Ex parte MedPartners, Inc.
| Decision Date | 02 November 2001 |
| Citation | 820 So.2d 815 |
| Parties | Ex parte MedPARTNERS, INC., and MedPartners Acquisition Corporation. (Re HealthSouth Corporation v. MedPartners, Inc.) |
| Court | Alabama Supreme Court |
Thomas W. Christian, Richard E. Smith, and Rhonda Pitts Chambers of Rives & Peterson, P.C., Birmingham (rehearing brief filed by Thomas W. Christian, Richard E. Smith, and Deborah Alley Smith of Christian & Small, L.L.P., Birmingham), for petitioners.
Charles A. McCallum III and Jonathan H. Waller of Campbell, Waller & McCallum, L.L.C., Birmingham, for respondent HealthSouth Corporation.
J. Russell Gibson III and Laura C. Karns of Phelps, Jenkins, Gibson & Fowler, L.L.P., Tuscaloosa, for respondents Dr. H. Leslie Fowler and Fowler Sports Medicine.
On Application for Rehearing
The opinion of June 29, 2001, is withdrawn, and the following is substituted therefor.
The petitioners, MedPartners, Inc., and MedPartners Acquisition Corporation (together hereinafter referred to as "Med-Partners"), are defendants and third-party plaintiffs in an action below. They petition this Court for a writ of mandamus directing the Jefferson Circuit Court to vacate its order severing the third-party complaint MedPartners filed against Dr. H. Leslie Fowler and Fowler Sports Medicine and Orthopaedics, P.C. (hereinafter "Fowler Sports Medicine"), and transferring that third-party action from Jefferson County to Tuscaloosa County. MedPartners' third-party action seeks to indemnify Med-Partners for damage HealthSouth claims it suffered by MedPartners' failure to lease space in a building Falcon Management Company was going to build. MedPartners claims that its failure to lease the space was the result of actions by Dr. Fowler and Fowler Sports Medicine.
Mandamus is a drastic and extraordinary writ to be issued only where "(1) there is a clear legal right in the petitioner to the order sought; (2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; (3) the lack of another adequate remedy; and (4) properly invoked jurisdiction of the court." Ex parte Integon Corp., 672 So.2d 497, 499 (Ala.1995). When this Court considers a petition for a writ of mandamus relating to a venue ruling, this Court's "scope of review is to determine if the trial court abused its discretion, i.e., whether it exercised its discretion in an arbitrary and capricious manner." Id. Additionally, Ex parte Alabama Great Southern R.R., 788 So.2d 886, 888 (Ala. 2000).
MedPartners, Inc., is a Delaware corporation with its principal place of business in Jefferson County. MedPartners, Inc., merged with MedPartners of Alabama, Inc., to form MedPartners Acquisition Corporation. MedPartners Acquisition Corporation is also a Delaware corporation whose principal place of business is in Jefferson County. MedPartners, Inc., was engaged in the business of managing medical clinics and providing management services to physicians and physician-practice groups.
Fowler Sports Medicine is an Alabama professional corporation that operates a medical facility in Tuscaloosa. From May 27, 1994, to April 28, 1998, the "operational affairs" of Fowler Sports Medicine were conducted in Jefferson County, pursuant to a contract with MedPartners. Dr. Fowler is a physician licensed to practice medicine in Alabama. At times material to the complaint in this case, Dr. Fowler resided in both Tuscaloosa County and Jefferson County, splitting his time between a residence owned by him and one owned by his wife.
HealthSouth Corporation's corporate headquarters and principal place of business are in Jefferson County. HealthSouth provides outpatient-surgery services and injury-rehabilitation services.
