                                                                Feb 04 2015, 9:54 am




ATTORNEY FOR APPELLANT                                     ATTORNEYS FOR APPELLEE
Randall J. Nye                                             Michael D. Sears
O’Neill McFadden & Willett LLP                             Jacquelyn S. Pillar King
Schererville, Indiana                                      Crist, Sears & Zic, LLP
                                                           Munster, Indiana

                                                           Heather Fesko Delgado
                                                           Barnes & Thornburg LLP
                                                           Chicago, Illinois



                                            IN THE
    COURT OF APPEALS OF INDIANA

Community Anesthesia & Pain                                February 4, 2015
Treatment, L.L.C.,                                         Court of Appeals Case No.
                                                           45A03-1401-PL-44
Appellant,
                                                           Appeal from the Lake Superior Court
        v.
                                                           The Honorable Diane Kavadias
                                                           Schneider, Judge
St. Mary Medical Center, Inc.,
Appellee.                                                  Cause No. 45D11-1001-PL-4




Brown, Judge.




Court of Appeals of Indiana | Opinion 45A03-1401-PL-44| February 4, 2015                Page 1 of 24
[1]   Community Anesthesia & Pain Treatment, LLC, (“CAPT”) appeals the trial

      court’s order entering summary judgment in favor of St. Mary Medical Center,

      Inc., (“SMMC”) with respect to Count I of SMMC’s complaint and Counts II

      and III of CAPT’s counterclaim. CAPT raises three issues which we

      consolidate and restate as whether the trial court erred in entering summary

      judgment in favor of SMMC. We affirm.


                                         Facts and Procedural History

[2]   Prior to August 2006, a group headed by Dr. G1 provided anesthesia services at

      SMMC. Dr. G was losing staff due in part to personal conflicts. On August 15,

      2006, SMMC and CAPT entered into a contract to arrange for hospital-based

      services (the “Agreement”) in which CAPT would provide anesthesiology

      services for patients at SMMC beginning on October 2, 2006, for a period of

      three years. At the request of SMMC, Dr. G became the medical director of the

      CAPT group. SMMC informed CAPT that a critical part of the Agreement

      was that CAPT keep Dr. G.


[3]   Section 6.3 of the Agreement addressed compensation and provided in part that

      SMMC would pay CAPT a monthly income guarantee of $175,000 on the first

      day of each month and that, on or before the fifteenth day of each month,




      1
       Both parties refer to this individual as Dr. G although he is identified in the record as Dr. Jorge Gonzalez.
      (Appellant’s Brief at 4; Appellee’s Brief at 5; Appellant’s Appendix at 241)

      Court of Appeals of Indiana | Opinion 45A03-1401-PL-44| February 4, 2015                           Page 2 of 24
      CAPT would remit to SMMC all of its net anesthesiology collections received

      in the immediately prior month up to $175,000. Section 6.3(b)(3) provided:

              The annual income guarantee for such initial term shall be $2,100,000,
              payable by [SMMC] to [CAPT] as provided in this Section 6.3(b).
              Within forty-five (45) days following the end of each contract quarter
              during each of the three (3) years of the initial term of this Agreement,
              the parties shall complete an accounting reconciliation of [CAPT’s]
              Net Anesthesiology Collections and compare such Net Anesthesiology
              Collections for the most recently ended contract quarter to the
              quarterly guaranteed net collections amount of $525,000 (the
              “Quarterly Income Guarantee Amount”). If [CAPT’s] Net
              Anesthesiology Collections exceed the Quarterly Income Guarantee
              Amount, and if [SMMC] has accrued any shortfall amounts (as
              described in subsections (2), above), then [CAPT] shall pay [SMMC]
              within fifteen (15) calendar days of the completion of such
              reconciliation the aggregate of all such shortfall amounts, up to the
              amount by which [CAPT’s] actual Net Anesthesiology Collections
              exceeds the Quarterly Income Guarantee Amount for such contract
              quarter. The accounting reconciliation for the fourth (4th) quarter of
              each of the three (3) years of the initial term of this Agreement shall
              serve as the annual reconciliation, such that at the conclusion of each
              year of the initial term, a full and complete reconciliation for such year
              shall be achieved as provided in this subsection. Final reconciliation
              shall occur at the end of the three (3) year term.


      Appellant’s Appendix at 155.


[4]   Section 9.15 of the Agreement contained a non-solicitation clause which

      provided in part that SMMC agreed to not directly or indirectly solicit any

      physician who was employed by or under contract with CAPT at any time

      during the eighteen months prior to the date of termination of the Agreement.




      Court of Appeals of Indiana | Opinion 45A03-1401-PL-44| February 4, 2015         Page 3 of 24
      Section 3.12 of the Agreement is titled “Locum Tenens Physicians” 2 and

      provided:

              For the first three (3) months of this Agreement, or at any time upon
              [SMMC’s] request to remove a Physician per Section 8.4 if a mutually
              agreeable and reasonable amount of time is not provided to replace
              such Physician, it may be necessary for [CAPT] to retain one or more
              locum tenens physicians specializing in the practice of Anestbesiology
              [sic] (the “Locum Tenens Physician”) to provide Anesthesiology
              Services. In such a case, [SMMC] shall reimburse [CAPT] for fifty
              percent (50%) of all direct and indirect costs of each and every Locum
              Tenens Physician incurred by [CAPT], upon receipt of a written
              invoice for those costs.


