PERFORMANCE DYNAMICS, INC. v. FLYNN et al

Filing 124

ORDER denying 120 Motion for Reconsideration in its entirety. The Court again directs the parties to submit a proposed injunction within 10 days of the date of this Entry. If the parties do not do so, the Court will rely on and evaluate the injunction contained in the Agreement. No extensions of time to file the proposed injunction shall be granted without good cause shown. Signed by Judge William T. Lawrence on 3/3/2017. (CBU)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
PERFORMANCE DYNAMICS, INC,
Plaintiff,
vs.
TIMOTHY W. FLYNN et al.,
Defendants.

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) CAUSE NO. 1:13-cv-298-WTL-TAB
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ENTRY ON DEFENDANTS’ MOTION TO RECONSIDER
On July 18, 2016, the Court granted the Plaintiff’s motion to enforce mediation
agreement and requested that the parties submit to the Court a proposed injunction within
fourteen days. See Dkt. No. 115. The Court granted two extensions of time for the parties to
submit the proposed injunction. See Dkt. No. 117 & 119. Instead of filing a proposed
injunction, the Defendants filed the instant motion on August 25, 2016 (Dkt. No. 120). The
Defendants ask the Court to reconsider its decision to deny the parties’ request for a hearing and
also ask the Court to reconsider in its entirety its Entry on the Plaintiff’s motion to enforce
mediation agreement. The Defendants further request, in the alternative, that the Court reform
the mediation agreement. For the reasons explained below, the Defendants’ motion to reconsider
is DENIED.
I.

DISCUSSION

The Court incorporates by reference the background information set forth in its July 18,
2016, Entry granting the Plaintiff’s motion to enforce mediation agreement. For ease of
reference, the Court reiterates the following points of information contained in its July 18, 2016,
Entry:

On April 20, 2015, a settlement agreement was executed at a court-ordered settlement
conference (the “Agreement”). The Agreement was memorialized on seven pages, including two
pages containing handwritten mark-ups to a document that had been provided by the Plaintiff’s
counsel to defense counsel on April 17, 2015; a sheet of notebook paper with handwritten notes;
and three pages containing handwritten mark-ups to a proposed permanent injunction entry
provided by the Plaintiff’s counsel to defense counsel on April 16, 2015.
The Defendants’ counsel agreed to compose a clean, typewritten version of the
Agreement. On June 4, 2015, the Defendants’ counsel sent a typed document entitled
“Settlement Agreement and Mutual Release” to the Plaintiff’s counsel. The typed document
intentionally omitted the following term from the Agreement: “No other instrumented soft tissue
treatment shall be provided at any such facility” (the “Omitted Term”).
A.

Reconsideration of Denial of Request for Hearing

The Defendants seek a hearing because they assert that they “can and will present
evidence, clarify or explain their prior arguments, respond to the Court’s questions, and
otherwise be heard on a matter of great importance to them and their livelihoods.” Dkt. No. 120
at 3. The Defendants note that the Court stated in a footnote to its Entry that neither party
provided the Court with information suggesting that they believed an evidentiary hearing
necessary. See id. at 4. As the Defendants correctly indicate, however, they provided such
information to the Court in the conclusion of their response to the Plaintiff’s motion to enforce
mediation agreement. See id. (quoting Dkt. No. 112 at 21). At that time, the Defendants
suggested that they would call a number of witnesses who “would testify as to the applicable
professional ethical obligations, the settlement conference and subsequent negotiations, IASTM,
the disputed sentence and its implications under the corporate practice of medicine doctrine, and

