Filing 212

MEMORANDUM OPINION AND ORDER signed by MAG/JUDGE JOE L. WEBSTER on 4/11/2017; that Cone Health's Motion for Partial Summary Judgment (Docket Entry 100 ) is GRANTED IN PART AND DENIED IN PART, and Conifer's Motion for Partial Summary Judgment (Docket Entry 103 ) is DENIED. (Sheets, Jamie)

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IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF NORTH CAROLINA THE MOSES H. CONE MEMORIAL HOSPITAL OPERATING CORPORATION d/b/a CONE HEALTH, ) ) ) ) ) Plaintiff, ) ) v. ) ) CONIFER PHYSICIAN SERVICES, INC. ) f /k/ a SPRINGFIELD SERVICE ) CORPORATION, ) ) Defendant. ) 1,:73CY651, MBMORANDUM OPINION AND ORDER This matter is before the Court upon Plaintiff, The Moses H. Cone Memorial Hospital Operating Cooperation's ("Cone Health") motion fot parlJral summary judgment pocket Etrtry 100), and Defendant Conifet Physician Services, Inc.'s ("Conifet") motion for parttal summary judgment. (Docket E.rtry 103.) Both matters have been fully briefed and ate tipe for disposition. For the reasons stated hetein, the Court wrll deny Conifet's motion for partj;al summary judgment and grant in part and deny in patt Cone Health's motion for pattal summary judgment.l By consent of the parties, this matter has been tefered to the undersþed putsuant to 28 U.S.C. $ 636(c),to conduct all proceedings including a jary or.nonjury trial, to order the entry of judgment, and to conduct all post-judgment proceedings therein. (Jøe Docket Entry 59.) 1 I. BACKGROUND Cone Health fìled its original complaint on August 8, 201.3, allegrng that Conifer breached the parties' Mastet Outsourcing Services ,\greement ("Agreement") and that Cone Health was terminating the Agteement breach. (Sæ generalþ Compl., Docket Entry 1.) and Supplement 1 ^s a result of Conifer's Cone Health alleged a clatm fot breach of contract (and the supplement) (Counts I and II), and also alleged five sepatate câuses of action for declaratory judgment (Counts dismiss Counts III through III through VII). (Id.nfl75-96.) Conifet filed a motion to VII of the Complaint. (Docket E.rt y 10.) The Court theteaftet granted Conifer's motion Q)ocket E.rtry 27), and the parties submitted a Joint Rule 26(f) Repot which the Court adopted. Q)ocket Entries 28,30.) ,{.ftet discovery commenced, Cone Health filed a consent motion to amend its Complaint, which was granted. pocket Entdes 39,42.) After the Amended Complaint was filed Q)ocket Entry 45), Conifer answered and assetted a countetclaim agaitst Cone Health. (Docket Entry 48.) Theteaftet discovery took place in this matter and both panies submitted motions extensive fot partial summalT judgment. (Docket Entdes 100, 103.) In its motion, Cone Health seeks parttal summâly judgment as to damages on Conifer's counterclaim. (Docket Entry 100.) Conifer's motion seeks pattial summary judgment as to: (1) liability on its counterclaim, Q) all claims fot relief in Cone Health's Amended Complaint except the claim fot a performance adjustment; (3) and other relief the Court finds appropdate. (Docket Entry 103.) Accotding to the Amended Complaint, Cone Health ptovides health care services thtough a netwotk of hospitals and physicians in Noth Carclirra. (Am. Compl. I 5, Docket Entry 45.) Conifer provides revenue management, health information management, and 2 billing services to health care providets like Cone Health.2 (Id, ÍT6.) On August8,20L1, Cone Health and Conifer enteted into â Master r\gteement (the "Agteement") undet which Cone Health outsourced certain claims management and accounts receivable functions to Conifer. Qd.nn 9-10; Master Agreement & Supplements, Ex. A, Docket Entty 45-1,.) Thereaftet, the parties executed "supplement 1" to the Agteement, undet which Conifet began ptoviding billing and claims management services to physicians owned by, or affthated, with, Cone Health. (Suppl. 1, Ex. Aat32-33.) The term of the,A.gteement undet Supplement years ftom the commencement date of Supplementl,. (Id. 1 was five ^t32.) On May 1.0,201.3, Cone Health notified Conifet of several purponed breaches of the Agreement and threatened to terminate it for cause as ofJuly 12,201,3. (Am. Compl. fl 58; ree alsoMay 10 Letter, Ex. A, Docket E.rtty 51-1.) The alleged breaches include Conifer's failute to ptopetly manage Cone Heath's accounts teceivable ("A'/R"), failute to implement a denial management team to process denied claims, failute to ptovide adequate customer service to patients, failure to provide daily reconciliation, and imptoper billing of Medicaid beneficiaries. (1d.11119-54.) Under the ,{.greement, Cone Health (with wdtten notice) could terminate the Agreement fot cause if Conifer failed to fix a material bteach within Health could terminate if a material breach was incutable. Qd. n 56; Master Agreement 1,5.2(a).) The ,A.greement also provided thtee-yeat annivetsary sixty (60) days, ot Cone $ for termination without câuse at any time aftet the of the Agteement, provided that Cone Health give six (6) months wtitten notice. (I4aster Agreement $ 15.2(c).) Âfter receiving notice of Cone Health's intent 2 Conifer is formerþ known as "springfield Serwice Coqporation" which did business as "SPi Healthcare." (A-. Compl. fl 7.) The Amended Complaint tefers to Defendant as "SPï'. This memorandum opinion tefers to Defendant as "Conifet". J to teminate the Agreement, Conifer responded by letter, addressing the issues in the notice from Cone Health. (Am. Compl. J[ 59; see aho May 30 Letter, Ex. B, Docket Et tty 51,-2.) Cone Health concluded that Conifer did not have the ability to cure its breaches, nor had Conifet remedied the issues raised in the May 10 letter. (Id.1160.) Cone Health agreed to suspend its termination notice until August1.2,201.3, to allow the patties to discuss termination transition resolutions . (Id.1163.) Cone Health then filed this action on August 8,20L3, alleging that Conifer breached the Agreement. Conifer fi.led an Answer and also asserted a counterclaim in this action alleging that Cone Health's termination was imptoper, and thus, abreach of the Agreement. (Counterclaim tf 3, Docket Entry 48 at Agreemen t and, 7.) Conifer alieges that it was (1) never in material breach of the Q) that it cured, or offered to cure any purported breach before Cone Health terminated the Agreemerrt. (Id.) Conifer seeks compensatory damages in excess of $20 million dollats. Qd.1146.) Some background undisputed facts ^re ^s follows:3 Cone health was initially struggling with revenue cycle performance prior to the execution of the ,{,gteement. (I(enneth Boggs Dep., Ex. 5 47:5-48'5, Docket Entry 105-4 at 7.) Revenue cycle functions include scheduling, tegisttation, billing fot medical services, collecting payment, account adjustments, and 33.) Cone Health's in-house struggles collections follow-up. @*. 