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Anesthesia Business Consultants, LLC v. Emcare, Inc.

United States District Court, E.D. Michigan, Southern Division

June 26, 2019

ANESTHHESIA BUSINESS CONSULTANTS, LLC, Plaintiff,
v.
EMCARE, INC., Defendant.

          ORDER DENYING CROSS-MOTIONS FOR SUMMARY JUDGMENT (DOCS 31, 37)

          AVERN COHN, UNITED STATES DISTRICT JUDGE

         I. INTRODUCTION

         This is a breach of contract case. Plaintiff/Counter-Defendant, Anesthesia Business Consultants, LLC, (“ABC”) is suing Defendant/Counter-Plaintiff, EmCare, Inc. (“EmCare”), for breach of contract and tortious interference. EmCare has filed a counterclaim for breach of contract and conversion. The crux of the dispute between the parties is whether their contractual relationship entitled ABC to a 2% or 6% billing rate for two EmCare affiliates.

         Each party has filed a motion for summary judgment. (Docs. 31, 37). ABC's tortious interference claim and EmCare's conversion claim are prefaced on a favorable decision regarding their claims for breach of contract. Because the Court concludes that summary judgment is inappropriate as to each parties' breach of contract claim, a discussion about dependent claims is unnecessary. For the reasons that follow, the motions for summary judgment (Docs. 31, 37) are DENIED.

         II. BACKGROUND

         The parties' papers do not detail their transactional relationship and contain generalized statements regarding the services that they provide. This makes it difficult for the Court to fully appreciate the terms of the contract at issue. The Court's understanding of the record, as best as can be gleaned from the parties' papers and oral argument, is as follows.

         ABC is a Michigan company that provides billing services to healthcare providers. EmCare is a Texas company that provides management services to its affiliated entities in the healthcare industry. ABC assists EmCare in billing insurance carriers. After billing the insurance carriers, ABC receives payment and calculates its service fee. After determining its fee, ABC sends the entire payment to EmCare and its affiliates. Finally, ABC sends an invoice for its service fee.

         In 2012, EmCare (through an affiliate California EM-I Medical Services) acquired Golden State Anesthesia Consultants (“Golden State”) and St. Vincent's Anesthesia Medical Group (“St. Vincent's”). At that time, ABC was providing billing services to Golden State and St. Vincent's; pursuant to two separate contracts that entitled ABC to 6% of the net collections received for anesthesia services.

         In 2014, EmCare and ABC entered into a contract that entitled ABC to 2% of the net collections received for anesthesia services. In relevant part, the 2014 contract states:

7.5 Client agrees to pay ABC two percent (2%) of the net collections received by Client for anesthesia, acute and chronic pain management accounts billed by ABC, excluding amounts received from a collection agency for Accounts billed by ABC and to pay such amounts within ten (10) days of the date of receipt of an invoice.

         The contract makes no separate mention of EmCare's affiliates Golden State and St. Vincent's. The contract also makes no mention of whether it applies to services rendered to future EmCare affiliates or existing EmCare affiliates.

         ABC says that the contract only covers future affiliates because it “required the parties to designate which entities would be assigned the 2% billing rate by executing a Billing Agency Addendum for each such entity.” (Doc. 35, ¶19). To support this reading of the contract, ABC cites three provisions:

13. NON-EXCLUSIVE BILLING RIGHT ABC agrees and acknowledges that it shall not be an exclusive provider of the Services set forth in this Agreement for the Client. Notwithstanding the preceding sentence, ABC shall be the exclusive provider at sites designated and assigned to ABC by Client in its sole discretion including without limitation, the exclusive right to process, bill for and receive its fee for all physician and CRNA Services for Client during the term of this Agreement or renewal.
15.2 Neither party to this Agreement may assign its rights or obligations under this Agreement without the express written consent of the other party, which consent shall not be unreasonably withheld, except that the obligations of ABC under this Agreement may be provided or fulfilled by any, parent, subsidiary, affiliate, or successor corporations, so long as ABC retains full responsibility for such obligations and Client has been provided with written notice of this assignment. This Agreement will inure to the ...

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