IN THE COURT OF APPEALS OF TENNESSEE

AT KNOXVILLE

October 18, 2018 Session

CHS DEVELOPMENT CORPORATION, INC. D/B/A BRIDGE 

DOCUMENTS v. LAKEVIEW NEUROREHAB CENTER MIDWEST, INC.

D/B/A LAKEVIEW SPECIALTY HOSPITAL

Appeal from the Circuit Court for Hamilton County

No. 16C388 L. Marie Williams, Judge

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No. E2018-00519-COA-R3-CV

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This contract dispute between CHS Development Corporation, Inc. d/b/a Bridge 

Documents (“CHS”), and Lakeview Neurorehab Center Midwest, Inc. d/b/a Lakeview 

Specialty Hospital (“Lakeview”), involves the interpretation of contract provisions

regarding exclusivity and noncompetition. The trial court determined that the contract 

provisions at issue were clear and unambiguous and granted summary judgment in favor 

of CHS. Lakeview has appealed. Determining that the applicable contract provisions are 

ambiguous, we reverse the trial court’s grant of summary judgment to CHS and remand 

for an evidentiary hearing to determine the contractual intention of the parties with 

consideration of parol evidence as necessary. Consequently, we vacate the trial court’s 

award of damages and attorney’s fees to CHS. We affirm the trial court’s denial of 

summary judgment to Lakeview. We also deny CHS’s request for attorney’s fees on 

appeal.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court 

Affirmed in Part, Reversed in Part, Vacated in Part; Case Remanded

THOMAS R. FRIERSON, II, J., delivered the opinion of the court, in which JOHN W.

MCCLARTY and KENNY W. ARMSTRONG, JJ., joined.

M. Andrew Pippenger, Chattanooga, Tennessee, for the appellant, Lakeview Neurorehab 

Center Midwest, Inc. d/b/a Lakeview Specialty Hospital

Harold L. North, Jr., and Kelly Blair Etchells, Chattanooga, Tennessee, for the appellee, 

CHS Development Corporation, Inc., d/b/a Bridge Documents.

12/19/2018
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OPINION

I. Factual and Procedural Background

On January 18, 2008, Lakeview entered into a written contract (“the Contract”)

with CHS for medical transcription services. The Contract was for an initial term of two 

years with automatic renewal for subsequent five-year terms. The Contract’s language 

states, inter alia, that Lakeview could terminate the Contract by providing CHS with 

notice of termination at least ninety days prior to the automatic renewal date. The 

Contract also includes a provision entitling CHS to reimbursement of expenses and 

reasonable attorney’s fees related to a legal action “[s]hould it become necessary for CHS 

to retain an attorney to collect any damages owed to CHS under the terms of [the 

Contract].”

Pertinent to the appellant’s issue on appeal, the Contract also contains the 

following provisions:

2. SCOPE. Beginning on or about February 1, 2008, CHS will provide 

medical transcription services to [Lakeview]’s physicians and other health 

providers at all [Lakeview]’s locations, and will be the exclusive vendor of 

outsourced transcription/editing services for [Lakeview].

* * *

8. NON-COMPETE. During the term of this Agreement, and for a period 

of two (2) years following its termination, [Lakeview] will not, directly or 

indirectly, employ, solicit for employment or do business with any 

employee, agent or sub-contractor of CHS without the express written 

consent of CHS, whether or not said employee, agent or sub-contractor has 

actually been engaged on [Lakeview’s] behalf or is still engaged by CHS, 

nor will [Lakeview] do business with any other vendor of the transcription 

system EMDAT. [Lakeview] acknowledges that this provision will survive 

this agreement, regardless of the reason for its cancellation.

The first term of the agreement ended in January 2010 with the next term ending

in January 2015. On January 18, 2015, the Contract automatically renewed for a second 

five-year term, set to end in 2020.1 On February 2, 2016, Lakeview entered into a 

Contract with a different medical transcription service vendor, SoftScript, Inc. 

(“SoftScript”) for medical transcription services. Although SoftScript provided medical 

 

1

Lakeview argued in its motion for summary judgment that it had terminated the Contract in 

2009. The trial court found to the contrary and that the Contract was effective through 2020. 

Lakeview does not dispute this determination on appeal.
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transcription services, it operated with a different platform than the EMDAT system 

specified in the Contract.