      Id. at 149.


[5]   During the first year of the Agreement between November 16, 2006, and

      September 7, 2007, SMMC paid $1,575,000 to CAPT consisting of nine

      payments of $175,000. CAPT remitted payments to SMMC of $820,763.75.

      During the second year, from October 1, 2007, to September 2, 2008, SMMC

      paid $2,139,504 to CAPT consisting of eleven payments of $175,000 and a

      payment of $214,504, and CAPT paid SMMC $2,505,124. In October 2008,

      SMMC paid $175,000 to CAPT, and CAPT did not remit any net collections to

      SMMC.




      2
       “Locum tenens” is defined generally as “[a] deputy; a substitute; a representative.” BLACK’S LAW
      DICTIONARY 959 (8th ed. 2007).

      Court of Appeals of Indiana | Opinion 45A03-1401-PL-44| February 4, 2015                      Page 4 of 24
[6]   On March 14, 2007, Milton Triana, the CEO / Administrator of SMMC, held a

      meeting with Dr. G and told him that he needed to change the manner in which

      he dealt with staff, and Dr. G admitted he needed to change his demeanor and

      to be nicer to staff. In a letter dated May 18, 2007, Triana informed Dr. Steven

      Gottlieb of CAPT that he was providing notice in accordance with Section 8.4

      of the Agreement that SMMC was requesting the removal of Dr. G from

      services with SMMC due to the fact that SMMC perceived him to be a

      “problematic physician.” Id. at 240. The letter also stated: “We understand

      that a reasonable period of time may be necessary for an appropriate transition

      of services as mutually agreed by the parties.” Id. In a letter dated July 19,

      2007, Triana wrote Dr. Tushar, the chief operating officer of CAPT, and

      informed him that Dr. G had completed an anger management course and that

      Triana reconsidered his initial request and would allow Dr. G to remain

      working at SMMC.


[7]   In an email dated March 25, 2008, Dr. Ramani informed Janice Ryba, an

      administrator for SMMC, that Dr. G resigned his position as an

      anesthesiologist at SMMC and that Dr. G informed CAPT that his last date of

      service would be June 13, 2008. The message also stated: “We have already

      been in contact with several well-qualified anesthesiologists regarding his open

      position and are confident that SMMC surgeons will continue to have excellent

      anesthesia service.” Id. at 168. In a letter dated April 18, 2008, Ryba informed




      Court of Appeals of Indiana | Opinion 45A03-1401-PL-44| February 4, 2015   Page 5 of 24
      Dr. Gottlieb of CAPT that SMMC requested the removal of Dr. G. At some

      point, Dr. G no longer worked for CAPT.3


[8]   On November 21, 2008, CAPT and SMMC entered into a termination

      agreement (the “Termination Agreement”) in which the parties agreed to

      terminate the Agreement with an effective date of December 1, 2008. The

      Termination Agreement provided that CAPT agreed to “release Kandiyur

      Seshadri, M.D. (‘Dr. Seshadri’) from any and all applicable restrictive

      covenants that exist between CAPT and Dr. Seshadri, as well as any provisions

      of the Agreement which otherwise would prohibit [SMMC] from directly or

      indirectly employing or retaining Dr. Seshadri to provide anesthesia services at

      [SMMC] . . . .” Id. at 96-97. The release was conditioned upon SMMC paying

      CAPT $100,000 and compliance by SMMC with obligations under the

      Termination Agreement and certain provisions of the Agreement including

      Section 3.12 dealing with locum tenens, Section 6.3 dealing with compensation,

      and Section 9.15 dealing with non-solicitation. In an email dated December 11,

      2008, Dr. Ramani sent Ryba data for locum tenens reimbursement which

      indicated that SMMC owed CAPT $219,378.47.


[9]   On May 20, 2009, SMMC filed a complaint against CAPT alleging: Count I,

      breach of contract; Count II, conversion; Count III, interference with

      prospective business advantage; Count IV, constructive fraud; Count V, unjust



      3
       In its statement of facts, CAPT asserts that Dr. G’s last day of service was to be June 13, 2008, but does not
      assert the date of his actual last day.

      Court of Appeals of Indiana | Opinion 45A03-1401-PL-44| February 4, 2015                           Page 6 of 24
       enrichment; Count VI, imposition of constructive trust; and Count VII, action

       for an accounting. On July 24, 2009, CAPT filed its answer and counterclaim.

       In its counterclaim, CAPT alleged: Count I, breach of contract based upon

       SMMC’s failure to pay amounts due upon reconciliation of Agreement; Count

       II, breach of contract based upon SMMC’s failure to reimburse locum tenens

       costs; and Count III, breach of contract based upon SMMC’s violation of the

       non-solicitation provision of the Agreement.


[10]   On March 30, 2012, both parties filed motions for summary judgment. CAPT’s

       motion alleged that “summary judgment will reserve for trial only the claims

       between the parties for failure to pay amounts due upon reconciliation of the

       [Agreement] presented by Count I of the Complaint and Count I of the

       Counterclaim.” Id. at 124. On September 6, 2012, the court held a hearing on

       the motions.


