Opinion
87778
12-06-2024
NINA STEFANOVA, MD, Appellant, v. NEVADA HOSPITALIST GROUP, LLP, Respondent.
Valerie Del Grosso, Esq. Nevada Bar No. 11103 Origins Legal Group, LLC Attorney for Appellant
UNPUBLISHED OPINION
District Court Case No.A-19-793944-C DEPT. NO: 14
Valerie Del Grosso, Esq. Nevada Bar No. 11103 Origins Legal Group, LLC Attorney for Appellant
APPELLANT'S OPENING BRIEF ON APPEAL
NINA STEFANOVA, MD ("Defendant/Appellant") by and through her attorney of record, VALERIE DEL GROSSO, ESQ., of ORIGINS LEGAL GROUP, LLC, hereby appeals the District Court's Orders denying Stefanova's Motion for Summary Judgment and granting Plaintiff's Countermotion for Summary Judgment and the resulting Amended Judgment that contains the resulting prevailing party fee award. This Petition is supported by the attached Memorandum of Points and Authorities, the accompanying Appendices, all papers filed with the District Court in this matter, and argument by counsel that the Court may entertain.
NRAP 26.1 DISCLOSURE STATEMENT
The undersigned counsel of record certifies that the following are persons and entities as described in NRAP 26.1(a) (1), and must be disclosed. These representations are made in order that the justices of this Court may evaluate possible disqualification or recusal:
Valerie Del Grosso, Esq. Origins Legal Group, LLC
Nina Stefanova, MD Vasken LLC
TABLE OF CONTENTS
NRAP 26.1 Disclosure Statement: Page iii
Table of Contents: Page iv
Table of Authorities: Page vi
Jurisdictional Statement: Page viii
Routing Statement: Page ix
Statement of Issues Presented for Review: Page x
Statement of the Case: Page 1
Summary of Argument: Page 2
ARGUMENT: Page 3
I. Standard of Review: Page 3
II. Substantive Law of the Case: Page 4
III. Argument: Page 4
A. The material issues of fact for trial are which party breached, if at all, and which breached first, thereby absolving the other party of any further duties under the contract, but this issue was not before the court and it decided it anyway. Page 4
B. Plaintiff's successful "Countermotion" was really a months late standalone motion, which was untimely and should not have been considered by the Court because it conferred a litigation advantage on Plaintiff. Page 5
C. The only timely issue before the court was the damages element of one claim, yet the court's order granted relief on liability and damages on two claims. Page 8 iv
i. The Court ruled on Defendant's breach of contract claim, a matter which was not before it and a matter Defendant herself conceded had factual issues for trial. Page 8
ii. The Court's ruling on that matter was not based on substantial evidence, which also undermines the Court's ruling on Plaintiff's breach of contract claim. Page 12
D. The Order does not address the validity of Defendant's contractual notice, and thus is not clear whether the liquidated damages clause applies or does not apply; this outcome generates different amounts of damages. Page 17
E. The Order does not express the amount of damages awarded, which makes it impossible to determine if the liquidated damages clause renders an unenforceable penalty. Page 20
F. The fees should also be overturned. Page 22
CONCLUSION AND RELIEF SOUGHT Page 23
Certificate of Compliance: Page xii
Certificate of Service: Page xiii
TABLE OF AUTHORITIES
Cases
Barmettlerv. Reno Air, Inc., 956 P.2d 1382, 1386 (Nev. 1998): Page 13
Bulbman, Inc. v. Nevada Bell, 825 P.2d 588, 589-90 (Nev. 1992): Page 19
Cain v. Price, 415 P.3d 25, 29 (Nev. App. 2018): Page 4, 11, 14, and 18
Calloway v. City of Reno, 993 P.2d 1259, 1263 (Nev. 2000): Page 13
Cheqer, Inc., Painters and Decorators Joint Committee, Inc., 655 P.2d 996, 998 (Nev. 1982): Page 10
Christiansen v. Colt Industries, 486 U.S. 800, 817 (1988): Page 21
Clark Cty Sch. Dist. v. Richardson Constr., 168 P.3d 87, 95 n. 21 (Nev. 2007): Page 15
Collins v. Union Federal Sav. & Loan, 662 P.2d 610, 619 (Nev. 1983): Page 12
Consolidated Generator v. Cummins Engine Co., 971 P.2d 1251, 1256 (Nev. 1998): Page 12 and 13
