Patrick S. Skulemowski, D.O. v. Joseph A. Zavaletta, M.D., P.A.

NUMBER 13-04-673-CV COURT OF APPEALS THIRTEENTH DISTRICT OF TEXAS CORPUS CHRISTI - EDINBURG PATRICK S. SKULEMOWSKI, D.O., Appellant, v. JOSEPH A. ZAVALETTA, M.D., P.A., Appellee. On appeal from the 404th District Court of Cameron County, Texas. MEMORANDUM OPINION Before Justices Yañez, Rodriguez, and Garza Memorandum Opinion by Justice Rodriguez This appeal arises from two traditional summary judgments granted in favor of appellee, Joseph A. Zavaletta, M.D., P.A., and against appellant, Patrick S. Skulemowski, D.O. (1) By four issues, Dr. Skulemowski contends the trial court erred in granting Dr. Zavaletta's first and second motion for summary judgment because (1) the judgments require Dr. Skulemowski to pay a virtual tax, (2) Dr. Zavaletta failed to render an accounting to Dr. Skulemowski, (3) Dr. Zavaletta was obligated to indemnify Dr. Skulemowski, and (4) the "issue of payment to the Hospital" was barred by res judicata, accord and satisfaction, and release. We affirm. I. Background In May 1997, Dr. Skulemowski and Dr. Zavaletta entered into an employment contract (Associate Agreement) whereby Dr. Zavaletta agreed to employ Dr. Skulemowski as an associate in his medical practice. The Associate Agreement was contingent upon Dr. Skulemowski entering into a recruitment contract (Recruiting Agreement) with Valley Regional Medical Center (the Hospital), which he did in July 1998. With respect to Dr. Skulemowski's compensation, the Associate Agreement provided that during Dr. Skulemowski's first twelve months of practice under the Associate Agreement, his "compensation and expenses shall be guaranteed by [the Hospital] . . . pursuant to [the Recruiting Agreement] executed by [Dr. Skulemowski] and [the Hospital] . . . ." More specifically, the Associate Agreement provided that "[the Hospital] shall pay [Dr. Skulemowski] an annual salary of Two Hundred and Twenty Thousand Dollars ($220,000.00) payable in 12 equal installments . . . ." In addition, pursuant to the Associate Agreement, Dr. Skulemowski agreed to "assign to DR. ZAVALETTA all funds received by [Dr. Skulemowski] under the [Recruiting Agreeement] . . . ." Dr. Skulemowski also agreed that "[a]ll income and accounts receivable generated by [Dr. Skulemowski] for services rendered hereunder and all activities related thereto shall belong to DR. ZAVALETTA . . . ." Furthermore, the Associate Agreement provided the following: [Dr. Skulemowski] expressly and irrevocably transfers, assigns, or otherwise conveys to DR. ZAVALETTA all rights, title and interest of [Dr. Skulemowski] in and to any fees resulting from or incidental to [Dr. Skulemowski's] practice of medicine . . . . Pursuant to an addendum to the Recruiting Agreement, the Hospital guaranteed that it would pay Dr. Skulemowski $27,500.00 per month for the first twelve months of his practice (the guarantee period), reduced by the amount of monthly gross cash receipts. (2) Thus, the Hospital guaranteed to pay Dr. Skulemowski $330,000.00 for his first year of practice, reduced by the amount of gross cash receipts for the period. The addendum also provided for an audit of Dr. Skulemowski's financial records by the Hospital at the end of the guarantee period to determine Dr. Skulemowski's net collectable revenue for that time period. (3) In the event that the combination of (1) the guaranteed payments made by the Hospital to Dr. Skulemowski and (2) Dr. Skulemowski's net collectable revenue for the guarantee period exceeded $330,000.00, the addendum provided the following: [Dr. Skulemowski] shall repay [the] Hospital a sum equal to the lesser of: a. The amount of the Guarantee Payments made by [the] Hospital during the Guarantee Period; or b. The amount by which [Dr. Skulemowski's] Net Collectable Revenue plus the amount of Guarantee Payments made by [the] Hospital exceeds the total amount of the monthly Guarantee Amounts. In 1999, after the conclusion of Dr. Skulemowski's employment with Dr. Zavaletta, Dr. Zavaletta sued Dr. Skulemowski to enforce a non-competition clause which had been part of the Associate Agreement. (4) The parties reached a settlement in the suit and executed a Mutual Release and Settlement Agreement (Settlement Agreement). The trial court entered a final judgment in the suit, incorporating portions of the Settlement Agreement