Court Opinion

ID: 4258202
Source: CourtListenerOpinion
Date Created: 2018-03-26 17:10:42.704515+00
Date Added: 2024-06-11T14:28:22.127004
License: Public Domain

FILED
                                                            Mar 23 2018, 3:15 pm

                                                                 CLERK
                                                             Indiana Supreme Court
                                                                Court of Appeals
                                                                  and Tax Court

                             IN THE

     Indiana Supreme Court
           Supreme Court Case No. 49S05-1710-PL-671

        The Care Group Heart Hospital, LLC,
                Appellant/Cross-Appellee (Defendant),

                                  –v–

                 Roderick J. Sawyer, M.D.,
                 Appellee/Cross-Appellant (Plaintiff).

         Argued: December 7, 2017 | Decided: March 23, 2018
                               Corrected

               Appeal from the Marion Superior Court,
                       No. 49D10-1208-PL-32513

                The Honorable David J. Dreyer, Judge

      On Petition to Transfer from the Indiana Court of Appeals,
                        No. 49A05-1603-PL-580

                    Opinion by Chief Justice Rush
Justice David, Justice Massa, Justice Slaughter, and Justice Goff concur.
Rush, Chief Justice.

   Parties are free to choose the terms of their agreements, and Indiana
courts firmly defend this freedom of contract by enforcing agreed-upon
terms.

   Here, a doctor worked as a cardiologist and was also a member–owner
of a hospital. He agreed with his employer and with the hospital that if his
employment is “terminated for any reason”—that is, upon “any
termination”—his ownership interest must be discontinued and
redeemed.

   We hold that “any termination” means just that—any termination, for
any reason. The hospital thus did not breach the agreement by paying out
the doctor’s ownership interest after his employment terminated. It did,
however, breach the agreement by delaying the payout, so the doctor is
entitled to interest.

  We also hold that the trial court did not abuse its discretion in
awarding the doctor discovery sanctions of $27,233.19 in attorney fees and
expenses.

  We therefore affirm in part, reverse in part, and remand to the trial
court.

Facts and Procedural History

   Doctor Roderick Sawyer worked as a cardiologist for St. Vincent
Medical Group, Inc. (“the Medical Group”). He was also a member–owner
of The Care Group Heart Hospital, LLC (“the Hospital”). These two
arrangements stood on three agreements: an employment agreement, an
operating agreement, and a joinder agreement.

   The employment agreement was between Dr. Sawyer and the Medical
Group and governed his ten-year term of employment as a cardiologist.
The operating agreement was between Dr. Sawyer and the Hospital and
prescribed payout of his ownership interest in the Hospital. And the
joinder agreement was among all three and conditioned Dr. Sawyer’s
continued ownership interest in the Hospital on his continued
employment with the Medical Group. The joinder agreement specified,

Indiana Supreme Court | Case No. 49S05-1710-PL-671 | March 23, 2018   Page 2 of 18
      [w]ithin ninety (90) days of any termination of employment
      between Physician and [the Medical Group] (other than a
      termination pursuant to Section 4.4(c) of the Agreement), . . .
      Physician and [the Hospital] shall cause Physician to be
      redeemed of his interest in [the Hospital] such that, following
      such redemption, Physician shall have no continuing direct or
      indirect membership, ownership or investment interest in [the
      Hospital]. (emphases added)

  The operating agreement then supplied a formula for calculating Dr.
Sawyer’s redemption amount at the time of his “involuntary withdrawal,”
which includes “the termination of employment or any material
agreement [Dr. Sawyer] is a party to with the [Medical Group].”

   The Medical Group terminated Dr. Sawyer’s employment on July 22,
2011. Almost eight months later, the Hospital paid Dr. Sawyer $196,787—
his redemption amount based on the operating agreement’s formula.

   Dr. Sawyer sued the Medical Group and the Hospital. 1 Against the
Medical Group, he claimed tortious interference with business
relationships; breach of the duty of good faith and fair dealing; and breach
of the employment agreement, which caused him to lose both his
employment and his ownership interest in the Hospital. Against the
Hospital, he brought a breach-of-contract claim.

