Court Opinion

ID: 2706719
Source: CourtListenerOpinion
Date Created: 2014-08-05 13:18:18.692122+00
Date Added: 2024-06-11T12:56:36.335145
License: Public Domain

[Cite as Southwestern Obstetrics & Gynecology, Inc. v. Mehta, M.D., 2014-Ohio-2904.]

                             IN THE COURT OF APPEALS OF OHIO

                                  TENTH APPELLATE DISTRICT

Southwestern Obstetrics &                           :
Gynecology, Inc.,
                                                    :
                Plaintiff-Appellee/                                        No. 13AP-624
                Cross-Appellant,                    :                  (C.P.C. No. 07CV-4650)
v.
                                                    :                (REGULAR CALENDAR)
Shraddha Mehta, M.D.,
                                                    :
                Defendant-Appellant/
                Cross-Appellee.                     :

                                           D E C I S I O N

                                     Rendered on June 30, 2014

                Dinsmore & Shohl, LLP, Eric J. Plinke, and Gregory P.
                Mathews, for appellee/cross-appellant.

                Wolinetz Law Offices, and Barry H. Wolinetz, for
                appellant/cross-appellee.

                  APPEAL from the Franklin County Court of Common Pleas

O'GRADY, J.
        {¶ 1} Defendant-appellant/cross-appellee, Shraddha Mehta, M.D., appeals from a
judgment of the Franklin County Court of Common Pleas.                         Plaintiff-appellee/cross-
appellant, Southwestern Obstetrics & Gynecology, Inc. ("Southwestern"), filed a cross-
appeal. Because we find the trial court erred, we affirm in part and reverse in part.
I. FACTS AND PROCEDURAL HISTORY
        {¶ 2} Dr. Mehta and Southwestern entered into an Employment Agreement on
August 6, 2003.         The Employment Agreement provided that Dr. Mehta would be
employed by Southwestern and would provide professional obstetric and gynecological
No. 13AP-624                                                                          2

services to Southwestern. The agreement was for a three-year term, which expired on
June 30, 2006. Dr. Mehta also entered into an Income Advance Agreement ("Advance
Agreement") with Mount Carmel Health System ("Mt. Carmel"), which provided that Dr.
Mehta agreed to provide services in exchange for professional advance payments. The
payments were required to be repaid unless Dr. Mehta continued to practice in a
designated area for a specified period of time and met other conditions. Dr. Mehta met
the conditions and, beginning October 1, 2004, the total amount of the income advance
payments that Mt. Carmel paid ($93,177.81, plus interest) was forgiven over 36 months.
The beginning and end dates of the two agreements did not correspond with each other.
Dr. Mehta, Mt. Carmel, and Southwestern entered into an Assignment and Consent
Agreement ("Assignment Agreement"), in which Dr. Mehta assigned her professional
income advance payments to Southwestern.
      {¶ 3} Dr. Mehta began her employment with Southwestern on October 1, 2003.
The Employment Agreement provided that during her first year of employment
Southwestern paid her a fixed salary.       Beginning October 1, 2004, Dr. Mehta's
compensation was based on a productivity formula, accounting for Dr. Mehta's net
earnings and expenses. The income advance payments assigned to Southwestern were
credited to Dr. Mehta as part of her compensation when the payments were forgiven. Dr.
Mehta decided not to continue her employment at Southwestern and her last day of
employment at Southwestern was June 30, 2006, the date her Employment Agreement
expired.
      {¶ 4} Dr. Diana M. Zitter, the president of Southwestern, testified that, using the
agreements and productivity reports, Southwestern determined that Dr. Mehta owed
Southwestern $83,311.58 when she left the practice. Southwestern sought to recover the
money, pursuant to the Employment Agreement, providing: "Furthermore, if the
Corporation has paid to the Employee an amount in excess of her 'productivity', the
Corporation may demand that the Employee repay the entire excess in full immediately
upon termination."
      {¶ 5} Southwestern filed this action asserting claims for breach of contract, unjust
enrichment and promissory estoppel.      Dr. Mehta filed an answer and counterclaim,
asserting Southwestern inappropriately allocated expenses, income advances and loan
No. 13AP-624                                                                            3

