPHENSON, STEPHENSON &
Commerce Park IV CARROTHERS
23240 Chagrin Boulevard, Suite 210 206 West High Avenue
Cleveland, Ohio 44122 New Philadelphia, Ohio 44663
Tuscarawas County, Case No. 2015 AP 03 0013 2
Wise, J.
{¶1} Defendant-Appellant Trinity Hospital Twin City ("THTC") appeals the
decision of the Court of Common Pleas, Tuscarawas County, granting summary
judgment in favor of Plaintiff-Appellee Mid-Ohio Emergency Physicians, LLC ("Mid-
Ohio"), in a breach of contract action. The relevant facts leading to this appeal are as
follows.
{¶2} Appellant THTC is a hospital located in Dennison, Ohio. In the summer of
2010, the provider of emergency medicine services to the hospital terminated its
relationship. As a result, in December 2010, Twin City Hospital Corporation, the
predecessor to Appellant THTC, entered into an "Agreement for Emergency
Department Management Services" with Appellee Mid-Ohio.
{¶3} Appellant THTC subsequently acquired the assets of the former Twin City
Hospital. On or about January 17, 2012, appellant adopted and ratified the aforesaid
agreement for emergency department management services.
{¶4} Item B.7.i. of the agreement, which addresses the practitioner recruiting
fee(s), is at the center of the present dispute. It reads as follows:
Recruiting Fee Upon Termination. Upon termination of this
Agreement for any reason, Hospital agrees to pay Partnership a one-time
recruiting fee for any practitioners recruited by Partnership and who
become staff members of Hospital during the term of this Agreement (i.e.,
excludes practitioners who were already on staff when this Agreement
was executed), as follows:
$25,000.00 for physicians
Tuscarawas County, Case No. 2015 AP 03 0013 3
Any amounts paid by Hospital for signing bonuses under 7.k.
below, will be credited against amounts owed for this recruiting fee.
{¶5} The above section makes reference to Item B.7.k. of the agreement,
which reads in pertinent part as follows:
Signing Bonuses. During the term of this Agreement, Hospital
agrees to reimburse Partnership for mutually agreed upon signing
bonuses and buy-outs expended to attract new physicians to staff
Hospital's emergency department, payable as incurred and invoiced to
Hospital by Partnership, not to exceed $20,000 per physician ***.
{¶6} Also of importance is Item B.14, which directs that the agreement "*** shall
be construed in accordance with the laws of the State of Michigan."
{¶7} During 2011 and part of 2012, Appellee Mid-Ohio recruited sixteen
physicians who were then admitted to the medical staff of the hospital. On August 1,
2012, Appellant THTC terminated its agreement with appellee, giving a ninety-day
written notice of termination, for an effective termination date of October 31, 2012.
{¶8} On or about December 11, 2012, Appellee Mid-Ohio purportedly
submitted an invoice to Appellant THTC in the amount of $388,000.00. This was
calculated on the basis of sixteen recruited physicians times a fee of $25,000.00 per
physician, minus a single $12,000.00 signing bonus previously paid, for a total amount
of $388,000.00 (i.e., (16 x $25,000.00) - $12,000.00). Appellant THTC refused to pay
the invoice, essentially asserting that the agreement called for a single termination fee
of $25,000.00.
Tuscarawas County, Case No. 2015 AP 03 0013 4
{¶9} On December 3, 2013, Appellee Mid-Ohio filed a complaint against
Appellant THTC in the Tuscarawas County Court of Common Pleas. The complaint,
which was subsequently amended on July 15, 2014, sought monetary damages against
appellant for an alleged breach of contract, with a jury demand. Appellant filed answers
to the complaint and amended complaint, alleging inter alia that the agreement
language was ambiguous.
{¶10} On December 5, 2014, appellee filed a motion for summary judgment,
including a supporting affidavit of its affiliate's regional director, Craig A. Rosenberg,
M.D. Appellant thereafter filed a memorandum in opposition to appellee's motion for
summary judgment, supported by affidavits of THTC's interim CEO, Frank V. Swinehart,
and its president, Joseph J. Mitchell.
