Court Opinion

ID: 3081076
Source: CourtListenerOpinion
Date Created: 2015-10-16 01:55:22.517306+00
Date Added: 2024-06-11T11:41:36.916266
License: Public Domain

In The
                     Court of Appeals
       Sixth Appellate District of Texas at Texarkana

                          No. 06-13-00010-CV

   CRAIG SESSIONS, M.D., P.A. AND CRAIG SESSIONS, M.D., Appellant

                                    V.

TH HEALTHCARE, LTD., D/B/A NACOGDOCHES MEDICAL CENTER, Appellee

                 On Appeal from the 145th District Court
                     Nacogdoches County, Texas
                      Trial Court No. C1127428

               Before Morriss, C.J., Carter and Moseley, JJ.
                       Opinion by Justice Moseley
                                              OPINION
        As a part of its physician recruitment program, TH Healthcare, Ltd., doing business as

Nacogdoches Medical Center (Hospital), entered into a contract with an orthopedic specialist,

Craig Sessions, M.D., and his business entity, Craig Sessions, M.D., P.A. (to which reference is

made collectively as Sessions) to encourage him to move his medical practice to Nacogdoches. 1

The contract was a relocation agreement, wherein Sessions was to move his medical practice

from Palestine to the Hospital’s service area, a geographical area defined as that encompassed

within thirteen United States Postal Service ZIP codes in and around Nacogdoches, Texas. As a

principal term of the contract, the Hospital guaranteed that Sessions would collect at least

$725,000.00 during the first year of the contract and, if Sessions’ “collections” were less than

that amount, the Hospital would pay Sessions the difference between his actual “collections” and

the $725,000.00 guaranteed minimum. Conversely, should Sessions collect (when the amount

paid by the Hospital is involved) in excess of $725,000.00 during that first year of the contract,

he was obligated to pay the excess to the Hospital in the form of a reconciliation payment.

        As things developed, the billing estimates upon which the contract was based must have

been conservative because the contractually-mandated “collections” reconciliation audit (which

dealt with Sessions’ “collections” during the first year of the contract) determined that Sessions

had collected $267,418.10 in excess of the agreed-upon $725,000.00. After that determination

was made, the Hospital made demand on Sessions for the $267,418.10 excess. Sessions, having

1
 Originally appealed to the Twelfth Court of Appeals in Tyler, this case was transferred to this Court by the Texas
Supreme Court pursuant to its docket equalization efforts. See TEX. GOV’T CODE ANN. § 73.001 (West 2013). As a
transfer case, we are required to apply the precedent of the Tyler Court of Appeals to the extent it may differ from
our precedent. See TEX. R. APP. P. 41.3.

                                                         2
interpreted the contract differently than the Hospital, refused to pay. The Hospital filed suit for

breach of contract, and Sessions filed counterclaims for the same.

       After the suit was filed and discovery had proceeded, the Hospital filed a motion for

summary judgment, and Sessions responded by filing a motion for partial summary judgment. In

his motion for partial summary judgment, Sessions sought a declaration that: (a) the term

“collections,” as used in the contract, was limited to “collections” for services rendered within

the Hospital’s service area, (b) in the alternative, that the definition of “collections” was

ambiguous as a matter of law, and/or (c) the contract was now a net income guarantee contract

rather than a “collections” guarantee contract. The summary judgment motion of the Hospital

sought findings that Sessions had breached the contract, and that he owed certain sums to the

Hospital, and sought recovery of those sums plus attorney’s fees and interest. The trial court

denied Sessions’ motion for partial summary judgment and granted summary judgment in favor

of the Hospital, awarding it $419,504.63 in damages, interest, and attorney’s fees.

       We affirm the trial court’s denial of Sessions’ motion for summary judgment. We

reverse and remand the trial court’s award of summary judgment to the Hospital.

I.     Background Facts

       The agreement to which reference is made above was entered into between the Hospital

and Sessions on September 1, 2008.

