Court Opinion

ID: 9386990
Source: CourtListenerOpinion
Date Created: 2023-04-14 14:04:49.870857+00
Date Added: 2024-06-11T17:18:10.486641
License: Public Domain

RENDERED: APRIL 7, 2023; 10:00 A.M.
                        NOT TO BE PUBLISHED

               Commonwealth of Kentucky
                         Court of Appeals

                            NO. 2022-CA-0018-MR

ELIZABETH VEENEMAN BATES,
M.D.                                                              APPELLANT

               APPEAL FROM JEFFERSON CIRCUIT COURT
v.               HONORABLE MARY M. SHAW, JUDGE
                       ACTION NO. 19-CI-006119

TED ENNENBACH AND HORMONE
HEALTH EXPRESS OF KENTUCKY,
P.S.C.                                                             APPELLEES

                                  OPINION
                                 AFFIRMING

                                 ** ** ** ** **

BEFORE: COMBS, MCNEILL, AND EASTON, JUDGES.

MCNEILL, JUDGE: Elizabeth Veeneman Bates, M.D. (“Dr. Bates”) appeals from

orders of the Jefferson Circuit Court denying her motion for summary judgment

and granting summary judgment in favor of Ted Ennenbach (“Ennenbach”) and

Hormone Health Express of Kentucky, P.S.C. (“HHE”), holding the parties’

indemnification agreement does not apply to Kentucky Board of Medical
Licensure (“KBML”) proceedings relating to or arising from professional

malpractice. Finding no error, we affirm.

                                 BACKGROUND

             In 2015, Dr. Bates and Ennenbach entered a business venture to

provide hormone optimization therapy to patients. Dr. Bates would provide the

medical care while Ennenbach would provide facilities, equipment, and non-

physician personnel through his management company, Body Shapes Medical

Limited Liability Company (“management company”). The parties formed HHE,

a professional service corporation, with Dr. Bates as president and sole

shareholder. Dr. Bates then entered two contracts, an employment agreement with

HHE and management company to provide administrative and patient care

services, and an indemnification agreement with Ennenbach, management

company, and HHE, which is the focus of this appeal.

             The indemnification agreement provides in relevant part:

                             I. INDEMNIFICATION

                     1.1 Shareholder, Director and Officer
             Indemnification. In consideration of Dr. Bates’s services
             for and on behalf of HHE, Ennenbach, HHE and
             Management Company shall jointly and severally
             indemnify Dr. Bates from and against any and all
             damages, losses, claims, judgments, actions, proceedings,
             liabilities, taxes, penalties and expenses . . . alleged
             against, or incurred or suffered by, Dr. Bates by virtue of
             the fact that she is or was a shareholder, director or
             officer of HHE or arising from or relating to the

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             transactions contemplated by that certain Management
             Services Agreement between Management Company and
             HHE of even date herewith. . . . Without limitation of
             the foregoing, HHE, Ennenbach and Management
             Company shall jointly and severally indemnify Dr. Bates
             against any Claims for penalties or sanctions imposed
             against Dr. Bates or revocation or suspension of Dr.
             Bates’s license to practice medicine in the
             Commonwealth of Kentucky . . . arising from any acts or
             omissions of Management Company or HHE or their
             agents or employees. The foregoing indemnification
             excludes Claims arising from or relating to professional
             malpractice by Dr. Bates or any matter involving Dr.
             Bates’s negligence or material breach of this Agreement
             or any option agreement or buy-sell agreement entered
             into by the Parties.

             In August 2015, the KBML began investigating Dr. Bates’ use of

Armour Thyroid to hyperstimulate the thyroid to promote weight loss in patients

with normal thyroid functioning. This resulted in KBML restricting Dr. Bates’

ability to “practice medicine in the context of hormone replacement and/or

optimization therapy” indefinitely. Throughout the investigation, Ennenbach,

HHE, and management company paid for Dr. Bates’ defense but declined to

continue doing so following her license restriction. In response, Dr. Bates filed

suit in Jefferson Circuit Court to enforce the indemnification agreement.

