Brandon, Jones, Sandall, Zeide, Kohn, Chalal & Musso, P.A. v. MedPartners, Inc.

312 F.3d 1349, 54 Fed. R. Serv. 3d 458, 2002 U.S. App. LEXIS 24289
CourtCourt of Appeals for the Eleventh Circuit
DecidedNovember 27, 2002
Docket01-15929, 01-16079
StatusPublished
Cited by48 cases

This text of 312 F.3d 1349 (Brandon, Jones, Sandall, Zeide, Kohn, Chalal & Musso, P.A. v. MedPartners, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eleventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Brandon, Jones, Sandall, Zeide, Kohn, Chalal & Musso, P.A. v. MedPartners, Inc., 312 F.3d 1349, 54 Fed. R. Serv. 3d 458, 2002 U.S. App. LEXIS 24289 (11th Cir. 2002).

Opinion

PER CURIAM:

The parties to these two separate appeals litigated three different cases across federal and state courts in two different states. The district court, in which the different cases were collected, entered an omnibus order that compelled arbitration. The parties appeal, presenting arbitration-related questions about our jurisdiction and about the merits of the ease. 1

BACKGROUND

I. Contract Formation

In 1994, MedPartners, Inc. contracted with Orthopedic Center of Palm Beach County (a collection of doctors) to manage the Orthopedic Center’s clinic over the next 20 years. According to the contract between the parties (“the Agreement”), MedPartners pays the Orthopedic Center a monthly payment that is based, in part, upon the doctors’ productivity.

The Agreement requires Orthopedic Center (that is, the doctors) to maintain the same level of productivity — the con *1351 tract uses the term “industry” — as they maintained before the Agreement to be eligible for a certain minimum monthly payment. If Orthopedic Center evidences a “lack of industry,” the Agreement provides that MedPartners can pay Orthopedic Center less than the minimum monthly payment required by the Agreement and, eventually, terminate the Agreement.

The Agreement has two arbitration clauses. The precise scope of the clauses is hotly debated by the parties. One arbitration clause basically requires the parties to arbitrate disputes over the amount of any payment. 2 And the other arbitration clause requires the parties to arbitrate disputes over whether the Agreement can be properly terminated (in other words, whether a party is in breach). 3

II. The Dispute and Initial Arbitration

In April 1999, MedPartners started paying Orthopedic Center less than the minimum monthly payment outlined in the Agreement. And, in May 1999, MedPart-ners sent Orthopedic Center a letter notifying Orthopedic Center that MedPartners intended to terminate the Agreement in six months if the doctors did not improve their “level of industry.” Not surprisingly, the letter created some coolness on the doctors’ part.

Orthopedic Center first demanded, and MedPartners agreed, to arbitrate their dispute over the amount of the April 1999 monthly payment. The parties began to arbitrate, in Florida, only the issue of the proper amount of the April payment before the American Arbitration Association (“AAA”). But, after the May payment was also less than the minimum monthly payment required by the Agreement, Orthopedic Center modified its arbitration complaint to add claims for the May payment and for anticipatory repudiation, and requested over $40 million in damages.

MedPartners objected to the anticipatory-repudiation claim as outside the scope of the Agreement’s arbitration clauses. The AAA arbitration panel disagreed. The panel concluded that the anticipatory-repudiation claim was arbitrable (that is, within the scope of the Agreement’s arbitration clauses) and continued with the arbitration in Florida, both on Orthopedic Center’s claims for adjustment in the April and May payments and on Orthopedic Center’s anticipatory-repudiation claim.

III. MedPartners’s Lawsuits (Dist. Case Nos. 01-8747 and 01-8748)

Five days later, MedPartners sued AAA) but not Orthopedic Center, in Alabama state court, seeking to enjoin the Florida arbitration. In an ex parte proceeding, *1352 the Alabama state court entered a TRO, enjoining AAA from continuing the arbitration on any issue. And, the Alabama state court issued a notice of hearing on a preliminary injunction. The AAA, according to its internal policy not to get involved in litigation over claims they .are arbitrating, did not appear at the preliminary-injunction hearing.

At the one-sided hearing, the Alabama state court converted the hearing from a preliminary-injunction hearing into a permanent-injunction hearing. The state court thereafter issued a permanent' injunction barring AAA from arbitrating Orthopedic Center’s claims, except the claim for April’s payment.

After obtaining the TRO from the state court, MedPartners filed suit against Orthopedic Center in the United States District Court for the Northern District of Alabama and asserted claims of fraud- and breach of contract. This suit is district court case No. 01-8747 (“MedRartners’s breach of eontraeVfraud lawsuit”). 4 Orthopedic Center filed a motion to dismiss, to transfer, or to stay the case in favor of arbitration.

The parties returned to the arbitration being conducted in Florida. In the arbitration, MedPartners argued that the Alabama state court injunction -against AAA prevented the arbitrators from continuing the arbitration of the anticipatory-repudiation claim. In response, Orthopedic Center argued that the injunction was against AAA only, not the individual arbitrators (who were neither employed nor controlled by AAA), and that .the arbitrators, therefore, were not bound by the injunction. The arbitrators voted to proceed despite the injunction.

MedPartners immediately got the Alabama state court to issue an order to show cause. AAA then obtained counsel and removed the Alabama state court case to federal district court. As removed, the suit became district court case No. Ó1-8748 (“MedPartners’s injunction lawsuit”). 5 The district court ultimately determined that the arbitrators were in contempt of the injunction, forced them to purge their contempt by agreeing not to arbitrate the anticipatory-repudiation claim, and sanctioned them.

Then, MedPartners added Orthopedic Center as a defendant to the injunction case (No. 01-8748). And, MedPartners’s injunction lawsuit (No. 01-8748) and Med-Partners’s breach of contract/fraud case (No. 01-8747) were consolidated. 6 Orthopedic Center then filed — in September 1999 — an emergency motion to dissolve the injunction against AAA. After waiting a year for the district court to rule on their emergency motion, Orthopedic Center appealed to this Court in September 2000.

IV. Orthopedic Center’s Lawsuit (Dist. Case No. 99-8624)

In the meantime, Orthopedic Center had filed its own complaint against MedPart-ners in Florida state court. Orthopedic Center’s complaint sought an order compelling arbitration of its anticipatory-repudiation claim. MedPartners removed the case to the Southern District of Florida; it *1353 was assigned to Judge Middlebrooks. The case became district court case No. 99-8624 (“Orthopedic Center’s lawsuit”). In November 1999, the district court dismissed Orthopedic Center’s complaint because of- the injunction against AAA: the district court believed that the Alabama injunction bound Orthopedic Center despite the fact that Orthopedic Center was not named in the injunction and was no party to the case at the time the injunction was granted.

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312 F.3d 1349, 54 Fed. R. Serv. 3d 458, 2002 U.S. App. LEXIS 24289, Counsel Stack Legal Research, https://law.counselstack.com/opinion/brandon-jones-sandall-zeide-kohn-chalal-musso-pa-v-medpartners-ca11-2002.