Court Opinion

ID: 9616282
Source: CourtListenerOpinion
Date Created: 2023-08-22 04:45:12.825979+00
Date Added: 2024-06-11T09:08:48.134146
License: Public Domain

Buchanan, J.,
dissenting.
The judgment of $59,109.60 against the appellant hospitals, which is affirmed by this decision, is based on a construction of the Lipps contract of January 1, 1935, which, in my judgment, is at variance with the plain language of that contract. What that contract means should be determined by what it says; not by what Lipps now says the understanding was.
The Lipps contract was made with an associated group of •five hospitals. After Southwest Virginia Hospitals, Inc., was formed, the hospital group which contracted with Lipps, together with the additional hospitals which are parties to this litigation, entered into the agreement of November 29,1938, with the corporation. The Lipps contract was attached to and made a part of that agreement, and Lipps was bound by its terms just as firmly as he would now bind these contracting hospitals by its terms.
That agreement of November 29, 1938, provided, in Article XI, Sec. 1 thereof, that “This contract may be terminated without notice b.y agreement in writing of all of the Participating Hospitals and the Corporation.”
The hospitalization contracts which Lipps sold provided that they might be cancelled at any time by either the subscriber or *213the hospital, upon the giving of thirty days’ written notice of cancellation.
By written contract dated July 16, 1947, the corporation and all of the participating hospitals agreed to terminate the contract of November 29, 1938.
On August 23, 1947, a committee, duly appointed to act with the attorney for the corporation to wind up its business, wrote to Lipps, enclosing a form of notice which “in accordance with our understanding with you” he was to have printed or mimeographed and mailed to the individual subscribers, informing them that their contracts would be terminated at the termination date of each contract. This letter called his attention to the fact that “as you know,” the Corporation Commission had entered an order on August 15, 1947, the effect of which was to prevent the corporation from issuing or renewing any hospitalization contracts under the plan.
Lipps, after some delay, mailed out these notices terminating •all the outstanding subscriber contracts, and this is the service for which he now claims from the hospitals more than $10,000, in addition to the judgment granted him.
Lipps’ contract with the hospitals, written by him, undertook to provide in paragraphs Ninth and Tenth thereof, quoted in the court’s opinion, what his compensation would be in the event of such termination.
Paragraph Ninth provided that “This agreement may be terminated by either party hereto on thirty days’ written notice to the other party. ’ ’
It provided that the hospitals were to have the further right to terminate it for neglect, inefficiency, etc., “but not solely for the reason that cheaper agency service can be obtained.”
The Tenth paragraph then provided that if the contract was terminated by the hospitals, for any cause, except neglect, inefficiency, etc., Lipps should receive “as remuneration for his efforts, in building business for the association,” a percentage of the monthly collections “that may subsequently be collected for a certain period of time on the contracts sold by him.” ‘‘This percentage,” that is, the percentage of the collections subsequently collected on the contracts sold by him, was to be calculated “in amount and time according to the following schedule,” based upon “his average monthly collections for the three *214months preceding such termination of contract.” (Italics added).
Then follows the schedule. It seems to me perfectly plain. Eeferenee to it in the court’s opinion will show that if Lipps’ monthly collections for the three months preceding the termination of the contract had been $1,000 or over, then Lipps was to have “10% of collections on his contracts for 5 years;” or he was to receive “10% of collections” on his contracts for shorter periods if his average collections for the three months prior to the termination had average amounts less than $1,000 a month.
The concluding sentence of paragraph Ninth is illuminating. It provided: “In event of the termination of this contract, the right of the parties of the first part to continue to sell and furnish a smiliar form of service, on a similar plan, shall not be abridged or effected.” That provision looked forward to the contingency that after the termination of the Lipps contract, the hospitals might continue to sell “a similar form of service.” In such event they would have the benefit of Lipps’ work in" building business; that is, selling hospital contracts. In that event, it was only fair, as the contract asserts, that Lipps should receive a percentage of the subsequent collections “on the contracts sold by him.” Can this mean anything other than what it says; i. e., that on collections made subsequent to the termination on contracts sold by Lipps previous to the termination, Lipps was to have 10% ?
The average amount of the monthly collections for the three months preceding the termination of the contract is not the amount on which the 10% is to be calculated. The contract expressly says that the 10% is to be calculated on collections “on his contracts” subsequent to the termination. The amount of the average monthly collections for the three months prior to the termination simply controls the length of time for which the 10% is to run. If that average is $1,000 or more, the period is to be 5 years; if $800 to $999, the period is to be 4 years, and so on.
But instead of using the basis thus clearly provided by the contract, the court below, and now this court, has said that Lipps is to have for 5 years, or 60 months, 10% of the average monthly collections on the contracts sold by him for the three months preceding the termination, not on the collections made subsequent to the termination. •
*215There is thus given to Lipps, every month for 5 years, in addition to the 25% already paid him under his contract, 10% of the average amount from all the contracts previously sold by him and on which collections were made during the three months preceding the termination of the contract, and amounting to the principal sum of $59,109.60, with interest, a sum which is apt to be not 10% but many times more than 100% of all collections made “on his contracts” subsequent to the termination.
The contract of November 29, 1938, was terminated because the hospitals were losing money. The 25% on collections paid to Lipps was doubtless an important cause of that result. To protect themselves against that eventuality, which would sooner or later, of course, put them out of business, they provided in their contract for a termination of it. Lipps ’ contract provided that if they did terminate it, for any reason other than his neglect, inefficiency, etc., they should pay him for certain periods of time 10% of collections made subsequent to the termination on contracts previously sold by him. He is certainly not entitled to more than that. He is now given a great deal more than that, contrary to and in spite of the terms of his own written contract.
Miller, J., concurs in this dissent.