561 F. App'x 327
5th Cir.2014Background
- Dr. Somprasong Songcharoen was a member/manager of Plastic and Hand Surgery Associates, PLLC (PHSA); each physician had a Services Agreement and PHSA had an Operating Agreement governing membership, compensation, and buyouts.
- Songcharoen withdrew effective Dec. 31, 2007 and sued PHSA claiming termination payments under Section 9A of the Services Agreement and entitlement to his 2007 capital account balance under the Operating Agreement; PHSA counterclaimed for expenses and "call‑time" damages.
- Section 9A provided a termination payment formula: 65% of certain patient accounts receivable (after reductions) less individual/common expenses; parties disputed whether that included surgical center (facility) fees and ancillary income collected after withdrawal.
- The Operating Agreement contained a buy‑out formula for a membership unit (Section 12.03) and a separate provision on capital accounts (Section 7.02); parties disputed whether the buy‑out subsumed the capital account balance.
- The district court found the contracts ambiguous, reserved disputed provisions for the jury, granted summary judgment dismissing PHSA’s call‑time counterclaim as time‑barred, and after trial the jury awarded Songcharoen most claimed payments while awarding PHSA its claimed expenses for a net verdict of $87,290.
- On appeal the Fifth Circuit affirmed the jury verdict except it reversed and remanded the dismissal of PHSA’s call‑time counterclaim (holding it was logically related or available as a setoff).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Section 9A termination payment includes Plastic Surgical Center facility fees | Songcharoen: facility fees (and ancillary income) collected after withdrawal but earned before are "accounts receivable" subject to 65% payment | PHSA: "accounts receivable" excludes surgical center/facility fees; also Service Agreement requires Class I membership to share surgical center profits | Ambiguous; reasonable evidence supported jury verdict awarding 65% share of facility fees — denial of JMOL affirmed |
| Whether Section 9A includes ancillary services income collected after withdrawal | Songcharoen: ancillary income tied to services he provided and is included in accrued accounts receivable | PHSA: Agreement unambiguously excludes ancillary income for withdrawing physicians | Ambiguous; sufficient evidence supported jury award of ancillary income — denial of JMOL affirmed |
| Whether Operating Agreement entitles withdrawing member to capital account balance in addition to membership buy‑out | Songcharoen: Section 7.02 entitles him to capital account balance separate from Section 12.03 buy‑out | PHSA: Section 12.03 buy‑out subsumes capital account; no separate capital payout on withdrawal | Ambiguous; jury reasonably found entitlement to capital account balance — denial of JMOL affirmed |
| Whether PHSA’s call‑time counterclaim was time‑barred | PHSA: claim timely as logically related to plaintiff’s contract claims or, alternatively, preserved as a setoff | Songcharoen: counterclaim permissive and barred by statute of limitations | District court erred: counterclaim was logically related (and alternatively available as setoff) — summary judgment dismissing it reversed and remanded |
Key Cases Cited
- Texas v. American Tobacco Co., 463 F.3d 399 (5th Cir.) (standard for contract ambiguity reviewed de novo)
- Epperson v. SOUTHBank, 93 So. 3d 10 (Miss. 2012) (contract ambiguity and parol‑evidence principles)
- Black v. J.I. Case Co., 22 F.3d 568 (5th Cir.) (post‑verdict review of denied summary judgment)
- Hiltgen v. Sumrall, 47 F.3d 695 (5th Cir.) (standard for JMOL review)
- Miss. Chemical Corp. v. Dresser–Rand Co., 287 F.3d 359 (5th Cir.) (contract and JMOL principles)
- Park Club, Inc. v. Resolution Trust Corp., 967 F.2d 1053 (5th Cir.) (logical‑relationship test for compulsory counterclaims)
- Tank Insulation Int’l, Inc. v. Insultherm, Inc., 104 F.3d 83 (5th Cir.) (factors for compulsory counterclaims)
- Erie R.R. Co. v. Tompkins, 304 U.S. 64 (U.S.) (apply state substantive law in diversity cases)