Frantz v. Johnson, 999 P.2d 351, 360 (Nev. 2000): Page 19
Joseph F Sanson Investment v. 268 Limited, 106 Nev. 429, 435, 795 P.2d 493, 496-97 (1990): Page 20
Miller v. Wilfong, 121 Nev. 619, 622, 119 P.3d 727, 729 (2005): Page 3
OtakNev, LLC v. Eighth Judicial Dist. Court, 129 Nev. 799, 805, 312 P.3d 491, 496 (2013): Page 16
Tien Fu Hsu v. Clark County, 173 P.3d 724, 729 (Nev. 2007): Page 21
Wood v. Safeway, 121 P.3d 1026, 1030 (Nev. 2005): Page 3
Statutes
NRS 18.010: Page 23
Rules
EDCR 2.2: Page 6 and 7
NRCP 56: Page 3
Other Authorities
22 AM.JUR.2d Damages § 684 (1980): Page 20
Restatement (Second) of Contracts § 237 (Am. Law Inst. 1981): Page 4, 11, 14, 18
Restatement (Second) of Contracts § 203 (2007): Page 13
JURISDICTIONAL STATEMENT
NRAP 3A governs this appeal and provides that the aggrieved party, Defendant/Appellant, may take appeal from a final judgment. NRAP 3A(b)(1). Defendant/Appellant may also take appeal from a special order of attorney's fees and costs. NRAP 3A(b)(8).
Notices of appeal were timely filed, as follows:
Order
Date Entered
Notice of Appeal Date
Amended Judgment
December 13, 2023
December 14, 2023
Amended Order
May 11, 2023 (an order denying reconsideration of this Order was entered November 22, 2023 - NRAP 4(a)(5))
December 14, 2023
The foregoing orders ended the case by dismissing all claims with prejudice, constituting a final order. The fees and costs awards are special orders from which appeals may be taken.
ROUTING STATEMENT
This matter is not retained by the Supreme Court under NRAP 17(a). It is presumptively assigned to the court of Appeals pursuant to NRAP 17(b)(6), contract disputes less than $150,000.
STATEMENT OF ISSUES PRESENTED FOR REVIEW
The following issues are presented for the Court's review:
1. The lower court was presented with a motion for partial summary judgment on damages for one party's claim, but disposed of the entire case - liability and damages - for both parties' claims. Did the court order relief which was not requested or before it, thereby denying Defendant her right to trial on her claims and to present a defense to liability?
2. If the matters are deemed properly before the court, did material issues of fact remain for trial on which party breached first, thereby absolving the other party of further contractual duties?
3. Did the lower court enter summary judgment on the basis of substantial evidence?
STATEMENT OF THE CASE
This is a case about which party breached a contract first. Associate Physician Agreement, Appendix ___1 ___, Exhibit A. While the case is about this question, the motion for partial summary judgment on appeal was not. Instead, it was about a limited issue on the application of a liquidated damages clause in the contract. Nevertheless, the court ruled on the entire case, finding (although not stated explicitly in the order) that Defendant breached first. Specifically:
Plaintiff sued Defendant for breach of an Associate Physician Agreement, arguing that Defendant terminated without proper notice, thus triggering a liquidated damages provision. Complaint, Appendix ___1 ___, Exhibit B.
Defendant counterclaimed for breach of the same Agreement for Plaintiff's failure to handle patient records in accordance with HIPAA and as required by the Agreement. Answer and Counterclaim, Appendix ___ 1 ___, Exhibit C.
Defendant timely filed a Motion for Partial Summary Judgment on the deadline for dispositive motions, as to the damages element only of Plaintiff's breach of contract claim only. Motion for Summary Judgment, Appendix1, Exhibit D; Scheduling Order, Appendix ___ 2 ___, Exhibit E.
Plaintiff did not file a Motion for Summary Judgment by the deadline.
Plaintiff later filed an Opposition and Countermotion for Summary Judgment and a Reply in Support of its Countermotion. Opposition and CounterMotion, Appendix ___2 ___, Exhibit F; Reply in Support of Countermotion, Appendix ___2 ___, Exhibit G.
The Court granted the Countermotion and denied Stefanova's Motion. Order Granting Countermotion, Appendix2, Exhibit H.