On March 17, 2016, CHS filed a complaint against Lakeview in the Hamilton 

County Circuit Court (“trial court”), alleging that Lakeview had breached the Contract by 

failing to abide by the Contract’s exclusivity provision and failing to make timely tender 

of payment for CHS’s transcription services provided under the Contract. Lakeview filed 

an answer and counter-complaint on July 22, 2016, alleging that it had terminated the 

Contract with CHS and was under no further obligations pursuant to that agreement. 

CHS subsequently filed a motion for summary judgment on November 17, 2017. 

Lakeview also filed a motion for summary judgment on December 13, 2017, 

alleging that it had not been in breach of the Contract by doing business with SoftScript. 

Lakeview contended that the Contract’s exclusivity and noncompetition provisions were

in conflict and created an ambiguity as to whether Lakeview would have been prohibited 

from entering into a contract with any vendor of medical transcription services or 

specifically vendors who used the EMDAT system. Lakeview argued that this alleged 

ambiguity should have been construed against CHS, the contract’s drafting party, so that 

Lakeview would be permitted to contract with any third-party vendor that does not use 

the specified EMDAT system. In its response to CHS’s motion for summary judgment, 

Lakeview did not dispute that it had been “behind on certain invoices” and stated that it 

had recently paid $2,509.11 to CHS for transcription services. 

On January 30, 2018, the trial court granted CHS’s motion for summary judgment 

and denied Lakeview’s motion for summary judgment, based upon its finding that the 

contract provisions clearly and unambiguously prevented Lakeview from contracting 

with any other vendor for medical transcription services. The trial court awarded CHS 

damages in the amount of $127,411.72, plus court costs and attorney’s fees. Lakeview 

timely appealed.

II. Issues Presented

Lakeview presents one issue for our review, which we have restated slightly:

1. Whether the trial court erred by granting CHS’s motion for summary 

judgment and denying Lakeview’s motion for summary judgment 

upon its determination that the Contract unambiguously prevented 

Lakeview from contracting with any other vendor for medical 

transcription services.

CHS presents one additional issue for review, which we have similarly restated as 

follows:
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2. Whether CHS should be awarded its reasonable attorney’s fees and 

related expenses on appeal.

III. Standard of Review

The grant or denial of a motion for summary judgment is a matter of law; 

therefore, our standard of review is de novo with no presumption of correctness. See Rye

v. Women’s Care Ctr. of Memphis, MPLLC, 477 S.W.3d 235, 250 (Tenn. 2015); Dick 

Broad. Co., Inc. of Tenn. v. Oak Ridge FM, Inc., 395 S.W.3d 653, 671 (Tenn. 2013) 

(citing Kinsler v. Berkline, LLC, 320 S.W.3d 796, 799 (Tenn. 2010)). As such, this Court 

must “make a fresh determination of whether the requirements of Rule 56 of the 

Tennessee Rules of Civil Procedure have been satisfied.” Rye, 477 S.W.3d at 250. As 

our Supreme Court has explained concerning the requirements for a movant to prevail on 

a motion for summary judgment pursuant to Tennessee Rule of Civil Procedure 56:

[W]hen the moving party does not bear the burden of proof at trial, the 

moving party may satisfy its burden of production either (1) by 

affirmatively negating an essential element of the nonmoving party’s claim 

or (2) by demonstrating that the nonmoving party’s evidence at the 

summary judgment stage is insufficient to establish the nonmoving party’s 

claim or defense. We reiterate that a moving party seeking summary 

judgment by attacking the nonmoving party’s evidence must do more than 

make a conclusory assertion that summary judgment is appropriate on this 

basis. Rather, Tennessee Rule 56.03 requires the moving party to support 

its motion with “a separate concise statement of material facts as to which 

the moving party contends there is no genuine issue for trial.” Tenn. R. 

