NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37 MOIZ CARIM, M.D. Appellant IN THE SUPERIOR COURT OF PENNSYLVANIA v. THE READING HOSPITAL SURGI-CENTER AT SPRING RIDGE, LLC Appellee No. 526 MDA 2013 Appeal from the Judgment Entered February 15, 2013 In the Court of Common Pleas of Berks County Civil Division at No(s): 10-5867 BEFORE: PANELLA, J., MUNDY, J., and PLATT, J. * MEMORANDUM BY PANELLA, J. FILED JANUARY 15, 2014 Appellant, Moiz Carim, M.D., appeals from the judgment entered by the Honorable Jeffrey K. Sprecher, Court of Common Pleas of Berks County. After careful review, we affirm. We draw the following factual background from the parties joint Stipulation of Facts presented to the trial court. In 2004, Dr. Carim became a member of Appellee, The Reading Hospital Surgi-Center at Spring Ridge, LLC, ( the Hospital ) by executing a Subscription Agreement and delivering a check for $25,000 to the Hospital. As its name implies, the Hospital is in the * Retired Senior Judge assigned to the Superior Court.
business of performing surgeries. The Operating Agreement of the Hospital contains a non-compete provision: 7.8 Exclusivity and Non-Solicitation. Each Physician Member hereby covenants and agrees that during the time the Physician Member owns an Interest in the Company and for a period of two (2) years thereafter, each Physician Member shall not participate directly or indirectly in (i) establishment, development, ownership, operation, or management of another ambulatory surgery center or comparable facility or service (including, but not limited, to, surgical specialty hospitals, other hospitals, surgical units, or surgical service or product lines of any facility or other entity) that renders services which are the same as or similar to the services rendered by the Company within the restricted area described on Exhibit G attached hereto (a) (d) Nothing in this Section 7.8 shall be construed to require any member to refer patients to the Ambulatory Surgery Center or to exclude a Member from referring patients to or obtaining professional services at any ambulatory surgery center no owned or managed by the Company. Notwithstanding anything else contained herein to the contrary, if a Physician Member breaches 7.8(a) following transfer of his or her membership interest pursuant to 7.3 or 7.4 hereof, such Physician Member shall forfeit the purchase price to be paid by the company for such membership interest as liquidated damages. Exhibit B to Dr. Carim s Complaint, filed 11/7/2011. 1 In 2005, Dr. Carim acquired property in Berks County to accommodate the relocation of his medical practice, as well as for a future surgery center 1 The joint Stipulation of Facts stipulated to the admissibility of all exhibits to Dr. Carim s complaint. - 2 -
( the Carim Surgery Center ). Dr. Carim does not challenge, on appeal, the trial court s implicit conclusion that the Carim Surgery Center was located within the geographical zone covered by the non-compete clause. On April 3, 2006, Dr. Carim notified the Hospital of his intent to withdraw from the Hospital, which the Hospital accepted effective June 1, 2006. On June 1, 2006, the Hospital informed Dr. Carim that its Board of Managers had decided that he had forfeited his initial investment of $25,000. The Carim Surgery Center was opened in August, 2008, and it was prepared and staffed to begin surgeries on that date. No surgeries were performed at the Carim Surgery Center prior to August, 2008. In November, 2011, Carim filed the instant complaint, seeking the return of his $25,000 investment in the Hospital. Ultimately, the parties agreed to a set of stipulated facts, and presented the case to the trial court for a non-jury trial. The trial court found in favor of the Hospital, and this timely appeal followed. On appeal, Dr. Carim raises three questions for our review: 1. Did the Court err in determining that the terms of paragraph 7.8(d) of the Operating Agreement are unambiguous, but interpreted the Agreement outside the plain meaning of the document? 2. Did the Court err in failing to construe the terms of the contract against the Hospital Surgicenter as the drafter of the Contract? 3. Whether the Court erred in failing to interpret the term renders services in paragraph 7.8 of the Contract as modifying the terms establishment, development, ownership, operation, or management of another ambulatory surgery - 3 -