{¶11} Via a judgment entry filed on February 20, 2015, the trial court entered
summary judgment in favor of appellee in the amount of $388,000.00 plus interest.
{¶12} On March 20, 2015, Appellant THTC filed a notice of appeal. It herein
raises the following two Assignments of Error:
{¶13} “I. THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION IN
GRANTING SUMMARY JUDGMENT; GENUINE ISSUES OF MATERIAL FACT
EXISTED NECESSITATING A TRIAL ON THE MERITS.
{¶14} “II. THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION BY
FINDING THAT THE DISPUTED PROVISION OF THE SUBJECT AGREEMENT,
PARAGRAPH B.7.i, IS CLEAR AND EVIDENT ON ITS FACE.”
Tuscarawas County, Case No. 2015 AP 03 0013 5
I., II.
{¶15} In its First and Second Assignments of Error, Appellant THTC contends
the trial court erred in granting summary judgment in favor of Appellee Mid-Ohio in the
breach of contract action, specifically concerning the trial court's conclusion that the
pertinent agreement language is unambiguous. We agree.
{¶16} Summary judgment proceedings present the appellate court with the
unique opportunity of reviewing the evidence in the same manner as the trial court. See
Smiddy v. The Wedding Party, Inc. (1987), 30 Ohio St.3d 35, 36, 506 N.E.2d 212. As
such, we must refer to Civ.R. 56(C) which provides, in pertinent part: “Summary
judgment shall be rendered forthwith if the pleadings, depositions, answers to
interrogatories, written admissions, affidavits, transcripts of evidence in the pending
case and written stipulations of fact, if any, timely filed in the action, show that there is
no genuine issue as to any material fact and that the moving party is entitled to
judgment as a matter of law. * * * A summary judgment shall not be rendered unless it
appears from the evidence or stipulation, and only from the evidence or stipulation, that
reasonable minds can come to but one conclusion and that conclusion is adverse to the
party against whom the motion for summary judgment is made, that party being entitled
to have the evidence or stipulation construed most strongly in the party's favor***.”
{¶17} Pursuant to the above rule, a trial court may not enter summary judgment
if it appears a material fact is genuinely disputed. The party moving for summary
judgment bears the initial burden of informing the trial court of the basis for its motion
and identifying those portions of the record that demonstrate the absence of a genuine
issue of material fact. The moving party may not make a conclusory assertion that the
Tuscarawas County, Case No. 2015 AP 03 0013 6
non-moving party has no evidence to prove its case. The moving party must specifically
point to some evidence which demonstrates the non-moving party cannot support its
claim. If the moving party satisfies this requirement, the burden shifts to the non-moving
party to set forth specific facts demonstrating there is a genuine issue of material fact for
trial. Vahila v. Hall (1997), 77 Ohio St.3d 421, 429, 674 N.E.2d 1164, citing Dresher v.
Burt (1996), 75 Ohio St.3d 280, 662 N.E.2d 264.
{¶18} As we previously suggested, Michigan contract law should be applied in
our analysis herein. The decision of the Eighth District Court of Appeals in Westgate
Ford Truck Sales, Inc. v. Ford Motor Co., 2012-Ohio-1942, 971 N.E.2d 967 (8th Dist.),
is instructive in this regard. The Westgate court first noted that "[a]ccording to Michigan
law, the court's primary obligation in interpreting a contract is to determine the intent of
the contracting parties.” Id. at ¶ 14, citing Quality Prod. & Concepts Co. v. Nagel
Precision, Inc., 469 Mich. 362, 375, 666 N.W.2d 251 (2003). Furthermore, "[a] contract
is construed as a matter of law 'if the language * * * is clear and unambiguous.' ” Id.,citing Quality Prod. & Concepts Co. at 375, 666 N.W.2d 251. Conversely, “the meaning
of an ambiguous contract is a question of fact that must be decided by the jury.” Id.,citing Klapp v. United Ins. Group Agency, Inc., 468 Mich. 459, 469, 663 N.W.2d 447(2003) (internal quotes omitted). Additionally, "[a]mbiguity exists when the provision is
'capable of conflicting interpretations.' ” Id., citing Klapp at 467, 663 N.W.2d 447.