forgiveness and she is owed an amount in excess of $25,000. She seeks compensatory
damages, interest and attorney fees.
       {¶ 6} The matter was tried before a magistrate, who issued a decision finding that
Southwestern was entitled to judgment on its breach of contract claim in the amount of
$83,311.58. Dr. Mehta was entitled to judgment on her counterclaim for breach of
contract in the amount of $66,625.00. Thus, the magistrate's decision was a net recovery
to Southwestern of $17,061.58. Both parties filed objections and the trial court overruled
the objections and adopted the magistrate's decision. Dr. Mehta filed an appeal and
Southwestern filed a cross-appeal.
II. ASSIGNMENTS OF ERROR
       {¶ 7} On appeal, Dr. Mehta assigns the following three errors for our review:
              ASSIGNMENT OF ERROR I:

              THE TRIAL COURT ERRED AND ABUSED ITS
              DISCRETION WHEN IT DETERMINED THAT DR. MEHTA
              IS NOT OWED AN ADJUSTMENT FOR THE YEAR 2004.

              ASSIGNMENT OF ERROR [II]:

              THE TRIAL COURT ERRED AND ABUSED ITS
              DISCRETION WHEN IT DETERMINED THAT DR. MEHTA
              IS NOT OWED AN ADJUSTMENT FOR THE YEAR 2006.

              ASSIGNMENT OF ERROR [III]:

              THE TRIAL COURT ERRED AND ABUSED ITS
              DISCRETION WHEN IT DETERMINED THAT DR. MEHTA
              IS NOT ENTITLED TO A CREDIT FOR FUTURE DEBT
              FORGIVENESS.

       {¶ 8} Southwestern assigns the following error for our review in its cross-appeal:

              The trial court erred in finding in Defendant's favor on her
              breach-of-contract claim because Plaintiff properly allocated
              malpractice expenses under the terms of the employment
              agreement.

III. DISCUSSION
       {¶ 9} Generally, an appellate court reviews a trial court's adoption, denial or
modification of a magistrate's decision for an abuse of discretion. Brunetto v. Curtis, 10th
No. 13AP-624                                                                           4

Dist. No. 10AP-799, 2011-Ohio-1610, ¶ 10. "Where an appeal from the trial court's action
on a magistrate's decision, however, presents only a question of law, such as a question of
contract interpretation, we review that question de novo." Id., citing Shah v. Smith, 181
Ohio App. 3d 264, 2009-Ohio-743, ¶ 7 (1st Dist.).
       A. CROSS-ASSIGNMENT OF ERROR
       {¶ 10} For ease of discussion, we will review Southwestern's cross-assignment of
error first. Southwestern contends the trial court erred in finding in Dr. Mehta's favor on
her breach of contract claim because Southwestern claims it properly allocated
malpractice expenses under the terms of the Employment Agreement. The magistrate
determined that Southwestern had miscalculated Dr. Mehta's malpractice premiums and
overcharged her $66,625 for the three years ($8,069 for October 1 through December 31,
2004; $45,810 for 2005 and $12,746 for January 1 through June 30, 2006).
       {¶ 11} Southwestern argues that although physician malpractice premiums are
specifically included as a direct expense under the Employment Agreement, it is
Southwestern's policy that the physicians evenly share this expense. Dr. Mehta argues
that the plain language of the agreement provides that physician malpractice premiums
are "direct expenses" that are "directly attributable to the Employee" and are to be "borne
solely by the Employee." Thus, Dr. Mehta should be charged the actual amount of
malpractice premiums attributable to her personally and not divide the entire cost among
all the physicians.
       {¶ 12} The construction of a written contract is a matter of law. Alexander v.
Buckeye Pipe Line Co., 53 Ohio St. 2d 241 (1978), paragraph one of the syllabus,
superseded by statute on other grounds. Common words in a contract must be given their
ordinary meaning unless manifest absurdity results, or unless some other meaning is
clearly intended, based on the face or overall contents of the contract. Id. at paragraph
two of the syllabus.
       {¶ 13} The purpose of contract interpretation is to give effect to the intent of the
parties and that intent is gleaned through the contract language. Westfield Ins. Co. v.
Galatis, 100 Ohio St. 3d 216, 2003-Ohio-5849, ¶ 11; Skivolocki v. E. Ohio Gas Co., 38 Ohio
St.2d 244, 247 (1974). See also Kelly v. Med. Life Ins. Co., 31 Ohio St. 3d 130, 132 (1987)
(parties' intent is presumed to reside in the contract language). When a contract dispute
No. 13AP-624                                                                              5

