Optimus Hospitalists & Pediatric Subspecialists, Ltd d/b/a Midwest Neoped Associates, Ltd. v. Franciscan Alliance, Inc.

Filing 69

MEMORANDUM OPINION AND ORDER: Signed by the Honorable Rebecca R. Pallmeyer on 8/20/2018. Mailed notice. (etv, )

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
OPTIMUS HOSPITALISTS & PEDIATRIC
SUBSPECIALISTS, LTD d/b/a MIDWEST
NEOPED ASSOCIATES, LTD., an
Illinois limited company,
Plaintiff,
v.
FRANCISCAN ALLIANCE, INC. d/b/a
FRANCISCAN ST. JAMES HEALTH f/k/a
SISTERS OF ST. FRANCIS HEALTH
SERVICES, INC. d/b/a ST. JAMES
HOSPITAL and HEALTH CENTERS, an
Indiana corporation,
Defendant.

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No. 16 C 7760
Judge Rebecca R. Pallmeyer

MEMORANDUM OPINION AND ORDER
This case requires the court to interpret a professional services contract between a group
of “hospitalists”—that is, physicians who provide medical care only to hospitalized patients—and
the hospital where they provided services.

Plaintiff Optimus Hospitalists & Pediatric

Subspecialists, Ltd. (hereafter “Optimus”) argues that the contract obligated Defendant
Franciscan Alliance, Inc. (hereafter “Franciscan”) to assign certain patients at its hospitals to
Plaintiff at least four days per week. According to Plaintiff, Defendant breached this obligation by
assigning those patients to Plaintiff on fewer than four days per week for an unidentified period
(or periods) between 2013 and 2015. Defendant responds that the contract required Plaintiff to
“accept” those patients at least four days per week, but only if Defendant exercised its discretion
to assign them to Plaintiff. Defendant counterclaims that Plaintiff failed to perform any of its
contractual obligations for a period of one week in December 2013. Both parties now seek
summary judgment on Plaintiff’s claim for breach of contract. 1 For the reasons explained below,

1

Defendant’s counterclaim is not at issue here.

the court concludes that the contract is ambiguous, and therefore denies both motions.
BACKGROUND
Most of the facts in this case are undisputed. Plaintiff Optimus is an Illinois corporation
with its principal place of business in Oak Brook, Illinois. (Pl.’s Statement of Facts (hereafter
“PSOF”) [57], at ¶ 1.) At all times relevant to this lawsuit, physicians employed by Optimus
provided medical services at certain hospital facilities in the Chicago area, including two facilities
owned by Defendant Franciscan, an Indiana nonprofit corporation whose principal place of
business is in Mishawaka, Indiana. (Def.’s Statement of Facts (hereafter “DSOF”) [61], at ¶ 2.)
Defendant’s Chicago-area facilities are in Chicago Heights, Illinois, and Olympia Fields, Illinois.
(Id.)
Both the Chicago Heights and Olympia Fields facilities permit “attending physicians”—that
is, primary-care providers who also have “medical staff privileges”—to admit patients to the
hospital. (PSOF ¶ 5.) Attending physicians are “responsible for providing, supervising, and/or
directing the treatment received” by their patients. (Id.) When an attending physician is not
available to care for her hospitalized patients, someone else must do so. (Id. at ¶ 9.) This service
is generally performed by a “hospitalist”—that is, by a physician who “specialize[s] in providing
only inpatient care,” and does not “maintain a private practice” or “provide primary medical care
outside the hospital setting.” (Id. at ¶¶ 10-13.) When a patient seeks treatment in the hospital’s
emergency department and subsequently requires inpatient admission to the hospital, Franciscan
assigns a hospitalist to supervise that patient’s care if the patient does not have a prior relationship
with one of the facility’s attending physicians. (Id. at ¶ 19.) Such patients are referred to as
“unassigned patients.” (Id.)
Physicians employed by Optimus began providing “urgent and on-going medical services”
at Franciscan’s Chicago Heights facility in the mid-1990s. (Id. at ¶ 8.) Although the record does
not show the exact terms of the parties’ agreement (or agreements) from that period, it appears
that at least one Optimus physician was to be “physically present at Chicago Heights, twenty-four
2

hours per day, seven days per week.” (Id.) This physician would care for patients “when the
patients’ primary care physician was unavailable.” (Id.)
I.

