Quantum Imaging & Therapeautic Associates, Inc. v. Metropolitan Diagnostic Imaging, Inc. et al

Filing 44

MEMORANDUM (Order to follow as separate docket entry) re 41 First MOTION for Summary Judgment filed by Quantum Imaging & Therapeautic Associates, Inc. Signed by Honorable Jennifer P. Wilson on 2/15/2023. (ve)

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IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
QUANTUM IMAGING &
:
THERAPEUTIC ASSOCIATES, INC., :
:
Plaintiff,
:
:
v.
:
:
METROPOLITAN DIAGNOSTIC
:
IMAGING, INC. D/B/A A.M.I.C.,
:
:
Defendant.
:

Civil No. 1:17-CV-00163

Judge Jennifer P. Wilson

MEMORANDUM
Before the court is a motion for summary judgment filed by Plaintiff
Quantum Imaging & Therapeutic Associates, Inc. (“Quantum”). (Doc. 41.)
Quantum asks the court to find that Defendant Metropolitan Diagnostic Imaging,
Inc. d/b/a A.M.I.C. (“MDI”) violated the terms of the parties’ contract, resulting in
damages of $147,905.94 to Quantum. Because the court finds that MDI breached
its contract with Quantum, the court will grant the motion.
FACTUAL AND PROCEDURAL BACKGROUND
At the outset, the court notes that MDI failed to respond to Quantum’s
motion for summary judgment, statement of facts, or brief. Thus, pursuant to
Local Rule 56.1, the material facts set forth in Quantum’s statement of facts are
deemed admitted.1

1

Quantum relies on admissions by MDI in support of its statement of facts. (See Doc. 40.) MDI
failed to respond to Quantum’s request for admissions, thus, the requests are deemed admitted.
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Quantum, a Pennsylvania corporation, entered into a written contract with
MDI on March 26, 2014. (Doc. 40, ¶¶ 1, 4; Doc. 40-3.) The contract required
Quantum to provide teleradiology services for MDI’s facility in Chicago, Illinois.
(Doc. 40, ¶ 4.) Specifically, Quantum would exclusively provide professional
radiology and teleradiology services for MDI during its normal operating hours.
(Doc. 40, ¶ 7; Doc. 40-3, ¶ 2.1.) The contract was for an initial term of five years
with automatic renewal for successive five-year terms unless terminated by one of
the parties in accordance with the contract. (Doc. 40, ¶ 6; Doc. 40-3, ¶ 7.1.) Under
the contract terms, a Quantum radiologist had to be present at the MDI facility at
least once every six months. (Doc. 40, ¶ 8; Doc. 40-3, ¶ 2.1.) Section 2.1(f) of the
contract provides: “At all times when Radiologists are not physically present at
Facility, Radiologists shall interpret all delineated radiological examinations and
procedures by teleradiology . . .” (Doc. 40-3, ¶ 2.1(f).)
Quantum agreed to assign its rights to receive payment from Medicare,
Medicaid, and other third-party payors to MDI. (Doc. 40, ¶¶ 12–13; Doc. 40-3,
¶ 2.5.) In consideration for this assignment, MDI agreed to pay Quantum twenty
percent, less a two percent billing and collection fee, of the “Net Collections”

Fed. R. Civ. P. 36(a)(3). Facts admitted due to a party’s failure to respond to requests for
admissions are “conclusively established” and “may support a summary judgment motion.”
Sec’y U.S. Dep’t of Labor v. Kwasny, 853 F.3d 87, 91 (3d Cir. 2017). Thus, the court considers
the matters established through Quantum’s unanswered requests for admissions as conclusively
established facts.
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amount MDI received when submitting claims for Quantum’s services. (Doc. 40,
¶¶ 14, 16; Doc. 40-3, ¶ 4.1.) The contract defines “Net Collections” as “an amount
equal to the gross technical and professional revenues collected and retained for all
Imaging Services performed following the date hereof” minus “any contractual
allowances, discounts, bad debt,” refunds, or collection fees paid to unaffiliated
collection agencies. (Doc. 40, ¶ 15; Doc. 40-3, ¶ 4.1.) MDI agreed to remit
payment to Quantum pursuant to Section 4.1 of the contract by the twentieth day of
each month for services performed during the prior month. (Doc. 40, ¶ 17; Doc.
40-3, ¶ 4.2.) MDI also agreed to provide Quantum with monthly reports within
twenty days following the end of each calendar month setting forth the Net
Collections for the prior month as well as the services provided each day by
Quantum personnel. (Doc. 40, ¶18; Doc. 40-3, ¶ 3.6.)
Quantum began providing services under the contract in December 2014.
(Doc. 40, ¶ 19.) Quantum acknowledged receipt of MDI’s partial payment on
September 10, 2015, but also advised that Quantum was still owed over
$36,000.00, which was an estimated amount based on the monthly reports
provided by MDI. (Id. ¶ 20.) In October 2015, the parties agreed that Quantum
had read and interpreted 2,594 teleradiology images and studies. (Id. ¶ 22.) By
email on December 17, 2015, MDI acknowledged that it had a past-due balance