2, Docket Entry 105-1 ^t with billing and collection services were primarily the tesult of staffing issues. (Boggt Dep., 3 Both paties have ptesented extensive evidence, including corporate documents, affidavits and deposition testimony which demonstrate an extensive histotical wotking relationship from a time pedod ptior to the execution of the Agreement through the filing of this civil action. The Coutt need not naffate every detailed factual allegation as the parties are intimately famthar. with such infotmation. To the extent necessâly, the Court will address facts pertinent to the legal atguments presented herein. 4 Ex. 5 47:8-12.) In 2010, Cone Health decided to change its electtonic healthcate records system ftom the 6 44:1.9-25, "GE/IDX" platform to the "EPIC" platform. Docket Entty 105-4 ^t (Vfatk R. Gotham Dep., Ex. 1,6.) EPIC was set to go "live" on February 1,201,2. Qd 73:12-1.9.) As part of Cone Health's efforts to improve revenue cycle functions, it aiso entered into the Agreement with Conifet. Conifet begin services on the GE/IDX system and latet moved to the EPIC system. (Jeø Suppl. 1, S VI.) Conifer's services included A/R follow-up, payment posting, ând customer sewice. (Ex. 8, Docket Etttty L05-4 at 65-66.) Cone health was still tesponsible fot some revenue cycle functions. (1/.) ïíhat transpired (and why it transpired) aftet Conifet begin performing undet Agreement is the root of considerable disagteement, but it is cleat that by early the 2013, Cone Health was unsatisfied with Conifers' perfotmance and intended to tetminate its agreement with Conifer. Cone Health hired another revenue cycle management company in March 20L3, Alleviant, and on Apdl 1.8,201.3, a Cone Health executive, Jefftey F. Jones, contacted Conifet's executive, John O'Donnell, regarding terminating the Agteement. (|effrey Jones Dep., F;x.7 6 271,:1.-272:20:, Docket Entry 1,2'1,-1,5 ^t 1,3-1,4.) Mr. O'Donnell wanted something in wtiting and on May 10, 201.3, Mr. Jones sent a ietter to Conifer regarding Cone Health's grounds for termination (tvluy 10 Letter ^t 2-3.) Thereaftet, Conifer provided â response to the issues raised in the letter whereby Conifer denied that Cone Health could tetminate the Agteement with cause. (NIuy 30 Letter ^t 2-7.) Cone Health v/tote a follow-up lettet on June 14,201.3 expressing futthet disagreement. $une 14Letter,Ex. C, Docket then filed the pending action against Conifet in August 201,3. 5 Ettty 51-3.) Cone Health II. DISCUSSION Both parties have moved for pattalsummary judgment in this matter. pocket Entries 100, 103.) Summary judgment is appropriate when there exists no genuine issue of material fact and,the movin g p^rqis entitled to Zahodnick u. Int'l nt ^s ^matter of law. Fed. R. Civ. P. 56(c); 135 F.3d 91,1,,91,3 (4th Cir. 1997). The party seeking Bws. Maclt¡. Corþ., summarry judgment bears the judgme initial butden of coming forwatd and demonsttating the absence of a genuine issue of material fact. Ternkin u. Frederick Counfl Comm'rs,945 F.2d71,6,71.8 (4th Ctr. 1,991) (citing Celotex u. Catrett, 477 U.S. 317 , 322 (1986). Once the moving party has met its burden, the non-moving patq must then afftmatively demonsttate that thete is a genuine issue of matedal fact which requires ttial. Mat¡ashita E,lec. Indas. Co. Ltd. u. Zenith Radio Corp., 475 U.S. 574,587 (1986). Thete is no issue for tÅaI unless thete is sufficient evidence favodng the non-moving party for a fact finder to return a verdict fot that p^rty. Anderson Iabþt, lnc.,477 U.5.242,250 (1986); S1luia Deu, Corp. u. Calaert Coørufl, u. Uber{t Md.,48 F.3d 810, 817 (4th Cit. 1,995). Thus, the movingpatry can beat his burden eithet by presenting afftmative evidence or by demonsttating that the non-moving patty's evidence is insufficient to estabüsh his claim. Celotex,477 U.S. at 331, (Btennan, dissenting). IØhen making the summary judgment determination, the Court must view the evidence, and all justifìable infetences from the evidence, in the light most favorable to the non-moving pafty. Zahodnick, 135 F.3d at 91,3; Haþerin Abacas Tech. Corp., 128 F.3d 191, 196 (4th Cir. 1,997). Howevet, the patty opposing u. sunìmaly judgment may not rest on mere allegations or denials, and the court need not considet "unsuppotted assettions" or "self-serying opinions without objective corroboration." Euanr u. Techs. Application¡ dv Sera. C0,80 F.3d 954,962 (4th Cir. 1,996); Anderson, 471 U.S. 6 ^t 248-49. "'When faced with cross-motions for summary judgment, the court must review each motion separately on its own merits ^ m^ttet of lâw."' 