The 2011 and 2013 agreements
The contract at issue in this case was formed in January 2011 and was amended in March

2013. Although it is the amended (2013) version of the contract that the court is called upon to
interpret here, the court concludes that this (amended) contract is ambiguous, as explained below.
The court therefore begins by recounting certain provisions of the original (2011) agreement, as
well as extrinsic evidence of negotiations between the parties in 2012 and 2013 that could shed
light on the intent behind the amendments.
a.

2011 agreement

The 2011 contract stated, inter alia, that Optimus would be the “exclusive” provider of “the
professional services described in Exhibit B (‘Services’).” (2011 Agreement § 1.1, Ex. 3 to DSOF.)
“This exclusive right to provide Services,” the contract continued, “shall not apply to any other
services.” (Id.)
Exhibit B to the 2011 Agreement described the various services that Optimus had the
exclusive right to perform.

These services included, inter alia, “[p]rovid[ing] a Designated

Professional on-site at each Facility 24 hours per day, seven days per week to serve as the
‘Urgent Hospitalist’ to provide house coverage”; “[p]rovid[ing] on-site hospitalist service at the
Facility located in Chicago Heights for clinical duties 24 hours per day, 365 days per year”; and
“[providing] a Hospitalist to make daily rounds and to be available on-call at the Facility located in
Olympia Fields.” (Id. at Ex. B.) Another service was described as follows: “[a]cceptance of any
and all unassigned patients who come to the Facility’s E[mergency] D[epartment] and who require
inpatient admission to the Facility and are assigned to [an Optimus employee] pursuant to the ED

3

call schedule.” 2 (Id.) So long as Optimus was “not in material breach of any of its obligations
under this Agreement,” Franciscan would not “extend Medical Staff privileges to any other
hospitalist or neonatologist who is not affiliated with [Optimus.]” (2011 Agreement § 1.1, Ex. 3 to
DSOF.) 3
b.

Negotiations leading to amendment

In August 2012, the President and CEO of Optimus informed Franciscan that Optimus
was “experiencing very serious, unexpected and unprecedented staffing problems in the
Hospitalist Service,” and was “frantically working on how to resolve these issues.” (Letter of
Aug. 31, 2012, Ex. 1 to Senesac Decl., Ex. 5 to DSOF.) The parties do not fully explain the nature
of these staffing problems, though it appears that Optimus was experiencing financial difficulties
and that at least two of its physicians had resigned. (See Supp. Aff. of Udochukwu Asonye
(hereafter “Asonye Supp. Aff.”) ¶¶ 11-12, Ex. 1 to Pl.’s Statement of Add’l Material Facts (hereafter
“PSAMF”) [62].) 4
Presumably because it could not meet its obligations under the 2011 agreement, Optimus
“requested amendment” of that agreement. (PSAMF ¶ 11.) During the ensuing negotiations
between the parties, Optimus’s representative—Dr. Udochukwu Asonye—asked for “a temporary
reduction in the number of ED on-call days [Optimus] received from Franciscan Alliance at
Chicago Heights.” (Asonye Supp. Aff. ¶ 23, Ex. 1 to PSAMF.) Franciscan’s representative—
Thomas Senesac, the company’s Chief Financial Officer—invited Optimus to propose an

2

As noted above, an “unassigned patient” is a patient who does not already have a
primary care physician authorized to treat patients at the applicable facility. (Def.’s Resp. to PSOF
¶¶ 19-20.)
3

“Hospitalists,” the parties agree, are physicians who do not maintain private
practices, and whose employers (such as Optimus) “contract with hospitals to provide medical
care solely and exclusively to hospitalized patients.” (Def.’s Resp. to PSOF [58], at ¶¶ 11-14.)
4