   The Hospital filed dispositive motions throughout the litigation: for
partial dismissal, for summary judgment, and for judgment on the
evidence. Each motion relied on a plain reading of the joinder agreement,
arguing no breach in the Hospital discontinuing and redeeming Dr.
Sawyer’s ownership interest. The trial court denied all these motions as to
the joinder agreement, but it granted summary judgment to the Hospital
as to the operating agreement. A jury returned a verdict against the
Medical Group for $1.1 million, which has been paid to Dr. Sawyer. The

1
 Dr. Sawyer also sued Dr. Christopher Hollon for tortious interference with his employment
agreement. The jury returned a verdict in Dr. Hollon’s favor.

Indiana Supreme Court | Case No. 49S05-1710-PL-671 | March 23, 2018             Page 3 of 18
jury also returned a verdict of $470,000 against the Hospital for breach of
the joinder agreement.

   The Hospital moved to correct error, reiterating that there was no
breach in discontinuing and redeeming Dr. Sawyer’s ownership interest—
only in delaying the payout after the 90-day deadline. The Hospital asked
the court to correct the jury’s $470,000 award by entering judgment on the
evidence for $6,559.60—the interest on the five-month delay at the
statutory rate of eight percent. The court denied the Hospital’s motion.

   Finally, the court ruled on the last of many discovery disputes that
tangled nearly every stage of the litigation. It ordered the Hospital and
Medical Group to pay a $27,233.19 sanction award to Dr. Sawyer.

   The Hospital appealed the $470,000 judgment, arguing that the trial
court erred in denying the Hospital’s motions under Indiana Trial Rules
12(B)(6), 50, and 59(J). Dr. Sawyer cross-appealed, arguing that the trial
court erroneously granted summary judgment to the Hospital as to the
operating agreement, and that the $27,233.19 in attorney fees and expenses
was an inadequate sanction.

   The Court of Appeals affirmed both the partial summary judgment for
the Hospital and the judgment against the Hospital. 2 The Care Group Heart
Hosp. v. Sawyer, 80 N.E.3d 190, 210 (Ind. Ct. App. 2017). But it reversed the
sanction award, remanding for re-evaluation and re-apportionment
among the defendants. Id.

  The Hospital and the Medical Group separately petitioned to transfer.
We granted transfer, vacating the Court of Appeals opinion. Ind.
Appellate Rule 58(A). 3

2We summarily affirm the Court of Appeals opinion affirming the trial court’s grant of
summary judgment as to the operating agreement. See The Care Group Heart Hosp. v. Sawyer,
80 N.E.3d 190, 203–05 (Ind. Ct. App. 2017); Ind. Appellate Rule 58(A)(2).
3Both before and after we granted transfer, attorneys for the Appellee filed repetitive
motions, which we address in a separate order published the same date as this opinion.

Indiana Supreme Court | Case No. 49S05-1710-PL-671 | March 23, 2018               Page 4 of 18
Standard of Review

   We face two questions. First, did a contract-interpretation error—which
we review de novo—pervade the trial court’s rulings on the Hospital’s
dispositive motions? See State Farm Mut. Auto. Ins. Co. v. Jakubowicz, 56
N.E.3d 617, 619 (Ind. 2016).

  Second, did the trial court abuse its discretion in awarding discovery
sanctions of $27,233.19 to Dr. Sawyer? See McCullough v. Archbold Ladder
Co., 605 N.E.2d 175, 180 (Ind. 1993).

Discussion and Decision

    We hold that under the plain meaning of the contract language, the
Hospital did not breach the joinder agreement by discontinuing and
redeeming Dr. Sawyer’s ownership interest. We conclude, though, that the
Hospital did breach the agreement by delaying the payout, so Dr. Sawyer
is entitled to interest on the delay. Finally, we turn to the sanction award
and find no abuse of discretion.

I. The Hospital breached the joinder agreement only by delaying Dr.
   Sawyer’s payout.

   The Hospital challenges the legal sufficiency of Dr. Sawyer’s breach-of-
contract claim. See Thornton v. State, 43 N.E.3d 585, 587 (Ind. 2015). The
claim’s legal sufficiency depends on our interpretation of the parties’
contract.

   Before interpreting the parties’ contract, however, we address a
threshold matter—whether the Hospital waived its contract-interpretation
argument. Dr. Sawyer gives three arguments for finding waiver.