Thereafter, after significant briefing, the Court likewise granted, in part, Plaintiff's Motion for Attorney's Fees and Costs using the prevailing party language of the Associate Physician Agreement. Judgment, Appendix ___2 ___, Exhibit I.
This appeal of the foregoing orders followed.
SUMMARY OF ARGUMENT
Defendant Stefanova filed a Motion for Partial Summary Judgment that was limited to damages, and specifically, that the liquidated damages clause in the contract between the parties limited damages to $7,520 as a matter of law.
The Motion conceded that there were material issues of fact that must be dealt with at trial as to liability, i.e., (i) which party breached first, thereby relieving the other of contractual duties, and (ii) as to the facts of that breach.
Even though it faced a limited motion on only one party's claim, the court nevertheless ruled on both liability and damages as to both party's claims. It did so, in part, on the basis of an untimely filed Countermotion for Summary Judgment by Plaintiff. Further, it did not limit damages to liquidated damages.
This was improper because (i) these matters were not before the court; (ii) even if they were, substantial issues of material fact remain, (iii) the court's ruling was not based on substantial evidence; (iv) liquidated damages are awarded in lieu of other damages but the court granted both; and (v) the court failed to consider or address certain arguments at all.
Then, the resulting attorney fee award against Defendant Stefanova was an abuse of discretion because (i) it was based on an error of law that made Plaintiff the prevailing party and (ii) allowed unreasonable billing which did not meet the Brunzell requirements.
ARGUMENT
I. Standard of Review
A. De Novo Review for Motions for Summary Judgment
The district court's legal conclusions on a Rule 56 motion for judgment are reviewed de novo. Wood v. Safeway, 121 P.3d 1026, 1030 (Nev. 2005). Summary judgment is appropriate under NRCP 56 when the pleadings, depositions, answers to interrogatories, admissions, and affidavits, if any, that are properly before the court demonstrate that no genuine issue of material fact exists, and the moving party is entitled to judgment as a matter of law. Id. at 1036.The substantive law controls which factual disputes are material and will preclude summary judgment; other factual disputes are irrelevant. Id. (citations omitted).
B. Abuse of Discretion Standard for Attorney Fees Awards
Attorney fee awards are reviewed for abuse of discretion. Miller v. Wilfong, 121 Nev. 619, 622, 119 P.3d 727, 729 (2005).
II. Substantive Law of the Case
A. Breach of Contract
One party's breach absolves the other of contractual duties. Cain v. Price, 415 P.3d 25, 29 (Nev. App. 2018), citing Restatement (Second) of Contracts § 237 (Am. Law Inst. 1981) ("one party's material breach of its promise discharges the non-breaching party's duty to perform") (emphasis added).
III. Argument
A. The material issue of fact for trial is which party breached, if at all, and which breached first, thereby absolving the other party of any further duties under the contract, but this issue was not before the court and it decided it anyway.
This case is straightforward in one way, but complicated procedurally. From a factual standpoint, two parties have sued each other for breaching the same contract, an Associate Physician Agreement. Associate Physician Agreement, Appendix ___1 ___, Exhibit A. Plaintiff alleges that Defendant breached but Plaintiff did not, and Defendant alleges that Plaintiff breached and Defendant did not.
The difficulty is that the court found that Defendant breached and Plaintiff did not, but (i) this issue was never before the court and (ii) even if it had been raised, the court had a glaring issue of fact precluding summary judgment in either party's favor. See, e.g., Order Denying Motion for Partial Summary Judgment and Granting Countermotion for Summary Judgment, Appendix2, Exhibit H.
Therefore, the remainder of this brief explains how this occurred. In short, the court had a limited issue in front of it in a motion or partial summary judgment, but through two compounding errors, it resolved the entire case without substantial evidence and with issues of fact remaining for trial.
On its de novo review, this Court should only consider the limited issue that was actually before the court (specifically, the interpretation of a liquidated damages provision in the contract), and should discard the remaining rulings on (i) liability for Plaintiff's claim and (ii) both liability and damages for Defendant's claim. Those were not before the court in fact or - even in a generous view of Plaintiff's "countermotion" - practically speaking, given that it was filed seven months late, as follows.
B. Plaintiff's successful "Countermotion" was really a months late standalone motion, which was untimely and should not have been considered by the Court because it conferred a litigation advantage on Plaintiff.
