J-A01034-15
NON-PRECEDENTIAL DECISION – SEE SUPERIOR COURT I.O.P 65.37
GREENVILLE SURGICAL ASSOCIATES, : IN THE SUPERIOR COURT OF P.C., : PENNSYLVANIA : Appellee : : v. : : RODOLFO ARREOLA, M.D., : : Appellant : No. 678 WDA 2014
Appeal from the Judgment entered April 7, 2014, Court of Common Pleas, Erie County, Civil Division at No. 14153-2004
GREENVILLE SURGICAL ASSOCIATES, : IN THE SUPERIOR COURT OF P.C., : PENNSYLVANIA : Appellee : : v. : : RODOLFO ARREOLA, M.D., : : Appellant : No. 737 WDA 2014
Appeal from the Order dated April 22, 2014, Court of Common Pleas, Erie County, Civil Division at No. 14153-2004
BEFORE: FORD ELLIOTT, P.J.E., DONOHUE and ALLEN, JJ.
MEMORANDUM BY DONOHUE, J.: FILED JULY 8, 2015
Rodolfo Arreola, M.D. (“Dr. Arreola”) appeals from the April 7, 2014
judgment entered in favor of Greenville Surgical Associates, P.C. (“GSA”)
following a non-jury trial, and the April 22, 2014 order denying Dr. Arreola’s
post-trial motions. Upon review, we reverse the judgment and remand for J-A01034-15
the entry of judgment in favor of Dr. Arreola, rendering the April 22, 2014
order moot.1
Beginning in approximately 1990, James J. Kolenich, M.D. (“Dr.
Kolenich”), a board-certified general surgeon, served as the lone officer and
shareholder of GSA. In 2001, he began discussing with UPMC Horizon, the
hospital with which GSA was affiliated, the need for a second surgeon in the
area and at GSA. To that end, UPMC Horizon recruited Dr. Arreola. On July
30, 2001, Dr. Arreola, GSA and UPMC Horizon signed a recruitment
agreement, which provided, in pertinent part, as follows:
2. Commencing on or before the Start Date and continuing throughout the term of this Agreement, [Dr. Arreola] shall practice medicine on a full-time basis in Hospital’s Service Area and outlying communities, excluding any other employment or professional duties, as are usual and customary in the area of [Dr. Arreola]’s specialty.
* * *
5. During the first two years of this Agreement, Hospital shall advance [GSA] on behalf of [Dr. Arreola] on a monthly basis, sums of money to guarantee that for the first two years of [Dr. Arreola]’s practice at Hospital (“Guarantee Period”),
1 On September 2, 2014, GSA filed a motion to quash the instant appeal based upon Dr. Arreola’s alleged failure to preserve several arguments before the trial court for appeal. See generally Motion to Quash Appeal, 9/2/14. Because we base our decision entirely on arguments preserved in the court below, we deny the motion. See Dr. Arreola’s Proposed Findings of Fact and Conclusions of Law, 10/3/11, ¶¶ 31, 49, 59-61, 72, 156, 158- 159; Dr. Arreola’s Motion for Post-Trial Relief, 10/29/13, ¶¶ 53-58, 62, 66- 71.
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[Dr. Arreola] receives actual cash receipts equal to $300,000 in the first year of the Guarantee Period and $324,000 in the second year of the Guarantee Period,
(a) During this Agreement, on or before the 15th day of each month, [GSA] shall submit to Hospital a statement identifying the cash receipts attributable to [Dr. Arreola]’s practice during the prior month(s). Within 30 days of receipt of that statement and subject to such verification as is reasonably necessary, Hospital will advance to [GSA] on behalf of [Dr. Arreola] an amount calculated as (i) $25,000 monthly during the first 12 months of the Guarantee Period and $27,000 monthly during the last 12 months of the Guarantee Period (the “Monthly Guarantee Amount”) minus (ii) any and all cash receipts for the month from whatever source attributable to [Dr. Arreola]’s practice (“Payments”). Notwithstanding this paragraph 5(a), Hospital will advance each of the first three Monthly Guarantee Amounts on or before the 1st business day of these three months beginning with the Start Date.
