Kettering Anesthesia Associates, Inc. v. PST Services Inc.

Filing 23

ORDER granting Plaintiff's Emergency motion for Injunctive Relief, 11 and Defendant's Motion for Partial Summary Judgment 10 . Signed by Judge Thomas M Rose on 9/11/2013. (jab)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION AT DAYTON

Kettering Anesthesia Associates,
Plaintiff/Counterclaim Defendant,
v.
PST Services Inc.,
Defendant/Counterclaim Plaintiff.

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CASE 3:13-cv-145
JUDGE THOMAS M. ROSE

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ENTRY AND ORDER GRANTING PLAINTIFF’S EMERGENCY MOTION FOR
INJUNCTIVE RELIEF, (DOC. 11) AND DEFENDANT’S MOTION FOR PARTIAL
JUDGMENT ON THE PLEADINGS, (DOC. 10),

Pending before the Court are two motions, Plaintiff’s Emergency Motion for Injunctive
Relief, Doc. 11, and Defendant’s Motion for Partial Judgment on the Pleadings, doc. 10, both of
which will be granted.
Defendant/Counterclaim Plaintiff PST Services, Inc., requests judgment on the pleadings
against Plaintiff/Counterclaim Defendant Kettering Anesthesia Associates on counts II and IV of
the counterclaim. Count II seeks a declaration that Kettering Anesthesia Associates must deposit
into escrow all disputed fees. Count IV asserts, inter alia, that Kettering Anesthesia Associates
breached an agreement to deposit with a mutually acceptable escrow agent an amount equal to
any disputed fees. Doc. 8 at 14, 15.
A motion for judgment on the pleadings under Fed. R. Civ. P. 12(c) is appropriate once
the pleadings are closed and within such time as to not delay the trial. Wagner v. Higgins, 754
F.2d 186, 188 (6th Cir. 1985) (citing Fed. R. Civ. P. 12(c)). “The motion is granted when no

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material issue of fact exists and the party making the motion is entitled to judgment as a matter
of law.” Paskvan v. City of Cleveland Civil Serv. Comm’n., 946 F.2d 1233, 1235 (6th Cir. 1991).
In reviewing a motion for judgment on the pleadings, the non-moving party is entitled to have all
the material allegations in the complaint, with all reasonable inferences to be drawn therefrom,
construed in its favor as true. Ziegler v. IBP Hog Mkt., Inc., 249 F.3d 509, 511 (6th Cir. 2001).
PST claims that Kettering Anesthesia Associates owes PST $625,051.95 in unpaid
invoices. Doc. 8 at ¶ 15. Kettering Anesthesia Associates “disputes that it owes PST such fees.”
Doc. 10 at 5. Both parties assert that they entered into an agreement that states “[i]f there is a
dispute as to the fees owed to [PST] by [Kettering Anesthesia Associates], [Kettering Anesthesia
Associates] shall pay [PST] the undisputed fees and deposit with a mutually acceptable escrow
agent...the amount equal to the disputed fees.” Doc. 1 Ex. A ¶ 19.
Kettering Anesthesia Associates asserts that it is not obliged to pay the escrow amount,
because “black-letter Ohio contract law...provides that a party to a contract is excused from
performance under a contract where the other party is already in material breach thereof.” Doc.
11 at 9. To this end, Kettering Anesthesia Associates cites a case that states that “repudiation or
total breach” by one party enables the other party to seek damages without performing acts that
would have been conditions precedent. Id.(citing Midwest Payment Systems, Inc. v. Citibank
Federal Sav. Bank, 801 F. Supp. 9, 13 (S.D. Ohio 1992; and Waste Management, Inc. v. Rice
Danis Industries Corp., 257 F. Supp. 2d 1076, 1084 (S.D. Ohio 2003). Another case cited by
Kettering Anesthesia Associates stands for the proposition that when one party does not perform
a contract duty, the other party is relieved of the duty to pay for the performance. Id. (citing
Arthur v. Arthur, 2003 WL 22006817 at *4 (Ohio App. Aug. 22, 2003). Kettering Anesthesia
Associates cites no case and the Court can find none that stands for the proposition that an

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allegation of a breach relieves a party from abiding by contracted dispute resolution terms. If
Kettering Anesthesia Associates’ position were adopted, the allegation of a breach would nullify
contractual provisions such as forum selection clauses and choice of law provisions. Wherefore,
PST’s motion for judgment on the pleadings on Counts II and IV will be granted.
Next, Kettering Anesthesia Associates requests an injunction requiring PST to deliver
Kettering Anesthesia Associates’ patient billing data to Kettering Anesthesia Associates in the
manner set forth in the parties’ agreement. As Kettering Anesthesia Associates points out, the
parties’ agreement states:
[a]fter ... placement with a mutually acceptable escrow agent of all disputed fees
owed to [PST] by [Kettering Anesthesia Associates], ... [PST will] (1) promptly
deliver to [Kettering Anesthesia Associates] a final list of accounts receivable and
(2) provide reasonable transitional services, as set forth on Schedule 3 to this
Agreement.
Doc. 11 at 8-9.
In determining whether to exercise discretion to grant a preliminary injunction, district
courts consider the following four factors:
(1) whether the movant has a “strong” likelihood of success
on the merits; (2) whether the movant would otherwise
suffer irreparable injury; (3) whether issuance of a
preliminary injunction would cause substantial harm to
others; and (4) whether the public interest would be served
by issuance of a preliminary injunction.
McPherson v. Michigan High Sch. Athletic Ass'n, Inc., 119 F.3d 453, 459 (6th Cir. 1997) (en
banc) (quoting Sandison v. Michigan High Sch. Athletic Ass'n, Inc., 64 F.3d 1026, 1030 (6th Cir.
1995)). These factors are not prerequisites to issuing an injunction but factors to be balanced. See
Unsecured Creditors' Comm. of DeLorean Motor Co. v. DeLorean,755 F.2d 1223, 1229 (6th Cir.
1985).

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Limiting itself to the likelihood Kettering Anesthesia Associates has of success on its
right to billing information after placement of disputed fees with a mutually acceptable escrow
agent, the Court finds it has a high chance of likelihood of success. Considering its own need
for the billing information, as well as the need of members of the public who have been their
patients to billing information, the remainder of the factors also favor granting the injunction.
Thus, the Court will order PST to provide the billing information immediately after Kettering
Anesthesia Associates places the disputed funds into escrow.
Thus, Defendant/Counterclaim Plaintiff’s Rule 12 (c) Motion for Partial Judgment on the
Pleadings, doc. 10, is GRANTED. Plaintiff/Counterclaim Defendant’s Emergency Motion for
Injunctive Relief, doc. 11, is GRANTED and PST will provide Kettering Anesthesia Associates’
billing information to it immediately after Kettering Anesthesia Associates deposits $625,051.95
with an escrow agent mutually acceptable to the parties.
DONE and ORDERED in Dayton, Ohio, Wednesday, September 11, 2013.
s/Thomas M. Rose
_______________________________
THOMAS M. ROSE
UNITED STATES DISTRICT JUDGE

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