   First, he asserts that the Hospital did not raise the argument in its
motions for partial dismissal and for summary judgment. But the Hospital
did, in fact, raise the argument in its motion for partial dismissal, asserting
that the joinder agreement “call[s] for the mandatory redemption of
Plaintiff’s membership interest in [the Hospital] following Plaintiff’s
termination of employment with [the Medical Group].” The Hospital then

Indiana Supreme Court | Case No. 49S05-1710-PL-671 | March 23, 2018   Page 5 of 18
relied on this plain reading of the joinder agreement in its later dispositive
motions.

   Dr. Sawyer also argues that the Hospital agreed to jury instructions on
breach. But the Hospital did not need to object to the jury instructions to
preserve its argument that the trial court erred in a contract-interpretation
ruling that was outside the jury’s purview. See, e.g., City of St. Louis v.
Praprotnik, 485 U.S. 112, 119–120 (1988) (finding no obstacle to review a
challenge, without an objection to jury instructions, where the focus of the
challenge was “not on the jury instruction itself, but on the denial of [the
party’s] motions for summary judgment and a directed verdict”).

    Finally, he argues that the Hospital waited until after the jury returned
its verdict to assert that the Hospital’s breach was limited to its untimely
payment. But the Hospital did not have to concede breach in untimeliness
to preserve its argument that, under a plain reading of the contract
language, there was no breach for paying out Dr. Sawyer’s ownership
interest.

  The Hospital thus has not waived its contract-interpretation argument,
and we turn to its merits.

    Our goal in contract interpretation is “to determine the intent of the
parties at the time that they made the agreement.” Citimortgage, Inc. v.
Barabas, 975 N.E.2d 805, 813 (Ind. 2012). We start with the contract
language to determine whether it is ambiguous. Ryan v. TCI
Architects/Eng’rs/Contractors, Inc., 72 N.E.3d 908, 914 (Ind. 2017). If the
language is unambiguous, we give it its plain and ordinary meaning in
view of the whole contract, without substitution or addition. See id.; State
v. Int’l Bus. Machs. Corp., 51 N.E.3d 150, 160 (Ind. 2016).

   A. The parties’ agreed-upon terms are unambiguous.

   The joinder agreement says:

      WHEREAS, [the Medical Group] and the Physician [Dr.
      Sawyer] are parties to that certain Physician Employment
      Agreement of even date herewith (the “Agreement”); and

Indiana Supreme Court | Case No. 49S05-1710-PL-671 | March 23, 2018   Page 6 of 18
      WHEREAS, Physician is a member of [the Hospital]; and . . .

      WHEREAS, the parties hereto desire that Physician and [the
      Hospital] shall cause Physician’s membership interest in [the
      Hospital] to be redeemed and Physician to no longer have any
      continuing direct or indirect membership, ownership or
      investment interest in [the Hospital] in the event that
      Physician’s employment referenced in the [Employment]
      Agreement is terminated for any reason (other than a
      termination pursuant to Section 4.4(c) of the Agreement).

       NOW THEREFORE, . . . the parties hereto agree as follows:

      1. Mandatory Redemption. Within ninety (90) days of any
      termination of employment between Physician and [the
      Medical Group] (other than a termination pursuant to Section
      4.4(c) of the Agreement), . . . Physician and [the Hospital] shall
      cause Physician to be redeemed of his interest in [the Hospital]
      such that, following such redemption, Physician shall have no
      continuing direct or indirect membership, ownership or
      investment interest in [the Hospital].

   Both parties initially argued that we should give these terms their plain
and ordinary meaning—though they disagreed on what that meaning is.
Then at oral argument, Dr. Sawyer alternatively offered that we could find
the terms ambiguous based on the trial court’s rulings, the jury verdict,
and the vacated Court of Appeals opinion.

   But the parties’ disagreement over the plain meaning does not create
ambiguity. Jernas v. Gumz, 53 N.E.3d 434, 444 (Ind. Ct. App. 2016), trans.
denied. Nor can the jury verdict or prior court rulings: after all, we review
a court’s interpretation of contract language de novo. Jakubowicz, 56
N.E.3d at 619. Thus, the plain meaning controls.

Indiana Supreme Court | Case No. 49S05-1710-PL-671 | March 23, 2018   Page 7 of 18
   B. The joinder agreement’s plain language requires redemption
      upon any termination of Dr. Sawyer’s employment with the
      Medical Group.

   Dr. Sawyer acknowledges that the joinder agreement requires buying
out his interest after “any termination of employment.” He contends,
however, that “any termination” means only a termination permitted by
the employment agreement’s terms because the employment agreement
and joinder agreement are really one contract.

