Opinion
No. 347341
04-02-2020
MICHIGAN NEUROLOGY ASSOCIATES, PC, Plaintiff/Counterdefendant-Appellant/Cross-Appellee, v. STEVEN S. BEALL, M.D., Defendant/Counterplaintiff-Appellee/Cross-Appellant.
If this opinion indicates that it is "FOR PUBLICATION," it is subject to revision until final publication in the Michigan Appeals Reports. UNPUBLISHED Macomb Circuit Court
LC No. 2016-004048-CB Before: TUKEL, P.J., and MARKEY and SWARTZLE, JJ. PER CURIAM.
The parties to this contractual dispute are defendant/counterplaintiff, Steven S. Beall, M.D. ("Dr. Beall"), and his former employer, plaintiff/counterdefendant Michigan Neurology Associates, P.C. ("MNA"). MNA and Dr. Beall appeal and cross-appeal, respectively, the trial court's opinion and order, following a bench trial, finding no cause of action with respect to both parties. We affirm.
I. FACTUAL BACKGROUND
This action arises out of an employment relationship between the parties. In 2003, Dr. Beall and MNA executed a Physician Employment Agreement governing Dr. Beall's employment with MNA. On or about January 1, 2006, the parties executed an amended employment agreement ("the 2006 agreement"). The 2006 agreement, which was drafted by MNA's legal counsel, provides, in relevant part:
2. Compensation . In consideration of his services, the Employer [i.e., MNA] agrees that during the term of this Agreement the Employee [i.e., Dr. Beall] shall be entitled to "Annual Compensation" determined as follows:
A. For the period commencing January 1, 2006 through December 31, 2006, and for each calendar year thereafter during the Term hereof, the Employee's Annual Compensation shall be based on the following Compensation Formula:
(i) a Base Salary draw payable in monthly installments, in that amount as is equal to the lowest monthly net income paid to the Employee during the immediately preceding calendar year based on Employee's collections less overhead, direct Doctor expenses and fringe benefits for such month, subject to reduction for all Federal and State income tax withholding and all other legally required items of withholding;
(ii) an Individual Clinical Productivity Bonus to be calculated in accordance with Paragraph A on the attached Exhibit A which is incorporated herein and made a part hereof by this reference, and, if such calculation results in a bonus, paid on a tri-annual basis as hereinafter provided;
(iii) a "Global Practice Performance Bonus" to be calculated in accordance with Paragraph B of said Exhibit A, and, if such calculation results in a bonus, paid on an annual basis as hereinafter provided; and
(iv) the Fringe Benefits to which the Employee is entitled, and/or chooses to add, under Paragraph 3 hereof.
B. Within thirty (30) days of the end of each of the first two (2) "Tri-Annual Bonus Periods" (as defined in Exhibit "A") during each calendar year of the Term hereof, the accountant regularly employed by Employer shall perform an accounting of the Employee's Individual Clinical Productivity Tri-Annual Bonus for said Period in accordance with Exhibit A. The resulting Individual Clinical Productivity Tri-Annual Bonus, if any, shall be paid to Employee no later than thirty (30) days after such accounting.
Further, such accountant shall perform a good faith preliminary accounting of Employee's year end Individual Clinical Productivity Bonus, if any, in accordance with the Compensation Formula set forth on Exhibit A. Such accounting shall be based on actual Revenue Generated for eleven (11) months and estimated Revenue Generated for the month of December. Any year end Individual Clinical Productivity Bonus shall be paid to Employee when Employee's Individual Clinical Productivity Tri-Annual Bonus, if any, for the Tri-Annual Bonus Period next following the end of such calendar year is paid.
C. For each calendar year during the Term hereof, the accountant regularly employed by Employer shall also perform an accounting of the Global Practice Performance Bonus in accordance with Exhibit A. Such accounting shall be based on actual Net Practice income for eleven (11) months and estimated Net Practice Income for the month of December. . . .
D. In the event Employee's Individual Clinical Productivity Bonus and/or Global Practice Performance Bonus are insufficient to make up any shortfall between compensation paid to Employee and the compensation to which Employee was actually entitled, for such Tri-Annual Bonus Period or calendar year, as the case may be, such shortfall shall be applied against each subsequent Tri-Annual
Bonus until such shortfall has been fully accounted for . . . . In the event of the termination of Employee's employment at a time when a shortfall exists, Employee agrees to repay Employer, within thirty (30) days of any such termination of employment, any and all amounts of such shortfall and Employee agrees that Employer may deduct any such shortfall from any other amounts owed by Employer to Employee, including wages, at the time of Employee's termination of employment.
