ABC Pediatrics v. Health Partners

J-A30030-14
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
ABC PEDIATRICS HHC IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellant
v.
HEALTH PARTNERS PLANS FORMERLY
KNOWN AS HEALTH PARTNERS
PHILADELPHIA
Appellee No. 1205 EDA 2014
Appeal from the Order Entered April 8, 2014
In the Court of Common Pleas of Philadelphia County
Civil Division at No(s): October Term, 2013 No. 02297
BEFORE: MUNDY, J., FITZGERALD, J.*, and PLATT, J.**
MEMORANDUM BY MUNDY, J.: FILED FEBRUARY 27, 2015
Appellant, ABC Pediatrics HHC, appeals from the April 8, 2014 order
granting Appellee, Health Partners Plans’, motion for judgment on the
pleadings on the basis that Appellant’s claims were covered by an earlier
settlement and release agreement entered into between the parties. After
careful review, we affirm.
The trial court aptly summarized the factual and procedural history of
this case as follows.
The present action was instituted by plaintiff
[Appellant] against [] Health Partners Plans [] to
recover for [Appellant’s] loss of business.
[Appellant] is a licensed home health care company
that provided medical services to home-confined
pregnant, postpartum and other infirm patients.
[Health Partners Plans] is a Pennsylvania based non-
* Former Justice specially assigned to the Superior Court.
** Retired Senior Judge assigned to the Superior Court.
J-A30030-14
profit health maintenance organization that manages
the medical care of its “members” through [a]
network of medical, dental, and mental health care
providers. On February 3, 2011, [Appellant] and
[Health Partners Plans] entered into an ancillary
provider agreement wherein [Health Partners Plans]
contracted [Appellant] to provide home health care
services to its members. The agreement was
renewed on November 17, 2012.
In or about January 2013, the parties
disagreed about the processing and payment of
certain claims submitted by [Appellant] related to
[Health Partners Plans’] Well Mom/Well Baby
Program. During the spring of 2013, the parties
engaged in discussions and negotiations regarding
the disputed claims. As a result of the negotiations
the parties executed a formal Settlement and
Release Agreement in July 2013. The Settlement
and Release provided in pertinent part as follows:
… WHEREAS, the parties disputed either
formally or informally various matters including
payment methodologies; and/or payment
and/or processing of claims with dates of
service through and including July 15, 2013
(collectively, the “Disputed Claims”); and/or
interpretation of contract provision in relation
to the Disputed Claims; and
NOW THEREFORE, in consideration of the
terms and conditions set forth herein, the
undersigned parties… with intent to be bound
legally hereby, agree as follows: …
3. Except as to the obligations created by this
Agreement, each party and their Successors
and Assigns, hereby release and forever
discharge the other party and its respective
Successors and Assigns, from any all claims,
suits, causes of action, actions, rights,
damages, expenses and all consequential
damages of any kind, whether arising in law or
equity, in contract or tort, as well as, any claim
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for attorney’s fees and exemplary and/or
punitive damages which are based upon, arise
out of, or are connected with, or were raised or
could have been raised in connection with the
Disputed Claims only. Provider explicitly
reserves any other rights available to it
pursuant to the provider agreement unrelated
to the Disputed Claims.
On August 5, 2013, [Health Partners Plans] paid to
[Appellant] the sum of $75,000.00 by bank draft
which was accepted and deposited by [Appellant].1
In October 2013, [Appellant] filed the instant
action against [Health Partners Plans] seeking
$2,000,000.00 in breach of contract damages
alleging that [Health Partners Plans’] failure to pay
timely the disputed claims in January 2013 breached
the parties’ provider agreement, and that such
breach caused plaintiff irreparable harm including in
particular the destruction of [Appellant’s] business.
In [Health Partners Plans’] answer and new matter,
[Health Partners Plans] raised affirmative defenses
including but not limited to the signed release bars
[Appellant’s] cause of action and accord and
satisfaction. After the pleadings were closed,
[Health Partners Plans] filed the instant motion for
judgment on the pleadings.
_______________________
1
[Appellant] alleges in the complaint that on or
about March 25, 2013, it closed its doors and ceased
doing business.
Trial Court Opinion, 4/8/14, at 1-2 (footnote in original).
On April 8, 2014, the trial court issued an order, with an accompanying
opinion, granting Health Partner Plans’ motion for judgment on the
pleadings. The trial court entered judgment in favor of Health Partner Plans
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and dismissed Appellant’s complaint. On April 10, 2014, Appellant filed a
timely notice of appeal.1
On appeal, Appellant raises the following issue for our review.
Did the trial court err in dismissing Appellant’s
complaint through judgment on the pleadings based
upon a separate release executed in the matter?
Appellant’s Brief at 9.
Our review of a challenge to a trial court’s grant of judgment on the
pleadings is subject to the following standards.