       After the reconciliation audit revealed that Sessions’ income exceeded the guaranteed

amount by $267,418.10, Sessions admitted to having received a copy of the reconciliation report

dated June 17, 2010. He refused to pay the Hospital the excess “collections,” maintaining that

                                                3
the amount was not owed. The Hospital notified Sessions on March 1, 2011, that it considered

Sessions in breach of the agreement and stated that he had thirty days to cure the breach without

penalty. Sessions refused to pay any amount, and, on May 1, 2011, the Hospital terminated the

agreement pursuant to Section 3(b) of the agreement.

       The Hospital brought its suit against Sessions June 24, 2011, alleging a breach of

contract. It was undisputed that virtually all of the $267,418.10 excess over the contractually-

prescribed $725,000.00 was collected by Sessions from his having continued a part-time

orthopedic medicine practice in Palestine, where he had previously been practicing, rather than

from work within the Hospital’s service area.

       The threshold conflict between the parties in the lawsuit was the definition of the word

“collections” as used in the agreement. The Hospital maintained that the agreement’s definition

of “collections” included any and all funds collected by Sessions for work performed during the

term of the agreement (irrespective of the place such work was performed), but Sessions argued

that the only “collections” applicable to the agreement were those he received from work

performed inside the Hospital’s service area—not those he collected as the result of winding

down his practice in Palestine.

       After denying Sessions’ motion for partial summary judgment and granting the

Hospital’s motion for summary judgment in full, the trial court awarded judgment against

Sessions for $419,504.63 (this being comprised of the $267,418.10 excess over the guaranteed

                                                4
income, principal unforgiven installments of $75,713.97, 2 $34,363.56 in prejudgment interest

from December 13, 2010, through September 20, 2012, and $42,009.00 in attorney’s fees). The

trial court also awarded conditional attorney’s fee awards of $25,000.00 for a successful appeal

to the court of appeals and an additional $20,000.00 for a successful appeal to the Supreme Court

of Texas.

II.     Standard of Review

        A traditional motion for summary judgment is granted only when the movant establishes

that there are no genuine issues of material fact and it is entitled to judgment as a matter of law.

Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009). An

appellate court reviews the grant or denial of a motion for summary judgment de novo and, in

doing so, is to consider the summary judgment evidence in the light most favorable to the

nonmovant. Id. Where (as here) each party files a motion for partial or full summary judgment

and the court grants one while overruling the other, the appellate court has jurisdiction to review

both the grant and the denial. Tex. Mun. Power Agency v. Pub. Util. Comm’n of Tex., 253
S.W.3d 184, 192 (Tex. 2007). Thus, in this case, we are to review the summary judgment

evidence presented by each party, determine all questions presented, and render judgment as the

trial court should have rendered. Id.; Comm’rs Court of Titus Cnty. v. Agan, 940 S.W.2d 77, 81

(Tex. 1997); Nash v. Beckett, 365 S.W.3d 131, 136 (Tex. App.—Texarkana 2012, pet. denied).

If we determine that a fact issue precludes summary judgment for either party, we remand the

2
This uncontested on appeal contractual damage amount represents certain principal amounts and other additional
monetary benefits owing under the contract that are unrelated to the excess “collections” amount.
                                                      5
cause for trial. See Univ. of Tex. Health Sci. Ctr. at Houston v. Big Train Carpet of El Campo,

Inc., 739 S.W.2d 792, 792 (Tex. 1987) (per curiam).

III.   Analysis

       A.      Does the Term “Collections” as Used in the Agreement Include Fees Paid for
               Medical Services Rendered by Sessions Outside the Hospital’s Defined
               Service Area or is the Term Ambiguous?

       Sessions contends that the trial court erred in its summary judgment rulings because the

term “collections,” as used in the agreement, does not include “collections” from services

rendered outside the Hospital’s service area; in the alternative, Sessions claims that the term is

ambiguous.

       In construing a written contract, the primary concern of the court is to ascertain the true

intentions of the parties as expressed in the terms and language of the instrument. Valence

Operating Co. v. Dorsett, 164 S.W.3d 656, 662 (Tex. 2005). When discerning the contracting

parties’ intent, we give contract terms their plain and ordinary meaning unless the instrument

indicates the parties intended a different meaning. Dynegy Midstream Servs., Ltd. P’ship v.