Dr. Udochukwu Asonye of Optimus suggests that Franciscan was experiencing
financial difficulties at this time, as well. (Asonye Supp. Aff. ¶¶ 8-9.) Asonye cites no evidence to
support this assertion, and he offers no basis for a conclusion that he had personal knowledge of
Franciscan’s financial position. See FED. R. EVID. 602.
4

arrangement that would limit Optimus’s responsibilities. Specifically, Senesac suggested that
Optimus could provide “all unassigned ER call for pediatrics” and “a minimum of 4 ER calls a
week,” as well as either “24/7 in-house adult coverage” or “12/7 in-house adult coverage.”
(Senesac to Asonye, Dec. 6, 2012, Ex. 1 to Senesac Decl.) It is not clear exactly what Senesac
meant by “in-house adult coverage,” though the court presumes he was referring to something
resembling the “hospitalist” and/or “urgent hospitalist” services described in the 2011 version of
Exhibit B.
Two weeks later, on December 21, 2012, Asonye proposed “a 40 Day Transition period
through January 31, 2013,” during which “Optimus’ 24/7 Care Responsibilities will remain for
Neonatology/Pediatric and Urgent Hospitalists services but NO ER Calls due to Professional
Manpower shortage.” (Asonye to Senesac, Dec. 21, 2012, Ex. 1 to Senesac Decl.) It is not clear
from the record what Asonye anticipated would happen when the proposed “transition period”
ended, or how Franciscan responded to Asonye’s proposal.
On February 4, 2013, several days after the end of the proposed “Transition Period,”
Asonye sent Senesac a document that Asonye referred to as “Counter Proposals for Continuation
of the 24/7 In-House Combined Neonatology, Pediatrics, Urgent & Modified Traditional Hospitalist
Services at the Chicago Heights Campus.” (Asonye to Senesac, Feb. 4, 2013, Ex. 1 to Senesac
Decl.) Asonye attached to this “counter proposal” a bullet-pointed list of “Services to be Provided.”
This list included “Traditional Hospitalist Services” for three categories of patients: “All PHO
Patients . . . 7 days/week 365 days/year”; “All WellGroup Patients in Chicago Heights
Campus . . . 7 days/week 365 days/year”; and “Unattached ED Patients x2 days/week.” (Id.) The
parties do not explain the meaning or significance of “PHO Patients” or “WellGroup Patients.”
The following day, Senesac responded that Franciscan would “agree to modify our current
agreement to include . . . [u]nassigned call 2 days per week,” but “cannot agree to . . . [e]xclusive
access to WellGroup patients as hospitalists.” (Senesac to Asonye, Feb. 5, 2013, Ex. 1 to
Senesac Decl.) On February 7, Asonye wrote that Optimus would “accept[ ] . . . [u]nassigned
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Emergency Department Patients 2 days/week,” but “request[ed] . . . 4 days per week On-Call and
Hospitalist Responsibilities for WellGroup Patients” as well. (Asonye to Senesac, Feb. 7, 2013,
Ex. 1 to Senesac Decl.) Senesac apparently rejected this proposal, too, and on February 19 he
asked Asonye to “provide the general terms, conditions, and cost under which Optimus would
require to provide the following services . . . 5. Acceptance of any and all unassigned patients
who come to the ED and require admission a minimum of two days per week.” An asterisk next
to this item referred to the following text at the bottom of the page: “Will accept Unassigned ED
three (3) days/week.” (Senesac to Asonye, Feb. 19, 2013, Ex. 1 to Senesac Decl.)
Asonye responded by proposing two alternative arrangements. If Franciscan would agree
to guarantee 100% of the fees Optimus sought to collect from “the poor and at this point, uncertain
Payor mix” (another term the parties do not explain), Optimus would “accept ED Unassigned
Patients three (3) instead of two (2) days a week.” Alternatively, if Franciscan gave Optimus
access to “PHO and WellGroup Patients at the Chicago Heights Campus 365 days/year,” Optimus
would “accept ED Unassigned Patients three (3) days a week” with only a 50% collection
guarantee. (Asonye to Senesac, Feb. 20, 2013, Ex. 1 to Senesac Decl.) Senesac rejected both
proposals and suggested that the parties instead agree to simply terminate their existing
agreement. (Senesac to Asonye, Feb. 25, 2013, Ex. 1 to Senesac Decl.)
The parties apparently resumed negotiations in March 2013, though it is not clear what
brought Franciscan back to the bargaining table. On March 7, Asonye sent Senesac a revised
list of “Services to be provided.” (Asonye to Senesac, March 7, 2013, Ex. E to PSOF.) Asonye’s
list contemplated an increase over time in the number of unassigned emergency patients Optimus
would “accept.” Thus, Asonye described the proposed “service” Optimus would provide as
follows: “Acceptance of any and all unassigned patients who come to the ED and require
admission a minimum of two (2) days per week through March 31, 2013 increasing to four days
a week, effective April 1, 2013.” (Id.)