[11]   On June 28, 2013, the court entered an order which provided in part:

                                          CONCLUSIONS OF LAW
                                                      *****
               2. The parties’ Motions for Summary Judgment, and, specifically,
                  their respective breach of contract claims, center around three
                  issues: (1) the meaning of the term “final reconciliation”; (2)
                  reimbursement of locum tenens costs to CAPT; and (3) the non-
                  solicitation provision contained in the Agreement.
               3. Indiana law provides that a contract shall be interpreted as a whole
                  in a way that harmonizes all of its provisions and does not render
                  any words, phrases or terms meaningless. T-3 Martinsville, LLC v.
                  U.S. Holding, LLC, 911 N.E.2d 100, 111 (Ind. Ct. App. 2009)
                  (internal citations omitted)[, clarified on reh’g, trans denied].


       Court of Appeals of Indiana | Opinion 45A03-1401-PL-44| February 4, 2015      Page 7 of 24
        4. Applying this standard to Section 6.3 of the Agreement, the Court
           hereby finds that this provision provided for four types of
           reconciliation-monthly, quarterly, annual and final. To accept
           CAPT’s position that the “final reconciliation” is the last annual
           reconciliation would render “final” redundant in light of the
           annual reconciliations and would also render some provisions of
           the Section meaningless. CAPT’s interpretation is inconsistent
           with the Agreement, which provided that “a full and complete
           reconciliation” shall be achieved for each year at the annual
           reconciliation. If, as CAPT contends, there is no carry over in
           reconciliations from year to year, there would also be no reason to
           provide for a final reconciliation, as the annual reconciliation
           provision cited herein ensures that each year is reconciled.
        5. Additionally, while the Court finds that the Agreement is not
           ambiguous, even assuming arguendo that it was, any such
           ambiguity would be construed against CAPT, as the drafter of the
           Agreement. Citizens Financial Services, FSB v. Innsbrook Country
           Club, Inc., 833 N.E.2d 1045, 1058 (Ind. Ct. App. 2005) (internal
           citations omitted)[, reh’g denied].
        6. Therefore, the Court finds that summary judgment should be
           GRANTED as to [SMMC] and DENIED as to CAPT regarding
           Section 6.3 and the reconciliation provisions contained therein.
        7. As for reimbursement of locum tenens costs, there is no dispute that
           [SMMC] requested the removal of a problematic physician, as
           allowed by the Agreement. However, at the time of removal, the
           undisputed evidence demonstrates that the physician’s resignation
           had already been submitted and that CAPT was not providing an
           adequate number of physicians, e.g., four. Section 3.12 provided
           that if a mutually agreeable and reasonable period of time is not
           provided for replacement of the “problematic physician,” CAPT
           may have to retain locum tenens physicians. There is no evidence
           before the Court that the reason CAPT incurred locum tenens costs
           from April to November of 2008 was the result of the removal
           request made by [SMMC].
        8. Therefore, the Court finds that summary judgment should be
           GRANTED as to [SMMC] and DENIED as to CAPT regarding
           Section 3.12 and the reimbursement of locum tenens costs.


Court of Appeals of Indiana | Opinion 45A03-1401-PL-44| February 4, 2015          Page 8 of 24
        9. [SMMC] is only liable under the non-solicitation provision if it had
           violated Sections 6.3 or 3.12 of the Agreement, and this Court
           finds, as a matter of law, it has not, as evidenced by the preceding
           paragraphs.
        10. However, even if there was a genuine issue of material fact as to
            whether [SMMC] breached Section 3.12 and/or Section 6.3 of the
            Agreement, the non-solicitation provision is unenforceable under
            Indiana law, as CAPT does not have a protectable business interest
            in that it has no operations in Indiana and cannot claim an interest
            in the patients of [SMMC]. Duneland Emergency Physician’s Medical
            Group, P.C. v. Brunk, 723 N.E.2d 963, 966 (Ind. Ct. App. 2000)[,
            trans. denied].
        11. Therefore, the Court finds that summary judgment should be
            GRANTED as to [SMMC] and DENIED as to CAPT regarding
            breach of the non-solicitation provision.
        12. While the testimony of the CFO of [SMMC] supported [SMMC’s]
            claims for damages, in light of the various amounts contained in
            the documents submitted by the parties, the Court will withhold
            entering a judgment of damages and will schedule a damages
            hearing to be conducted at a later date relative to the claims of
            [SMMC].
        13. The Court finds that no genuine issue of material fact forecloses
            summary judgment in favor of CAPT as to Counts II through VII
            of [SMMC’s] Complaint, and CAPT has demonstrated its
            entitlement to judgment as a matter of law relative to these Counts.
            Therefore, summary judgment is GRANTED to CAPT as to
            Counts II through VII of [SMMC’s] Complaint.
                                                  Judgment
                 IT IS THEREFORE ORDERED that pursuant to Rule 56 of
                 the Indiana Rules of Trial Procedure, the Motion for Summary
                 Judgment filed by Plaintiff/Counter-Defendant [SMMC] is
                 GRANTED as to Count I of its Complaint and all claims and
                 allegations contained in Defendant/Counter-Plaintiff’s
                 Counterclaim, and that the Motion for Summary Judgment
                 filed by Defendant/Counter-Plaintiff [CAPT] is GRANTED as
                 to Counts II through VII, inclusive, of the Complaint and



Court of Appeals of Indiana | Opinion 45A03-1401-PL-44| February 4, 2015       Page 9 of 24
                         DENIED as to Count I of the Complaint and all claims and
                         allegations contained in the Counterclaim.