Apache Corp., 294 S.W.3d 164, 168 (Tex. 2009).

       The construction of an unambiguous contract is a question of law for the court, a question

which we review de novo. Tawes v. Barnes, 340 S.W.3d 419, 425 (Tex. 2011). Where a

contract is unambiguous, the language of the contract alone expresses the parties’ intent, and it

must be enforced as written. Puckett v. U.S. Fire Ins. Co., 678 S.W.2d 936, 938 (Tex. 1984);

Yancey v. Floyd W. & Co., 755 S.W.2d 914, 918 (Tex. App.—Fort Worth 1988, writ denied).

“A contract is not ambiguous simply because the parties disagree over its meaning.” Apache

                                                6
Corp., 294 S.W.3d at 168. Rather, a contract is ambiguous only when “its meaning is uncertain

and doubtful or is reasonably susceptible to more than one interpretation.” Heritage Res., Inc. v.

NationsBank, 939 S.W.2d 118, 121 (Tex. 1996).

       “Collections,” as defined in Exhibit C-1 of the contract or agreement, includes:

       all monthly fees and charges resulting and collected from items or services
       furnished by, or under the direction of, Physician (including, without limitation, a
       reasonable allocation for services provided under capitated payment
       arrangements), regardless of where or to whom such services are provided, and
       shall also include compensation for all professional and administrative service
       arrangements for the month.

       Sessions provides three reasons he contends that the word “collections” does not include

revenue collected from services rendered outside the Hospital’s service area: (a) the Hospital is

bound by his interpretation because it knew prior to entry of the parties into the contract that

Sessions interpreted the term “collections” to exclude revenue from any wind down practice he

conducted in Palestine, (b) Sessions’ interpretation is necessary when the term is viewed in light

of the whole document, and (c) the parties’ course of performance, coupled with the surrounding

circumstances, established Sessions’ interpretation of that word as the correct one.

               1.     Is the Hospital          Bound     by    Sessions’    Previously-Disclosed
                      Interpretation?

       Sessions contends that the Hospital is bound by his interpretation because a few months

prior to signing the agreement, he had spoken with Gary Stokes, the Hospital’s Chief Executive

Officer (CEO), about his desire to remain available to take on patients in Palestine, and Stokes

knew that it was Sessions’ understanding that the Hospital would not receive revenue from those

patients. The Hospital argues that all prior oral communications are superseded by the parol

                                                 7
evidence rule and the contract’s merger clause, which states, in relevant part, “This [a]greement

contains the entire understanding of the parties . . . and supersedes all prior agreements, oral or

written, and all other communications between the parties relating to such subject matter.” 3

         The general rule is that every person who has the capacity to enter into a contract is held

to know what words were used in the contract, to know their meaning, and to understand their

legal effect. Amouri v. Sw. Toyota, Inc., 20 S.W.3d 165, 169 n.2 (Tex. App.—Texarkana 2000,

pet. denied). The consequence of this rule is that a party to a contract may not successfully claim

that he believed the provisions of the contract were different from those plainly set out in the

agreement or that he did not understand the meaning of the language used. Id. at 169; Brown v.

Aztec Rig Equip., Inc., 921 S.W.2d 835, 846 (Tex. App.—Houston [14th Dist.] 1996, writ

denied). The parol evidence rule provides that extrinsic evidence will not be received if its effect

is to vary, add to, or contradict the terms of a written contract that is complete in itself and

unambiguous. Amouri, 20 S.W.3d at 169 n.2; Guisinger v. Hughes, 363 S.W.2d 861, 865 (Tex.

