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IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

AmSurg Holdings Incorporated, et al., 

Plaintiffs, 

v. 

Divesh Anireddy, et al., 

Defendants. 

No. CV-17-04181-PHX-SMB 

ORDER DENYING DEFENDANTS’ 

MOTION FOR SUMMARY 

JUDGMENT 

At issue is the motion for summary judgment filed by defendants Anireddy, Esker, 

Miller, Bryant, Endoscopy Center of Yuma, L.L.C. (“ECY”), and Yuma Endoscopy 

Center, L.L.C. (“YEC”) (collectively, “Defendants”).1

 (Doc. 62, “Mot.”). Plaintiffs 

AmSurg Holdings, Inc. (“AmSurg”), and The Yuma AZ Endoscopy ASC, L.L.C. filed a 

response (Doc. 74, “Resp.”), to which Defendants filed a reply (Doc. 86, “Reply”). Oral 

argument was held on January 9, 2019. 

I. Background 

Defendant ECY is a physician entity located in Yuma, Arizona. Defendants Divesh 

Anireddy, M.D., and Alec Esker, M.D., are Members of ECY. AmSurg is a corporation in 

the business of developing, owning, and operating ambulatory surgery centers in 

partnership with physicians. Their dispute arises from a joint venture that began in October 

2005, when AmSurg bought a 51% share of a surgery center operated by 

 

1

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judgment, but the parties have since stipulated to its dismissal. (Doc. 70). 
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ECY. (DSOF, Ex. 1). Plaintiffs allege they paid $6.5 million for their share of the surgery 

center. (Doc. 46 ¶ 14, “Complaint”). To operate the surgery center, AmSurg and ECY 

formed an LLC called The Yuma AZ Endoscopy ASC, LLC (“ASC”). (DSOF, Ex. 1). 

Defendant Beverly Bryant was an administrator at ASC, where defendant Seth Miller, 

M.D., also performed procedures before starting a competing surgery center, YEC. In their 

Complaint, Plaintiffs allege Defendants purposely undermined the success of the joint 

venture in order to operate and develop YEC. (Doc. 46, “Complaint”). 

AmSurg and ECY signed an operating agreement (the “Agreement”) for ASC that 

states that the purpose of ASC is to own and operate the “Center.” (DSOF, Ex. 1). The 

Center is defined as “the ambulatory surgery center operated by [ASC] and located in 

Yuma, Arizona, including the real property, or leasehold improvements, furniture, fixtures, 

the Equipment, books records, supplies, accounts receivable, goodwill, other intangibles 

and other assets used in its operation.” (DSOF, Ex. 1). ECY maintained a 49% stake in the 

Center, and AmSurg and ECY are the only two members of ASC. (DSOF, Ex. 1). 

The Agreement also includes an anti-assignment clause that, among other things, 

requires all members to approve another member’s assignment of its membership interest 

to a non-party. (DSOF, Ex. 1). An assignment that is inconsistent with the Agreement 

“shall be void.” (DSOF, Ex. 1). The Agreement is governed by Tennessee law, specifically 

the Tennessee Limited Liability Company Act, Tenn. Code. Ann. §§ 48-201-101 et seq. 

(DSOF, Ex. 1). 

At the time of the Agreement, AmSurg Holdings, Inc. and its parent company, 

AmSurg Corp., were both corporations organized under Tennessee laws. (DSOF, Ex. 1). 

In 2014, AmSurg Holdings, Inc. (“AmSurg-Tennessee”) merged into a newly-created 

Delaware corporation of the same name (“AmSurg-Delaware”). (DSOF ¶ 7). In 2016, 

AmSurg Corp. also merged into a different Delaware Corporation called New Amethyst, 

which then merged into Envision Healthcare Holdings, Inc., a Delaware corporation 

(“Envision”). (PASOF ¶ 19). The parent company was not a party to the Agreement. 