(b) Payments when advanced by Hospital to [GSA] shall be treated as a loan to [GSA] and shall be subject to repayment with interest on such sums from the date they were advanced computed at the prime rate of interest on the date of this Agreement reported by the Wall Street Journal plus 1% (the “Applicable Interest Rate”) in accordance with Sections 5, 6 and 7 of this Agreement and documented with a promissory note in the form attached hereto as Exhibit “B” (the “Note”).
(c) If in any month during the Guarantee Period the [Dr. Arreola]’s cash receipts (i.e., 5(a)(ii) above) exceeds the Monthly Guarantee Amount (i.e., 5(a)(i)), such excess shall be immediately paid to Hospital by
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[GSA] to the extent of any unpaid loan balance and accrued interest on account of prior advances by Hospital (“Paybacks”).
(d) For purposes of determining the Monthly Guarantee Amount, the parties agree that the amount was determined based on an annual salary for the [Dr. Arreola] of $160,000 and $184,000 in Years 1 and 2 of the Guarantee Period respectively as well as expenses directly attributable to [Dr. Arreola]’s practice which shall mean those reasonable costs and expenses directly related to the operation of [Dr. Arreola]’s practice as outlined in Exhibit C. Allowable expenses shall not include, among other things, any personal expenses such as an automobile, personal debts or loans and any payment to [Dr. Arreola]’s deferred compensation plan and/or the allocation/reallocation of any practice expenses that existed prior to initiation of [Dr. Arreola]’s practice.
7. Notwithstanding the above, as an alternative means of repayment, Hospital agrees that the Net Amount advanced by Hospital … shall be forgiven and the Note executed as of such date shall be canceled if, at all relevant times up until and throughout the Guarantee End Date, [Dr. Arreola] and [GSA] have met (as applicable) all of the following requirements:
(a) [Dr. Arreola] shall have engaged in the full-time practice of General Surgery in the Hospital’s Service Area at Hospital and made services available to the public in accordance with the provisions of this Agreement;
(b) [Dr. Arreola] shall have worked a normal work week as is customary for [Dr. Arreola]’s in the
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area who practice in [Dr. Arreola]’s specialty unless unable to do so due to disability;
(c) [Dr. Arreola] and [GSA] shall not have restricted the number of Medicare and Medicaid patients treated by [Dr. Arreola] or [GSA];
(d) [Dr. Arreola] and [GSA] shall have accepted patients referred by Hospital's referral service irrespective of ability to pay;
(e) [Dr. Arreola] and [GSA] shall not have limited the number of indigent or charitable patients seen or treated and shall have kept adequate records of all such patients and made those records available to Hospital upon reasonable request;
(f) [Dr. Arreola] shall have assisted Hospital in its educational programs as may be reasonably requested by Hospital;
(g) [Dr. Arreola] shall have participated in a call coverage arrangement, irrespective of the patients’ ability to pay;
(h) Subject to also fulfilling his other duties hereunder, [Dr. Arreola] shall have assisted Hospital in the development of community services as may be reasonably requested by Hospital, and
(i) [Dr. Arreola] and [GSA] shall have otherwise satisfied all of his/its obligations under this Agreement.
14. The commencement date of this Agreement shall be September 1, 2001 and it shall terminate on August 31, 2007, unless otherwise set forth in this Agreement.
