Regional Imaging Consultants Corp. v. Computer Billing Services, Inc., 01-LW-4588
| Decision Date | 30 November 2001 |
| Docket Number | 01-LW-4588,00 CA 79 |
| Citation | 2001 Ohio 3457 |
| Parties | REGIONAL IMAGING CONSULTANTS CORP., ET AL., PLAINTIFFS-APPELLANTS v. COMPUTER BILLING SERVICES, INC., ET AL., DEFENDANTS-APPELLEES CASE |
| Court | Ohio Court of Appeals |
Civil Appeal from the Court of Common Pleas of Mahoning County Ohio Case No. 97 CV 1441
Hon. Cheryl L. Waite, Hon. Joseph J. Vukovich, Hon. Mary DeGenaro
For Plaintiffs-Appellants: Atty. John C. Pfau, Pfau, Pfau & Marando, P.O. Box 9070, Youngstown, Ohio 44513
For Defendants-Appellees: Atty. Charles L. Richards, Atty. Robert C. Maynard, Suite 300, The First Place, 159 E. Market Street, Warren, Ohio 44481-1122
This timely appeal arises from two judgment entries of the Mahoning County Court of Common Pleas which adjudicated Appellants' complaint for breach of contract and defamation. For the following reasons, we must dismiss the appeal of the March 1, 2000, Judgment Entry because that entry is not a final appealable order pursuant to R.C. §2505.02. Appellants' first four assignments of error dealt with the March 1, 2000, Judgment Entry. Based on the record here, however, we overrule Appellant's fifth assignment of error and affirm the February 29, 2000, Judgment Entry.
This case involves disputes which arose after the sale of parts of a diagnostic radiology medical practice in late December of 1990. The practice was owned by a number of corporations and partnerships, all of which were controlled by Dr. Lloyd E. Slusher ("Dr. Slusher") as principal shareholder or controlling partner. Dr. Slusher and his business entities will be referred to collectively as "Appellees." The purchasers were Dr. Albert M. Bleggi ("Dr. Bleggi"); a corporation controlled by him, namely, Radiology Imaging Consultants, Corp. ("RICC"); and Dr. Jon A. Molisky, who is not involved in this action. Dr. Bleggi and RICC will be collectively referred to as "Appellants."
Both Dr. Slusher and Dr. Bleggi are physicians who specialize in the field of diagnostic radiology.
In December of 1990 and early January, 1991, the parties entered into at least nineteen contracts and transactions, which included the partial sale of assets of Dr. Slusher's businesses, assignments of leases, service contracts for reading radiological results and noncompetition agreements.
One of the service contracts gave Appellants the exclusive right to read and interpret all ultrasound procedures performed by Appellee Medical Ultrasound, Inc. ("MUI"). MUI was one of the business entities being partially retained by Dr. Slusher. The ultrasound service agreement was effective between January 1, 1991, and December 31, 2000. Appellants were to receive 20% of any fees collected by MUI for ultrasound interpretative services. Appellees continued to own the imaging equipment, and agreed to maintain the equipment and to pay for the technical personnel needed to operate the equipment.
The ultrasound service agreement contained a covenant in which Appellants agreed:
"not to compete or engage in interpretation or diagnosis of ultrasound for any other agency, entity or person within the term period of this agreement * * * or within forty-five (45) miles from downtown Youngstown and three (3) years from the date that this contract is terminated by election by one of the parties or one of the parties breaches this agreement."
.
Some of the other agreements between the parties also contained noncompetition clauses, although the terms of the noncompetition clauses vary. One such clause appeared in a service agreement between Appellants and Computer Billing Services, Inc. ("CBSI"), a company controlled by Dr. Slusher. The parties agreed that Appellants would have the exclusive right to read computerized tomography ("CT") scans completed by scanning equipment owned by CBSI and performed at Appellants' Boardman and Austintown, Ohio, offices. The clause stated that Appellants, "will not compete at any other location within ten (10) miles or three (3) years from the termination of the contract by breach or election by [Appellants]." (Emphasis added.) One of the disputes that later arises between the parties is whether the word "or" in this covenant renders the covenant ambiguous and unenforceable.
On March 25, 1997, MUI and Dr. Slusher notified Appellants in writing that they were electing to terminate the ultrasound reading agreement and were enforcing the noncompetition covenant. (Dr. Ball Depo., Plaintiff's Exh. 6).