Civ. P. 56.03. “Each fact is to be set forth in a separate, numbered 

paragraph and supported by a specific citation to the record.” Id. When 

such a motion is made, any party opposing summary judgment must file a 

response to each fact set forth by the movant in the manner provided in 

Tennessee Rule 56.03. “[W]hen a motion for summary judgment is made 

[and] . . . supported as provided in [Tennessee Rule 56],” to survive 

summary judgment, the nonmoving party “may not rest upon the mere 

allegations or denials of [its] pleading,” but must respond, and by affidavits 

or one of the other means provided in Tennessee Rule 56, “set forth specific 

facts” at the summary judgment stage “showing that there is a genuine issue 

for trial.” Tenn. R. Civ. P. 56.06. The nonmoving party “must do more 

than simply show that there is some metaphysical doubt as to the material 

facts.” Matsushita Elec. Indus. Co., 475 U.S. [574,] 586, 106 S. Ct. 1348

[(1986)]. The nonmoving party must demonstrate the existence of specific 

facts in the record which could lead a rational trier of fact to find in favor of 

the nonmoving party. If a summary judgment motion is filed before 

adequate time for discovery has been provided, the nonmoving party may 
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seek a continuance to engage in additional discovery as provided in 

Tennessee Rule 56.07. However, after adequate time for discovery has 

been provided, summary judgment should be granted if the nonmoving 

party’s evidence at the summary judgment stage is insufficient to establish 

the existence of a genuine issue of material fact for trial. Tenn. R. Civ. P. 

56.04, 56.06. The focus is on the evidence the nonmoving party comes 

forward with at the summary judgment stage, not on hypothetical evidence 

that theoretically could be adduced, despite the passage of discovery 

deadlines, at a future trial.

Rye, 477 S.W.3d at 264-65 (emphasis in original). Pursuant to Tennessee Rule of Civil 

Procedure 56.04, the trial court must “state the legal grounds upon which the court denies 

or grants the motion” for summary judgment, and our Supreme Court has instructed that 

the trial court must state these grounds “before it invites or requests the prevailing party 

to draft a proposed order.” See Smith v. UHS of Lakeside, Inc., 439 S.W.3d 303, 316 

(Tenn. 2014). 

We review the trial court’s interpretation of a written agreement de novo with no 

presumption of correctness. See Ray Bell Constr. Co., Inc. v. State, Tenn. Dep’t of 

Transp., 356 S.W.3d 384, 386 (Tenn. 2011); Cracker Barrel Old Country Store, Inc. v. 

Epperson, 284 S.W.3d 303, 308 (Tenn. 2009). As this Court has previously explained:

In resolving a dispute concerning contract interpretation, our task is 

to ascertain the intention of the parties based upon the usual, natural, and 

ordinary meaning of the contract language. Planters Gin Co. v. Fed. 

Compress & Warehouse Co., Inc., 78 S.W.3d 885, 889-90 (Tenn. 2002) 

(citing Guiliano v. Cleo, Inc., 995 S.W.2d 88, 95 (Tenn. 1999)). A

determination of the intention of the parties “is generally treated as a 

question of law because the words of the contract are definite and 

undisputed, and in deciding the legal effect of the words, there is no 

genuine factual issue left for a jury to decide.” Planters Gin Co., 78 

S.W.3d at 890 (citing 5 Joseph M. Perillo, Corbin on Contracts, § 24.30 

(rev. ed. 1998); Doe v. HCA Health Servs. of Tenn., Inc., 46 S.W.3d 191, 

196 (Tenn. 2001)). The central tenet of contract construction is that the 

intent of the contracting parties at the time of executing the agreement 

should govern. Planters Gin Co., 78 S.W.3d at 890. The parties’ intent is 

presumed to be that specifically expressed in the body of the contract. “In 

other words, the object to be attained in construing a contract is to ascertain 

the meaning and intent of the parties as expressed in the language used and 

to give effect to such intent if it does not conflict with any rule of law, good 

morals, or public policy.” Id. (quoting 17 Am. Jur. 2d, Contracts, § 245).
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Kafozi v. Windward Cove, LLC, 184 S.W.3d 693, 698 (Tenn. Ct. App. 2005), perm. app. 

denied (Tenn. Jan. 30, 2006).