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Plaintiff’s Exhibit 1 (Recruitment Agreement), ¶¶ 2, 5, 7, 14 (emphasis
added). The promissory note, referenced above and included as Exhibit B to
the recruitment agreement, included a promise by Dr. Arreola and GSA to
pay the full amount of the money loaned by UPMC Horizon to GSA for the
months Dr. Arreola’s cash receipts totaled less than the Monthly Guaranteed
Amount. Exhibit C to the recruitment agreement set forth a detailed
schedule of expenses that the Monthly Guaranteed Amount was to cover:
ANNUAL PRACTICE EXPENSES YEAR 1 YEAR 2
Physician Gross Salary $160,000 $184,000 Part Time Secretary (increase RN hours) $40,000 $40,000 Pension $22,000 $22,000 Malpractice Insurance $20,000 $20,000 Term Life Insurance $2,400 $2,400 Cell Phone $1,100 $1,100 Gas Credit Card $2,100 $2,100 Meetings and Board Exams $4,000 $4,000 Journals $350 $350 Disability Insurance $6,000 $6,000 Phone & Advertising $7,500 $7,500 Health Insurance $5,300 $5,300 Personal Liability Insurance $1,100 $1,100 Workers Compensation $750 $750 Dues for Professional Organizations $1,450 $1,450 Extra Office Supplies $6,800 $6,800 Extra Office Space (800 sq.ft. @ $12/sq.ft.) $9,600 $9,600 Contingency Expenses $4,000 $4,000 Legal & Accounting Costs $5,550 $5,550
TOTAL EXPENSES $300,000 $324,000
Id. at Exhibit C.
Also on or about July 30, 2001, Dr. Arreola and GSA entered into an
employment contract, which stated, in relevant part: “[Dr. Arreola]
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expressly agrees to indemnify and hold [GSA] harmless from and against
any indebtedness, liabilities, costs, damages or other losses under the
Recruitment Agreement with UPMC Horizon … or the Promissory Note
attached to such Recruitment Agreement[.]” Plaintiff’s Exhibit 2
(Employment contract), ¶ 15(b).
Dr. Arreola began working for GSA in September 2001. In accordance
with the recruitment agreement, UPMC Horizon issued money to GSA from
between September 2002 and September 2003 in amounts necessary to
cover the disparity between Dr. Arreola’s cash receipts for those months and
the Guaranteed Minimum Amount, $25,000 in 2002 and $27,000 in 2003.
The amount loaned by UPMC Horizon to GSA pursuant to the recruitment
agreement totaled $184,800.24. Dr. Arreola’s cash receipts began to
exceed the Guaranteed Minimum Amount in July 2002 and continued to do
so almost continuously through the end of the Guarantee Period in
September 2003.2 The amount of income generated by Dr. Arreola for GSA
during his tenure with GSA totaled $702,947.42.
During the Guarantee Period, GSA made expenditures to expand the
practice and remodel the office. In June 2003, Dr. Kolenich sent Dr. Arreola
a letter detailing his “intentions with regard to [Dr. Arreola’s] entry into the
2 The record reflects that Dr. Arreola’s cash receipts did not exceed the Guaranteed Minimum Amount in one month of 2002, when his receipts totaled $19,509. See Plaintiff’s Exhibit 5 (Dr. Arreola’s Receipts); Defendant’s Exhibit A (Loan Balance Calculation).
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practice.” Defendant’s Exhibit E. Therein, Dr. Kolenich indicated that if Dr.
Arreola passed his boards in the fall of 2003, he believed Dr. Arreola could
“buy into” GSA as a shareholder of the corporation. Id.
On July 18, 2003, Dr. Arreola gave Dr. Kolenich a letter of resignation.
In response thereto, Dr. Kolenich authored a letter to Dr. Arreola on July 29,
2003, in relevant part, “remind[ing]” Dr. Arreola “of the financial obligation
[he has] to UPMC/Horizon per [his] employment contract with [GSA],”
referring specifically to paragraph 15(b) of the employment contract.
Defendant’s Exhibit G (7/29/03 Letter from Dr. Kolenich to Dr. Arreola). On
September 19, 2003, Dr. Arreola ceased working for GSA and did not
continue to work in the UPMC Horizon service area.
GSA made payments on the loans from UPMC Horizon in August 2002,
September 2002 and July 2003. Because of the other expenditures GSA
made during the Guarantee Period, however, it was reportedly financially
unable to make any additional payments on the loans. Following Dr.
Arreola’s departure from the UPMC Horizon practice area, GSA made two
additional payments to UPMC Horizon in November 2003 and December
2003, respectively, fully satisfying the outstanding debt owed pursuant to
the recruitment agreement. The amount GSA repaid, including accrued
interest, totaled $209,699.76.
