Opinion
CIVIL ACTION No. 98-2361-GTV.
January 8, 2002
MEMORANDUM AND ORDER
Plaintiff Steven M. Orr, M.D., brought this case after defendants/third-party plaintiffs Richard F. Beamon, M.D., et al. (individual physicians) terminated his employment. Dr. Orr alleged seven causes of action, all of which this court dismissed in an order dated April 27, 2000. Defendants/third-party plaintiffs bring their claim against third-party defendant St. Joseph's Emergency Physicians, Inc. ("SJEP") (the only remaining claim for relief in this case) to recover their attorney fees, costs and expenses accrued in defending Dr. Orr's lawsuit and to recover their costs for seeking indemnity from SJEP. The case is before the court on SJEP's motion for summary judgment (Doc. 185). For the reasons set forth below, SJEP's motion is granted.
Dr. Orr's claims included violations of the Sherman and Clayton Acts, violations of Kansas and Missouri antitrust statutes, tortious interference with employment contract, tortious interference with business expectancy, fraudulent misrepresentation, and civil conspiracy by defendants/third-party plaintiffs.
I. FACTUAL BACKGROUND
The following facts are taken from the summary judgment record and are either uncontroverted or viewed in the light most favorable to defendants/third-party plaintiffs' case. Immaterial facts and facts not properly supported by the record are omitted.
Dr. Orr was employed by SJEP as an emergency-room physician. Dr. Orr also served as corporate secretary for SJEP and was a minority shareholder in SJEP. BHR, Inc. ("BHR") is a medical billing service that provided billing services to SJEP. During his employment, Dr. Orr complained that the rates that BHR charged SJEP for billing services were higher than competitive prices. Dr. Orr claimed that the individual physician-defendants, who were the controlling shareholders in both SJEP and BHR, refused to permit SJEP to seek competitive bids for billing services.
Dr. Orr's employment with SJEP was terminated in November 1997, and subsequently, the minority shareholders of SJEP, including Dr. Orr, filed suit in Jackson County, Missouri, Circuit Court against BHR and the individual physician-defendants. The suit, styled Althoff, et al. v. Beamon, et al., was based on defendants' conduct as directors and majority shareholders and included Dr. Orr's claim that he was wrongfully terminated.
The parties in Althoff, including defendants, Dr. Orr and SJEP, entered into a settlement agreement on April 28, 1998. The settlement agreement provided for a general release of all claims defendants had or would have had against SJEP based upon their business relationship, and culminated in the sale of SJEP by the majority to the minority shareholders. In the settlement agreement, Dr. Orr specifically reserved his right to sue defendants for wrongful termination. SJEP also specifically reserved its right to indemnity and/or contribution against the individual physicians with regard to any action Dr. Orr might bring for the termination of his employment.
Dr. Orr later filed this suit against BHR and the individual physician-defendants, alleging that he was terminated because he opposed the billing situation between BHR and SJEP. He asserted various claims, all of which were dismissed by this court in Orr v. Beamon, 77 F. Supp.2d 1208 (D.Kan. 1999), aff'd, Orr v. BHR, Inc., 246 F.3d 682 (10th Cir. 2001). Defendants/third-party plaintiffs brought SJEP into this lawsuit as a third-party defendant for purposes of indemnification. Defendants/third-party plaintiffs now seek to recover from SJEP their attorney fees, costs and expenses accrued in defending Dr. Orr's lawsuit and to recover their costs for seeking indemnity from SJEP.
II. SUMMARY JUDGMENT STANDARD
Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). Lack of a genuine issue of material fact means that the evidence is such that no reasonable jury could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Essentially, the inquiry is "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Id. at 251-52.
The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. This burden may be met by showing that there is a lack of evidence to support the nonmoving party's case.Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). Once the moving party has properly supported its motion for summary judgment, the burden shifts to the nonmoving party to show that there is a genuine issue of material fact left for trial. Anderson, 477 U.S. at 256. "[A] party opposing a properly supported motion for summary judgment may not rest on mere allegations or denials of his pleading, but must set forth specific facts showing that there is a genuine issue for trial." Id. Therefore, the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment. Id. The court must consider the record in the light most favorable to the nonmoving party. Bee v. Greaves, 744 F.2d 1387, 1396 (10th Cir. 1984).
III. DISCUSSION
Third-party defendant SJEP seeks summary judgment on the ground that defendants/third-party plaintiffs waived any right to indemnity by releasing all claims against SJEP in the 1998 settlement agreement. The court agrees.
