11/16/2017
IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
May 23, 2017 Session
R.B.E., PLLC ET AL. V. EMERGENCY COVERAGE CORPORATION
Appeal from the Circuit Court for Knox County
No. 2-540-15 Kristi M. Davis, Judge
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No. E2016-02378-COA-R3-CV
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This case focuses on a service contract between R.B.E,PLLC (RBE) and Emergency
Coverage Corporation pursuant to which Dr. Robert Bruce Evans1 and his company were
to provide medical services in emergency rooms. The issue before us is whether the
subject contract obligates Emergency Coverage to schedule Dr. Evans for a minimum
number of hours. Dr. Evans2 and RBE filed a breach of contract action alleging that
Emergency Coverage failed to pay the required minimum monthly amounts due under the
contract. Emergency Coverage filed a motion for summary judgment asserting that the
contract contains a minimum availability requirement for Dr. Evans but no obligation on
the part of Emergency Coverage to use Dr. Evans for a guaranteed number of hours. The
trial court granted the motion. The plaintiffs appeal. We affirm.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court
Affirmed; Case Remanded
CHARLES D. SUSANO, JR., J., delivered the opinion of the court, in which JOHN W.
MCCLARTY and KENNY W. ARMSTRONG, JJ., joined.
Mark T. Hurt, Abingdon, Virginia, for the appellants, R.B.E.,PLLC, and David Michael
Serrano, Executor of the Estate of Dr. Robert Bruce Evans.
Andrew R. Tillman and Jeremey R. Goolsby, Knoxville, Tennessee, for the appellee,
Emergency Coverage Corporation.
1
While he is not a named party to the contract, he is the sole member of RBE, a
professional limited liability company. We will refer to Dr. Evans since he is the beneficiary of
and, effectively, the obligor under, the contract. All references to Dr. Evans in this opinion are
equally applicable to RBE.
2
Dr. Evans passed away on February 17, 2016, and the Executor of his Estate was
substituted as a plaintiff.
OPINION
I.
Emergency Coverage is a staffing company that contracts with physicians to
provide coverage in hospital emergency rooms. The plaintiff RBE entered into a contract
with Emergency Coverage for Dr. Evans to provide medical services at two hospitals.
The genesis of this litigation is in the language of the service contract; “Addendum 1”
executed contemporaneously with the contract; and three amendments to Addendum 1.
The relevant portions of the parties’ agreement can be found in the original contract, and
the four Addenda. The following is from the contract:
Scheduling. Professional agrees to provide Services at
Facilities during mutually agreeable shifts, including holidays
as necessary in accordance with the minimum availability
requirements set forth in Addendum “1”. For each month that
this Agreement is in effect, Professional will notify Company
of the days Professional is not available to provide Services.
When scheduling Professional to perform Services, Company
shall use reasonable efforts to accommodate Professional’s
availability. In the event that Professional is or becomes
unable to provide Services as scheduled by Company,
Professional must immediately notify Company and locate a
replacement to fill Professional’s vacant shift in order that the
schedule may be filled. Except in cases of emergency, if
Professional fails to procure replacement coverage to fill
Professional’s vacant shift, Professional will pay Company
any expenses incurred by Company in providing a substitute
for Professional.
As previously noted in this opinion, Addendum 1 was amended three times. The last
amendment was effective during the timeframe relevant to this appeal. Dr. Evans was
obligated to provide emergency room services at two locations, Wythe County
Community Hospital and Clinch Valley Medical Center. The following language from
that last amendment is relevant:
Service Locations; Base Compensation; Scheduling
Requirement. Professional agrees to provide Services under
this Agreement for the number of hours or shifts as set forth
below at the following Facility(ies) [sic] at the following base
rates for Services provided by Professional:
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Facility Name
a. Wythe County Hospital
b. Clinch Valley Medical Center
Service Line
a. Emergency Department
b. Emergency Department
Base Rate
a. $150 per hour
b. $175 per hour
Scheduling Requirement
a. Minimum of 144 hours each month
b. Minimum of 120 hours each month
(Numbering in original omitted; underlining and bold font in original.)