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the issues discussed in this brief and the supporting exhibits.” Dkt. No. 112 at 21. The
Defendants maintain that the reasons it presented in its earlier request remain valid reasons for a
hearing. Dkt. No. 120 at 4. The Court, however, has considered evidence pertaining to all areas
that the Defendants suggested they would discuss at a hearing and finds no reason to reconsider
previously rejected arguments.1
The Defendants also now indicate that they will “provide further evidence that they in
fact advised the mediator, opposing counsel, and opposing parties that they could not ethically
agree to any provision that did not include such modifying language and therefore would not do
so,” id. at 2, and that they “have presented additional evidence that they did in fact bargain for
the ‘recommend and encourage’ language to apply to [the Omitted Term],” id. at 4. They did
not, however, specify what this new evidence is, and they instead refer only to the prior affidavit
of the Defendants’ counsel, which was submitted to this Court prior to its July 18, 2016, Entry.
See, id.
In drafting its July 18, 2016, Entry, the Court considered evidence, including the affidavit
of the Defendants’ counsel, that the Defendants advised the Magistrate Judge, the Plaintiff, and
the Plaintiff’s counsel that they “‘would not agree to any provision . . . that would limit the use of
treatments that individual physical therapists in their professional judgment deemed necessary
and appropriate for their patients.’” Dkt. No. 115 at 4 (quoting Dkt. No. 112 at 4). In addition,
at the time of its Entry, the Court reviewed the Defendants’ evidence that it bargained for
language modifying the Omitted Term. See, e.g., id. at 8-9. The Court further understood at the

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Should the Defendants contend that the Court did not address each of its assertions,
“[m]erely because a fact or argument has not been explicitly laid out does not mean that it has
not been given serious consideration by the court.” McDonald v. Vill. of Winnetka, 371 F.3d
992, 994 (7th Cir. 2004).
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time of its Entry that the Defendants attempted for months to modify the Omitted Term
following its execution of the Agreement.
Resubmission to the Court of previously rejected arguments is not an appropriate use of a
motion to reconsider. This Court’s opinions are not intended as first drafts subject to revision
and reconsideration at the litigant’s pleasure. The Defendants have not given a good reason to
alter the Court’s prior entry. The Court does not require further evidence clarifying the
Defendants’ prior arguments. It understands perfectly well the Defendants’ position:
“Undersigned counsel [Benjamin C. Fultz] signed the agreement in question without the
modifying language that [the Defendants argue] was supposed to accompany the [Omitted
Term]. The inclusion of the [Omitted Term] without modification was a mistake.” Dkt. No. 120
at 5.
The fact remains that the Defendants - both their counsel, Benjamin C. Fultz, and
Defendant Laurence Benz, who is also a president, owner and member, partner, and/or principal
of Defendant Texas Physical Therapy Specialists, PC; and a principal, member, and/or partner of
Defendant Evidence in Motion, LLC2 - signed the Agreement, which included the Omitted Term.
As previously explained by the Court, “[u]nder Indiana law, a party to a contract is presumed to
understand and assent to the terms of the contracts he or she signs.” Dkt. No. 115 at 9 (quoting
John M. Abbott, LLC v. Lake City Bank, 14 N.E.3d 53, 56 (Ind. Ct. App. 2014) (internal
quotation omitted)).
The Defendants also now wish to “present evidence that the consequences on their
businesses and professional practices of not including the modifying language [i.e., adding

See Dkt. No. 72 ¶¶5, 7, 8, & 11 for the Defendants’ admission of the allegations
contained in Dkt. No. 69 ¶¶5, 7, 8, & 11, which contain the aforementioned facts.
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‘recommend and encourage’ to the Omitted Term] are so significant that the Defendants would
not have knowingly ever agreed to a settlement that did not include the modifying language.”
Dkt. No. 120 at 2. As the Court has previously stated, it is not this Court’s responsibility to
protect parties from their own oversights. Dkt. No. 115 at 9-10 (citing Glass v. Rock Island Ref.
Corp., 788 F.2d 450, 454-55 (7th Cir. 1986); Beverly v. Abbott Labs., 817 F.3d 328, 331 (7th Cir.
2016); and Pohl v. United Airlines, Inc., 213 F.3d 336, 337 (7th Cir. 2000)). Evidence
concerning the ramifications to the Defendants of having executed the Agreement does not in
any way assist the Court in ruling on the Plaintiff’s motion to enforce the Agreement. The Court
refuses to grant a hearing on this basis and therefore denies the Defendants’ request for a
hearing.
B.