It goes without saying that all parties are bound to the Court's scheduling order. The requirement to file dispositive motions was imposed on all parties in this case, including Plaintiff. The due date was July 5, 2022. Scheduling Order, Appendix ___ 2 ___, Exhibit E.
Stefanova timely filed her Motion for Partial Summary Judgment on July 5, 2022, according to the scheduling order then in effect. Motion for Partial Summary Judgment, Appendix ___1 ___, Exhibit D. It asked the court to construe a liquidated damages provision in the parties' contract only, to avoid the need to do so at trial. That is, even if Plaintiff proved its breach of contract claim, its damages would be limited by that clause. That was the only matter before the court.
Plaintiff did not file anything by the deadline.
Rather, on February 16, 2023, or seven months and ten days later, Plaintiff filed an "opposition and countermotion." Opposition and CounterMotion, Appendix ___, Exhibit F. Plaintiff takes the position that various extensions given to Plaintiff to oppose Defendant's Motion for Partial Summary Judgment should be read to include an extension to make a countermotion as well. This is wrong according to the substance of the stipulations, and because what was filed was not a countermotion, and because the dispositive motion deadline could not be extended this way.
As an initial matter, the Eighth Judicial District Court Rules define "countermotion;" not every document which combines an opposition and standalone legal argument constitutes a "countermotion." Rather, EDCR 2.2 defines "countermotion" as "An opposition to a motion that contains a motion related to the same subject matter will be considered as a countermotion." (emphasis added).
Stefanova's original motion only pertained to the damages element of Plaintiff's breach of contract claim. By contrast, Plaintiff's filing pertained to the liability element of Plaintiff's own breach of contract claim. Opposition and CounterMotion, Appendix ___2 ___, Exhibit F.
In other words, what Plaintiff filed was a standalone Motion for Summary Judgment, regardless of its styling as a countermotion. This filing was more than seven months late, and thus should have been disregarded by the Court for that reason.
EDCR 2.2 provides that "Failure of the opposing party to serve and file written opposition may be construed as an admission that the motion and/or joinder is meritorious and a consent to granting the same." The Court may exercise its discretion to disregard late filings, and it should have done so for several reasons. These are the same reasons why, under this Court's de novo review, that the orders should be reversed and the case remanded for trial.
First, the untimely filing provided a procedural advantage to Plaintiff, which not only got to see the substance of Stefanova's primary motion in advance of its own filing, but also Plaintiff got the benefit of seven additional months' time to craft its own primary motion. If the dispositive motion deadline were properly followed by Plaintiff, Plaintiff - like Stefanova- also would have been "blind" to the opening position of the opponent, because the motions would likely have been filed on the same day, the deadline of July 5, 2022. Scheduling Order, Appendix ___, Exhibit E.
Second, Plaintiff would only have been afforded one opportunity to make its point to the Court if it had abided by the dispositive motion deadline; that is, Plaintiff would have gotten to oppose Stefanova's Motion, and Stefanova's reply would have been the final word. Instead, Plaintiff had the benefit of its opposition, the late "countermotion," and a late reply to its "countermotion." In other words, it bypassed the original deadline and still had the benefit of additional briefing.
For the foregoing reasons, Defendant Stefanova asks that the Court reverse that portion of the Amended Order granting Plaintiff's untimely motion for summary judgment as to liability on Plaintiff's own breach of contract claim.
C. The only timely issue before the court was the damages element of one claim, yet the court's order granted relief on liability and damages on two claims.
i. The Court ruled on Defendant's breach of contract claim, a matter which was not before it and a matter Defendant herself conceded had factual issues for trial.
Motions for summary judgment may dispose of cases where no genuine issues of material fact remain, and there are a variety of formulations of these requests for relief. For example, motions may be made on some, but not all, of a party's claims, or (as in the case of Stefanova's Motion for Partial Summary Judgment) on liability or damages elements of single claims. See, e.g., Bulbman, Inc. v. Nevada Bell, 825 P.2d 588, 589-90 (Nev. 1992) (in which the lower court ruled on liability on the motion for summary judgment but not damages, which were tried separately).
That is, a motion for summary judgment can address matters which need not proceed to trial, and leave the items for trial which are contested or subject to differing versions of events requiring the fact-finder to weigh evidence.