IV. Interpretation of Contract Provisions

Lakeview contends that the Contract’s provisions regarding exclusivity and 

noncompetition contain conflicting terms and create an ambiguity as to whether 

Lakeview was prohibited from contracting with SoftScript. In response, CHS asserts that 

the terms of the Contract are unambiguous and do not conflict, making Lakeview’s 

actions tantamount to a material breach of contract. CHS argues in the alternative that 

even if the provisions at issue do create an ambiguity, parol evidence resolves the 

ambiguity by demonstrating that the parties considered CHS to be the exclusive vendor 

of medical transcription services for Lakeview. Upon a thorough review of the Contract, 

we agree with Lakeview that the Contract is ambiguous with regard to the exclusivity and 

noncompetition clauses.

In interpreting a contract, our “initial task is to determine whether the language in 

the contract is ambiguous.” Ray Bell, 356 S.W.3d at 386-87 (citing Planters Gin Co. v. 

Fed. Compress & Warehouse Co., 78 S.W.3d 885, 890 (Tenn. 2002)). “If the contract 

language is unambiguous, then the parties’ intent is determined from the four corners of 

the contract.” Ray Bell, 356 S.W.3d at 387 (citing Whitehaven Cmty. Baptist Church v. 

Holloway, 973 S.W.2d 592, 596 (Tenn. 1998)). This Court has explained the principles 

applied to determine whether the contract language is clear or ambiguous as follows:

The language in dispute must be examined in the context of the entire 

agreement. Cocke County Bd. of Highway Commrs. v. Newport Utils. Bd., 

690 S.W.2d 231, 237 (Tenn. 1985). The language of a contract is 

ambiguous when its meaning is uncertain and when it can be fairly 

construed in more than one way. Farmers-Peoples Bank v. Clemmer, 519 

S.W.2d 801, 805 (Tenn. 1975). “A strained construction may not be placed 

on the language used to find ambiguity where none exists.” Id.

Vanbebber v. Roach, 252 S.W.3d 279, 284 (Tenn. Ct. App. 2007), perm. app. denied

(Tenn. Mar. 3, 2008). 

It is well settled that “ambiguities in a contract are to be construed against the 

party drafting it.” Frank Rudy Heirs Assocs. v. Moore & Assocs., Inc., 919 S.W.2d 609, 

613 (Tenn. Ct. App. 1995). In interpreting the language of a contract, we are required to 

use “the usual, natural, and ordinary meaning” of terms. See Staubach Retail Servs.-Se., 

LLC v. H.G. Hill Realty Co., 160 S.W.3d 521, 526 (Tenn. 2005); Adkins v. Bluegrass 

Estates, 360 S.W.3d 404, 411 (Tenn. Ct. App. 2011). 
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The Contract’s exclusivity provision states that “CHS will provide medical 

transcription services to [Lakeview’s] physicians and other health providers at all 

[Lakeview]’s locations, and will be the exclusive vendor of outsourced 

transcription/editing services for [Lakeview] (emphasis added).” In contrast, the 

Contract’s noncompetition provision states in relevant portion that during the term of the 

Contract and for two years thereafter, Lakeview “will not, directly or indirectly, employ, 

solicit for employment or do business with any employee, agent or sub-contractor of 

CHS” “nor will [Lakeview] do business with any other vendor of the transcription system 

EMDAT (emphasis added).”

In its memorandum opinion incorporated into the judgment, the trial court found 

that the Contract was “clear and unambiguous” and that the provisions contained in these 

paragraphs could “easily be reconciled.” In determining the contract provisions to be 

unambiguous, the trial court reasoned as follows:

Paragraph 2 provides that [CHS] will be the exclusive vendor of certain 

services throughout the term of the agreement; whereas, paragraph 8 

provides certain limitations on [Lakeview’s] activities, including a 

limitation on the defendant Lakeview’s doing business with any other 

vendor with the transcription system EMDAT during the term of the 

contract and for two years thereafter. Accordingly, the Court finds the

contract clear and unambiguous. Entering into a contract with SoftScript 

even though SoftScript does not use EMDAT services is a violation of the 

agreement between the parties that [CHS] will be the exclusive vendor of 

outsourced transcription/editing services for [Lakeview].