Civ. App.—Dallas 1962, writ ref’d n.r.e.).                 The intent of the parties must ordinarily be

3
 Issues not expressly presented to the trial court by written motion, answer, or other response shall not be considered
on appeal as grounds for reversal. Avmanco, Inc. v. City of Grand Prairie, 835 S.W.2d 160, 166 (Tex. App.—Fort
Worth 1992, writ dism’d as moot). Summary judgment may not be affirmed on a ground not presented to the trial
court. State Farm Lloyds v. Page, 315 S.W.3d 525, 532 (Tex. 2010). Here, Sessions failed to raise this argument to
the trial court as grounds or support for his motion for partial summary judgment, and, therefore, he may not raise it
in support thereof for the first time on appeal. See TEX. R. CIV. P. 166a; Deutsche Bank Nat’l Trust Co. v. Stockdick
Land Co., 367 S.W.3d 308, 318 n.17 (Tex. App.—Houston [14th Dist.] 2012, pet. filed) (citing Bickers v. State, 646
S.W.2d 668, 670 (Tex. App.—Dallas 1983, no writ). However, we address this argument insofar as it attacks the
legal sufficiency of the Hospital’s motion for summary judgment. See City of Houston v. Clear Creek Basin Auth.,
589 S.W.2d 671, 678 (Tex. 1979) (even when nonmovant fails to answer, legal sufficiency may be raised for first
time on appeal).
                                                          8
ascertained from the contract alone. 4 Paxton v. Spencer, 503 S.W.2d 637, 642–43 (Tex. Civ.

App.—Corpus Christi 1973, no writ).

            Sessions contends that the Hospital is bound by his interpretation because the Hospital

knew his interpretation of the scope of “collections” and then allowed him to perform part of the

contract before asserting a different meaning of the term. Sessions based this premise upon the

Restatement (Second) of Contracts:

            (2)     Where the parties have attached different meanings to a promise or
            agreement or a term thereof, it is interpreted in accordance with the meaning
            attached by one of them if at the time the agreement was made
                    (a)     that party did not know of any different meaning attached by the
            other, and the other knew the meaning attached by the first party; or
                    (b)     that party had no reason to know of any different meaning attached
            by the other, and the other had reason to know the meaning attached by the first
            party.

RESTATEMENT (SECOND) OF CONTRACTS § 201 (1981). In support of this premise, Sessions cites,

among others, United States v. Stuart, 489 U.S. 353, 377 n.7 (1989); McBride v. Ponder, 242
S.W.2d 253, 256 (Tex. Civ. App.—San Antonio 1951, writ ref’d n.r.e.); Dublin Elec. & Gas Co.

v. Thompson, 166 S.W. 113 (Tex. Civ. App.—Fort Worth 1914, no writ); accord Centron DPL

Co. v. Tilden Fin. Corp., 965 F.2d 673, 675 (8th Cir. 1992) (“It is well settled, however, that

where only one party knows or has reason to know of the different meaning attached by the

other, that party is bound by the other party’s meaning.”). When the contract applies the phrase

“regardless of where or to whom such services are provided” within the definition of

“collections,” it provides for the lack of physical boundaries. Sessions’ argument fails, and the

cases he cites are distinguishable because, here, at the time the agreement was made, Sessions

4
    We note that Sessions failed to plead fraud or mistake.
                                                              9
knew or should have known of the Hospital’s “different” interpretation of the term “collections”

as it was plainly spelled out in the contract he signed. See Amouri, 20 S.W.3d at 169; see

RESTATEMENT (SECOND) OF CONTRACTS § 201(2)(a), (b).

       As the term is defined in the contract, “collections” is unambiguous.         If a written

contract’s terms are unambiguous, then parol evidence is inadmissible to vary, add to, or

contradict its terms, especially when the contract contains a merger clause.          Stauffer v.

Henderson, 801 S.W.2d 858, 863 (Tex. 1990). Accordingly, Sessions’ prior oral statements or

understandings of the contract terms are not competent evidence to vary the plain terms of the

contract.

               2.      Is the Trial Court’s Interpretation of “Collections” Correct in Light
                       of the Whole Document?

       Sessions argues that when the term “collections” is harmonized “under a whole-

document view, the [a]greement requires [his] interpretation” that the scope of “collections” was

limited to the Hospital’s service area.

       In interpreting a contract, courts must examine the entire agreement and give effect to

each provision so that none is rendered meaningless.       Tawes, 340 S.W.3d at 425.       When

performing this review, no single provision will be given controlling effect; instead, all of the

provisions must be considered in light of the whole agreement. Id.