6

Senesac responded with a draft agreement incorporating Asonye’s language verbatim.
Instead of requiring Optimus to “accept” any and all unassigned emergency patients every day,
as the 2011 version of Exhibit B implied, Senesac’s draft now required Optimus to “accept” those
patients “a minimum of two (2) days per week through March 31, 2013, increasing to four days a
week, effective April 1, 2013.” (See Draft First Amendment to Agreement 4, Ex. F to PSOF.)
Senesac’s revised draft also changed the language in the exclusivity provision, which had
appeared in section 1.1 of the 2011 agreement. As previously noted, the original version of this
provision stated that Optimus would be the “exclusive” provider of “the professional services
described in Exhibit B (‘Services’),” and then subsequently referred to “this exclusive right to
provide Services[.]” In Senesac’s revised draft, however, one sentence continued to suggest that
Optimus would be the exclusive provider of all “Services,” while another limited the exclusivity
arrangement only to “neonatal intensive care Services.” (Id. at 3 (emphasis added).) Asonye
made dozens of changes to the language of Senesac’s draft before sending a “red-lined” version
back to him. (See Ex. G to PSOF; PSOF ¶ 53.) But Asonye left the language relating to exclusivity
exactly as it appeared in Senesac’s draft. (Ex. G to PSOF, at 4.)
c.

Amended agreement

It is not clear whether any further negotiations took place. What is clear is that, in late
March 2013, representatives of the parties signed an amended agreement that made numerous
changes in the original agreement, including—but not limited to—the changes noted above. (See
Amended Agreement, Ex. 4 to DSOF)
The amended agreement’s exclusivity provision appears to be identical to Senesac’s draft.
In one sentence, it designates Optimus as the exclusive provider of “Services.” Two sentences
later, it appears to limit the exclusivity arrangement to neonatal intensive care services alone.
Unlike the original agreement, which designated Optimus as the exclusive provider of the services
listed in Exhibit B and then stated that “[t]his exclusive right to provide Services shall not apply to
any other services,” the amended agreement designates Optimus as the exclusive provider of
7

“Services” and then states that “[t]his exclusive right to provide neonatal intensive care Services
shall not apply to any other services.” (Id.) (emphasis added).
The list of services in Exhibit B, meanwhile, was amended in at least two ways that are
relevant to this case. First, as in Senesac’s draft, the amended Exhibit B incorporates Asonye’s
language relating to unassigned emergency patients verbatim. Instead of requiring Optimus to
“[a]ccept[ ] any and all unassigned patients who come to the Facility’s ED and who require
inpatient admission to the Facility and are assigned to [Optimus’s doctors] pursuant to the ED call
schedule,” as the 2011 version of Exhibit B did, the amended Exhibit B requires Optimus to
“[a]ccept[ ] any and all unassigned patients who come to the ED and require admission a minimum
of two (2) days per week through March 31, 2013 increasing to four (4) days a week, effective
April 1, 2013.” (Id.) Second, the amended Exhibit B completely eliminates one of Optimus’s
services that appeared in the 2011 version: “provid[ing] on-site hospitalist service at the Facility
located in Chicago Heights for clinical duties 24 hours per day, 365 days per year.” (Id. at 5.)
The amended agreement also imposes at least one new duty on Franciscan. Under the
heading “Financial Support,” Franciscan promises to pay Optimus a $1.25 million “Support Fee”
in any year that Optimus’s “gross collection for personal services rendered” does not exceed
$1.09 million. (Id. at 2.)

(If Optimus does collect more than $1.09 million for its services, the

amount Franciscan must pay is reduced by a designated amount. (Id.)) Although this provision
grants Franciscan “the right to terminate the Support Fee in its sole discretion at any time,” it also
states that Franciscan cannot exercise this right unless Optimus “has achieved gross collections
goals for Professional Services rendered of $545,000 at least three (3) consecutive six (6) month
periods[.]” Assuming this condition is satisfied, Franciscan still must provide written notice to
Optimus at least 180 days prior to the effective date of termination. (Id. at 3.)
II.