Entry of judgment on the pleadings is
permitted under Pennsylvania Rule of Civil Procedure
1034, which provides that “after the pleadings are
closed, but within such time as not to unreasonably
delay trial, any party may move for judgment on the
pleadings.” Pa.R.C.P. 1034(a). A motion for
judgment on the pleadings is similar to a demurrer.
It may be entered when there are no disputed issues
of fact and the moving party is entitled to judgment
as a matter of law.
Appellate review of an order granting a motion for
judgment on the pleadings is plenary. The appellate
court will apply the same standard employed by the
trial court. A trial court must confine its
consideration to the pleadings and relevant
documents. The court must accept as true all well
pleaded statements of fact, admissions, and any
documents properly attached to the pleadings
presented by the party against whom the motion is
filed, considering only those facts which were
specifically admitted.
____________________________________________
1
The trial court did not order Appellant to file a concise statement of errors
complained of on appeal pursuant to Pennsylvania Rule of Appellate
Procedure 1925. The trial court issued a Rule 1925(a) opinion referencing
its April 8, 2014 opinion as containing the reasons for its ruling.
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We will affirm the grant of such a motion only when
the moving party’s right to succeed is certain and the
case is so free from doubt that the trial would clearly
be a fruitless exercise.
Southwestern Energy Prod. Co. v. Forest Res. LLC, 83 A.3d 177, 185
(Pa. Super. 2013) (citation omitted), appeal denied, 96 A.3d 1029 (Pa.
2014).
Instantly, the trial court based its grant of Health Partner Plans’ motion
for judgment on the pleadings on its interpretation of the parties’ settlement
agreement as precluding Appellant’s suit. Trial Court Opinion, 4/8/14, at 3.
The enforceability of settlement agreements is
determined according to principles of contract law.
Because contract interpretation is a question of law,
this Court is not bound by the trial court’s
interpretation. Our standard of review over
questions of law is de novo and to the extent
necessary, the scope of our review is plenary as [the
appellate] court may review the entire record in
making its decision. With respect to factual
conclusions, we may reverse the trial court only if its
findings of fact are predicated on an error of law or
are unsupported by competent evidence in the
record.
The law of this Commonwealth establishes that
an agreement to settle legal disputes between
parties is favored. There is a strong judicial policy in
favor of voluntarily settling lawsuits because it
reduces the burden on the courts and expedites the
transfer of money into the hands of a complainant.
If courts were called on to re-evaluate settlement
agreements, the judicial policies favoring settlements
would be deemed useless. …
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Where a settlement agreement contains all of
the requisites for a valid contract, a court must
enforce the terms of the agreement.
Mastroni-Mucker v. Allstate Ins. Co., 976 A.2d 510, 517-518 (Pa. Super.
2009) (citations omitted).
In interpreting a contract, the ultimate goal is to
ascertain and give effect to the intent of the parties
as reasonably manifested by the language of their
written agreement. When construing agreements
involving clear and unambiguous terms, this Court
need only examine the writing itself to give effect to
the parties’ understanding. This Court must
construe the contract only as written and may not
modify the plain meaning under the guise of
interpretation.
Southwestern, supra at 187 (citation omitted).
With specific reference to what constitutes
“ambiguity” in the context of contract interpretation,
our Supreme Court has opined as follows:
Contractual language is ambiguous if it is
reasonably susceptible of different
constructions and capable of being understood
in more than one sense. This is not a question
to be resolved in a vacuum. Rather,
contractual terms are ambiguous if they are
subject to more than one reasonable
interpretation when applied to a particular set
of facts. We will not, however, distort the
meaning of the language or resort to a strained
contrivance in order to find an ambiguity.
Lenau v. Co-eXprise, Inc., 102 A.3d 423, 430 (Pa. Super. 2014), quoting
Madison Constr. Co. v. Harleysville Mut. Ins. Co., 735 A.2d 100, 106
(Pa. 1999) (internal quotation marks and citations omitted).
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Appellant alleges the trial court erred in construing the parties’ July 30,
2013 release as a general release that precluded Appellant’s instant
complaint against Health Partner Plans for loss of business. Appellant’s Brief
at 13. Appellant maintains the release was limited and did not encompass
the claims it raises in the instant complaint. Id. at 12-13
The crux of the disagreement in this matter is
whether or not the parties July 15, 2013 settlement
and release [] was intended to cover and bar
[Appellant’s] subsequent claim in contract for loss of
business. A plain reading of the Release reveals the
parties’ settlement was not a general release. The
Release was narrowly tailored to cover only the bills
which Health Partners had failed to pay and was not
intended to bar a law suit for Health Partners pattern
and practice of late payments, which late payments
destroyed [Appellant’s] business.