E. The Annual Compensation to which Employee is entitled to [sic] hereunder shall also include . . . all "direct Doctor expenses" which are defined as all expenses directly attributable to Employee which are not otherwise charged to Employee, specifically including but not limited to, all legal, accounting, consulting or other professional or administrative fees incurred by Employer as a result of Employee's contractual, professional or administrative requirements, adjustments or modifications which are not also attributable to all other physicians employed by Employer. . . .
* * *
7. Expenses. During the period of his employment, Employee may be reimbursed for his reasonable expenses in accordance with the general policy of the Employer as adopted by Employer's Board of Directors from time to time. . . . Nothing in this paragraph shall be construed as requiring Employer to assume to pay or reimburse Employee for such expenses, provided, however, that nothing in this paragraph will prevent the Employer in its sole discretion, from assuming to pay or reimbursing the Employee for any reason in any of the categories above enumerated.
* * *
9. Termination . The parties specifically acknowledge that the employment contemplated hereby is "at will" and that the Employer may terminate this Agreement at any time upon thirty (30) days' written notice to the Employee. . . .
In the event Employee wishes to terminate his employment he must provide Employer with six (6) months' advance written notice of such termination. During such six (6) month period, Employee shall continue in good faith to render his services under this Agreement in strict accordance with the terms hereof and must be otherwise deemed cooperating with the day-today functioning of the practice of Employer in a constructive and professional manner. Upon compliance with the foregoing, Employee shall continue to receive his Compensation as hereinbefore provided in Paragraph 3 hereof.
* * *
10. Compensation Upon Termination. Upon any termination of this Agreement, the Employee shall be entitled to receive within ten (10) days after termination the Base Salary draw pro-rated to the date of termination and those Fringe Benefits, also pro-rated up to the date of termination, which have not been used as of the date of termination.
Further, in the event the Employee shall be "in good standing" (as hereinafter defined) at the time of such termination, the Employee shall also be entitled to receive (i) whatever Tri-annual Bonus that may be payable at the date of such termination, (ii) whatever Global Practice Performance Bonus that may be payable at the date of such termination . . . . If Employee shall not be "in good standing" . . . , Employee shall forfeit all of the foregoing bonuses.
"In good standing" is hereby defined as a termination of employment either by Employer on an "at will" basis, or by Employee in strict accordance with Paragraph 9 hereof which requires (i) six (6) months' advance written notice . . . to Employer of Employee's intention to terminate employment with Employer, (ii) that during said six (6) month notice period the Employee continue to perform in good faith his services required hereunder in strict accordance with the terms of this Agreement and is otherwise deemed cooperating with the day-to-day functioning of the practice of Employer in a constructive and professional manner . . . .
* * *
15. Miscellaneous.
* * *
D. Notices. All notices under this Agreement shall be given in writing. . . .
E. Entire Agreement. The foregoing Agreement contains the entire agreement of the parties hereto and no modifications hereof shall be binding upon the parties hereto unless the same is in writing signed by the respective parties hereto.
* * *
L. Employee agrees to indemnify and hold Employer harmless from any liability, expense, payment or cost of any kind incurred or suffered by Employer as a result of a claim against Employer based on vicarious liability for Employee's acts or omissions. The foregoing indemnification shall survive any termination of Employee's employment with Employer. . . .
* * *
Neither the 2006 agreement nor its attached Exhibit A provide any definition or explanation concerning the meaning of the term "share" in the above-emphasized phrase, i.e., "Employee's share of actual fixed and variable expenses and other operating expenses[.]" (Emphasis added.)
EXHIBIT "A"
BONUS FORMULA
1. Compensation Model:
A. Individual Clinical Productivity Bonus
* * *
2. The total "Revenue Generated" of the Employee during the applicable Tri-Annual Bonus Period shall be calculated. "Revenue Generated" is hereby defined as all collections received by Employer on account of medical services personally performed by Employee.
3. Employee's salary draws, fringe benefit costs and direct expenses, together with Employee's share of actual fixed and variable expenses and other operating expenses for the same applicable Tri-Annual Bonus Period shall be subtracted from Employee's Revenue Generated for such Tri-Annual Bonus Period to establish Employee's Individual Clinical Productivity Bonus for said Tri-Annual Bonus Period. [Emphasis added.]
