Highhouse v. Midwest Orthopedic Institute

• Decision Date: 04 February 2003
• Docket Number: No. 89A01-0202-CV-75.,89A01-0202-CV-75.
• Citation: 782 N.E.2d 1006
• Parties: Michael E. HIGHHOUSE, M.D., Appellant-Plaintiff, v. MIDWEST ORTHOPEDIC INSTITUTE, P.C., Appellee-Defendant.
• Court: Indiana Appellate Court

782 N.E.2d 1006

Michael E. HIGHHOUSE, M.D., Appellant-Plaintiff, v.MIDWEST ORTHOPEDIC INSTITUTE, P.C., Appellee-Defendant.

No. 89A01-0202-CV-75.

Court of Appeals of Indiana.

February 4, 2003.

Jeffrey R. Gaither, T. Joseph Wendt, Leagre Chandler & Millard LLP, Indianapolis, IN, Attorneys for Appellant.

Norris Cunningham, Hall Render Killian Heath & Lyman, P.S.C., Indianapolis, IN, Attorney for Appellee.

OPINION

RILEY, Judge.

STATEMENT OF THE CASE

Appellant-Plaintiff, Michael E. Highhouse, M.D.(Highhouse), appeals the trial court's judgment in favor of Appellee-Defendant, Midwest Orthopedic Institute, P.C.(MOI)¹, and against him on the parties' cross-motions for partial summary judgment.

We reverse and remand.

ISSUES²

Highhouse raises three issues for review, two of which we find dispositive and restate as follows:

1.Whether the trial court erred in holding that the parties' Employment Agreement (Agreement) did not entitle Highhouse to bonus payments subsequent to his voluntary resignation from MOI.

2.Whether MOI's failure to pay Highhouse any bonus after his voluntary resignation from MOI violated Ind.Code § 22-2-5-1.

FACTS AND PROCEDURAL HISTORY

MOI is an Indiana medical professional corporation with its principal place of business in Richmond, Indiana.On May 16, 1996, Highhouse and MOI entered into an Agreement for Highhouse's services as a physician.The Agreement covered an initial period of two years, beginning July 1, 1996, subject to automatic renewal each year thereafter.Among other things, the Agreement provided:

3. Compensation.

(a)Salary.Commencing August 1, 1996, for all services rendered by Employee under this Agreement, Employer shall pay Employee an annual base salary of Two Hundred Fifty Thousand Dollars ($250,000.00) which amount shall be payable monthly on the last day of each month in the amount of Twenty Thousand Eight Hundred Thirty-Three Dollars and Thirty-Three Cents ($20,833.33).

(b)Bonus.Employer shall also pay an annual bonus to Employee based upon Employee's productivity, collection of accounts, office expenses for the offices located in Richmond, Indiana and Connersville, Indiana, and the net income of the offices located in Richmond, Indiana and Connersville, Indiana during each Applicable Year, which for purposes of this Agreement shall be a calendar year from January 1 until December 31.The Applicable Year for 1996 will be a short year commencing July 1, 1996 and the Employee's bonus shall be reduced pro rata.

For purposes of this Agreement, net income shall be defined as the gross receipts (collections) of Employer within such Applicable Year which are attributable to professional services rendered by all physicians of Employer at all locations, reduced by the ordinary and necessary business expenses which are attributable to the operation of all business locations of Employer.Bonuses shall be paid no later than February 28 following the end of the previous calendar year.

(c)Retirement plan.A 401(k) plan as established by Employer with eligibility commencing July 1, 1997.

(d)Health Insurance....

(e)Life insurance....

(Appellant's Appendixpp. 16-18).Although the Agreement stated that the annual bonus was to be paid "no later than February 28 following the end of the previous calendar year"(Appellant's App.p. 17), the parties agree that MOI made "quarterly advanced payments" each March, June, September and December.(Appellant's App.p. 75).

On March 2, 1999, Highhouse notified MOI that he was resigning his employment effective June 30, 1999.MOI paid Highhouse his quarterly advanced bonus payments through May 1999, in accordance with the method proscribed in the Agreement.Highhouse received his final salary payment in July.Highhouse, however, did not receive any further bonus payments after his resignation, even though MOI continued to receive payments on accounts receivable Highhouse generated prior to his departure.

On December 13, 1999, Highhouse filed his Complaint for Damages.Count III of the complaint alleged that after June 30, 1999, MOI continued to receive collections from the professional services Highhouse rendered while employed by MOI, and that MOI breached the Agreement by not making subsequent bonus payments to Highhouse based on those receipts.Count VI alleged that Highhouse's "bonus constitutes a `wage' pursuant to Ind.Code §§ 22-2-4 et. seq." and that "MOI's failure to pay [him] his full bonus for the month of June and its failure to pay him any bonus after June 30, 1999, despite its receipt of payments for professional services [he] rendered while employed with MOI, constitute violations of Ind.Code § 22-2-5-1"(Indiana's Wage Payment Statute).(Appellant's App.p. 13).