       Id. at 16-20. The court scheduled a hearing to determine SMMC’s damages for

       August 19, 2013.


[12]   On August 2, 2013, CAPT filed a motion for certification of interlocutory

       appeal and an objection to determination of damages by the court. On August

       19, 2013, the court held a hearing on CAPT’s motions, denied CAPT’s motion

       for interlocutory appeal, and determined that trial by jury was appropriate for

       the determination of the amount of damages. On January 15, 2014, the parties

       filed an agreed judgment which ordered CAPT to pay $563,616.25 to SMMC

       and provided that the agreed judgment not affect CAPT’s right to appeal the

       court’s June 28, 2013 order or the agreed judgment.4 The court approved the

       agreed judgment.


                                                       Discussion

[13]   The issue is whether the trial court erred in entering summary judgment in

       favor of SMMC with respect to Count I of its complaint and Counts II and III




       4
         The $563,616.25 amount is the difference between the total payments SMMC paid to CAPT, which was
       $3,889,504, and the total amounts CAPT paid SMMC, which was $3,325,887.75. On appeal, CAPT alleges
       in its statement of facts that it “submitted a ‘payments reconciliation’ which indicates that during the entire
       contract period a total of $2,314,504.00 was paid by the Hospital to CAPT, while CAPT paid $2,505,124.00
       to the Hospital.” Appellant’s Brief at 8. CAPT also notes that “[a]s an accommodation to the Hospital,
       CAPT informally agreed, in January 2009, to go above and beyond the terms of its agreement by paying the
       Hospital all receipts for a limited period of time to assist the Hospital in making up its substantial revenues
       shortfall for the year 2007.” Id. at 8 n.3. On appeal, CAPT does not argue that the amount of $563,616.25
       specified in the Termination Agreement is incorrect. Rather, it argues that the trial court misinterpreted the
       Agreement.

       Court of Appeals of Indiana | Opinion 45A03-1401-PL-44| February 4, 2015                          Page 10 of 24
       of CAPT’s counterclaim. Summary judgment is appropriate only where there

       is no genuine issue of material fact and the moving party is entitled to judgment

       as a matter of law. Ind. Trial Rule 56(C); Mangold ex rel. Mangold v. Ind. Dep’t of

       Natural Res., 756 N.E.2d 970, 973 (Ind. 2001). All facts and reasonable

       inferences drawn from those facts are construed in favor of the nonmovant.

       Mangold, 756 N.E.2d at 973.


[14]   The Indiana Supreme Court recently held that summary judgment is a “high

       bar” for the moving party to clear in Indiana and held:

               Summary judgment is a desirable tool to allow the trial court to
               dispose of cases where only legal issues exist. But it is also a “blunt . .
               . instrument,” by which “the non-prevailing party is prevented from
               having his day in court.” We have therefore cautioned that summary
               judgment is not a summary trial, and the Court of Appeals has often
               rightly observed that it is not appropriate merely because the non-
               movant appears unlikely to prevail at trial. In essence, Indiana
               consciously errs on the side of letting marginal cases proceed to trial
               on the merits, rather than risk short-circuiting meritorious claims.
       Hughley v. State, 15 N.E.3d 1000, 1003-1004 (Ind. 2014) (quotations and

       citations omitted).


[15]   Our review of a summary judgment motion is limited to those materials

       designated to the trial court. Mangold, 756 N.E.2d at 973. In reviewing a trial

       court’s ruling on a motion for summary judgment, we may affirm on any

       grounds supported by the Indiana Trial Rule 56 materials. Catt v. Bd. of Commr’s

       of Knox Cnty., 779 N.E.2d 1, 3 (Ind. 2002). The entry of specific findings and

       conclusions does not alter the nature of a summary judgment which is a

       judgment entered when there are no genuine issues of material fact to be

       Court of Appeals of Indiana | Opinion 45A03-1401-PL-44| February 4, 2015          Page 11 of 24
       resolved. Rice v. Strunk, 670 N.E.2d 1280, 1283 (Ind. 1996). In the summary

       judgment context, we are not bound by the trial court’s specific findings of fact

       and conclusions thereon. Id. They merely aid our review by providing us with

       a statement of reasons for the trial court’s actions. Id. The fact that the parties

       make cross-motions for summary judgment does not alter our standard of

       review. Hartford Acc. & Indem. Co. v. Dana Corp., 690 N.E.2d 285, 291 (Ind. Ct.

       App. 1997), trans. denied. Instead, we must consider each motion separately to

       determine whether the moving party is entitled to judgment as a matter of law.

       Id.


[16]   To the extent that this case requires that we interpret the Agreement or the

       Termination Agreement, “[i]nterpretation of a contract is a pure question of law

       and is reviewed de novo.” Dunn v. Meridian Mut. Ins. Co., 836 N.E.2d 249, 252

       (Ind. 2005). If a contract’s terms are clear and unambiguous, courts must give

       those terms their clear and ordinary meaning. Id. Courts should interpret a

       contract so as to harmonize its provisions, rather than place them in conflict.