  We disagree. The joinder and employment agreements are not one
contract, and the plain meaning of “any termination” is any termination,
for any reason.

       1. The joinder agreement and employment agreement are not one
          contract.

  Dr. Sawyer urges that the two agreements are really one—and so
should be construed together—because the Hospital and the Medical
Group are one entity and because the joinder agreement incorporates the
employment agreement.

   We conclude otherwise. The Hospital and the Medical Group are
separate entities, and the four corners of the joinder agreement do not
encompass the employment agreement. Thus, the employment agreement
does not affect the plain meaning of the joinder agreement’s terms.

           a. We do not read the two agreements together under the
               contemporaneous document doctrine.

   Dr. Sawyer’s argument that the Hospital and the Medical Group are
really one entity invokes the contemporaneous document doctrine. This
doctrine lets us, on a case-by-case basis, construe together contracts that
relate to the same transaction or subject matter, if nothing indicates a
contrary intention. See Lily, Inc. v. Silco, LLC, 997 N.E.2d 1055, 1068 (Ind.
Ct. App. 2013), trans. denied. Despite the doctrine’s title, the agreements
may have been executed at different times. Id.

Indiana Supreme Court | Case No. 49S05-1710-PL-671 | March 23, 2018   Page 8 of 18
   But when a litigant is not a party to one of the agreements, the
contemporaneous document doctrine most likely will not apply. The
reasons are straightforward: a contract generally cannot bind a nonparty, 4
and assent to the terms of the contract is a basic tenet of contract
formation. Martin Rispens & Son v. Hall Farms, Inc., 621 N.E.2d 1078, 1087
(Ind. 1993), abrogated on different grounds by Hyundai Motor Am., Inc. v.
Goodin, 822 N.E.2d 947 (Ind. 2005); Carr v. Hoosier Photo Supplies, Inc., 441
N.E.2d 450, 455–56 (Ind. 1982).

   Yet, these reasons are not automatically implicated by a disparity in the
contracts’ casts of parties. For instance, the doctrine may still apply where
one contract has five parties while another has three. See, e.g., McGann &
Marsh Co. v. K & F Mfg. Co., 179 Ind. App. 411, 419, 385 N.E.2d 1183, 1188
(1979), trans. denied. The critical inquiry is whether the litigant who is
absent from the cast of parties to one of the agreements is nevertheless
“the same in essential respects” to a party to that agreement. Id. Compare
Murat v. South Bend Lodge No. 235 of Benevolent & Protective Order of Elks,
893 N.E.2d 753, 757 (Ind. Ct. App. 2008), trans. denied, and Estate of Spry v.
Greg & Ken, Inc., 749 N.E.2d 1269, 1274 (Ind. Ct. App. 2001), with McGann,
179 Ind. App. at 419, 385 N.E.2d at 1188, and GEICO Ins. Co. v. Rowell, 705
N.E.2d 476, 481–82 (Ind. Ct. App. 1999), and Ruth v. First Fed. Sav. & Loan
Ass’n, 492 N.E.2d 1105, 1108 (Ind. Ct. App. 1986).

   Here, the Medical Group and Dr. Sawyer are parties to both the joinder
and the employment agreements, but the Hospital is not a party to the
employment agreement. Dr. Sawyer argues that the Hospital nonetheless
is a party to the employment agreement because the Hospital and the
Medical Group are really one entity. Yet, his position has not been entirely
consistent.

4Certain traditional principles of state law—such as assumption, agency, veil piercing, alter
ego, waiver, estoppel, third-party beneficiary, and incorporation by reference—may bind a
nonparty to a contract. 17A Am. Jur. 2d Contracts § 400 (2016); Arthur Andersen LLP v. Carlisle,
556 U.S. 624, 631 (2009); Warciak v. Subway Rests. Inc., 880 F.3d 870, 872 (7th Cir. 2018). We
address below the principle that Dr. Sawyer raised: incorporation by reference.

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   In one breath, Dr. Sawyer acknowledges that the Medical Group and
the Hospital are separate entities. In his amended complaint, he identifies
them as different defendants, observes that the Medical Group is a
corporation while the Hospital is a limited liability company, seeks to
recover his lost ownership interest from both the Medical Group and the
Hospital, and explains that his employment relationship with the Medical
Group differs from his ownership relationship with the Hospital.

