Georgia Magnetic Imaging, Inc. v. Greene County Hosp. Authority, s. A95A1171

• Decision Date: 05 December 1995
• Docket Number: A95A1172,Nos. A95A1171,s. A95A1171
• Parties: GEORGIA MAGNETIC IMAGING, INC. v. GREENE COUNTY HOSPITAL AUTHORITY. GREENE COUNTY HOSPITAL AUTHORITY v. GEORGIA MAGNETIC IMAGING, INC.
• Court: Georgia Court of Appeals

Page 41

466 S.E.2d 41

219 Ga.App. 502

GEORGIA MAGNETIC IMAGING, INC. v. GREENE COUNTY HOSPITAL AUTHORITY.

GREENE COUNTY HOSPITAL AUTHORITY v. GEORGIA MAGNETIC IMAGING, INC.

Nos. A95A1171, A95A1172.

Court of Appeals of Georgia.

Dec. 5, 1995.

Reconsideration Denied Dec. 19, 1995.

Certiorari Denied April 1, 1996.

Moore & Mangum, Joab O. Mangum III, Milledgeville, for appellant.

David G. Kopp, Greensboro, for appellee.

RUFFIN, Judge.

Georgia Magnetic Imaging, Inc. ("GMI") had three two-year contracts with the Greene County Hospital Authority d/b/a Minnie G. Boswell Hospital ("hospital authority") to provide CT Scan, mammogram and sonogram services to the hospital authority. Sixteen months into the contracts, the hospital authority unilaterally terminated the contracts, and GMI sued to recover sums due for services rendered and lost revenues for the time remaining on the contracts. The hospital authority filed a counterclaim alleging that GMI breached its obligation to provide 24-hour emergency CT Scan services. The trial court denied both parties' motions for summary judgment, and both petitioned this court for interlocutory review. We granted GMI's application to consider whether GMI was obligated to provide 24-hour emergency CT Scan services and whether the hospital authority's chief financial officer was authorized to enter into contracts on the hospital authority's behalf. We denied the hospital authority's application which raised the question of whether the hospital authority suffered financial detriment under the contracts and therefore was justified in terminating them. Both parties now appeal.

Case No. A95A1171

1. GMI contends it was entitled to summary judgment on the hospital authority's counterclaim because it was not obligated under the contract to provide 24-hour emergency CT Scan services.

The contract indicated that GMI was providing nuclear medicine and ultrasound services to area hospitals on a shared basis and that it planned to provide mobile CT Scan services on a shared basis as that arrangement had proved to be a cost-effective method of satisfying the need for such services. With regard to scheduling, the contract provided in pertinent part: "[GMI] will provide CT scanner on mutually agreed time schedule.... If at any time it is determined by HOSPITAL that the delay under any of the above conditions is dangerous to the welfare of the patient, then HOSPITAL is free to make any other arrangements that it desires for scanning an emergency patient." An addendum to the contract also provided that if the hospital "exceeds 50 or more [scans] in three consecutive months, [GMI] will negotiate placing a C.T. scanner in house for full time coverage."

In support of its motion for summary judgment, GMI submitted the affidavit of Richard Smith, its president and chief executive officer, who stated that GMI and the hospital agreed that CT Scans would be performed on Wednesdays; that the hospital never reached the volume of 50 scans per month requiring the parties to negotiate for a full-time in-house scanner as provided in the addendum; that until termination, the hospital never contended that GMI was obligated to furnish CT scans on a 24-hour or emergency basis; that, as a courtesy, GMI did send the mobile unit to the hospital whenever the hospital requested and the unit was available; and that GMI informed the radiologist and other hospital officials that due to the location of the CT Scan units at various times, one was not always available for emergencies. Smith also stated that during the terms of the contracts, the hospital hired a new administrator, Louis Kuntz, who attempted to negotiate new contracts for in-house, daily CT Scan, mammography and sonography services and that when the parties could not agree to new terms, he terminated the contracts.

In opposition to the motion for summary judgment, the hospital authority submitted the affidavit of Dr. William Rhodes, a member of the hospital's board of directors, who stated that in reference to the hospital board meetings in which the proposed contract with GMI was discussed, "it was his impression" that GMI "was to be available at any time for emergency 'CT Scans' at the Hospital, under any agreements under discussion." The hospital authority also argues that the phrase "mutually agreed time schedule" is ambiguous and presumably can be interpreted to mean that GMI was obligated to provide CT Scan services on a 24-hour emergency basis.

"OCGA § 13-2-3 declares that '(t)he cardinal rule of construction is to ascertain the intention of the parties.' 'It is ordinarily the duty of the court to interpret a contract as a matter of law and, where necessary, to construe it by applying the rules of construction set forth in OCGA § 13-2-2. (Cits.) ... Where the language of an instrument may fairly be understood in more than one way, it should be interpreted to reflect the sense in which the parties understood it at the time of execution, and extrinsic evidence is admissible to establish what that original understanding was. (Cit.) That meaning is to be preferred which will give effect to the contract as a whole. OCGA § 13-2-2(4).' [Cit.]" DeKalb County v. Rockdale Pipeline, 189 Ga.App. 121, 123-124(2), 375 S.E.2d 61 (1988). "Words in [a] ... contract must be given their usual, ordinary, and common meaning. OCGA § 13-2-2(2).... 'It is the function of the court to construe the contract as written and not to make a new contract for the parties. (Cit.)' [Cit.]" Bold Corp. v. Nat. Union Fire Ins. Co., etc., 216 Ga.App. 382, 383-384(1), 454 S.E.2d 582 (1995). We are not authorized to "make an unambiguous contract ambiguous by the introduction of parol evidence." Houston v. Jefferson Standard Life Ins. Co., 119 Ga.App. 729, 732, 168 S.E.2d 843 (1969).

We agree with GMI that there is no factual dispute as to whether the contract obligates GMI to provide 24-hour emergency CT Scan service. The clear and unambiguous terms of the contract provided that GMI would supply service on a shared basis with other hospitals; that there would be a schedule for use of the scanner; that the hospital was free to obtain emergency service elsewhere; and that there could be re-negotiation for continuous service if certain volumes were reached. Richard Smith's unrebutted affidavit supports this construction, and it cannot be logically maintained that under the circumstances of this case, "mutually agreed time schedule" can be construed to mean 24-hour emergency service. Furthermore, Dr. Rhodes' affidavit does not demonstrate the presence of a genuine issue of material fact but serves only to make this otherwise unambiguous contract ambiguous. See id. Accordingly, the trial court erred in failing to grant summary judgment to GMI on the question of GMI's obligation to provide CT Scan services.

2. In its answer to GMI's complaint, the hospital authority asserted, as a defense, that the person who signed the contracts on its behalf was without authority to bind the hospital authority and that the contracts were therefore unenforceable. GMI contends it was entitled to summary judgment on this issue because it submitted unrebutted evidence demonstrating that Timothy Thomas, the hospital's chief financial officer, was authorized to sign the contracts on behalf of the hospital authority. GMI also contends that the hospital authority ratified the contracts as a matter of law by accepting its services for 16 months of the 24-month contracts. We agree.

GMI concedes that there is no single document clearly stating that Thomas did or did not have authority to sign the contracts. However, GMI submitted an affidavit from the hospital authority board chairman which showed that the board was aware of Thomas's negotiations with GMI for CT Scans, mammograms, and sonograms for the hospital; that board policy permitted the hospital administrator or her designee to negotiate and execute routine contracts for the hospital; that the contracts at issue would be deemed routine if they mirrored previous agreements; that the board did not...