Moore Eye Care, P.C. v. Chartcare Solutions Inc.
Moore Eye Care, P.C. v. Chartcare Solutions Inc.
Opinion of the Court
MEMORANDUM
Rufe, District Judge *428Plaintiffs Moore Eye Care, P.C. and Eye Services, MSO d/b/a Moore Eye Institute (collectively "Moore Eye") provide medical and surgical ophthalmology services.
I. BACKGROUND
While Moore Eye refers to this case as a "straightforward contractual dispute" for which summary judgment is appropriate,
In December 2012, Moore Eye entered into a billing agreement with i-Plexus Solutions, Inc., under which i-Plexus would provide medical billing services to Moore Eye, and Moore Eye would pay i-Plexus a percentage of its monthly collections.
On January 26, 2015, a meeting was held between Moore Eye representatives and Michael Halligan, the Vice President of QHR (ChartCare's parent company). Moore Eye alleges that its representatives presented Halligan with evidence of ChartCare's failure to perform its contractual duties.
ChartCare and MTBC entered into an Asset Purchase Agreement ("APA") dated July 10, 2015, by which MTBC assumed all responsibilities for the billing contract.
On August 11, 2015, the President of MTBC sent Dr. Ginsburg, the founder of Moore Eye, an email stating that MTBC "cannot continue to allocate resources to [Moore Eye's] account after [August 14, 2015] unless/until we receive a good faith payment of the most recent two months' balance by the end of the week (i.e., Friday, 8/14)."
On August 14, 2015, Moore Eye filed its complaint in the Court of Common Pleas of Delaware County, Pennsylvania, alleging claims for breach of contract and fraud against Defendants, which include ChartCare, QHR, and MTBC. On September 23, 2015, the matter was removed to this Court. All Defendants, except MTBC, have settled with Plaintiff.
On October 29, 2015, MTBC filed an answer, and asserted two cross-claims against ChartCare for indemnification, and counterclaims against Moore Eye for breach of contract, quantum meruit, and unjust enrichment.
II. LEGAL STANDARD
A court will award summary judgment on a claim or part of a claim where there is "no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law."
In evaluating a summary judgment motion, a court "must view the facts in the light most favorable to the non-moving party," and make every reasonable inference in that party's favor.
The rule is no different where there are cross-motions for summary judgment.
III. DISCUSSION
A. MTBC AND MOORE EYE'S CROSS-MOTIONS FOR SUMMARY JUDGMENT ON MTBC'S COUNTER-CLAIMS FOR BREACH OF CONTRACT
Moore Eye and MTBC have filed cross-motions for summary judgment on MTBC's breach of contract claims, which are based on Moore Eye's failure to pay for services provided by ChartCare and MTBC, and Moore Eye's alleged early termination of the contract in violation of the contract's terms.
MTBC also seeks summary judgment on these counterclaims, asserting that it is undisputed that Moore Eye breached the terms of the billing agreement by refusing to pay the monthly service fees. MTBC asserts that any breach by ChartCare or MTBC did not absolve Moore Eye of its duty to pay, as the record shows that Moore Eye elected to continue performance of the billing agreement regardless of MTBC and ChartCare's alleged breach.
ChartCare asserts that it did not breach the contract, that it never agreed to write off the pre-2015 accounts receivable, and that any such agreement modifying the contract would be void for lack of consideration.
Under Pennsylvania law, a cause of action for breach of contract requires: "(1) the existence of a contract, including its essential terms, (2) a breach of a duty imposed by the contract and (3) resultant damages."
For example, the Court cannot determine as a matter of law whether Moore Eye elected to continue the contract and to obligate itself to pay, despite any alleged breach by the servicers.
Additionally, the dispute as to the nature of any alleged waiver of the pre-2015 debt by ChartCare precludes any finding, at this stage, as to the viability of a claim seeking payment for any pre-2015 accounts receivable. Moore Eye has produced its summary of the January 26, 2015 meeting stating that Mr. Halligan offered to release Moore Eye's obligation for all pre-2015 outstanding balances as a good faith gesture. ChartCare also continued to provide some services in the absence of payment from Moore Eye. However, the alleged waiver is disputed by both MTBC and ChartCare, and even Moore Eye's meeting summary does not establish the context of any waiver, such as whether it was part of a broader agreement to modify the contract for consideration, or whether any such consideration was satisfied.