On May 27, 1994, MedPartners, Fowler Sports Medicine, and Dr. Fowler entered into a series of agreements, including an "Agreement to Purchase Assets" (hereinafter "the Purchase Agreement") and a "Clinic Service Agreement" (hereinafter "the CSA"). The Purchase Agreement provided that MedPartners would purchase the physical facilities and the accounts receivable of Fowler Sports Medicine. MedPartners paid Fowler Sports Medicine $254,550 for the then existing accounts receivable and $396,869 for the furnishings, equipment, and inventory of Fowler Sports Medicine. MedPartners also assumed certain liabilities of Fowler Sports Medicine. Pursuant to the CSA, MedPartners would provide practice-management services, facilities, personnel, equipment, and supplies and perform the billing and collection work from its principal place of business in Jefferson County. In return, Dr. Fowler and Fowler Sports Medicine were to provide medical services to patients for a fee. Shortly after the Purchase Agreement and the CSA were executed, HealthSouth, MedPartners, and MCF, Inc.,1 entered into a "Development and Consulting Agreement."
During the course of negotiating the agreements between MedPartners, Dr. Fowler, and Fowler Sports Medicine and after those agreements were executed, there were discussions among Dr. Fowler, HealthSouth, MedPartners, and Falcon Management Company, a construction company, regarding the development of a medical-office building that Falcon Management Company would build. The parties contemplated that HealthSouth would lease a part of the building for rehabilitation services and that MedPartners would lease a part of the building to be used by Fowler Sports Medicine as clinic facilities. HealthSouth alleges that in an effort to further these negotiations, it took certain actions it now claims caused it to suffer economic loss. In the action in the trial court it claims damages from MedPartners based on an alleged breach of contract and indemnity as a third-party beneficiary.
Pursuant to the CSA, MedPartners, Dr. Fowler, and Fowler Sports Medicine agreed that all revenues collected from the operations of Fowler Sports Medicine would be deposited into a bank account at AmSouth Bank, N.A., in Jefferson County, in the name of MedPartners. Fowler Sports Medicine was to receive from these deposits an amount equal to 78% of the net revenues. In exchange, Fowler Sports Medicine irrevocably assigned to MedPartners its rights to receive payment for medical services relating to "pre-termination accounts receivable." Fowler Sports Medicine was to endorse to the order of MedPartners any payments received for such services.
MedPartners alleges that from approximately January 1, 1998, until March 12, 1998, Dr. Fowler and/or Fowler Sports Medicine, acting either independently or in concert, misappropriated an unknown amount of money by converting funds directed to the MedPartners account at AmSouth Bank's branch office located a 720 39th Street North, Birmingham. Those funds were to be deposited to MedPartners' account pursuant to the CSA agreement. Instead, MedPartners says, Dr. Fowler and/or Fowler Sports Medicine converted the accounts receivable to their own use by intentionally failing to enter charges into the computerized billing service of MedPartners, thereby allowing Fowler Sports Medicine and/or Dr. Fowler to collect revenues of Fowler Sports Medicine.
On March 10, 1998, MedPartners wrote Fowler Sports Medicine and Dr. Fowler, demanding that they repay the funds MedPartners says were misappropriated. Neither Fowler Sports Medicine nor Dr. Fowler made any effort to repay. As a result, MedPartners terminated the CSA on April 28, 1998. Since the CSA was terminated, Fowler Sports Medicine has allegedly retained assets identified in the Purchase Agreement as being purchased by MedPartners and converted those assets to its own use by failing to exercise an option in that Agreement that allowed it to repurchase those assets.
On January 6, 1999, HealthSouth sued MedPartners in the Jefferson Circuit Court. HealthSouth's complaint alleges that MedPartners failed or refused to enter into an agreement pursuant to which it would lease space in the medical-office building; it further alleges that because of MedPartners' failure to lease, the building was never constructed.
On June 4, 1999, MedPartners filed a third-party complaint against Dr. Fowler and Fowler Sports Medicine, alleging that its failure to enter into the lease agreement with HealthSouth was the result of what it says were improper acts committed by Fowler Sports Medicine and Dr. Fowler. MedPartners argues that the termination of the CSA with Dr. Fowler and Fowler Sports Medicine was proper, and it seeks indemnity in favor of MedPartners against Fowler Sports Medicine and Dr. Fowler from any claim by...
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