center or comparable facility or service so as to narrowly construe the restrictive covenant. Appellant s Brief, at 5. All three of Dr. Carim s issues on appeal challenge the trial court s interpretation of the non-compete provision in the Operating Agreement. Interpretation of a contract poses a question of law and our review is plenary. See Charles D. Stein Revocable Trust v. General Felt Industries, Inc., 749 A.2d 978, 980 (Pa. Super. 2000). In construing a contract, the intention of the parties is paramount and the court will adopt an interpretation which under all circumstances ascribes the most reasonable, probable, and natural conduct of the parties, bearing in mind the objects manifestly to be accomplished. Id. To give effect to the intent of the parties, we must start with the language used by the parties in the written contract. See Szymanski v. Brace, 987 A.2d 717, 722 (Pa. Super. 2009), appeal denied, 606 Pa. 688, 997 A.2d 1179 (2010). Generally, courts will not imply a contract that differs from the one to which the parties explicitly consented. See Kmart of Pennsylvania, L.P. v. M.D. Mall Associates, LLC, 959 A.2d 939, 944 (Pa. Super. 2008), appeal denied, 602 Pa. 667, 980 A.2d 609 (2008). We are not to assume that the language of the contract was chosen carelessly or in ignorance of its meaning. See id. Where the language of the contract is clear and unambiguous, a court is required to give effect to that language. See Prudential Property and - 4 -
Casualty Ins. Co. v. Sartno, 588 Pa. 205, 212, 903 A.2d 1170, 1174 (2006). Contractual language is ambiguous if it is reasonably susceptible of different constructions and capable of being understood in more than one sense. Hutchison v. Sunbeam Coal Co., 513 Pa. 192, 201, 519 A.2d 385, 390 (1986). As quoted above, the non-compete clause of the Operating Agreement prohibited members from directly or indirectly establishing or developing a surgery center to compete with the Hospital for two years after a member withdraws from the Hospital. Dr. Carim first argues that the non-compete provision is ambiguous, as the enforcement provision found in section 7.8(d) refers only to violations of section 7.8(a). We agree with the trial court that the reference to section 7.8(a) is a typographical error. Section 7.8(a) is not a prohibition applying to members, but a safe harbor for members: Nothing in this Section 7.8 shall be construed to require any Member to refer patients to [the Hospital] or to exclude a Member from referring patients to obtaining professional services at any competing surgery center. Therefore, it is difficult to imagine how a member could violate section 7.8(a), thereby triggering the enforcement provision set forth in section 7.8(d). Furthermore, section 7.8(d) states that the non-compete provision is of extraordinary value to the Hospital, and that a breach of the provision would cause the Hospital immediate and irreparable harm. It would be - 5 -
unreasonable, improbable, and unnatural to conclude that a provision that the parties agreed was highly valuable would be left with no enforcement provision. We are not to ascribe a meaning to the Operating Agreement that would be contrary to the clear intent of the parties. The parties clearly intended that the non-compete provision use the forfeiture of the $25,000 investment as its enforcement mechanism. We therefore conclude that Dr. Carim s first issue on appeal merits no relief. In his second issue, Dr. Carim argues that trial court erred in failing to construe any ambiguities in the Operating Agreement against the Hosptial, as the agreement s drafter. However, the trial court did not find ambiguity; it determined that the contract contained a typographical error, and that the parties intent was clear. We agree with the trial court. The reference to section 7.8(a) was nonsensical, and clearly contradicted the explicit intent of the parties as set forth in the Operating Agreement itself. We therefore conclude that Dr. Carim s second issue on appeal merits no relief. In his final issue on appeal, Dr. Carim contends that the trial court erred in failing to construe the term renders services as a limitation on the conduct prohibited by the non-compete provision. We do not agree. The parties did not intend the term renders services to require that competing surgery center actually render services during during the prohibition period. Rather, such language was included to limit the applicability of the noncompete clause to surgery centers which provided services which are the - 6 -
same as or similar to the services rendered by [the Hospital]. Operating Agreement, Section 7.8. If we were to accept the interpretation set forth by Dr. Carim, the prohibition on establishing or developing a surgery center would be meaningless. Furthermore, the modifying language following the term renders services would be meaningless surplusage, unconnected to the rest of the sentence. We therefore conclude that Dr. Carim s third issue on appeal merits no relief. As we conclude that none of Dr. Carim s issues on appeal merit relief, we affirm the judgment. Judgment affirmed. Jurisdiction relinquished. Judgment Entered. Joseph D. Seletyn, Esq. Prothonotary Date: 1/15/2014-7 -