These same factual disputes preclude a determination as to whether either party could, or did, terminate the contract without notice.
B. MOORE EYE'S MOTION FOR SUMMARY JUDGMENT ON MTBC'S COUNTERCLAIMS FOR UNJUST ENRICHMENT AND QUANTUM MERUIT
Moore Eye moved for summary judgment on MTBC's claims of unjust enrichment and quantum meruit. Summary judgment will be granted as to these two claims, as under Pennsylvania law, "the doctrine of quasicontract, or unjust enrichment, is inapplicable where a written or express contract exists."
C. MTBC'S MOTION FOR SUMMARY JUDGMENT ON COUNT I OF MOORE EYE'S COMPLAINT
MTBC moved for summary judgment on Count I of Moore Eye's complaint for breach of contract, primarily relying on the same arguments discussed above.
D. CHARTCARE'S MOTION FOR SUMMARY JUDGMENT ON MTBC'S CROSS-CLAIMS
MTBC brought cross-claims against ChartCare seeking indemnification for Moore Eye's claims against it. In Count I, MTBC asserts that ChartCare warranted that the Moore Eye receivables were valid obligations, and any alleged agreement to write off the pre-2015 accounts receivable would breach this warranty. In Count II, MTBC seeks indemnification to the extent it is found liable for damages against Moore Eye based on ChartCare's "breaches, acts or omissions."
i. ChartCare's Contention That Counts I and II are Premature
ChartCare asserts that MTBC's claims against it are premature because the APA does not provide a right to indemnification until MTBC sustains damages in excess of $ 50,000. According to ChartCare, MTBC has not yet sustained any damages because the claims against it are still pending.
By asserting that MTBC's claims for indemnification are premature, ChartCare misconstrues the language of the APA. The relevant article of the APA provides: "The Purchaser will not be entitled to make any Indemnity Claim against the Vendor ... until the aggregate amount of all Damages exceeds $ 50,000 (the "Indemnity Threshold").
*435ii. Count I of MTBC's Cross-Claim
ChartCare seeks summary judgment on Count I of MTBC's cross-claim, asserting that MTBC cannot offer "clear and convincing" evidence that ChartCare orally modified its service agreement with Moore Eye.
ChartCare also asserts that Count I should be dismissed because ChartCare did not guarantee MTBC's ability to collect the Moore Eye Receivables, and instead "expressly disclaimed the collectability of the Moore Eye Receivables in the APA and provided for the possibility that Moore Eye would seek to reduce or eliminate entirely any amount owed."
All existing accounts receivable of the Vendor: (i) represent valid obligations of customers of the Vendor arising from bona fide transactions entered into in the Ordinary Course of Business; and (ii) except for Moore Eye, are current and, to the Vendor's knowledge and without independent inquiry, will be collected in full (without any counterclaim or setoff).
The APA addresses the Moore Eye account specifically in other provisions as well: Article 2.6 provides that MTBC was only obliged to pay ChartCare for the Moore Eye Receivables to the extent it was able to collect them,
Although the APA distinguishes the Moore Eye account from those that were "current" and would be "collected in full," ChartCare warranted that the Moore Eye account represented a "valid obligation[ ]."
iii. Count II of MTBC's Cross-Claim
ChartCare also moves for summary judgment on Count II, in which MTBC seeks indemnification for "damages sustained by Moore Eye as a result of contractual breaches, acts or omissions by [ChartCare]."
*436In response, MTBC asserts that ChartCare provided all of the billing services that Moore Eye claims were deficient and for which MTBC is being sued. Specifically, during the period following the execution of the APA, ChartCare's employees were still performing all the work on Moore Eye's account in accordance with the APA's provision that ChartCare employees would assist MTBC in transitioning the acquired accounts, and because Moore Eye refused to grant MTBC's employees access to the Moore Eye server.
