United States District Court, E.D. Tennessee, Winchester Division
SHELBYVILLE HOSPITAL CORPORATION, d/b/a HERITAGE MEDICAL CENTER, Plaintiff,
E. WAYNE MOSLEY, M.D., Defendant.
W. Phillips, United States District Judge.
matter is before the Court on Plaintiff's Motion for
Reconsideration [doc. 235], Plaintiff's Motion for Oral
Argument [doc. 236], Defendant's Response [doc. 238], and
Plaintiff's Reply [doc. 239]. For the reasons herein, the
Court will deny the motions.
August 2011, Shelbyville Hospital Corporation and E. Wayne
Mosley, M.D. (“Dr. Mosley”) entered into a
Recruitment Agreement [doc. 1-1], under which Dr. Mosley,
with financial incentives from Shelbyville Hospital, agreed
to establish a medical practice in Shelbyville, Tennessee,
for thirty-six months. [Id. at 1-2]. The parties
agreed that this thirty-six-month period would proceed in two
phases: (1) the Cash Collections Guarantee Period, which
would comprise the first eighteen-months of the Recruitment
Agreement,  and (2) the Cash Collections Continuation
Period, which would comprise the second eighteen months of
the Recruitment Agreement. [Id. at 1, 3, 12]. During the
first eighteen months-the Cash Collections Guarantee
Period-Shelbyville Hospital guaranteed Dr. Mosley's
practice would earn at least $84, 416.66 every month.
[Id. at 1, 10]. If Dr. Mosley's practice failed
to realize $84, 416.66 in any month, Shelbyville Hospital
would make up the difference by providing Dr. Mosley with
“Guarantee Payment[s], ” but those payments could
not exceed $1, 013, 000 in the aggregate. [Id.].
the second eighteen months-the Cash Collections Continuation
Period- Shelbyville Hospital would forgive one eighteenth of
the total Guarantee Payments for each month that Dr. Mosley
maintained the “Full-Time Private Practice of
Medicine.” [Id. ¶ D.7]. The parties
agreed to these terms of forgiveness in paragraph D.7:
During the Cash Collections Continuation Period, which shall
begin on the day following the last day of the Cash
Collections Guarantee Period and continue for the number of
months set forth as the Continuation Period on the Cover
Page, Hospital agrees that it will cancel (amortize) one
eighteenth (1/18th) of the Total Cash Collection
Guarantee Payments made by Hospital under this Agreement for
each full month Physician remains in the Full-Time Private
Practice of Medicine, in Physician's Specialty, in the
Community. In the event Physician fails to maintain a
Full-Time Private Practice of Medicine in the Community
during the Cash Collections Continuation Period, Physician
shall immediately reimburse to Hospital the unamortized
amount of the Total Cash Collections Guarantee Payments paid
[Id.]. Paragraph B.1 of the Recruitment Agreement
defines “Full-Time Private Practice of Medicine”
as a “minimum average of forty (40) hours per week of
direct patient contact hours and patient care activities
directly relating to the establishment of the practice of
Physician's Specialty in the Community.” The
Recruitment Agreement also binds Dr. Mosley to various
“Covenants of Physician, ” [id.
¶¶ B.1-B.18], one of which is the requirement that
Dr. Mosley, under paragraph B.1, must maintain the Full-Time
Private Practice of Medicine during the full thirty-six-month
duration of the Recruitment Agreement: “Physician shall
. . . during the Practice Commitment Period, engage in the
‘Full-Time Private Practice of Medicine' (as
defined herein) in the Community.” [Id.
¶B.1]. In addition, paragraph B.4 requires Dr.
Mosley to fulfill his contractual obligations “on a
regular and continuous basis” during the first eighteen
Physician shall discharge obligations hereunder on a regular
and continuous basis. . . . If Physician fails to render
services pursuant to this Agreement for a period of ten (10)
consecutive business days during the Cash Collections
Guarantee Period without Hospital and Physician's mutual
agreement, Physician shall have failed to carry out
Physician's covenants herein on a regular and continuous
[Id. ¶ B.4]. The parties also contemplate
consequences for Dr. Mosley's failure to fulfill his
contractual obligations. Under paragraph D.6, they agreed
that Dr. Mosley would be liable for damages if he failed to
maintain the Full-Time Private Practice of Medicine during
the first eighteen months:
Should the Physician fail to maintain a Full-Time Private
Practice of Medicine in the Community during the Cash
Collections Guarantee Period, Physician shall immediately
reimburse to Hospital the total sum of the Total Cash
Collections Guarantee Payments and/or any other payments made
by Hospital under this Agreement to Physician to date.