'to determine whethet either of the parties deserves judgment as Rossignol u. Voorhaar,31.6 F.3d 51.6, 523 (4th Cir. 2003) (citation omitted). Conifer's Motion for Partial SummaryJudgment Conifer seeks parial summary judgment as to: (1) liability on its counterclâim, Q) all claims for relief in Cone Health's Amended Complaint (except the claim fot a performânce adjustment); (3) and other telief the Court finds appropdate. Q)ocket Entry 103.) Cone Health argues that Conifer's motion should be denied because "there is a question of fact for th. j"ry as to \¡/hether [Conifer] has cuted, could cure, or was even ttyi"g to cure its matedal bteach at the time of termination." @1.'s Resp. Bl at24,Docket Entry 118.) The parties do not dispute that the any alleged bteach of the Agteement is govemed by Notth Catolina law. To establish liability f.or a breach of contrâct claim under North Catoltna law, there must be (1) an existing valid conttact and (2) breach of the tetms of that contract. Poor a. Hill, 1,38 in dispute as to whether a N.C. '{.pp. 19,26,530 S.E.2d 838, 843 (2000). Neither pany hete is valid contract existed. Howevet, the ctux of this case surrounds the ultimate determination of whether Conifer or Cone Health breached the ,\gteement. Undet Notth Carchna law, when one party materially bteaches abilateral contract, the non-breaching party is excused ftom further performance. McC/ure Lumber Co. a. Helrzsnan Constr., lnc.,1,60 N.C. App. 190, 198, 585 S.E.2d 234,239 Q003); I-øke Møry Ltd. P'shþ u. Johnston,145 N.C. App. 525, 537, 551, S.E.2d 546, 555 Q001); Coleman u. Shirlen, 53 N.C. App. 573, 577J8,281, S.E.2d 437,434 (1981). "\ü/hether abrcachis matedal or immaterial is otdinatily a question of fact." McClare Lamber, 160 N.C. App. at 198, 585 S.E.2d 7 ^t 239 (citation omitted). "Interpreting a conÚact requires the court to examine the language of the contract itself for indications of the parties' intent at the moment of executio¡." State u. Philþ Moñ¡ USA Inc., 363 N.C. 623, 631,-32, 685 S.E.2d 85, 90-91 (2009) (citation omitted). Thus, language of a contract is clear, the intention of the parties is infetred contract." IWalton u. Ciyt ofRohiyh,342 "[i]f the plain ftom the wotds of the N.C. 879, 881, 467 S.F.2d 410,41'1, (1'996). Uabilin As a threshold issue, the Court must ftst detetmine the scope of this suit. Hete, Cone Health alleges that Conifer has breached S 11.2 of the,{.gteement which performance of services that Conifer has obligated itself Cone Health further asserts that it dghtfully alleged breach should not be narrowed to. (Jaa Master sets forth the Agreement S 11.2.) tetminated under $ 15.2(a), and that Conifet's to the six specific violations set forth in the lettets dated May 10, 201.3 andJune 14, 201.3, as the basis Conifers' failute to effectively manage the of Cone Health's tetmination was for A/R, "its fundamental responsibility under the [Agreement]." (Pl.'s Resp. Br. at25.) Under the Agreement, Cone Health (with wtitten notice) could terminate the Agreement for cause (60) days, or if if Conifer failed to fix a material bteach within sixty amaterial bteach was incurable. (À4aster Agteement S 15.2(a).) By lettet dated May 10, 201.3, Cone Health informed Conifer of its intent to terminate the Agteement for its breach of its warranties of performance set forth in $ 11.2. QvIay 10 Lettet at2.) Cone Health fwther stated "[t]he specific conduct that constitutes fConifet's] bteach includes, without limitation:" (1) Conifer's management of A/R days ttending was well below industry standards; (2) Conifer failed to assign a dedicated denial management team; (3) Conifet has failed to ptovide daily reconciliations; (4) Conifer failed to get approval and give prior notice 8 of write-offs; and (5) Conifer improperþ engaged in balance-billing. (Id.) In closing, Cone Health further stated that "[t]ermination of the Agteement will be effective on July 1'2,201'3 unless [Conifet] has fully cured all bteaches to Cone Health's satisfaction befote that date." (Id. at3.) North Catohna law generally enforces valid notice and cute Dishner Deuelopers, Inc. u. Brown,145 569,557 S.E.2d 528 Q001); 201,3WL 601.1.1.2, see clauses in a conftact. N.C. App. 375, 378, 549 S.E.2d 904, 906, aÍ|d' 354 N.C. alto lordan's Con$r., Inc. u. Fore¡t Springs, LLC,738 S.E.2d 454, at x2 (NT.C. Ct. App. Feb. 19, 201,3) ("There is no evidence in the tecord indicating that defendant provided plaintiff with wtitten notice of plaintiffs bteach of the contract and the right to cure as required by the Agteement."). While the Coutt recognizes the language of Cone Health's May 10 letter, including its "without limitation" verbiage, a fak reading of $ 15.2(a) would requke Cone Health to ptovide Conifer notice of all of the performance deficiencies that tequired curing, ot that could not be cued. Flete, Conifet could only be held liable for what it was propedy put on notice of and failed to cure, or put on notice of bteaches thât wete incurable. LCA Deu., [ | Ç a. ll/MS Mgnt. Grp', IJ-C,789 S.E.2d 569, 340651.9, at *2 O{.C. Ct. App. June default could not be a material bteach. until aftet [defendant] was given notice and an 201,6 WL opportunity to cure-were it 21., 201,6) (unpublished table decision) otherwise, the cute provision ("fl]h. in the contract would be meaningless."). Thus, the scope of this civil action is limited to breaches of the Agteement I which Conifer was put on notice4 to cure, or bteaches which Cone Health gave written notice that were incutable. Having considered the evidence presented with tegardto issues raised in Cone Health's letters, the Court concludes that there is a genuine issue cured the violatioris set foth in Cone of matenal fact as to whethet Conifer Health's notice lettet, or whethet there were bteaches that could not be cuted. North Carohna Court law looks at the Restatement (Second) of Contracts for guidance on cute issues. 709,2071. fØL IØeauer's Asphalt dv Maint. Co. u. Il/illians,770 S.E.2d 705150,at*4 (I{.C. Ct. App. Mar L,201,1) (unpublished table decision) (quoting Rest. 2d S 237 cmt. B (1981)); 91,8 Q013) (quoting Rest. Restatement (Second) ¡ee al¡o Reeder u. Carter,226 2d S 369 (1981)). N.C. App. 270,276,740 S'8.2d Cases ftom other iudsdictions appþing of Contracts $ 237 have found that p^tty in bteach does not cute ^ unless it begins to substantial petfotm its conttactual obligations. ADC Telecommanicaîions, 1nc.,24L F. Supp. 2d 1,01,6, 1.019-20 on the question [of whatis means to cure] is spatse, meâns to engage matería| failure."); 779 N.!