Hope Int'l Hospice v. Net Health Sys.
| Docket Number | 2:22-cv-00656-DBB |
| Decision Date | 25 August 2023 |
| Parties | HOPE INTERNATIONAL HOSPICE, INC., Plaintiff, v. NET HEALTH SYSTEMS, INC., Defendant. |
| Court | U.S. District Court — District of Utah |
Defendant Net Health Systems, Inc. (“Net Health”) moves to enforce a settlement agreement allegedly entered into with Plaintiff Hope International Hospice, Inc. (“Hope International”) on March 27, 2023.[1]For the following reasons, the court grants this motion and denies Hope International leave to amend its complaint.
Hope International provides hospice services, while Net Health offers software services to post-acute care providers.[2] The parties entered into a Subscription Agreement in 2013.[3]In October 2022, Hope International commenced this suit, alleging contract, tort, and unfair business practice claims.[4] This court dismissed each of Hope International's claims on March 9, 2023, and gave Hope International 60 days to seek leave to amend its complaint.[5] On March 17, counsel for Hope International emailed counsel for Net Health, asking about the possibility of discussing “a mutual walk-away with each party to bear their own costs and fees, in exchange for [Hope International] waiving its right to an amendment or appeal.”[6]Counsel for Hope International asked for Net Health's “thoughts” on such a proposal.[7]Counsel for Net Health replied on March 20, and stated that Net Health “would agree” so long as the dismissal was with prejudice.[8]On March 21, counsel for Hope International sent Net Health the proposed agreement-titled “Settlement Agreement and General Release of All Claims” (“Settlement Agreement”)-motion and order.[9] Counsel for Hope International asked counsel for Net Health to [10]
Under the Settlement Agreement it prepared, Hope International agreed to “release and absolutely and forever discharge NET HEALTH . . . from any and all claims . . . of every kind and nature whether now known or unknown” which it “now has, owns or holds or ever had, owned or held, or could, shall or may ever have” based on the parties' relationship.[11]Hope International also agreed to “waive any and all right to amend its complaint” or appeal the order granting Net Health's motion to dismiss.[12]Hope International also agreed to “file [a] Stipulated Motion to Dismiss with Prejudice” within five days of receipt of an executed Stipulation for Dismissal.[13]On March 27, counsel for Net Health returned the signed document without making any revisions.[14] Hope International never signed the Settlement Agreement nor filed the Stipulated Motion with the court.
Instead on March 30, counsel for Hope International called and then emailed counsel for Net Health regarding the possibility of adding a provision into the Settlement Agreement to ensure access to Hope International's data held by Net Health.[15]Counsel for Net Health replied on April 6 that Net Health had sold a piece of its business to Careficient, Inc. (“Careficient”), who was in possession of Hope International's data, and that Net Health was unable “to make any binding commitments about the availability of [Hope International's] data.”[16]Counsel for Hope International contacted Careficient regarding the data and was informed that data could be accessed through either purchase of an annual subscription or by manually downloading PDF files for each patient.[17]
On May 8, Hope International filed a Motion for Leave to File an Amended Complaint.[18]In response, on May 17, Net Health filed the instant Motion to Enforce Settlement Agreement.[19]On June 9, Hope International filed its Opposition to Net Health's Motion to Enforce.[20] And on June 13, Net Health filed its Reply in Support of its Motion to Enforce.[21]
At the outset, the court observes that it has subject-matter jurisdiction to decide the Motion. “[W]here . . . a party seeks to enforce a settlement agreement after the district court has dismissed the case, the district court lacks jurisdiction over the agreement unless the court either incorporated the agreement's terms into the dismissal order or expressly retained jurisdiction over the agreement.”[22]“If, however, a party seeks to enforce a settlement while the underlying suit remains pending, then the district court has jurisdiction to enforce the related settlement.”[23]The court previously dismissed the Complaint without prejudice and did not terminate the case.[24]As a result, the court has jurisdiction to decide the Motion.