[Id. ¶ D.6].
the thirty-six-month lifespan of the Recruitment Agreement,
Shelbyville Hospital sued Dr. Mosley, alleging breach of
contract after Dr. Mosley was absent from his practice for
twenty-four consecutive business days while participating in
an African mission trip in 2012. [Compl., doc. 1, at 8; Mem.
Op., doc. 173, at 5, 13]. Shelbyville Hospital eventually
moved for summary judgment on its claim, contending that Dr.
Mosley, while in Africa, breached the Recruitment Agreement
during the first eighteen months by violating paragraph
B.4's “10-day limit.” [Pl.'s Br., doc.
142, at 23]. As recompense, it requested $1, 013, 000 in
Guarantee Payments under paragraph D.6, interest, and
attorney's fees. [Id. at 24-25].
Court concluded that Dr. Mosley breached paragraph B.4
because he “missed more than ten consecutive days of
work in late 2012, ” and it awarded summary judgment to
Shelbyville Hospital on the issue of liability only. [Mem.
Op. at 30]. It did not make legal conclusions or factual
findings concerning the issue of damages. Instead, it
reserved ruling on damages and scheduled a hearing in which
it intended to allow the parties to present evidence and make
arguments. [Id. at 30-31]. It also ordered
Shelbyville Hospital to submit proof of its damages.
up to the hearing, Dr. Mosley argued that he is entitled to a
setoff or reduction in damages because, after he completed
his mission trip in 2012, he returned to the Full-Time
Private Practice of Medicine in Shelbyville and
“continued to treat his patients and perform surgeries
as he had before.” [Def.'s Resp., doc. 180, at 4].
He requested the opportunity “to put on proof” at
the hearing to show that he returned to his practice and is
therefore entitled to receive a setoff “based upon
partial continued performance.” [Id. at 2, 7,
15]. As to the exact amount of the setoff, Dr. Mosley
proposed that “[a]ny amount of compensatory damages . .
. should be reduced proportionally based upon the work [he]
did provide under the contract.” [Id. at 7].
Court held the evidentiary hearing and heard evidence and
arguments from the parties. After the hearing, the Court
determined that Dr. Mosley was not entitled to pursue a
setoff. The Court concluded that his request for a setoff was
contractual in nature, invoked paragraph D.7, and did not
satisfy paragraph's D.7 requirements. [Mem. Op. Denying
Summ. J., doc. 233, at 28-30]. The Court rejected Shelbyville
Hospital's request for summary judgment as well,
determining that it did not meet its burden as the movant for
damages under paragraph D.6. [Id. at 17-27].
Specifically, the Court ruled that Shelbyville Hospital
failed to establish, beyond any genuine issue of material
fact, that Dr. Mosley did not maintain the Full-Time Private
Practice of Medicine during the initial eighteen months.
[Id.]. Under Federal Rule of Civil Procedure 54(b),
Shelbyville Hospital now moves for reconsideration of the
Court's decision and for clarification of three
Rule 54(b), “any order or other decision . . . that
adjudicates fewer than all the claims . . . may be revised at
any time before the entry of a judgment adjudicating all the
claims.” Fed.R.Civ.P. 54(b). In short, Rule 54(b)
authorizes courts to reconsider interlocutory orders before
an entry of final judgment. A movant, to justify
reconsideration under Rule 54(b), must show “(1) an
intervening change of controlling law; (2) new evidence [is]
available; or (3) a need to correct a clear error or prevent
manifest injustice.” Rodriguez v. Tenn. Laborers
Health & Welfare Fund, 89 F. App'x 949, 959 (6th
Cir. 2004). “A motion under Rule 54(b), however, may
not ‘serve as a vehicle to identify facts or raise
legal arguments which could have been, but were not, raised
or adduced during the pendency of the motion of which
reconsideration was sought.'” Madden v. City of
Chattanooga, No. 108-cv-160, 2010 WL 670107, at *2 (E.D.
Tenn. Feb. 19, 2010) (quotation omitted). When considering a
motion under Rule 54(b), a district court “must . . .
temper” its ability ...