       In support of his argument, Sessions points out that the Hospital’s “service area” is a

phrase that is referenced throughout the agreement, specifically in the recitals and physician’s

obligations as well as in the provisions relating to relocation expenses, malpractice insurance,

marketing support, consulting fees, and contract termination. He posits that the repetitive use of
                                               10
the phrase reflects a contract focused on and limited to the service area, but no such global

limitation appears in the agreement or the definition of “collections.”

       He urges that the phrase “regardless of where or to whom such services are provided”

should be considered as addressing only the laws regulating physician practices and federal anti-

kickback laws regulating what a hospital can and cannot do to entice a physician to its facility or

its service area. Limiting that phrase to that application strains credulity, and no such limitation

is found in the contract.

       Sessions also contends that the Hospital’s interpretation of “collections” contradicts

“other stated contract terms, including the Agreement’s payment terms.” Under the payment

terms portion of the agreement, during the first month of the guarantee period, the Hospital is

required to advance a full monthly guarantee amount at the outset, and Sessions maintains that

“[t]his strongly implies that the guaranteed payments were intended to ensure a threshold amount

of “collections” for the Nacogdoches-area practice, which would have little, if any, receipts in its

first month.” Here, due to the reconciliation process outlined in the agreement, the payment

terms do not directly conflict with the clear language in the “collections” definition.

       After examining the definition of “collections” in light of the entire document, we are

unable to determine as a matter of law that Sessions’ urged interpretation is correct. Even

though the phrase “service area” frequently appears in the agreement, no service area limitation

is imposed on the definition of “collections.” The fact that the term “service area” is frequently

found elsewhere in the contract but absent in the portion of the contract defining “collections”

would seem to show an intent to exclude that term from that portion of the contract. A literal

                                                 11
interpretation of “collections” does not conflict with any other provision or render any other

provision meaningless.

                 3.       Does the Parties’ Course of Performance Define “Collections”?

        Sessions also alleges that the parties’ course of conduct or dealing during the term of the

contract shows that the term “collections” was intended to exclude revenue collected by him

from outside the Hospital’s service area. Evidence of trade usage and course of conduct is

admissible to explain, supplement, or qualify a term or an agreement, but it may not be used to

contradict an express term. Carson Energy, Inc. v. Riverway Bank, 100 S.W.3d 591 (Tex.

App.—Texarkana 2003, pet. denied); Transcon. Gas Pipeline Corp. v. Texaco, Inc., 35 S.W.3d
658, 670 (Tex. App.—Houston [1st Dist.] 2000, pet. denied). Here, the term “collections” and

its definition are quite express and very clear; therefore, course of performance may not be used

to contradict them.

        After examining the entire agreement, we determine that the term “collections” and its

definition in the agreement are clear and unambiguous, making it necessary to enforce the term

as it was written. The trial court impliedly ruled that “collections” includes “all monthly fees

and charges . . . from items or services furnished by, or under the direction of, [Sessions], . . .

regardless of where or to whom such services are provided . . . ” and that the term is not limited

to fees and charges for services rendered within the Hospital’s service area. 5 We believe this to

be a correct application of the law to the facts.                In the face of an express and patently

unambiguous term, neither the parties’ subsequent course of conduct nor Sessions’ prior oral

5
 This ruling was required in order for the trial court to grant the Hospital’s motion for summary judgment and award
the damage amounts it awarded.
                                                        12
communications may be used to add to, vary, or contradict the plain terms of the written

agreement. We overrule this point of error.

       B.     Was the Contract Amended from a “Collections” Guarantee to a Net Income
              Guarantee?

       Sessions also argues that the trial court’s summary judgment rulings were in error

because the contract was amended from a “collections” guarantee to a net income guarantee

when Sessions purchased membership and ownership units in the Surgery Center of

Nacogdoches. There is no dispute that Sessions purchased membership and ownership units in

the Surgery Center. The parties disputed what the purchase meant under the contract.