Reconsideration of Entry to Enforce Mediation Agreement

The Defendants also request that the Court reconsider in its entirety its July 18, 2016,
Entry enforcing the Agreement. They renew several arguments that were previously rejected by
the Court. As the Court has already mentioned, a motion to reconsider is not an opportunity for
the parties to submit to the Court previously rejected arguments. Therefore, the Court will not
reopen the door for the Defendants to take a second bite at the apple as to arguments the
Defendants have previously presented.
That said, the Court is compelled to comment on one argument made by the Defendants,
because they misrepresent the terms of the Agreement and suggest that the Court did not
consider the argument when it issued its July 18, 2016, Entry. See Dkt. No. 115 at 8 (Court’s
addressing the argument in its July 19, 2016, Entry). The Defendants argue that they
“bargain[ed] for the ‘recommend and encourage’ language to apply to the [Omitted Term]” and
that that position “is supported by the preceding sentence in the [Agreement].” Dkt. No. 120 at

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4. They argue that the preceding sentence “presupposes that there will be clinicians at those
facilities providing [other] instrumented soft tissue treatment and thus contradicts the [Omitted
Term].”3 Id. at 4-5; see also Dkt. No. 122 at 3. The Agreement reads, in relevant part:
Defendant(s) shall recommend and encourage that all clinicians providing
instrumented soft tissue treatment at any of those facilities: (i) be trained in
ASTYM® therapy, within 6 months of this Agreement or within the first 6 months
of the clinician providing care in such a facility; and (ii) maintain ASTYM®
certification under an active Service Agreement with PDI during such time that
clinician is providing care at such a facility.
Dkt. No. 108-1 at 1 (emphasis added).
In both their motion and response brief, the Defendants abbreviated the Agreement’s
actual language to instead say that “the defendants shall ‘recommend and encourage that all
clinicians providing instrumented soft tissue treatment at any of those facilities’ be trained in
ASTYM and maintain ASTYM certification.” Dkt. No. 120 at 4-5 (emphasis omitted); see also
Dkt. No. 122 at 2-3. The Defendants rightfully argue that this truncated version of the term
supports their position and perhaps “flatly contradicts [the] Plaintiff’s position.” Dkt. No. 122 at
3. But the term as the Defendants presented it is not found in the Agreement. The Agreement’s
actual term, as shown above, recommends and encourages a specific time frame for clinicians
who provide instrumented soft tissue treatment at the pertinent facilities to be trained in ASTYM
- either within six months of the Agreement, if they are already working at a facility, or within
the first six months of providing care in a facility. The second condition of the sentence
recommends and encourages that clinicians maintain ASTYM certification under an active
service agreement with the Plaintiff during such time that the clinician provides care at a covered
facility. These statements do not contradict the Plaintiff’s position or the Omitted Term and do

Contrary to the Defendants’ intimation, the sentence they refer to does not directly
precede the Omitted Term. There is a sentence between it and the Omitted Term.
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not “presuppose[] that there will be clinicians at those facilities providing [other] instrumented
soft tissue treatment,” as the Defendants argue. Id. This contractual term therefore does not
support reconsideration of the Court’s previous ruling.
The Defendants also present a new reason that they believe warrants the Court’s
reconsideration of its July 18, 2016, Entry: “Reconsideration and a hearing are also appropriate
so that prior to finality[,] the Defendants can have the opportunity to retain and get the benefit of
additional or altogether different counsel if they so choose[,] given the current circumstances and
posture of the matter.” Dkt. No. 120 at 5. The concern described by the Defendants, though,
existed as soon as the Defendants determined that they did not want the Agreement enforced as
executed on April 20, 2015, which was well before this Court’s July 18, 2016, Entry. Any
concerns the Defendants had regarding their counsel could and should have been addressed once
the Plaintiff filed its motion to enforce the Agreement. The Court declines to reopen the matter
on this basis.
C.

Reformation of the Agreement

The Defendants seek, in the alternative, reformation of the Agreement. They request that
the Court modify the Omitted Term to make it “subject to the ‘recommend and encourage’
modifying language.”4 Dkt. No. 120 at 6. As the Defendants acknowledge, they “did not
previously seek equitable reformation, arguing instead that there was no enforceable agreement
to be reformed.” Id. Again, a motion to reconsider is not the appropriate means for raising
arguments that could have been made at an earlier time. At the time the Defendants argued that

