Boss Urgent Care, PLLC v. Urgent Care Works, LLC
| Decision Date | 17 May 2012 |
| Docket Number | No. 7:11-cv-00071-FL,7:11-cv-00071-FL |
| Court | U.S. District Court — Eastern District of North Carolina |
| Parties | BOSS URGENT CARE, PLLC and ONSLOW URGENT CARE, PLLC, Plaintiffs, v. URGENT CARE WORKS, LLC and THE POSEIDON GROUP, INC., Defendants. |
This matter comes before the court on defendants' motion for judgment on the pleadings, to dismiss the complaint, for enforcement of the settlement agreement, and for attorney's fees and expenses (DE # 22) pursuant to Rules 12(b)(6) and 12(c) of the Federal Rules of Civil Procedure. Plaintiffs have responded (DE # 25), and defendants have replied (DE # 26). In this posture, the matter is ripe for adjudication. For the following reasons, defendants' motion is denied.
On April 7, 2011, plaintiffs, BOSS Urgent Care, PLLC ("BOSS") and Onslow Urgent Care PLLC ("Onslow"), initiated this action in diversity against defendants, Urgent Care Works, LLC ("UCW") and The Poseidon Group, Inc. ("Poseidon"), by filing a complaint alleging five claims for relief, including breach of contract and various statutory claims. Plaintiffs also sought a preliminary injunction. On April 27, 2011, the court conducted a telephonic Rule 16 conference at which counsel for the parties reported that they anticipated the matter would be settled. The court directed the parties to file a stipulation of dismissal by July 6, 2011, and that ifno stipulation of dismissal or other documents memorializing a settlement were filed by July 5, 2011, the parties were to appear for a Rule 16 status conference on July 6, 2011. The parties consented to a stay of the case through July 5, 2011, and counsel were directed to file a proposed consent order by May 4, 2011, memorializing the conference. On May 5, 2011, the parties submitted a proposed consent order, and on May 9, 2011, the court entered the consent order ("May 9 Consent Order") staying all deadlines until July 6, 2011, and providing the parties until July 5, 2011, to consummate the terms of their settlement and tender a consent order of dismissal with prejudice. The order further stated that in the event the parties failed to tender a consent order of dismissal with prejudice on or before July 5, 2011, that counsel for the parties were to appear on July 6, 2011, for a status and pretrial conference.
On July 6, 2011, the court convened a status conference upon notice that no stipulation of dismissal had been filed by the July 5, 2011 deadline. At the conference, the parties recited certain activities which defendants argued had resulted in a settlement of the issues in dispute. The court did not consider the alleged settlement agreement at the hearing, but denied plaintiffs' motion for preliminary injunction, directed defendants to respond to the complaint by July 20, 2011, and set various scheduling deadlines, all of which were memorialized in the court's July 11, 2011 order.
On July 21, 2011, defendants filed a corrected answer to the complaint and a counterclaim to enforce a settlement agreement with plaintiffs and for attorney's fees and expenses, to which plaintiffs filed an answer on August 10, 2011. Defendants subsequently filed the instant motion for judgment on the pleadings, to dismiss the complaint, for enforcement of the settlement agreement, and for attorney's fees and expenses, in which they contend that the parties had reached a settlement agreement that is dispositive of plaintiffs' claims and entitlesthem to a judgment as a matter of law. Plaintiffs responded that the alleged settlement agreement was merely an unenforceable agreement to agree, that, alternatively, defendants breached any purported settlement agreement, and that there is no basis to dismiss their claims or to grant defendants a judgment as a matter of law.
Plaintiffs BOSS and Onslow are limited liability companies formed to operate urgent care clinics in eastern North Carolina,1 and Dr. Howard Brown ("Dr. Brown") is a member-manager of both LLCs. Defendant UCW is a limited liability company that operates a practice and records management system supporting electronic medical records, coding, and billing for urgent care medical practices. UCW's billing services are supported by RealMed Corporation ("RealMed"), which provides online processing of claim and payment transactions. On February 5, 2010, Dr. Brown, on behalf of BOSS, entered into an agreement with UCW for use of its practice management system. However, Onslow, not BOSS, began using the UCW system on April 30, 2010, to manage its patient medical records, and on June 1, 2010, it began using the UCW system to manage its billing records. Plaintiffs alleged in their complaint that from the outset there were errors in the functioning of the UCW system that prevented Onslow from submitting claims, providing accurate patient statements, and locating patient records. Plaintiffs further alleged that Onslow disputed bills it received from UCW based on the alleged system errors and that UCW ultimately terminated Onslow's access to the UCW system and refused to provide medical and billing records stored therein.