In this case, Defendant Stefanova filed a timely Motion for Partial Summary Judgment on only one element of one claim, specifically, for a ruling on the damages element of Plaintiff's breach of contract claim. Defendant requested a finding that - even if Plaintiff was successful at trial on the liability portion of breach of contract claim against Defendant, a question too factually disputed to address on summary judgment - that Plaintiff would be limited to damages calculated under the liquidated damages clause. The Court disagreed with Stefanova and thus the Amended Order denied Stefanova's Motion on the basis that a liquidated damages provision does not operate in lieu of other damages; this matter is the only proper item for de novo review on appeal.
Then, the Court went beyond Stefanova's prayer for relief, and also granted relief on claims which were not before it: liability on Plaintiff's claim, and liability and damages on Defendant's claim. But Stefanova did not bring a motion on her own claim for breach of contract. In fact, she conceded in her briefing that there were too many issues of material fact for trial to even attempt it.
It was in clear error to grant relief on elements or claims which were not before the Court, especially when the party itself had conceded had significant factual issues for trial on its own claims, and on this Court's de novo review, it should limit its ruling to only the matters in the timely filed brief by Stefanova. See, Cheqer, Inc., Painters and Decorators Joint Committee, Inc., 655 P.2d 996, 998 (Nev. 1982) (examining situations where the filing of motions for summary judgment is not a concession that no material issues of fact remain, and imposing the obligation on the trial court to make that determination).
And to the extent that it would appear that Plaintiff brought Defendant's breach of contract claim before the court in its "countermotion," that is not the case. This is why:
Plaintiff contends that Defendant breached the contract first by terminating it prior to one year. So, Plaintiff's "countermotion" merely argued the timing of Stefanova's departure from Plaintiff's company; in other words, Plaintiff argued on its own breach of contract claim that, by the timing of Stefanova's departure, she was liable, thereby triggering the contract provided for a damages calculation.
By contrast, Plaintiff's countermotion did not address Stefanova's breach of contract counterclaim, which - in brief- is that Plaintiff breached by mishandling patient records in violation of the contract, and therefore Defendant was not "terminating" within one year, but rather had been absolved of further duties because Plaintiff breached. Cain v. Price, 415 P.3d 25, 29 (Nev. App. 2018), citing Restatement (Second) of Contracts § 237 (Am. Law Inst. 1981) ("one party's material breach of its promise discharges the non-breaching party's duty to perform") (emphasis added).
Because Plaintiff's untimely countermotion also only addressed its own breach of contract claim, therefore, the court's ruling on Stefanova's claim was improper because that claim was not before the court. That ruling, in effect, was that (i) Plaintiff did not mishandle records; (ii) therefore it was not in breach first, and (iii) as a result, Defendant's exit was a breach of the contract. However, none of this information was before the court, as follows.
ii. The Court's ruling on that matter was not based on substantial evidence, which also undermines the Court's ruling on Plaintiff's breach of contract claim.
Even if the Court disagrees with the foregoing and finds that Defendant's breach of contract claim was before the lower court (as opposed to Plaintiff's breach of contract claim only), there is a second basis for reversal of the Court's Amended Order as it pertains to Stefanova's breach of contract claim.
Namely, "summary judgment, however, may not be used as a shortcut to the resolving of disputes upon facts material to the determination of the legal rights of the parties." Collins v. Union Federal Sav. & Loan, 662 P.2d 610, 619 (Nev. 1983) (citations omitted). The moving party must rely on affidavits; conclusory arguments and statements which fail to address the issues in the case are to be disregarded. Consolidated Generator v. Cummins Engine Co., 971 P.2d 1251, 1256 (Nev. 1998) ("we decline to address these arguments").
With respect to Plaintiff's "counterpetition," it is two paragraphs, as follows:
C. NHG's Countermotion for Summary Judgment
NHG's Statement of Undisputed Facts in Section III, above, are all supported by documentary evidence in the forms of the Agreement and the December Email. Whether NHG saw the December Email in December of 2018 or January of 2019, it proves that Stefanova breached the Agreement by (i) terminating the Agreement prior to one year after its Effective Date and (ii) failing to give 60 days' written notice of termination to NHG. Accordingly, this Court should rule at a minimum that Stefanova breached the Agreement in those particulars and that Stefanova owes $7,520.00 in liquidated damages to NHG.