             Later, she moved for summary judgment arguing that Ennenbach and

HHE breached the indemnification agreement by refusing to pay for her defense of

the KBML action. The trial court denied the motion, finding that the

indemnification agreement distinguished between KBML claims stemming from

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Dr. Bates’ mere affiliation with HHE, which were covered, and those directly

related to the way she practiced medicine, which were not. The court noted the

agreement specifically indemnified Dr. Bates from KBML actions “arising from

any acts or omission of Management Company or HHE or their agents or

employees.” However, the KBML action did not arise from any act or omission of

any other person or entity, but from Dr. Bates’ patient care alone. Following the

denial, Ennenbach and HHE moved for summary judgment which was granted.

This appeal followed.

                                STANDARD OF REVIEW

                Summary judgment is proper when the trial court determines that no

genuine issues of material fact exist and the moving party is entitled to judgment as

a matter of law. Steelvest, Inc. v. Scansteel Serv. Ctr., 807 S.W.2d 476, 480 (Ky.

1991); CR1 56.03. The parties agree no genuine issues of material fact remain and

summary judgment turns on a single question of contract interpretation: whether

the agreement requires Ennenbach and HHE to indemnify Dr. Bates for the costs

associated with the KBML action. “[T]he interpretation of a contract . . . is a

question of law for the courts and is subject to de novo review.” Cantrell Supply,

Inc. v. Liberty Mut. Ins. Co., 94 S.W.3d 381, 385 (Ky. App. 2002).

1
    Kentucky Rules of Civil Procedure.

                                          -4-
                                         ANALYSIS

                As an initial matter, we must first address the deficiency of Dr. Bates’

appellate brief. Her argument section fails to make “reference to the record

showing whether the issue was properly preserved for review and, if so, in what

manner” as required by RAP2 32(A)(4). We require a statement of preservation:

                so that we, the reviewing Court, can be confident the
                issue was properly presented to the trial court and
                therefore, is appropriate for our consideration. It also has
                a bearing on whether we employ the recognized standard
                of review, or in the case of an unpreserved error, whether
                palpable error review is being requested and may be
                granted.

Oakley v. Oakley, 391 S.W.3d 377, 380 (Ky. App. 2012).

                “Our options when an appellate advocate fails to abide by the rules

are: (1) to ignore the deficiency and proceed with the review; (2) to strike the brief

or its offending portions, [RAP 31(H)(1)]; or (3) to review the issues raised in the

brief for manifest injustice only[.]” Hallis v. Hallis, 328 S.W.3d 694, 696 (Ky.

App. 2010) (citing Elwell v. Stone, 799 S.W.2d 46, 47 (Ky. App. 1990)). Because

the record is small, and we have been able to determine her arguments were

properly preserved, we will ignore the deficiency and proceed with the review.

                The primary objective in construing a contract is to effectuate the

intentions of the parties. Cantrell Supply, Inc., 94 S.W.3d at 384 (citations

2
    Kentucky Rules of Appellate Procedure.

                                             -5-
omitted). A contract must be construed as a whole, giving effect to all parts and

every word if possible. Id. at 384-85 (citation omitted). “[I]n the absence of

ambiguity a written instrument will be enforced strictly according to its terms, and

a court will interpret the contract’s terms by assigning language its ordinary

meaning and without resort to extrinsic evidence.” Frear v. P.T.A. Industries, Inc.,

103 S.W.3d 99, 106 (Ky. 2003) (internal quotation marks and citations omitted).

The parties agree the indemnification agreement is unambiguous; thus, we turn to

its four corners and consider the ordinary meaning of its terms.