During the relevant timeframe, Dr. Thomas Giancarlo and "Dr. Voci" were the sole owners of MNA. In March 2011, a female medical assistant, DW, alleged that Dr. Beall had called her into an examination room and, while purportedly performing "muscle testing" on her, touched her inner thighs, groped her vaginal area, and pressed his genitals against her. According to DW, this was not the first time that Dr. Beall had made "inappropriate sexual advances" toward her. DW reported the incident to Dr. Voci, who informed Dr. Giancarlo, and DW also reported the matter to Christine Nettie, who was then a human resources employee at MNA. An investigation was subsequently conducted, during which, Nettie alleged, Dr. Giancarlo impeded her efforts to investigate the matter and ordered her to participate in a "cover-up." Thereafter, Nettie and DW each either were discharged or constructively discharged by MNA.
On May 16, 2011, Dr. Beall officially resigned his employment with MNA by way of correspondence addressed to Dr. Giancarlo. In that correspondence, Dr. Beall wrote: "I . . . agree as requested . . . to resign immediately, and waive the six months notice period previously required by my employment agreement." At trial, Dr. Beall testified that, when he resigned, it was his "understanding" that MNA had agreed to waive the six-month notice period set forth in the 2006 agreement with regard to Dr. Beall's termination of his employment with MNA. Dr. Giancarlo disagreed, stating that there was no such agreement. On cross-examination, Dr. Beall admitted that Dr. Giancarlo had never agreed to waive the six-month notice provision, either orally or in writing.
In December 2011, DW and Nettie filed a seven-count complaint against MNA, Dr. Giancarlo, and Dr. Beall. DW and Nettie each asserted a claim for several violations of the Elliot Larsen Civil Rights Act, MCL 37.2101 et seq., collectively including allegations of sexual harassment, sexual discrimination, maintenance of a hostile work environment, and retaliatory discharge. In the alternative, DW and Nettie framed those same essential claims as actions for violations of Michigan public policy. Additionally, DW asserted tort claims for assault and battery against Dr. Beall, and Nettie asserted a claim for intentional interference with a business expectancy against MNA and Dr. Giancarlo. DW and Nettie alleged that MNA, Dr. Giancarlo, and Dr. Beall were jointly and severally liable for damages related to the claims asserted, and in a paragraph that was incorporated by reference into all counts of the complaint, they also alleged that MNA and Dr. Giancarlo were vicariously "liable for the conduct of [Dr. Beall] under the doctrine of respondeat superior."
MNA and Dr. Giancarlo later entered a settlement agreement with DW and Nettie, settling all claims in exchange for payments of $120,000 to DW and $30,000 to Nettie. MNA's and Dr. Giancarlo's settlement agreement with Nettie failed to allocate specific portions of the settlement to each claim; the settlement agreement similarly failed to specify which portion, if any, of the settlement was attributable to the alleged vicarious liability of MNA and Dr. Giancarlo for Dr. Beall's conduct. In contrast, the settlement agreement with DW provided some allocations in that regard, but noted that those allocations had been agreed to by DW and her legal counsel "only[.]"
In November 2016, MNA instituted this action by way of a five-count complaint asserting claims against Dr. Beall for, among other things, (1) breach of contract for Dr. Beall's failure to indemnify MNA for its settlement of DW's lawsuit, plus all associated costs and attorney fees, for an alleged total of $271,003.43; (2) breach of contract for Dr. Beall's failure to indemnify MNA for its $30,000 settlement of Nettie's lawsuit, plus all associated costs and attorney fees; and (3) collection of excess salary "draws" taken by Dr. Beall, which allegedly exceeded the amount of compensation to which he had actually been entitled under the 2006 agreement.
In addition to answering MNA's complaint, Dr. Beall filed a very brief counterclaim—consisting of only four numbered paragraphs—which alleged, in pertinent part:
3. In violation of the Employment Agreement, MNA consistently underpaid Dr. Beall and refused to provide accurate accounting. Among other things:
a. MNA overstated Employee Costs;
b. MNA overstated General Expenses;
c. MNA overstated Direct Doctor Expenses; and
d. MNA did not provide Dr. Beall with enough information to accurately determine the proper accounting.
