Moore v. Omnicare, Inc.
| Decision Date | 22 July 2005 |
| Docket Number | No. 30244.,No. 30245.,30244.,30245. |
| Citation | 141 Idaho 809,118 P.3d 141 |
| Parties | David MOORE and Mednat, Inc., an Idaho corporation and successor in interest to Tandem Health Group, Inc., Petitioners-Appellants, v. OMNICARE, INC., Respondent. OMNICARE, INC., Petitioner-Respondent, v. David Moore and Mednat, Inc., an Idaho corporation and successor in interest to Tandem Health Group, Inc., Respondents-Appellants. |
| Court | Idaho Supreme Court |
Eberle, Berlin, Kading, Turnbow & McKlveen, Chartered, Boise, for appellants. Gary I. Grenley argued.
Moffatt, Thomas, Barrett, Rock & Fields, Chartered, Boise, and Thompson Hine, LLP, Cincinnati, Ohio, for respondent. Deborah S. Brenneman argued.
This is an appeal from a Judgment of the district court vacating in part and confirming in part an arbitration panel's award on claims arising out of an Asset Purchase Agreement and Employment Agreement between David Moore (Moore) and Mednat, Inc. (Mednat) and Omnicare, Inc. (Omnicare). Both parties appealed the Judgment and ask for attorney fees on appeal.
David Moore (Moore) and James Tanzini (Tanzini) were shareholders of a pharmaceutical and health care equipment supply company, Tandem, Inc. (Tandem). In July of 1997 Omnicare, Inc. (Omnicare) wanted to acquire Tandem to expand its own pharmaceutical and health care supply business. Through its wholly owned subsidiary, THG Acquisition Corporation (THG), Omnicare entered into an agreement (the Asset Purchase Agreement) to acquire the assets and goodwill of Tandem, now known as Mednat, Inc. (Mednat), for $1.4 million. Section 2.1 of the Asset Purchase Agreement contained an Earnings Holdback provision whereby the parties agreed:
If and only if the Operating Profit Margin Percent (as defined below) of the Business being acquired by Purchaser [Omnicare] for the consecutive twelve (12) calendar months commencing October 1, 1997 is equal to or greater than the operating profit of the Seller for the four-month period ended April 30, 1997, Purchaser shall pay to Seller $400,000 (the `Earnings Holdback') or such lesser amount as is determined in accordance with Sections 2.2 and 7.4 hereof . . .
Omnicare also agreed to hire Moore as Mednat's Chief Operating Officer (COO). In a separate employment agreement (the Employment Agreement) Omnicare agreed to pay Moore a base compensation of $110, 000 per year for five years.
Section 10.8 of the Asset Purchase Agreement stated that the agreement would be "governed by and construed and enforced in accordance with, the laws of the State of Idaho." Section 10.9 set forth the terms and conditions of dispute resolution under the agreement:
(a) Any controversy, dispute or claim arising out of, in connection with, or in relation to the interpretation, performance or breach of this Agreement, including, without limitation, any claim based on contract, tort or statute and any claim pursuant to the provisions of Article 2 or 7 hereof, shall be settled by arbitration. Any arbitration pursuant to this Agreement shall be conducted in at the site in Boise, Idaho designated by the moving party before and in accordance with the then existing Rules for Commercial Arbitration of the American Arbitration Association. . . . In any matters submitted to arbitration hereunder, the arbitrators may not through their award compromise any difference between the positions of Omnicare and Seller. Instead, three days before any arbitration is scheduled to commence, Omnicare and Seller shall each submit to the arbitration panel a proposed award. The arbitrators shall endorse as their final award either the award proposed by Omnicare or the award proposed by Seller. No other award may be made. Fees and expenses of the arbitration shall be paid by the parties against whom the arbitrator rules. . . .
(b) The parties intend that the agreement to arbitrate as set forth in this Section 10.9 shall be valid, enforceable and irrevocable. Each party in any arbitration proceeding commenced hereunder shall bear such party's own costs and expenses (including expert witness and attorneys' fees) of investigating, preparing and pursuing such arbitration claim. The parties to any arbitration shall have the right to discover the relevant books and records of the other side that are not confidential or privileged.
(c) In any dispute as to the determination of the Adjustment Amount or related matters in connection with Sections 2.1 and 2.2 hereof, such arbitrator shall be limited in his or her award to determining that the amount due pursuant to Sections 2.1 and 2.2 hereof, and such arbitrator shall not seek to compromise any difference between such statement, notice or objection as to such amount.
The Employment Agreement was governed by similar provisions. Sections 2.2 through 2.4 outlined the reasons for and methods by which Moore could be terminated. Section 2.2 described "termination for cause." After outlining the various circumstances constituting a for cause discharge, the agreement required Omnicare to provide:
[W]ritten notice from the board of directors of the Company or Omnicare stating the nature of the conduct forming the basis for termination and affording Employee ten (10) days to correct the act or omission described. Unless Employee cures such act or omission to the satisfaction of the Company and Omnicare such Termination for Cause shall be effective immediately upon the expiration of said ten (10) day period. Upon the effectiveness of any Termination for Cause by the Company, payment of all compensation to Employee under this Agreement shall cease immediately (except for any payment of compensation accrued but unpaid through the date of such Termination for Cause).
