Walker v. GWINNETT HOSP. SYSTEM, INC.

• Decision Date: 18 September 2003
• Docket Number: No. A03A1409.,A03A1409.
• Citation: 263 Ga. App. 554,588 S.E.2d 441
• Parties: WALKER v. GWINNETT HOSPITAL SYSTEM, INC.
• Court: Georgia Court of Appeals

588 S.E.2d 441

263 Ga. App. 554

WALKER v. GWINNETT HOSPITAL SYSTEM, INC.

No. A03A1409.

Court of Appeals of Georgia.

September 18, 2003.

Reconsideration Denied October 7, 2003.

Russell & Herrera, Decatur, Dorothea L. Russell, Dana C. Bryan, for appellant.

Hall, Booth, Smith & Slover, James H. Fisher II, Atlanta, Brittany L. Tuggle, for appellee.

MILLER, Judge.

Gwinnett Hospital System, Inc. (the hospital) sued Dr. Carol Walker to recover monies the hospital loaned to Dr. Walker while she was beginning her medical practice. Dr. Walker defended on the grounds that the six-year statute of limitation had run and that she was entitled to a set-off for the hospital's preventing her from hiring an associate physician, who would have increased her revenues and thereby assisted her in paying off the loan earlier. The trial court granted summary judgment to the hospital and entered judgment against Dr. Walker in the principal amount outstanding on the loan plus prejudgment interest. Dr. Walker appeals, contending that (i) the statute of limitation barred the hospital's action because she had breached the repayment terms of her contract with the hospital more than six years prior to the filing of this suit, (ii) disputed issues of fact concerning the set-off defense precluded summary judgment, and (iii) the hospital was not entitled to prejudgment interest. We hold that the undisputed facts showed that the first breach of the contract took place within six years of suit, that no set-off was justified, and that the court did not err in awarding the hospital prejudgment interest. Therefore, summary judgment in favor of the hospital was appropriate, and we affirm.

"Summary judgment is proper when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. OCGA § 9-11-56(c)." Matjoulis v. Integon Gen. Ins. Corp., 226 Ga.App. 459(1), 486 S.E.2d 684 (1997). We apply a de novo standard of review to an appeal from the grant of summary judgment, construing the evidence in the light most favorable to the nonmovant. Id.

So construed, the evidence showed that the hospital persuaded Dr. Walker to begin a medical practice near the hospital by promising to reimburse Dr. Walker for certain expenses and to loan Dr. Walker money interest-free to cover other expenses, including the salary cost of four full-time employees and a $20,000 monthly salary to Dr. Walker during her first year of practice. The parties executed a written agreement to this effect, which provided that Dr. Walker would begin repaying the loan when her monthly net income (after paying expenses, including Dr. Walker's $20,000 monthly salary) from the practice exceeded $3,000. Once that threshold was exceeded, Dr. Walker was obligated each month to pay the hospital all net income exceeding $3,000 for that month until the loan was fully paid. Although the agreement did not specify a certain date by which the loan was to be paid off, it did state: "It is the joint expectation of [the hospital] and `Physician' that `Physician' will have paid back in full the amount theretofore paid to `Physician' by [the hospital] within twelve (12) months beginning the payback."

Pursuant to the agreement, Dr. Walker in November 1992 began a medical practice near the hospital and over the next several months received loan proceeds from the hospital in the aggregate amount of $393,667.87. In June 1993, her net income (after paying all expenses, including her own salary) exceeded $3,000 and she paid the hospital the excess amount. Until April 1996, she paid the hospital on a monthly basis all net income exceeding the $3,000 amount. At that point, she ceased making the payments called for by the contract and instead made sporadic payments in amounts not set forth in the contract. She made her last payment in January 1998, which left a balance of $191,361.91.

In July 2001, the hospital sued Dr. Walker to recover the outstanding balance. Dr. Walker responded that the six-year statute of limitation barred recovery based on her argument that she had breached the contract when she failed to pay the loan off fully within twelve months of June 1993. She further claimed that she was entitled to a set-off for damages caused by the hospital's breaching the duty of good faith implied in the agreement. The set-off claim was based on a hospital official's having told Dr. Walker in 1995 that the contract, which only referred to four employees in Dr. Walker's practice, prohibited her from hiring a physician employee (who would have been a fifth employee and would have required the hiring of more support employees). The trial court granted summary judgment to the hospital, holding that neither defense survived under the undisputed facts. Dr. Walker appeals.

1. Dr. Walker contends that the provision of the agreement—that the parties' joint expectation was that the loan would be fully paid off within 12 months of the first repayment—obligated her to pay off the loan in full by June 1994, the 12-month anniversary of her first repayment. Accordingly, because Dr. Walker did not pay off the loan by that date, she argues that she breached the agreement as of June 1994 and that the applicable statute of limitation began to run on that date. Since suit was not filed until July 2001, she asserts that the six-year statute of limitation found in OCGA § 9-3-24 for written contracts barred recovery of the debt.

OCGA § 9-3-24 does require that an action upon a written contract be brought within six years after the contract becomes due and payable. Mobley v. Murray County, 178 Ga. 388(1), 173 S.E. 680 (1934), held that the statute begins to run when the plaintiff could first have maintained her action to a successful result, which would be the date of the contract's breach. See id. at 394-398, 173 S.E. 680. Thus, Baker v. Brannen/Goddard Co., 274 Ga. 745, 749-750(2), 559 S.E.2d 450 (2002), held that the six-year period started when the first monthly installment payment of commissions was missed.

The question therefore is when Dr. Walker here first breached the contract, i.e., when she missed the first payment. Where the facts are undisputed, "the question of whether the case is within the bar of the statute is one of law for the court." (Citations omitted.) Curlee v. Mock Enterprises, 173 Ga.App. 594, 596(2), 327 S.E.2d 736 (1985). Furthermore, "the construction of a contract is a question of law for the court based on the intent of the parties as set forth in the contract...." (Footnote omitted.) Deep Six v. Abernathy, 246 Ga.App. 71, 73(2), 538 S.E.2d 886 (2000); see OCGA § 13-2-1. "Parol evidence is inadmissible to add to, take from, or vary a written contract." OCGA § 13-2-2(1).

Here the written contract, which provided that it was the entire agreement between the parties, defined the repayment obligations by stating that Dr. Walker "shall pay" the hospital the excess of her net income over $3,000 until the loan was "paid in full." The language added at the end of this repayment paragraph—"It is the joint expectation of [the parties that Dr. Walker] will have paid back in full the amount theretofore paid to [Dr. Walker by the hospital] within twelve (12) months beginning the payback"— did not accelerate the due date of the loan and obligate Dr. Walker to pay it off by the end of those first 12 months. "Expectation" simply refers to "[t]he act of looking forward" or "anticipation." Black's Law...