On April 18, 2001, Highhouse moved for partial summary judgment on his "claim that the parties' contract obligates [MOI] to pay him compensation for services [he] rendered prior to his employment separation from [MOI] and that his contractual `bonus' constitutes a `wage' under Ind. Code § 22-2-5 et seq. ..."(Appellant's App.p. 30).In support of that motion, Highhouse designated his affidavit, wherein he stated: "MOI never communicated any policy, via contract or otherwise, that I had to be in MOI's employ at the end of each quarter, or the end of the year, in order to receive bonus payments."(Appellant's App.p. 44).

In response, MOI cross-filed for partial summary judgment on the same issue.In its cross-motion, MOI argued that Highhouse's resignation of employment invoked Paragraph 9 of the Agreement, which read:

9.Termination without Cause.Employer may terminate this Agreement at any time and without cause effective upon ninety (90) days advance written notice provided to Employee.In such event, Employee shall continue to render his services, and shall be paid his regular compensation up to the date of termination.

(Appellant's App.p. 21).MOI argued that this provision evidenced the Agreement's clear intent that Highhouse was not entitled to any bonus payments after his date of resignation.Further, MOI argued, even if Paragraph No. 9 did not apply, "there is no specific language authorizing bonus payments after resignation, nor was there any intention by the parties to include such a provision in the Agreement."(Appellant's App.p. 50).To support these assertions, MOI designated affidavits from its Chief Executive Officer and from its accountant.

Highhouse responded with a supplemental affidavit stating that it had been his understanding and intention that "Paragraph 9 of this Agreement only applied if MOI terminated my employment without cause, not if I left voluntarily," and that he"did not believe paragraph No. 9 meant I would not receive bonus payment after a voluntary separation for services I performed while an MOI employee."(Appellant's App.pp. 98-99).

On August 10, 2001, MOI moved for leave to file its Answer and Affirmative Defenses.The trial court heard oral argument on the cross-motions for partial summary judgment on August 31, 2001, at the start of which the trial court granted "the motion for filing with the exception of its being used for purposes of today's hearing."(Tr.p. 3).On November 13, 2001, the trial court entered its summary Order Granting Defendant's Cross-Motion for Partial Summary Judgment with Regard to Count III and a Portion of Count VI (Order), which states:

The Court, having considered the Complaint, Answer, designated evidence, briefs and argument of counsel; now finds that Defendant's Cross-Motion for Partial Summary Judgment should be granted with respect to Count III and that portion of Count VI which addresses the allegations of Count III.The Plaintiff's Motion for Partial Summary Judgment should be denied.

(Appellant's App.p. 7).Highhouse now appeals.Additional facts will be provided as needed.

DISCUSSION AND DECISION

I.Standard of Review

When reviewing an entry of summary judgment, this court applies the same standard as the trial court.Burkett v. American Family Ins. Group,737 N.E.2d 447, 451(Ind.Ct.App.2000).Summary judgment may only be granted when the evidence designated to the trial court demonstrates that no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law.Id. at 451-52;Ind. TrialRule 56(C)."A genuine issue of material fact exists where facts concerning an issue which would dispose of the litigation are in dispute or where the undisputed material facts are capable of supporting conflicting inferences on such an issue."Mendenhall v. City of Indianapolis,717 N.E.2d 1218, 1224(Ind.Ct. App.1999).Once the moving party successfully demonstrates the absence of any dispute regarding the material facts and their inferences, our review is limited to determining whether the trial court correctly applied the law to the undisputed facts.Burkett,737 N.E.2d at 451.We review such pure questions of law de novo.Id.The fact that the parties filed cross-motions for summary judgment does not alter our standard of review; we must consider each motion separately to determine whether the undisputed facts entitle either party to judgment as a matter of law.Lake States Ins. Co. v. Tech Tools, Inc.,743 N.E.2d 314, 318(Ind.Ct.App.2001).If our review of the record discloses an incorrect application of the law to the undisputed facts, then we must reverse the grant of summary judgment.Id. at 317.

An unambiguous contract, i.e. one that does not require extrinsic evidence for interpretation, makes an appropriate subject for summary judgment.Sample v. Kinser Ins. Agency, Inc.700 N.E.2d 802, 804(Ind.Ct.App.1998)."When summary judgment is granted based upon the construction of a contract, the trial court has either determined as a matter of law that the contract is not ambiguous or uncertain, or that the ambiguity can be resolved without the aid of factual determinations."Id.Thus, a contract rendered ambiguous solely...