On November 15, 2004, GSA commenced an action against Dr. Arreola
by filing a praecipe for writ of summons. One year later, GSA filed a nine-
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count complaint against Dr. Arreola. Following multiple filings by both
parties, the case ultimately came before the trial court for a bench trial, held
on February 28, March 1, and May 25, 2011. By agreement of the parties,
the bench trial addressed only the first four counts of the complaint,
sounding in breach of contract and raising a claim for
indemnification/contribution by Dr. Arreola to GSA.
On April 5, 2012, the trial court entered an order and opinion. The
trial court found Dr. Arreola liable to GSA based upon his failure to work in
UPMC Horizon’s service area for six years, concluding that this constituted a
“material breach,” of the recruitment agreement, causing GSA’s forfeiture of
the loan forgiveness provision contained therein. Trial Court Opinion,
4/5/12, at 14-16. The trial court determined that “GSA’s failure to make
payment obligations under the [r]ecruitment [a]greement[] was due to
GSA’s cash flow shortages,” and that this “was not a material breach” by
GSA of the recruitment agreement. Id. at 10, 14. It further concluded that
Dr. Arreola’s obligation pursuant to paragraph 15(b) of the employment
contract was not limited to those expenses appearing in Exhibit C to the
recruitment agreement, as those were only “projected expenses,” for which
UPMC Horizon would cover the cost through its loans. Id. at 13. It
therefore found Dr. Arreola liable to GSA for the $209,669.76 GSA paid to
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UPMC Horizon for loans pursuant to the recruitment agreement3 and
$182,7614 for other losses not contemplated by Exhibit C to the recruitment
agreement that GSA incurred during Dr. Arreola’s tenure.
GSA filed a praecipe for the entry of judgment on April 18, 2012. On
May 30, 2012, Dr. Arreola filed a petition to strike or open the judgment
asserting that because there were five remaining counts of the complaint
still outstanding, the entry of judgment on the trial court’s April 5, 2012
order was improper. The trial court denied the motion. Dr. Arreola
appealed to this Court and we vacated the trial court’s order and remanded
the case for action on the remaining counts of GSA’s complaint and for Dr.
Arreola to file post-trial motions if he elected to do so. See GSA v. Arreola,
1151 WDA 2012 (Pa. Super. Sep. 9, 2013) (unpublished memorandum).
On remand, GSA voluntarily discontinued the remaining outstanding
counts of the complaint on October 24, 2013. On October 29, 2013, Dr.
3 Relying on principals of joint and several liability and contribution, the trial court also found that by signing the promissory note and breaching the recruitment agreement, Dr. Arreola was required to reimburse GSA for half of the amount it paid to UPMC in satisfaction of the loans – $104,849.88 – but because it found that under the employment contract, “Dr. Arreola [was] responsible for the entirety of the indebtedness,” it concluded that “this need not be considered since GSA cannot recover the same loss twice.” Trial Court Opinion, 4/5/12, at 12-13 & n.4. 4 The trial court arrived at this number based upon the testimony of GSA’s expert witness, Robert Sherbondy, who testified that during the two years of Dr. Arreola’s employment, GSA suffered losses directly attributable to Dr. Arreola’s employment of $182,761. Trial Court Opinion, 4/5/12, at 11; see also Plaintiff’s Exhibit 3 (Robert Sherbondy Deposition), at 35-36.
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Arreola filed a timely post-trial motion. GSA filed an answer to the post-trial
motion on November 22, 2013. The parties filed briefs in support of their
respective positions, following which Dr. Arreola filed a motion requesting
leave to file a supplemental post-trial motion nunc pro tunc. GSA filed an
answer to this motion on March 14, 2014. Because more than 120 days had
passed since Dr. Arreola originally filed his post-trial motion and the trial
court had not yet issued a decision thereon, GSA filed a praecipe for the
entry of judgment on April 7, 2014. On April 23, 2014, Dr. Arreola filed a
timely notice of appeal from the entry of judgment.
On April 22, 2014, the trial court entered an order denying Dr.
Arreola’s request to file a supplemental post-trial motion nunc pro tunc and
adopting its April 5, 2012 opinion and order. On May 2, 2014, Dr. Arreola
filed a timely notice of appeal from this order. On June 19, 2014, this Court
sua sponte consolidated the two appeals.