arises, the court first looks to the contract language to determine if an ambiguity exists.
"[I]f the contract terms are clear and precise, the contract is not ambiguous and the trial
court is not permitted to refer to any evidence outside of the contract itself, including the
purported intentions of the parties." Ryan v. Ryan, 9th Dist. No. 19347 (Oct. 27, 1999).
       {¶ 14} The Employment Agreement between Dr. Mehta and Southwestern set
forth that Dr. Mehta's income is based on a productivity formula after her first year,
beginning October 1, 2004, as follows:
              [T]he Employee shall be entitled to annual compensation
              based upon her "productivity" as defined herein, and as
              modified from time to time by agreement between the
              Employee and the Board of Directors. For the purposes of
              this Agreement, "Net Earnings" shall be determined by
              deducting from the gross income of the Corporation
              attributable to services rendered by the Employee, the
              Employee's share of Office Expenses and any and all Direct
              Expenses. "Net Earnings" credited to Employee shall also
              include any "Professional Income Advances," as such term is
              defined in the [Advance Agreement] entered into between
              Employee and Mount Carmel Health System ("Mt. Carmel"),
              which have been assigned to Corporation by Employee, and
              which Professional Income Advances are not required to be
              repaid by the Corporation to Mt. Carmel because they have
              been forgiven pursuant to Section 3(d) of the aforementioned
              [Advance Agreement].

       {¶ 15} "Office Expenses" and "Direct Expenses" are then separately defined, as
follows:
              Office Expenses are overhead and operating expenses
              attributable to all items, except Direct Expenses, attributable
              to the provision of professional services, such as rent,
              utilities, staff and ancillary personnel salaries and payroll
              taxes, paper products, etc. within the Corporation. Office
              Expenses shall be shared equally and proportionately by
              physicians participating in the productivity arrangement.

              Seventy percent (70%) of the total Office Expenses shall be
              designated as "Fixed Expenses." For purposes of allocating
              such expenses, Employee shall be treated like the full-time
              physician employees of the Corporation and shall share sucy
              expenses equally with the full-time physician employees
              participating in this productivity arrangement.
No. 13AP-624                                                                            6

              Thirty percent (30%) of the total Office Expenses shall be
              designated as "Variable Expenses." Variable expenses shall
              be shared proportionately according to the physician
              employee's Production Ratio. "Production Ratio" is equal to
              the receipts for the Corporation attributable to the
              professional services of Employee, divided by the total
              receipts of the Corporation.

              Direct expenses are those expenses directly attributable to
              the Employee ("Direct Expenses"), such as dues,
              subscriptions, physician malpractice and health insurance
              premiums, etc. and are borne solely by the Employee.

       {¶ 16} The Employment Agreement provides, at Section 4, that the employee's
annual compensation based upon her productivity "shall be equal to the sum of (1) the
actual fees collected by the Corporation which are directly related to professional services
rendered by the Employee, and (2) the monthly loan repayments which the Corporation is
obligated to repay to Mt. Carmel and which have been forgiven pursuant to Section 3(d) of
the [Advance Agreement] * * *, reduced by the amount of annual salary and/or draws
paid to the Employee pursuant to this paragraph 4, reduced by Employee's share of Office
Expenses, described herein, and further reduced by the amount of Employee's Direct
Expenses."
       {¶ 17} Dr. Zitter testified regarding Southwestern's computations.      She testified
that the physicians in the group attended monthly meetings to look at the production
figures. Each doctor was responsible for one-fifth of the rotating obstetrician call duties.
Dr. Zitter explained that malpractice expenses were applied under direct physician
expenses and, thus, were the same for all the physicians. Since all the physicians evenly
divided the obstetrician call duty, which is the bulk of the malpractice, the expense was
also equally divided. This expense had been computed in this manner since at least 1984,
when Dr. Zitter joined Southwestern.
       {¶ 18} Dr. Mehta's expert, Brian A. Russell, relied on the actual malpractice
premiums charged to Dr. Mehta, rather than Southwestern's reports, which evenly
divided the malpractice premiums. Russell testified regarding his computations. He
accounted for fiscal years and calendar years and the periods associated with the
premiums to remove any overlap and determine Dr. Mehta's individual malpractice
premiums. He also subtracted the nine months in 2004 when Dr. Mehta was a salaried
No. 13AP-624                                                                             7