The case ultimately proceeded to a three-day bench trial. At the outset, the trial court indicated that it was "confused" about why the parties had allowed this contractual case to proceed to trial rather than attempting to resolve it by way of summary disposition, noting that any parol evidence might be irrelevant if the trial court found that the 2006 agreement was unambiguous. The parties, however, agreed that the undefined term "share," as used in § I.A.3 of Exhibit A to the 2006 agreement, was ambiguous, at least as applied to the facts of this case.
The parties recited the following stipulations of fact: (1) they were bound under the 2006 agreement, (2) "Dr. Beall was an employee," (3) he "was paid compensation throughout his time with [MNA] through the end," (4) "[t]he periods in question [we]re 2009, 2010 and 2011," and (5) the parties agreed about "the numbers that [they were] presenting, but not the way the numbers were appreciated or allocated." In particular, the parties explained, their disagreement about those "numbers" exclusively turned on MNA's methodology in allocating Dr. Beall's "share" of certain expenses under the 2006 agreement.
Three witnesses testified at trial: Dr. Giancarlo, Dr. Beall, and MNA's chief executive officer, Peter Sinishtaj. According to Dr. Giancarlo, during the pertinent timeframe, MNA employed eight or nine neurologists, including Dr. Beall, and several of the other neurologists were employed under contracts identical to the 2006 agreement. The 2006 agreement was MNA's standard employment contract for "senior doctors," and it was intended to represent an "actual overhead model," under which Dr. Beall's income would fluctuate based on MNA's actual overhead relative to actual income. By contrast, MNA's "junior doctors" were employed under a "protected overhead" agreement, under which they were "protected from any variability because the overhead was stipulated."
According to Dr. Giancarlo, from 2009 to 2011, he sat down and "went over" Dr. Beall's "numbers" with him "[a]s frequently as once every trimester," and all of MNA's doctors received a monthly report that was "upfront, candid, [and] transparent."
Sinishtaj testified that he holds a bachelor's degree in accounting and master's degrees in finance and international finance. Among his other duties as CEO of MNA, he oversaw the accounting department and would "verify" their "calculations" using "generally accepted accounting principles" (GAAP). Sinishtaj also "set" the allocations for MNA's physicians, although he first began to work for MNA "a month" after Dr. Beall left the practice.
With regard to the allocation of MNA's expenses during the relevant years, Sinishtaj testified that all "employee costs"—which were considered to be "operating expenses" and included wages, benefits, employer-paid taxes, unemployment insurance, and worker's compensation insurance—were first allocated to specific departments, such that Dr. Beall was only allocated a share of those employee costs "that pertain[ed] to the general neurology department." MNA "had five or six locations at the time," and the employee costs were pooled on a departmental basis including all locations. MNA calculated Dr. Beall's "share" of the neurology department's employee costs under a per diem method, calculating the percentage of the days he worked in relation to the total number of days worked by the seven physicians in MNA's neurology department who were employed "under the actual overhead model." In other words, if "Dr. Beall worked 240 days . . . and all the doctors combined worked 1500 days," then Dr. Beall would be allocated "240/1500" of the employee costs for that year. MNA employed that per diem method because "activity based accounting" for employee costs—i.e., allocation based on the amount of time employees actually spent performing work for any given physician—was deemed fiscally impracticable.
According to Sinishtaj, MNA allocated "general fixed expenses"—i.e., expenses that "don't vary based on volume"—using the same per diem method. Contrastingly, "general variable expenses," were costs for items such as medical supplies and do vary year-to-year "based on volume," and were allocated to each physician based on his or her proportional share of gross departmental revenue. For example, if the neurology department's general variable expenses were equal to 5% of its total gross revenue in a given year, each of the seven "actual overhead" physicians in that department would be allocated to contribute 5% of their gross receipts for that year to cover the general variable expenses.
Finally, any "direct doctor expenses"—i.e., "items that [we]re only attributable to Dr. Beall," such as his requests for travel reimbursement—were allocated directly to him. According to Sinishtaj, the above method of allocating expenses was "the model" that MNA had "always used," and it used that model consistently with regard to all physicians who contracted under an "actual overhead" agreement.
On cross-examination, Sinishtaj admitted that the word "share" was undefined in the 2006 agreement, and that GAAP did not provide a definition. Therefore, Sinishtaj admitted, the word could be interpreted in different ways, such that the 2006 agreement gave no clear guidance as to how, precisely, Dr. Beall's "share" of expenses should have been calculated. Sinishtaj also admitted that he had no personal knowledge or documentation to support the allocation of numerous expenses during the disputed years.