   But in the next breath, he denies this separation as “simply a fiction.”
He argues that St. Vincent Health is, in his words, the “mother ship” with
a controlling ownership of both the Hospital and the Medical Group. He
also reasons that the Hospital and the Medical Group retained the same
counsel through trial.

   We disagree that the Hospital and the Medical Group are a single
entity. As Dr. Sawyer has already acknowledged, the two parties have
different business structures, are different defendants, and have different
relationships with him. He has not tried to pierce the corporate veil, see
Reed v. Reid, 980 N.E.2d 277, 301–02 (Ind. 2012), and sharing an attorney
does not make the Hospital and the Medical Group one and the same, see
Ind. Rules of Prof. Conduct Rule 1.7; Williams v. State, 724 N.E.2d 1070,
1079 (Ind. 2000).

   Thus, the Hospital was not a party to the employment agreement.
Cautious to not bind a nonparty to contract terms it did not assent to, we
will not apply the contemporaneous document doctrine to construe the
joinder and employment agreements together.

           b. The joinder agreement did not incorporate the entire
              employment agreement.

    Dr. Sawyer offers a second theory for reading “any termination” as
limited by the employment agreement: since the joinder agreement
references and is attached to the employment agreement, it incorporates
the employment agreement’s terms. As explained below, the joinder
agreement did not incorporate the entire employment agreement. Rather,
it incorporates by reference only one provision of the employment
agreement—Section 4.4(c)—which does not affect this case.

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   We interpret incorporated content as part of the agreement. I.C.C.
Protective Coatings, Inc. v. A.E. Staley Mfg. Co., 695 N.E.2d 1030, 1036 (Ind.
Ct. App. 1998), trans. denied. For incorporation to occur, the incorporating
contract must include a clear and explicit expression of intent to be bound
by the auxiliary content. See MPACT Const. Grp., LLC v. Superior Concrete
Constructors, Inc., 802 N.E.2d 901, 907–09 (Ind. 2004); Norwood Promotional
Prods., Inc. v. Roller, 867 N.E.2d 619, 625 (Ind. Ct. App. 2007), trans. denied.
Mere reference to another contract is not enough. See Bd. of Trs. of Purdue
Univ. v. Eisenstein, 87 N.E.3d 481, 502–03 (Ind. Ct. App. 2017), trans. denied.
And simply attaching a document is neither necessary nor sufficient for
incorporation. See Kleen Leen, Inc. v. Mylcraine, 174 Ind. App. 579, 583, 369
N.E.2d 638, 640–41 (Ind. Ct. App. 1977) (construing document that was
“attached to and incorporated by reference” as part of the contract
(emphasis added)); accord Republic Bank v. Marine Nat. Band, 53 Cal. Rptr.
2d 90, 92 (Cal. Ct. App. 1996).

   We are also mindful that incorporation occurs in one direction: it pulls
material into the incorporating contract. See MPACT, 802 N.E.2d at 909.
While incorporation is unidirectional, it may be partial—incorporating
some parts of a separate agreement while leaving others unincorporated.
See I.C.C., 695 N.E.2d at 1036. And material referenced for a particular
purpose is incorporated for that purpose only. Id.

   Here, the fact that the joinder agreement was attached as an exhibit to
the employment agreement does not show that the joinder agreement
incorporated the employment agreement. Indeed, it is the incorporating
contract that must clearly and explicitly communicate the intent to
incorporate the other writing. MPACT, 802 N.E.2d at 909. And although
the terms of the joinder agreement reference the employment agreement
multiple times, none of these references include an incorporation clause:

      WHEREAS, [the Medical Group] and [Dr. Sawyer] are parties
      to that certain Physician Employment Agreement of even date
      herewith (the “Agreement”); . . .

      WHEREAS . . . in the event that Physician’s employment
      referenced in the [Employment] Agreement is terminated for

Indiana Supreme Court | Case No. 49S05-1710-PL-671 | March 23, 2018   Page 11 of 18
      any reason (other than a termination pursuant to Section 4.4(c)
      of the [Employment] Agreement). . . .

      Within ninety (90) days of any termination of employment
      between [Dr. Sawyer] and [the Medical Group] (other than a
      termination pursuant to Section 4.4(c) of the Agreement) . . .