The settlement agreement provides in pertinent part:
Except as set forth in this agreement, each member of the BHR group, on their own behalf and on behalf of their successors, assigns, heirs and personal representatives hereby RELEASE AND FOREVER DISCHARGE the Corporation [(SJEP)] . . . from all liability, claims, damages, commands, losses, causes of action, or claims, whether known or unknown, anticipated or unanticipated, liquidated or unliquidated, or whether accrued or accruing for any and all damages, injuries, or losses of any kind, based upon conduct or events before the execution of This agreement which have arisen as a result of their professional and business relationship by and through the Corporation.
Settlement agreements are contracts, and as such, are governed by the general principles of contract construction. Andes v. Albano, 853 S.W.2d 936, 941 (Mo.banc. 1993). The intent of the parties governs, and the court should determine the intent of the parties from the four corners of the document unless the document is ambiguous. Id. Whether the document is ambiguous is a question of law. J.H. Berra Constr. Co. v. Mo. Highway Transp. Comm'n, 14 S.W.3d 276, 279 (Mo.Ct.App. 2000) (citation omitted). "An ambiguity in a contract arises only from the terms susceptible to fair and honest differences, not mere disagreements as to construction." CB Commercial Real Estate Group, Inc. v. Equity P'ships Corp., 917 S.W.2d 641, 646 (Mo.Ct.App. 1996).
Missouri law applies because the acts giving rise to this cause of action occurred in Missouri. See Security Ins. Co. of New Haven v. Johnson, 276 F.2d 182, 185 (10th Cir. 1960).
Here, the contract unambiguously states that defendants/third-party plaintiffs release SJEP from all claims "liquidated or unliquidated," "accrued or accruing" for all damages "based upon conduct or events before the execution of This agreement which have arisen as a result of their professional and business relationship" (emphasis added). According to Black's Law Dictionary, Fifth Edition, an "unliquidated claim" is one "which has not been finally determined either as to liability or damages." "Accruing" means "[i]nchoate; in process of maturing. That which will or may, at a future time, ripen into a vested right, an available demand, or an existing cause of action." Both of these terms refer to claims arising from past conduct that will mature in the future. Based on the plain language of the contract, the court concludes that defendants/third-party plaintiffs intended to release SJEP from all claims for damages arising out of their business relationship which may or may not have been mature, but could be mature in the future. Such claims are exactly the type of claims at issue here. Defendants/third-party plaintiffs seek indemnity from SJEP for costs incurred as a result of Dr. Orr's lawsuit against them. Dr. Orr's lawsuit was based on acts committed by the individual physicians when they were majority shareholders/directors of BHR and SJEP, acts committed before the parties entered into the settlement agreement. A claim for indemnity based on the costs incurred in defending such a lawsuit may or may not have been mature at the time of the settlement agreement, but it undoubtably already was accruing. Furthermore, any damages associated with such a claim are based on defendants/third-party plaintiffs' former business relationship with SJEP. An indemnity claim by defendants/third-party plaintiffs appears to be precisely the type of claim the parties contemplated when they executed the release.
The court is further convinced of the intent of the parties by another clause in the settlement agreement. The agreement provides:
The Corporation [(SJEP)] and the Minority Shareholders do not release any member of the BHR Group [(the individual physicians)] with regard to any right of indemnity and/or contribution which they may have under applicable common and statutory law . . . against any member of the BHR Group with regard to any lawsuit brought against the Minority Shareholders or the Corporation by Dr. Orr concerning the termination of employment . . . .
SJEP clearly reserved its right to indemnity against defendants/third-party plaintiffs. However, the agreement provides no corresponding reservation of the right to indemnity by defendants/third-party plaintiffs against SJEP. The absence of such a provision indicates that the parties intended that SJEP retain its indemnification right against defendants/third-party plaintiffs and that defendants/third-party plaintiffs forgo their indemnification right against SJEP. The court will construe the contract in accordance with the parties' intent.
For the above-stated reasons, the court concludes that the terms of 1998 settlement agreement bar any claim by defendants/third-party plaintiffs for indemnification against SJEP.
IT IS, THEREFORE, BY THE COURT ORDERED that SJEP's motion for summary judgment (Doc. 185) is granted.
The case is closed.
Copies of this order shall be transmitted to counsel of record.
IT IS SO ORDERED.