AmSurg-Delaware had no further mergers. 
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Defendants argue Plaintiffs lacking standing to sue because the mergers violate the 

Agreement’s anti-assignment clause, thus voiding Plaintiff’s interest in ASC. (Mot. at 8–

17). Plaintiffs, however, characterize the merger as a “routine business decision” meant 

only to change AmSurg’s state of domicile from Tennessee to Delaware. (Resp. at 1, 3; 

PASOF ¶ 8). They assert the merger did not change “AmSurg’s business operations, 

practices, policies, officers or other personnel,” (Resp. at 3; PASOF ¶ 9), and that the 

merger was not a traditional assignment but a transfer or assignment by operation of law, 

which is not a prohibited assignment as contemplated by the agreement. They note 

AmSurg-Delaware even retained the same IRS Federal Employer Identification Number 

after the merger. (Resp. at 3; PASOF ¶ 10). Defendants do not present any facts to dispute 

the assertion that the merger didn’t change AmSurg’s business operations, practices, 

policies, officers or other personnel. Defendants, for their part, say Plaintiffs hid the merger 

from them, (Mot. at 16), and they only “discovered” the merger after discovery began in 

this litigation. (DSOF ¶ 12). Plaintiffs respond by noting the merger was a public 

transaction filed with the Tennessee and Delaware Secretaries of State. (Resp. at 2; PASOF 

¶ 7). Plaintiffs also argue that equity compels the court to reject Defendants’ motion. 

Defendants’ motion asks for summary judgment on all causes of action alleged in 

the Complaint arguing that Plaintiffs have no standing to sue. (Mot. at 2). 

II. Legal Standard 

Summary judgment is appropriate 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). Under this standard, “[o]nly disputes over facts that might affect the outcome of the 

suit under governing [substantive] law will properly preclude the entry of summary 

judgment.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A “genuine issue” 

of material fact arises only “if the evidence is such that a reasonable jury could return a 

verdict for the non-moving party.” Id. 

In considering a motion for summary judgment, the court must regard as true the 

non-moving party’s evidence if it is supported by affidavits or other evidentiary material. 
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Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986); Eisenberg v. Ins. Co. of N. Am., 815 

F.2d 1285, 1289 (9th Cir. 1987). The non-moving party may not merely rest on its 

pleadings; it must produce some significant probative evidence tending to contradict the 

moving party’s allegations, thereby creating a question of material fact. Anderson, 477 U.S. 

at 256-57 (holding that the plaintiff must present affirmative evidence in order to defeat a 

properly supported motion for summary judgment); First Nat’l Bank of Ariz. v. Cities Serv. 

Co., 391 U.S. 253, 289 (1968). 

III. Analysis 

Defendants move for summary judgment on the grounds that the entities they 

contracted with, AmSurg-Tennessee and AmSurg Corp., ceased to exist when they merged 

into different corporations and the anti-assignment clause prevents any rights the original 

entities had from transferring to the new corporations AmSurg-Delaware and Envision. 

Therefore, Plaintiffs do not have standing to sue. For the reasons that follow, Defendants’ 

arguments are unpersuasive. 

1. The ASC’s anti-assignment clause 

The anti-assignment clause is found in Section 12 of the Agreement. Defendants 

argue Plaintiffs only have standing to sue if the original entities assigned their membership 

interest to the new entities consistent with Subsection 12.3, the portion of the Agreement 

that governs assignments to “any person who is not a member.” (Mot. at 5). The relevant 

portions of the Agreement are as follows: 

12.1. Assignment of Membership Interests. No assignment of all or any 

part of a Membership Interest in the LLC (including any Financial Rights, 

Governance Rights or other rights pertaining to a Membership Interest) shall 

be made except as follows: 

... 

12.1.2. Subject to the provisions of Section 12.3 hereof, a Member 

may assign such Member’s Membership Interest to any person who is 

not a Member; 

... 

12.1.5. The LLC need not recognize any assignment of all or any part 

of a Membership Interest other than an assignment described in 

Sections 12.1.1 through 12.1.4 hereof. Any other assignment or 
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attempted assignment shall be void. No assignment shall be effective 

until written notice thereof has been provided to the LLC and any 

other applicable requirements set forth in this Agreement, the Articles 

of Organization or the Act have been satisfied. 

...

12.3. Assignment of Membership Interest with Consent of Other 

Members. A Member may assign all or any part of such Member’s 

Membership Interest to a person not theretofore a Member in accordance 

with Section 12. l.2 hereof if (a) the assignor first gives written notice to the 

other Member(s) and the LLC of the proposed assignment, giving the name, 

address and social security or taxpayer identification number of the proposed 

assignee and describing the terms of the assignment, (b) the proposed 

assignee executes a copy of this Agreement and agrees in writing to be bound 

by the terms hereof, (c) the assignment is approved in writing by the other 

Members, and (d) the assignment is permitted under Section 12.5 hereof. ... 

The approval by the Members of an assignment pursuant to this Section 12.3 

shall constitute consent to the continuation of the existence and the business 

of the LLC pursuant to the Act. 

... 