therein. (5) In 2001, the Hospital filed suit against Dr. Skulemowski to recover the amount allegedly owed by Dr. Skulemowski to the Hospital under the Recruiting Agreement, that is the amount by which the guarantee payments and net collectable revenue allegedly exceeded $330,000.00. In response to the Hospital's petition, Dr. Skulemowski filed a counterclaim against the Hospital and a third-party action against Dr. Zavaletta. The Hospital subsequently assigned its rights under the suit to Dr. Zavaletta. (6) Dr. Zavaletta filed his first motion for summary judgment in his capacity as plaintiff, as the Hospital's assignee, which the trial court granted. Dr. Zavaletta's first motion for summary judgment was premised on the ground that he had established as a matter of law that Dr. Skulemowski owed him, as the Hospital's assignee, (1) $32,736.67, which was the amount by which Dr. Skulemowski's guarantee payments and net collectable revenue allegedly exceeded $330,000.00, and (2) $6,830.00 in attorney's fees. Dr. Zavaletta filed his second motion for summary judgment in his capacity as third-party defendant. The trial court granted said motion. Dr. Zavaletta's second motion for summary judgment was based on the following grounds: (1) that paragraph five of the Settlement Agreement and the corresponding section in the final judgment in the 1999 suit clearly and unambiguously limited his obligation to indemnify Dr. Skulemowski; (2) that no extrinsic evidence could be used in the construction of paragraph five and the corresponding section in the final judgment; and (3) that the accounting issue which previously existed between Dr. Skulemowski and Dr. Zavaletta was moot. In granting Dr. Zavaletta's second motion for summary judgment, the trial court found the following: (1) "the accounting issue which existed between the parties in August 1999, which is the subject of paragraph 5 . . . and the corresponding provision of the Judgment is presently moot and [Dr. Zavaletta] is not responsible for furnishing any additional accounting to Dr. Skulemowski in that [Dr. Zavaletta] has rendered an accounting to the Hospital for the services rendered by Dr. Skulemowski"; and (2) "Dr. Zavaletta, having accounted to the Hospital in regard to service provided by Dr. Skulemowski, is not responsible [to indemnify Dr. Skulemowski] for any sums that Dr. Skulemowski may owe to the Hospital or its successor in interest under his Recruiting Agreement with the [Hospital]." (7) II. Standard of Review We review the granting of a traditional motion for summary judgment de novo. Branton v. Wood, 100 S.W.3d 645, 646 (Tex. App.-Corpus Christi 2003, no pet.) (citing Natividad v. Alexsis, Inc., 875 S.W.2d 695, 699 (Tex. 1994); Tex. Commerce Bank Rio Grande Valley v. Correa, 28 S.W.3d 723, 726 (Tex. App.-Corpus Christi 2000, pet. denied)). To prevail, the movant has the burden of showing that there is no genuine issue of material fact and that he is entitled to judgment as a matter of law. Id. (citing Tex. R. Civ. P. 166a(c); Lear Siegler, Inc. v. Perez, 819 S.W.2d 470, 471 (Tex. 1991)). If the party opposing summary judgment relies on an affirmative defense, he must come forward with summary judgment evidence sufficient to raise an issue of fact on each element of the defense to avoid summary judgment. Brownlee v. Brownlee, 665 S.W.2d 111, 112 (Tex. 1984) (citing City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678-79 (Tex. 1979); Life Ins. Co. of Virginia v. Gar-Dal, Inc., 570 S.W.2d 378, 381 (Tex. 1978); Dorsaneo, Texas Litigation Guide § 101.05 (1983)). In determining whether there is a genuine issue of material fact, evidence favorable to the nonmovant is taken as true, and all reasonable inferences and doubts are resolved in favor of the nonmovant. Branton, 100 S.W.3d at 646. III. Analysis By four issues, Dr. Skulemowski asserts that the trial court erred in granting Dr. Zavaletta's first and second motion for summary judgment. Specifically, Dr. Skulemowski contends that the trial court granted the summary judgments in error because (1) the judgments require "[Dr.] Skulemowski to pay a virtual tax to work for [Dr.] Zavaletta," (2) Dr. Zavaletta failed to render an accounting to Dr. Skulemowski, (3) it "held that [Dr.] Zavaletta is not responsible to indemnify [Dr.] Skulemowski for any sums he may have failed to pay the Hospital," and (4) the "issue of payment to the Hospital" was barred by res judicata, accord and satisfaction, and release. A. Res Judicata, Accord and Satisfaction, and Release By his fourth issue, Dr. Skulemowski asserts that the trial court erred in granting Dr. Zavaletta's first and second motion for summary judgment because the "issue of payment to the Hospital" was barred by res judicata, accord and satisfaction, and release. We disagree. With respect to Dr. Skulemowski's contention that the trial court erred in granting Dr. Zavaletta's first and second motion for summary judgment because the "issue of payment to the Hospital" was barred by res judicata, we note that Dr. Skulemowski does not argue on appeal that he raised a fact issue on each element of this affirmative defense in his response to Dr. Zavaletta's motions. See Brownlee, 665 S.W.2d at 112 (providing that a nonmovant who relies on an affirmative defense to defeat the movant's motion for summary judgment must raise an issue of fact on each element of the defense to avoid summary judgment). Instead, Dr. Skulemowski urges reversal of Dr. Zavaletta's first and second summary judgment based on an evaluation of the "transactional approach to res judicata." However, this suggested ground for reversal of Dr. Zavaletta's first and second summary judgment was not expressly presented to the trial court in Dr. Skulemowski's responses to Dr. Zavaletta's motions for summary judgment. Pursuant to rule 166a(c), issues not expressly presented to the trial court by written answer or response shall not be considered on appeal as grounds for reversal. Tex. R. Civ. P. 166a(c); see Clear Creek Basin Auth., 589 S.W.2d at 677-79. Therefore, we may not consider this ground as a basis for reversing Dr. Zavaletta's first and second summary judgment on appeal. See Tex. R. Civ. P. 166a(c); Clear Creek Basin Auth., 589 S.W.2d at 677-79. Finally, although Dr. Skulemowski asserts that the trial court erred in granting Dr. Zavaletta's first and second motion for summary judgment because the "issue of payment to the Hospital" was barred by accord and satisfaction and release, we conclude that the briefing is inadequate as Dr. Skulemowski failed to fully develop and support his assertions. See Tex. R. App. P. 38.1(h) (providing that appellant's brief must contain a clear and concise argument for the contentions made, with appropriate citations to authorities and to the record). Therefore, we will not consider these contentions. Accordingly, we overrule Dr. Skulemowski's fourth issue. B. Indemnification and Accounting By his third issue, Dr. Skulemowski contends that the trial court erred in granting Dr. Zavaletta's second motion for summary judgment because it "held that [Dr.] Zavaletta is not responsible to indemnify [Dr.] Skulemowski for any sums he may have failed to pay the Hospital." (8) By his second issue, Dr. Skulemowski asserts that the trial court erred in granting Dr. Zavaletta's first and second motion for summary judgment because Dr. Zavaletta failed to render an accounting to Dr. Skulemowski. 1. Applicable Law "A settlement agreement is a contract, and its construction is governed by legal principles applicable to contracts generally." ASI Tech., Inc. v. Johnson Equip. Co., 75 S.W.3d 545, 547 (Tex. App.-San Antonio 2002, pet. denied) (quoting Donzis v. McLaughlin, 981 S.W.2d 58, 61 (Tex. App.-San Antonio 1998, no pet.)). If the agreement can be given a certain or definite legal meaning, then it is unambiguous and will be construed as a matter of law. Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983) (citing Universal C.I.T. Credit Corp. v. Daniel, 150 Tex. 513, 243 S.W.2d 154, 157 (1951)). In construing such a contract, our primary concern is to ascertain the true intentions of the parties as expressed in the instrument. Coker, 650 S.W.2d at 393 (citing R & P Enters. v. LaGuarta, Gavrel & Kirk, Inc., 596 S.W.2d 517, 518 (Tex. 1980); City of Pinehurst v. Spooner Addition Water Co., 432 S.W.2d 515, 518 (Tex. 1968)). Toward this end, we examine and consider the entire writing in an effort to harmonize and give effect to all provisions of the contract so that none will be rendered meaningless. Id. (citing Universal C.I.T. Credit Corp., 243 S.W.2d at 158). No single provision taken alone will be given controlling effect; rather, all the provisions must be considered with reference