Id. (citations omitted, emphasis added).2 Appellant maintains that the
qualifying language, “[Appellant] explicitly reserves any other rights
available to it pursuant to the provider agreement unrelated to the Disputed
Claims,” contained in Paragraph 3 of the settlement and release agreement
and other references to “Disputed Claims,” means the release was not
____________________________________________
2
Although referencing a “July 15, 2013” agreement, Appellant actually,
albeit mistakenly, quotes provisions from an unexecuted July 24, 2013 draft
version of the settlement agreement. However, much of the specific
language that Appellant emphasizes as supporting his argument was either
changed or omitted in the final agreement executed on July 30, 2013.
Compare, Health Partner Plans’ Answer and New Matter, 11/12/13, Exhibit
A - Settlement and Release Agreement (July 30, 2013), with Appellant’s
Answer to Motion for Judgment on the Pleadings, 12/10/13, Exhibit A -
Settlement and Release Agreement (July 24, 2013).
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general. Id. at 14, quoting Health Partner Plans’ Answer and New Matter,
11/12/13, Exhibit A - Settlement and Release Agreement at 2, ¶ 3. Rather,
Appellant argues the term “Disputed Claims” was defined in the settlement
and release agreement as “payment methodologies; and/or processing of
claims with dates of service through and including July 15, 2013.” Id. at 17,
quoting Health Partner Plans’ Answer and New Matter, Exhibit A - Settlement
and Release Agreement at 1. However, Appellant’s quote is incomplete, as
the final version of the settlement and release agreement prefaced that
definition with, “various matters including payment methodologies….”
Health Partner Plans’ Answer and New Matter, 11/12/13, Exhibit A -
Settlement and Release Agreement at 2, ¶ 3. Thus, in the following
averment from its complaint against Health Partners Plans, Appellant
maintains its claim falls outside the terms of the release.
16. The aforestated settlement agreement and
release disposed of the claims for unpaid bills only.
17. Because billed revenue was not coming into the
business on a timely basis, plaintiff was unable to
pay its fixed expenses ….
Appellant’s Complaint, 10/24/13, at 4, ¶¶ 16, 17.
The trial court, contrary to Appellant’s implication, did not determine
the release provision in the settlement agreement was a general release.
Rather the trial court concluded, “[t]he claim alleged in [Appellant’s]
complaint falls squarely within the scope of disputed claims as defined by the
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Settlement and Release Agreement.” Trial Court Opinion, 4/8/14, at 4. We
agree.
The settlement and release agreement provides as follows.
3. Except as to the obligations created by this
Agreement; each party and their Successors
and Assigns, hereby release and forever
discharge the other party –and its respective
Successors and Assigns, from any and all
claims, suits, causes of action, actions,
rights, damages, expenses and all
consequential damages of any kind,
whether arising in law or equity, in
contract or tort, as well as, any claim for
attorney’s fees and exemplary and/or
punitive damages which are based upon,
arise out of, or are connected with, or
were raised or could have been raised in
connection with the Disputed Claims only.
Provider explicitly reserves any other rights
available to it pursuant to the provider
agreement unrelated to the Disputed Claims.
4. This Agreement is intended to compromise and
settle fully and forever all claims of every
kind, character and description of the
undersigned parties which were or could
have been raised in connection with the
Disputed Claims. Nothing in this Agreement
shall be construed as an admission of any
impropriety or liability on the part of either
party.
Health Partner Plans’ Answer and New Matter, 11/12/13, Exhibit A -
Settlement and Release Agreement at 2, ¶¶ 3, 4. (emphasis added).3
____________________________________________
3
“Consequential damages are generally understood to be other damages
which naturally and proximately flow from the breach of contract.” Cresci
Constr. Servs., Inc. v. Martin, 64 A.3d 254, 264 n.15 (Pa. Super. 2013)
(Footnote Continued Next Page)
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Appellant’s claim clearly seeks damages allegedly stemming from
Health Partners Plans’ failure to make payments under the parties’ provider
agreement, which lie squarely within the “Disputed Claims” defined in the
settlement and release agreement. We agree with the trial court that “[t]he
claim for loss of destruction of business or loss of profits is a consequential
damage arising from defendant’s failure to pay the disputed claims.” Trial
Court Opinion, 4/8/14, at 5. We also agree with the trial court that “there is
no ambiguity in the Settlement and Release Agreement.” Id.; see Lenau,
supra. We therefore conclude the trial court did not err in granting Health
Partners Plans’ motion for judgment on the pleadings, because, as a matter
of law, its cause of action was the subject of a valid settlement and release
agreement, and Appellant was not entitled to any relief. See
Southwestern, supra at 185. Accordingly, we affirm the trial court’s April
8, 2014 order granting Health Partners Plans’ judgment on the pleadings and
dismissing Appellant’s complaint.
Order affirmed.
_______________________
(Footnote Continued)
(internal quotation marks and citation omitted). “Consequential
damages. Losses that do not flow directly and immediately from an
injurious act but that result indirectly from the act.” Black’s Law Dictionary
416 (8th ed. 2004).
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Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 2/27/2015
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