# FILED
March 12, 1997 Cecil W. Crowson Ap pellate Cou rt Clerk BIENVENIDO T. SAMSON, M.D ., ) ) Plaintiff/Appellee, ) ) Appeal No. ) 01-A-01-9609- CH-00430 VS. ) ) Trousdale Chancery ) No. 6243 HARTSVILLE HOSPI TAL, INC., ) ) Defendant/Appellant. )

COURT OF APPE ALS OF TENNESSEE MIDDLE SEC TION AT NASHVILLE
APPEALE D FRO M THE C HANC ERY C OURT O F TROU SDALE COUN TY AT HARTSVILLE, TENN ESSEE THE HONORABLE C. K. SMITH, CHANCELLOR

EDDIE TAYLOR DONOHO, TAY LOR & TAYLOR 204 Court Street P. O. Box 179 Hartsvi lle, Tennessee 37074 Attorney for Plaintiff/Appellee LUIS C . BUSTA MANTE J. FORD LITTLE WOOLF, MCCLANE BRIGHT, AL LEN & CARPEN TER 900 S. Gay Str

eet, Suite 900 P. O. Box 900 Knoxvil le, Tennessee 37901- 0900 Attorneys for Defendant/Appellant

REVERSED AN D REMAND ED

BEN H. CAN TRELL, JUDGE CONCUR: TODD, P.J., M .S. KOCH, J.- 2 - 

## O P I N I O N

The appe llan t hos pita l has aske d thi s cou rt to review t he q uestion of whether Dr. Samson sho uld be requi red to submit h is dispute with the hospital to binding arb i tration after the termination of a con tract between them. The hospital insisted on ar bitration, and the doctor chose to pursue his rights through the courts. The Chancery

Court of Trousdal e County found that the arbitrat ion clause in the contract was no lo nger bindin g on the doctor , and it enjoi ned the hospital from pursuing ar bitration. We revers e.

I.

On October 8, 1993, Hartsville Hosp i tal and Dr. B ienvenido Sams on entered into a one year Physician Agreement, whereby the doctor would establish a practice in Hartsville, and the hospital would provide assistance to him in the form of advancementsof up to $15,000 per mont h. The purpose of the advancements

was to enable the doctor

to meet his oper

ating ex penses, and to g uarantee a floor under his income. Theagreement als o required the doctor to pr ovide the hospital w ith 60 hours per month of emergency r oom coverag e at no charg e.

The agreement contain ed a pr ovision for repayment of the advancementsafter the contrac t cam e to an en d, and also for forg iveness of that obligation on a prorated basis if the doctor continue d to maintain a practice in Hartsvi lle. Th e contract was renew able for one additi onal year u pon the wri tten approval of both parties.

The termination s ection g ave the parties the r ight to ter minate the contract without cause upon 60 days writte n notice, or t o terminate it for cause wi thout- 3 -

notice, upon cer

tain spec ifie d hap peni ngs , or upon the “

fail ure of either party to faithfully and dilig ently car ry out the provisi ons of this agreement.” Termination of the agreementby the doc tor without cause, or termination by the hospita l with cause would result in all the money that h ad been advanced t o the doctor beco ming due and payable within 30 days.

Another clause involv ing terminat ion provi ded as follows : In the ev ent that either party notifies the other

of intent to terminate the agreement, either party to this agreement may request bindi ng ar bitration t o reso lve a ny di sagreeme nts, w ith the cost of such ar bitration bei ng equall y shared.

The parties per

formed in accordanc e with theterms of the contr act, and continued to per

form after

Octobe r 8, 19 94, but

neithe r of the m f urnished the other with a w ritten notic e of intent to renew
.

On August 14, 1995 the hospital w as sold. On O ctober

2, 1995 the new owners of the hospital s ent Dr. S amson a no tice of their i ntent to terminatethe agreementwith hi m, and requested reimbursement of the advancements, amount ing to $154,614. The doctor rejected the r

equest on the bas is that the ter mination was without cause, and that i t thus exti nguished his obligatio n to repay t he advancements. S inc e the parties were unable to resolve thei r differences, the h ospital inv oked the arbitration provisi ons of the contract
.