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with Quantum and would set up a payment plan for the outstanding balance. (Id.
¶ 23.)
From December 2014 through December 2015, Quantum “read and
interpreted several thousand electronic and non-electronic radiological renderings
and studies for MDI in accordance with” the contract. (Id. ¶ 25.) MDI failed to
provide timely and accurate monthly reports as required by the contract. (Id. ¶ 26.)
MDI further failed to compensate Quantum for the professional services provided
in accordance with the contract. (Id. ¶¶ 27–28.) MDI was billed for the
professional radiology services provided by Quantum in excess of $147,905.94 but
refused to pay that amount. (Id. ¶¶ 29–30.) Rather, MDI received and retained
payments made by third-party payors for services provided by Quantum yet failed
to compensate Quantum under the contract. (Id. ¶¶ 31–32.)
This case was initiated by Quantum on January 27, 2017, by filing a fourcount complaint. (Doc. 1.) An amended complaint was filed on April 13, 2017,
alleging claims for breach of contract and quantum meruit. (Doc. 11.) MDI
answered the amended complaint and asserted affirmative defenses. (Doc. 12.)
On November 28, 2017, MDI filed a suggestion of bankruptcy. (Doc. 21.) The
court stayed the case based on that suggestion of bankruptcy on December 13,
2017. (Doc. 23.)

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Following this case being reassigned to the undersigned, the court ordered
that the parties file a status report on August 10, 2021. (Doc. 24.) The parties
complied and the court scheduled a case management conference. (Docs. 25, 26,
27.) On September 14, 2021, MDI’s counsel requested to withdraw from this case
because he did not have any communication with the present owners of MDI, nor
did he ever represent MDI through its present owners. (Doc. 29.) Further, counsel
no longer worked at the law firm that represented the prior owner of MDI. (Id.)
Over Quantum’s objection, the court permitted MDI’s counsel to withdraw from
this case. (Docs. 29-1, 31.) The court required Quantum to serve all court orders,
discovery requests, and filings on MDI’s registered service agent until new counsel
appeared for Defendant. (Doc. 37.) Thereafter, on January 24, 2022, the court
issued a case management order. (Doc. 39.)
On April 29, 2022, Quantum filed the instant motion for summary judgment,
statement of facts, and brief in support. (Docs. 40, 41, 42.) MDI has not
responded to this motion,2 thus, it is ripe for review.

2

MDI has not participated in this case since the court permitted its counsel to withdraw on
October 12, 2021.
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JURISDICTION
The court has diversity jurisdiction in this case pursuant to 28 U.S.C. § 1332
because the amount in controversy exceeds $75,000 and the parties are citizens of
different states. Furthermore, venue is proper under 28 U.S.C. § 1391 because
Quantum’s principal place of business is in the Middle District of Pennsylvania
and a substantial part of the acts or omissions in this case occurred in this District.
STANDARD OF REVIEW
A court may grant a motion for summary judgment when “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). A dispute of fact is material if resolution of
the dispute “might affect the outcome of the suit under the governing law.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Summary judgment is
not precluded by “[f]actual disputes that are irrelevant or unnecessary.” Id. “‘A
dispute is genuine if a reasonable trier-of-fact could find in favor of the
nonmovant’ and ‘material if it could affect the outcome of the case.” Thomas v.
Tice, 948 F.3d 133, 138 (3d Cir. 2020) (citation omitted).
In reviewing a motion for summary judgment, the court must view the facts
in the light most favorable to the non-moving party and draw all reasonable
inferences in that party’s favor. Jutrowski v. Twp. of Riverdale, 904 F.3d 280, 288
(3d Cir. 2018) (citing Scheidemantle v. Slippery Rock Univ. State Sys. of Higher