12.5. Restrictions on Assignment. No Member shall be permitted to assign 

such Member’s Membership Interest, Financial Rights or Governance Rights 

if such assignment would result in the LLC being taxed for federal income 

tax purposes as an association taxable as a corporation or would constitute a 

violation of any applicable federal or state law. Each of the Members hereby 

agrees and acknowledges that the restrictions on assignment contained in this 

Article 12 are not unreasonable in view of the nature of the parties and their 

relationships to one another and the nature of the business of the LLC. 

The crux of the issue is whether AmSurg-Tennessee’s merger into AmSurg-Delaware is a 

prohibited assignment contemplated by the Agreement. Defendants contend that the 

merger was a “transfer by operation of law,” which is barred by the Agreement and 

AmSurg-Delaware is nothing more than an “imposter” without a claim to any of the 

contractual rights previously possessed by AmSurg-Tennessee. (Mot. at 10–11) (quoting 

Freeman Mgmt. Corp. v. Shurgard Storage Centers, Inc., No. 3:06cvo736, 2007 WL 

1541877, at 4* (M.D. Tenn. May 23, 2007)). Plaintiffs agree the merger is “an assignment 

by operation of law” or a “transfer by operation of law,” but argue an assignment by 

operation of law is a legal term of art that is fundamentally different than an assignment as 

contemplated by the Agreement. (Resp. at 4–9). See also Tenn. Code Ann. § 48-244-
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104(c)(1), (2) (The effect of a merger is that every entity “other than the surviving entity 

ceases to exist,” and “all property . . . owned by each of the merged entities vests in the 

surviving or resulting entity.”) 

2. Tennessee statutes do not provide a definitive answer. 

AmSurg-Tennessee, AmSurg-Delaware, AmSurg Corp, New Amethyst, and 

Envision are all corporations. Mergers of for-profit business corporations are governed by 

Tenn. Code. Ann § 48-21-108. It provides that when a merger is effective, “The 

Corporation or eligible entity that is designated in the plan of merger as an entity surviving 

the merger shall survive, and the separate existence of every other corporation or eligible 

entity that is a party to the merger shall cease.” Tenn. Code Ann. § 48-21-108(a)(1) 

(emphasis added). Further, “All property owned by, and every contract right possessed by, 

each corporation or eligible entity that is merged into the survivor shall be vested in the 

survivor without revision or impairment.” Id. at § 48-21-108(a)(2). Therefore, when 

AmSurg-Tennessee merged into AmSurg-Delaware, AmSurg-Tennessee ceased and all 

property owned by it “vested in” AmSurg-Delaware “without reversion or impairment.” 

The same goes for AmSurg Corp.’s merger into New Amethyst and then Envision. 

Defendants argue that the party they originally did business with has ceased to exist 

and the “vesting” of AmSurg-Tennessee’s interest in the ASC into AmSurg-Delaware is 

an assignment in violation of Tenn. Code. Ann. § 48-218-102, which sets the default rules 

for assignment of membership interests in Limited Liability Companies. Section 48-218-

102(b)(2)(A) governs an assignment to a non-member: 

Except as provided in subdivisions (b)(2)(B) and (C), any other assignment 

of any governance rights is effective only if all the members, other than the 

member seeking to make the assignment, approve the assignment by 

unanimous consent or if the articles or operating agreement so permit, the 

assignment is approved in accordance with, if the assignment is approved in 

accordance with § 48-232-102.2

 

2

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Company. 
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Subsection f provides the outcome of an assignment that is not consistent with the statute: 

(f) CONSEQUENCES OF INEFFECTIVE ASSIGNMENT. If any 

purported or attempted assignment of governance rights is ineffective for 

failure to obtain the consent required in subsection (b): 

(1) The purported or attempted assignment is ineffective in its 

entirety; and 

(2) Any assignment of financial rights that accompanied the purported 

or attempted assignment of governance rights is void. 

What is conspicuously absent from the statutes cited by Defendants is whether the 

statute that vested AmSurg-Tennessee’s property into AmSurg-Delaware when those 

corporations merged is an “assignment.”3

 Additionally, subsection (b)(1) of the same 

statute the defendants cited allows parties to contract around the default rules. Tenn. Code. 

Ann. § 48-218-102(b)(1). And, as previously noted, Plaintiffs concede that courts have 

interpreted a merger to be an assignment by operation of law or a transfer, but they argue 

the Agreement should be interpreted as unambiguously allowing a merger because it is a 

legal term of art, categorically different than the generic “assignment” used in the 

Agreement. That is, the Agreement was never intended to prevent assignments by 

operation of law. Defendants argue otherwise, pointing to case law that has barred transfers 

of property after a merger. 

