Lead Opinion
*347Dr. Dan Peterson ("Dr. Peterson"); Optum Computing Solutions, Inc.; Hitschler-Cera, LLC; Donald Bauman; Michael Held; The Held Family Limited Partnership; Robert Wagner; Alek Beynenson; I-Grant Investments, LLC; James Munter; Gail Shenk; Steven E. Davis; Charles *348W. Leonard, III; and John Does 1-10
Background
This is Defendants' second appeal in this case. Although a full recitation of the first appeal's facts and procedural history may be found in Premier, Inc. v. Peterson ,
On 29 September 2006, Premier acquired stock in Cereplex, Inc. ("Cereplex") by entering into a Stock Purchase Agreement with Defendants, former shareholders and stakeholders of Cereplex, under which Defendants were entitled to receive an annual Earnout Amount from Premier for five years after the date of the Agreement. Cereplex had developed software products, Setnet and PharmWatch, that provided web-based surveillance and analytic services for healthcare providers. After acquiring shares of Cereplex, Premier developed SafetySurveillor, a successor product that combined the functionalities of Setnet and PharmWatch into one software program which generates automated alerts to notify its users of health-related problems that require attention.
Pursuant to the Agreement, the annual Earnout Amount to which Defendants are entitled is calculated as "$12,500 for each Hospital Site where a Product Implementation occurs during the applicable 12-month period; excluding the first fifty (50) Hospital Sites where a Product Implementation occurs[.]" There has been "Product Implementation" when:
a Hospital Site ... has (A) subscribed to or licensed the Company's Setnet or PharmWatch product (or any derivative thereof, successor product, or new product that substantially replaces the functionality of either product), *349whether such product is provided, sold, or licensed (for a charge or at no charge, or provided on a stand-alone basis or bundled with other products and/or services) to the applicable Hospital Site by Company (or its successor in interest), any affiliate of the Company or any reseller authorized by the Company, and (B) completed any applicable implementation, configuration and testing of the product so that the product is ready for production use by the Hospital Site.
(Emphasis added and omitted).
Following an audit of Premier's records, Defendants accused Premier of failing to report or include in the Earnout Amount certain Hospital Sites where there was Product Implementation. Specifically, Defendants alleged that single-event alerts
On 19 January 2011, Premier preemptively filed an action in Mecklenburg County Superior Court seeking declaratory judgment that it had not breached the Agreement.
Defendants timely appealed the 11 December 2012 Order and Opinion. In the original appeal, Premier claimed that "for Product Implementation to occur, a Hospital Site must affirmatively take steps to subscribe to or license the SafetySurveillor" software, and that mere receipt of the product was not enough. Premier, Inc. I ,
Conversely, Defendants asserted that the "subscribed to or licensed" component of Product Implementation is satisfied when Premier simply provides SafetySurveillor to a facility, a fact which would be evinced by the alerts fired from those facilities. Id. at 606,
On 4 March 2014, we vacated the trial court's 11 December 2012 Order and Opinion and remanded the case for further proceedings. Id. at 610,
However, we also recognized that the Agreement does not specifically require a formal written agreement. Id. at 609-10,
*351Pertinent to the instant appeal, we also concluded that interpreting the Agreement in this way did not resolve the case. Id. at 608,
ii. Case Activity on Remand
On remand, the parties submitted a joint Case Management Report in which they agreed that fact discovery would consist of two phases-fact witness depositions followed by written discovery. On 30 June 2014, the trial court entered an Amended Case Management Order that established the parties would have through 1 November 2014 to conduct fact discovery as contemplated by the Case Management Report.
On 31 October 2014, one day before the discovery deadline and 221 days after remand from this court, Defendants served their first set of interrogatories and requests for production of documents. On 21 November *6032014, Premier filed a motion for protective order arguing that Defendants' discovery requests were untimely under Rule 18.8 of the North Carolina Business Court's General Rules of Practice and Procedure as they could not be answered within the trial court's deadline. However, the trial court, giving great deference to this Court's directive to develop more fully the factual record, ordered Premier to serve responses to Defendants' discovery requests. The parties subsequently engaged in written discovery and related document production to retrieve evidence of the requisite affirmative acts. Defendants did not conduct third party discovery, did not issue a single subpoena, nor did they produce evidence relating to interactions between Premier and the Hospital Sites in contention, or, as we noted in Premier, Inc. I , evidence of "affirmative acts [ ] taken by the facilities identified by Defendants to obtain the SafetySurveillor product[.]" Id. at 610,
On 1 December 2015, Premier filed a motion for summary judgment which was heard on 26 February 2016. On 13 May 2016, the trial court *352granted Premier's motion for summary judgment, dismissed with prejudice Defendants' counterclaims, and entered judgment in Premier's favor on its claim for declaratory judgment. In doing so, the trial court observed:
[D]espite ample opportunity to develop a more complete factual record, Defendants have failed to bring forward evidence that any of the [Hospital Sites] took "affirmative acts ... to obtain the SafetySurveillor product." [Id. ] at 610,755 S.E.2d at 62 . Because the Court of Appeals has concluded that "the Agreement requires some affirmative act by a Hospital Site to subscribe to or license the SafetySurveillor product in order for Product Implementation to occur,"id. [at 610,755 S.E.2d at 62 ], Defendants cannot show that there was a Product Implementation at any [Hospital Site].
Defendants timely appealed to this Court.