{¶19} The Michigan Supreme Court has also long held: “Where a contract is to
be construed by its terms alone, it is the duty of the court to interpret it; but, where its
meaning is obscure and its construction depends upon other and extrinsic facts in
connection with what is written, the question of interpretation should be submitted to the
Tuscarawas County, Case No. 2015 AP 03 0013 7
jury, under proper instructions.” Hewett Grocery Co. v. Biddle Purchasing Co., 289
Mich. 225, 236, 286 N.W. 221 (1939) (internal citations omitted).
{¶20} The primary question before us in the case sub judice is this: Can we
presently, within the four corners of the document, interpret with reasonable certainty
whether Item B.7.i. of the agreement means a $25,000.00 single fee payable to
appellee upon termination of the contract, or instead means the accrual of a $25,000.00
fee for each physician recruited, to be deferred as a final lump sum payment?
{¶21} Appellant, in support of the former view, directs us to language in B.7.i.
such as “one-time recruiting fee” and the use of the plural term “practitioners” and plural
“physicians.” Appellant also contends the word "any" could be construed as a modifier
of the type or group of practitioners (e.g., recruited physicians) for which a $25,000.00
one-time recruiting fee is payable. Appellee, in support of the latter view, responds inter
alia that B.7.i. simply provides a formula to be used at termination of the agreement to
calculate the sum owed to appellee for its services in recruiting physicians during the
corresponding period of time. Appellee also encourages us to consider the relationship
between B.7.i. and the subsequent B.7.k., to the effect that any amounts paid for
signing bonuses will be credited against “amounts owed” for the recruiting fee. Appellee
urges that under this interpretation, it is guaranteed under B.7.k. to earn at least a
$5,000.00 recruiting fee per physician, with the potential of $25,000.00 per physician.
However, appellant counters that it would still be reasonably possible to find the parties
were also attempting via B.7.i and B.7.k. to agree to a total “cap” of up to $25,000.00
worth of signing bonuses.
Tuscarawas County, Case No. 2015 AP 03 0013 8
{¶22} We must also bear in mind that Michigan, like Ohio, recognizes the
general rule that ambiguities are to be construed against the drafter of the contract.
Herweyer v. Clark Hwy. Services, Inc., 455 Mich. 14, 22, 564 N.W. 2d (1997); Cf.
Holderman v. Huntington Leasing Co. (1984), 19 Ohio App.3d 132, 134, 483 N.E.2d
175, citing Monnett v. Monnett (1888), 46 Ohio St. 30, 34–35, 17 N.E. 659. In this
instance, it appears undisputed appellee was the drafter, and while it would seem to
make sense from a business perspective for appellee to be paid for each physician
recruited (albeit, oddly, not until the end of the entire contractual relationship), appellee
could have much more clearly said so versus using the language we find set forth in
B.7.i. As such, we answer our earlier “primary question” in the negative, and, pursuant
to the rule set forth by the Michigan Supreme Court in Hewett Grocery, supra, we hold
the portion of the parties’ agreement captioned as B.7.i. is ambiguous as a matter of law
and the action must be submitted to a jury.
{¶23} The trial court therefore erred in granting summary judgment in favor of
appellee.1 Appellant’s First and Second Assignments are sustained.
1 Both sides in the present appeal have provided well-articulated references in the
briefs to the Civ.R. 56 materials in the trial court record, particularly the various
affidavits. Based on our present holding, we find recitation of this information
unnecessary in this opinion.
Tuscarawas County, Case No. 2015 AP 03 0013 9
{¶24} For the reasons stated in the foregoing opinion, the judgment of the Court
of Common Pleas, Tuscarawas County, Ohio, is hereby reversed and remanded for
further proceedings.
By: Wise, J.
Hoffman, P. J., and
Farmer, J., concur.
JWW/d 1109