       In pertinent part, the contract reads:

       If during the Guarantee Period (as defined in Exhibit B), Physician subsequently
       (i) contracts with an existing medical practice (“Existing Practice”) for
       management services, office space, or other items or services, or (ii) joins an
       Existing Practice as an independent contractor, employee, partner or member (any
       event in (i) or (ii) shall be a “Change In Status”), then Physician shall cause the
       Existing Practice to execute an amendment to this Agreement to convert it from a
       Collections Guarantee to a Net Income Guarantee and to limit the expenses used
       in calculating Net Income to the actual additional incremental expenses incurred
       by the Existing Practice in providing the services to Physician. Notwithstanding
       the foregoing, if Physician or Existing Practice fails to execute such amendment,
       then Hospital shall have no obligation to make any further Guarantee Payments
       under this Agreement. In addition, from the effective date of Physician’s Change
       In Status, the Guaranteed Monthly Amount shall be the lesser of the salary used in
       calculating the Collection Guarantee Amount or Physician’s actual compensation
       payable by Existing Practice. Further, the Guarantee Amount shall be reduced to
       be the sum of the actual Guaranteed Monthly Amount and the Monthly Expense
       Cap (to be defined in the amendment) for each month of the Guarantee Period.
               b.      The terms and provisions of this Section 9 shall supersede any
       conflicting or inconsistent terms and provisions in the Agreement, including all
       exhibits or other attachments thereto and all documents incorporated therein by
       reference.

                                                13
       Whether the contract is a “collections” guarantee or a net income guarantee is material

because it determines the method by which damages would be calculated in the event of breach.

       In an affidavit incorporated in his motion for summary judgment, Sessions stated that in

September 2008, he purchased two units of ownership in an entity called “The Nacogdoches

Medical Center Surgery Center, d/b/a The Surgery Center of Nacogdoches” for $12,500.00 per

share and that in October 2009, he purchased a third ownership unit in the same entity for an

additional $12,500.00. With the purchase of units in this entity, Sessions “obtained privileges to

operate and perform medical services at the Surgery Center and did in fact perform operations

and other medical services at the Surgery Center during the first 12 months of the Relocation

Agreement . . . .” The Hospital does not dispute these allegations.

       In an affidavit given in opposition to Sessions’ motion for partial summary judgment,

Rhonda Rogers, the Hospital’s Chief Financial Officer, disputes that the contract guarantee

morphed from one based on “collections” to one controlled by net income. She stated that the

Surgery Center is a Texas limited partnership (LP) and is an affiliate of the Hospital “in the sense

that it is controlled by or under common control with the Hospital.” Her affidavit went on to

relate that the Surgery Center does not employ any physicians, and it pays no compensation to

the surgeons who practice there; however, “[depending on the LP’s results of operations, profits

of the LP may be paid to the physician limited partners . . . .”

       Here, there is no dispute that Sessions purchased membership and ownership interests in

the Surgery Center. However, the term “existing practice” is not defined in the contract, and the

summary judgment evidence fails to affirmatively establish whether an ownership interest in the

                                                 14
Surgery Center equates to an “existing practice” under the contract. We find that summary

judgment on this issue was inappropriate because the evidence is insufficient to prove as a matter

of law whether the entity in which Sessions bought membership and ownership interests was,

indeed, an “existing medical practice” as that term is used in the contract. Accordingly, we

overrule this point of error, affirm the trial court’s denial of Sessions’ motion for partial

summary judgment, reverse the trial court’s order granting summary judgment to the Hospital,

and remand the case for further proceedings.

       C.      Did Sessions Dispute the Reconciliation Report in Writing?

       Neither party claims that the contract is unenforceable, the parties concur that the

reconciliation report alleges that Sessions owes the Hospital $267,418.10, and they agree that

Sessions has paid no part of that amount, which was demanded by the Hospital. A primary area

of dispute between the parties regards the issue of whether Sessions did breach the contract and,

if so, when the breach occurred. In challenging the trial court’s summary judgment in favor of

the Hospital, Sessions argues that the summary judgment was in error because there is a fact

issue as to whether Sessions notified the Hospital in writing of any discrepancies in the

reconciliation report.