Upon our careful review, we respectfully disagree with the trial court’s conclusion that 

the contract provisions are clear and unambiguous.

In the case at bar, the parties’ Contract can reasonably be interpreted in more than 

one way and is, therefore, ambiguous. See Vanbebber, 252 S.W.3d at 284 (“The 

language of a contract is ambiguous when its meaning is uncertain and when it can fairly 

be construed in more than one way.”). The exclusivity provision sets forth the scope of 

the parties’ contract and provides that CHS “will be the exclusive vendor of outsourced 

transcription/editing services” for Lakeview. This contract language suggests that CHS 

cannot contract with any other company for transcription or editing services during the 

term of the Contract. In the separate noncompetition paragraph, however, Lakeview is

prohibited from conducting business with “any other vendor of the transcription system 

EMDAT” while the Contract is in effect and for two years thereafter. This paragraph 

therefore contemplates that Lakeview may contract with other transcription service 

vendors who do not use the EMDAT transcription system. As such, we conclude that the 

respective contract provisions two and eight establish an ambiguity.
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As in this case, where we have determined the contract provisions to be 

ambiguous, our Supreme Court has explained:

When contractual language is found to be ambiguous, the court must 

apply established rules of construction to determine the intent of the parties.

An ambiguous provision in a contract generally will be construed against 

the party drafting it. Furthermore, when a contractual provision is 

ambiguous, a court is permitted to use parol evidence, including the 

contracting parties’ conduct and statements regarding the disputed 

provision, to guide the court in construing and enforcing the contract.

Allstate Ins. Co. v. Watson, 195 S.W.3d 609, 611-12 (Tenn. 2006) (additional internal 

citations omitted). 

In the instant action, because the trial court found that the Contract was clear and 

unambiguous, the trial court properly did not consider parol evidence. However, as we 

have determined the contract provisions to be ambiguous, we further determine that a 

genuine issue of material fact exists regarding the intent of the parties. As such, we 

remand to the trial court for an evidentiary hearing and the application of established 

rules of construction with consideration of parol evidence as necessary to determine the 

intention of the parties. Having concluded that summary judgment is not appropriate in 

this case, we reverse the trial court’s grant of summary judgment to CHS and affirm the 

trial court’s denial of summary judgment to Lakeview. Ergo, we vacate the trial court’s 

award of damages and attorney’s fees to CHS for reconsideration after the trial court has 

resolved the issue regarding the parties’ contractual intent. See, e.g., Schwartz v. 

Diagnostix Network All., LLC, No. M2014-00006-COA-R3-CV, 2014 WL 6453676, at 

*13 (Tenn. Ct. App. Nov. 17, 2014).

V. Attorney’s Fees

CHS seeks an award of reasonable costs and attorney’s fees on appeal pursuant to 

the Contract’s provisions. The attorney’s fees provision of the contract states in pertinent 

part: “Should it become necessary for CHS to retain an attorney to collect any damages 

owed to CHS under the terms of this Service Agreement, CHS will be entitled to recover, 

in addition to its damages, reasonable attorney’s fees and other expenses normally 

associated with the collection process.” However, inasmuch as Lakeview has partially

prevailed with regard to its issue on appeal and this Court has vacated the trial court’s 

award of damages to CHS, we determine that an award of attorney’s fees on appeal to 

CHS is not warranted.
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VI. Conclusion

For the aforementioned reasons, we reverse the trial court’s judgment granting

summary judgment to CHS. Consequently, we vacate the trial court’s award of damages 

and attorney’s fees to CHS for reconsideration after the issue regarding the parties 

contractual intent has been resolved. We affirm the trial court’s denial of Lakeview’s 

motion for summary judgment. We also deny CHS’s request for attorney’s fees and costs 

on appeal. We remand this matter to the trial court for an evidentiary hearing and 

application of established rules of contract construction with consideration of parol 

evidence as necessary to determine the intent of the parties. The costs on appeal are 

taxed to the appellee, CHS Development Corporation, Inc.

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THOMAS R. FRIERSON, II, JUDGE