Foundation for Seacoast Health v. Hospital Corp. of America

71 A.3d 736, 165 N.H. 168
CourtSupreme Court of New Hampshire
DecidedJuly 16, 2013
DocketNo. 2012-371
StatusPublished
Cited by23 cases

This text of 71 A.3d 736 (Foundation for Seacoast Health v. Hospital Corp. of America) is published on Counsel Stack Legal Research, covering Supreme Court of New Hampshire primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Foundation for Seacoast Health v. Hospital Corp. of America, 71 A.3d 736, 165 N.H. 168 (N.H. 2013).

Opinion

CONBOY, J.

This appeal and cross-appeal are from decisions of the Superior Court (McHugh, J.) on remand after we decided Foundation for Seacoast Health v. HCA Health Services of New Hampshire, 157 N.H. 487 (2008) (Foundation 7). We affirm in part and reverse in part.

This case and Foundation I involve the same parties and relate to a 1983 Asset Purchase Agreement (the Agreement) under which the trustees of Portsmouth Regional Hospital (the Hospital) agreed to sell the Hospital to defendants Hospital Corporation of America (HCA) and HCA Health Services of New Hampshire, Inc. (HCA-NH). Foundation I, 157 N.H. at 489. The plaintiff, the Foundation for Seacoast Health, is a non-profit entity created with the proceeds from the Hospital’s 1983 sale. Id. The defendants are HCA, its successors, and HCA-NH. Id. at 488. In 1983, HCA was a publicly traded company that owned all of the common stock of HCA-NH. Id. at 489. HCA currently is survived by a successor company. Id. For ease [171]*171of reference, we refer to HCA and its successors as “HCA.” HCA-NH has owned and operated the Hospital since the 1983 Agreement. Id. at 490.

The dispute between the parties centers upon the meaning and effect of Section 5.2.11(a) of the Agreement, which, among other things, affords the Foundation the right to “repurchase” the Hospital’s tangible assets under certain conditions. Id. at 489. The parties’ dispute began in 2006, when the Foundation brought a petition in equity to enforce that right. See id. at 490-91.

Foundation I concerned two transactions, one in 2006 and the other in 1999, which the Foundation contended violated Section 5.2.11(a). Id. In the 2006 transaction, a group of private investors acquired the stock of HCA Inc., which was the corporate grandparent of HCA and the corporate great-grandparent of HCA-NH. Id. at 490. In the 1999 transaction, HCA transferred to its corporate parent, Healthtrust, Inc. — The Hospital Company (Healthtrust), all of its interest in HCA-NH’s corporate parent. Id. at 490-91. We affirmed the grant of summary judgment to the defendants on the Foundation’s claims related to the 2006 transaction and vacated the dismissal of the Foundation’s claims related to the 1999 transaction. Id. at 496-97, 502. We remanded to the trial court for further proceedings consistent with our opinion. Id. at 502.

On remand, by agreement of the parties, the trial court bifurcated the proceedings to determine whether the 1999 transaction breached Section 5.2.11(a) and, if so, the Foundation’s remedy. In the liability proceeding, the trial court found that the 1999 transaction constituted a material breach of Section 5.2.11(a). However, in the remedy proceeding, the trial court clarified that the parties intended Section 5.2.11(a) to afford the Foundation the right to purchase the Hospital only if it were sold to a third party. Because the 1999 transaction was an inter-company transfer, it did not afford the Foundation that right. Accordingly, the trial court did not order specific performance of the Foundation’s alleged contractual right to purchase the Hospital. The trial court also declined to award the Foundation monetary damages for the defendants’ breach.

The trial court ordered HCA to “undo” the 1999 transaction by “tak[ing] whatever steps are necessary to put the hospital back in the same direct corporate chain that it was before the 1999 transfer.” The court also awarded the Foundation its attorney’s fees for the defendants’ breach, but did so for only the liability proceeding. The court found that the Foundation could have challenged the 1999 transaction “by using far less resources and people than [it] chose to use in this case” and that, before the remedy proceeding, HCA offered to undo the 1999 transaction — the remedy the trial court eventually ordered.

[172]*172The Foundation appeals the trial court’s determination that Section 5.2.11(a) was intended to give the Foundation a right to purchase the Hospital only in the event of a sale to a third party. The Foundation argues that because of this erroneous determination, the trial court also erred by failing to: (1) order specific performance of the Foundation’s contractual right to purchase the Hospital; (2) award monetary damages for the defendants’ material breach; and (3) award attorney’s fees for the remedy proceeding. The Foundation further contends that the trial court erred by ordering HCA to undo the 1999 transaction. In their cross-appeal, the defendants challenge the trial court’s determination that their breach of Section 5.2.11(a) was “material” and its corresponding decision to award attorney’s fees to the Foundation. We affirm all but the trial court’s attorney’s fee award.

I. Foundation’s Contractual Right to Repurchase Hospital

We first address whether, as the Foundation argues, the trial court incorrectly decided that the Foundation lacked a contractual right to “repurchase” the Hospital. Resolving this issue requires that we interpret Section 5.2.11(a) of the Agreement.

When interpreting a written agreement, we give the language used by the parties its reasonable meaning, considering the circumstances and the context in which the agreement was negotiated, and reading the document as a whole. Birch Broad. v. Capitol Broad. Corp., 161 N.H. 192, 196 (2010). We give an agreement the meaning intended by the parties when they wrote it. Id. “Absent ambiguity, however, the parties’ intent will be determined from the plain meaning of the language used in the contract.” Id. (quotation omitted). The interpretation of unambiguous contractual language is a question of law, which we review de novo. See id. The determination of whether contractual language is ambiguous is also a question of law entitled to de novo review. Id.

“The language of a contract is ambiguous if the parties to the contract could reasonably disagree as to the meaning of that language.” Id. (quotation omitted). “If the agreement’s language is ambiguous, it must be determined, under an objective standard, what the parties, as reasonable people, mutually understood the ambiguous language to mean.” Id. “In applying this standard, a court should examine the contract as a whole, the circumstances surrounding execution and the object intended by the agreement, while keeping in mind the goal of giving effect to the intentions of the parties.” Id. at 196-97. “Where ... the terms of a contract are indeed ambiguous, and the fact finder has properly looked to extrinsic evidence to determine the intent of the parties, our standard of review is more [173]*173deferential.” Behrens v. S.P. Constr. Co., 153 N.H. 498, 500-01 (2006). We will sustain its findings and conclusions unless they are lacking in evidentiary support or tainted by error of law. Id.

A. Section 5.2.11(a)

Section 5.2.11(a) of the Agreement provides:

5.2.11. Right to Repurchase Hospital.

(a) Right of First Refusal.

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Cite This Page — Counsel Stack

Bluebook (online)
71 A.3d 736, 165 N.H. 168, Counsel Stack Legal Research, https://law.counselstack.com/opinion/foundation-for-seacoast-health-v-hospital-corp-of-america-nh-2013.