employee, not subject to the productivity formula.        Thus, Russell determined that
Southwestern overcharged Dr. Mehta $8,069 for 2004 (October 1 through December 31),
$45,810 for 2005 and $12,746 for 2006 (January 1 through June 30) for a total of
$66,625.
       {¶ 19} The magistrate found the language of the Employment Agreement was clear
in that the physician malpractice premiums are direct expenses directly attributable to the
physicians. The expense should not be evenly divided among the five physicians, but each
physician charged the actual premium. Thus, the magistrate determined that Dr. Mehta
was owed a credit of $66,625 for the overcharge of malpractice premium expenses.
       {¶ 20} We find, as the trial court did, that the Employment Agreement language is
clear and physician malpractice premiums are listed as an example of a "direct expense"
and should be borne solely by each employee. These expenses should not be evenly
divided among the physicians like office expenses.
       {¶ 21} This finding renders Southwestern's calculations and exhibits incorrect
because the malpractice premiums are equally divided among the physicians, rather than
each physician charged an individual amount. However, neither party determined Dr.
Mehta's actual profit/loss for October 1 through December 31, 2004. Both parties used
the entire 2004 year and then Russell determined the amount Dr. Mehta was overcharged
for the year by redetermining her income, but based it on the entire year. For nine
months of 2004, Dr. Mehta's compensation was not based on the productivity formula,
but, rather, she was paid a salary. The numbers both parties used to calculate her income
and expenses were for the entire year.
       {¶ 22} Not only are both parties' calculations based on an entire year but some of
the exhibits do not correspond to the facts. For example, the stipulated facts state the Mt.
Carmel loan forgiveness began October 1, 2004; yet, Exhibit G shows the amount forgiven
by year and states that forgiveness began in November 2004. This calls into question
whether Exhibit G demonstrates that appropriate amount of forgiveness per year, which
is important in using the productivity formula to determine Dr. Mehta's compensation.
       {¶ 23} Another example of an exhibit creating doubt concerning the calculations is
Schedule 2, the document demonstrating the calculation of Dr. Mehta's malpractice
premiums per year. The document provides the net premium for August 1 through
No. 13AP-624                                                                           8

December 31, 2004 is $10,364.00, which corresponds to $2,072.80 per month, multiplied
by three months = $6,218.40 for the last quarter of 2004. However, the total provided on
Schedule 2 for the 2004 year is $16,348.00, which would be $4,087.00 per quarter.
       {¶ 24} A third example involves the exhibits regarding the Mt. Carmel loan
forgiveness, again one document provides $30,026.73 for forgiveness in 2005 and the
other $31,140 for 2005. Dr. Zitter could not explain the discrepancy, stating "I'm sorry. I
cannot [explain the difference in numbers]." (Tr. 32.)       The parties need to provide
accurate exhibits in order to determine any monies owed.
       {¶ 25}   Thus, it is clear that Southwestern improperly allocated malpractice
expenses under the terms of the Employment Agreement which resulted in Dr. Mehta
being overcharged. Since the exact amount of the overcharge is not decipherable from the
trial exhibits, the trial court will need to redetermine the amount. Southwestern's cross-
assignment of error is overruled.
       B. APPELLANT'S ASSIGNMENTS OF ERROR
       {¶ 26} Dr. Mehta argues in her first assignment of error the trial court erred when
it determined that she was not owed an adjustment for year 2004. She contends the
magistrate correctly found that she was entitled to $66,625 because of an overallocation
of malpractice premiums during her employment; however, the magistrate failed to
determine she was entitled to an adjusted 2004 net profit allocation.     Russell testified
that when Dr. Mehta's compensation is adjusted for the correct malpractice premiums,
then her share of the profit, after Mt. Carmel loan forgiveness is accounted for, also
changes.
       {¶ 27} Southwestern argues that Dr. Mehta is attempting to use a productivity
credit for the entire 2004 year, rather than only the last quarter. However, Southwestern
does not acknowledge that its calculations and exhibits are also based on the entire year.
Southwestern does admit that "[o]nce it is assumed that malpractice expenses were not
properly allocated, this figure [Southwestern's original loss calculation, $79,213.50] no
longer accurately reflects Dr. Mehta's loss while on salary."       (Appellee's Brief, 7.)
Southwestern also admits that, if the original malpractice allocation was incorrect, the
loss amount would have to be reduced. "Assuming (as the trial court found) that the
original malpractice allocation was incorrect, the loss amount would have to be adjusted
No. 13AP-624                                                                              9

