Opinion ID: 2995627
Heading Depth: 2
Heading Rank: 1

Heading: Quantum’s Claim

Text: No breach on UCH’s part occurred unless it terminated the Agreement without cause, and two requisite profitable months occurred--one that first achieved an operating gain (the breakeven month), and a second that surpassed the breakeven month by 20%. The district court assumed without deciding that UCH’s termination of the contract was without cause. We do the same. At issue, then, are the two Section IV(B) profitable-month conditions. The only financial data presented--UCH’s Spreadsheet of Plan Financial Information for Fiscal Year 1998--itemized revenues and expenses for the year and showed an operating loss for each month. According to this evidence, neither a breakeven month nor a month that achieved at least 120% of the enrollment level of a breakeven month occurred. These two profitable months are conditions precedent to UCH’s contractual obligation. Hardin, Rodriguez & Boivin Anesthesiologists, Ltd. v. Paradigm Ins. Co., 962 F.2d 628, 633 (7th Cir. 1992) (Under Illinois law, a condition precedent is some act that must be performed or event that must occur before a contract becomes effective or before one party to an existing contract is obligated to perform.). Where a condition precedent is not satisfied, no breach of contract occurs for failure to perform. Id.
Month Quantum contends that Fey’s deposition testimony that two UCH representatives told him that the Plan was cash positive in March 1998 constitutes sufficient evidence to raise a genuine issue of material fact. We disagree. First, the district court held that such testimony was inadmissible hearsay (as Fey did not establish that the statements were made in a representative capacity) and violated myriad other federal rules of evidence. Moreover, even if we accept the statements as true, they do little to prove that a breakeven month occurred as defined by the Agreement: an excess of total expenses over total revenues . . . computed on an accrual basis as specified by generally accepted accounting principles. Quantum argues that the testimony is enough because the Agreement placed the burden of keeping the monthly breakdown of accrued monthly medical expenses was on UCH. Because UCH breached the contract by failing to do so, it contends, it cannot be expected to provide specific financial data to the court. However, Quantum can point to no actual clause in the Agreement that places such a duty on UCH. Quantum attempts to rely on the Illinois Wrongful Prevention Doctrine which provides that a party that prevents the occurrence of a condition precedent may not ruly on such nonoccurrence to refuse to perform. Swaback v. American Information Technologies Corp., 103 F.3d 535 (7th Cir. 1996). The doctrine is simply inapplicable in this case because nothing suggests that UCH wrongfully pre vented the Plan from achieving an operating gain. Even if Quantum could show that UCH had the duty to produce better records and did not do so, which it cannot, the doctrine would not be of any help.
Breakeven Level Even assuming that the evidence to which Quantum points regarding the breakeven month creates a genuine issue of material fact, Quantum presented absolutely no evidence to the district court that a month existed where the Plan achieved 120% of the breakeven level of enrollment. The lowest enrollment for a month that Quantum argues was a breakeven month was 15,825 in March 1998; one hundred twenty percent of 15,825 is 18,990. Quantum does not contest that the Plan’s highest enrollment level was 17,618. In fact, it fails to address the issue altogether in its brief on appeal. Quantum admits that the 120% month is an essential element that it must prove, but makes no attempt to do so.
If the Agreement was terminated for cause, Section IV(E) provides that no payments beyond those paid by UCH are due. If the Agreement was terminated without cause, Section IV(D) states that any payments called for under IV(B) shall continue. If the sale of the plan constituted a structural change, then Section IV(F) states that any IV(B) payments due shall be equitably adjusted. Because Quantum fails to show that it was entitled to payment under Section IV(B), Sections IV(D) and (F) are not implicated. Therefore, whether the Agreement was terminated for or without cause, Quantum creates no issue of fact. We agree with the district court that summary judgment was appropriate.