Subsequent dealings between the parties
For an unidentified period after April 1, 2013—neither party identifies the precise length of

time—Franciscan assigned Optimus four days of “ED call” per week. (PSOF ¶¶ 72; Def.’s Resp.
8

to PSOF ¶¶ 72.) At some point in 2013, however, Defendant reduced the number of ED call days
it assigned to Optimus to either two days per week (in Plaintiff’s account) or three days per week
(in Defendant’s account). (PSOF ¶ 73; Def.’s Resp. to PSOF ¶ 73.)
At some point—again, the parties do not say when—Udochukwu Asonye asked
Franciscan’s Chief Medical Officer, Daniel M. Netluch, to explain why Optimus was not being
scheduled to care for emergency patients at least four days per week. (PSOF ¶ 75.) The parties
dispute how Netluch responded. According to Plaintiff, Netluch told Asonye to “be patient,”
assured Asonye that Optimus “would be given four ED call days per week,” and explained that
Franciscan “had to give some ED days to non-hospitalist primary care physicians who were
members of the Medical Staff, in order to assist those physicians in building up their private
practices.” (PSOF ¶¶ 76-77.) Netluch denies that he said any of this. In Netluch’s account, he
told Asonye that Franciscan reduced Optimus’s ED call days “because Optimus had
demonstrated an inability to staff the obligations it contracted to provide.” (Netluch Aff. ¶¶ 5-6,
Ex. 1 to Def.’s Statement of Add’l Material Facts (hereafter “DSAMF”) [59].) Although this
statement could be interpreted as an admission of, and a justification for, a breach by Franciscan,
Netluch also testifies that he “never advised Dr. Asonye or anyone that Optimus was contractually
entitled to any number of ED call days.” (Id. at ¶ 5.)
Despite Optimus’s belief that Franciscan was in breach of the contract, the parties
continued to do business with each other until the end of 2015. At some point in 2014, Franciscan
“worked with” Optimus to “create marketing material” that was subsequently displayed at the
Chicago Heights facility. (PSOF ¶ 69; Def.’s Resp. to PSOF ¶ 69.) This “marketing material”
consisted of a poster with three columns of text and images. In one of the columns, the words
“Optimus Group” appear immediately below the heading “Hospitalist Physician Team.” (See Ex.
I to Asonye Aff.) In late 2014 and early 2015, Asonye requested “expedited Reinstatement of our
4th On-Call Day” in multiple e-mail messages to Netluch. (See Exs. J-K to PSOF.) Plaintiff claims
that Netluch responded that Franciscan was “working on it,” but Netluch denies this, and it
9

appears that none of his responses were preserved in writing. (PSOF ¶ 88; Def.’s Resp. to PSOF
¶ 88.) On July 13, 2015, Franciscan’s President and CEO notified Optimus in writing that
Franciscan would not seek to extend the parties’ agreement when it expired on December 31,
2015. (Ex. L to PSOF.) Franciscan’s letter offered no reason for the termination.
III.

Procedural history
Plaintiff filed this action on August 1, 2016, seeking more than $800,000 for what it

characterized as Defendant’s breach of both the ED call provision in Exhibit B and the exclusivity
provision of the amended agreement.

Defendant filed a counterclaim seeking $23,000 for

unidentified “services” it alleges Plaintiff was contractually obligated, but failed, to provide
between December 23 and December 31, 2013. (Def.’s Counterclaim ¶¶ 4-7.) Both parties now
seek summary judgment in their favor on Plaintiff’s claims for breach of contract.
DISCUSSION
To prevail on a motion for summary judgment, the moving party must show that “there is
no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of
law.” FED. R. CIV. P. 56(a). “When presented with cross-motions for summary judgment, the court
is required to adopt a ‘Janus-like perspective,’ viewing the facts for purposes of each motion
through the lens most favorable to the non-moving party." Moore v. Watson, 738 F. Supp. 2d
817, 827 (N.D. Ill. 2010) (Gottschall, J.) (quoting Buttitta v. City of Chicago, 803 F. Supp. 213, 217
(N.D. Ill. 1992) (Shadur, J.), aff’d, 9 F.3d 1198 (7th Cir. 1993)).
In this case, there are no genuine disputes about whether Defendant provided Plaintiff
with “ED call” patients at least four days per week after April 1, 2013. Defendant concedes that it
did not. The only dispute is whether, under Illinois law, the amended contract required Defendant
to do so.
“The primary objective” of contract interpretation “is to give effect to the intention of the
parties.” Thompson v. Gordon, 241 Ill. 2d 428, 441, 948 N.E.2d 39, 47 (2011). Where “the words
in the contract are clear and unambiguous,” the court must give those words their “plain, ordinary,
10

and popular meaning,” without considering extrinsic evidence of the parties’ intent. Id. If the
language of the contract is ambiguous, however, “a court can consider extrinsic evidence to
determine the parties’ intent.” Id.
I.