MTBC fails to explain how any ineffectiveness in ChartCare's provision of services would give rise to a claim of indemnification against them. The provision of the APA that MTBC refers to only provides that ChartCare "will permit those other employees [who were not transferred to MTBC] ... to support the transition of the Purchased Assets to Purchaser."
IV. CONCLUSION
For the reasons stated above, MTBC's motion for summary judgment will be denied. ChartCare's motion for summary judgment and Moore Eye's motion for summary judgment will be denied in part and granted in part. MTBC's counterclaims for quantum meruit and unjust enrichment are dismissed, and Count II of MTBC's cross-claim is dismissed. An Order follows.
Pls.' Statement of Uncontested Facts in Supp. Summ. J. [Doc. No. 86] ¶¶ 1-2.
This Court has subject matter jurisdiction over this case under
Pls.' Mem. Law Supp. Summ. J. [Doc. No. 86] at 1.
See i-Plexus Billing Solutions Contract, Ex. 5 to Pls.' Mot. Summ. J. [Doc. No. 86] ¶ 3.
The parties variously refer to the conduct by QHR's subsidiary, ChartCare, as conduct of SoftCare, ChartCare, QHR, and SoftCare/QHR. QHR is no longer a party to this action. SoftCare has changed its name to ChartCare.
Pls.' Statement of Uncontested Facts in Supp. Summ. J. [Doc. No. 86] ¶¶ 20-22, 24-25.
ChartCare's Counterstatement to Pls.' Statement of Uncontested Facts [Doc. No. 90] ¶¶ 24-25; MTBC's Counterstatement to Pls.' Statement of Uncontested Facts [Doc. No. 91] ¶¶ 24-25.
Pls.' Statement of Uncontested Facts in Supp. Summ. J. [Doc. No. 86] ¶ 26.
ChartCare's Counterstatement to Pls.' Statement of Uncontested Facts [Doc. No. 90] ¶¶ 27-28; MTBC's Counterstatement to Pls.' Statement of Uncontested Facts [Doc. No. 91] ¶¶ 27-28.
Pls.' Statement of Uncontested Facts in Supp. Summ. J. [Doc. No. 86] ¶ 29.
See Asset Purchase Agreement, Ex. 8 to Pls.' Mot. Summ. J. [Doc. No. 86].
Pls.' Statement of Uncontested Facts in Supp. Summ. J. [Doc. No. 86] ¶ 37.
MTBC's Statement of Uncontested Facts in Supp. Summ. J. [Doc. No. 88] ¶¶ 39-41. Moore Eye disputes MTBC's characterization of the server, and asserts that "Moore Eyes' billing system contained the patient record." Pls.' Response to MTBC's Additional Facts [Doc. No. 99] ¶ 51. Moore Eye also asserts that MTBC did not specify why they were requesting access to Moore Eye's server, and that it did not feel confident giving MTBC access to the server.
Pls.' Statement of Uncontested Facts in Supp. Summ. J. [Doc. No. 86] ¶ 49.
MTBC's Counterstatement to Pls.' Statement of Uncontested Facts [Doc. No. 91] ¶ 43.
MTBC's Answer [Doc. No. 11]. MTBC also asserted a counterclaim for fraud, which has been voluntarily dismissed. [Doc. No. 26].
In Count II, MTBC asserts that it provided additional services to Moore Eye from July 10, 2015 through August 13, 2015, and that it is owed for the services rendered by ChartCare and MTBC during the period from July 1, 2015 through August 13, 2015. MTBC's Counterclaims [Doc. No. 11] at ¶¶ 6-8
Fed. R. Civ. P. 56(a).
It appears that MTBC only moved for summary judgment on its counterclaims for breach of contract based on Moore Eye's alleged failure to pay, not its alleged early termination of the contract. See MTBC's Mem. Law Supp. Summ. J. [Doc. No. 88] at 16.
Pls.' Mem. Law Supp. Summ. J. [Doc. No. 86] at 9-13.
Id. at 10.
MTBC Mem. Law Supp. Summ. J. [Doc. No. 88] at 10-13.