as well. The original loss amount of $79,213.50 would have to be reduced by at least
$24,208.49, which is the amount Dr. Mehta claims was erroneously attributed to her.
This means that Dr. Mehta's adjusted loss while on salary would be no more than
$55,005.01." (Appellee's Brief, 7.)
       {¶ 28} However, Southwestern does not acknowledge that the numbers on their
exhibits are incorrect, and Dr. Mehta based her numbers on the discovery provided by
Southwestern.
       {¶ 29} Moreover, Dr. Zitter testified that at the end of the year, if the physician has
a positive number in the productivity calculation, the physician is paid that amount as a
productivity bonus, but, if the salary exceeds their productivity, the physician either has to
adjust their salary or pay the money back at the end of the year. The Employment
Agreement provides for such reconciliation. "Periodically, the Corporation shall calculate
the Employee's 'productivity' for that period. If the Employee has been paid less than her
'productivity' for the period, the Corporation shall make an additional payment to her
representing the deficit. If the Corporation has paid to the Employee an amount in excess
of her 'productivity', it shall reduce future compensation to her until the excess has been
eliminated." Thus, Dr. Mehta's losses and gains were to be reconciled at the end of each
year. Southwestern's exhibits do not reflect any reconciliation. Such reconciliation must
be taken into account when determining any monies due either party, since, for example,
Dr. Mehta paid the corporation $2,418.06 at the end of 2004 as a loss for the year (again
this calculation includes the entire year, not the last three months).
       {¶ 30} It is clear that once we determined that Southwestern incorrectly accounted
for the malpractice premiums, the income/loss of Dr. Mehta must be recalculated. Both
parties acknowledge this fact. However, given the state of the exhibits, we are unwilling to
perform this recalculation.     Southwestern admits their numbers are incorrect and
Russell's numbers are based on Southwestern's numbers. Thus, we cannot say that Dr.
Mehta is owed a credit for 2004, but the loss amount that Southwestern provided is
incorrect. Dr. Mehta's first assignment of error is sustained in part, but not as to the
amount of the credit, and overruled in part.
       {¶ 31} By her second assignment of error, Dr. Mehta contends the trial court erred
when it determined that she is not owed an adjustment for year 2006. Dr. Mehta argues
No. 13AP-624                                                                                            10

