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HealthPRO Heritage, LLC v. Health Services Manchester, LLC

United States District Court, E.D. Tennessee, Chattanooga

December 13, 2019

HEALTHPRO HERITAGE, LLC, et al., Plaintiffs,
v.
HEALTH SERVICES MANCHESTER, LLC doing business as HORIZON HEALTH & REHAB CENTER, et al., Defendants.

          LEE MAGISTRATE JUDGE

          ORDER

          HARRY S. MATTICE, JR. UNITED STATES DISTRICT JUDGE

         Before the Court is the Amended Motion for Summary Judgment of Plaintiffs HealthPRO Heritage, LLC and Rehab Solutions (North Carolina), LLC (“Plaintiffs”). [Doc. 42]. Plaintiffs contend that summary judgment is proper against Defendants Health Services Manchester, LLC d/b/a Horizon Health & Rehab Center; Knoxville Healthcare, LLC d/b/a Westmoreland Health and Rehab; Benchmark Healthcare of Dane County, Inc. d/b/a Heartland Country Village; Madisonville Healthcare, LLC d/b/a Madisonville Health and Rehab; Waynesboro Healthcare, LLC d/b/a Waynesboro Health and Rehab Center; Hidden Acres Healthcare, LLC d/b/a Mt. Pleasant Health and Rehab Center (collectively, “Facility Defendants”); and Health Services Management Group, LLC (“Guarantor Defendant” but, all collectively, “Defendants”). For the reasons set forth herein, the Motion will be GRANTED IN PART and DENIED IN PART.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         Plaintiffs entered into separate service agreements with Defendants at various and dispersed times prior to April 2017, under which Plaintiffs provided rehabilitation services and Defendants reimbursed them. [See generally Doc. 1-3]. Facilities Defendants then defaulted on payments required under those service agreements and, on April 5, 2017, the Parties executed a Settlement Agreement specifying both the terms of payment for the obligations then in default (“Default Balance”) and payment for services going forward (“Ongoing Services”). [See Doc. 1-1]. Guarantor Defendant guaranteed at least some of Facilities Defendants' obligations under the Settlement Agreement, although precisely which obligations is at issue in this case.

         In early 2018, Defendants defaulted on their obligations under the Settlement Agreement and Plaintiffs sued, leading Judge McDonough to enter an Agreed Order laying out terms of a settlement as to obligations under the Settlement Agreement. [Doc. 1-2; see also No. 1:18-cv-68, Doc. 13].

         Defendants then violated the Settlement Agreement again by failing to pay for Ongoing Services. It is “admitted[] that the Facility Defendants each owe various” amounts for Ongoing Services, but Defendants deny that they are jointly and severally liable for the Ongoing Services balances and deny that Guarantor Defendant guaranteed “any unpaid amounts arising from Ongoing Services.” [Doc. 47, at 4-5]. Moreover, Defendants contend that the precise amounts they owe are in dispute.

         II. STANDARD OF REVIEW

         Federal Rule of Civil Procedure 56 instructs the Court to grant summary judgment “if the movant shows that 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). A party asserting the presence or absence of genuine issues of material fact must support its position either by “citing to particular parts of materials in the record, ” including depositions, documents, affidavits or declarations, stipulations, or other materials, or by “showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact.” Fed.R.Civ.P. 56 (c)(1). When ruling on a motion for summary judgment, the Court must view the facts contained in the record and all inferences that can be drawn from those facts in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Nat'l Satellite Sports, Inc. v. Eliadis Inc., 253 F.3d 900, 907 (6th Cir. 2001). The Court cannot weigh the evidence, judge the credibility of witnesses, or determine the truth of any matter in dispute. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986).

         The moving party bears the initial burden of demonstrating that no genuine issue of material fact exists. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The moving party may discharge this burden either by producing evidence that demonstrates the absence of a genuine issue of material fact or simply “by ‘showing' - that is, pointing out to the district court - that there is an absence of evidence to support the nonmoving party's case.” Id. at 325. Where the movant has satisfied this burden, the nonmoving party cannot “rest upon its . . . pleadings, but rather must set forth specific facts showing that there is a genuine issue for trial.” Moldowan v. City of Warren, 578 F.3d 351, 374 (6th Cir. 2009) (citing Matsushita, 475 U.S. at 586; Fed.R.Civ.P. 56). The nonmoving party must present sufficient probative evidence supporting its claim that disputes over material facts remain and must be resolved by a judge or jury at trial. Anderson, 477 U.S. at 248-49 (citing First Nat'l Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253 (1968)); see also White v. Wyndham Vacation Ownership, Inc., 617 F.3d 472, 475-76 (6th Cir. 2010). A mere scintilla of evidence is not enough; there must be evidence from which a jury could reasonably find in favor of the nonmoving party. Anderson, 477 U.S. at 252; Moldowan, 578 F.3d at 374. If the nonmoving party fails to make a sufficient showing on an essential element of its case with respect to which it has the burden of proof, the moving party is entitled to summary judgment. Celotex, 477 U.S. at 323.

         III. ANALYSIS

         Prior to the merits, the Court will consider the contention of four Facility Defendants that there is no federal subject-matter jurisdiction over them. No. Defendants dispute diversity, but the following four assert that the amount-in-controversy as to any claims against them were, at the time of filing, as follows and therefore below the $75, 000 threshold required by 28 U.S.C. § 1332(a):

Health Services Manchester, LLC d/b/a Horizon Health & Rehab Center

$73, 962.78

Benchmark Healthcare of Dane County, Inc. d/b/a Heartland Country Village

$38, 758.18

Waynesboro Healthcare, LLC d/b/a Waynesboro Health and Rehab Center

$36, 299.64

Hidden Acres Healthcare, LLC d/b/a Mt. Pleasant Health and Rehab Center

$57, 267.05

         Plaintiffs, however, allege that the jointly-executed Settlement Agreement between the Parties gives rise to joint and several liability among Defendants. The Court may therefore aggregate the claims against Defendants for purposes of the amount-in-controversy. Charvat v. NMP, LLC, 656 F.3d 440, 446 (6th Cir. 2011) (“[Plaintiff] alleges that Defendants are jointly and severally liable for each of the multiple claims brought pursuant to the [Telephone Consumer Protection Act] and Ohio law. … We thus can aggregate [plaintiff's] claims to determine whether the total alleged exceeds $75, 000.”); Reusser v. Saxon Mortg. Servs., Inc., No. 2:12-cv-87, 2012 WL 3241973, at *3 (S.D. Ohio Aug. 3, 2012) (“Because the plaintiffs assert a common undivided right against defendants who they ...


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