MTBC's Mem. Opp'n Pls.' Mot. Summ. J. [Doc. No. 91] at 12.
Id. at 14.
ChartCare's Mem. Opp'n. Pls.' Mot. Summ. J. [Doc. No. 90] at 2-3. Moore Eye asserts that ChartCare does not have standing to oppose Moore Eye's summary judgment motion because there are no pending claims between Moore Eye and ChartCare. Pls.' Reply Mem. Supp. Mot. Summ. J. [Doc. No. 99] at 5-6. However, as the resolution of this motion implicates ChartCare's potential liability to MTBC pursuant to MTBC's cross-claim seeking indemnification from ChartCare, the Court may consider ChartCare's filing.
Fina v. Fina ,
13 Pa. Stat. and Cons. Stat. § 1303(f); see also AFCO Cargo PIT LLC v. DHL Exp. (USA), Inc. , No. 10-1080,
"Under basic contract principles, when one party to a contract feels that the other contracting party has breached its agreement, the non-breaching party may either stop performance and assume the contract is avoided, or continue its performance and sue for damages. Under no circumstances may the non-breaching party stop performance and continue to take advantage of the contract's benefits." S & R Corp. v. Jiffy Lube Intern., Inc. ,
See Spreadsheet of 1890 Claims Uploaded for Moore Eye Ex. 8 to MTBC's Opp'n Pls.' Mot. Summ. J. [Doc. No. 92].
See Mem. of January 26, 2015 Meeting, Ex. 6 to Pls. Mot. Summ. J. [Doc. No. 86].
Ginsburg Dep., Ex. 1 to Pls.' Mot. Summ. J. [Doc. No. 86] at 89, 106.
Notably, Moore Eye's summary of the meeting asserts that, after Halligan offered to release Moore's obligation, "Dr. Ginsburg then stated that Moore Eye will pay QHR within 24 hours after receiving the invoice from QHR starting January 2015." Mem. of January 26, 2015 Meeting, Ex. 6 to Pls. Mot. Summ. J. [Doc. No. 86]. The Court cannot determine from the record whether this agreement to pay, which Moore Eye did not conform to, was consideration for a modification by which the pre-2015 accounts receivable would be waived.
MTBC has asserted that "[i]n light of Moore Eye's admission that a contract existed between Moore Eye and MTBC, a fact it previously disputed, the issues raised [in the unjust enrichment and quantum meruit counts] are moot." MTBC's Opp'n. Pls.' Mot. Summ. J. [Doc. No. 91] at 16.
MTBC's Mem. Supp. Summ. J. [Doc. No. 88] at 10-15.
Asset Purchase Agreement, Ex. B. to ChartCare's Mot. Summ. J. [Doc. No. 87] § 6.3(b)
The parties agree that the APA is governed by Canadian law, under which words are to be given their literal meaning "where that meaning is unambiguous ... is not excluded by the context, and is sensible with reference to the extrinsic circumstances in which the writer was placed at the time of writing." Cruise Connections Charter Mgmt. 1, LP v. Attorney General of Canada ,
See MTBC's Cross-Claims [Doc. No. 11] ¶¶ 1-7.
An oral modification of a written contract must be proven by "clear, precise and convincing evidence." Fina v. Fina ,
ChartCare's Mem. Supp. Summ. J. [Doc. No. 87] at 1-2.
Asset Purchase Agreement, Ex. B. to ChartCare's Mot. Summ. J. [Doc. No. 87] § 3.1(e).
MTBC's Cross-Claims [Doc. No. 11] at ¶ 10.
ChartCare's Mem. Supp. Summ. J. [Doc. No. 87] at 12-13.
MTBC's Mem. Opp'n ChartCare's Mot. Summ. J. [Doc. No. 95] at 11-12.
Asset Purchase Agreement, Ex. B. to ChartCare's Mot. Summ. J. [Doc. No. 87] § 7.3.
Reference
- Full Case Name
- MOORE EYE CARE, P.C. v. CHARTCARE SOLUTIONS INC.
- Cited By
- 2 cases
- Status
- Published