ø.2 in 913, itis See e.!., Anacapa Tech., Inc. a. (D. Minn. 2002) ("!7hile case law cleat that to cure a mateÅaI breach subsequent conduct that substantially petfotms or peffotms without a see al¡o Voluo Truck¡ N. Am. u. State DeP't of Transþ.,323 Wis. 2d 294,31'4, d 423,433 Q01,0) ('Â reasonable interpretation of the statutory wotd 'cured' means the breaching party is to stop the offending conduct and to substantially perfotm the contract. A North Carolina court, tn arnlyztng a contrâct suit undet New York law, found similatly that the scope of proper termination was detetmined by the specific issues in the notice. Ba-yer CropScience I'P a. ChenTura Corþ., No. 12 CVS 3057, 201,2 WL 28781,74, at *5 n.44 (N.C. Supet. July 1,3, 2012) (unpublished). It held that "the newly alleged breaches cânnot support [defendant's] termination of the þatties'l Agreement, and the coutt will only look to the issues raised by [defendant] in the Notice to determine whether [defendant's] termination of the þarties'] Agreement was ptoper." (Id.) + 10 No other interpretâtion of the word 'cured' is mote teasonable )'); u. Coleman Co., Fleetwood FoldingTrailer¡, Inc. 38IQn. App. 2d 30, 43, 1.61P.3d 786, 198 Q007) (considering "substantial performance" descdbed ín Anacaþa). "Cure does not require perfect performance. Anacapa, 241, F. Srrpp. 2d at 1,020. Hete, under $ ts.Z(a)(t) of the Agreement, Cone Health could ptopedy tetminate the contract if Conifet failed to cure to a level of substantial performance. Also, Cone Health could terminate the Agreement pursuant to $15.2(a)(ü) if it gave wdtten notice of breaches that could not be cured. Aftet reviewing the evidence presented, it is unclear whether Conifer substantially petformed, thereby curing the purported breach of the watranties of petformance. Substanttal petfotmance of the issues raised in Cone Health's cortespondence are collectively geffiâne to this bteach of conttact action, and the determination of such perfoÍmance is a question of f.act fot the jury. For example, one of the issues raised in the May 10 letter included Conifer's failute to designate "a dedicated denial mânagement team to review and resolve Cone [Health's] denials." (À4ay 10 Letter at2.) The specific coîtta'cttra,l provision refetenced is paragtaph V.8 of the Supplement, which indicates that the "fd]enial claims will be teviewed by specific teams dedicated to the resolution of certain types of denials." (Suppl. 1 T V.8, Docket Entry 45-1, at 32.) This clause is ambþous the denial claims, or if as to whethet special denial teams wete requited to deal with Conifets cuttent team structure met the terms of the agïeement. Conifet argues that though it did not have to implement special teams,5 it offered, in its May 30 tesponse letter, to make the necessary adjustments to Cone Health's satisfaction. (Àzlay 30 5 Cone Health also submits evidence that Conifer's representatives acknowledged that a specific denial management team was necessâty. (See Andtea Mendoza Dep. Ex. 7875:6-76:7, Docket E,try 121-17 at 8-9.) Conifer's objections to the use of this deposition testimony is overruled. 11 Letter *4.) Ina deposition, Cone Health's Vice Ptesident of Revenue Cycle, Michael Simms admitted that he did not personally respond, and that he could not tecall, not give an answer to whether anyone from his staff told Conifer to implement a dedicated denial staff. (Simms Dep., Ex. 15 1.35:5-136:25, Docket Entry 105-7 ^t32.) TheJune l4Ietter by Cone Health did further discuss the denial team mânagement issue, and concluded by "demand[ing] that [Conifer] immediately desþate and implement a dedicated denials team that is completely separate ftom. . . the existing 55-member collections team." Sune 1,4Letter at 3.) Yet, in a further response dated August 8,2073, Conifer again indicated that it was "teady, willing, and able to make this change immediateþ upon receiving insttuction to do so ftom Cone [Health]." (August 8 Letter, Ex. 31, Docket Er,tty 105-9 ^t 22.) These facts all present genuine issue of whethet substantial petfotmance has been a met. Likewise, thete are othet disputed facts raised regarding other issues in the May 10 letter. There ate also genuine issues of material factas to alleged breaches that could not be cured, fot example, as Cone Health sets forthinitsJune 1.4,20L3letter. (SeeJune14Letter.ùt2-4.) Suchissues pteclude summalT judgment in favor of Conifet as to liability on its countetclaim and as to Cone Health's claims in the Âmended Complaint. To the extent Conifer seeks parial summalT judgment alleged breach as to certain gtounds fot the of contract, the Coutt finds that this is impropet under Federal Rule of Civil Procedure Rule 56. Rule 56 permits claim or defense--or the p^tt of ^p^rty to "move fot summary judgment, identi$ring each each claim ot defense--on which summary judgment is sought." Fed. R. Civ. P. 56(a). Par:ual summa{y judgmentis permitted (..g., finding of liability, the issues of damages); however, this rule is impropet as to what Conifer l2 seeks; that is, a pruning of factual allegations related to Cone Health's sole bteach of contract claim (which raises several grounds of termination).ó Conifet opposes Cone Health's argument and relies upon the 2010 Comment Notes of Rule 56(a), which "make[s] cIear. at the beginning that summary judgment may be requested not only as to ân entire case but also as to a claim, defense, or part of a claim ot defense." Fed. R. Civ. P. 56(a), 2010 Comm. Notes. The Court agrees that disposition of less than an entire action is petmissible under the Rule. However, to piecemealand separately decide each gtound for which Cone Health bdngs its claim, which is the root of liability in this breach of contract action pursuant to one ptovision in the parties' agreement, does not serve the best interest of justice here.7 Indeed, the case cited by Cone Health supports this position. Cardenas a. Kantv Hay L.L.C, No. 14-1067-S4C,201.6 WL 3881,345, at x7 (D. I{an. July 1,8,201,6) (unpublished) ("Thete may be parts of claims, such as liability, upon which a motion for. parial summary judgment may be granted.").8 Damase¡ - 'Reasonable Certaintv" Standard Conifer also asserts that Cone Health's pdncipal damages fail undet the "teasonable cefiunty" standard. (Def.'s Br. at 22.) Cone Health argues that its damages ate teasonably 6 The Amended Complaint sets forth two counts, one fot bteach of the Agteement, and one fot breach of the supplement. Çæ Am. Compl.\n64-72.) There is no dispute that the parties were operating undet one single contrâct. 7 This also applies to Conifer's argument regarding Cone Health's disclosure (ot lack thereof) of damages. (Jea Def.'s Bt. at26-27, Docket Entry 104.) 