Court Opinion

ID: 3177433
Source: CourtListenerOpinion
Date Created: 2016-02-16 16:19:25.859474+00
Date Added: 2024-06-11T14:03:56.157372
License: Public Domain

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),                                  Feb 16 2016, 8:01 am

this Memorandum Decision shall not be
regarded as precedent or cited before any
court except for the purpose of establishing
the defense of res judicata, collateral
estoppel, or the law of the case.

ATTORNEY FOR APPELLANT                                   ATTORNEY FOR APPELLEE
Mark A. Lienhoop                                         Sean E. Kenyon
Newby, Lewis, Kaminski & Jones, LLP                      Hoeppner Wagner & Evans, LLP
La Porte, Indiana                                        Valparaiso, Indiana

                                           IN THE
    COURT OF APPEALS OF INDIANA

Mirza Raheem, M.D.,                                      February 16, 2016
Appellant-Plaintiff,                                     Court of Appeals Case No.
                                                         45A04-1508-PL-1080
        v.                                               Appeal from the Lake Superior
                                                         Court
Pinnacle Healthcare, LLC,                                The Honorable John M. Sedia,
Appellee-Defendant                                       Judge
                                                         Trial Court Cause No.
                                                         45D01-1310-PL-90
                                                         reassigned from
                                                         Cause No. 45D01-1309-PL-96

Baker, Judge.

Court of Appeals of Indiana | Memorandum Decision 45A04-1508-PL-1080 | February 16, 2016       Page 1 of 7
[1]   Mirza Raheem appeals the trial court’s order granting summary judgment in

      favor of Pinnacle Healthcare (Pinnacle) on Dr. Raheem’s complaint for breach

      of contract against Pinnacle. Finding that Dr. Raheem has established as a

      matter of law that Pinnacle breached the contract and that there are genuine

      issues of material fact regarding Dr. Raheem’s damages, we reverse and remand

      for trial regarding damages.

                                                     Facts
[2]   Dr. Raheem owned 100% of the shares of stock of Raheem Medical Clinic,

      P.C., which owned and operated a medical practice in Michigan City. The

      practice operated out of a facility owned by St. Francis Health Services and

      leased to Dr. Raheem individually.

[3]   On March 8, 2012, Pinnacle and Dr. Raheem entered into a contract (the

      Contract), pursuant to which Pinnacle agreed to purchase all of the stock of the

      medical practice in exchange for $565,000. The Contract provided that if Dr.

      Raheem’s current landlord did not agree to an assignment of his lease to

      Pinnacle, then Pinnacle would relocate Dr. Raheem and his practice to another

      location in Michigan City. The Contract specified that the closing date would

      be ninety days after March 8, 2012.

[4]   Among other things, the Contract provided that Dr. Raheem was required to

      deliver a number of documents to Pinnacle at or before the closing. Appellant’s

      App. p. 32-35. Among the required documents was an executed employment

      agreement, which provided that following closing, Dr. Raheem would work for

      Court of Appeals of Indiana | Memorandum Decision 45A04-1508-PL-1080 | February 16, 2016   Page 2 of 7
      Pinnacle for five years but that he could terminate his employment after two

      years. The Contract also required that Pinnacle either procure an assignment of

      Dr. Raheem’s lease or relocate his practice to another location in Michigan City

      by the date of closing. Finally, Pinnacle was required to deliver a portion of the

      $565,000, plus a promissory note for the remainder, to Dr. Raheem

      simultaneously with his delivery to Pinnacle of the required documents.

[5]   Pinnacle was unable to procure an assignment of Dr. Raheem’s lease and was

      also unable to secure a new location for the practice in Michigan City.

      Therefore, on June 4, 2012, the parties executed a written amendment to the

      Contract, which provided that the closing date was extended to 180 days after

      March 8, 2012. On September 4, 2012, the parties executed a second written

      amendment to the Contract, providing that the closing date was again extended

      to December 31, 2012.