   These references in the joinder agreement do three things. First, they
recognize that Dr. Sawyer and the Medical Group are parties to the
employment agreement. Second, they identify the employment that Dr.
Sawyer’s ownership interest is conditioned on: his employment as a
cardiologist for the Medical Group. And, finally, they specify that the one
exception to “any termination” is defined by Section 4.4(c) of the
employment agreement. 5

   The references to Section 4.4(c), though, incorporate only that
subsection of the employment agreement and only for the purpose of
identifying the sole termination that does not trigger the mandatory
redemption provision—a termination that the parties agree did not occur
here. See I.C.C., 695 N.E.2d at 1036. In other words, no other portions of
the employment agreement are incorporated by reference. The joinder
agreement simply lacks the requisite expression of intent to incorporate
the entire employment agreement.

       2. The plain meaning of “any termination” is any termination,
          regardless of the reason.

   Since the joinder agreement incorporated only an inapplicable section
of the employment agreement, we cannot consider the employment
agreement in determining the plain meaning of “any termination.” See
AM Gen. LLC v. Armour, 46 N.E.3d 436, 440 (Ind. 2015). It is true that we
determine the meaning of a contract by considering all of its provisions,
not individual words, phrases, or paragraphs read alone. Evansville–

5Section 4.4(c) applies when the Medical Group eliminates, and another company purchases,
the doctor’s practice unit and the doctor voluntarily ends his employment with the Medical
Group.

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Vanderburgh Sch. Corp. v. Moll, 264 Ind. 356, 363, 344 N.E.2d 831, 837 (1976).
But when the contract terms are unambiguous, as they are here, we do not
go beyond the four corners of the contract to investigate meaning.
Performance Servs., Inc. v. Hanover Ins. Co., 85 N.E.3d 655, 660 (Ind. Ct. App.
2017). In other words, we will not consider extrinsic evidence, even if that
evidence is another agreement executed on the same day. See, e.g., AM
Gen. LLC, 46 N.E.3d at 440 (recognizing a redemption agreement executed
on the same day as an employment agreement as extrinsic evidence for
interpreting the disputed term in the employment agreement).

   Thus, looking only within the four corners of the joinder agreement, the
plain meaning of “any termination” is any termination, for any reason.
This includes a termination that breaches the employment agreement. For
example, had Dr. Sawyer terminated his employment in a way that
breached the employment agreement, the joinder agreement would still
require redemption of his ownership interest. Likewise, when the Medical
Group terminated his employment in breach of the employment
agreement—as the jury found here—the Hospital is required to buy out
Dr. Sawyer’s interest.

   Adding the terms of Dr. Sawyer’s reading—any termination under the
employment agreement—would dramatically change the parties’
agreement. For the Hospital to determine whether the mandatory
redemption was triggered, it would have to investigate whether the
termination resulted from a breach of the employment agreement. If the
parties had intended that result, they could have said so. See, e.g., Wright
Motors, Inc. v. Marathon Oil Co., 631 N.E.2d 923, 925–26 (Ind. Ct. App.
1994). They did not, and we will not add tacit terms into the parties’
express, agreed-upon ones. Int’l Bus. Machs. Corp., 51 N.E.3d at 160.

   The Medical Group’s termination of Dr. Sawyer’s employment—
authorized by the employment agreement or not—thus triggered the
joinder agreement’s mandatory redemption provision. The Hospital
accordingly did not breach the agreement by discontinuing and paying
out Dr. Sawyer’s ownership interest. The trial court erred in holding
otherwise and denying the Hospital’s motion for partial dismissal on that

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ground, and this legal error pervaded the court’s later rulings on the
Hospital’s dispositive motions.

   Importantly, Dr. Sawyer is not without a remedy for the
discontinuation of his ownership interest. He properly sought to recover
the ten-year value of this ownership interest as damages for the Medical
Group’s breach of the employment agreement, and he recovered from the
Medical Group over $1.1 million.

   C. The Hospital breached the agreement by delaying payment to Dr.
      Sawyer, who is entitled to interest on the delay.

  The only remaining issue of breach is the Hospital’s delay in paying out
Dr. Sawyer’s interest.

   The parties do not dispute that that the redemption amount was
properly calculated; that the joinder agreement required redemption
“[w]ithin ninety (90) days of any termination of employment”; or that the
Hospital delivered Dr. Sawyer his redemption check nearly five months
after the 90-day deadline. They thus agree that the delay was a breach,
though Dr. Sawyer also acknowledges that he presented no evidence of
the amount owed for that delay. The Hospital, on the other hand, asserted
in its motion to correct error that Dr. Sawyer is entitled to statutory
interest on the delay. We agree.