that she is entitled to a $33,594.89 credit as an adjustment to debt forgiveness in 2006.
The argument has two parts:              first, Dr. Mehta argues she is entitled to a credit of
$15,626.00 as a result of Southwestern's over-allocation of the amount of debt forgiveness
for 2006, and secondly, she is entitled to a credit of $17,968.89 because Southwestern
improperly charged this amount to her in its final calculation for 2006.
        {¶ 32} Initially, we note that, pursuant to Exhibit G, $33,011.76 was the amount
forgiven in 2006, not $31,250.06.              $31,250.06 is the principal amount loaned and
$1,761.70 is the interest. The Advance Agreement provides that "the entire amount of the
unreimbursed Professional Income Advance, together with interest, shall be forgiven [if
the requirements are met]." (Emphasis added.) Thus, $16,505.88 ($33,011.76 divided by
2) should be credited to Dr. Mehta for January 1 through June 30, 2006 as loan
forgiveness and part of her compensation.
        {¶ 33} However, Southwestern deducted $17,968.89 from her income for 2006.
This results from an accounting mistake in 2004. In 2004, Southwestern credited Dr.
Mehta with $73,177.81 and $7,785.00 for the Mt. Carmel loan forgiveness. In 2005,
Southwestern credited Dr. Mehta with $31,140.00 for the Mt. Carmel loan forgiveness.1
However, in 2006 Southwestern made an adjustment to the balance sheet of $17,968.89
to correct the $73,177.81 credit in 2004. ($7,785.00 (2004) + $31,140.00 (2005) +
$16,505.88 (2006) = $55,430.88. $73,177.81 - $55,430.88 = $17,746.93, close to the
amount Southwestern used to adjust the balance sheet.)                        Thus, given the state of
Southwestern's balance sheets, this deduction would be proper (although not the correct
amount). However, again we note that Southwestern's exhibits for 2004 and 2006
include the entire year, not the relevant time periods for determining Dr. Mehta's
compensation using the productivity formula.                 Therefore, as previously pointed out,
Exhibit D is inaccurate and Exhibit G's accuracy is questionable. When determining Dr.
Mehta's income, the Mt. Carmel forgiveness amounts are $7,785.00 (2004) + $33,011.76
(2005) + $16,505.88 (2006) = $57,302.64, assuming Exhibit G is accurate. These are the
amounts that Dr. Mehta is entitled to be credited for the forgiveness of the Mt. Carmel

1 Southwestern used the figure including interest in 2004, but the figure without interest in 2005. The credit

in 2005 should be $33,011.76, assuming Exhibit G is accurate. We have already pointed out its accuracy is
questionable.
No. 13AP-624                                                                                             11

loan while she was employed by Southwestern. Thus, Dr. Mehta's second assignment of
error is sustained in part and overruled in part.
        {¶ 34} By her third assignment of error, Dr. Mehta contends the trial court erred
and abused its discretion when it determined that Dr. Mehta is not entitled to a credit for
future debt forgiveness. Dr. Mehta assigned the professional income advance payments
from Mt. Carmel to Southwestern. Dr. Mehta argues that Southwestern was obligated to
extend further productivity credit to her because Southwestern was not obligated to repay
the amounts forgiven by Mt. Carmel after she left Southwestern because she complied
with the requirements for the loan to be forgiven. Again, the beginning and end dates of
the Employment Agreement and the Advance Agreement do not correspond. Loan
amounts were forgiven in a monthly amount for 36 months beginning October 2004,
therefore, the Advance Agreement provided for forgiveness through September 2007, but
Dr. Mehta's last day of employment was June 30, 2006. Dr. Mehta argues that she is
entitled to credit for the $44,016 that was forgiven after she was no longer employed,
because Southwestern received the benefit of the forgiveness.2
        {¶ 35} The magistrate found that the Employment Agreement, Advance
Agreement and Assignment Agreement do not provide for Dr. Mehta receiving
productivity credit or future compensation after her employment with Southwestern
terminated. Further, Dr. Mehta was not entitled to a credit due to unjust enrichment
because there was no bad faith or fraud on the part of Southwestern. We agree with the
trial court on this issue.
        {¶ 36} The Employment Agreement provides that the Mt. Carmel income advances
shall be credited, as follows:
                The Employee's annual compensation based upon her
                "productivity" shall be equal to the sum of (1) the actual fees
                collected by the Corporation which are directly related to
                professional services rendered by the Employee, and (2) the
                monthly loan repayments which the Corporation is obligated
                to repay to Mt. Carmel and which have been forgiven
                pursuant to Section 3(d) of the [Advance Agreement] entered
                into between the Employee and Mt. Carmel, reduced by the
                amount of annual salary and/or draws paid to the Employee
2 Dr. Mehta's expert, Russell, testified the loan forgiveness after she left Southwestern is $42,946. The
magistrate relied on this figure. However, Russell's Exhibit 1, Schedule 4 also includes the interest and that
total is $44,016.
No. 13AP-624                                                                         12

              pursuant to this paragraph 4, reduced by Employee's share of
              Office Expenses, described herein, and further reduced by
              the amount of Employee's Direct Expenses.