to the whole instrument. Id. (citing Myers v. Gulf Coast Minerals Mgmt. Corp., 361 S.W.2d 193, 196 (Tex. 1962); Citizens Nat'l Bank in Abilene v. Tex. & P. Ry. Co., 136 Tex. 333, 150 S.W.2d 1003, 1006 (1941)). "When the parties disagree over the meaning of an unambiguous contract, the court must determine the parties' intent from the agreement itself, not from the parties' present interpretation." ASI Tech., Inc., 75 S.W.3d at 548 (quoting Donzis, 981 S.W.2d at 62). "The same rules of interpretation apply in construing the meaning of a court order or judgment as in ascertaining the meaning of other written instruments." Lone Star Cement Corp. v. J. Roll Fair, District Judge, 467 S.W.2d 402, 404-05 (Tex. 1971) (citing Permian Oil Co. v. Smith, 129 Tex. 413, 107 S.W.2d 564 (1937)). The determinative factor is the intention of the court. In re Bain, 144 S.W.3d 236, 239 (Tex. App.-Tyler 2004, orig. proceeding) (citing Alford v. Thornburg, 113 S.W.3d 575, 584 (Tex. App.-Texarkana 2003, no pet.)). If a judgment is unambiguous, we construe it as "a whole and declare its effect in light of the literal language used." Id. (citing Lone Star Cement Corp., 467 S.W.2d at 405; Lohse v. Cheatham, 705 S.W.2d 721, 726 (Tex. App.-San Antonio 1986, writ dism'd)). 2. Indemnification Because paragraph five of the Settlement Agreement and the corresponding section of the final judgment at issue can be given a definite or certain legal meaning, as set forth below, we conclude that they are in fact unambiguous. Coker, 650 S.W.2d at 393 (citing Universal C.I.T. Credit Corp., 243 S.W.2d at 157). As a result, our duty is to examine and consider the entire Settlement Agreement and final judgment in an effort to harmonize and to give effect to all their provisions so that none will be rendered meaningless. Id. (citing Universal C.I.T. Credit Corp., 243 S.W.2d at 158); see Lone Star Cement Corp., 467 S.W.2d at 404-05 (citing Permian Oil Co., 107 S.W.2d at 564) (providing that the same rules of interpretation apply in construing the meaning of a court judgment as in ascertaining the meaning of other written instruments). By his third issue, Dr. Skulemowski contends that the trial court erred in granting Dr. Zavaletta's second motion for summary judgment because it "held that [Dr.] Zavaletta is not responsible to indemnify [Dr.] Skulemowski for any sums he may have failed to pay the Hospital." The relevant portions of the Settlement Agreement and final judgment at issue contain identical language with the exception that one uses the words "agrees to" whereas the other uses the word "shall" in the first line of the text: In this regard Dr. Zavaletta ["agrees to"; "shall"] indemnify Dr. Skulemowski for any amounts which Dr. Zavaletta may have failed to pay or credit, if any, the Hospital in regard to the services provided by Dr. Skulemowski. Dr. Zavaletta is, however, not responsible for any sums that Dr. Skulemowski may owe to the Hospital except to the extent of any funds which Dr. Zavaletta may have failed to account or pay to the Hospital in regard to service provided by Dr. Skulemowski. It is certain from this language, Coker, 650 S.W.2d at 393, that both the parties and the trial court contemplated circumstances under which Dr. Zavaletta would indemnify Dr. Skulemowski. More specifically, it is definite from the first sentence quoted above that Dr. Zavaletta was to indemnify Dr. Skulemowski for any amounts which Dr. Zavaletta may have failed to pay or credit, if any, the Hospital. However, this sentence is qualified by the second sentence, which states with certainty that Dr. Zavaletta was required to indemnify Dr. Skulemowski only insofar as Dr. Zavaletta may have failed to account to or pay the Hospital. Thus, Dr. Zavaletta was required to indemnify Dr. Skulemowski only if he failed to account to or pay the Hospital; Dr. Zavaletta was not required to account to and pay the Hospital in order to avoid his obligation to indemnify Dr. Skulemowski. Although Dr. Skulemowski urges this Court to interpret this portion of the Settlement Agreement and final judgment as requiring Dr. Zavaletta to account to the Hospital and then to indemnify Dr. Skulemowski for the amount that the accounting shows is due to the Hospital, we cannot reach such a conclusion. Such a conclusion would render the use of the word "or" meaningless and would modify Dr. Zavaletta's