Daines v. Vincent

• Citation: 2008 UT 51,190 P.3d 1269
• Decision Date: 29 July 2008
• Docket Number: No. 20060838.,20060838.
• Parties: Welden L. DAINES, Plaintiff and Appellant, v. Richard B. VINCENT and ASC Group, L.C., a Utah limited liability company, Defendants and Appellees.
• Court: Utah Supreme Court

190 P.3d 1269

2008 UT 51

Welden L. DAINES, Plaintiff and Appellant, v. Richard B. VINCENT and ASC Group, L.C., a Utah limited liability company, Defendants and Appellees.

No. 20060838.

Supreme Court of Utah.

July 29, 2008.

Nick J. Colessides, John Martinez, Salt Lake City, for plaintiff.

Francis M. Wikstrom, Michael P. Petrogeorge, Salt Lake City, for defendants.

DURHAM, Chief Justice:

INTRODUCTION

¶ 1 This case comes to us on appeal from directed verdicts granted by the trial court. Welden Daines sued the Ambulatory Surgical Centers Group, L.C. (ASC) and Richard Vincent seeking to enforce an alleged oral agreement. After Daines presented his case-in-chief, the trial court granted directed verdicts against him effectively dismissing all of his claims. Central to the appeal before us is an agreement (Release) signed by Daines releasing West Valley Surgical Center (WVSC) or "any of its members," of which ASC is one, from "any and all claims in connection with services provided . . . for the organization, development, and operation of an ambulatory surgical center." We are asked to determine whether this language is facially ambiguous and can reasonably support contrary interpretations. We conclude that it is not and affirm the trial court's holding that the language of the Release is not ambiguous as a matter of law.

¶ 2 Daines also challenges the trial court's directed verdict on his claim of fraud and his claim against Mr. Vincent personally. We affirm each of these directed verdicts. Daines also appeals the trial court's denial of his motion to admit a trial order from the case of Lipscomb v. Vincent (Lipscomb order) as part of his case-in-chief and to challenge Vincent's veracity as a witness. Findings of Fact, Conclusions of Law and Order, Lipscomb v. Vincent, No. 970600134-CV (Utah 3d Dist. Feb. 2, 2001).¹ We affirm the trial court's decision to exclude the Lipscomb order as impermissible character evidence.

¶ 3 Finally, Daines argues that the trial court's directed verdicts denied him his day in court. We disagree. We also find that the trial court's award of costs to ASC and Vincent was appropriate and consistent with rule 54 of the Utah Rules of Civil Procedure.

BACKGROUND

¶ 4 Welden Daines is a retired CPA. During his career and into his retirement, he worked for several physicians as an accountant and medical center manager. In early 2000, one of his clients, Dr. Burrows, indicated that he and several other surgeons were interested in starting a surgical center. A surgical center is generally an outpatient surgical group co-owned by the surgeons involved. Surgical centers provide surgeons with greater control over their working environment and an opportunity to enjoy higher profits from their work than typically experienced in a traditional relationship with a hospital.

¶ 5 ASC, now known as Nueterra Healthcare, is in the business of organizing, developing, and managing surgical centers. Vincent is the co-founder of ASC and was either a member or chairman of the board of ASC during the relevant period.

I. THE MEMORANDUM OF UNDERSTANDING

¶ 6 On September 22, 2000, Daines met with Vincent to discuss the possibility of organizing a new surgical center in West Valley City. Daines met Vincent through Bob Smith, a health care consultant who had worked with ASC. Daines prepared a Memorandum of Understanding (MOU) which he presented to Smith and Vincent. The MOU prepared by Daines indicated that Daines would give ASC a list of physicians from West Valley City in exchange for $150,000 plus expenses. Vincent and Smith signed the MOU on signature lines provided for them by Daines under the heading "ASC."

¶ 7 On September 27, 2000, Daines faxed a list of physicians to Vincent and Smith. That night, Daines arranged a meeting with Vincent, Smith, and several of the physicians on the list, including Dr. McCray and Dr. Burrows, whom Daines referred to as "the leaders." During the meeting, Vincent presented the physicians with an informational brochure detailing ASC's process of organizing, developing, and managing surgical centers. Based on the success of this first meeting, ASC began preparing feasibility studies and term sheets.² ASC presented the first set of term sheets to the doctors on November 21, 2000, proposing the formation of WVSC. Section 13 of the first set of term sheets, titled "Development Fees," included a provision for WVSC to pay Daines $150,000 "for the introduction of ASC to this project." Section 13 indicated that the fee would be paid for by WVSC.

