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

203 F.R.D. 677, 2001 U.S. Dist. LEXIS 21482, 2001 WL 1349307
CourtDistrict Court, S.D. Florida
DecidedSeptember 20, 2001
DocketNo. 99-8624-CIV
StatusPublished
Cited by16 cases

This text of 203 F.R.D. 677 (Brandon, Jones, Sandall, Zeide, Kohn, Chalal & Musso, P.A. v. MedPartners, Inc.) is published on Counsel Stack Legal Research, covering District Court, S.D. Florida 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., 203 F.R.D. 677, 2001 U.S. Dist. LEXIS 21482, 2001 WL 1349307 (S.D. Fla. 2001).

Opinion

OMNIBUS ORDER

MIDDLEBROOKS, District Judge.

THIS CAUSE came before the Court on a series of related motions, including Plaintiff Brandon, Jones, Sandall, Zeide, Kohn, Chalal & Musso, P.A.’s (“Orthopedic Center”) Renewed Motion with Memorandum in Support to Compel Arbitration, for Attorneys’ Fees, and for Other Relief (D.E.# 49) pursuant to the Florida and Federal Arbitration Acts, Defendants’ Motion to Excuse Arbitration Panel, filed August 6, 2001 (DE#58), and Defendants’ (“MedPartners”) Renewed Motion to Dismiss, filed August 6, 2001 (DE# 55). This Court heard oral argument on the motions on August 13, 2001, and these matters are now ripe for disposition.

I. Factual Background and Procedural History

A. The Dispute

In 1994, the Orthopedic Center and Med-Partners entered into a twenty-year clinic services management agreement (“Agreement”) under which the doctors comprising the Orthopedic Center contracted with Med-[679]*679Partners to manage their practice. Pursuant to the Agreement, MedPartners collects revenue on behalf of the Orthopedic Center and distributes a portion of the collected revenue back to the Orthopedic Center as compensation. In this suit, several provisions of the Agreement are at issue: first, a compensation provision establishing a guaranteed minimum level of compensation; and finally, two related provisions requiring the arbitration of certain disputes between the parties. The compensation provision guarantees a minimum level of compensation to the Orthopedic Center so long as the Center’s doctors retain a substantially equivalent level of industry as when the practice was first acquired in 1994. The guaranteed minimum level of compensation is $5.35 million per year, or $445,833 per month.

The contract also contains two independent arbitration clauses in sections G and 6.2 that require arbitration to resolve disputes over the amounts of payments “due” and allegations of a “breach of contract,” after one side has given the other side notice and an opportunity to cure. Section G reads as follows:

G. Acceptance of Interim Payments Not Waiver of Balance Due
It is expressly understood and agreed that provisions in this Agreement for the payment by MEDPARTNERS of sums in payment of overdue amounts do not constitute, and shall not be construed or interpreted as constituting or implying, an agreement to accept such sums in full payment of, of settlement for, amounts due. In the event of a dispute as to what amount is owed by MEDPARTNERS in any situation where a payment is due, including but not limited to monthly payments, the matter shall be resolved by binding arbitration under the auspices of the American Arbitration Association, before three arbitrators, with the arbitration fee equally split between the parties, who shall otherwise hear their own respective fees and costs. However, the losing party (as defined hereinbelow) in each instance of arbitration shall pay the fees and costs of the prevailing party, which fees and costs shall be determined by the same panel of arbitrators at a hearing to be held not later than three (3) weeks after the date of the arbitrators’ majority decision on the issue(s) in dispute. Within ten (10) days from the date said payment is due, each side shall select and gain the commitment to participate of one arbitrator, and those two arbitrators shall select a third; arbitration shall be held within three weeks of the date the payment was due, in Palm Beach County, Florida. The decision of the majority of the arbitrators shall be binding. Within five (5) days of the date of the arbitrators’ decision, MEDPART-NERS shall pay to the P.A. the entire amount which the arbitrators have determined is due, with interest at 18% per annum from the due date. Once that procedure is followed and MEDPARTNERS pays in full the amount determined to be due, with interest, the dispute as to said amount shall be deemed fully resolved; in such event, the P.A. shall upon demand of MEDPARTNERS, following the P.A.’s receipt of said funds, provide MEDPART-NERS with a release describing the nature of the payments involved, the period of time involved, and acknowledging that said matter is settled. For purposes of the foregoing, if a majority of the Arbitrators rules (a) that one party owes the other party more than $50,000, the first party shall be deemed “the losing party;” or (b) that there has been a breach of this Agreement sufficient to justify termination by the complaining party, said party shall be deemed “the losing party.”

Section 6.2(c) states:

(c) Termination by MEDPARTNERS for Alleged Lack of Industry
In order to invoke this provision for termination, MEDPARTNERS must demonstrate that the then-current Physician Shareholders and Physician P.A. Employees, taken as a group, are not complying with their obligations of industry as defined in Section 5.1(a) and as further amplified by illustration in Exhibit B hereto following receipt of a detailed notice of breach on this ground, setting forth the physicians involved and detailing the particulars of why the P.A. taken as a group is thus not complying with said obligations of industry; the P.A. will have six (6) months [680]*680from receipts of said notice within which to cure the alleged breach; if at the end of said six months, MEDPARTNERS maintains that the then-current activity of the group still does not comply with the obligations of industry defined in Section 5.1(a), the provisions of Section 6.2(d)© below shall apply. In the event that a majority of the arbitrators rules against MEDPARTNERS, the provisions of Section 6.2(d)(ii) below shall apply; in the event that a majority of the arbitrators rules against the P.A, the provisions of Sub-paragraphs 6.2(d)(iii)(A) through (d)(iii)(D), inclusive will apply:
(d)(i) If either party informs the other in writing that in its opinion, the other party has breached the contract, the alleged breaching party will have the period indicated above from the date of receipt of said writing to cure the breach or demonstrate why no breach has occurred. If the first party still maintains there is a breach on the same grounds, it shall serve a written demand for arbitration upon the alleged breaching party. The matter, shall be resolved by binding arbitration under the auspices of the American Arbitration Association, with the arbitration fee equally split between the parties, who shall otherwise bear their own respective fees and costs. Within fifteen (15) days from the date of the alleged breaching party’s receipt of the first party’s written demand for arbitration, each side shall select and gain the commitment to participate of one arbitrator, and those two arbitrators shall select a third; arbitration shall be held within three weeks thereafter, in Palm Beach County, Florida. The Clinic Services Agreement, as amended, would remain in full force and effect until the arbitrators reached a decision. The decision of the majority of the arbitrators shall be binding.

In May 1999, a dispute arose between the parties. The Orthopedic Center alleges that in a May 13, 1999 letter MedPartners accused the Center’s doctors of a “lack of industry,” and announced that it intended to terminate the entire agreement in six months. The Orthopedic Center claims that the April 1999 payment made to the Orthopedic Center on May 15,1999 was $277,240 less than required by the Agreement.

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Bluebook (online)
203 F.R.D. 677, 2001 U.S. Dist. LEXIS 21482, 2001 WL 1349307, Counsel Stack Legal Research, https://law.counselstack.com/opinion/brandon-jones-sandall-zeide-kohn-chalal-musso-pa-v-medpartners-flsd-2001.