Precision, Inc. v. North Louisiana Regional Hospital, Inc.

802 So. 2d 1016, 2001 La. App. LEXIS 3267, 2001 WL 1658741
CourtLouisiana Court of Appeal
DecidedDecember 28, 2001
DocketNo. 34,793-CA
StatusPublished

This text of 802 So. 2d 1016 (Precision, Inc. v. North Louisiana Regional Hospital, Inc.) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Precision, Inc. v. North Louisiana Regional Hospital, Inc., 802 So. 2d 1016, 2001 La. App. LEXIS 3267, 2001 WL 1658741 (La. Ct. App. 2001).

Opinions

L GASKINS, Judge.

■ The plaintiff, Precision, Inc., appeals a judgment in favor of the defendants, John S. Turner, Jr. and William C. Windham. The trial court granted the defendants’ motions for summary judgment, dismissing the plaintiffs claims against the defendants individually. For the following reasons, we affirm.

FACTS

In October 1992, North Louisiana Regional Hospital, a Louisiana partnership' (the “Partnership”), began operating a psychiatric hospital in Shreveport. The Partnership was formed by two corporations, Precision, Inc. (“Precision”) and North Louisiana Regional Hospital, Inc. (“NLRH”). The written articles of partnership allocated a one-third interest to Precision and a two-thirds interest to NLRH. Article Seven provided that any action concerning the Partnership’s business required the unanimous written consent of the partners.

The sole shareholder and president of Precision is Dr. Richard Williams, a licensed psychiatrist. The shareholders of NLRH are John Turner and William Windham. In 1993, Precision and NLRH [1018]*1018joined in the formation of Orleans Regional Hospital, L.L.C. (“ORH”), to operate a psychiatric hospital in New Orleans. The parties also created additional entities to perform psychiatric services, including Magnolia Health Systems, L.L.C.; Children’s Hospital of Vicksburg, L.L.C.; Success Counseling, L.L.C.; Spectrum Community Mental Health Center, L.L.C.; and Magnolia HMO, Inc. (“Other Entities”). Although the partners could not agree on the | ¿method of operation of these entities, Precision was listed as a member of the Other Entities in the initial reports of organization filed with the State.

In 1995, Louisiana changed the Medicaid reimbursement program and the Partnership’s hospital in Shreveport lost revenue. Unable to agree on the future operation of the hospital, Precision and NLRH executed a written settlement agreement in April 1996. Pursuant to the settlement, Precision was paid $733,333 toward its partnership interest. The parties also agreed that the Partnership would be dissolved on or before April 30, 1996, and that NLRH could continue hospital operations in the same facility with a different company and owners.

Shortly after the parties signed the contract, the Partnership was notified by the Louisiana Office of Inspector General (“OIG”) that it was considering a recommendation to the State to collect an alleged overpayment of approximately $3,569,778. After receiving the notice, NLRH asserted a belief that dissolution of the Partnership would increase the likelihood that the State would pursue collection of the alleged overpayment. Consequently, NLRH decided that dissolution was not in the Partnership’s best interest at the time and refused to comply with the settlement agreement.

Subsequently, the plaintiff, Precision, filed suit against the defendants, NLRH, John Turner and William Windham, alleging that the failure to dissolve the Partnership was a breach of the settlement agreement and that the transfer of partnership funds to the Other Entities by NLRH violated the partnership articles. The plaintiff also alleged that Turner and | aWindham were personally liable for intentional interference with a contract based on the failure of NLRH to dissolve the Partnership and the transfer of partnership funds without Precision’s consent.

NLRH filed a motion for summary judgment seeking a declaration by the district court that Precision was a member of the Other Entities as a matter of law. The motion was denied. In July 1999, Turner and Windham moved for partial summary judgment, seeking dismissal of the plaintiffs claim for intentional interference with a contract. After a hearing, the district court granted the motion for partial summary judgment, finding that the plaintiff failed to present factual support sufficient to satisfy its evidentiary burden of proving an absence of justification for the breach of the settlement contract.

The plaintiff filed an amended petition alleging that it had withdrawn from the Partnership on March 31, 1996, and that Turner and Windham were individually liable for inducing NLRH to breach the partnership articles by failing to pay the plaintiff the value of its partnership interest on the date of withdrawal and by distributing partnership funds without the plaintiffs written consent. Subsequently, Turner and Windham filed another motion for summary judgment, seeking dismissal of all of the plaintiffs claims against them individually for intentional interference with a contract based on the alleged breach of the partnership articles.

In May 2000, the district court issued written reasons for judgment finding that because the plaintiffs withdrawal termi[1019]*1019nated the Partnership, NLRH was not obligated to immediately pay the plaintiff the value of its ^partnership interest under La. C.C. art. 2824 Official Comment (c). The court determined that the plaintiff could not establish factual support for its claim to the partnership interest as a withdrawing partner, as required by 9 to 5 Fashions v. Spurney, 538 So.2d 228 (La.1989). The court also found that the plaintiff possessed actual knowledge of the loans to the Other Entities, but did not object, and thus tacitly ratified the distribution of partnership funds by NLRH. The court rendered judgment in favor of the defendants, dismissing the plaintiffs claims against Turner and Windham. The plaintiff appeals the judgment.

DISCUSSION

The plaintiff contends the trial court erred in granting summary judgment in favor of Turner and Windham. The plaintiff argues that a genuine issue of fact exists concerning the question of whether Turner and Windham were justified in breaching the settlement agreement.

Summary judgment shall be rendered if the pleadings, depositions, answers to interrogatories, admissions on file, and any affidavits, show that there is no genuine issue of material fact and that the mover is entitled to judgment as a matter of law. La. C.C.P. art. 966. The mover has the burden of establishing the absence of a genuine issue of material fact. If the mover will not bear the burden of proof at trial on the matter, then he is required to point out to the court the absence of factual support for one or more elements essential to the adverse party’s claim or action. La. C.C.P. art. 966(C)(2).

LThe party opposing summary judgment cannot rest on the mere allegations of his pleadings, but must show that he has evidence which could satisfy his evidentiary burden at trial. If he does not produce such evidence, then there is no genuine issue of material fact and the mover is entitled to summary judgment. La. C.C.P. art. 966(C)(2). Appellate courts review summary judgments de novo under the same criteria that govern the district court’s consideration of whether summary judgment is appropriate. NAB Natural Resources v. Willamette Industries, Inc., 28,555 (La.App.2d Cir.8/21/96), 679 So.2d 477.

The Louisiana Supreme Court has defined the elements which must be established to sustain a claim for intentional interference with a contract: 1) a contract or legally protected interest must exist between the plaintiff and the corporate defendant; 2) the corporate actor must know of the contract; 3) the officer must intentionally induce or cause the corporation to breach the contract; 4) there must be an absence of justification on the part of the corporate actor; and 5) the breach of contract must cause damages to plaintiff. 9 to 5 Fashions v. Spumey, supra.

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Related

9 to 5 Fashions, Inc. v. Spurney
538 So. 2d 228 (Supreme Court of Louisiana, 1989)
NAB Nat. Resources v. Willamette Industries, Inc.
679 So. 2d 477 (Louisiana Court of Appeal, 1996)
Smith v. Lynn
749 So. 2d 692 (Louisiana Court of Appeal, 1999)

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Bluebook (online)
802 So. 2d 1016, 2001 La. App. LEXIS 3267, 2001 WL 1658741, Counsel Stack Legal Research, https://law.counselstack.com/opinion/precision-inc-v-north-louisiana-regional-hospital-inc-lactapp-2001.