Likewise, this Court should grant summary judgment against Stefanova's: Counterclaim against Stefanova. As set forth, above, there is no evidence that NHG breached the Agreement or otherwise harmed Stefanova. NHG was not responsible for the actions or inactions of Tufail or TA, and Stefanova's and TA's claims against each other have been dismissed with prejudice in this action. Accordingly, Stefanova cannot establish any wrongdoing by NHG with respect to Stefanova's relationship with TA. Likewise, Stefanova has no evidence to support her allegations that NHG breached the Agreement, committed any torts or violated any federal or state laws or regulations.
This is reproduced here only for convenience; the original appears in the Opposition and Counter Motion, Appendix ___2 ___, Exhibit F.
Plaintiff's own statement of undisputed facts says nothing about whether it performed its contractual duties, namely, whether or not it reported the lost patient records as the law and contract require. Id. Plaintiff also ignored Stefanova's own concession that which party breached first is a highly fact-specific issue that must go to trial, providing unsupported legal conclusions to the Court that Plaintiff has no duty or responsibility. See Consolidated Generator, 971 P.2d at 1256.
This is problematic for two reasons.
First, Plaintiff's burden of proof on its own breach of contract claim required a showing that the Plaintiff performed its own part of the contract. Calloway v. City of Reno, 993 P.2d 1259, 1263 (Nev. 2000), citing Restatement (Second) of Contracts § 203 (2007); see also, Barmettler v. Reno Air, Inc., 956 P.2d 1382, 1386 (Nev. 1998) ("Where an essential element of a claim for relief is absent, the facts, disputed or otherwise, as to other elements are rendered immaterial...").
But Plaintiff's filings did not provide any evidence whatsoever that it fulfilled its duties, specifically safeguarding patient data as the contract and federal law required. Thus the ruling in Plaintiff's favor on liability was in clear error for this reason alone.
Nor did Plaintiff make even a "naked allegation[]" that it met this element. Barmettler, 956 P.2d at 1386 (naked allegations are insufficient to raise a triable issue of fact).
But regardless, Plaintiff could not have made that showing. The case law is clear that "one party's material breach of its promise discharges the non-breaching party's duty to perform." Cain v. Price, 415 P.3d 25, 29 (Nev. App. 2018), citing Restatement (Second) of Contracts § 237 (Am. Law Inst. 1981) (emphasis added).
The crux of Stefanova's case is that Plaintiff breached first, thus absolving Stefanova of her contractual duties, but due to Plaintiff's untimely "countermotion," Stefanova was in the odd procedural position of having to show that summary judgment was not available on her own claim, a claim which was not before the Court on the motion.
Plaintiff likewise did not make the showing that it had fulfilled its contractual conditions even though Plaintiff was aware - from the face of Defendant's timely motion - that even Defendant agreed there were material issues for trial on that fact. That is, Plaintiff did not dispense with Stefanova's concession to show that there were no material issues of fact for trial as to Plaintiff's conduct pertaining to the confidential patient records. The requirement that a party show it fulfilled its own obligation is supported by Clark Cty. Sch. Dist. v. Richardson Constr., 168 P.3d 87, 95 n. 21 (Nev. 2007) (citations omitted). Plaintiff did, however, disagree with almost all of Stefanova's factual allegations, reinforcing that this matter should proceed to trial due to factual disputes.
And to the extent that Plaintiff argues that it had no patient record keeping obligation, and/or that some third party was responsible for the lost records, that is belied by the terms of the contract itself:
Section 4.01 provides that the patient health records are property of Plaintiff, Nevada Hospitalist Group. Associate Physician Agreement, Appendix ___1 ___, Exhibit A.
The health records used to bill insurance for reimbursement for patient care are the records mishandled by Plaintiff. Answer and Counterclaim, Appendix ___1 ___, Exhibit C.
Those records were delivered to Plaintiff's office to the biller; Defendant, under the contract, "shall bill patients for the Services provided by the Physician utilizing a biller recommended by the partnership." Section 2.05. Associate Physician Agreement, Appendix ___, Exhibit A.
Patient health records are "Confidential Information" pursuant to the Agreement. Section 1.03. Id.
Stefanova contends that the loss of records by Plaintiff violated Section 2.02, which requires, among other things, that all laws pertaining to patient information and care be followed (i.e., HIPAA). Id. Plaintiff said nothing about any of this, and yet the court decided that Plaintiff had not mishandled patient records or breached the agreement.