8 Cardena¡ fiuther stated that "þabiliry] is a much latget aspect ot 'element' of plaintiff s negligence claim than the issues raised in plaintiffs motion. Plaintiffs motion asks the court to make piecemeal findings ofl matters which . . . does not promote a just, speedy or inexpensive determination of this dispute." 201,6WL 3881.345, *t*7. See also Bolkin Anchor Co. u. AT dz T Corp.,825 F. Snpp. 2d706, 709 (E.D.N.C. 201t) þpptyr"g similar principle under Rule 12þ)(6) standatd) ('The court also declines to accept defendant's invitation to dismiss the libel claim 'in part,'which âppears to the court to be little more than ân âttempt to dispose of. at allegarion nthet than the undetlying claim."). 13 certain and not speculative. Pl." Resp. Br. at 29.) A"party seeking damages must show that the amount of damages is based upon a standard that will allow the finder of the amount of damages with reasonable certâinty." Oliuetti Corp. Bat N.C. 534, 5474$356 S.E.2d 578, 586 (1987). "In defendant's misconduct âre shown required to show aî Ames S1ts., 1nc.,31.9 where a claím for damages ftom to a reasonable certainty, the plaintiff should not exact dollar amount Head dv Engqø*t Egazþ., cases u. fact to calculate with mathematical precision." a be Sanbe/t Renta/s, Inc. u. L.L.C,174 N.C. App. 49, 61,, 620 S.E.2d 222,23L (2005). However, damages may not be "based upon mere speculation or conjectute." Byd's L¿wn dz l-"andvøpìng Inc.a.Smith,142N.C. App.371,379,542S.8.2d 689,694 (2001). Thebutdenisonthepatty seeking damages to show that the teasonable cettainty standard is met. Med. StaffingNetwork, Inc. a. Ndgway 194 N.C. App. 649, 660, 670 S.E.2d 321,, 330 (2009). "IØhethet a patty's evidence meets the 'teâsonable certainty' standatd is a question of law fot the IWashington Mat. Bank, 566 F'. S.rpp. 2d 468,482 (E.D.N.C. 2008), afd court." sub nom. Ro¡¡ u. Ross u. F.D.LC., 625F.3d 808 (4th Cu.201,0) (citation omitted). Hete, "[to] estimate its damages, Cone [Health] applied an histotical gross collection rate ("GCR") to an extrapolated amount of AR that was written off due to Conifer's breach." (Pl.'s Resp .Bt. at29.) Thebasis for the GCR is set forth in the affidavit of David Ìüofford. $Vofford Aff., Ex. 124,Docket Entry 1,24-1,2.) According to Wofford, the GCR is "simply the amount actually collected during the time period in question, divided by the total amount of all charges þoth Collectible Chatges and Uncoliectible Chatges)." (Id.nU,.) Conifer takes issue with this calculation because it would include "Clean Claims" which are claims Conifet would not have worked on. Conifer worked on "Ptoblem Claims." pavid Wofford Dep., 14 Ex. 36 303:23-306:4, Docket E.rtry 105-9 at 57-58.) Woffotd noted that "þlresumbly, the collection :øite for the A/R under its management should be lower than the ovetall gross collection rate because [Conifet] only managed 'Ptoblem Claims."' flWofford -,\ff. T 7.) However, ìTofford also expressed the ptoblems with solely c tegoriziîgClean verses Problem Claims, and also stated that the GCR "takes into account, over an extended petiod of time, all of the various factors that lead to a physician practice not collecting II 8, 14.) Wofford 1,00o/o of its chatges." Qd. futther stated that this application was "an extremely conservative calculation method." (Id. 11 1,6.) Based upon the calculation method used hete, the Coutt cannot conclude as a mattet of law that Cone Health's damages are putely speculative and not reasonably certain. The historical collection rate used hete is distinguishable from the collection method teiected in Managed Care Profls, Inc. u. Medlantic Healthcare Grp., 1.64 F3d 624,1998 ffl- 704458, at*7 (4th Cir. Oct. 1, 1998) (unpublished table decision).e In that case, the plaintiff ptedicted its damages based upon collection rates from pdor dealings with aûother health care ptovider and a different third-paty payot. Id. at *6-7. The Coutt also noted that the plaintiff failed to perform. "detailed account-by-account reviews." Id. at calculation did *7. Hete, Cone Health's damages not include anothet health care ptovider and based upon the expert's explanation of the method used, the application of the historical GCR should allow the fact- finder to calculate damages with reasonable cetainty. Thus, Conifer's motion for partial summary judgment as to Cone Health's damages fall.Io e This case applied Virginia law. 10 The Court overrules Conifer's objections to the use of \X/offord's affidavit. 15 Cone Health's Motion for Partial SummaryJudgment Cone Health seeks pattdral summâtT judgment as to damages on Conifet's counterclaim for two reasons: (1) Conifer is bared from recoveting iost profits; and Q) if Conifer is entitled to lost profìts, such damages should be limited to those occurring priot to August g,201,4. @1.'s for Br., Docket Entry 101.) Conifet argues to the contrar!, asseting thatit seeks damages direct lost profits which âre not bared under the Agreement, and that ít is entitled to damages acctued thtough January 31.,201,7 . (Def.'s Resp. Br., As to Cone Health's fìrst argument, DocketBnty 1,17 .) it relies upon a ptovision in the Agreement regatding the disclaimer of inditect damages. Section 1,4.2 of the Agteement states: Disclaimer of Indirect Damages. Neither paty shall be liable to the othet patty for indirect, incidental, consequential, exemplary, punitive or special damages, incløding lott profits, tegatdless of the form of the action ot the theory of tecovery, even if such pafty has been advised of the possibility of such ^ damages, but such limitation shall not apply to a breach of the business associate agreement (BAA) between the parties. (I4astet Agreement S 14.2) (emphasis added)). Cone Health argues that this provision excludes all damages for lost profits, whether cìirect or incìirect. €1.', Bt. at 8.) Conifer âsserts that a plain reading of S 14.2 of the Agreement leads to only one conclusion that the lost ptofits language set out in the ptovision solely pertains to irudirect loss ptofits, thus Conifet's loss ptofits that^reclitect damages are not barred. (Def.'s