The doct or then filed a complaint in chancery cour t for a declarat o r y judgmentthat he was

not obligat ed to repay t he advancements a nd thathe wasunder no legal obligation to arbitrate the dispute. He also aske d th e court to enjo in the hospital from proceeding under the arbit ration claus e, and he demanded to be pa id $ 4,350 fo r emergency room serv ices rendere d under the contr act. The hospital respon ded by

filin g a mot ion to stay

further court proce eding s pendi ng theoutcom e- 4 -

of arbitrati on. After

a hearing on the hospital’ s motion, the tr ial court di smissed it, a nd enjoined the hospi tal from pursuingarbitrati on. This appeal foll owed.

II.

This case is before t h is co urt by virtue of Tennessee’s Uniform Arbitration Act, Tenn. Code Ann. § 29-5-301 et seq. The provisions of the Act encour age the u se of agree men ts to arbit rate by m aking it easier to enforce such agreements thr

ough the court s.
Tenn. Code Ann. § 29- 5-302 reads in pertinent par t: Agreements to submit to arbitration -- Jurisdiction. -- (a) A writte n agreement to s ubmit any ex isting controversy to arbitration or a prov ision in a w ritten contr act to submit to arbitration any controversy thereafter aris ing between the parties is vali d, enforceable and irrevocable save upon such groundsas existas law or in equity for the revocation of any contract . .
. . (b) The making of an agree ment described i n this secti on providingfor arbitrati on in this st ate confers juri sdiction on the court to enforce the ag reement under thi s part and to ent er judgmenton an award thereunder [Act s 1983, ch. 462, §§ 1,17.]

Tenn. Code Ann. § 2 9-5- 303 enables courts to ma ke a summary determination as to wheth er a party is entitled to arbitrat ion, upon the applicati on of a party w ho can show the kind of agreement described i n Tenn. Code Ann. § 29- 5 - 302 and an opposing party’s refusal to arbi trate. The case b efore us was initially filed bythe party who refused to arbit rate, rather than by the one who sought arbitrati on, but we do no t believe t hat this minor deviation from the procedure d escribed in the statute impair

s the hospital ’s righ ts under the Un iform Arbitrat ion Act.

The rig ht to appeal an adverse ruling on the question of arbitration is found in Tenn. Code Ann. § 29-5-319:- 5 - Appeal. --

(a) A n appeal may betaken from: (1) An order

denyi ng an a pplication t o comp e l arbitration made under § 29-5- 303; (2) An order grantin g an applicatio n to stay arbitration made unde r 29-5-303(b);

. . . (b) An appeal shall be taken in the manner and to the same extent as

from orders or

judgments in a civil action. [Acts 1983, ch. 462, §19.]

The statute create s a rare exception to the g eneral rule that a par tyis not entitled to appea l a judgment or order to the C ourt of Appeals un less that order or judgment is a final one. See T enn. R. App. P. Rule 3(b).

III.

There is little doubt that had Har tsvill e Hospital terminated the contract with Dr. Samson pr ior to October 8, 1994, then thehospital would have been entitled to arbitrati on, despite any objection by Dr. Samson. However, the doc tor argued at trial, as h e argue s her

e, th at th e par

ties ’ fa ilu re to execu te a wri tten renewal of the contract eli minated all his obligatio ns under thatcontract, i ncluding theobligatio n to submit disputes to ar bitration. I n the alternati ve, he arg ues that his obl igations und er the contract were terminated on the dat e that the hospital was sold, because the sale rendered the si gnatories u nable to perform in accordance w ith its provisions.

The appellant arg ues to the contrar y that thecontract was still in effect afterOctober 8, 1994, because both parties continued to p erform under it. To uphold this argument, we would per haps have to find that the situation is aki n to t hat o f a holdover tenant at the conc lusion of a one-year lease. The agreement in such a case continues on the same terms as before, exce pt that it is converted t o a periodic tenancy or a tenancy at will, which ca n be ter minated by ei ther party upon proper notice.- 6 - Appellantalso argues that Dr. Samson’s complai nt contained a bi nding judicial admission that the contract remained in effect after the fir st year. The relevant portion of the compl aint reads as follows:

11. In addition, D r. Samson performed c ertain serv ices pursuantto his agreement with t he Defendant for whi ch he was entitled to compensation whi ch has never been paid. Specificall y , Dr. Samson per formed Emergency