Thus, the ruling was made without substantial evidence for each element and for this reason, should be overturned. Otak Nev., LLC v. Eighth Judicial Dist. Court, 129 Nev. 799, 805, 312 P.3d 491, 496 (2013) (substantial evidence is evidence that "a reasonable mind might accept as adequate to support a conclusion").
Finally, by ruling on liability without having heard - at trial - from Defendant Stefanova, there is a procedural problem. No one had asked the court for relief on Stefanova's claim, which should have survived. If the court did intend to rule on Stefanova's claim, it did so without any evidence, because Stefanova did not provide any because she was not seeking relief on that claim. Summary judgment requires "substantial evidence" in support of it, and without substantial evidence, should be overturned. Id.
Rather, the court found, on no evidence but Plaintiff's generic statement that Stefanova breached, that Plaintiff should not only win its own breach of contract claim, but that Stefanova should lose hers. This went well beyond the matters timely before the Court and was not made on the basis of substantial evidence. Thus, the issue of which party breached first is a factual matter for trial.
D. The Order does not address the validity of Defendant's contractual notice, and thus is not clear whether the liquidated damages clause applies or does not apply; this outcome generates different amounts of damages.
The liquidated damages provision that is the subject of Defendant Stefanova's original motion for partial summary judgment is triggered when termination occurs within the first year of the Associate Physician Agreement. Associate Physician Agreement, Appendix ___1 ___, Exhibit A. Thus, even if the court properly ruled that Defendant was in breach first, the issue of when Stefanova terminated is central to the award of damages.
Stefanova briefed the issue below, specifically, that an email sent on her behalf to terminate constituted personal delivery of notice under the Associate Physician Agreement. But the Order is silent on this issue. Instead, it simply awarded Plaintiff damages under the liquidated damages provision, stating that the termination was within one year of the contract's effective date and notice was improper. But it failed to consider or address Defendant's argument that notice was proper under existing case law.
If it is implied that Stefanova's termination was timely under this clause, it is not clear that she breached the contract. In other words, there is still a factual issue as to whether she made an election under the contract's terms which allow early exit. This is in addition to the factual issue of whether Plaintiff breached first, which would absolve Stefanova of further duties under the contract, and of course, liability for a later "breach" and any resulting damage. Cain v. Price, 415 P.3d 25, 29 (Nev. App. 2018), citing Restatement (Second) of Contracts § 237 (Am. Law Inst. 1981). In fact, "the injured party is both excused from its contractual obligation and entitled to seek damages for the other party's breach." Id.
Even if the Court feels that it had substantial evidence to decide that Stefanova did elect termination as opposed to being relieved of her duties due to Plaintiff's breach, the Order was silent as to whether the notice by email was sufficient to properly terminate. If it was, the liquidated damages clause operates; if not, the notice was after the one year period and the liquidated damages provision does not apply.
Finally, even if the Court disagrees that the notice by email to terminate was insufficient, Plaintiff provided no evidence of its damages aside from the liquidated damages clause. Damages must have an evidentiary basis for their award, which must be provided by the party seeking the damages. Frantz v. Johnson, 999 P.2d 351, 360 (Nev. 2000). Plaintiff did not provide this evidence in its untimely motion. For this reason, the Amended Order required amendment at least, both to address whether the email was sufficient notice, and as a result, which measure of damages (and how much) applies, and the court refused.
E. The Order does not express the amount of damages awarded, which makes it impossible to determine if the liquidated damages clause renders an unenforceable penalty.
"Liquidated damages are the sum which a party to a contract agrees to pay if he fails to perform, and which, having been arrived at by a good faith effort to estimate the actual damages that will probably ensue from a breach, is recoverable as agreed-upon damages should a breach occur." Joseph F. Sanson Investment v. 268 Limited, 106 Nev 429, 435, 795 P.2d 493, 496-97 (1990).
Liquidated damages "is a sum inserted in a contract... as the measure of compensation for its breach." 22 AM.JUR.2d Damages § 684 (1980). Liquidated damages is the sum to be paid in the event of non-performance. Id.
The court's Order imposes damages under the liquidated damages clause and other damages. The Order is silent as to what categories of damages those are; it is also silent as to their amount.