   To receive a prejudgment interest award, a party needs to show only
that the obligor breached the contract by failing to pay the appropriate
amount by a particular time. Thor Electric, Inc. v. Oberle & Assocs., Inc., 741
N.E.2d 373, 380 (Ind. Ct. App. 2000), disapproved on other grounds by Inman
v. State Farm Mut. Auto. Ins. Co., 981 N.E.2d 1202, 1205 (Ind. 2012); see also
Kosarko v. Padula, 979 N.E.2d 144, 146 (Ind. 2012). An award of
prejudgment interest in a contract action is appropriate purely as a matter

Indiana Supreme Court | Case No. 49S05-1710-PL-671 | March 23, 2018   Page 14 of 18
of law when the breach did not arise from tortious conduct, 6 the amount
of the claim rests on a simple calculation, and the trier of fact does not
need to exercise its judgment to assess the amount of damages. Inman, at
1204 & n.2; INS Investigations Bureau, Inc. v. Lee, 784 N.E.2d 566, 578 (Ind.
Ct. App. 2003), trans. denied. Where parties have not agreed on an interest
rate, Indiana Code section 24-4.6-1-102 (2017) supplies a rate of eight
percent. See also Ind. Code §§ 24-4.6-1-101, -103(b).

   Here, the Hospital undisputedly should have paid Dr. Sawyer his
$196,787 redemption amount five months earlier. At the statutory rate of
eight percent, Dr. Sawyer is entitled to $6,559.60.

II. The trial court did not abuse its discretion in awarding Dr. Sawyer
    $27,233.19 in attorney fees and costs.

   Dr. Sawyer argues that the trial court abused its discretion in awarding
him discovery sanctions of only $27,233.19 in attorney fees and expenses.
He gives two reasons: that the court did not hold a hearing on the sanction
award amount as required by Trial Rule 37(A), and that he is entitled to
more than $27,233.19 for discovery abuses. We conclude that any error in
not holding a hearing was harmless, and the $27,233.19 award was within
the court’s discretion.

    Trial courts “stand much closer than an appellate court to the currents
of litigation pending before them,” so they are better positioned to assess
and manage discovery matters. Whitaker v. Becker, 960 N.E.2d 111, 115
(Ind. 2012). They accordingly have “wide discretionary latitude,” Vanway
v. State, 541 N.E.2d 523, 527 (Ind. 1989), and their orders carry “a strong
presumption of correctness,” Gonzalez v. Evans, 15 N.E.3d 628, 633 (Ind. Ct.
App. 2014), trans. denied; see McCullough, 605 N.E.2d at 180. We will not

6 As we recognized in Inman, an award of prejudgment interest under the Tort Prejudgment

Interest Statute (TPIS), Ind. Code §§ 34-51-4-1 to -9 (2017), is reviewed for abuse of discretion.
Inman, 981 N.E.2d at 1204. But the TPIS “applies to any civil action arising out of tortious
conduct,” id. (emphasis omitted), and no party suggests that any breach of contract here was
tortious. See INS Investigations Bureau, Inc. v. Lee, 784 N.E.2d 566, 577–78 (Ind. Ct. App. 2003),
trans. denied.

Indiana Supreme Court | Case No. 49S05-1710-PL-671 | March 23, 2018                   Page 15 of 18
overturn a decision absent clear error and resulting prejudice. See Ind.
Trial Rule 61; Vanway, 541 N.E.2d at 527.

    Here, discovery disputes hampered every stage of this protracted
litigation, and the trial court sanctioned Dr. Sawyer and the defendants
along the way. One of the trial court’s discovery orders granted Dr.
Sawyer’s motion to compel and awarded expenses for pursuing the order.
As litigation progressed, Dr. Sawyer moved for a contempt hearing on the
defendants’ failure to comply with the order compelling discovery. After
consolidating several pending motions, the trial court granted Dr.
Sawyer’s motion for the contempt hearing. Following a hearing, the court
issued an order indicating that “[a]ny expenses, fees, or costs shall be
determined when submitted by Plaintiff,” as discussed during the
hearing.