3. Case law does not provide a definitive answer. 

Defendants argue that a merger is a “transfer by operation of law,” Freeman, 2007 

WL 1541877 at *4, which constitutes an assignment. In their view of the Agreement, if the 

parties meant to exclude transfers by operation of law from the broader prohibition on 

assignments, the Agreement would have explicitly stated so. See PPG Indus., Inc. v. 

Guardian Indus. Corp., 597 F.2d 1090, 1095 (6th Cir. 1979) (“If the parties had intended 

an exception [to the anti-assignment clause] in the event of a merger, it would have been a 

simple matter to have so provided in the agreement.”). In support of this interpretation, 

 

3

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a ceasing entity is vested in the surviving corporation without reversion or impairment. It 

is hard to imagine a more significant impairment of the rights owned by the ceasing entity 

in this case, AmSurg-Tennessee, than the remedy requested by Defendants. 
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Defendants largely rely on PPG Industries, Freeman, L & L Trucking, Inc. v. Hewlett, Nos. 

01-A-01-9105-BC00159, 1992 WL 69635 (Tenn. Ct. App. 1992), and Mapco Petroleum, 

Inc. v. Basden, 774 S.W.2d 598 (Tenn. 1989). 

In all four cases a transfer of property was barred after a merger, but Defendants 

overstate the applicability of those cases to this one. The facts of the cases are 

distinguishable, as is the legal reasoning that animates them. In Mapco, the Tennessee 

Supreme Court held that a permit to sell beer did not pass to a succeeding corporation by 

merger. 774 S.W.2d at 660. The Court noted that it had previously held that a permit is not 

assignable even when a purchaser buys a location that previously held a valid permit, and 

that the purpose of the beer permitting statute was to “evaluate the qualifications and the 

moral character” of the person or entity seeking a permit. Id. at 599–600. Therefore, a 

surviving entity must apply for a new permit to sell beer. Id. at 600. L & L Trucking presents 

a similar problem for Defendants. There, a trucking company sought to transfer a certificate 

of convenience and necessity that had been abandoned by its previous holder through a 

merger. L & L Trucking, 1992 WL 69635, at *4. The court held that there was no reversion 

or impairment of the previous entity’s rights because of the abandonment, and the transfer 

by merger would have been subject to a state law that prohibited transfers of such 

certificates without review by a state regulator. Id. Here, there is no overarching public 

safety or regulatory scheme preventing AmSurg-Tennessee’s interest from being 

assignable to the successor entity. In fact, Tennessee State law specifically allows parties 

to contract around the default rules for assignments of membership interest. Tenn. Code. 

Ann. § 48-218-102(b)(1). 

Defendants’ reliance on Freeman is also misplaced. There, the agreement at issue 

contained an anti-assignment clause that specifically forbade assignments by operation of 

law. Freeman, 2007 WL 1541877 at *2, 5. The agreement forbade an assignment 

“voluntarily or by operation of law (herein sometimes collectively called a ‘transfer’).” Id. 

at *2. Additionally, in that case, allowing the merger would have resulted in a competitor 

becoming partners with the plaintiff, thus “forcing the [plaintiffs] to accept as a partner a 
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person with which they did not consent to become partners.” Id. at *8. Here, the Agreement 

lacks the specificity of the Freeman agreement, as it does not explicitly forbid assignments 

by operation of law or even the more generic term “transfer.” Furthermore, believing 

Plaintiffs’ statement that AmSurg’s “operations, practices, policies, officers, or other 

personnel” remained unchanged after the merger, which the Court is required to do at this 

stage, avoids the Freeman court’s concerns about forcing Defendants into an agreement 

with a stranger. 

PPG Industries is also distinguishable. There, the 6th Circuit considered whether a 

patent license is transferable in a merger when the anti-assignment clause stated it was 

“non-transferrable” and “personal” to the licensee. PPG Ind., 597 F.2d at 1092. They held 

the anti-assignment clause prevented assignment by operation of law because, “if the 

parties had intended an exception” to the anti-assignment clause in the case of a merger, 

“they would have included it in the agreement.” Id. at 1095. Again, this is factually distinct 

from the case at bar, which uses “assignment” without such specificity. Furthermore, PPG 

Industries was not interpreting Tennessee law, and other courts have declined to follow 

PPG Industries on the grounds that it is too “mechanical[].” Star Cellular Telephone Co., 

Inc. v. Baton Rouge CGSA, Inc., Civ. A. No. 12507, 1993 WL 294847, at *6 (Del. Ch. 

