Performance Food Group of Georgia, Inc., d/b/a PFG Milton's v. Healthlink, LLC., Healthlink Srvices, LLc. v. HCC Healthcare of Charlotte, LLC. ( 2010 )

IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
August 31, 2010 Session
PERFORMANCE FOOD GROUP OF GEORGIA, INC., d/b/a PFG
MILTON'S, v. HEALTHLINK, LLC., HEALTHLINK SERVICES, LLC., v.
HCC HEALTHCARE OF CHARLOTTE, LLC., et al.
Appeal from the Chancery Court for Bradley County
No. 06-167 Hon. Jerri S. Bryant, Chancellor
No. E2009-01532-COA-R3-CV - FILED OCTOBER 18, 2010
Plaintiff brought this action against defendant for an unpaid debt. Both parties moved for
summary judgment and the Trial Court granted plaintiff's summary judgment and denied
defendant's summary judgment. On appeal, we affirm the Trial Court's decision.
Tenn. R. App. P.3 Appeal as of Right; Judgment of the Chancery Court Affirmed.
H ERSCHEL P ICKENS F RANKS, P.J., delivered the opinion of the Court, in which C HARLES D.
S USANO, J R., J., and. J OHN W. M CC LARTY, J., joined.
Richard C. Rose, Chattanooga, Tennessee, for the appellant, Healthlink Services, LLC.
Chadwick B. Tindell and M. Todd Ridley, Knoxville, Tennessee, for the appellee,
Performance Food Group of Georgia, Inc., d/b/a PFG Milton's.
OPINION
Plaintiff, Performance Food Group of Georgia, Inc. d/b/a PFG Milton’s, filed a
Complaint against HealthLink, LLC, alleging that HealthLink maintained a credit account
with plaintiff for the purchase of goods, and that HealthLink’s account was past due and had
not been paid despite repeated demands for payment by plaintiff. Plaintiff alleged that
defendant owed $45,929.67 as of June 24, 2005, and also sought collection costs, interest,
and attorneys fees. Plaintiff attached a copy of the credit agreement to the Complaint.
HealthLink answered, denying that it owed plaintiff any money. Plaintiff then filed
a Motion for Summary Judgment, and attached a Statement of Undisputed Material Facts,
stating that HealthLink had executed a credit agreement with plaintiff, and identified various
entities who could purchase goods on credit pursuant to the same. Plaintiff stated that the
debt it was owed was due to purchases by Elizabeth Place Nursing Home, which was one of
the facilities listed on HealthLink’s credit agreement. Plaintiff stated that HealthLink paid
timely for a number of years, but had failed to pay the existing debt. Plaintiff attached the
credit agreement and its attached list of facilities, as well as an Affidavit from plaintiff’s
credit manager and records custodian.
HealthLink amended its Answer, and sought to add HCC Healthcare of Charlotte,
LLC, Douglas Mittleider, and Park Village Rehab and Health, Inc., as third-party defendants,
alleging that if Elizabeth Place Nursing Home ordered the goods in question then the third-
party defendants would be responsible for same and not HealthLink.
Plaintiff's Motion for Summary Judgment was denied by the Trial Court, on the
grounds that there were disputed issues of material fact. Plaintiff then filed a second Motion
for Summary Judgment, and at that juncture Healthlink also filed a Motion for Summary
Judgment, stating that HealthLink did not order the goods in question, and other responses.
Plaintiff then filed a third Motion for Summary Judgment and withdrew the second
Motion for Summary Judgment. Plaintiff stated that it was withdrawing the Second Motion
due to the discrepancy in the original affidavit, and was instead relying on the Supplemental
Affidavit in its Third Motion. Plaintiff filed a Third Statement of Undisputed Material Facts,
stating that HealthLink had identified a number of entities who were authorized to purchase
goods from plaintiff on HealthLink’s account, and that Elizabeth Place was one of those
entities. Plaintiff stated the goods in question were ordered by Elizabeth Place, and that the
ordinary course of business was for Elizabeth Place to order goods and HealthLink would
pay for them.
Plaintiff also filed responses to requests for admissions filed on it by HealthLink, and
admitted that there was no record of the name of the person who called in the order for
Elizabeth Place, but that the goods were delivered to Elizabeth Place and signed for by an
Elizabeth Place employee. Plaintiff attached copies of all the invoices detailing the goods
that were delivered to Elizabeth Place.
