Plains Radiology Servs. v. Good Samaritan Hosp.
A-16-674
| Neb. Ct. App. | May 9, 2017Background
- Plains Radiology (formed by two physicians who split from GPR) and GPR were parties to a 5-year professional services agreement with Good Samaritan Hospital covering radiology services at Kearney Imaging Center (KIC).
- The agreement required Contractors (GPR and Plains) to provide radiology services per a Coverage Schedule and gave Contractors an exclusive right to furnish radiology services "within the Facility," but did not expressly describe exclusivity tied to specific weeks in the schedule.
- Plains alleged that after a 2009 sale of KIC interests to the Hospital and a later Hospital-GPR exclusive contract for in-hospital services, the Hospital diverted imaging studies at KIC during weeks allocated to Plains, causing significant lost billings.
- Plains requested patient/study lists to verify contract compliance; the Hospital refused citing confidentiality. Plains later obtained detailed billing records via subpoena and calculated alleged diversion damages.
- Plains sued for breach of contract and breach of the implied covenant of good faith and fair dealing. The district court granted the Hospital's summary judgment and denied Plains’ partial summary judgment. Plains appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the contract unambiguously granted Plains an exclusive right to perform studies during weeks allocated in the Coverage Schedule | The schedule creates an exclusive right to perform supervision and image interpretation in the weeks assigned to Plains | The contract grants exclusivity only to having GPR or Plains as providers at the Facility, not exclusive rights between them by week | Court: Contract unambiguous; no per‑week exclusivity; summary judgment for Hospital affirmed |
| Whether Hospital breached good faith by refusing records and diverting studies | Hospital’s refusal to provide records and alleged diversion frustrated Plains’ contractual expectations and violated good faith | No contractual right to exclusive per‑week performance, so refusal to provide records did not breach the covenant | Court: No breach of implied covenant because no underlying contractual exclusivity was violated |
| Whether extrinsic evidence of parties’ reasonable expectations may be considered | Plains: Parties’ expectations support a per‑week exclusivity interpretation | Hospital: Contract’s plain language controls; expectations irrelevant when unambiguous | Court: Ordinary contract‑interpretation rules applied; expectations not considered because contract unambiguous |
| Whether the contract lacks mutuality / meaningful mutual promises | Plains: Ruling renders contractual obligations non‑mutual (one side mandatory, other optional) | Hospital: Hospital was restricted to using only GPR or Plains; mutual restraint exists | Court: No lack of mutuality; Hospital did not contract with outside providers and no mutuality problem shown |
Key Cases Cited
- Cisneros v. Graham, 294 Neb. 83 (summary judgment standard and appellate review)
- Labenz v. Labenz, 291 Neb. 455 (construction of contract is a question of law reviewed de novo)
- Facilities Cost Mgmt. Group v. Otoe Cty. Sch. Dist., 291 Neb. 642 (clarifies when contract language is unambiguous and controls)
- Brozek v. Brozek, 292 Neb. 681 (plain meaning rule: clear contract terms control, no extrinsic evidence)
- In re Claims Against Pierce Elevator, 291 Neb. 798 (ambiguity determined objectively, not by subjective party assertions)
Disposition: Affirmed the district court’s grant of summary judgment for the Hospital on both breach of contract and good faith claims; Plains’ partial summary judgment denied.