Ambiguity
A contract is ambiguous if it “is susceptible to more than one meaning.” Thompson, 948

N.E.2d at 47. To determine whether a contract is susceptible to more than one meaning, the
court must consider the document as a whole, and may not interpret the contract’s language “in
a manner that would nullify or render provisions meaningless.” Id.
In this case, Franciscan and Optimus both argue that the amended agreement is only
susceptible to one meaning, and each side contends the plain meaning requires judgment in its
favor. Both parties cannot be right about this, but “a contract is not rendered ambiguous merely
because the parties disagree on its meaning.” Id. at 48. The court must consider whether the
contract is, in fact, “susceptible” to the meaning each party assigns to it.
In Optimus’s interpretation, it agreed to supply 100% of Franciscan’s need for a particular
service—“acceptance” of unassigned emergency patients—on at least four days per week, and
Franciscan agreed to purchase that service from Optimus at least four days per week. Although
Exhibit B does not by its terms impose such a reciprocal obligation on Franciscan—which a
conventional requirements contract must include to be enforceable under Illinois law, see
Brooklyn Bagel Boys, Inc. v. Earthgrains Refrigerated Dough Production, Inc., 212 F.3d 373, 379
(7th Cir. 2000)—that obligation can be inferred from certain language in the exclusivity provision,
which states that “[Optimus’s employees] shall be the exclusive providers of Services at the
Facility.” See In re Modern Dairy of Champaign, Inc., 171 F.3d 1106, 1108 (7th Cir. 1999) (noting
that the obligatory return promise can be inferred from an exclusive-dealing provision). Relying
on this language, Optimus characterizes the agreement as a conventional requirements contract
involving a seller who agrees to supply all the buyer’s need for a particular service in return for
the right to be the exclusive provider of that service.
11

Franciscan argues that the contract is not, in fact, susceptible to this interpretation,
because there is additional language in the exclusivity provision that limits Optimus’s right to act
as an exclusive supplier to neonatal intensive care services alone, rather than the broader range
of services listed in Exhibit B. That language, which appears a mere two sentences after the
language on which Plaintiff relies, reads as follows: “This exclusive right to provide neonatal
intensive care Services shall not apply to any other services[.]” (emphasis added.) Because the
exclusivity provision does not apply to the service of “accept[ing]” unassigned emergency patients
at least four days per week, Defendant reasons, the court should not infer any reciprocal obligation
of Franciscan to refer those patients to Optimus at least four days per week. Instead, Defendant
argues, Optimus promised to accept any and all unassigned emergency patients requiring
inpatient admission at least four days per week, but Franciscan never promised to refer any and
all such patients to Optimus at least four days per week. In Franciscan’s reading, Franciscan
reserved the right to refer unassigned emergency patients to physicians unaffiliated with Optimus,
even on days when Optimus would have been obligated to accept any such referral it received.
Plaintiff argues that it would be “irrational to assume that Franciscan Alliance entered into
a contract with Optimus with the intention of denying Optimus the promised four ED call days per
week and of thereby forcing Optimus’ breach of the ED call day provision.” (Pl.’s Response Br.
[63], at 5.)