Aug. 2, 1993). Delaware cases, such as Star Cellular, are particularly persuasive on issues 

of corporate law. Athlon Sports Comm., Inc. v. Duggan, 549 S.W.3d 107, 125 (Tenn. 2018) 

(“[I]n matters of corporate law, Tennessee courts often look to Delaware law.”). Therefore, 

while it is certainly possible that the anti-assignment clause prohibits transfers by merger, 

it is not plain and unambiguous from case law. 

Plaintiffs rely on Star Cellular as the leading case. Star Cellular interpreted a very 

similar anti-assignment clause. It provided that a “General Partner may transfer or assign 

its General Partner’s Interest only after written notice to all the other Partners and the 

unanimous vote of all the other Partners to permit such transfer . . . .” 1993 WL 294847 at 

*3. Star Cellular acknowledged that some courts, in interpreting anti-assignment clauses, 

treat transfers that occur “by express voluntary act” differently than “those that occur by 
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operation of law.” Id. at *6. The court saw that “existing uncertainty” as proof that the word 

“transfer” did not have a “generally prevailing” meaning at the time of the contract. Id. at 

*7. While the plaintiffs in Star Cellular urged the “broadest possible construction” of 

“transfer,” id. at *4, the court held that the uncertainty in the law when the agreement was 

drafted prevented it from holding that a transfer by operation of law was a type of transfer 

prohibited by the anti-assignment clause. Id. at *7. Furthermore, the parties easily could 

have provided language addressing mergers or transfers by operation of law. Id. By failing 

to do so, it was “not plain[] and unambiguous[]” that mergers were included “within the 

category of prohibited ‘transfers.’” Id. Star Cellular also explains the rationale behind antiassignment clauses: they “are normally included in contracts to prevent the introduction of 

a stranger into the contracting parties’ relationship and to assure performance by the 

original contracting parties.” 1993 WL 294847 at *8. 

Similar to Star Cellular, Defendants here have not pointed to Tennessee authority 

clearly establishing a merger that changes nothing but the domicile of an entity by 

operation of law is a type of assignment “plainly and unambiguously” prohibited by a 

generic anti-assignment clause. If the parties wanted to plainly and unambiguously prohibit 

assignments by operation of law, they could have done so like the parties in Freeman did. 

Unfortunately, Plaintiffs and Defendants, like the parties in Star Cellular, did not include 

language addressing what would happen if a member transferred its interest by operation 

of law. Therefore, the Court is unable to determine a clear intent with regard to whether 

the anti-assignment clause applies to transfers by operation of law. Accordingly, both 

Plaintiffs’ and Defendants’ readings of the anti-assignment clause are a reasonable

interpretation of it, and, therefore, the clause is ambiguous. 

4. The ambiguity precludes summary judgment because it is a material issue of fact. 

In interpreting contracts, a court’s goal “is to ascertain and give effect to the intent 

of the parties.” Allmand v. Pavletic, 292 S.W.3d 618, 630 (Tenn. 2009). To determine the 

parties’ intent, a court first looks “at the plain meaning of the words in a contract.” Id. If 

the plain meaning is unambiguous, the inquiry ends and that meaning is applied. Id. If, 
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however, the “words are ambiguous, i.e., susceptible to more than one reasonable 

interpretation, the parties’ intent cannot be determined by a literal interpretation of the 

language.” Id. When a contract’s language is ambiguous, the court applies “established 

rules of construction to determine the intent of the parties.” Id. (quoting Allstate Ins. Co. v. 

Watson, 195 S.W.3d 609, 611 (Tenn. 2006)). 

Here, both Defendants and Plaintiffs have reasonable interpretations of the clause. 

Under Defendants’ theory “assignment” is given a broad reading, essentially including any 

transfer of interest. The clause, however, does not mention mergers or even use the word 

“transfer,” and the statute explaining the effect of a merger refers to property “vest[ing]” 

in the new entity rather than the former entity transferring or assigning property to the 

surviving entity. Nevertheless, contracting parties are “presumed to know the law,” Dick 

Broadcasting Co., Inc. v. Oak ridge FM, Inc., 395 S.W.3d 653, 660 (Tenn. 2013), and case 

law refers to mergers as “transfer[s] by operation of law,” see, e.g., PPG Industries, 597 

F.32d 1090; Star Cellular, 1993 WL 294847, and “assignment[s] by operation of law,” 

Subcontracting concepts, LLC v. Creative Ins. Managers, Inc., Civil Action File No. 1:13-

CV-02973-HLM, 2014 WL 12013431, at *2 (N.D. Ga. Jan. 3, 2014) (collecting Delaware 

cases). 

