Professional Dental Health Network, Inc. v. Advantage Health Plan, Inc.

782 So. 2d 1068, 0 La.App. 5 Cir. 1399, 2001 La. App. LEXIS 73, 2001 WL 79578
CourtLouisiana Court of Appeal
DecidedJanuary 30, 2001
DocketNo. 00-CA-1399
StatusPublished
Cited by1 cases

This text of 782 So. 2d 1068 (Professional Dental Health Network, Inc. v. Advantage Health Plan, 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
Professional Dental Health Network, Inc. v. Advantage Health Plan, Inc., 782 So. 2d 1068, 0 La.App. 5 Cir. 1399, 2001 La. App. LEXIS 73, 2001 WL 79578 (La. Ct. App. 2001).

Opinion

R SUS AN M. CHEHARDY, Judge.

Plaintiff appeals the dismissal of its suit for breach of contract. We affirm, for the reasons that follow.

FACTS

Professional Dental Health Network, Inc. (“PDHN”) is a corporation formed primarily to engage in the business of providing discounted referral dental plans to members of health maintenance organizations, employer groups, trade groups and individuals. Advantage Health Plan, Inc. (“AHP”) is a health maintenance organization (“HMO”) that entered into three contracts (“the Agreements”) with PDHN for a term of one year beginning September 1, 1996 to provide discounted referral plans for dental, hearing and vision care (“the DVH Rider”) to AHP’s members.

The Agreements provided that AHP would pay the PDHN a monthly fee for members to access the referral plans. A dispute arose between the parties as to the number of AHP members covered by the Agreements. PDHN asserted the Agreements covered all members of AHP. AHP contended the Agreements | ?,required it to pay access fees only for those members who chose to include the DVH Rider in their insurance plan renewals. Thus, AHP was paying access fees to PDHN for only a portion of its members, but PDHN contended that AHP was required by the Agreements to pay access fees for all members of AHP.

On September 1, 1997 the Agreements were renewed for another year by operation of an automatic renewal clause. On September 9, 1997 AHP notified PDHN in writing that effective September 1, 1997 it would discontinue offering PDHN’s networks to its groups. Accordingly, on September 9, 1997 PDHN advised AHP in writing that AHP had breached the Agreements “by not providing its group members access” to PDHN’s networks. PDHN warned AHP that this was “in clear breach” of the Agreements.

On November 20, 1997 PDHN filed suit against AHP for an accounting and damages. PDHN alleged that AHP had failed to comply with the Agreements by not allowing 100% of its members access to the Agreements, that such conduct constituted a breach of the Agreements, and that the breach resulted in PDHN suffering loss of access fees in respect of all members and/or subscribers of AHP during the term of the Agreements. PDHN sought an accounting of the AHP membership from September 1, 1996 to the date of the petition and damages in the amount to which PDHN alleged it would otherwise have been entitled under the Agreements.

PDHN was paid $34,133.68 by AHP over the course of the Agreements. PDHN contends the full amount of fees, if properly calculated under the provisions of Paragraph 2.3, should have been $349,000.09. Thus, PDHN sought Ran award of $314,965.32, together with legal interest from November 20,1997 until paid.

In addition, PDHN requested damages for loss of reputation, disruption of busi[1070]*1070ness activities, and other losses associated with the breach, as well as attorney’s fees and costs.

On January 27, 1998 AHP notified PDHN it was terminating the Agreements effective 120 days from that date.

The matter came to trial on January 11-12, 2000. The trial court took the matter under advisement and rendered judgment on May 26, 2000. The court found that AHP did not breach the terms of the Agreements entered into with PDHN and, accordingly, rendered judgment in favor of AHP. In written Reasons for Judgment, the trial court made the following findings and conclusions, in pertinent part:

At trial the testimony was that these were standard form contracts that were prepared by Jim Henderson, owner and president of PDHN. Similar contracts had been previously used by PDHN in other business arrangements with other parties.
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Louisiana Civil Code Article 2056 and the Courts are clear that in instances where there is a difference of interpretations of standard form contracts, “The contract must be construed against the party who furnished its text.” Therefore the interpretation of the contracts should be weighed in favor of the defendants in that they in no way contracted with the plaintiff to fulfill all those requirements that have been alleged by the plaintiff to have been breached.
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[T]here were several terms contained in these contracts which the defendant pointed out that they had no intention of fulfilling because such terms would have been impossible to fulfill. The Court also finds that there were in fact certain terms which were impossible to comply with by the defendants....
[sThis Court finds that the terms of these contracts were not only ambiguous, but they also failed to express the clear intent of the parties. Furthermore, there were provisions within these contracts which were not possible to perform and yet remain in compliance with certain insurance regulatory requirements. As a result there was no breach committed by the defendant, Advantage Health Plan, to which the plaintiff, Professional Dental Health Network, is entitled by law to seek damages.

On appeal, PDHN makes the following assignments of error:

1. The trial court erred in failing to enforce the terms of unambiguous contracts.
2. The trial court erred in considering parole evidence to interpret unambiguous contracts.
3. The trial court erred when it found that the agreements were standard form contracts of PDHN wherein they were negotiated agreements between AHP and PDHN.
4. The trial court erred in holding that AHP was excused from its obligations under the three agreements in that AHP had no intention of fulfilling certain obligations under the three agreements.
5. The trial court erred in holding that AHP would have been required to pass the cost of the DVH Rider to its members in violation of regulations of the Louisiana Department of Insurance, which regulations do not exist and which was specifically prohibited by the contracts.
6. The trial court erred in finding that the terms of the three agreements were not only ambiguous but they [1071]*1071also failed to express the clear intent of the parties.

These assignments raise the following issues on appeal: whether the Agreements were ambiguous; whether parole evidence was properly admitted to interpret the Agreements; whether the substance of the Agreements was prohibited | fiby any regulations of the Louisiana Department of Insurance; whether the trial court should have enforced the terms of the Agreements; and whether PDHN is entitled damages and, if so, the amount thereof.

LANGUAGE OF AGREEMENTS

The three Agreements (one each for the dental, vision and hearing networks) are nearly identical; the main difference is the rate schedule for each network, but there are a few differences in language in other portions of the Agreements. The following are the relevant provisions from the dental network Agreement, with notes to indicate differences in the other two Agreements:

This Agreement is entered into as of the 1st day of September, 1996, by and between, ADVANTAGE HEALTH PLAN, INC. (“AHP”) ... and PROFESSIONAL DENTAL HEALTH NETWORK, INC. (“PDHN”)....

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Cite This Page — Counsel Stack

Bluebook (online)
782 So. 2d 1068, 0 La.App. 5 Cir. 1399, 2001 La. App. LEXIS 73, 2001 WL 79578, Counsel Stack Legal Research, https://law.counselstack.com/opinion/professional-dental-health-network-inc-v-advantage-health-plan-inc-lactapp-2001.