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Although the Defendants do not provide the precise language of the term that they say
they proposed at the settlement conference, the Court presumes the Defendants suggest that the
modifying language and a new subject be added to the Omitted Term to create the following
term: “The Defendants shall recommend and encourage that no other instrumented soft tissue
treatment shall be provided at any such facility.”
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there was no enforceable agreement, they should have argued, in the alternative, that equity
required reformation of the Agreement. The Defendants chose not to make such an argument.
The Court, nonetheless, will now consider the Defendants’ new argument. The
Defendants acknowledge that there are only two conditions under which equity intervenes in a
contract under Indiana law: where there is mutual mistake and where “one party executes the
document and the other party acts fraudulently or inequitably while having knowledge of the
other’s mistake.”5 Gierhart v. Consol. Rail Corp.-Conrail, 656 N.E.2d 285, 287 (Ind. Ct. App.
1995). “Equity should not intervene ‘where the complaining party failed to read the instrument,
or, if he read it, failed to give heed to its plain terms.’” Mid-States Gen. & Mech. Contracting
Corp. v. Town of Goodland, 811 N.E.2d 425, 435 (Ind. Ct. App. 2004) (quoting Estate of Spry v.
Greg & Ken, Inc., 749 N.E.2d 1269, 1275 (Ind. Ct. App. 2001)).
The Defendants do not allege that the Plaintiff acted fraudulently. Nor do they allege that
their mistake was induced by a misrepresentation by the Plaintiff. See Mid-States Gen. & Mech.
Contracting Corp, 811 N.E.2d at 435 (Ind. Ct. App. 2004) (“[A] contract generally may not be
avoided [or, presumably, reformed] for unilateral mistake unless the mistake was induced by the
misrepresentation of the opposite party”). Rather, the Defendants seek reformation based on
alleged inequitable conduct by the Plaintiff. The party seeking reformation for this reason “has
the burden of proving the alleged fraud [or inequity, in this instance,] and his resultant mistake.”
Ruff v. Charter Behavioral Health Sys. of N.W. Ind., Inc., 699 N.E.2d 1171, 1173 (Ind. Ct. App.
1998), trans. denied, 714 N.E.2d 170 (Ind. 1999) (citing Kruse, Kruse & Miklosko, Inc. v. Beedy,
353 N.E.2d 514, 529 (Ind. Ct. App. 1976)).

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The Defendants acknowledge that the Court determined that no mutual mistake existed.
See Dkt. No. 120 at 6 (citing Dkt. No. 115 at 18).
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The Defendants argue that they “made a mistake by not including the modifying
language, and [the] Plaintiff, knowing that [the] Defendants had expressed the necessity of such
language, acted inequitably by proceeding to consummate the agreement without it, thereafter
refusing to add it, and attempting to enforce the agreement without it.” Dkt. No. 120 at 6. The
Defendants’ counsel’s affidavit indicated that he “advised the participants [of the April 20, 2015
settlement conference] that while the [D]efendants could not ethically agree to any such
provision[,] they could agree to ‘recommend and encourage’ the use of ASTYM.”6 Dkt. No.
112-2 ¶ 8. The Plaintiff acknowledges that the Defendants’ counsel raised a concern “early in
the negotiations” regarding restrictions on the use of treatments deemed necessary for patients.
See Dkt. No. 121 at 6. However, “[t]he Plaintiff’s representatives understood this to be posturing
for negotiating a settlement.” Id. It is by no means unusual for a party’s position to change
substantially during the course of settlement negotiations. There is nothing inequitable about the
fact that the Plaintiff believed that to be the case with respect to the Defendants’ position
regarding the Omitted Term. Given the lack of fraud or inequitable conduct, reformation is not
an appropriate remedy.
II.

CONCLUSION

After carefully reviewing the Court’s July 18, 2016, Entry and considering the
Defendants’ motion to reconsider, for the reasons explained above, the Court denies the
Defendants’ request for a hearing; denies the Defendants’ request that the Court reconsider its
Entry to enforce the Agreement; and denies the Defendants’ request that the Court reform the

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The Court believes the Defendants meant “any such provision” to refer to the Omitted

Term.
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mediation agreement. Accordingly, the Defendants’ motion to reconsider (Dkt. No. 120) is
DENIED in its entirety.
The Court again directs the parties to submit a proposed injunction within 10 days of the
date of this Entry. If the parties do not do so, the Court will rely on and evaluate the injunction
contained in the Agreement. No extensions of time to file the proposed injunction shall be
granted without good cause shown.
SO ORDERED: 3/3/17
_______________________________
Hon. William T. Lawrence, Judge
United States District Court
Southern District of Indiana

Copies to all counsel of record via electronic notification

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