Because the Agreement is ambiguous, the Court looks to extrinsic evidence to 

determine the intent of the parties. Bourland, Heflin, Alvarez, Minor & Matthews, PLC v. 

Heaton, 393 S.W.3d 671, 676 (Tenn. App. 2012). If ambiguity with regard to a material 

fact continues to exist after considering extrinsic evidence, it is a genuine issue of fact 

precluding summary judgment. Id. “[P]arol evidence ‘regarding the relations existing 

between the parties, the facts surrounding them at the time when they entered into the 

agreement, and also their acts subsequent thereto’ may be considered by the court when 

interpreting an ambiguous contractual provision.” Dog House Investments, LLC v. Teal 

Properties, Inc., 448 S.W.3d 905, 913 (Tenn. Ct. App. 2014) (quoting Faulkner v. Ramsey, 

158 S.W.2d 710, 711 (1942)). 

The Parties have provided little information with regard to what Dog House directs 
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courts to consider when ambiguities in contracts are found. Defendants have not shown 

how AmSurg-Tennessee merging into AmSurg-Delaware has harmed them, though they 

allege that doing business with AmSurg-Tennessee was a “material inducement” because 

of “its assurances of the services it could provide, the people behind the corporation, and 

the overall business model,” and the merger “destroyed the original intent of doing business 

with the exact corporation and people that originally convinced us and ECY to go into 

business with them to form the ASC.” (Affidavits of Divesh R. Anireddy, M.D., Doc. 64 ¶ 

13, and Alec H. Esker, M.D., Doc.65 ¶ 13). Plaintiffs counter that the merger “did not 

affect business operations, practices, policies, or other personnel.” (Declaration of Justin 

Page, Doc. 75, Ex. A). While perhaps more information regarding the relations between 

the parties and the facts surround the agreement may exist to resolve the ambiguity, at this 

point in the litigation, the Court does not have enough information to reach a conclusion 

and, at a minimum, this creates a factual dispute that precludes summary judgment. 

5. Equitable principles also compel denial of Defendants’ motion. 

The Tennessee Limited Liability company Act invites courts to apply equitable 

principles when enforcing an LLC operating agreement. Tenn. Code Ann. § 48-206-102(c) 

(“A court of equity may enforce an operating agreement by injunction or by such other 

equitable relief as the court in its discretion determines to be fair and appropriate in the 

circumstances.”). To be sure, the merger of AmSurg-Tennessee into AmSurg-Delaware 

resulted in a different legal entity owning the member interest in ASC, but this technical 

change does not overwhelm the substance of the Agreement. 

“[E]quity looks not to the outward form but to the inward substance of every 

transaction.” Halco Fin. Servs., Inc. v. Foster, 770 S.W.2d 554, 556 (Tenn. App. 1989) 

(quoting Bond v. Jackson, 4 Tenn. 189, 189 (1817). Here, the substance was a $6.5 million 

investment in an ambulatory surgery center in exchange for a 51% share in it. A simple 

formal change in domicile by AmSurg accomplished through a merger without Defendant 

providing any evidence of damages from the merger cannot equitably result in Plaintiffs 

forfeiting their interest in ASC. Therefore, Plaintiffs have standing to sue. 
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6. ASC is a proper plaintiff. 

Defendants contend that the ASC is not a proper plaintiff because AmSurgDelaware is an imposter without standing after the merger. As discussed above, the Court 

is not persuaded that the merger resulted in AmSurg-Delaware forfeiting AmSurgTennessee’s 51% interest in ASC. Accordingly, AmSurg-Delaware still has a controlling 

stake in ASC, and ASC is a proper plaintiff. 

IV. Conclusion 

Defendants seek summary judgment on all counts on the grounds that the merger of 

AmSurg-Tennessee into AmSurg-Delaware was an assignment prohibited by the 

Agreement that deprived Plaintiffs standing to bring suit. Because it is ambiguous whether 

a transfer by operation of law is forbidden by the Agreement and there is a dispute of 

material facts, Defendants’ motion must be denied. 

Accordingly, IT IS ORDERED that: 

1. The motion for summary judgment by Defendants is DENIED. 

 Dated this 29th day of January, 2019.