[6]   In mid-December 2012, Pinnacle’s attorney informed Dr. Raheem that

      Pinnacle would not be ready to close by December 31, 2012. Specifically,

      Pinnacle was not ready to close because “I just don’t think we had everything

      together” and because the new Michigan City space “wasn’t even close to being

      ready.” Appellant’s App. p. 417-18. Pinnacle requested a third extension of the

      closing date. In exchange for a third extension, Dr. Raheem requested a

      modification of the Employment Agreement such that he could terminate his

      employment with Pinnacle after eighteen months rather than two years.

      Pinnacle refused that request, and no third extension was agreed upon. No

      closing occurred on December 31, 2012, though Dr. Raheem made “multiple

      Court of Appeals of Indiana | Memorandum Decision 45A04-1508-PL-1080 | February 16, 2016   Page 3 of 7
      efforts” to track down Pinnacle employees on and before that date. Id. at 573-

      74. He sat in his office for four hours on December 31 trying to find a Pinnacle

      principal to “ask him why we are not closing.” Id. at 574.

[7]   On January 14, 2013, Pinnacle sent Dr. Raheem a letter indicating that because

      the closing date had passed and Dr. Raheem had never delivered his closing

      documents, it was not required to close on the Contract at all. After receiving

      that letter, Dr. Raheem entered into an agreement to sell the assets of his

      practice to Franciscan Physician Network for $108,000, and that transaction

      closed on March 31, 2014.

[8]   On July 19, 2013, Dr. Raheem filed a complaint against Pinnacle alleging

      breach of contract and seeking specific performance 1 and/or damages for the

      breach. Pinnacle filed a motion for summary judgment and Dr. Raheem filed a

      cross-motion for partial summary judgment on the issue of breach. Following

      briefing and a hearing, on July 7, 2015, the trial court entered summary

      judgment in Pinnacle’s favor. In relevant part, the trial court found as follows:

              Raheem was required to deliver all documents in connection
              with the Agreement, including the closing documents, and,
              pursuant to Section 7.7, was also required to execute and deliver
              the Employment Agreement. Although it is true that the
              Agreement did not provide that Pinnacle’s requirement to
              purchase the stock was contingent upon the securing of a lease
              assignment, amendment or relocation, Pinnacle was not required

      1
       After Dr. Raheem’s agreement with Franciscan Physician Network closed in March 2014, he voluntarily
      waived his claim for specific performance. That claim is not at issue in this appeal.

      Court of Appeals of Indiana | Memorandum Decision 45A04-1508-PL-1080 | February 16, 2016    Page 4 of 7
               to purchase the stock until Raheem delivered the required
               documents and executed and delivered the Employment
               Agreement. He did not do so. Raheem did not perform the
               conditions that had to be fulfilled before Pinnacle was obligated
               to purchase his stock.

       Id. at 14. Dr. Raheem now appeals.

                                    Discussion and Decision
[9]    Our standard of review on summary judgment is well established:

               We review summary judgment de novo, applying the same
               standard as the trial court: “Drawing all reasonable inferences in
               favor of . . . the non-moving parties, summary judgment is
               appropriate ‘if the designated evidentiary matter shows that there
               is no genuine issue as to any material fact and that the moving
               party is entitled to judgment as a matter of law.’” Williams v.
               Tharp, 914 N.E.2d 756, 761 (Ind. 2009) (quoting T.R. 56(C)). “A
               fact is ‘material’ if its resolution would affect the outcome of the
               case, and an issue is ‘genuine’ if a trier of fact is required to
               resolve the parties’ differing accounts of the truth, or if the
               undisputed material facts support conflicting reasonable
               inferences.” Id. (internal citations omitted).

       Hughley v. State, 15 N.E.3d 1000, 1003 (Ind. 2014).