The plaintiffs allege that Emergency Coverage failed to pay the minimum monthly
amounts due under the contract. According to the plaintiffs, Dr. Evans made himself
available to work the minimum number of hours and is entitled to compensation for that
number of hours, regardless of whether he actually worked those hours.
Emergency Coverage filed a motion for summary judgment. It asserted that it had
no obligation to pay Dr. Evans for shifts not worked. According to Emergency
Coverage, “the [c]ontract requires [Dr. Evans] to be available for a minimum number of
hours, the [c]ontract does not require [Emergency Coverage] to actually schedule him for
the full amount of his availability.” (Emphasis in original.) According to Emergency
Coverage, the contract does not require Emergency Coverage to schedule Dr. Evans for
nor does it guarantee that he would be scheduled for a minimum number of hours.
The trial court granted Emergency Coverage summary judgment. The court found
that “[t]he various addenda all relate back to the minimum availability requirement in that
they more particularly define that availability requirement.” The trial court concluded
that the contract is not ambiguous. As will be explained in this opinion, the contract
establishes a minimum availability requirement for Dr. Evans, not a scheduling
requirement for Emergency Coverage.
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II.
The issue before the Court is whether the trial court erred when it construed the
contract as not requiring Emergency Coverage to schedule Dr. Evans for a minimum
number of hours each month.
III.
We review a grant of summary judgment in accordance with the following
standard, as established by the Supreme Court:
Summary judgment is appropriate when “the pleadings,
depositions, answers to interrogatories, and admissions on
file, together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving
party is entitled to a judgment as a matter of law.” Tenn. R.
Civ. P. 56.04. We review a trial court’s ruling on a motion
for summary judgment de novo, without a presumption of
correctness.
* * *
[I]n Tennessee, as in the federal system, when the moving
party does not bear the burden of proof at trial, the moving
party may satisfy its burden of production either (1) by
affirmatively negating an essential element of the nonmoving
party’s claim or (2) by demonstrating that the nonmoving
party’s evidence at the summary judgment stage is
insufficient to establish the nonmoving party’s claim or
defense. . . . The nonmoving party must demonstrate the
existence of specific facts in the record which could lead a
rational trier of fact to find in favor of the nonmoving party.
Rye v. Women’s Care Ctr. of Memphis, MPLLC, 477 S.W.3d 235, 250, 264-65 (Tenn.
2015) (emphasis in original). In this case, there are no disputed material facts. The only
issues are ones of law.
IV.
A.
The contract at issue designates the governing law as the law of the state where the
healthcare facilities are located. Because the facilities where Dr. Evans was to provide
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services are located in Virginia, that State’s law governs this dispute.
The Supreme Court of Virginia has provided the following guidance:
[T]he question whether a contract is ambiguous is not one of
fact but one of law.
. . . [W]e have often said that it is the duty of the court to
construe a contract as written:
It is the function of the court to construe the contract made by
the parties, not to make a contract for them. The question for
the court is what did the parties agree to as evidenced by their
contract. The guiding light in the construction of a contract is
the intention of the parties as expressed by them in the words
they have used, and courts are bound to say that the parties
intended what the written instrument plainly declares.
Wilson v. Holyfield, 313 S.E.2d 396, 398 (Va. 1984).
B.
According to the plaintiffs, the contract unambiguously required Emergency
Coverage to schedule Dr. Evans for a minimum number of hours. They claim that,
because the number of hours provided in the contract was labeled a “scheduling
requirement,” the contract expressly required Emergency Coverage to schedule Dr. Evans
for that number of hours.
