United States District Court, D. Colorado
Brooke Jackson United States District Judge
order addresses plaintiff Integrity Medical Management,
LLC's (IMM) motion for partial summary judgment [ECF No.
108], defendant Surgical Center at Premier, LLC's
(Premier) motion for summary judgment [ECF No. 110], and
defendant Surgical Care Affiliates, LLC's (SCA) motion
for summary judgment [ECF No. 112]. For the reasons stated
below, the Court grants IMM's motion in part and denies
it in part, grants Premier's motion, and grants SCA's
motion. With all of IMM's claims dismissed, this case
will continue to trial only on Premier and SCA's
a Texas company that provides management and development
services for healthcare facilities. ECF No. 1, ¶¶
1, 12; ECF No. 55 at 14, ¶¶ 2, 7. Premier owned and
operated an ambulatory surgery center in Colorado Springs,
Colorado. ECF No. 1, ¶ 13; ECF No. 55 at 15, ¶ 8.
SCA owned a roughly 20% interest in Premier and had two
representatives on Premier's seven-person board of
managers. ECF No. 1, ¶¶ 15, 20; ECF No. 112 at 2.
IMM also had an ownership interest in Premier and had one
representative-IMM's chief executive officer Lewis
Nichols-on its board. ECF No. 1, ¶¶ 24, 28; ECF No.
110, Ex. 5; ECF No. 112, Ex. 2, at 151:3-25.
April 1, 2013, IMM and Premier agreed for IMM to manage
Premier's surgery center. ECF No. 55 at 15, ¶¶
9-10; ECF No. 108 at 3, ¶ 3. IMM and Premier
subsequently entered into an “Amended and Restated
Management Agreement” effective October 16, 2013. ECF
No. 108, Ex. 1, ¶ 6; ECF No. 127, Ex. 1; ECF No. 127,
Ex. 2, at 54:23-25, 55:4-10. This agreement had an initial
term of April 1, 2013 through June 30, 2015. ECF No. 127, Ex.
1, § 1. Section 8.02(c) of the management agreement
allowed the agreement to be terminated without cause,
Either party may terminate this Agreement for any reason
effective as of any date after the end of the Initial Term,
provided that (i) the management fee payable to [IMM]
pursuant to Section 4.01(a) hereof for the period of two full
consecutive calendar quarters . . . ending immediately prior
to the date notice of such termination is given is less than
$100, 000 (i.e. an average of $50, 000 per quarter),
and (ii) the terminating Party gives the other Party
at least 120 days prior notice of such termination.
Id. § 8.02(c). Unless the parties terminated
the agreement, it would automatically renew for successive
one-year terms through June 30, 2022. Id. § 1.
to be paid according to a complex formula. Section 4.01(a)
specifies that IMM's annual management fee was a share of
Premier's net profits above a baseline level.
Id. § 4.01(a). Section 4.01(b) provided IMM
quarterly payment advances as follows:
Commencing on the date that is 90 days after the Effective
Date, and each quarter thereafter during the term of this
Agreement, [IMM] will be paid an advance quarterly management
fee based on the estimated management fee for the entire
year, as determined in good faith from time to time by
[Premier's] outside accountant.
Id. § 4.01(b). That provision also required
overpayments and underpayments of advances to be reconciled
once IMM's actual management fee is calculated:
Promptly upon completion of the financial statements for each
calendar year, [Premier] shall cause a final computation of
the management fee for such calendar year to be delivered to
[IMM]. Within 30 days after the delivery of such statement,
[Premier] shall pay [IMM] any excess of the actual management
fee over the advances paid during the year, and [IMM] shall
pay [Premier] any excess of the advances paid during the year
over the actual management fee.