Dr. Arreola raises the following issues on appeal for our review:
A. Whether the trial court misinterpreted the recruitment agreement to find that Dr. Arreola had caused a forfeiture of loan forgiveness?
B. Whether the trial court misinterpreted the promissory note to find Dr. Arreola liable thereunder to GSA?
C. Whether the trial court erred by misinterpreting the employment contract to find that Dr. Arreola was liable to GSA for GSA’s operating losses?
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D. Whether the trial court erred by awarding prejudgment interest?
E. Whether the motion for leave to file [a] supplemental motion for post-trial relief should have been granted?
Dr. Arreola’s Brief at 1-2.5
Dr. Arreola’s first three issues on appeal challenge the trial court’s
determination that he was responsible for indemnifying GSA for the money it
paid to UPMC Horizon under the recruitment agreement and for the money
GSA expended during his tenure for expenses outside of those amounts
included in Exhibit C to the recruitment agreement. These present questions
of contract interpretation. “Since contract interpretation is a question of law,
our review of the trial court’s decision is de novo and our scope is plenary.”
Bair v. Manor Care of Elizabethtown, PA, LLC, 108 A.3d 94, 96 (Pa.
Super. 2015) (citation and quotation marks omitted). The goal of contract
interpretation is to “ascertain the intent of the parties.” Lenau v. Co-
eXprise, Inc., 102 A.3d 423, 429 (Pa. Super. 2014)
In the cases of a written contract, the intent of the parties is the writing itself. If left undefined, the words of a contract are to be given their ordinary meaning. When the terms of a contract are clear and unambiguous, the intent of the parties is to be ascertained from the document itself. When, however, an ambiguity exists, parol evidence is admissible to explain or clarify or resolve the ambiguity, irrespective of whether the ambiguity is
5 Based upon our resolution of Dr. Arreola’s first three issues, we need not address the remaining two issues raised on appeal.
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patent, created by the language of the instrument, or latent, created by extrinsic or collateral circumstances.
Id. at 429-30 (internal citations omitted). Language in a contract is
“ambiguous” “if it is reasonably susceptible of different constructions and
capable of being understood in more than one sense.” Id. at 430. (citation
omitted).
At the outset, we observe that the sole basis for finding any obligation
by Dr. Arreola to GSA is under the employment contract. As Dr. Arreola
correctly observes, GSA and Dr. Arreola owed no duty to one another under
the promissory note and recruitment agreement. Dr. Arreola’s Brief at 26.
UPMC Horizon was the only entity with standing to sue to enforce the
recruitment agreement and promissory note; GSA could not.6 Thus, unless
Dr. Arreola failed to satisfy his obligations to GSA under the employment
contract, his obligations under the recruitment agreement are irrelevant for
purposes of this appeal. His alleged breach of the recruitment agreement –
let alone the materiality of the breach – by failing to work in the UPMC
Horizon service area for six years has no bearing on the outcome of this
case. The only question is whether Dr. Arreola breached or otherwise failed
to satisfy the requirements of the employment contract.
6 We note that there are no obligations inter se under the promissory note, it simply secured the recruitment agreement.
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The provision of the employment contract central to this appeal is the
indemnity provision contained in paragraph 15(b). “An agreement to
indemnify is an obligation resting upon one person to make good a loss
which another has incurred or may incur by acting at the request of the
former, or for the former’s benefit.” Potts v. Dow Chem. Co., 415 A.2d
1220, 1221 (Pa. Super. 1979) (en banc) (citation omitted). The right to
indemnification depends, in relevant part, on “the scope of the
indemnification agreement; the reasonableness of the underlying claim; its
coverage by the indemnification agreement; [and] the reasonableness of the
alleged expenses[.]” McClure v. Deerland Corp., 585 A.2d 19, 22 (Pa.
Super. 1991) (citation omitted).