It is, of course, true that an interpretation leading to absurd or unreasonable

conclusions should be rejected in favor or one “which makes a rational and probable agreement,”
NutraSweet Co. v. American Nat’l Bank and Trust Co. of Chicago, 262 Ill. App. 3d 688, 695, 635
N.E.2d 440, 445 (1st Dist. 1994). But Plaintiff puts the cart before the horse: it takes as a given
that Franciscan “promised” to refer all unassigned emergency patients to Optimus—and only
Optimus—at least four days per week. In Defendant’s interpretation of the amended agreement,
Franciscan never made this promise.
A stronger argument for rejecting Defendant’s interpretation is that, if accepted, it might
render the contract unenforceable for lack of consideration. “Without exclusivity,” some cases
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assert, “the buyer in a requirements contract has effectively promised nothing of value to the
seller.” Torres v. City of Chicago, 261 Ill. App. 3d 499, 505, 632 N.E.2d 54, 58 (1st Dist. 1994).
Because “a construction of a contract which renders the agreement enforceable rather than void
is preferred,” 933 Van Buren Condominium Ass’n v. West Van Buren, LLC, 2016 IL App. (1st)
143490, ¶ 37, 61 N.E.3d 929, 940 (1st Dist. 2016), Plaintiff’s interpretation appears, at first glance,
to be the only one to which the contract is truly susceptible. But a reciprocal promise like the one
Optimus asks the court to infer is not the only way to make a contract like this enforceable. See
Torres, 261 Ill. App. 3d at 505, 632 N.E.2d at 58 (suggesting that “some other form of
consideration”—besides a reciprocal promise to purchase the relevant product or service
exclusively from the seller—can create an enforceable requirements contract). In this case,
Franciscan not only promised to make Optimus the exclusive provider of care for a different
category of patients—those requiring neonatal intensive care services—it also promised to pay
Optimus a “support fee” of $1.25 million per year. This is sufficient consideration for Optimus’s
promise to “accept” all unassigned emergency patients requiring admission at least four days per
week. 5 Defendant’s interpretation therefore would not render the contract unenforceable.
The court concludes that the amended agreement is susceptible to both parties’
interpretations. As a result, neither party is correct that the contract unambiguously supports its
position. The contract is ambiguous, and the court therefore turns to extrinsic evidence to
decipher the parties’ intent.

5

Although the amended agreement states that Franciscan has a right to “terminate”
the support fee “in its sole discretion at any time,” it also states that Franciscan can exercise this
right only after providing Optimus with 180 days’ written notice, and only if Optimus’s “gross
collections” during the previous 18 months exceeded a designated amount. Franciscan’s promise
to pay the support fee therefore is not illusory. See 3 W ILLISTON ON CONTRACTS § 7:13 (4th ed.)
(noting that “even a slight restriction on the exercise of the right of cancellation” can be “sufficient
to satisfy the requirement of consideration”); Laclede Gas Co. v. Amoco Oil Co., 522 F.2d 33, 37
(8th Cir. 1975) (party’s unilateral right to cancel did not make its promise illusory, where one
prerequisite to exercising the right was written notice to the other party 30 days prior to
cancellation).
13

II.

Extrinsic evidence
Unfortunately, the extrinsic evidence the parties have presented does little to clarify their

intent. Defendant first suggests that Udochukwu Asonye’s December 21 letter shows that the
parties intended for Franciscan to retain the freedom to offer unassigned emergency patients to
whomever it chose, in whatever quantity it chose. In this letter, Asonye suggested “a 40 Day
Transition period through January 31, 2013,” during which “Optimus’ 24/7 Care Responsibilities
will remain for Neonatology/Pediatric and Urgent Hospitalists services but NO ER Calls due to
Professional Manpower shortage.” According to Defendant, “[i]t defies logic for Optimus to argue
it was fighting for more days [of ED calls] when it started the negotiation by asking for zero days.”
(Def.’s Memo. in Supp. of Mot. for Summ. J. [54], at 9.)
This argument is not persuasive. Asonye explicitly suggested a temporary elimination of
Optimus’s obligation to care for unassigned ED patients, not a permanent one. Indeed, even a
request for a permanent elimination of that obligation would not establish that the parties intended
for Franciscan to retain the discretion to assign unassigned emergency patients to Optimus as
many days per week as Franciscan chose. The letter says nothing about what the parties intended
for Franciscan’s obligations to be once the proposed 40-day transition period expired.
Defendant next argues that the removal of certain language from the 2011 version of the
contract shows that the parties intended for the amended exclusivity provision to apply only to
neonatal intensive care services, not to all the services listed in the amended Exhibit B. The 2011
version of Exhibit B required Optimus to provide “on-site hospitalist service at the Facility located
in Chicago Heights for clinical duties 24 hours per day, 365 days per year.” This language does
not appear in the 2013 version of Exhibit B. In Defendant’s view, the removal of Optimus’s
obligation to provide general “hospitalist” services 24 hours per day, 365 days per year, shows
that the parties intended to eliminate Optimus’s right to act as the exclusive provider for all but
neonatal intensive care services.

