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CURAFLEX HEALTH SERVS. v. BRUNI

February 27, 1995

CURAFLEX HEALTH SERVICES, INC., Plaintiff,
v.
LARRY M. BRUNI, M.D., P.C., et al., Defendants.



The opinion of the court was delivered by: PAUL L. FRIEDMAN

 This case came before the Court for argument on January 20, 1995, on Defendants' Motion for Summary Judgment On Counts I, II, III, VII, VIII, IX and X of the Amended Complaint. The Court finds that there are no genuine disputes as to any facts material to the disposition of these counts and that defendants are entitled to judgment as a matter of law.

 I. BACKGROUND

 Curaflex Health Services, Inc. provides home infusion care to patients with AIDS and those who are HIV-positive. Defendant Larry M. Bruni, M.D., P.C. ("Bruni P.C.") is a medical practice primarily serving such patients, and defendant Larry M. Bruni, M.D., a licensed physician, is its primary shareholder, as well as a director and officer of Bruni P.C. Medical Office Management Systems, Inc. ("MOMS") is a medical software supplier. Defendant Gary P. Whaley is a shareholder, director and president of MOMS and an officer of Bruni P.C.

 Curaflex and Bruni P.C. entered into a Product and Service Supply Agreement ("PSSA") in May of 1992, whereby Curaflex agreed to provide products and services to patients of Bruni P.C. Under the Agreement, Bruni P.C. was to compensate Curaflex 70% of the amount billed for Curaflex services, regardless of whether the patients paid Bruni P.C. for the services.

 Curaflex provided services to patients of Bruni P.C., which generated accounts receivable. Some patients and third-party payors deposited funds in payment of the accounts receivable into a lock box at Riggs Bank, as provided for in the Agreement. Other patients and third-party payors paid funds directly to Bruni P.C. and did not deposit them into the lock box.

 Curaflex alleges that Bruni P.C. violated the Agreement by failing to notify Curaflex of each patient and third-party payor remittance paid directly to Bruni P.C. It also alleges that Bruni P.C. diverted the payments it directly received from patients and some of the lock box funds to MOMS to pay payroll and other expenses of MOMS. After Curaflex filed this lawsuit, Bruni P.C. stopped paying Curaflex any of the money from the lock box and failed to pay Curaflex other monies it was owed.

 Curaflex brought this suit against Dr. Bruni, Bruni P.C., MOMS, and Michael Anestos, Bruni P.C.'s general counsel. Curaflex subsequently amended its complaint to add a count and a fifth party, Gary P. Whaley. Counts I, II and III of the Amended Complaint allege conversion; Count IV alleges breach of contract; Count V alleges tortious interference with contract; Count VI alleges breach of contract on a promissory note (against Bruni P.C. only); Count VII alleges breach of contract on the guarantee of the promissory note (against Dr. Bruni only); Count VIII alleges conspiracy to convert; Count IX alleges aiding and abetting conversion; and Count X alleges tortious interference with prospective economic and business relations. On November 18, 1994, the Court granted Defendant Michael Anestos' motion for summary judgment and dismissed him from this case. On the same day, the Court granted Plaintiff's Motion for Partial Summary Judgment on Count VI of the Amended Complaint and entered judgment against Bruni P.C., the only defendant named in that count.

 Defendants now seek summary judgment on the counts alleging conversion, conspiracy to convert, and aiding and abetting conversion (Counts I, II, III, VIII, and IX), as well as on Counts VII and X. Plaintiff has informed defendants and the Court that it shall not pursue Counts II and III; they have been rendered moot because they seek injunctive relief that is no longer available. Therefore, plaintiff does not oppose defendants' motion on these counts. Plaintiff has also indicated that it no longer contests the grant of summary judgment to defendant Dr. Bruni on Count VII because Dr. Bruni's obligations under the guarantee were to be released if Bruni P.C. received payments of more than $ 1,300,000 as the result of services Curaflex rendered under the PSSA, and defendants have now provided evidence that Bruni P.C. in fact received payments in excess of that amount. Plaintiff has also abandoned Count X. Thus, the Court need consider defendants' motion only as it pertains to Counts I, VIII and IX, all of which are based on a conversion theory.

 II. DISCUSSION

 A. Summary Judgment Standard

 Under Rule 56, Fed. R. Civ. P., summary judgment shall be granted if the pleadings, depositions, answers to interrogatories, admissions on file and affidavits show that there is no genuine issue of material fact in dispute and that the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). Material facts are those "that might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). In considering a motion for summary judgment, the "evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor." Id. at 255; see also Washington Post Co. v. U.S. Dept. of Health and Human Services, 865 F.2d 320, 325 (D.C. Cir. 1989). But the non-moving party's opposition must consist of more than mere unsupported allegations or denials and must be supported by affidavits or other competent evidence setting forth specific facts showing that there is a genuine issue for trial. Fed. R. Civ. P. 56(e); Celotex Corp. v. Catrett, 477 U.S. 317, 324, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). The non-moving party is "required to provide evidence that would permit a reasonable jury to find" in its favor. Laningham v. U.S. Navy, 259 U.S. App. D.C. 115, 813 F.2d 1236, 1242 (D.C. Cir. 1987). If the evidence is "merely colorable" or "not significantly probative," summary judgment may be granted. Anderson v. Liberty Lobby, Inc., 477 U.S. at 249-50.

 "In cases in which the dispositive issue involves the construction of a contract, summary judgment may be appropriate if the provisions of the contract are unambiguous." Davis v. Chevy Chase Financial Ltd., 215 U.S. App. D.C. 117, 667 F.2d 160, 169 (D.C. Cir. 1981); see America First Inv. Corp. v. Goland, 288 U.S. App. D.C. 298, 925 F.2d 1518, 1520 (D.C. Cir. 1991); Farmland Industries, Inc. v. Grain Bd. of Iraq, 284 U.S. App. D.C. 276, 904 F.2d 732, 735-36 (D.C. Cir. 1990). Furthermore, it is settled that whether a contract term is ambiguous is a question to be determined by the court. Carey Canada, Inc. v. California Union Ins. Co., 708 F. Supp. 1, 4 (D.D.C. 1989).

 B. The Contract Is Unambiguous And Does Not Create A Property Interest In Curaflex For Which It May ...


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