Also on March 25, 1997, MUI sent letters to approximately ten physicians which had previously used MUI's equipment and services. The letters stated: "[d]ue to past and on-going quality concerns, effective April 1, 1997, we will be utilizing Drs. Dean Ball and Adam Crouch for interpretation of ultrasound exams performed in your office." (Aug. 17, 1999 Motion for Summ.J., Dr. Slusher Affidavit 4).
On April 16, 1997, Appellants filed a complaint in Mahoning County Court of Common Pleas alleging breach of contract, promissory estoppel, detrimental reliance, defamation per se and defamation per quod, and asking for a declaratory judgment that the noncompetition covenants were no longer enforceable due to Appellees' breach of contract.
On July 7, 1997, Appellees filed an Answer and Counterclaim, which was later amended. Appellees prayed for injunctive and monetary relief as a result of the three counts in their counterclaim. Appellees' first count alleged that Appellants breached the noncompetition clause in the CT scan service agreement. Appellees alleged that Appellants either terminated or breached the contract, which triggered the noncompetition clause. Appellees alleged that Appellants continued to read CT scans at their Boardman and Austintown offices in violation of the noncompetition clause.
Appellees's second count alleged that Appellants breached the noncompetition clause of the ultrasound reading agreement. Appellees asserted that Appellants breached the agreement by performing, "substandard, suboptimal, negligent, careless and/or inaccurate," ultrasound readings. Appellees asserted that Appellants' breach triggered the noncompetition clause.
Appellees third count alleged that Appellants breached a billing contract whereby CBSI was given the exclusive right to provide billing services for Appellants.
On August 17, 1999, Appellees filed a partial Motion for Summary Judgment on the defamation claims, to which Appellants responded.
A September 24, 1999 Judgment Entry assigned to a magistrate the declaratory judgment issue and all other issues of law arising from the opposing claims.
On December 21, 1999, a magistrate's hearing was held on the declaratory judgment and legal issues.
On January 19, 2000, the magistrate filed his decision as to the defamation claims. The decision recommended granting summary judgment to Appellees on the defamation per se claim, and recommended denying summary judgment on the defamation per quod claim.
On January 20, 2000, the magistrate filed his decision as to the declaratory judgment questions and the other issues of law. The magistrate found that there was no unified global agreement between the parties and that the contracts entered into by the parties were separate and independent contracts. He found that Appellees were permitted to terminate the ultrasound reading agreement pursuant to the terms of the contract, and that its termination had no effect on the validity of the other contracts entered into by the parties. He found that the covenant not to compete contained in the ultrasound reading agreement was reasonable, not ambiguous, and enforceable. He also found that the covenant not to compete in the CT scan reading agreement was ambiguous and that Appellants did not breach it.
Both parties filed objections to both of the magistrate's decisions. Appellees objected to the denial of summary judgment on the defamation per quod claim, and to the finding that the covenant not to compete contained in the CT scan agreement was not enforceable. Appellants objected to the granting of summary judgment on the defamation per se claim. Appellants also objected to these three findings of the magistrate: 1) that there was no integrated global agreement between the parties; 2) that Appellees were permitted to unilaterally terminate the ultrasound reading agreement; and 3) that the noncompetition covenant in the ultrasound reading agreement was reasonable and enforceable.
On February 29, 2001, the trial court ruled on the objections to the defamation issues. The trial court adopted the magistrate's recommendation that Appellees be granted summary judgment on the defamation per se claim. The trial court rejected the magistrate's recommendation on the defamation per quod claim, concluding that Appellees successfully raised the defense of qualified privilege and that Appellants did not provide any evidence in rebuttal. The trial court granted summary judgment to Appellees on the defamation per quod claim as well.
On March 1, 2000, the trial court ruled on the objections to the magistrate's decision relating to the noncompetition covenants. The trial court partially sustained Appellees' objection to the conclusion that the noncompetition covenant in the CT scan agreement was unenforceable. The court found that the covenant was ambiguous on its face, but that additional parol evidence resolved the ambiguity. The trial court determined that the "or" should be read as "and," thus resolving the ambiguity. The court nevertheless concluded that there was no evidence in the record that Appellants breached the noncompetition covenant.
The trial court overruled Appellants' objections and adopted the remaining conclusions and...
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