According to Dr. Beall, at the time that he executed the 2006 agreement, the parties did not discuss the meaning of the disputed term "share." Dr. Beall "assumed" that his share of expenses would be his "part of the overhead," calculated according to what he actually used, not a sharing relationship under which he would contribute to expenses unrelated to his own practice. In part, this assumption was premised on representations that Dr. Giancarlo made to the effect that Dr. Beall would only "pay for the overhead [he] use[d]." Had he been aware of MNA's planned method for calculating his "share" of expenses, Dr. Beall testified, he never would have executed the 2006 agreement. Moreover, Dr. Beall "had no clue as to how the overhead was calculated." He asked for clarification about how his share of expenses was calculated "three times a year," but he received nothing but "a cold stare" or unfulfilled promises that he would be provided answers later.
After considering the evidence, the trial court issued an opinion and order denying the parties any relief with regard to their respective claims. Principally, the trial court reasoned that the parties had failed to carry their respective burdens of proving their contractual claims by a preponderance of the evidence. This appeal ensued.
II. ANALYSIS
On appeal, the parties raise several claims of error. We examine each in turn.
At the outset, we note that the parties' claims of error implicate differing standards of review. "This Court reviews a trial court's findings of fact in a bench trial for clear error and its conclusions of law de novo. A finding is clearly erroneous where, after reviewing the entire record, this Court is left with a definite and firm conviction that a mistake has been made." Alan Custom Homes, Inc v Krol, 256 Mich App 505, 512; 667 NW2d 379 (2003) (citations omitted).
"We review de novo as a question of law the proper interpretation of a contract, including a trial court's determination whether contract language is ambiguous." Andrusz v Andrusz, 320 Mich App 445, 452; 904 NW2d 636 (2017). As discussed in Innovation Ventures v Liquid Mfg, 499 Mich 491, 507; 885 NW2d 861 (2016):
Absent an ambiguity or internal inconsistency, contractual interpretation begins and ends with the actual words of a written agreement. When interpreting a contract, our primary obligation is to give effect to the parties' intention at the time they entered into the contract. To do so, we examine the language of the contract according to its plain and ordinary meaning. If the contractual language is unambiguous, courts must interpret and enforce the contract as written[.] [Quotation marks and citations omitted.]If a term or phrase is contractually defined, then that definition controls. Twichel v MIC Gen Ins Corp, 469 Mich 524, 534; 676 NW2d 616 (2004). "Where a term is not defined . . . , it is accorded its commonly understood meaning," id., and "[a] dictionary may be consulted to ascertain the plain and ordinary meaning of words or phrases used in the contract," Auto Owners Ins Co v Seils, 310 Mich App 132, 145; 871 NW2d 530 (2015). "[C]ontracts must be read as a whole," Kyocera Corp v Hemlock Semiconductor, LLC, 313 Mich App 437, 447; 886 NW2d 445 (2015), giving "effect to every word, phrase, and clause," while taking pains to "avoid an interpretation that would render any part of the contract surplusage or nugatory," Klapp v United Ins Group Agency, Inc, 468 Mich 459, 468; 663 NW2d 447 (2003).
A. MNA'S CLAIM TO RECOVER ALLEGED OVERPAYMENTS
MNA first argues that, after determining that the phrase "share of actual fixed and variable expenses and other operating expense" was ambiguous as used in Exhibit A to the 2006 agreement, the trial court clearly erred by failing to resolve that ambiguity in accord with the parties' course of performance and dealing after entering the 2006 agreement. We disagree.
"Price or compensation is an essential ingredient of every contract for . . . the rendering of services." 17A Am Jur 2d Contracts, § 191. For parties to form a valid contract, there must be a "mutual assent or a meeting of the minds on all the essential terms," as "judged by an objective standard, looking to the express words of the parties and their visible acts, not their subjective states of mind." Kloian v Domino's Pizza, LLC, 273 Mich App 449, 453-454; 733 NW2d 766 (2006) (quotation marks and citation omitted). "Where mutual assent does not exist, a contract does not exist." Quality Prods & Concepts Co v Nagel Precision, Inc, 469 Mich 362, 372; 666 NW2d 251 (2003).