Room service s at Hartsville Hospital in June, July and August, 1995 , forwhich he is entitled to agreed and r eason ab le compensation in the amount of Four Thousand Three Hundred Fifty and 00.100 Dollars ($4,3 50.00).
App ellant f urther contends that arbitratio n is appropriate in this case because of clear leg islative and public pol icy favor ing that mode of dispute resol ution. See Buracz

ynski v. Ey

ring, 919 S.W .2d 314 (Tenn. 199 6). Appellant poi nts out that at least o ne prev ious decisi on of this court has called for a liberal con struction of arbitration clauses, w ith all doubts to be resolved in favor of ar bitration. S ee Dewitt v. Al-Haddad

, Appeal No. 89-394-II (Filed April 25, 1990 ).

IV.

The cardinal r ule in inter preting any contract is to determi ne the intention of the parties, and t o give e ffect to that intention, consistent with le gal princ iples. Bob Pearsall Motors v. Regal Chrysler-Plymouth, Inc. , 521 S. W.2d 5 78 (Tenn. 1975); Petty v. Sloan , 277 S.W.2d 355, 197 Tenn. 630 (195 5). In determiningthe intent of the parties, we must look to the contrac

t as a whol e, even thoug h we are her e called upon to interpret

only one of it s clauses. See Cocke County B oard of Highway Commission ers

v. Newport Utilities Board, 690 S.W .2d 231 (Tenn. 198 5); Aetna Casualty and Surety Co. v. Wo ods, 565 S.W.2d 861 (Tenn. 1978).

We hesitate to pretermit any argument that ei the r of the p arties may advance on remand, by ruling th at the contract ended on any pa rticular da te. It- 7 -

appears to us that

the notice of termination is not only th e trigg ering event that entitle s either party to req uest ar bitration, but it also m a yaffect the outcome of further proceedings, as the obligat ions of the parties may depend on the reason s advanced for termination.

We must note, however, that the refund the hospital de mands is based upon advancements t hat arose under the contract, a nd that the clause w hich prov ides for bindi ng arbitr

ation to resol ve “any

disagreement”

between the par

ties must o f necessity

include dis agreements about those advancement s. In fact, it appears to us that the parties contemplated that thei r respecti ve oblig ations relati ve to the advancements w

ould be the most l ikely ar ea for disagreements to arise
.
We note also that t he contract appar ently anti cipat es t hat such arbitration may

oc cur after its one year term, and perha ps even several years afterward, in view

of the clause that compels the hospi tal to reduce t he doctor’ s obligation of repayment by $30,000 “for

every year that the p hysic ian re main s in ac tive practice in the service area following the expiration of the term of this agreement.”

In view of the clear ev idence tha t the parties i ntended that disagreements

about the repay ment of advancesbe decided by arbitrati on, and the uncertainties

surrounding the legal effects of the hospital’ s purported ter mination of the contract on th e rights of the parties, we are incli ned to rever se the chancellor. Our decision is reinforced by the public policy argument w hich we di scussed in DeWitt v. Al-Haddad, supra , as follows:

“.
. . case law

across the country indi cates that it is a wel l established principle that arbitration is f avored by the state, Federal and common law. This strong publ ic policy favoring the arbitrati on o f dispu tes is reflected in the Unifo rm Arbitra tion A ct, whic h is desig ned to discoura ge litig ation, permit a resolution of dis pute s in a speci alized forum conversant

with the issues inv

olved a nd p rovide a s peedy resolution of the disputes. Th erefore , c ourts generally- 8 - construe arbitrati on clausesliber ally an d res olve any doubts in favor of arbitratio n. . . [ C]ourts usual ly gi ve as broad an interpretation to an arbitr ation provi sion as the words and intentionsof the parties, drawn from th eir expressions, will warrant.” ( citations om itted ).

V.

The decis ion of t he tri al cou rt isrev ersed. Rema nd thi s cause to the ChanceryCourt of Trous dale County for further proce edings consistent with this opinion. Tax the costs on appeal to the appellee.

________________________________ BEN H. CAN TRELL, JUDGE CONCUR:

_______________________________ HENRY F . TODD, PRESID ING JUDGE MIDDLE SEC TION

_______________________________ WILLIAM C. KOCH, JR., J UDGE