Id. Section 8.04 explains that such surplus or
deficient advances must also be settled immediately if the
contract is terminated:
Upon any termination of this Agreement, [Premier] shall
promptly pay to [IMM] any accrued but unpaid sums due under
this Agreement and [IMM] shall promptly pay to [Premier] any
accrued but unpaid sums due under this Agreement including
but not limited to the excess of the advances paid during the
year over the actual management fee pursuant to Section
Id. § 8.04.
profits did not exceed the baseline level at any time during
the contract term, so IMM was not contractually entitled to
any payment for its work. See ECF No. 55 at 17,
¶ 24; ECF No. 108, Ex. 1, ¶ 10. However, Premier
decided to pay IMM $15, 000 every month for its services
anyway. ECF No. 1, ¶ 23; ECF No. 55 at 17, ¶¶
23-25. On April 23, 2014 Premier's board of managers held
a meeting and ratified these payments. ECF No. 108, Ex. 5;
ECF No.110, Ex. 5. The meeting's minutes state:
Motion was made by Dan Kopacz to forgive 2013 management
shortfall under the management contract, pay IMM $15, 000 per
month through December 31, 2014 consistent with what IMM has
been being [sic] paid without additional true-up under the
contract . . . . Motion seconded by John Pak and approved
unanimously. Discussion included agreeing to go back to
contract calculation in 2015 once all cost-cutting measures
had been implemented.
ECF No. 108, Ex. 5.
April 2014, with more than a year left in IMM's initial
term managing Premier's facilities, Premier considered
merging with Audubon Ambulatory Surgery Center. ECF No. 1,
¶ 21; ECF No. 55 at 4, ¶ 21. A non-binding letter
of intent indicated that SCA rather than IMM would provide
management services to the merged entity. ECF No. 1,
¶¶ 24-25; ECF No. 55 at 4, ¶ 25; ECF No. 112,
Ex. 3, § 3(d). The letter further stated that Audubon
and Premier “shall mutually agree upon the terms and
conditions by which the Management Agreement between Premier
and [IMM] would be terminated.” ECF No. 112, Ex. 3,
§ 4(d). Premier's board of managers, including
IMM's representative, signed this letter of intent. ECF
No. 112, Ex. 3, at 7. SCA subsequently offered to buy out the
remainder of IMM's management contract with Premier, but
IMM rejected the offer. ECF No. 1, ¶ 27; ECF No. 55 at
4, ¶ 27.
negotiations unsuccessful, Premier's board of managers
invoked Section 8.02(c) to terminate the management agreement
with IMM. On March 3, 2015 Premier sent IMM a notice to
terminate the agreement 120 days later on July 1, 2015. ECF
No. 55 at 20, ¶¶ 36-37; ECF No. 108, Ex. 7.
filed this action on October 9, 2015. ECF No. 1. IMM argues
that Premier breached their contract and breached the duty of
good faith and fair dealing by terminating the management
agreement despite the April 23, 2014 board meeting's
amendment. Id. ¶¶ 39-53. IMM also contends
that SCA's involvement in Premier's termination of
the management agreement makes it liable for intentional
interference with IMM's contract, intentional
interference with IMM's prospective business relations,
unjust enrichment at IMM's expense, and civil conspiracy
to commit these wrongful acts. Id. ¶¶
submitted counterclaims against IMM on December 28, 2015 and
amended these counterclaims on February 26, 2016. ECF Nos.
18, 55. Premier maintains that it was IMM who breached the
contract or, in the alternative, was unjustly enriched by
failing to provide required services, failing to repay money
owed to Premier, failing to pay for Mr. Nichols's health
benefits, and improperly delegating tasks it was obligated to
perform without paying for their performance. ECF No. 55,
¶¶ 42-51. SCA similarly argues that IMM was
unjustly enriched by having SCA perform services without
compensation that IMM was supposed to perform under the
management agreement. Id. ¶¶ 52-56.
close of discovery, IMM filed a motion for partial summary
judgment against Premier while Premier and SCA each submitted
a motion for summary judgment on every one of IMM's
claims. ECF Nos. 108, 110, 112.
Court may grant summary judgment if “there is no
genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Fed.R.Civ.P.
56(a). The moving party has the burden to show that there is
an absence of evidence to support the nonmoving party's
case. Celotex Corp. v. Catrett, 477 U.S. 317, 325
(1986). The nonmoving party must “designate specific
facts showing that there is a genuine issue for trial.”
Id. at 324. A fact is material “if under the
substantive law it is essential to the proper disposition of
the claim.” Adler v. Wal-Mart Stores, Inc.,
144 F.3d 664, 670 (10th Cir. 1998). A material fact is
genuine if “the evidence is such that a reasonable jury
could return a verdict for the nonmoving party.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986). The Court ...