       Id. “We will make all attempts to construe the language of a contract so as not

       to render any words, phrases, or terms ineffective or meaningless.” Rogers v.

       Lockard, 767 N.E.2d 982, 992 (Ind. Ct. App. 2002). “A contract will be found

       to be ambiguous only if reasonable persons would differ as to the meaning of its

       terms.” Beam v. Wausau Ins. Co., 765 N.E.2d 524, 528 (Ind. 2002), reh’g denied.

       “Rules of contract construction and extrinsic evidence may be employed in

       giving effect to the parties’ reasonable expectations.” Johnson v. Johnson, 920

       N.E.2d 253, 256 (Ind. 2010). “When a contract’s terms are ambiguous or

       Court of Appeals of Indiana | Opinion 45A03-1401-PL-44| February 4, 2015   Page 12 of 24
       uncertain and its interpretation requires extrinsic evidence, its construction is a

       matter for the factfinder.” Id. “An ambiguous contract will be construed

       against the party who drafted it.” Boswell Grain & Elevator, Inc. v. Kentland

       Elevator & Supply, Inc., 593 N.E.2d 1224, 1227 (Ind. Ct. App. 1992). Whenever

       summary judgment is granted based upon the construction of a written

       contract, the trial court has either determined as a matter of law that the

       contract is not ambiguous or uncertain, or the contract ambiguity, if one exists,

       can be resolved without the aid of a factual determination. Mid State Bank v. 84

       Lumber Co., 629 N.E.2d 909, 914 (Ind. Ct. App. 1994).


[17]   CAPT argues that the trial court erred by (A) granting summary judgment to

       SMMC on Count I of SMMC’s complaint by improperly interpreting Section

       6.3 of the Agreement addressing reconciliation; (B) denying CAPT’s motion for

       summary judgment with respect to Count II of its counterclaim dealing with

       SMMC’s failure to reimburse locum tenens costs; and (C) denying CAPT’s

       motion for summary judgment with respect to Count III of its counterclaim

       which alleged that SMMC breached the non-solicitation provision of the

       Agreement.


       A. Reconciliation


[18]   CAPT argues that the trial court misinterpreted Section 6.3 by concluding that

       shortfalls carry over from year to year. CAPT points to the following portion of

       Section 6.3(b)(3):




       Court of Appeals of Indiana | Opinion 45A03-1401-PL-44| February 4, 2015   Page 13 of 24
        The accounting reconciliation for the fourth (4th) quarter of each of
        the three (3) years of the initial term of this Agreement shall serve as
        the annual reconciliation, such that at the conclusion of each year of
        the initial term, a full and complete reconciliation for such year shall
        be achieved as provided in this subsection. Final reconciliation shall
        occur at the end of the three (3) year term.


Appellant’s Appendix at 155. CAPT asserts that the foregoing language in

Section 6.3(b)(3) demonstrates that “the parties intended that each contract year

stand on its own, such that the reconciliation at the end of each year was the

final reconciliation for that year, with any shortfall not carrying over from year

to year.” Appellant’s Brief at 17. CAPT argues that the trial court’s decision

completely disregards and renders meaningless the explicit agreement that the

reconciliation for the fourth quarter of each year shall serve as the annual

reconciliation. It argues that “[i]f shortfalls are intended to carry over from year

to year, it makes no sense to say that an annual reconciliation is ‘full and

complete.’” Id. at 19. CAPT asserts that the trial court was mistaken in

believing that, if there is no carry over in reconciliations from year to year, there

would be no reason to provide for a “final reconciliation” and overlooked the

fact that there is almost always a time lag between the date anesthesia services

are rendered and the date payment is finally received from an insurance carrier,

Medicare, Medicaid, or an individual patient. Id. It asserts that “[t]he purpose

of the reference to a ‘final reconciliation’ at the end of the three year term was

to clearly confirm that there was no expectation that there could be yet another

reconciliation for the money which would continue to come in from accounts

receivable after the end of the three year term.” Id. at 19-20.

Court of Appeals of Indiana | Opinion 45A03-1401-PL-44| February 4, 2015           Page 14 of 24
[19]   SMMC argues that the Agreement unambiguously provides for four types of

       reconciliations: monthly, quarterly, annual, and a final reconciliation. SMMC

       argues that CAPT’s position “that ‘final’ essentially means ‘for the last year’

       must be rejected outright, as it would render the term ‘final’ meaningless.”

       Appellee’s Brief at 14. In other words, SMMC contends that the “final

       reconciliation” would be the same as the last annual reconciliation under

       CAPT’s interpretation. Id. SMMC asserts that CAPT’s actual cash collections

       exceed the amounts it repaid by at least $563,000 and that if CAPT is not

       required to repay the amount of the overage, CAPT’s payment for

       anesthesiology services will be $563,000 more than its actual collections

       because it was prepaid that money and did not have to pay it back. SMMC

       argues that the parties’ conduct is consistent with the trial court’s and SMMC’s

       interpretation of “final reconciliation.” Id. at 16. SMMC asserts that CAPT

       asks this court to interpret the contract to read out the term “final

       reconciliation” so that CAPT does not have to repay amounts that accrued in

       shortages in year one based on surpluses in years two or three. Id. at 19.