Resp. Br. at 10.) As pteviously stated, plain and unambiguous language of a contract controls and the intention of parties is infered from the wotds of the contracl Phihp Morris,363 N.C. at631,- 32,685 S.E.2d at 90 (citation omitted). Here, the clear language of $ 14.2 leads to only one appropriate intelpretation that the parties are barred from recovedng only inditect lost profits, 1,6 thus Conifer's claim for damages tesulting ftom ditect lost profits are recovetable under the Agreement. To reach this conclusion, the Court looks at the language of $ 14.2 as a whole, and with particuladty, the words "incladinglost ptofits." (I\4aster Agteement S 14.2) (emphasis added)). This language is preceded by a list of excludable damages: "inditect, incidental, consequential, exemplary, punitive or special damages." (Id.) Intetpreting a statutory provision, the Nonh Caro\na Coutt of Appeals has telied upon general dictionary definitions to the wotd "including": The New Oxþrd American Dictionarl defines the wotd "including" to mean "containing as patt of the whole being considered." The New Oxþrd American Dictionøry. . . . SimilaÃy, Black't Løw Dictionary explains, "The patticiple including typically indicates a par:úalhst." B/ac/<'t I,aw Dictionary 831 (9th ed. 2009). Sîate ex rel. Utìlities Comm'n u. Enutl. Def Fand,214 N.C. App. 364,367,7L6 S.E.2d 370,372 Q01,1). In appþing another the statutory provision, the Supreme Coutt of stated that "[c]leady, by use Noth Carohna of the wotd 'including' the lawmakers intended metely to /i:t examples[.]" ,òt CarolinaTpk. Auth. u. Pine Island,Inc.,265 N.C. 109, 120,1,43 S.E.2d 31,9,327 (1965) (emphasis added). Thus, the sole reasonable interpretation of "lost profits" in S 1,4.2 is that the tetm is an example of the pteceding list of excludable damages, all of which are indirect and consequential in nature such that none necessadly flow immediately from the bteach. See e.!., Plea¡ant Vallgt Promenade u. I-echmere, Lruc.,1,20 N.C. ,\pp. 650,671.,464 47, 62 (1995) (citation omitted) (emphasis in original) ("Consequential bteach of contract perfonnanca are those claimed to resalt as a ot special secondary cznreqaence S.E.2d damages of tbe defendanl's fot non- They are distinguished from genetal damages, which ate based on the value of the performance itself, not on the value of some consequence that performance may ptoduce."); 1,7 1,35,140,2935.8.2d21'9,223(1'982)(citng&odd PiedrnontPlastict,Inc.u.MiqeCo.,58N.C.App. u. Drug C0.,30 N.C. App. 564, 568,228 S.E.zd 35,38 damages are 'special damages, those which (1,976) ("IncidentaI and, consequential do not necessarily result ftom the wtong."')). Because S 14.2 ptecludes recovery of. indirect lost profits and Conifet seeks directlost profits from any damages incurted, Cone Health's motion for.parttal summarT judgment on this issue fails. Cone Health's teliance upon two misplaced. In Troclte a. Binbo damages ptovision of any Notth Carchna fedetal disttict court cases is Foods Bakeries Distribation, Inc., the defendant atgued that the in the parties' contract ptecluded the plaintiff ftom recovedng lost ptofits kind. No.3:1'L-CY-234-RJC-DSC,20'l,6WI-5417203,at*3 CX/.D.N.C. Sept.27,2076) (unpublished). The plaintiff argued to the conttar|, asserting that the lost profits preclusion was limited to inditect and consequential damages. (d.) That court concluded that"the clear language of the fdamages provision] leads to only one reasonable interpretation: þ]laintiff is prohibited from recovering [any] Iost profits." (Id.) In holding that the contrâct bared all damages tesulting damages ptovision ftom lost profits, as Troche appears to tely on two cases, one with a similar the one in Troche,and one with a compatable damages ptovision. 1/. at *3-4. Both âre unpersuasive hete. In Car a. ll/al-Mørt Store¡ Inc., applylng New York law, that court held that the agreement between the patties "cleady states that 'lost profìts' cannot be tecoveted." No. 10-CV-6176 CJS, 201,1, WL 9391,68, at *5 CX/.D.N.Y. Mar. 1,6, 201,1) (unpublished). That court disagteed with the "þ]laintiff['s] focus[ I on the clause's tefetence to 'consequential, incidental, inclirect'damages," and it also appears thât no consideration was given to the dictionary definition of "including" which pteceded the list of disclaimed damages 18 (indirect, incidental, consequential, and special damages). Id. at * 1, 5.11 In a separate unpublished order, this Coutt, applylng North Carohna law, held that "the plain language of. [the damages clause in the parties' agreement] clearly states that consequential damages are excluded, that incidental damages are excluded, and, that lost profits, tegardless of whether they are chanctetízed as consequential damages 61 direct damages, ate excluded." Ordet at 3,Ada Uss Grp. a. Sara Lee Branded Apparel, No. 1:06-CV-610 (IVI.D.N.C. Dec. 28, 2007). However, the provision at issue in Ada Uss included language whereby the patties agreed to exclude "incidental or consequential damages andf or any claims fot lost ptofits." Id. at2-3 (emphasis added). Such language is distinguishable ftom the present case. Although not controlling, the facts hete âre more akin to the Tenth Citcuit Court of Appeals' holding in Penntro Atsocs.,Inc. a. Sprint Spectrun, L.P.,499 F.3d 1151 (1Oth C1r.2007). In a breach of contract action, the defendant argued that the plaintiff v/as not entitled to lost profits based upon a provision in the patties' agreement fotbidding "the recovery of 'consequential damages,' specifiiing that they 'include, but ate not limited to, lost ptofits, lost revenues and lost business opportunities."' Id. at" 1.1.55-56. That court gave considetation to the dictionary definition of "to include: tt Notably, four years after the decision 1n Can, the !