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Educ., 470 F.3d 535, 538 (3d Cir. 2006)). The court may not “weigh the evidence”
or “determine the truth of the matter.” Anderson, 477 U.S. at 249. Instead, the
court’s role in reviewing the facts of the case is “to determine whether there is a
genuine issue for trial.” Id.
The party moving for summary judgment “bears the initial responsibility of
informing the district court of the basis for its motion, and identifying those
portions of ‘the pleadings, depositions, answers to interrogatories, and admissions
on file, together with the affidavits, if any,’ which it believes demonstrate the
absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S.
317, 323 (1986) (quoting Fed. R. Civ. P. 56(c)). The non-moving party must then
oppose the motion, and in doing so “‘may not rest upon the mere allegations or
denials of [its] pleadings’ but, instead, ‘must set forth specific facts showing that
there is a genuine issue for trial. Bare assertions, conclusory allegations, or
suspicions will not suffice.’” Jutrowski, 904 F.3d at 288–89 (quoting D.E. v. Cent.
Dauphin Sch. Dist., 765 F.3d 260, 268–69 (3d Cir. 2014)).
Summary judgment is appropriate where the non-moving party “fails to
make a showing sufficient to establish the existence of an element essential to that
party’s case, and on which that party will bear the burden of proof at trial.”
Celotex, 477 U.S. at 322. “The mere existence of a scintilla of evidence in support
of the plaintiff’s position will be insufficient; there must be evidence on which the
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jury could reasonably find for the plaintiff.” Anderson, 477 U.S. at 252. “Where
the record taken as a whole could not lead a rational trier of fact to find for the
non-moving party, there is no genuine issue for trial.” Matsushita Elec. Indus. Co.,
Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).
DISCUSSION
Quantum argues that the court should grant judgment in its favor and against
MDI as to its breach of contract claim. (Doc. 42, pp. 5–7.)3 In accordance with
paragraph 10.10 of the contract, Quantum also submits that the court should apply
New York substantive contract law in this diversity action. (Id. at 5; Doc. 40-3,
¶ 10.10.)
At the outset, the court must determine the appropriate choice of law.
Because the court is exercising diversity jurisdiction in this case, the court applies
state substantive law and federal procedural law. Erie R.R. Co. v. Tompkins, 304
U.S. 64, 78 (1938); Chamberlain v. Giampapa, 210 F.3d 154, 158 (3d Cir. 2000.)
As argued by Quantum, the contract at issue in this case contains a choice of law
provision designating New York law as applicable to any disputes. (Doc. 40-3,
¶ 10.10.) Thus, the court will apply New York law to the breach of contract claim
analyzed herein.

3

For ease of reference, the court uses the page numbers from the CM/ECF header.
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Under New York law, a plaintiff must prove the following elements for a
breach of contract claim: (1) the existence of a contract; (2) that the plaintiff
performed under the contract; (3) that the defendant breached its contractual
obligations; and (4) that the defendant’s breach resulted in damages to the plaintiff.
Canzona v. Atanasio, 118 A.D.3d 837, 838–39 (N.Y. App. Div. 2014) (quoting
Dee v. Rakower, 112 A.D.3d 204, 208–09 (N.Y. App. Div. 2013)).
Here, Quantum and MDI entered into a written contract on March 26, 2014.
(Doc. 40, ¶ 4; Doc. 40-3.) As to the second element, Quantum established that it
provided radiology and teleradiology services pursuant to the contract from on or
about December 2014 through December 2015. (Doc. 40, ¶¶ 19–20, 22–23, 25.)
In exchange for providing radiology and teleradiology services under the contract,
MDI was required to pay Quantum by the twentieth day of each month. (Doc. 403, ¶¶ 4.1, 4.2.) MDI was also required to provide monthly reports with the Net
Collections and services provided by Quantum. (Id. ¶ 3.6.) Quantum established
that MDI failed to make the required payments and provide the required reports,
therefore, the court concludes that MDI breached its contractual obligations to
Quantum. Finally, Quantum further established that MDI’s breach resulted in
damages in the amount of $147,905.94 for services rendered but not paid.

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Accordingly, the court holds that Quantum has proven its breach of contract
claim against MDI and will grant the motion for summary judgment in Quantum’s
favor.4
CONCLUSION
Accordingly, for the reasons stated herein, the court will grant Quantum’s
motion for summary judgment. (Doc. 41.) An appropriate order will issue.
s/Jennifer P. Wilson
JENNIFER P. WILSON
United States District Court Judge
Middle District of Pennsylvania
Dated: February 15, 2023

4

Although Quantum also pleaded a quantum meruit claim, Quantum did not pursue that claim on
summary judgment. For this reason and because quantum meruit relief is “an alternative to a
cause of action alleging breach of contract,” the court need not reach this claim. Thompson v.
Horowitz, 141 A.D.3d 642, 643–44 (N.Y. App. Div. 2016).
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