obligation under the Settlement Agreement and final judgment. See Coker, 650 S.W.2d at 393 (citing Universal C.I.T. Credit Corp., 243 S.W.2d at 158) (providing that the Court must give effect to all provisions of the contract so that none will be rendered meaningless). Because the summary judgment evidence demonstrates that Dr. Zavaletta did provide an accounting to the Hospital, we conclude that Dr. Zavaletta satisfied his requirement to account to or pay the Hospital, and thereby avoided the necessity of indemnifying Dr. Skulemowski. Therefore, we conclude that the trial court properly granted Dr. Zavaletta's second motion for summary judgment on the basis that "Dr. Zavaletta, having accounted to the Hospital in regard to service provided by Dr. Skulemowski, is not responsible for any sums that Dr. Skulemowski may owe to the Hospital or its successor in interest under his Recruiting Agreement with the [Hospital]." Accordingly, we overrule Dr. Skulemowski's third issue. 3. Accounting By his second issue, Dr. Skulemowski asserts that the trial court erred in granting Dr. Zavaletta's motions for summary judgment because Dr. Zavaletta failed to render an accounting to Dr. Skulemowski. In the order granting Dr. Zavaletta's second motion for summary judgment, the trial court found the following: the accounting issue which existed between the parties in August 1999, which is the subject of paragraph 5 . . . and the corresponding provision of the Judgment is presently moot and [Dr. Zavaletta] is not responsible for furnishing any additional accounting to Dr. Skulemowski in that [Dr. Zavaletta] has rendered an accounting to the Hospital for the services rendered by Dr. Skulemowski. The relevant portions of the Settlement Agreement and final judgment at issue contain identical language. They both read as follows: In this regard, Dr. Zavaletta agrees to render a complete and accurate accounting for such services of Dr. Skulemowski to the Hospital and to Dr. Skulemowski within 60 days from the date hereof, in order to insure that Dr. Skulemowski receives all credit due to him under his agreement with that Hospital. It is certain from this language, Coker, 650 S.W.2d at 393, that both the parties and the trial court intended for Dr. Zavaletta to render an accounting to the Hospital and to Dr. Skulemowski. The word "render" is generally defined to mean "to give, hand over, deliver, present, or submit." Webster's New Twentieth Century Dictionary 1530 (2nd ed. 1979). The word "accounting" is generally defined to mean "a statement of debits and credits" or a "settling or balancing of accounts." Id. at 13. Since the purpose of the accounting in this circumstance was to "insure that Dr. Skulemowski receives all credit due to him under his agreement with that Hospital," it is definite that the accounting referred to a statement of net collectable revenue balanced against guarantee payments. Thus, this portion of the Settlement Agreement and final judgment required Dr. Zavaletta to "give, hand over, deliver, present, or submit," see id. at 1530, a statement of net collectable revenue balanced against guarantee payments to the Hospital and to Dr. Skulemowski. Dr. Zavaletta argues that this accounting issue is moot because he presented an accounting to the Hospital, and the Hospital in turn presented the accounting to Dr. Skulemowski. Dr. Skulemowski, however, contends that the accounting issue is not moot because Dr. Zavaletta has not presented the accounting to him directly, and therefore, Dr. Zavaletta has not satisfied his obligation under the provision at issue. The word "moot" is generally defined to mean "having no practical significance" or "hypothetical or academic." Black's Law Dictionary 456 (2nd pocket ed. 1996). The summary judgment record establishes that Dr. Zavaletta in fact rendered an accounting to the Hospital; Dr. Skulemowski does not dispute such fact. In addition, the record shows that the Hospital in turn rendered an accounting to Dr. Skulemowski. The accounting was attached to a letter from the Hospital's counsel to Dr. Skulemowski. The letter stated that the Hospital had received audited figures from Dr. Zavaletta's accountant and that it had accepted the audited figures as accurate. Furthermore, the figures contained in the accounting presented by the Hospital to Dr. Skulemowski are identical to the