Without this information in the Order, it cannot be determined that the application of liquidated damages in addition to these other measures of damages works an unenforceable penalty on Stefanova. Joseph F. Sanson Inv. Co. v. 268 LTD., 795 P.2d 493, 497 (Nev. 1990) (a liquidated damage clause constitutes a penalty when the liquidated damages are disproportionate to the actual damages sustained by the injured party) (citations omitted).
That is, the Order was silent as to actual damages from which a comparison can be made. This is due, in part, to the issues addressed earlier in this brief, that pertain to which party breached first, whether Defendant was absolved of contractual duties at the time of her email notice to Plaintiff, and if the email was before or after the contract's liquidated damages cutoff. In other words, the amount of actual damages sustained, which was not provided by Plaintiff to the court, did not end up in the Order; it is an issue for trial, such that the court can contrast actual damages to the liquidated damages amount to determine if the clause is applicable in the first place, and then make a determination of whether it is an enforceable estimate of actual damages or an unenforceable penalty.
As a result of the ruling, the trial date was vacated and Defendant Stefanova denied her day in court, a manifest injustice which must be corrected. Tien Fu Hsu v. Clark County, 173 P.3d 724, 729 (Nev. 2007), citing Christiansen v. Colt Industries, 486 U.S. 800, 817 (1988).
Only one element (damages) of one claim (Plaintiff NHG's breach of contract claim) was before the Court in Stefanova's timely motion for summary judgment. The Court's ruling appears to have ruled on the other element (liability) of that claim, and both liability and damages elements of the other claim (Stefanova's breach of contract claim).
With respect to the former, the court should not have ruled on liability on Plaintiff's breach of contract claim, because it was raised by Plaintiff many months late. And with respect to the latter, the court should not have ruled on Defendant Stefanova's breach of contract claim (liability or damages) because neither party raised it in any motion, whether or not timely. To the extent that it was raised, Defendant herself conceded she could not prove the claim on summary judgment. Reviewing the order de novo, this Court should consider that the only award that should have issued was as to the damages portion of Plaintiff's claim. However, if it agrees that the other elements and claims were properly raised, it should find that the following issues of fact for trial preclude entry of summary judgment:
1. When Stefanova delivered records to the biller in Plaintiff's office, was he an actual or apparent agent of Plaintiff, such that his actions bind the principal?
2. Were the records actually lost? [Plaintiff disagrees that they were, even though Defendant had to reprint and deliver them to Plaintiff's executive director after having submitted to the biller].
3. If the records were lost, did Plaintiff have an obligation to report under HIPAA?
4. Plaintiff's director stated in writing that the biller had caused a problem for other doctors, too. Did this mean that more than 500 records, which triggers an additional reporting duty under HIPAA, arise for Plaintiff?
5. Did Plaintiff report as required by law?
6. If so, did the reporting mean it did not breach the Associate Physician Agreement?
7. Given that Plaintiff has only one employee, who monitored the email inbox where notice of termination was sent? That is, was notice actually received?
None of this was raised below because the claims were not before the court.
F. The fees should also be overturned.
If the Court overturns the order on summary judgment, the fee award must also be overturned because Plaintiff would no longer be the prevailing party. Associate Physician Agreement, Appendix ___, Exhibit A. NRS 18.010 makes clear that fees must be based on statute, contract, or a finding of groundlessness. Here, the court awarded fees based on the prevailing parties language of the contract. If Plaintiff does not prevail as a result of this appeal, the fee award should also be overturned.
VI. CONCLUSION AND RELIEF SOUGHT
Defendant respectfully requests that the Court reverse and remand for trial. The only de novo review should be of the matters actually and properly before the court. The rest should be overturned.
CERTIFICATE OF COMPLIANCE
I hereby certify that I have read the above and foregoing brief and to the best of my knowledge, information and belief, it is not frivolous or interposed for any improper purposes. I further certify that this brief complies with all applicable Nevada Rules of appellate procedure, in particular NRAP 28(e) and the formatting requirements of NRAP 32(a)(4)-(6) (Times New Roman Size 14, 6256 words, 24 pages), which requires every assertion in the brief regarding matters in the record to be supported by appropriate references to the records. I understand that I may be subject to sanctions in the event that the accompanying brief is not in conformity with the requirements of the Nevada Rules of Appellate Procedure.