New Medical Horizons II, Ltd. v. Jacobson

317 S.W.3d 421, 2010 WL 1840217
CourtCourt of Appeals of Texas
DecidedMay 6, 2010
Docket01-09-00238-CV
StatusPublished
Cited by23 cases

This text of 317 S.W.3d 421 (New Medical Horizons II, Ltd. v. Jacobson) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
New Medical Horizons II, Ltd. v. Jacobson, 317 S.W.3d 421, 2010 WL 1840217 (Tex. Ct. App. 2010).

Opinion

OPINION

SHERRY RADACK, Chief Justice.

Appellant, New Medical Horizons II, Ltd., d/b/a Cypress Fairbanks Medical Center (“the Hospital”), appeals from an interlocutory order denying its motion for summary judgment that requested, in part, confirmation of an arbitration award. We determine (1) whether we have jurisdiction over this appeal and, if so, (2) whether the trial court erred in denying confirmation of the arbitration award. Answering both questions in the affirmative, we reverse the interlocutory summary-judgment order to the extent that it denied confirmation of the arbitration award, and we remand the case with instructions.

BACKGROUND

Appellee, Robert L. Jacobson, M.D., was a physician specializing in maternal fetal medicine. Newborn Intensive Care Specialist, P.A. (“NICS”) wished for Jacobson to join its practice in the Hospital’s service area. Although NICS hired Jacobson, neither party could finance the desired practice.

In March 2005, Jacobson, NICS, and the Hospital entered into an agreement (the “Relocation Agreement”). Under the Relocation Agreement, Jacobson agreed to practice full time in the Hospital’s service area for four years. The Hospital financed the establishment of the new practice through a line-of-credit note (“the Note”) in the amount of $589,300. The Note provided that if NICS or Jacobson breached the Relocation Agreement and did not cure the breach within 60 days, the Hospital could terminate the contract and require repayment of the Note. The Relocation Agreement allowed either NICS or Jacobson to seek arbitration to determine allocation of fault between them if the Hospital terminated the agreement for specified reasons, with that allocation binding the Hospital for collection on the Note. The arbitration clause provided:

Any dispute or controversy arising under, out of or in connection with, or in relation to this Agreement, or any amendment hereof, or the breach hereof, except actions brought by Hospital ... to enforce the Line of Credit Note, shall be determined and settled by arbitration in Harris County, Texas, in accordance with the American Health Lawyers Association Alternative Dispute Resolution Service Rules of Procedure for Arbitration, applying the laws of the State....

(Emphasis added.)

Although the Relocation Agreement had a term of four years, the employment agreement between NICS and Jacobson had only a two-year term. NICS and Jacobson failed to renew the employment agreement when it expired, with each party blaming the other for the failure, and Jacobson ceased practicing in the Hospital’s service area. The Hospital terminated the Relocation Agreement in May 2007 and demanded that NICS and Jacobson repay the Note.

*424 Invoking the Relocation Agreement’s terms, NICS instigated an arbitration proceeding against both Jacobson and the Hospital to determine breach and allocation of fault between NICS and Jacobson. The Hospital answered and asserted its own claims for affirmative relief, seeking declaration of 11 matters and attorney’s fees under the Texas Declaratory Judgment Act. 1 Jacobson moved the arbitrator to dismiss each of these requests for declaratory relief, either on the basis that the Relocation Agreement excluded them because they related to enforcement of the Note or because the Hospital lacked standing to assert them. The arbitrator dismissed only three requests, for which it determined that the Hospital lacked standing, and denied Jacobson’s request to dismiss the remaining declaratory requests. Jacobson continued to object to the ruling allowing the Hospital’s pursuit of its remaining requests for declaratory relief, arguing that the arbitrator lacked jurisdiction under the Relocation Agreement to decide them.

On December 17, 2007, the arbitrator rendered his award. He found that Jacobson had breached the Relocation Agreement and allocated fault for that breach 80% to Jacobson and 20% to NICS. The award further recited that “[ajfter considering Dr. Jacobson’s Motion to Dismiss and the Hospital’s opposition, the Arbitrator determined that the Hospital’s requests for declaratory relief did not seek enforcement of the Note and the Motion to Dismiss was not granted. An additional action would be required to enforce the Note.” (Emphasis added.) The arbitrator then rendered the following declarations:

a.Monthly installments falling due under the Note after January 31, 2007 are not required to be forgiven pursuant to the Relocation Agreement. ...
b. The principal amount of the Note that was due as of February 1, 2007(i) was $191,030.08, (ii) bears interest from February 1, 2007 through May 1, 2007 at the rate of 7.5% per annum and from May 2, 2007 until paid at the rate of 10.25% per annum.
c. The Hospital gave proper written notice of Dr. Jacobson’s breach of the Relocation Agreement and properly allowed 60 days to cure the breach.
d. [The] Hospital properly terminated the Relocation Agreement by written notice on May 2, 2007.
e. All outstanding principal and accrued interest under the Note became fully due and payable on June 1, 2007.
f. [The] Hospital is entitled to recover under the Note the principal sum of $191,030.08, together with interest accrued at 7.5% per annum from February 1, 2007 through May 1, 2007 in the amount of $3,532.50, interest accrued at 10.25% per annum from May 2, 2007 through October 29, 2007 in the amount of $9,798.84 and, for so long as none of said principal is paid, interest accruing thereafter at $53.64 per day or $53.49 in a leap year.
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In March 2008, the Hospital filed suit against Jacobson. The Hospital asserted (1) an application for confirmation of the arbitration award and (2) a claim for breach of, and to enforce, the Note. The Hospital sought to confirm the award un~ *425 der the Texas General Arbitration Act (“TGAA”). 2

Jacobson never filed a motion to vacate or to modify the arbitration award, but on May 20, 2008, he filed his answer, alleging as one of several affirmative defenses that “[the hospital’s] claims are barred, in whole or in part, because the Arbitrator lacked jurisdiction to hear [its] claims, enter [sic] the Final Arbitration Award. Alternatively, the award entered in favor of [the Hospital] exceeds the scope of the Arbitrator’s limited jurisdiction under applicable law including, without limitation, Section 6.06 of the American Health [Lawyers] Association Alternative Dispute Resolution Service Rules of Procedure for Arbitration.” 3 In response, the Hospital filed an “answer” to Jacobson’s answer to address his affirmative defenses, alleging in part the “affirmative defense” that the 90-day limitations period to assert a motion to vacate or to modify the arbitration award under the TGAA had expired.

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Bluebook (online)
317 S.W.3d 421, 2010 WL 1840217, Counsel Stack Legal Research, https://law.counselstack.com/opinion/new-medical-horizons-ii-ltd-v-jacobson-texapp-2010.