figures contained in the accounting presented by Dr. Zavaletta to the Hospital. Thus, to require Dr. Zavaletta, at this juncture, to directly render an accounting to Dr. Skulemowski would indeed be an academic exercise, and such an action would have no practical significance. Therefore, we conclude that the trial court did not err in finding that "the accounting issue which existed between the parties in August 1999, which is the subject of paragraph 5 . . . and the corresponding provision of the Judgment is presently moot and [Dr. Zavaletta] is not responsible for furnishing any additional accounting to Dr. Skulemowski in that [Dr. Zavaletta] has rendered an accounting to the Hospital for the services rendered by Dr. Skulemowski." Accordingly, we overrule Dr. Skulemowski's second issue. Having concluded that the accounting issue is moot, we need not address a sub-issue relating to whether acceptance of the accounting by the Hospital excused Dr. Zavaletta from his obligation to account to Dr. Skulemowski. See Tex. R. App. P. 47.1. C. Virtual Tax By his first issue, Dr. Skulemowski asserts that the trial court erred in granting Dr. Zavaletta's first and second motion for summary judgment because it "requires [Dr.] Skulemowski to pay a virtual tax to work for [Dr.] Zavaletta." However, Dr. Skulemowski did not expressly raise his virtual tax theory in either of his responses to Dr. Zavaletta's first and second motion for summary judgment. Therefore, we may not consider this ground as a basis for reversing Dr. Zavaletta's first or second summary judgment on appeal. See Tex. R. Civ. P. 166a(c); Clear Creek Basin Auth., 589 S.W.2d at 677-79. Accordingly, we overrule Dr. Skulemowski's first issue. IV. Conclusion Accordingly, we affirm the judgments of the trial court. NELDA V. RODRIGUEZ Justice Memorandum Opinion delivered and filed this 15th day of February, 2007. 1. In his notice of appeal, Dr. Skulemowski specified the dates of two summary judgments that he desired to challenge on appeal. Those dates correspond to two summary judgments that were granted in relation to a 2001 suit to which Dr. Skulemowski and Dr. Zavaletta were parties. However, on appeal, Dr. Skulemowski attempts to challenge a third summary judgment which was granted in a 2003 suit filed by Dr. Skulemowski against Dr. Zavaletta. Because Dr. Skulemowski did not appeal from the third summary judgment in his notice of appeal, we will not address his fifth issue relating to that third motion for summary judgment. See Tex. R. App. P. 25.1(b), (d). 2. Based on the Associate Agreement, such payments were to be assigned by Dr. Skulemowski to Dr. Zavaletta. 3. Net collectable revenue was defined in the addendum as an amount equal to the following: (i) the amount of the Gross Cash Receipts during the Guarantee Period plus (ii) an amount equal to all patient bills not yet issued by [Dr. Skulemowski] for services rendered during the Guarantee Period plus (iii) an amount equal to [Dr. Skulemowski's] accounts receivable remaining uncollected at the end of the Guarantee Period, less forty percent (40%) of the amounts in (ii) and (iii) for contractual allowances and bad debts. 4. The non-competition clause contained in the Associate Agreement prohibited Dr. Skulemowski from engaging in the practice of obstetrics and gynecological medicine in Cameron County, Texas, during the term of the Agreement and for a period of two years after termination of the Agreement. 5. The construction of paragraph five of the Settlement Agreement and the corresponding section in the final judgment served as the basis for Dr. Zavaletta's second motion for summary judgment. 6. Based on the assignment of the Hospital's rights in the suit to Dr. Zavaletta, the trial court dismissed the Hospital from the suit and substituted Dr. Zavaletta as the plaintiff in the suit. 7. The trial court also found that paragraph five of the Settlement Agreement and the corresponding provision of the final judgment were clear and unambiguous and that extrinsic evidence was not permitted to assist in their construction. These findings are not challenged on appeal. 8. To the extent that Dr. Skulemowski attempts to challenge the grant of Dr. Zavaletta's first motion for summary judgment on this basis, we conclude the briefing is inadequate. See Tex. R. App. P. 38.1(h). Thus, we will not consider such an assertion.