[20]   Paragraph 6.3 of the Agreement is titled “Compensation” and provides:

                    (a) Compensation for Anesthesiology Services. [CAPT’s] actual
                        cash collections for the Anesthesiology Services provided by
                        [CAPT] and the Physicians hereunder net of any refunds
                        (“Collections”), shall (subject to the guarantee and
                        reconciliation provisions in Section 6.3(b) below), constitute the
                        full and complete payment for all Anesthesiology Services.


                    (b) Guarantee and Reconciliation.


       Court of Appeals of Indiana | Opinion 45A03-1401-PL-44| February 4, 2015         Page 15 of 24
                      (1) It is the intention of the parties that [CAPT] generate
                          sufficient revenues from the Anesthesiology Services so
                          as not to require any income subsidization by [SMMC];
                          however, due to many factors beyond the control of both
                          [SMMC] and [CAPT] (such as the level of coverage
                          required pursuant to this Agreement, the level of
                          uninsured and underinsured patients presenting at
                          [SMMC] whom both [SMMC] and [CAPT] must treat
                          pursuant to this Agreement, and the necessity of
                          complying with controlling provisions of federal law and
                          regulations requiring that certain medical and hospital
                          treatment be provided without regard to a patient’s
                          ability to pay, among others), the parties understand that
                          the Anesthesiology Services provided by [CAPT]
                          pursuant to this Agreement may not from time to time
                          generate sufficient revenue to cover the provision of such
                          Anesthesiology Services as mandated by this
                          Agreement.


                      (2) Consequently, on the Commencement Date and on the
                          first day of each month during the first three (3) years
                          following the Commencement Date, [SMMC] shall pay
                          [CAPT] the sum of $175,000.00 (the “Monthly Income
                          Guarantee Amount”) as payment for the Anesthesiology
                          Services provided hereunder (subject to adjustment as
                          provided in the remainder of this Section 6.3(b)). On or
                          before the fifteenth (15th) day of each month during the
                          first three (3) years following the Commencement Date,
                          [CAPT] shall remit to [SMMC] all of its Net
                          Anesthesiology Collections (defined below) received in
                          the immediately prior month, up to (but not exceeding)
                          the Monthly Income Guarantee Amount. For purposes
                          of this Section 6.3(b), Net Anesthesiology Collections
                          shall mean Collections less any amounts due or paid by
                          [CAPT] to its billing company, up to a maximum of ten
                          percent (10%) of Collections, but shall not include (i)
                          any Monthly Income Guarantee or any other payments
                          due or paid by [SMMC] to [CAPT], or (ii) any

Court of Appeals of Indiana | Opinion 45A03-1401-PL-44| February 4, 2015         Page 16 of 24
                          collections due or received by [CAPT] for the
                          professional component of pain management services
                          rendered by Physicians. Any shortfall between
                          [CAPT’s] Net Anesthesiology Collections and the
                          Monthly Income Guarantee Amount paid by [SMMC]
                          shall be repaid to [SMMC] by [CAPT] (if at all) in
                          accordance with subsections (3), below.


                      (3) The annual income guarantee for such initial term shall
                          be $2,100,000, payable by [SMMC] to [CAPT] as
                          provided in this Section 6.3(b). Within forty-five (45)
                          days following the end of each contract quarter during
                          each of the three (3) years of the initial term of this
                          Agreement, the parties shall complete an accounting
                          reconciliation of [CAPT’s] Net Anesthesiology
                          Collections and compare such Net Anesthesiology
                          Collections for the most recently ended contract quarter
                          to the quarterly guaranteed net collections amount of
                          $525,000 (the “Quarterly Income Guarantee Amount”).
                          If [CAPT’s] Net Anesthesiology Collections exceed the
                          Quarterly Income Guarantee Amount, and if [SMMC]
                          has accrued any shortfall amounts (as described in
                          subsections (2), above), then [CAPT] shall pay [SMMC]
                          within fifteen (15) calendar days of the completion of
                          such reconciliation the aggregate of all such shortfall
                          amounts, up to the amount by which [CAPT’s] actual
                          Net Anesthesiology Collections exceeds the Quarterly
                          Income Guarantee Amount for such contract quarter.
                          The accounting reconciliation for the fourth (4th)
                          quarter of each of the three (3) years of the initial term of
                          this Agreement shall serve as the annual reconciliation,
                          such that at the conclusion of each year of the initial
                          term, a full and complete reconciliation for such year
                          shall be achieved as provided in this subsection. Final
                          reconciliation shall occur at the end of the three (3) year
                          term.




Court of Appeals of Indiana | Opinion 45A03-1401-PL-44| February 4, 2015            Page 17 of 24
                    (c) Audit of Books and Records. Upon reasonable notice,
                        [SMMC] shall have the right to inspect, audit, and make
                        extracts or copies from [CAPT’s] books and records during
                        normal business hours in order to verify the relevant
                        Collections and Net Anesthesiology Collections as described
                        herein. [CAPT] shall maintain such books and records for the
                        period of five (5) years from the termination of this Agreement.


       Appellant’s Appendix at 154-155.