As stated above, pursuant to paragraph 15(b) of the employment
contract, Dr. Arreola “agree[d] to indemnify and hold [GSA] harmless from
and against any indebtedness, liabilities, costs, damages or other losses
under the Recruitment Agreement with UPMC Horizon … or the Promissory
Note attached to such Recruitment Agreement[.]” Plaintiff’s Exhibit 2
(Employment Contract), ¶ 15(b). The record reflects that Dr. Arreola did
just that – he generated sufficient revenue above the guaranteed monthly
amount ($25,000 for the first year, $27,000 for the second year) for enough
months to allow GSA to repay the money it received from UPMC Horizon
pursuant to the recruitment agreement. N.T., 2/28/11, at 53; Plaintiff’s
Exhibit 5 (Dr. Arreola’s Receipts); Defendant’s Exhibit A (Loan Balance
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Calculation). There was indebtedness created under the recruitment
agreement at the beginning of Dr. Arreola’s tenure – UPMC Horizon provided
loans to GSA in the months Dr. Arreola earned less than $25,000. See
Plaintiff’s Exhibit 1 (Recruitment Agreement); Plaintiff’s Exhibit 5 (Dr.
Arreola’s Receipts); Plaintiff’s Exhibit 22 (Downing Exhibit 31). However, Dr.
Arreola earned revenue in excess of the guaranteed amount for all but one
month of the remaining time of his employment with GSA. See Plaintiff’s
Exhibit 5 (Dr. Arreola’s Receipts), 22 (Downing Exhibit 31); Defendant’s
Exhibit A (Loan Balance Calculation). Pursuant to the recruitment
agreement, GSA had an obligation to use the revenue earned by Dr. Arreola
over the guaranteed amount each month to repay the amounts previously
loaned by UPMC Horizon to GSA. See Recruitment Agreement, ¶ 5(c).
Instead of repaying all of the money it owed to UPMC Horizon, the record
reflects that GSA decided to allocate the revenue earned by Dr. Arreola to
other sources, a decision over which Dr. Arreola had no control. See Dr.
Arreola’s Brief at 20; Plaintiff’s Exhibit 4 (Sherbondy Deposition Exhibits);
Plaintiff’s Exhibit 17 (Ruthanne Beighley Deposition), at 33; Defendant’s
Exhibit H (Dr. Kolenich Deposition), at 59-60.
To permit GSA to benefit from the revenue earned by Dr. Arreola
pursuant to the recruitment agreement and additionally require Dr. Arreola
to indemnify GSA for the money it paid to UPMC Horizon under the
recruitment agreement would be to allow double recovery by GSA. By
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earning revenue in excess of the Guaranteed Minimum Amount provided
under the recruitment agreement, Dr. Arreola paid what he owed to GSA as
indemnification. See Potts, 415 A.2d at 1221. To conclude otherwise
would lead to an absurd result based on a simple review of the numbers
alone – Dr. Arreola’s salary during his employment with GSA was $344,000
and he would be responsible for paying $209,699.76 to cover the loan that
GSA received from UPMC Horizon despite the fact that he brought into GSA
over $700,000 in revenue. See Plaintiff’s Exhibit 5 (Dr. Arreola’s Receipt);
N.T., 2/28/11, at 55.
GSA’s “cash flow” does not weigh into this decision at all. See Trial
Court Opinion, 4/5/12, at 10, 14. To the contrary, the record reflects that
Dr. Arreola met his obligation to GSA as set forth in the employment
contract by generating revenue in excess of the Guaranteed Minimum
Amount, thus indemnifying GSA for the money it received from UPMC
Horizon to support Dr. Arreola’s employment. That GSA allocated the
revenue Dr. Arreola generated to other sources – again, a decision over
which Dr. Arreola had no control – does not render Dr. Arreola liable for the
cost of the loan. GSA’s ultimate repayment to UPMC Horizon for the loan
provided pursuant to the recruitment agreement does not constitute
additional “indebtedness, liabilities, costs, damages or other losses” for
which Dr. Arreola was liable pursuant to the employment contract. See
Plaintiff’s Exhibit 2 (Employment Contract), ¶ 15(b). He repaid GSA by
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earning revenue in excess of the guaranteed amount, and therefore satisfied
his indemnification obligation.