   Dr. Sawyer’s fee petition asked for $450,000. The defendants responded
that $27,233.19 of his requested fees were appropriate, but the other
expenses fell outside the court’s order and expenses permitted by Indiana
Trial Rule 37. For example, Dr. Sawyer’s petition included expenses for a
separate qui tam lawsuit, a motion for default judgment that was denied,
summary judgment filings, and a consumer complaint against another
doctor. Dr. Sawyer replied that he should be compensated $445,500 for the
defendants’ “pervasive and systematic” delays in discovery “[d]uring the
entire pendency of the case.” But the trial court agreed with the
defendants’ assessment of Dr. Sawyer’s submitted expenses.

   Dr. Sawyer first claims that the trial court did not comply with Indiana
Trial Rule 37(A), which requires the court, after granting a motion to
compel discovery, to provide an opportunity for a hearing before
awarding reasonable expenses incurred in obtaining the order. However,
even if the court here failed to comply with that requirement, Dr. Sawyer
has not shown prejudice—that the lack of a hearing affected the sanction
amount.

    Dr. Sawyer gave the trial court a detailed fee request, including over
fifty pages of spreadsheets itemizing and describing the expenses he
sought to recover. The defendants then submitted a response, categorizing
Dr. Sawyer’s submitted fees and explaining why many of them fell

Indiana Supreme Court | Case No. 49S05-1710-PL-671 | March 23, 2018   Page 16 of 18
outside of the court’s discovery order. Dr. Sawyer replied, contesting the
defendants’ categorizations. Neither in his petition nor in his reply did Dr.
Sawyer request another hearing. And at oral argument, when asked what
information a hearing would have revealed that the record did not
already supply, Dr. Sawyer’s counsel responded only that he would have
pointed out how the defendants’ categorizations misalign with the court’s
order. This explanation, however, was included in Dr. Sawyer’s reply. He
thus has failed to show that the award would have been different had
there been a hearing.

  Dr. Sawyer next argues that the awarded amount is erroneously low.
Again, this argument is without merit. The court had in the parties’ filings
a detailed account of the disputed fees, with reasons why those fees fell
within or outside the scope of the court’s orders and Rule 37. Given the
compounded discovery issues of this protracted litigation, the detailed
analysis of expenses presented to the trial court, and Dr. Sawyer’s requests
for expenses unrelated to discovery abuses, we find that Dr. Sawyer has
not overcome the strong presumption of correctness in the court’s award.
We thus find no abuse of discretion and affirm the court’s $27,233.19
sanction award.

Conclusion

   We defend the freedom of contract by enforcing parties’ agreed terms.
Giving effect to the plain language of the parties’ agreement here, we
reverse the $470,000 judgment against the Hospital and remand for entry
of judgment in the amount of $6,559.60 against the Hospital.

   We also find no abuse of discretion in the trial court’s award of attorney
fees and expenses.

  We therefore reverse in part, affirm in part, and remand to the trial
court to enter judgment against the Hospital in the corrected amount.

David, Massa, Slaughter, and Goff, JJ., concur.

Indiana Supreme Court | Case No. 49S05-1710-PL-671 | March 23, 2018   Page 17 of 18
A TT O RN E YS FO R A P PELL A N T/ C R OS S - A P P E L L E E

John R. Maley
Peter J. Rusthoven
Leah L. Seigel
Barnes & Thornburg LLP
Indianapolis, Indiana

A TT O RN E YS FO R PE T ITI O NE R S T. V IN CE N T M E DI CA L G R OU P, I NC.

David B. Honig
Andrew B. Howk
Hall, Render, Killian, Heath & Lyman, P.C.
Indianapolis, Indiana

A TT O RN E YS FO R A P PELL EE / C R OS S - A P PE L L A N T

Kevin W. Betz
Sandra L. Blevins
Betz + Blevins
Indianapolis, Indiana

A TT O RN E YS FO R A M ICU S CU RIA E I N DIA NA LE GA L FO U N DA T IO N I NC .

Julia Blackwell Gelinas
Maggie L. Smith
Frost Brown Todd LLC
Indianapolis, Indiana

A TT O RN E YS FO R A M ICU S CU RIA E DE FE N S E T RIA L C OU NS EL O F
IN DIA NA

Philip E. Kalamaros
Hunt Suedhoff Kalamaros LLP
Saint Joseph, Michigan

Lucy R. Dollens
Quarles & Brady LLP
Indianapolis, Indiana

Indiana Supreme Court | Case No. 49S05-1710-PL-671 | March 23, 2018     Page 18 of 18