¶ 8 On November 22, 2000, a second set of term sheets was prepared with a change in the Development Fees provision for Daines. According to the November 22 term sheets, "Quantum Ventures, L.L.C., of which Mr. Welden Daines is a principal" was to receive a fee either "in the form of cash or equity in [WVSC]." No separate fee was provided for Daines individually. Like the fee provision for Daines in the November 21 term sheets, WVSC was liable for the "cash or equity" provision for Quantum Ventures in the November 22 term sheets.

II. THE FIRST ORAL AGREEMENT

¶ 9 Thereafter, Daines began actively negotiating with ASC on behalf of the surgeons. At some point after beginning negotiations with ASC, Daines told Dr. Burrows that he was "uncomfortable" because he felt that both ASC and the surgeons expected him to negotiate on their behalf. On December 13, 2000, while still negotiating with ASC on behalf of the surgeons, Daines met with Vincent. During this meeting, Daines claims that he entered into an oral agreement with Vincent to forego his $150,000 compensation under the MOU in exchange for 8 Class II shares of ownership in WVSC.³

¶ 10 The term sheets following the December 13 meeting and oral agreement between Daines and Vincent did not include a provision for payment to Daines or Quantum Ventures. On January 4, 2001, Vincent made a note during a phone call with Daines that "Welden has torn up his prior agreement and is only working for them." During subsequent negotiations of the term sheets, Daines sent an email to Vincent stating "nothing for me."

III. REAL ESTATE DEVELOPMENT AND A SECOND ORAL AGREEMENT

¶ 11 In February 2001, the surgeons and ASC reached an agreement and formed WVSC. After the formation of WVSC, Daines and Smith began working together to develop several real estate properties for the new center. Daines testified that the surgeons asked him to be involved in the real estate development process. However, there is no indication that the surgeons, WVSC, or ASC made any contractual agreements with Daines for his services as a real estate developer. One of the sites Daines and Smith worked on was a site located in West Valley, and controlled by The Boyer Company (Boyer). Boyer had exclusive rights to develop that site (Boyer site). At some point during the development process, and at the request of Dr. Burrows, Boyer entered into an oral agreement with Daines promising him payment in connection with his work on the Boyer site if the site was selected. In September, 2001, the WVSC board selected the Boyer site as the location of the new surgical center. Following the site selection, Daines phoned Vincent on September 25, 2001 to inquire about the eight shares promised in the first oral agreement. Daines testified that Vincent responded by asking, "What eight shares?"

IV. THE RELEASE

¶ 12 On October 8, 2001, Daines sent a letter to Lynn Summerhays of Boyer requesting payment of $50,000, based on their oral agreement, for work done in connection with the development of the Boyer site. Summerhays responded with a letter substantiating the oral agreement, but indicated that the offer "came as a result of a request from Dr. Burrows" and that payment would follow the "rental commencement of the center." Daines responded by sending a fax to Dr. Burrows on October 29, asking for help in obtaining payment from Boyer. On October 30, 2001, Dr. Burrows proposed to the WVSC board that Daines be paid immediately since his work was "pretty well complete." The board determined that ASC would pay Daines $6,000 for his out-of-pocket expenses. Boyer would subsequently reimburse ASC for the $6,000 and pay the balance of the $50,000 to Daines when the lease was executed.

¶ 13 Two days after the board meeting, Daines faxed an invoice to "ASC West Valley Surgical Center" for $6,000, indicating that the balance of his fee for work performed for WVSC would be paid by Boyer once the surgical center was open. On December 10, Dr. McCray sent a letter to Daines with the Release, stating that a check had been made out to Daines for $6,000 and would be released when Daines signed and returned the Release.

¶ 14 The Release states:

We, Welden L. Daines and Robert Smith, do hereby conditionally release West Valley Surgical Center, LLC or any of its members from any and all liabilities and or claims in connection with services provided by us for the due diligence, acquisition of real estate, or any other services rendered to date for West Valley Surgical Center, or on behalf of its members, for the organization, development and operation of an ambulatory surgical center in the West Valley and any services connected with the same. This release encompasses and satisfies any prior agreements and discussions whether written or verbal by the West Valley Surgical Center, LLC or any of its members.

This release shall be conditioned upon the receipt of $50,000 due and payable from the real estate developer of the West Valley City Surgical Center. In addition, by signing below, we agree that any partial amounts paid against the $50,000 liability either by West Valley Surgical Center, LLC or by The Boyer Company, Developer of the Real Estate for the project for amounts owed us shall become unconditionally released by us upon confirmed receipt of said partial payments.

Daines and Smith signed and returned the Release on December 11, 2001. After receiving the...