Section 2.3 described termination "without cause". This section provided that:
The Company shall have the right to terminate this Agreement and Employee's employment without cause upon ten (10) days' written notice to Employee. If the Company terminates this Agreement and Employee's employment without cause pursuant to this Section 2.3, Employee shall receive his Base Compensation, as that term is defined in Section 3.1 of this Agreement, for the remainder of the then current term of this Agreement. Upon such termination, Employee shall not receive any further compensation pursuant to Sections 3.2, 3.3 or 3.4 of this Agreement. In the event of termination without cause, Employee acknowledges that the Company shall have no liability to him whatsoever other than its obligation to pay him his Base Compensation for the remainder of the then current term of this Agreement.
Section 7.9(a) of the Employment Agreement provided that any claims would be settled by arbitration "in accordance with the Commercial Arbitration Rules of the American Arbitration Association as set forth in the Asset Purchase Agreement." The Employment Agreement was to be governed by Idaho contract law.
After three years Mednat's client base began to steadily decline. On June 29, 2000, representatives from Omnicare informed Moore they were closing Mednat and terminating his employment. They did not give Moore written notice. Moore filed a petition with the American Arbitration Association (AAA) alleging improper termination under the terms of his Employment Agreement. Omnicare counterclaimed for indemnification, damages resulting from Medicare payments made on Moore's behalf, and for breach of contract in Moore's alleged failure to use "best efforts" in his duties relating to Mednat.
In October of 2001 Moore amended his claim, adding Mednat as a party and including a new claim for damages under the "Earnings Holdback" provision of the Asset Purchase Agreement. The assigned single arbitrator was replaced by a three-person panel of arbitrators. The panel granted Moore summary judgment on the Employment Agreement issue. The panel awarded Moore $247,500 in damages on this claim.
The arbitrators heard the remaining Earnings Holdback, indemnification, Medicare, and breach of contract claims on October 15, 16 and 17, 2002 in Boise. Both parties submitted their requested claims for relief under a "baseball arbitration" format as stated in § 10.9(a) of the Asset Purchase Agreement, that is, the arbitrators were to accept one proposal or the other. In addition to their damage request, Moore and Mednat submitted a request for costs and attorney fees on the Employment Agreement and Earnings Holdback claims. Moore also asked that damages under the Employment Agreement claim be trebled pursuant to I.C. § 45-615.
On January 23, 2003, after the close of hearing and filing of post-hearing briefs, the panel made a second Interim Award, awarding Moore prejudgment interest on the $247,500 in damages under the Employment Agreement. They denied Moore's request for attorney fees and treble damages on the basis that such an award was outside the scope of their authority. They awarded Mednat $400,000 in damages on the Earnings Holdback claim. The arbitrators acknowledged that the proposed award included a request for prejudgment interest, costs and attorney fees. They ordered Mednat to provide a calculation of prejudgment interest and an affidavit of fees and costs. Omnicare objected.
On April 3, 2003, the panel made its Final Award. The panel denied Omnicare's request for a further hearing on Moore and Mednat's Statement of Attorney's Fees and Costs. The panel awarded prejudgment interest in the amount of $205, 282, costs of $26,688 and attorney fees of $130,000 in connection with the Earnings Holdback claim. Additionally, the panel confirmed its January 23, 2003 Interim Award of prejudgment interest to Moore on the Employment Agreement claim. The panel once again denied Moore's request for treble damages and attorney fees on the Employment Agreement claim.
Omnicare paid the full amount of the Employment Agreement claim...
To continue reading
Request your trial
-
Gannett Fleming, Inc. v. Corman Constr., Inc.
...e.g. , Manhattan Loft, LLC v. Mercury Liquors, Inc. , 173 Cal.App.4th 1040, 93 Cal. Rptr. 3d 457, 465 (2009) ; Moore v. Omnicare, Inc. , 141 Idaho 809, 118 P.3d 141, 153 (2005) ; Kent Cty. Deputy Sheriff's Ass'n v. Kent Cty. Sheriff , 463 Mich. 353, 616 N.W.2d 677, 683 (2000).10 We also fin......
-
T3 Enters., Inc. v. Safeguard Bus. Sys., Inc.
...employs virtually the same standard of review as that of the district court when ruling on the petition." Moore v. Omnicare, Inc. , 141 Idaho 809, 814, 118 P.3d 141, 146 (2005). "Judicial review of arbitrators’ decisions is ‘limited to an examination of the award to discern if any of the gr......
-
Huber v. Lightforce United States, Inc.
...was not severance because it was entirely separate from services rendered during employment. Id. at 522, 96 P.3d at 623. Similarly, in Moore v. Omnicare, this Court held that compensation promised in an employment agreement is not wages where it is not in consideration for any services actu......
-
Huber v. Lightforce United States, Inc.
...was not severance because it was entirely separate from services rendered during employment. Id. at 522, 96 P.3d at 623. Similarly, in Moore v. Omnicare, this Court held that compensation promised in an employment agreement is not wages where it is not in consideration for any services actu......
-
Chapter 3
...court held that the legislature had not exempted government entities from coverage.[348] . Idaho Code § 7-901.[349] . Moore v. Omnicare, 141 Idaho 809, 118 P.3d 141 (2005).[350] . 9 U.S.C. §§ 1 et seq.[351] . Idaho Code § 7-902.[352] . Idaho Code § 7-903.[353] . Idaho Code § 7-904.[354] . I......
-
When do statutes of limitations apply in arbitration?
...the bringing of an action under any of our statutes of limitation." In a concurring opinion, an Idaho court in Moore v. Omnicare, Inc., 118 P.3d 141 (Idaho 2005), stated that "[t]he arbitration panel was neither a court nor a judge, and the arbitration proceedings were not a civil action. A......