Clinton Physical Therapy Services, P.C. v. John Deere Health Care, Inc.

714 N.W.2d 603, 2006 Iowa Sup. LEXIS 61, 2006 WL 1302243
CourtSupreme Court of Iowa
DecidedMay 12, 2006
Docket04-1893
StatusPublished
Cited by65 cases

This text of 714 N.W.2d 603 (Clinton Physical Therapy Services, P.C. v. John Deere Health Care, Inc.) is published on Counsel Stack Legal Research, covering Supreme Court of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Clinton Physical Therapy Services, P.C. v. John Deere Health Care, Inc., 714 N.W.2d 603, 2006 Iowa Sup. LEXIS 61, 2006 WL 1302243 (iowa 2006).

Opinion

CADY, Justice.

In this appeal from a judgment entered by the district court following a jury verdict in a breach-of-contract action, we must primarily consider the parameters within which the district court may resolve and correct inconsistencies in a verdict and reform the jury’s answers to questions in the verdict in lieu of granting a new trial. We conclude the district court erred in failing to grant a new trial in this case. We reverse and remand for a new trial on all issues.

I. Background Pacts and Proceedings

Clinton Physical Therapy Services, P.C. (CPT) is an Iowa corporation with its principal place of business in Clinton. It also has offices in DeWitt and Davenport, Iowa and Morrison and Savanna, Illinois. On April 15,1996, CPT entered into a contract with John Deere Health Care, Inc. (John Deere), a health maintenance organization, to be a “network provider” of physical therapy services to John Deere plan members. The Davenport office was not in existence at the time the contract was executed, and the agreement was silent on which of CPT’s offices were covered by the agreement.

The Davenport office, also called the Plaza office, opened in August 1997. CPT notified John Deere of the new Davenport office by letter on August 11 and indicated it wanted the office to be covered by the network-provider contract. John Deere initially paid for services provided at the Davenport office, but claimed it did not realize the payments were for services performed at the office at the time the payments were made. It later took the position that the office was not a covered facility under the contract, and denied claims for services performed at the Davenport office.

John Deere sent CPT letters on April 23 and June 1, 1999 stating the Davenport office was not covered by the contract. Nevertheless, CPT continued to provide services to John Deere plan members at the Davenport office. Ultimately, CPT provided services to approximately 300 John Deere plan members over 2775 visits at the Davenport office without reimbursement from John Deere at the $50-per-visit rate under the contract. This amounted to $138,750 in unpaid services up to August 2001. Of this amount, $128,200 in services were rendered after John Deere notified CPT in writing that services at the Davenport office would not be paid. In August 2001, the parties entered into a new contract. The new contract contained a specific clause indicating that John Deere had discretion to pay for services provided by CPT at a new office location.

In February 2003, CPT brought a breach-of-contract action against John Deere. CPT claimed John Deere breached the 1996 contract by refusing to pay for services provided to John Deere plan members at the Davenport office. John Deere claimed the Davenport office was not covered by the contract. It also claimed that even if it was covered, CPT failed to mitigate its damages by continuing to treat John Deere plan members at the Davenport office after receiving notice from John Deere that the services would not be reimbursed, and not billing the plan members for the services. 1

*607 The case was tried to a jury. At trial, CPT offered the 2001 contract into evidence as an aid to interpret the 1996 contract. John Deere claimed the clause pertaining to new locations in the 2001 contract was in the nature of a subsequent remedial measure and was not relevant. The district court excluded the contract from the evidence. The case was submitted to the jury on a verdict form that required the jury to answer a series of questions and determine the amount of damages in the event a breach of contract was established. The form provided:

We find the following verdict on the questions submitted to us:
Question No. 1: Did the terms of the contract allow for the Plaintiff to add its new Plaza or North Scott, location by providing written notification to Defendants of the opening of that office?
Answer “yes” or “no.”
ANSWER: _
(If your answer is “no,” do not answer any further questions)
Question No. 2: Did the Plaintiff comply with all the terms of the contract that were required unless excused?
Answer “yes” or “no.”
■ANSWER: _
(If your answer is “no,” do not answer any further questions)
Question No. 3: Did the Defendant breach its contract with Plaintiff?
ANSWER: _
(If your answer is “no,” do not answer any further questions)
Question No. 4: Did the Plaintiff fail to mitigate its damages?
Answer “yes” or “no.”
ANSWER: _
Question No. 5: State the amount of damages sustained by the Plaintiff as to each of the following items of damages:
A. The reasonable value, at the contracted rate, of outstanding charges for treatment provided by Plaintiff in its Plaza facility to Defendants’ eligible members from 1997 through July 31, 2001.
$-
B. The reasonable value of Plaintiffs lost profits from the loss of referrals of Defendants’ members to its Plaza facility from 1997 through July 31, 2001.
$-
Question No. 6: State the amount of damages which Plaintiff failed to mitigate.
$-
Question No. 7: State the total amount of recoverable damages to the Plaintiff. (The total of the answer to Question 6 minus the total of the answer to Question 7). 2
$-

The parties consented to a sealed verdict, which permitted the jury to be discharged *608 after reaching the verdict without reporting its findings in open court in the presence of the parties. See Iowa R. Civ. P. 1.931(3) (“When, by consent of the parties and the court, the jury has been permitted to seal its findings and separates before it is rendered, such sealing is equivalent to a rendition and a recording thereof in open court, and such jury shall not be polled or permitted to disagree with respect thereto”).

After a period of deliberations, the jury notified the judge that it had reached a verdict. The judge discharged the jury without notifying the attorneys for the parties. In response to the first three questions in the verdict, the jury found that the network-provider contract did allow CPT to add the Davenport office, that CPT complied with all the terms of the contract, and that John Deere breached the contract. In response to question 4, the jury found that CPT did not fail to mitigate its damages. It then found CPT suffered $138,750 in damages in response to question 5, subpart A.

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Cite This Page — Counsel Stack

Bluebook (online)
714 N.W.2d 603, 2006 Iowa Sup. LEXIS 61, 2006 WL 1302243, Counsel Stack Legal Research, https://law.counselstack.com/opinion/clinton-physical-therapy-services-pc-v-john-deere-health-care-inc-iowa-2006.