Federal trial courts have “the power to summarily enforce a settlement agreement entered into by the litigants while the litigation is pending before it.”[25]Thus, federal courts treat a motion to enforce a settlement agreement akin to a motion for summary judgment,[26]and will grant the motion if “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”[27]
Under Utah law,[28]“[s]ettlement agreements are governed by the rules applied to general contract actions.”[29]The party alleging the existence of a contract bears the burden of proof.[30] Net Health argues that the parties entered into an enforceable contract notwithstanding the fact that Hope International did not sign the Settlement Agreement.[31]
The “elements essential to contracts” include “offer and acceptance, competent parties, and consideration.”[32]On March 21, Hope International sent Net Health the Settlement Agreement it prepared.[33]In the email accompanying the Settlement Agreement, Hope International asked Net Health to [34]This was a clear and unequivocal offer to settle on the terms presented in the written Settlement Agreement. On March 27, Net Health returned the signed Settlement Agreement without making any revisions.[35]This constituted the acceptance of Hope International's proposed Settlement Agreement. The Settlement Agreement itself details the consideration.[36]Accordingly, the “essential elements” of a contract are all present: an offer by Hope International, an acceptance of that offer by Net Health, the consideration identified in the Settlement Agreement, and competent parties.[37] In its Opposition, Hope International raises three issues: (A) whether the parties had a meeting of the minds sufficient to create an enforceable contract; (B) whether a definite offer was unconditionally accepted; and (C) whether the parties made a mutual mistake as to the ownership of Hope International's data that would render the alleged settlement agreement unenforceable.[38]The court addresses each in turn.
“Under the principles of basic contract law, a contract is not formed unless there is a meeting of the minds” as to the “essential terms” of the contract.[39]Those “terms must be definite and unambiguous.”[40] Hope International does not argue that the terms of the Settlement Agreement are indefinite or ambiguous. Instead, it argues that the parties did not reach a meeting of the minds on the settlement agreement because each party understood the terms of the settlement differently, with Hope International believing it would “retain access to its patient data” and Net Health being at least mistaken as to whether it possessed the data.
As noted earlier, Hope International offered to settle its dispute with Net Health on the terms contained in the Settlement Agreement, and Net Health accepted the Settlement Agreement.[41]The Settlement Agreement does not even contain the word “data,” does not discuss patient data in any way, and certainly does not provide a basis for arguing that Net Health currently possessed patient data or that Hope International would have access to any such data. It is entirely silent on the issue. Instead, the Settlement Agreement clearly and succinctly states that the parties waive any and all claims against each other.[42]The Settlement Agreement also plainly states that it constitutes the “entire understanding between the Parties,” that it “fully supersedes any and all prior agreements,” and that it cannot “be amended or modified in any respect whatsoever except by a writing duly executed by the Parties.”[43]Hope International's “meeting of the minds” argument fails.
Hope International cites to Sackler v Savin[44]in support of its position, yet Sackler is of no help. In Sackler, the parties entered into a partnership agreement for the purpose of operating a condominium unit for vacation rentals.[45]A dispute arose as to whether Savin could occupy the unit for his personal use, and if so, how much Savin owed Sackler for such use.[46]Savin, through counsel, proposed a settlement, under which he would pay the full rental value, minus 10%.[47]Counsel for Sackler responded with a purported acceptance, plus additional terms “regarding the sale of the unit and handling of partnership checks.”[48]The parties continued to exchange communications regarding accounting related to Savin's use of the unit.[49]Eventually, it became clear that the parties were not in agreement on who-as between the partnership and Sackler- would be paid for Savin's use.[50] The Utah Supreme Court held that this precluded the formation of a contract, since “the parties had not come to an agreement on the essential terms of the contract.”[51] The situation here is entirely different. In Sackler, there was an agreement on the amount to be paid, but no agreement on who would be...
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