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This argument is similarly unpersuasive. Defendant does not explain how Optimus’s
obligation to provide “hospitalist” services was related to its obligation to provide either neonatal
intensive care services or the “acceptance” of unassigned emergency patients.

Relieving

Optimus of the obligation to provide general hospitalist services may shed light on the question
of whether the parties intended for Optimus to be the exclusive provider of care for unassigned
ED patients at least four days per week. But that possibility is not enough to grant summary
judgment in Defendant’s favor. A reasonable jury could conclude that the circumstances do not
clarify the ambiguous provisions at issue here.
Defendant’s extrinsic evidence is not sufficient to grant summary judgment in its favor, but
the court concludes that Plaintiff also has not shown it is entitled to summary judgment. As
evidence of the parties’ intentions in amending their contract in 2013, Plaintiff points to the
marketing materials that the parties jointly produced at some point the following year.

As

described above, these marketing materials consist of a poster on which the words “Optimus
Group” appear immediately below the words “Hospitalist Physician Team.” Plaintiff suggests that
this demonstrates the parties’ earlier intent to preserve Optimus’s right to act as the exclusive
provider of services other than neonatal intensive care services. In the court’s view, this vague
reference in a poster does not eliminate any disputes of fact. A reasonable jury could conclude
that the decision to identify Optimus with the “Hospitalist Physician Team” in 2014 sheds no light
on the question whether the parties intended, the previous year, to grant Optimus the right to act
as the exclusive provider of services other than neonatal intensive care services.
Plaintiff’s only other evidence is either disputed or only vaguely relevant to the question of
the parties’ intent. Plaintiff claims that Netluch “repeatedly” told Asonye, at various points after
April 1, 2013, that Franciscan was “working on” restoring Optimus’s fourth day of “ED call.” 6
Optimus contends this statement shows that the parties intended for the amended contract to

6

Plaintiff does not argue that Netluch’s purported assurances created a new,
implied-in-fact contract between the parties, so the court does not consider the question.
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give Optimus a right to four days of “ED call” per week. But Netluch denies that he ever said it,
and whether he did is a question of fact for a jury. Plaintiff also notes Netluch’s explanation for
Franciscan’s failure to refer all unassigned emergency patients to Optimus four days per week:
Optimus’s own alleged breach of the contract in December 2013. The court agrees that this
explanation could be interpreted as an acknowledgement that the contract did, in fact, require
Franciscan to do what Optimus claims it did. But that is not the only way to interpret Netluch’s
statement. A reasonable jury could conclude Netluch was not invoking Optimus’s breach to justify
Franciscan’s own breach, but rather that he was simply explaining that Franciscan was trying to
assign Optimus the amount of work its actions suggested it was capable of performing.
Plaintiff’s final argument is that any remaining uncertainty about the amended contract’s
meaning should be resolved against Franciscan, because Franciscan “drafted” the amended
agreement.

But Franciscan was not, in fact, the sole drafter of the amended agreement.

Optimus’s representative offered numerous proposals to alter the text of that agreement, several
of which appear to have been included in the document the parties signed. The general rule that
an ambiguous contract should be construed against its drafter does not help Plaintiff here. See
Farmers Auto Ins. Ass’n v. St. Paul Mercury Ins. Co., 482 F.3d 976, 978 (7th Cir. 2007) (“The rule
is presumably limited by its logic, and hence to cases in which there is no negotiation over the
terms . . . .”).
If, after considering extrinsic evidence and relevant canons of contractual interpretation,
the court is still unsure of the meaning of a contract, “then the question of interpretation must be
left to the trier of fact.” Bourke v. Dun & Bradstreet Corp., 159 F.3d 1032, 1037 (7th Cir. 1998)
(quoting Countryman v. Industrial Commission, 292 Ill. App. 3d 738, 686 N.E.2d 61, 64 (2d Dist.
1997)). The extrinsic evidence in this case does little to clarify the meaning of the parties’
amended agreement. The court therefore denies both parties’ motions for summary judgment.

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CONCLUSION
Defendant’s Motion for Summary Judgment [52] and Plaintiff’s Motion for Partial Summary
Judgment [55] are both denied. A status conference is set for September 4, 2018, at 9:30 a.m.
ENTER:

Dated: August 20, 2018

_________________________________________
REBECCA R. PALLMEYER
United States District Judge

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