       In pertinent part, the contract reads:

       Not later than fifteen (15) days following receipt by Physician of the
       Reconciliation Report (the “Review Period”), Physician shall notify Hospital in
       writing of any discrepancies, providing sufficient detail to permit the parties to
       fully evaluate the matters at issue. The absence of written notice of any
       discrepancies by Physician within the Review Period shall be considered an
       acceptance of the Reconciliation Report as written. Notice of discrepancy shall
       not relieve Physician of the obligation to pay any undisputed amount according to
       the terms of Section C-6.
                                                15
        If, at the conclusion of the Post-Guarantee Period, the Total Income exceeds the
        Guarantee Amount, then Physician shall repay Hospital the excess funds up to the
        net Guarantee Payments made by Hospital. Any such repayment of excess funds
        (the “Reconciliation Payment”) shall be made within one hundred eighty (180)
        days following the date that the Reconciliation Report became final except that
        any portion of the Reconciliation Payment related to disputed items shall be due
        within one hundred eighty (180) days following the date that the dispute is
        resolved.

(Emphasis added.)

        The Hospital’s summary judgment evidence fails to affirmatively establish that it

received no written notice of dispute from Sessions. Instead, in its summary judgment proof

regarding this issue, the Hospital relies entirely on the depositions of Sessions and his wife. 6

During his deposition, Sessions testified that he had orally notified the Hospital’s CEO, Stokes,

that he disputed the findings of the reconciliation report, but that he did not remember when he

did so or whether he had given written notice to the Hospital that he disputed the finding. In her

deposition, Sessions’ wife was asked twice about whether Sessions had given the Hospital

written notice of discrepancies in the reconciliation report within fifteen days of receiving it. In

response to the first time the question was posed, she responded, “I don’t know that he did in

writing . . . [b]ut in writing, I’m not -- I just do not remember on that, so . . . .” Only a short

while later during the same deposition, she was asked almost the same question, to which she

responded, “I’m sorry. No, I don’t --” (here, the questioner apparently spoke at the same time

she was responding) “believe he did, no.”

6
 In Sessions’ answers to requests for admissions propounded by the Hospital, Sessions denied that he failed to notify
the Hospital in writing of a dispute.
                                                        16
       The issue of whether a written disputation was sent by Sessions is material, because

under the contract, the existence of a written dispute by him can impact the final date any

repayment of an amount set out in the reconciliation report would be due. The contract itself

prescribed that Sessions was obligated to make repayment within 180 days “following the date

that the Reconciliation Report became final.” The finality of the reconciliation report hinged, to

some degree, on whether Sessions responded with a written disputation of its conclusion,

something he was allowed to do within fifteen days after receipt of the reconciliation report. If

he filed a written disputation, then he was obligated to pay within 180 days “following the date

that the dispute is resolved.” The contract states that if no written notice of discrepancies is

made within the fifteen-day review period, then the reconciliation report is deemed accepted, but

the contract is silent as to whether that acceptance becomes final (thereby triggering the start of

the 180-day period) on the date the reconciliation report was mailed, on the day Sessions

received the report, or on the expiration of the review period. The contract is similarly silent as

to the means by which resolution of any such dispute was to be accomplished or as to any

schedule for achieving that resolution.

       Here, although Sessions testified that he did not remember whether he filed a written

dispute and Sessions’ wife indicated that she did not believe such a written dispute was made,

the Hospital failed to affirmatively establish that no written dispute was ever sent by Sessions or

that it never received one. Therefore, we sustain this point of error, because the Hospital failed

to prove as a matter of law that Sessions breached the agreement and (if he did, indeed, breach

the agreement) when that breach occurred.

                                                17
       For the reasons stated herein, we affirm the trial court’s denial of Sessions’ motion for

partial summary judgment, reverse the trial court’s grant of the Hospital’s motion for summary

judgment, and remand to the trial court for proceedings consistent with this opinion.

                                             Bailey C. Moseley
                                             Justice

Date Submitted:       July 31, 2013
Date Decided:         August 28, 2013

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