Souder v. Health Partners, Inc.

997 S.W.2d 140, 1998 WL 1099595
CourtCourt of Appeals of Tennessee
DecidedOctober 27, 1998
Docket02A01-9712-CH-00321
StatusPublished
Cited by19 cases

This text of 997 S.W.2d 140 (Souder v. Health Partners, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Souder v. Health Partners, Inc., 997 S.W.2d 140, 1998 WL 1099595 (Tenn. Ct. App. 1998).

Opinion

*142 CRAWFORD, Presiding Judge, Western Section.

This case involves a contract arbitration clause and the Tennessee Open Meetings Act (Act). Defendant, Health Partners, Inc. (HP), appeals the Chancellor’s order denying its motion to compel arbitration and granting the Plaintiffs, Dr. Bob T. Souder, M.D. (Souder), motion for judgment on the pleadings.

HP is a Preferred Provider Organization (PPO) that contracts with insurance companies and employers from Tennessee and other states. HP provides contracting third-party payors with a network of physicians. HP was created in 1994 under the authority of the Jackson-Madison County General Hospital District (District) as a “governmental instrumentality” of the District. The District created HP in order to further the District’s mission to provide the full range of health care and allied and incidental services. 1 HP is a not-for-profit mutual benefit corporation which has, as its sole member, the District.

In 1994, Souder entered into a Physician Participation Agreement (PPA) with HP. In late 1996, Souder and other physicians who were participating medical providers in HP’s PPO received a letter 2 dated November 26, 1996 from HP which stated in part as follows:

The Board of Directors of Health Partners recently approved actions which offer an exclusive provider relationship to West Tennessee Alliance for Healthcare (WTAH), a Physician Hospital Organization (PHO), and the Jackson Clinic to serve as the sole physician networks, for services they render, in Madison County....
[[Image here]]
It is our understanding that you are not currently a member of WTAH. Because of the above described decision, we are hereby notifying you that your existing contract with Health Partners will not be renewed. 3

The action of the Board of Directors of HP described in the above-quoted letter did not take place at a board meeting, but instead took place in the form of a written consent resolution in lieu of a meeting. 4 On January 9,1997, the Board of Directors of HP adopted a resolution in which it restated its previously adopted policy of limiting HP’s physician provider network in Madison County. This meeting took place without prior public notice as had all previous meetings of the Board of Directors of HP.

Subsequently, Souder and the other physicians received a letter from McGuire dated January 31, 1997, which stated as follows:

You previously received from us a letter dated November 26, 1996, advising that your Physician Participation Agreement with Health Partners, Inc. would not be renewed. We understand there may be some misunderstanding as to the effect of the notice of nonrenewal. In order to clarify any confusion that may exist, and to assure an orderly transition, this letter is notice, pursuant to Section 9.2 of the Physician Participation Agreement, that the agreement is terminated. The effective date of the termination of your Physician Participation Agreement is sixty (60) days from the date of this letter, April 1, 1997. Until this date, you will remain a participating provider in Health Partners, Inc.

*143 On July 29, 1997, the Board of Trustees of the District amended HP’s charter making the Board of Trustees of the District the Board of Trustees of HP. This meeting was announced to the public and open to such. 5 In addition to amending HP’s charter, the Board of Trustees of the District ratified and confirmed all actions of the previous Board of Directors of HP and the management of HP.

In May 1997, Souder filed this suit seeking reinstatement of his PPA with HP alleging that the actions of HP violated the Act. Souder alleges that the Act is applicable to the Board of Directors of HP in that it is an entity that falls within the provisions of the Act. Furthermore, Souder avers that the action of the Board of Directors of HP to limit its network, thereby excluding himself and other similarly situated physician providers, was taken at meetings without the required public notice. Souder alleges that all actions taken by the Board of Directors of HP are void and of no effect since none of its meetings have been open to the public pursuant to the Act.

HP filed a motion to compel Souder to submit the case to arbitration as required by the PPA. This motion and a subsequent motion to reconsider were denied by the Chancellor. After HP’s answer was filed, Souder filed a motion for judgment on the pleadings with regard to the applicability of the Act to HP and the possible violations of the Act by HP.

The Chancellor granted Souder’s motion. The Chancellor concluded that HP was subject to the coverage and requirements of the Act because of its status as a governmental instrumentality according to its charter, and because of its status as a subsidiary entity of the District according to Chapter 165 of the Private Acts of 1992 of the Tennessee General Assembly. Furthermore, the Chancellor concluded that HP had committed numerous violations of the Act in that it has never published or publicized any public notice of the meetings of its Board of Directors. Finding such, the Chancellor declared, as required by statute, all actions of HP’s Board of Directors void and of no effect. Thus, the action of HP’s Board of Directors in terminating Souder’s contract was declared void and of no effect, and the Chancellor declared the PPA between Souder and HP still in effect. In addition, the Chancellor issued an injunction enjoining HP from further violations of the Act. 6

HP perfected the present appeal, and presents the following issues, as stated in its brief, for our review:

1. Whether it was error for the chancery court to fail to compel the Plaintiff to submit his claim against the Defendant to arbitration.
2. Whether it was error for the chancery court to grant the Plaintiff a judgment on the pleadings on the applicability of the Open Meetings Act.
3. Whether it was error for the chancery court to find that the Open Meetings Act applied to Health Partners.
4. Whether it was error for the chancery court to find that the termination of the Plaintiffs contract with Health Partners was an action of Health Partners’ Board of Directors.
5. Whether it was error for the chancery court not to find that any violation of the Open Meetings Act that might *144 have occurred was cured by action of the Board of Trustees of the District.
6. Whether the scope of the injunction entered by the chancery court is imper-missibly broad.

Standard of Review

It appears from an examination of the Chancellor’s Conclusions of Law, that he relied on matters outside the pleadings.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Wayne Gray v. Dickson County, Tennessee
Court of Appeals of Tennessee, 2022
In Re Conservatorship of Michael S. Starnes
Court of Appeals of Tennessee, 2014
Joseph H. Johnston v. Marilyn Swing
Court of Appeals of Tennessee, 2013
Dennis Allen v. City of Memphis, Tennessee
397 S.W.3d 572 (Court of Appeals of Tennessee, 2012)
Monica Whitmore v. Shelby County Government
Court of Appeals of Tennessee, 2011
Long v. CITY OF COOPERTOWN
801 F. Supp. 2d 674 (M.D. Tennessee, 2011)
Lewis v. Cleveland Municipal Airport Authority
289 S.W.3d 808 (Court of Appeals of Tennessee, 2008)
Teresa McWherter v. JACOA Alcoholism Center
Court of Appeals of Tennessee, 2007
Hamrick v. Charleston Area Medical Center, Inc.
648 S.E.2d 1 (West Virginia Supreme Court, 2007)
Opinion No.
Arkansas Attorney General Reports, 2003
Charles Rooker v. Donal Campbell
Court of Appeals of Tennessee, 2000

Cite This Page — Counsel Stack

Bluebook (online)
997 S.W.2d 140, 1998 WL 1099595, Counsel Stack Legal Research, https://law.counselstack.com/opinion/souder-v-health-partners-inc-tennctapp-1998.