      {¶ 37} The Advance Agreement provides:

              At the end of the Advance Period, the outstanding balance, if
              any, of all moneys advanced to Physician under the
              Professional Income Advance which remain unreimbursed
              together with interest accrued during such period shall be
              calculated by [Mt. Carmel]. Thereafter, Physician shall repay
              the total amount of unreimbursed advances and interest to
              [Mt. Carmel] in cash in thirty-six (36) equal monthly
              installments commencing on the first day of the first month
              following the end of the Advance Period and continuing on
              the first of each month until all sums due are paid in full;
              provided, however, if: (i) Physician is practicing in Central
              Ohio, (ii) Physician's practice is open to Medicare and
              Medicaid patients, and (iii) Physician has not breached any
              of the other terms and conditions of this Agreement, the
              monthly payment due shall be forgiven by [Mt. Carmel]
              (such amount forgiven will constitute additional
              compensation to Physician). Therefore, if the Physician
              complies with such requirements for the entire three (3)
              years, the entire amount of the unreimbursed Professional
              Income Advance, together with interest, shall be forgiven.

      {¶ 38} Pursuant to the Assignment Agreement, Dr. Mehta assigned to
Southwestern "any and all 'Professional Income Advances' * * * from the Hospital" and
"[a]s long as Physician has not breached the terms of her Employment Agreement,
[Southwestern] agrees that it will repay Hospital for all funds advanced by Hospital
pursuant to the Recruitment Agreement as required thereunder, and will hold Physician
harmless from any and all financial responsibilities which would otherwise be required of
Physician."
      {¶ 39} None of the contracts provide that Dr. Mehta would continue to receive
productivity credit for the loan forgiveness after her employment ended. Dr. Mehta's
compensation was determined in part by the monthly loan repayments which
Southwestern is obligated to repay to Mt. Carmel and which "have been forgiven pursuant
to Section 3(d)" of the Advance Agreement. There is no provision that she receive credit
No. 13AP-624                                                                          13

for the loan forgiveness after her employment ended. As already stated, the beginning
and end dates of the Employment Agreement and Advance Agreement do not correspond.
       {¶ 40} Russell testified at trial that because Southwestern continued to receive
forgiveness of the loan after Dr. Mehta ended her employment, Dr. Mehta should be
entitled to a corresponding adjustment.      The magistrate found this argument was
equitable in nature and without factual support. Unjust enrichment is a doctrine derived
from the natural law of equity. U.S. Health Practices, Inc. v. Byron Blake, M.D., Inc.,
10th Dist. No. 00AP-1002 (Mar. 22, 2001), citing Loyer v. Loyer, 6th Dist. No. H-95-068
(Aug. 16, 1996). An equitable action for unjust enrichment will not lie in the absence of
fraud or bad faith when the subject of the claim is governed by an express contract, and
since here, there was no evidence of fraud or bad faith, the contract controls.       See
Natl./RS, Inc. v. Huff, 10th Dist. No. 10AP-306, 2010-Ohio-6530, ¶ 28, citing Kucan v.
Gen. Am. Life Ins. Co., 10th Dist. No. 01AP-1009, 2002-Ohio-4290, ¶ 39. Here, there was
no evidence presented of bad faith or fraud by Southwestern. In fact, the parties should
have been aware at the time the contracts were signed that the beginning and end dates of
the contracts did not correspond.     If the parties had wished to have the contracts
terminate contemporaneously, the contracts could have been written to do so. However,
the parties did not do so. Dr. Mehta's claim for equitable relief in the form of unjust
enrichment is precluded by the express contracts. Dr. Mehta's third assignment of error
is overruled.
IV. CONCLUSION
       {¶ 41} For the foregoing reasons, Dr. Mehta's first and second assignments of error
are sustained in part and overruled in part, her third assignment of error is overruled,
Southwestern's cross-assignment of error is overruled, and the judgment of the Franklin
County Court of Common Pleas is affirmed in part, reversed in part, and remanded to
redetermine the amount payable to both parties.

                                        Judgment affirmed in part and reversed in part;
                                                     cause remanded with instructions.

                          BROWN and DORRIAN, JJ., concur.