[21]   Section 6.3(b)(3) mentioned both an “annual reconciliation” and a “[f]inal

       reconciliation.” Id. at 155. The trial court construed the Agreement to avoid a

       redundancy. Specifically, the trial court found:

               [T]he Court hereby finds that this provision provided for four types of
               reconciliation-monthly, quarterly, annual and final. To accept
               CAPT’s position that the “final reconciliation” is the last annual
               reconciliation would render “final” redundant in light of the annual
               reconciliations and would also render some provisions of the Section
               meaningless. CAPT’s interpretation is inconsistent with the
               Agreement, which provided that “a full and complete reconciliation”
               shall be achieved for each year at the annual reconciliation. If, as
               CAPT contends, there is no carry over in reconciliations from year to
               year, there would also be no reason to provide for a final
               reconciliation, as the annual reconciliation provision cited herein
               ensures that each year is reconciled.


       Id. at 20. As noted, courts should interpret a contract so as to harmonize its

       provisions, rather than place them in conflict, and we make all attempts to

       construe the language of a contract so as not to render any words, phrases, or

       terms ineffective or meaningless. To the extent that CAPT argues that the

       court’s interpretation rendered meaningless the “full and complete” language



       Court of Appeals of Indiana | Opinion 45A03-1401-PL-44| February 4, 2015       Page 18 of 24
       describing the annual reconciliation, we observe that the statement addressing

       annual reconciliations states:

               The accounting reconciliation for the fourth (4th) quarter of each of
               the three (3) years of the initial term of this Agreement shall serve as
               the annual reconciliation, such that at the conclusion of each year of
               the initial term, a full and complete reconciliation for such year shall be
               achieved as provided in this subsection.


       Id. at 155 (emphasis added). The language “full and complete reconciliation”

       describes the reconciliation for each individual year and does not include prior

       years. This interpretation is favored because it does not render the last sentence

       of Section 6.3(b)(3) mentioning a “[f]inal reconciliation” superfluous. A final

       reconciliation which is not duplicative of the annual reconciliations addresses

       possible shortfalls not already addressed during the three-year term of the

       Agreement. This interpretation is consistent with Section 6.3(b)(2), which

       states in part: “Any shortfall between [CAPT’s] Net Anesthesiology Collections

       and the Monthly Income Guarantee Amount paid by [SMMC] shall be repaid

       to [SMMC] by [CAPT] (if at all) in accordance with subsections (3), below.”

       Id. (emphasis added). The trial court did not err in entering summary judgment

       in favor of SMMC on this issue.


       B. Locum Tenens Physicians


[22]   CAPT argues that, “[b]ecause there is no dispute about the fact that Doctor G

       was a problematic physician, and no dispute about the accuracy of [the

       accounting of locum tenens expenses], CAPT should have been granted

       summary judgment on this issue.” Appellant’s Brief at 21. CAPT argues that
       Court of Appeals of Indiana | Opinion 45A03-1401-PL-44| February 4, 2015          Page 19 of 24
       Dr. G was the cause of staffing, quality, and risk management problems before

       CAPT ever became involved with SMMC, and that the difficulties Dr. G

       caused were the very reason SMMC was looking for a new anesthesia service

       provider in 2006. CAPT asserts that Dr. G.’s last day at the hospital was to be

       June 13, 2008, and the date of his removal came well after the date of his letter

       of resignation, which was April 14, 2008, and that the only requirement for it to

       have a right of reimbursement for locum tenens expenses is a request by SMMC

       for the removal of a physician pursuant to Section 8.4. CAPT seeks

       reimbursements of the locum tenens expenses it incurred as a result of the

       removal of Dr. G.


[23]   SMMC argues that CAPT had to replace Dr. G regardless of SMMC’s belated

       request to remove him because Dr. G had already tendered his letter of

       resignation. SMMC contends that Section 3.12 provides SMMC is responsible

       for fifty percent of the cost of locum tenens physicians “if they occurred ‘upon the

       [SMMC’s] request to remove per Section 8.4’ and ‘if a mutually agreeable and

       reasonable amount of time is not provided’ to replace such a physician.”

       Appellee’s Brief at 21. SMMC argues that CAPT fails to meet either condition

       and that the portions of the record cited by CAPT show only that the costs were

       for one locum physician, not that they were for Dr. G. SMMC contends that

       “providing locum coverage for just Dr. G could not have been a cause of

       additional expenses that SMMC was supposed to bear under the contract, as

       even with such locum coverage, SMMC [sic] was still short-staffed.” Id. at 22.

       SMMC argues that CAPT advised SMMC as to Dr. G’s resignation on March


       Court of Appeals of Indiana | Opinion 45A03-1401-PL-44| February 4, 2015   Page 20 of 24
       25, 2008, and CAPT assured SMMC that it had already been in contact with

       several well-qualified anesthesiologists regarding the position and that it would

       continue to provide satisfactory anesthesia services to SMMC. Without

       citation to the record, SMMC argues that “[a]t no point did CAPT advise

       SMMC that its request for removal was not reasonable or that it did not agree

       with the timeframe or removal for replacement.” Id. SMMC contends that

       “CAPT’s failure to complain about the request to remove Dr. G (after he had

       already resigned) should be construed as an implicit consent or waiver of any

       ability to contest the timeliness of the replacement of Dr. G.” Id. at 23. SMMC

       also contends that CAPT breached the agreement first because it failed to

       adequately staff SMMC and did not provide SMMC with four physicians

       during the majority of the term of the Agreement. In its reply brief, CAPT

       asserts that it always had four physicians available for the practice, and any

       claim that a failure by CAPT to provide adequate staffing was released by the

       Termination Agreement.