We further agree with Dr. Arreola that the trial court inappropriately
awarded damages for costs incurred by GSA in excess of those contemplated
in Exhibit C to the recruitment agreement. See Dr. Arreola’s Brief at 33.
The plain language of the employment contract only holds Dr. Arreola
responsible for “indebtedness, liabilities, costs, damages or other losses
under the Recruitment Agreement[.]” Plaintiff’s Exhibit 2 (Employment
Contract), ¶ 15(b) (emphasis added). Exhibit C to the recruitment
agreement sets forth the annual practice expenses covered under the
recruitment agreement, the costs for which totaled $300,000 in the first
year and $324,000 in the second year, or $25,000 per month in the first
year and $27,000 per month in the second year. Plaintiff’s Exhibit 1
(Recruitment Agreement), ¶ 5 & Exhibit C. Both Dr. Arreola and GSA were
aware of these amounts prior to entering into the employment contract and
the plain language of the employment contract only holds Dr. Arreola
responsible for the amounts included in the recruitment agreement. Indeed,
the record reflects that GSA requested the inclusion of additional anticipated
costs in Exhibit C, such as money for the purchase of a new computer
system that Dr. Kolenich had already been considering purchasing, but
UPMC Horizon did not agree to include any other expenses. N.T., 2/28/11,
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at 83; Plaintiff’s Exhibit 14 (Letter from Dr. Kolenich to Dave D’Urso of UPMC
Horizon).
We recognize that Attorney Ruthanne Beighley, the drafter of the
employment contract, testified that she intended the language in paragraph
15(b) of the employment contract “to cover losses associated with the
employment of [Dr. Arreola],” not specifically limited to those amounts listed
in Exhibit C to the recruitment agreement. See Plaintiff’s Exhibit 17
(Ruthanne Beighley Deposition), at 21. We also acknowledge that GSA’s
expert, Robert Sherbondy, testified that losses incurred by GSA of $182,761
during Dr. Arreola’s tenure with GSA were “directly related to the
employment of [Dr. Arreola].” See Plaintiff’s Exhibit 3 (Robert Sherbondy
Deposition), at 35-36. We conclude, however, that the terms of paragraph
15(b) of the employment contract are clear and unambiguous: Dr. Arreola
agreed only to indemnify and hold GSA harmless for the amounts included in
the recruitment agreement. Thus, as a matter of law, we may only consider
the contractual terms without reference to evidence provided outside of the
contract, rendering the testimony concerning the losses GSA incurred
outside of the amounts included in Exhibit C to the recruitment agreement
irrelevant. See Bair, 108 A.3d at 96 (noting our de novo standard of review
and plenary scope of review for questions of contract interpretation); Lesko
v. Frankford Hosp.-Bucks Cnty., 15 A.3d 337, 342 (Pa. 2011) (“The
meaning of an unambiguous contract presents a question of law[.]”); see
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also Lenau, 102 A.3d at 429 (“When the terms of a contract are clear and
unambiguous, the intent of the parties is to be ascertained from the
document itself.”).
Based on the foregoing, we conclude that the trial court erred as a
matter of law by awarding damages to GSA for amounts it paid to UPMC
Horizon under the recruitment agreement and for losses it sustained above
those amounts included in the recruitment agreement during Dr. Arreola’s
term of employment. Reimbursement to GSA by Dr. Arreola for payments
GSA made on the loans from UPMC Horizon, under the circumstances of this
case, was unreasonable, and the payments for expenses not included in
Exhibit C to the recruitment agreement were outside the scope of and not
covered by the employment contract’s indemnification agreement. See
McClure, 585 A.2d at 22. We therefore reverse the trial court’s decision
and remand for the entry of judgment in favor of Dr. Arreola.
Judgment reversed. Motion to quash denied. Case remanded with
instructions. Jurisdiction relinquished.
Ford Elliott, P.J.E. joins the Memorandum.
Allen, J. files a Dissenting Memorandum.
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Judgment Entered.
Joseph D. Seletyn, Esq. Prothonotary
Date: 7/8/2015
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