             As correctly determined by the trial court, the agreement provides for

blanket indemnification for all claims against Dr. Bates that arise from or relate to

(1) her capacity as a shareholder, director, or officer of HHE and (2) “transactions

contemplated by that certain Management Services Agreement between

Management Company and HHE of even date herewith[.]” It also provides for

indemnification for “any Claims in connection with establishing or enforcing a

right to indemnification” under the agreement. None of these provisions applies to

the KBML action. The KBML action concerns Dr. Bates’ conduct as a medical

provider, not a shareholder, director, or officer of HHE, and the management

                                         -6-
services agreement referenced in the indemnification agreement is not a part of the

record.3

              The only relevant section of the indemnification agreement, as

admitted by Dr. Bates, is as follows:

              Without limitation of the foregoing, HHE, Ennenbach
              and Management Company shall jointly and severally
              indemnify Dr. Bates against any Claims for penalties or
              sanctions imposed against Dr. Bates or revocation or
              suspension of Dr. Bates’s license to practice medicine in
              the Commonwealth of Kentucky . . . arising from any
              acts or omissions of Management Company or HHE or
              their agents or employees. The foregoing
              indemnification excludes Claims arising from or relating
              to professional malpractice by Dr. Bates or any matter
              involving Dr. Bates’s negligence or material breach of
              this Agreement or any option agreement or buy-sell
              agreement entered into by the Parties.

(Emphasis added.)

              Under the plain language of this section, Dr. Bates is indemnified

against any claims concerning her license to practice medicine, which includes

KBML actions, “arising from any acts or omissions of Management Company or

HHE or their agents or employees.” However, the KBML action in this instance

arose solely from Dr. Bates’ practice of medicine, not from any act or omission of

3
 A management services agreement dated June 17, 2015 is, however, in the record. Even
assuming this agreement is the one referenced in the indemnification agreement, the KBML
action did not “arise from or relat[e] to the transactions contemplated” by the management
services agreement. The management services agreement is between HHE and management
company and concerns administrative matters, not patient care.

                                             -7-
anyone else. While Dr. Bates is an employee of HHE, when read in the context of

the indemnification agreement as a whole, “employee,” as used in this section

refers to other employees of HHE and management company, not Dr. Bates. This

interpretation is bolstered by the very next sentence which states: “The foregoing

indemnification excludes Claims arising from or relating to professional

malpractice by Dr. Bates or any matter involving Dr. Bates’s negligence . . . .”

Thus, Dr. Bates is only indemnified against licensure actions arising from acts or

omissions of others, not her own. This indemnification does not apply to licensure

actions concerning Dr. Bates’ negligence or professional malpractice, which is the

basis for the KBML action in this instance.

                Dr. Bates argues this interpretation renders the clause concerning

licensure actions meaningless, because any KBML action would necessarily arise

from her practice of medicine. We disagree. Just as one example, pursuant to

KRS4 311.595(10), the KBML may discipline a physician for making “a false

statement in any document executed in connection with the practice of his

profession[.]” If management company made a false statement in connection with

advertising HHE’s services, pursuant to the indemnification agreement, Dr. Bates

would be indemnified against any KBML action because such action arose from

acts or omissions of others.

4
    Kentucky Revised Statutes.

                                           -8-
             Finally, Dr. Bates contends the trial court made impermissible fact

determinations in ruling on the motion for summary judgment. Again, we

disagree. While the trial court recited, and even interpreted, the facts in its order

granting summary judgment, these facts were irrelevant to its conclusion that the

agreement did not require Ennenbach and HHE to indemnify Dr. Bates against the

KBML action, which was purely a legal question.

             In sum, because the indemnification agreement does not apply to

licensure actions arising from or relating to professional malpractice by Dr. Bates,

she cannot prove a breach of the agreement and the trial court did not err in

denying her motion for summary judgment and granting summary judgment in

favor of Ennenbach and HHE.

                                   CONCLUSION

             Accordingly, the orders of the Jefferson Circuit Court are affirmed.

             ALL CONCUR.

 BRIEFS FOR APPELLANT:                      BRIEF FOR APPELLEES:

 Laura E. Landenwich                        John D. Cox
 Abigail V. Lewis                           Scott D. Spiegel
 Louisville, Kentucky                       Peterson S. Thomas
                                            Louisville, Kentucky

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