Øestern District of New York, in applying New York law, held that a disclaimer provision in a conúact did not include ditect lost profits sought by the defendant. Nie/sen Co. p.S.), LLC u. Success S1ts., Inc., 1.1,2 F. Snpp. 3d 83, 103 (S.D.N.Y. 2015). That coutt found that the ptovision at issue exculpates the parties from liability fot "special, incidental, consequential, indirect, punitive or exemplary damages including but not limited to ...lost ptofits." . . . The term "lost profits" as it is used here, clearþ refers to ân example of losses that fall, urithin the six categories of damages expressly excluded by the [agteement]. These categories, in turn, clearþ refer to damages beyond those flowing directly from the [agreement]. Id. 19 The dictionary undetscores the point. \Webstet's defines the tetm "to include" as meaning "to place, list, or rate as a part or component of a whole ot of a Iarger group, class, or aggregate." IØebster's Third New Intemational Dictionary 1.1.43 Q002). The mote general term infotms the subsequently listed examples, not the othet way around, and so lost ptofits hete refet only to those that ate "a part or component" of the larger group or class of consequential damages. Id. at 1156 (10th Clr. 2007). The court interpreted the contract clause to say "that no consequential damages are recoverable, 'includ[ing]' lost profits; it simply does not speak to direct damages, or to lost profits recoverable undet such a theory." Id.12 The ptovisionl3 here is similar in that it forbids recoverT of lost ptofits resulting ftom the preceding listed categories, none of which are direct damages. Thus, Conifer's claim for lost ptofits flowing from direct damages is not barred. See Martin u. Binbo Foods Bakeriet Distribation,lza., No. 5:14-CV-17-BR, 201,6WL 5173249, at*2 F,.D.N.C. Sept.21,201,6) (unpublished) þolding that Pennsylvania law had not definitively addressed a similar liability limitation issue; therefore, citing the court held that "[i]t Penncro, is [ody] the recovery of lost ptofits which are considered consequential, incidental, inclirect, or special damages that is ptecluded" and ptofits); EMS, Inc. a. Cbeg Inc., No. 8:11CV113 , 201,2 WL 541.2956, at 201,2) (unpublished) (appþing Nebraska law and holding not all lost *5 Q). Neb. Nov. 6, that "the limitation of liability provision draws a distinction between direct and inditect damages and excluding covetage of the phrase 'but not limited to' when listing of examples of consequential, indkect, or incidental damages indicates that lost profits can be an example of the latter [such that] [u]se tz The court in Pennno was appþing I(ansas law. 13 Cone Health argues, and this Coutt agrees, that the headline, "Disclaimer of Indirect Damages", should be given no effect. (Jee Pl.'s Reply, Docket E rt y 707 at 3 n.7; see also Mastet Agreement $ 16.8) (emphasis added)). Notwithstanding such, the plain language of the contract clause makes it cleat that the damages disclaimed within are indirect damages. 20 such damages"); In re First Magnas Fin. Corp., No. ,A,DV.09-00381-JMM, 2010 WL 6452904, at *5 (B.A.P. 9th Cir. Aug. 31, 2010) (unpublished) ({inding that "the plain language of contract] unambþously restricts damages from lost profits in the context of [the incidental, punitive, indirect, special or coflsequential damages" but did not fotbid collection of profits resulting from a clirect breach); Coremetrics,Inc. 2005 u. Aî,I-l,C,No. C-04-0222\MC, WL 3370093, at *4 Oi.D. Cal. Dec. 7 ,2005) (unpublished) (appþing Califotnialaw and finding that "the Limitations on Damages clause is unambiguous and contemplates a bar on recoverT of indirect damages, not the direct damages fthe plaintiff] seeks hete"). Having found that Conifer is not baned from seeking lost ptofits from direct damages resulting from any alleged breach by Cone Health, the Coutt v¡ill address Cone Health's ârgument that Conifer should be limited to damages incured prior to August 9,201.4. €1.'. Bt. at 10-15.) Cone Health relies upon $ 15.2(c) of the Agteement to support its argument. The conüact ptovision states: Without Cause. After the three (3) year anniversary of this Agreement, [Cone any time with six (6) Health] may terminate this Agreement without cause ^t months written notice. (N4aster Agreement $ 15.2(c).) Cone Health asserts that Conifer had no expectation that the Agreement would continue beyond the thtee year antiversary date of August 9, 2014. Gl." Br. at 10.) Conifer ârgues to the contrarf, and asserts that Cone Health is misguided upon the case law It which it relies. (Def.'s Resp. Br. at 17-18.) has long been established as a general rule undet Noth Carohna law that "[i]n a suit for damages arising out of abteach of contract, the party injuted by the bteach is entitled to full compensation for the loss and to be placed 21, as near as may be in the position which [the non-breaching party] would have occupied had the conttact not been bteached." Meares u. Nixon Con¡t. C0.,7 N.C. App. 61,4,622-23,173 S.E.2d 593,599 (1970) (citing Harris dv Hanis Constr. Co. a. Crain and Denbo, lnc.,256 N.C. 110, 1,23 S.E.2d 590 (1,962)). Thus, "the injured patty is to be compensated 'for the loss which fulfillment of the contract could have ptevented or the breach of it has entailed."' 1,8, Coble u. Nchard¡on Corp. of Greensboro, Tl N.C. App. 511, 517- 322 S.E.2d 817, 822 (1984) (citing Nonaood u. Carter, 242 N.C. 1.52, 1'55, 87 S.E.2d 2, 4 (1955). "The interest being protected by this genetal de is the non-bteaching patty's 'expectation interes!' and in so doing, the injwed party receives the 'benefit of the bargain."' Fir¡t (Jnion llat Bank of N. Carolina u. Na1/0r,102 N.C. App. 719, 725, 404 S.E.2d 1,61', 1'64 (1991) (citation omitted). Applyt"g North Carolina law, the Foutth Ckcuit in an unpublished decision held that "when ^ contract doet provide a rþht to cancel with notice the parties must reasonably expect that this dght might be exetcised[.]" Strategic Oahourcing Inc. u. Cont'l Cas. Co., 27 4 F. App'x 228, 235 (4th Cir 2008) (unpublished). To support its atgument to limit Conifer's damages, Cone Health relies upon its unilateral ability to terminate the contract without câuse at the thtee-year annivetsary of the parties'A.greement (with six months' notice). Cone Health argues that Conifet's expectation interest could not have exceeded the scope of the without cause provision. (Pl.'s Br. at 1,2- 13.) The Court frst notes that Cone Health terminated the contract pursuant to $ 1,5.2(a) "u/ith