However, if an express contract sets forth all of its essential terms but is silent as to other details, the court will "suppl[y] the missing details by construction." Nichols v Seaks, 296 Mich 154, 159; 295 NW 596 (1941). See also Rasheed v Chrysler Corp, 445 Mich 109, 127 n 25; 517 NW2d 19 (1994) (noting that courts may supply a term that is "reasonable in the circumstances" as a "gap-filler" for an omitted "term which is essential to a determination of [the parties'] rights and duties"), quoting Restatement Contracts, 2d, § 204.
In this instance, the 2006 agreement set forth the fundamental terms concerning Dr. Beall's compensation, but it neglected certain details, including the method by which his "share of actual fixed and variable expenses and other operating expenses" was to be calculated for purposes of the bonus formula set forth in Exhibit A. This imprecise contractual drafting led to a latent ambiguity.
Contractual ambiguities can be either patent or latent. Shay v Aldrich, 487 Mich 648, 667; 790 NW2d 629 (2010). Patent ambiguities appear "from the face of the document." Id. Accordingly, "extrinsic evidence may not be used to identify a patent ambiguity." Id. In contrast, "[a] latent ambiguity exists when the language in a contract appears to be clear and intelligible and suggests a single meaning, but other facts create the necessity for interpretation or a choice among two or more possible meanings." Id. at 668 (quotation marks and citations omitted).
The meaning of the term "share" in the 2006 agreement was not patently (i.e., facially) ambiguous. By resorting to dictionary definitions, the trial court could have resolved any potential ambiguity in the text itself, affording the term "share" its plain and ordinary meaning. However, parol evidence is properly considered when determining whether a latent ambiguity exists. Shayy, 487 Mich at 668. ("To verify the existence of a latent ambiguity, a court must examine the extrinsic evidence presented and determine if in fact that evidence supports an argument that the contract language at issue, under the circumstances of its formation, is susceptible to more than one interpretation."). "[I]f a latent ambiguity is found to exist, a court must examine the extrinsic evidence again to ascertain the meaning of the contract language at issue." Id.
At trial, the parties presented a great deal of extrinsic evidence tending to show that a latent ambiguity existed, but they presented very little to assist the trial court in ascertaining the meaning of the latently ambiguous term "share" or to assist it in arriving at a reasonable gap-filler. Although Sinishtaj testified about his understanding of how the "share" had been allocated in the past, he admitted that he had no personal knowledge of the contracting parties' intent at the time of formation of the contract. Rather, he admittedly formed his opinion about the "share" allocable to Dr. Beall "after the fact," by reviewing financial statements and accounting reports that had been prepared by others. He also admitted that the "source documents" supporting certain allocated expenses were not being presented to the trial court because they were "not readily available," residing "in files, God knows where."
It is true that the parties' past course of dealing and performance may be used to discern their intent. See, e.g., State Bank of Standish v Curry, 442 Mich 76, 86; 500 NW2d 104 (1993). Yet, while course-of-performance evidence is, as a general rule, "highly persuasive evidence of proper contract interpretation when introduced against the party so performing, the law also recognizes that a party may undertake a wrong interpretation of the words of a contract and the other party should never be permitted to profit by such mistake[.]" Andrusz, 320 Mich App at 455 (quotation marks and citation omitted). In this instance, Dr. Beall testified that he had no understanding of how the disputed term was being construed and applied by MNA during the course of performance, that he repeatedly asked for clarification on that point and was denied further information, and that his understanding at the time of formation was at odds with what he eventually learned about the course of performance that had actually occurred. The trial court credited such testimony as true, and on this record, we see no basis to disturb its related credibility determination. See Patel v Patel, 324 Mich App 631, 635; 922 NW2d 647 (2018) (holding that "where testimony conflicts, we must afford deference to the trial court's superior ability to judge the credibility of the witnesses who appear before it"); see also MCR 2.613(C) ("Findings of fact by the trial court may not be set aside unless clearly erroneous. In the application of this principle, regard shall be given to the special opportunity of the trial court to judge the credibility of the witnesses who appeared before it.").
In the end, although the parties agreed that the 2006 agreement was ambiguous with regard to the meaning of the term "share" in Exhibit A, they presented a dearth of extrinsic evidence to assist the trial court in resolving that ambiguity. As plaintiff, MNA bore the burden of proving all elements of its breach-of-contract claim—including breach and damages—by a preponderance of the evidence. See Miller-Davis Co v Ahrens Constr, Inc, 495 Mich 161, 178; 848 NW2d 95 (2014). Moreover, "[i]f the parties' intent cannot be determined after considering extrinsic evidence, the court should construe the contract against the drafter." Wagner v Farm Bureau Mut Ins Co of Mich, 321 Mich App 251, 258; 908 NW2d 327 (2017). In light of such principles, given the scant evidentiary record, and paying deference to the trial court's superior fact-finding ability, we are not definitely and firmly convinced that the trial court made a mistake when it found that MNA had failed to carry its burdens of proof and persuasion with regard to this breach-of-contract claim.