After this action was filed, the parties engaged in settlement negotiations and agreed upon what plaintiffs characterize as a "term sheet" or "agreement to agree" and what defendantscharacterize as a "settlement agreement," which the court will hereafter refer to as the "Letter Agreement." The Letter Agreement, dated April 26, 2011, was drafted by Deborah Fletcher, counsel for defendants, and was addressed to Jim White, counsel for plaintiffs. It purported to be in response to a counteroffer of April 18, 2011, and in amendment of defendants' letter of April 19, 2011. The Letter Agreement provided, in pertinent part, as follows: (1) that UCW would create a portal through which Onslow could access and print patient invoices and medical and billing records and also transmit billing information to RealMed; (2) that Onslow would have access to the UCW system for 21 days from the date it established a fully functional link with RealMed, which was necessary in order to process historical claims; (3) that all communications regarding access to and use of the system would be made through counsel; (4) that Onslow would pay UCW 20% of any sums collected from the processing of historical claims up to $65,000.00, which the parties defined as the "Settlement Payments;" (5) that all the terms of the settlement would be effective when reduced to a consent order entered by the court; (6) that within ten days of acceptance of the terms of settlement, Onslow would ship to UCW seven optical scanners previously delivered to Onslow by UCW; (7) that both parties agree to mutual non-disparagement and to sign mutual releases; and (8) that the parties acknowledge that the Settlement Payments would be paid to UCW for the creation of the portal and the full satisfaction of all outstanding obligations and payments under the "UCW Agreement," which the court presumes is the original agreement between BOSS and UCW for use of the UCW system. The Letter Agreement concluded by asking that acceptance of the offer be indicated by plaintiffs' signatures, and Jim White signed the Letter Agreement on behalf of his clients, BOSS and Onslow.
On May 9, 2011, the court entered what has heretofore been referred to as the May 9 Consent Order, which was titled "Consent Order to Stay Action Pending Consummation of Settlement." Defendants contend, and plaintiffs dispute, that the May 9 Consent Order is the same consent order contemplated by paragraph 11 of the Letter Agreement. The parties agree that plaintiffs were provided access to records in the UCW system on May 31, 2011, but disagree as to the level of access provided and whether there was full functionality with RealMed as contemplated by the Letter Agreement. Throughout June, the parties' counsel communicated by email regarding the implementation of various terms set forth in the Letter Agreement, including establishment of plaintiffs' access to the UCW system, retrieval of documents by plaintiffs from the UCW system, plaintiffs' return of scanners to UCW, and the 21-day access period. On June 17, 2011, both the parties and their counsel participated in a conference call regarding issues with RealMed and the 21-day access period, which defendants contended would expire on June 21, 2011. As a result of that conference, defendants provided certain records via e-mail to plaintiffs.
On June 21, 2011, plaintiffs' counsel requested an additional seven days of access to the UCW system, and defendants' counsel responded that UCW would shut down the system "in accordance with the settlement agreement," but would reopen access if plaintiffs provided certain additional consideration, including $1,000 to compensate UCW for access to the system beyond the scope of the Letter Agreement. The following day, defendants' counsel provided two additional alternatives under which plaintiffs could gain further access to the UCW system. On June 26, plaintiffs' counsel responded, but the parties failed to resolve their disagreement, ultimately resulting in the filing of the instant motion.
A. Motion for Judgment on the Pleadings
Under Rule 12(c), a party may move for judgment on the pleadings "[a]fter the pleadings are closed—but early enough not to delay trial[.]" Fed. R. Civ. P. 12(c). "The test applicable for judgment on the pleadings is whether or not, when viewed in the light most favorable to the party against whom the motion is made, genuine issues of material fact remain or whether the case can be decided as a matter of law." Med-Trans Corp. v. Benton, 581 F. Supp. 2d 721, 728 (E.D.N.C. 2008) (quoting Smith v. McDonald, 562 F. Supp. 829, 842 (M.D.N.C. 1983), aff'd, 737 F.2d 427 (4th Cir. 1984), aff'd, 472 U.S. 479 (1985)). "When there are no factual issues, judgment on the pleadings should be granted where the moving party is...
To continue reading
Request your trial