[24]   Section 3.12 of the Agreement is titled “Locum Tenens Physicians” and

       provides:

               For the first three (3) months of this Agreement, or at any time upon
               [SMMC’s] request to remove a Physician per Section 8.4 if a mutually
               agreeable and reasonable amount of time is not provided to replace
               such Physician, it may be necessary for [CAPT] to retain one or more
               locum tenens physicians specializing in the practice of Anestbesiology
               [sic] (the “Locum Tenens Physician”) to provide Anesthesiology
               Services. In such a case, [SMMC] shall reimburse [CAPT] for fifty
               percent (50%) of all direct and indirect costs of each and every Locum
               Tenens Physician incurred by [CAPT], upon receipt of a written


       Court of Appeals of Indiana | Opinion 45A03-1401-PL-44| February 4, 2015    Page 21 of 24
               invoice for those costs.


       Appellant’s Appendix at 149.


[25]   Paragraph 8.4 of the Agreement is titled “Termination of an Individual

       Physician” and provides:

               In the event that any Physician commits a material breach of the terms
               of this Agreement, [SMMC] shall provide notice to [CAPT], who shall
               have the right to investigate and remedy any deficiencies within thirty
               (30) days. [CAPT] agrees to remove a problematic physician upon the
               request of the Hospital Administrator. [CAPT] also shall have the
               right to remove a Physician and substitute additional Physician’s [sic]
               as required to meet [SMMC’s] need. Termination of such Physician
               shall constitute a cure of the alleged breach for the purposes of Section
               8.3(b) above.


       Id. at 158.


[26]   The designated evidence reveals that SMMC requested that CAPT remove Dr.

       G. on May 18, 2007, but later withdrew the request on July 19, 2007. In an

       email dated March 25, 2008, Dr. Ramani informed Ryba, an administrator of

       SMMC, that Dr. G resigned his position as an anesthesiologist at SMMC and

       that Dr. G informed CAPT that his last date of service would be June 13, 2008.

       In a letter dated April 14, 2008, Dr. G wrote Dr. Devanathan, the chairperson

       of the Medical Executive Committee at SMMC, and the Executive Committee,

       stating: “Effective April 1, 2008, I am tendering my resignation as Chairman of

       the Department of Anesthesia at [SMMC] for personal reasons.” Id. at 241. In

       a letter dated April 18, 2008, SMMC requested Dr. G’s removal and



       Court of Appeals of Indiana | Opinion 45A03-1401-PL-44| February 4, 2015       Page 22 of 24
       acknowledged that a “reasonable period of time may be necessary for an

       appropriate transition of services as mutually agreed by the parties.” Id. at 242.


[27]   Given that by the time SMMC sent its April 18, 2008 letter Dr. G had already

       informed CAPT that he resigned his position as anesthesiologist at SMMC and

       that his last day of service would be June 13, 2008; that SMMC did not request

       that Dr. G be removed earlier than June 13, 2008; and that SMMC

       acknowledged a reasonable period of time may be necessary for an appropriate

       transition, we conclude that the designated evidence does not demonstrate a

       question of fact as to whether costs were incurred as the result of SMMC’s

       request for removal of Dr. G. Accordingly, we affirm the trial court’s grant of

       SMMC’s motion for summary judgment with respect to Count II of CAPT’s

       counterclaim.


       C. Non-solicitation


[28]   CAPT observes that the Termination Agreement conditioned SMMC’s release

       from the non-solicitation provision of the Agreement on both full compliance

       with its final reconciliation obligations and also payment of all locum tenens

       expenses. CAPT argues that if the trial court erred in its resolution of either the

       reconciliation or locum tenens issue, then it is entitled to summary judgment on

       its claim for liquidated damages under the non-solicitation provision of the

       agreement. Because we conclude that the trial court did not err in entering

       summary judgment in favor of SMMC on the reconciliation issue and locum

       tenens issue, we conclude that the provision in the Termination Agreement in


       Court of Appeals of Indiana | Opinion 45A03-1401-PL-44| February 4, 2015   Page 23 of 24
       which CAPT agreed to release Dr. Seshadri in exchange for SMMC paying

       CAPT $100,000 is enforceable.5 Thus, we cannot say that the trial court erred

       in granting summary judgment to SMMC on this issue.


                                                      Conclusion

[29]   For the foregoing reasons, we affirm the trial court’s order.


[30]   Affirmed.


       Barnes, J., and Bradford, J., concur.




       5
        We note that the trial court’s order found that “[p]ursuant to the Termination Agreement, [SMMC] paid
       CAPT $100,000 to release CAPT’s remaining employed anesthesiologist from the non-solicitation clause
       contained in the initial Agreement.” Appellant’s Appendix at 18. CAPT concedes in its brief that SMMC
       has already paid $100,000 following the execution of the Termination Agreement for the solicitation, hiring,
       or retention of Dr. Seshadri.

       Court of Appeals of Indiana | Opinion 45A03-1401-PL-44| February 4, 2015                        Page 24 of 24