[10]   With respect to whether there was a breach of the Contract, the essential facts

       are undisputed:

            The parties agreed upon two extensions of time for the closing date,
             leaving a final closing date of December 31, 2012.
            In mid-December, Pinnacle’s attorney told Dr. Raheem that it would be
             unable to close on December 31. Part of the reason it would be unable to

       Court of Appeals of Indiana | Memorandum Decision 45A04-1508-PL-1080 | February 16, 2016   Page 5 of 7
             close on that date was because it had not yet secured the agreed-upon
             new location in Michigan City for the medical practice.
            In exchange for a third extension of time, Dr. Raheem requested an
             amendment of the employment agreement. Specifically, he asked to
             have the right to terminate his employment with Pinnacle after eighteen
             months instead of two years.2
            Pinnacle refused his request to amend the employment agreement, and
             Dr. Raheem refused Pinnacle’s request to a third extension of time.
            The closing date of December 31 came and went, but no closing
             occurred. Dr. Raheem attempted to reach Pinnacle in the days leading
             up to December 31, and for hours on December 31, to no avail.

       The trial court found that Pinnacle was entitled to summary judgment because

       Dr. Raheem failed to comply with conditions precedent, including the delivery

       of documents and the execution of the employment agreement. We disagree.

[11]   The Contract plainly states that, while Dr. Raheem was required to provide a

       number of documents to Pinnacle, he was not required to do so until closing.

       Appellant’s App. p. 32-35. And the Contract also provides, sensibly, that

       Pinnacle was required to provide Dr. Raheem with the agreed-upon

       consideration at the same time he provided Pinnacle with, among other things,

       his shares of stock. Id. at 34-35.

       2
         Pinnacle calls Dr. Raheem’s request a “unilateral demand for a reduction in the term of the Employment
       Agreement,” Appellee’s Br. p. 16 n.3, but contract law does not accommodate “unilateral demands.” Dr.
       Raheem asked, in exchange for an agreement to extend the closing date a third time, that the employment
       agreement also be amended. Pinnacle refused, as it was entitled to do. And Dr. Raheem refused to amend
       the closing date, as he was entitled to do. At the end of these negotiations, the contract remained as agreed
       upon, with a closing date of December 31, 2012, and an unchanged employment agreement. Had the closing
       occurred, and had Dr. Raheem refused to execute the unchanged employment agreement at that time, then
       Dr. Raheem would have been in breach. Instead, Pinnacle refused to participate in the closing at all;
       consequently, it was the breaching party.

       Court of Appeals of Indiana | Memorandum Decision 45A04-1508-PL-1080 | February 16, 2016          Page 6 of 7
[12]   The closing did not happen—because Pinnacle was not prepared to close.

       Among other things, Pinnacle had yet to secure a new location in Michigan

       City for the medical practice, which was an essential contractual obligation on

       Pinnacle’s part. Pinnacle asked for a third extension of the closing date. Dr.

       Raheem did not agree to a third extension; therefore, the closing date of

       December 31, 2012, remained in place. Pinnacle did not make itself available

       to Dr. Raheem on or before December 31—indeed, it did not even return his

       phone calls. Under these circumstances, we cannot fault Dr. Raheem for his

       failure to provide documents to Pinnacle at a closing that simply did not occur.

[13]   We find as a matter of law that by failing to appear at the closing prepared to

       comply with the terms of the Contract, Pinnacle committed a breach of that

       Contract. It was erroneous to enter judgment in Pinnacle’s favor on this issue.

       We reverse with directions to enter summary judgment in Dr. Raheem’s favor

       on the issue of breach.

[14]   With respect to the issue of Dr. Raheem’s damages, it is apparent that there are

       multiple issues of fact that require evaluation by a factfinder. Therefore, we

       remand for a trial on the issue of damages.

[15]   The judgment of the trial court is reversed and remanded with instructions to

       enter summary judgment in Dr. Raheem’s favor on the issue of breach and to

       hold a trial on the issue of damages.

       Bradford, J., and Pyle, J., concur.

       Court of Appeals of Indiana | Memorandum Decision 45A04-1508-PL-1080 | February 16, 2016   Page 7 of 7