Analysis
As the parties' depositions, affidavits, and other documents were filed under seal, the depth of our discussion and analysis in this opinion is somewhat limited; however, our review was exhaustive and we considered all of the documents and testimony under seal. See e.g. Radiator Specialty Co. v. Arrowood Indemnity Co. , --- N.C. App. ----, ----,
The issue on appeal is whether Plaintiffs have forecast any evidence which would create a genuine issue of material fact that the Hospital Sites took affirmative acts as outlined in Premier, Inc. I to "subscribe to" or "license" SafetySurveillor. "Our standard of review of an appeal from summary judgment is de novo[.]" In re Will of Jones ,
Defendants first contend that the work of an Infection Preventionist to identify health related issues that will trigger alerts, coupled with the software's firing of alerts, constitutes an affirmative act taken by the Hospital Site to subscribe to SafetySurveillor. We have already held that firing of alerts *604alone is insufficient. Premier, Inc. I ,
According to the Law of the Case Doctrine, "an appellate court ruling on a question governs the resolution of that question both in subsequent proceedings in the trial court and on a subsequent appeal, provided the same facts and the same questions, which were determined in the previous appeal, are involved in the second appeal." Creech v. Melnik ,
In Premier, Inc. I , this Court determined that the firing of alerts and "the circumstances under which the product came to be received by these facilities is probative of the issue of whether the facilities did, in fact, meet the criteria for Product Implementation[,]" but that firing of alerts is not enough in and of itself. Premier, Inc. I ,
Defendants next contend that, for Premier to be compliant with the Health Insurance Portability and Accountability Act ("HIPPA"), a Business Associate Agreement ("BAA") must necessarily exist between the Hospital Site and Premier prior to any exchange of patient information. Based on this, Defendants ask us to accept that a BAA exists between Premier and every Hospital Site at issue. Defendants maintain that the signing of a BAA constitutes the requisite affirmative act taken by the Hospital Sites necessary to show that Product Implementation occurred. However, there is no record evidence that Premier is in fact HIPPA compliant. Defendants took no steps to obtain evidence of any specific BAA that may exist between Premier and the Hospital Sites. In fact, the record before this Court has over 2,000 pages, but there is only one "example" BAA in the record.
*354Even if we assume arguendo that Premier is HIPPA compliant, the exchange of information between Premier and the Hospital Sites alone does not necessarily prove that a BAA exists between Premier and that Hospital Site. Therefore, the HIPPA-compliant exchange of information between Premier and these Hospital Sites does not demonstrate the existence of an affirmative act that would trigger an Earnout Amount payment.
In Premier, Inc. I , we determined that "the unmistakable meaning of the language the parties agreed upon in drafting the Agreement is that some affirmative act on the part of the Hospital Site is required." Premier, Inc. I ,
SafetySurveillor receives Protected Health Information ("PHI") transferred from the source site to the system operator. The transfer of PHI is governed by HIPPA. See
In the instant case, the parties have provided evidence in the form of depositions, *605affidavits, and one example BAA between Premier and one Hospital Network. However, even with additional time for discovery, the denial of Premier's Motion for Protective Order, and specific instruction from this Court regarding the evidence needed, Defendants declined to take third-party discovery to determine whether even one of the Hospital Sites in dispute, and not the Hospital Networks, took any affirmative steps to accept SafetySurveillor. Since the record evidence only shows that the Hospital Networks signed the BAA on behalf of the Hospital Sites, and Defendants failed to produce evidence of acceptance *355of SafetySurveillor by the Hospital Sites as required in Premier, Inc. I , the mere existence of a BAA does not prove that an affirmative action was taken by the Hospital Sites themselves. Even after having the opportunity to develop more fully the factual record on remand from this Court, Defendants have failed to demonstrate that they are entitled to an Earnout Amount on the basis of any of the disputed Hospital Sites. Accordingly, the trial court's grant of summary judgment in favor of Premier was appropriate.
Conclusion
Defendants failed to provide evidence of affirmative acts taken by the Hospital Sites at issue to "subscribe to" or "license" SafetySurveillor. Therefore, Premier is not required to provide an Earnout Amount to Defendants for the disputed Hospital Sites. Accordingly, for the reasons stated above, we affirm the ruling of the trial court.
AFFIRMED.
Judge STROUD concurs.
Judge DILLON concurs by separate opinion.
The record contains a number of different names and spellings for certain individual defendants. However, pursuant to court practice, we use the above names and spellings listed on the order from which appeal is taken.
A single-event alert refers to the notification the SafetySurveillor program sends to designated medical personnel to identify either (1) the potential presence of an infection that a patient acquired during their course of treatment in a healthcare facility or setting; or (2) a possible problem with the antibiotic therapy prescribed to a patient.
This matter was designated as a mandatory complex business case by the Chief Justice of the Supreme Court of North Carolina on 19 January 2011.
Concurrence Opinion
I concur based on the conclusion that we are bound by holdings of our Court in the first appeal of this case, reported at Premier, Inc. v. Peterson ,
I note that in its definition of "subscribe," Webster's does not require an affirmative act which occurs prior to receipt of the product, as Premier I suggests. Webster's lists other definitions for "subscribe"
*356as well, such as to "sanction" and to "assent to." Here, I believe that the term "subscribe" is sufficiently ambiguous to include Hospital Sites within networks where the network had a contract with Premier but where the Hospital Site received the product, but then implemented the product-where the inputting of patient data and other acts to implement the product constitute affirmative acts of "Product Implementation" to constitute "sanction[ing]" and "assent[ing] to" the product. And perhaps the best evidence concerning the parties' intent in their use of the word "subscribe" was evidence of Premier's relationship with the Hospital Sites identified in Section 2(b)(iii) of the Disclosure Schedule of the agreement, in which the parties agreed where Product Implementation had occurred. For example, it would be interesting if some of the Sites that implemented the product which are listed as part of a network did not actually have a direct formal agreement with Premier but were included because they were part of a network which did have a formal agreement. But the record is silent on this issue.