The Court entered a Summary Judgment Order, granting summary judgment to
plaintiff and denying HealthLink’s Motion for Summary Judgment. The Court found that
it was undisputed that the goods were delivered to Elizabeth Place, and that Elizabeth Place
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was an authorized purchaser under the agreement, such that HealthLink would be liable to
pay for same. The Court declared the Judgment to be final, and stated that it would not affect
the third party claims. In its Memorandum Opinion, the Court noted that the agreement listed
both HealthLink and Elizabeth Place as purchasers, and that Elizabeth Place accepted the
goods, which constituted a purchase. HealthLink filed a Notice of Appeal.
The issues presented on appeal are:
1. Did the Trial Court err in granting summary judgment to plaintiff, even though
plaintiff did not show that the goods were purchased by HealthLink?
2. Did the Trial Court err in denying summary judgment to HealthLink?
3. Did the Trial Court err in enforcing an illegible agreement?
This is a breach of contract action, filed to recover the amounts due to plaintiff under
the parties’ agreement. The agreement provides: “Purchaser identified as such in the
foregoing Customer Information and Credit Application (“Purchaser”), agrees that all
purchases on open account made by Purchaser, or by any person representing himself to be
an agent, employee, or representative of Purchaser, from PFG Milton’s Foodservice Inc. . .
. are subject to the following terms and conditions”,which included that “all amounts due
seller are payable in accordance with terms granted by seller”, and that there could be
services charges added to balances owing past thirty days, that seller could seek costs of
collection, etc. As the Trial Court noted, the term “purchaser” is used in various places at
the beginning of the agreement, including in the “Bill to” section, which lists HealthLink,
and in the “Ship to” section, which says “see attached facility listing”. It is undisputed that
the attached facility listing included Elizabeth Place.
It was also undisputed that, in the normal course of dealings between these parties, the
facilities listed on the attached list ordered goods from plaintiff, those goods were delivered
to said facilities, plaintiff billed HealthLink for the goods, and HealthLink paid the bills.
HealthLink argues that the parties’ agreement states that HealthLink itself must order the
goods in order to be liable for same, but the agreement lists both HealthLink and Elizabeth
Place as purchasers. Moreover, it is undisputed that, during the years these parties dealt with
one another, HealthLink never actually ordered any goods itself.
The Trial Court held that both HealthLink and the facilities listed on the attached list
were purchasers, since the agreement has “purchaser name” attached to both. However,
HealthLink argues that such was not the intent. The Court considered the parties’ course of
conduct in determining what the intent of the agreement was. See Coble Systems, Inc., v.
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Gifford Co., 627 S.W.2d 359 (Tenn. Ct. App. 1981). Singletary’s Supplemental Affidavit
unequivocally states that the parties’ course of dealing for the past several years was that the
facilities listed on the attached list would order goods from plaintiff, those goods would be
billed to HealthLink, and HealthLink would pay for them. The affidavit also states that
Elizabeth Place ordered the goods in question, just as they had done for years, that the goods
were delivered to Elizabeth Place and signed for by an Elizabeth Place employee, and that
plaintiff then billed the goods to HealthLink, as was their agreement. This proof was
unrefuted by HealthLink, who filed no other affidavits or any documents to assert that
Elizabeth Place did not, in fact, order these goods. Rather, HealthLink simply argued the
goods had to be ordered by HealthLink itself, even though there was proof that this had never
been done. Also, significantly, HealthLink did not produce any affidavits stating that
HealthLink had ever actually ordered any goods from plaintiff.
HealthLink contends that plaintiff must show (1) the existence of an enforceable
contract, (2) nonperformance of that contract that amounts to a breach, and (3) damages
caused by the breach.
Plaintiff met its burden of proving that the parties had an enforceable contract (which
HealthLink conceded), that it was breached by HealthLink’s non-payment, and that there
were monetary damages, via Singletary’s supplementary affidavit. Once these facts were
established, HealthLink (as the non-moving party) was required to produce evidence of
specific facts establishing that genuine issues of material fact existed. HealthLink did not,
however, come forward with any affidavits or other evidence to show that any of these
material facts were disputed. As such, the Trial Court properly granted summary judgment
to plaintiff.
For the foregoing reasons, summary judgment was properly denied to HealthLink, and
HealthLink’s issue regarding the legibility of the agreement is moot, as HealthLink conceded
that the agreement was valid, and quoted the pertinent parts from it in multiple documents.
We affirm the Judgment of the Trial Court and remand to the Trial Court for further
proceedings consistent with this Opinion. The cost of the appeal is assessed to HealthLink,
LLC.
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HERSCHEL PICKENS FRANKS, P.J.
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