cause" rather than "without cause" ur S 1,5.2(c) permits. Additionally, Cone Health tetminated the Agreement on August 12,201.3, priot to the three-y ear antiversary. time, even if it At that had sought to do so, Cone Health could not have unilaterally terminated pursuant to $ 15.2(c) because its actions would be have been premature. Howevet, this is not 22 determinative here. North Carolina case law has held that "the damages recoverable ate such as may reasonably be supposed to have been in the contemplation of the paties when the contract uat nade." Troitino a. Goodrzan, 225 N.C. 406, 41,2,35 S.E.2d 217 ,281, (1,945) (emphasis added) (citation omitted); see al¡o lWelerhaeuserCo. u. GodwinBldg. Suppþ C0.,292 N.C. 557, 560-61.,234 S.E.2d 605,607 (1g77)(quoting Troitino). Thus, at the time of conttacting, Conifer could have no expectation beyond the three year annivetsary (with six months' notice). As such, Conifet's damages should be limited to those occurring priot to August 9,201.4.14 274F.App'* ("Notth Carohnalaw. .. holds thataninjuted ^t235 parLy Strategic Outsourcing to àcontta'ctof fixed duration mây recover damages incured during the entire contract pedod when one party prematufely terminates the conffact if it does notinclude a cancellaton ptovision."). In an alternative argument, Conifer assetts that even if the damages ate limited, such limitation should be to February 8, 201.5 nther than the August 9, 20'1,4 anniversary date. Q)ef.'s Br. at 23-25.) Conifer relies upon the language of $ 15.2(c) and suggests that it "only became operative'fo|fttrthe three Q)year anniversary.. . with six months written notice."' (d. at24.) Cone Health argues that this new theory asserted by Conifer is imptoper and that Conifer has "maintained the position throughout this litigation that Cone þIealth] could have terminated the Agreement 'without cause on August 9,201.4."' (Pl.'s Reply Br. at 9, Docket Enry 135) (citation omitted) la Conifer âttempts to distinguish Cone Health's suppoting cases by arguing that those cases dealt with contract provisions allowing termination at ãnl Time and also arguing th¿t Cone Health could not have terminated the Agreement withoat carln at the time it imptopetly breached the Agteement pwsuant to the with cau¡e provision. @ef.'s Bt. at 1,7 -23) The Court finds these ârguments inapposite as they fatl,to âccount for Conifer's expectation interest at the time the contract was made. 23 Here, the Coutt finds that $ 15.2(c) is ambiguous on the issue of when Cone Health could provide notice of its intent to terminate under $15.2(c). "[A] conttact lterm] ambþous when the 'writing Kay dzAssoæ., P.A. leaves it uncettain as is to what the agreement u/as . . . ."' Balrett u. ColonialBldg. Co. ofRøleìgh,129 N.C. App. 525,528, 500 S'8.2d 108, 111 (1998) (citing Intemational Paper Co. u. Corporex Con$ructors, Inc.,96 N.C. App. 372,31,7,385 S.E.2d 553,556 (1989). The New Oxford Arnerican Dictionary defines "notice" as "notification or warning of something, esp. to allow prepanttons to be made." The l{ew Oxþrd American Dictionaryt1,200 @hzabethJ. Jewell et al. eds., 3d ed. 2010). Hete, the clause is susceptible to moÍe than one interpretation âs a reasonable jury could find that Cone Health could give notice six (6) months prior to the annivetsary date, or that Cone Health could give notice only after the date of the three-year anniversary. The inquiry does not end hete, howevet. Even where a court, however, detetmines as a mattet of law that the contract is ambiguous, it may yet examine evidence extrinsic to the contract that is included in the summary judgment matedals, and, f îhe eaidence is, as a natter of law, ditpotitìue of the interpretatiue issae, grant vntmarytjadgmenî on that basis. If, however, resort to extrinsic evidence in the summary judgment materials leaves genuine issues of fact respecting the contract's proper interpretation, suûìtnary judgment must of course be tefused and intetptetation left to the ttiet of fact. lØasltington Metro. Area Tranit Aath. u. Potonac Inu. Properties, Inc., 476 F.3d 231,,235 (4th Cu. 2007) (emphasis added) (citing Goodrzan u. Resolation Tra$ Corp.,7 F.3d 1.1.23,1,1,26 (4th Ctt. 1993)). Hete, Conifer's conduct demonstrates that the intent of the parties was that the eatliest Cone Health could terminate the conttact (without cause) was on August 9,201,4. One of Conifer's executives indicated that Cone Health court tetminate after thtee years. fohn O'Donnell Dep., Ex. B L45:1.-3, Docket Errtty Docket Entry 1,01,-71, 1,01,-2 at 5; see also Worachek Email, Ex. I(, (summarizing the contrâct term as "5 years with the option to terminate 24 after 3")). ,{.dditionally, in its discovery response, Conifet indicated that Cone health had the opportunity to terminate the Âgreement "without cause on August 9,2074, provided that Cone [Health] gave six months'written notice to [Conifer]." (Conifer Irlterrogâtory Response fl 28, Ex. H, Docket Ent y 1,01,-8 at 3.) One of Conifet's experts also based a portion of his opinion using the August 9, 2014 termination date. @,rik C. Lioy Expert Repott, Ex. G, Docket Entry 1,07-7 at 3.) Thus, the undisputed extdnsic evidence supports the finding that that Conifer is entided to lost profits, if any, through August 9,20'1.4.1s Cone Health's motion for patttal summary judgment is granted on this issue. III. CONCLUSION For the reâsons stated above,IT IS THEREFORE ORDERED that Cone Health's Motion forParrdral SummaryJudgment @ocket DENIED IN PART, 103) is Entty 100) is GRÄNTED and Conifer's Motion for Part:raL Summary Judgment (Docket Ettty DENIED. oe L. U April IN PART AND tet States Magisttate Judge 11,201,7 Durham, North Carchna ls Cone Health also claims that Conifer's representative drafted the A.gteement; thus, the contract is stdctly construed against Conifer. Rqtfeld Auiation, I-LC u. þon Auiation,.Izr., No. 1:11'CY274,2074 WL 1,3201,1,8, at *9 n.15 @a.D.N.C. Mar. 31,,2074), afd Q\ov. 6,2014) ('Both,parties note the wellestablished interpretive cânon that a contract is to be construed strictly against its dtafter."). 25

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