As previously noted in this opinion, the contract provides that Dr. Evans “agrees
to provide Services at Facilities during mutually agreeable shifts including holidays as
necessary in accordance with the minimum availability requirements set forth in [the
contract].” Under the contract, Dr. Evans “agrees to provide Services under this
[a]greement for the number of hours or shifts as set forth below . . . at the following base
rates for Services provided by [him].”
In plain language, the Addendum defines the “minimum availability requirements”
for Dr. Evans. This provision deals with Dr. Evans and how many hours he must be
available, not with the number of hours that Emergency Coverage must schedule him.
This interpretation is supported by the language that Dr. Evans agreed to provide services
“as necessary.” (Emphasis added.) This language demonstrates that Emergency
Coverage would utilize Dr. Evans’s services as needed and, contrary to Dr. Evans’s
position, was not agreeing to schedule him for the number of hours set forth in the last
addendum.
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While the minimum number of hours in the contract is set forth under the heading
“Scheduling Requirement,” the contract does not purport to place on Emergency
Coverage a duty to schedule Dr. Evans for that number of hours. When read as a whole,
the scheduling requirement simply establishes that Dr. Evans must be available for
Emergency Coverage to schedule him for that number of hours each month. Nothing in
the contract imposes an obligation on Emergency Coverage to schedule Dr. Evans. The
contract does, however, impose an obligation on Dr. Evans to be available. The
scheduling requirement is clearly an obligation imposed on Dr. Evans and not Emergency
Coverage.
The contract, when read as a whole, lends support to this interpretation. Under the
provision titled “professional duties,” the contract provides that Dr. Evans “will render
medical services (“Services”) . . . .” Also, the provision dealing with “service
compensation” explains that Dr. Evans would be paid the amounts in the contract in
consideration for assigning his professional fees to Emergency Coverage. It is significant
that the contract focuses on his “Services” rather than on hours not worked by him. The
contract is clear that Dr. Evans would be compensated by Emergency Coverage for
rendering medical services and he, in return, would assign his compensation from the
hospitals to Emergency Coverage. Nothing in the contract imposes an obligation on
Emergency Coverage to compensate Dr. Evans in connection with shifts he did not work.
The plaintiffs claim that implied covenants would require Emergency Coverage to
schedule Dr. Evans for the minimum number of hours set forth in the contract. They
argue that Emergency Coverage must not prevent nor hinder performance of the contract
by Dr. Evans. Emergency Coverage, however, has not hindered performance.
Performance under the contract involved Dr. Evans working the shifts for which
Emergency Coverage scheduled him. By not scheduling Dr. Evans, Emergency
Coverage did not hinder his ability to work as a physician.
The plaintiffs also argue that there was an implied obligation for Emergency
Coverage to not frustrate Dr. Evans’s expectation of working. Because there was no
requirement for Emergency Coverage to schedule Dr. Evans, there could be no
expectation of work. Additionally, under the terms of the contract, when Emergency
Coverage did not schedule Dr. Evans, he was free to work at another facility or for
another company. Accordingly, Emergency Coverage did nothing to frustrate Dr.
Evans’s expectation of working.
In summary, the contract is unambiguous. The clear intention of the parties based
on the contract as written was that Dr. Evans would be available to work a minimum
number of hours each month and Emergency Coverage would pay Dr. Evans for the
number of hours he worked. The “scheduling requirement” defines the minimum
availability requirement that Dr. Evans was obligated to meet. Under the contract, Dr.
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Evans would be compensated using the base hourly rate of pay for rendering services.
Emergency Coverage was not required to schedule Dr. Evans for a certain number of
hours. There is no error in the trial court’s grant of summary judgment.
V.
The judgment of the trial court is affirmed. The costs on appeal are assessed to the
appellants, R.B.E.,PLLC and David Michael Serrano, Executor of the Estate of Robert
Bruce Evans. This case is remanded to the trial court for collection of costs assessed
below.
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CHARLES D. SUSANO, JR., JUDGE
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