B. MNA'S CLAIM FOR CONTRACTUAL INDEMNIFICATION
MNA also argues that the trial court clearly erred by finding that it had failed to make the necessary showing to prevail on its indemnification claim related to the settlement with DW and Nettie. We disagree.
MNA's claim for indemnification arose out of a contractual duty owed by Dr. Beall under the 2006 agreement. The trial court agreed with MNA, as do we, that the plain language of § 15.L of the 2006 agreement required Dr. Beall to indemnify it "from any liability, expense, payment or cost of any kind incurred or suffered . . . as a result of a claim against [MNA] based on vicarious liability for [Dr. Beall's] acts or omissions." Furthermore, it was undisputed below that Dr. Beall had never indemnified MNA for any portion of its settlement with DW and Nettie. Nevertheless, the trial court held that MNA had failed to prove, by a preponderance of the evidence, what portion of its settlements with DW and Nettie were attributable to MNA's vicarious liability for Dr. Beall's actions, and thus MNA's claim for indemnification necessarily failed. We find no error in that ruling.
"[D]amages are not presumed in relation to contracts, in which cases a plaintiff is instead required to prove the measure of damages with 'reasonable certainty.' " Doe v Henry Ford Health Sys, 308 Mich App 592, 603; 865 NW2d 915 (2014), quoting Alan Custom Homes, Inc, 256 Mich App at 512 ("The party asserting a breach of contract has the burden of proving its damages with reasonable certainty, and may recover only those damages that are the direct, natural, and proximate result of the breach."). Accord Lawrence M Clarke, Inc v Richco Constr, Inc, 489 Mich 265, 283; 803 NW2d 151 (2011).
Based on the record established below, we can conceive of no method by which the trial court might have calculated MNA's damages for this contractual claim with reasonable certainty. Indeed, in its brief as appellant, MNA presents no coherent explanation in that regard, instead merely arguing—without citation to any record evidence in support—that it is "clear" that the majority of MNA's settlement with DW and Nettie was paid in satisfaction of claims that arose out of Dr. Beall's alleged misconduct. After thoroughly reviewing the record, however, we find little support for MNA's position. Although MNA's and Dr. Giancarlo's settlement agreement with DW did state some allocation for the settlement funds—specifying amounts paid for various claims and for fees and costs—that provision was expressly agreed to be between DW and her legal counsel "only[.]" On the other hand, MNA's and Dr. Giancarlo's settlement agreement with Nettie made no allocation with regard to the portion of the settlement that was attributable to each claim, nor regarding the portion attributable to MNA's and Dr. Giancarlo's alleged vicarious liability for Dr. Beall's conduct. Because the trial court lacked any means, based on the evidence presented to it, to arrive at a reasonably certain calculation of damages, we are not definitely and firmly convinced that it made a mistake by holding that MNA was not entitled to any damages with regard to the instant claim.
C. DR. BEALL'S COUNTERCLAIM
Dr. Beall argues that the trial court clearly erred by finding that he was not entitled to any damages for his counterclaim for unpaid bonuses (i.e., bonuses to which he would allegedly have been entitled had MNA properly allocated his "share" of expenses under Exhibit A in 2009, 2010, and 2011). But it is undisputed that Dr. Beall failed to strictly comply with the six-month notice provision for termination under the 2006 agreement, because he failed to provide MNA with six months' advance written notice of his intent to terminate the 2006 agreement and to continue to perform his services for MNA during that notice period. Moreover, the trial court discounted Dr. Beall's testimony concerning MNA's purported waiver of the six-month notice provision, noting that Dr. Beall had admitted that Dr. Giancarlo never agreed to such a waiver either orally or in writing. Consequently, pursuant to § 10 of the 2006 agreement, we find no error in the trial court's determination that Dr. Beall was not "in good standing" at the time of termination, which meant that he forfeited his right to any bonuses that MNA might have owed him at that time.
Affirmed.
/s/ Jonathan Tukel
/s/ Jane E. Markey
/s/ Brock A. Swartzle