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Rayham v. Multiplan, Inc.

Supreme Court of New York, Second Department

August 23, 2017

Roman Rayham, etc., et al., appellants,
Multiplan, Inc., et al., respondents. Index No. 503315/13

          Argued-June 5, 2017

         D53154 O/htr

          Kenneth L. Kutner, New York, NY, for appellants.

          James Edward Gross, Albany, NY, and Baker Donelson, Bearman, Caldwell & Berkowitz, P.C., Baton Rouge, Louisiana (Errol J. King, pro hac vice, and Robert Blankenship, pro hac vice, of counsel), for respondents (one brief filed).


          DECISION & ORDER

         Appeal from an order of the Supreme Court, Kings County (Carolyn E. Demarest, J.), dated February 23, 2015. The order denied the plaintiffs' motion for summary judgment on the complaint, and granted the defendants' cross motion for summary judgment dismissing the complaint.

         ORDERED that the order is affirmed, with costs.

         The plaintiff Roman Rayham is a plastic surgeon, and the plaintiff RR Plastic Surgery P.C. (hereinafter RR Office) is his private practice. Rayham also works as an attending physician at various New York City hospitals, including New York Methodist Hospital (hereinafter Methodist). Nonparty Park Slope Physician Services P.C. (hereinafter PSPS) handles all of Methodist's billing, including the billing for services Rayham provides at Methodist.

         In 2009, in connection with his practice at Methodist, Rayham executed a limited power of attorney authorizing nonparty Allegiance Billing & Consulting, LLC (hereinafter Allegiance), to contract on his behalf with network providers and health insurance companies for services performed at Methodist.

         In 2010, Allegiance executed an agreement (hereinafter the Beech Street Agreement) on Rayham's behalf with the defendant Beech Street Corporation (hereinafter Beech Street), a preferred provider organization. The Beech Street Agreement provided that its terms may be amended upon "30 days prior written notice from Beech to [Rayham]" and that the "amendment shall be effective at the conclusion of such 30 day notice period unless [Rayham] objects to the amendment and notifies Beech in writing of [Rayham's] intent to terminate prior to the conclusion of such notice period." The address to which the Beech Street Agreement required the written notice to be sent was the address for the office of PSPS. The Beech Street Agreement further provided that Beech Street may assign its rights under the contract to a "Beech Affiliate, " which was defined as any "entity" that is "controlled by or is under common control of Beech [Street]."

         In 2010, the defendant Multiplan, Inc. (hereinafter Multiplan), another preferred provider organization, acquired Beech Street's parent company. In March 2011, Multiplan sent two letters to Rayham at PSPS's address. Both letters advised that Multiplan had acquired Beech Street and that, effective July 15, 2011, the Beech Street and Multiplan networks would integrate and claims would be processed under Multiplan's fee schedule. The second letter, dated March 28, 2011, advised that the Beech Street Agreement would be amended so as to include the claims for services Rayham provided at Methodist in the Multiplan network. Rayham claims he never received these letters.

         In November 2011, the plaintiffs faxed Beech Street a letter on their letterhead requesting that the RR Office be added "to our profile, " with a retroactive date of July 1, 2011. The letter provided the RR Office's address and tax-identification number, and a W-9 form was attached. Upon receiving the fax, the defendants retroactively enrolled the RR Office in their networks and processed the RR Office's claims according to Multiplan's fee schedule. A few months later, after realizing that the RR Office was receiving lower reimbursements than were once provided by Beech Street, Rayham learned that Multiplan had acquired Beech Street and that claims were being processed pursuant to Multiplan's fee schedule. Rayham requested the RR Office's removal from the defendants' networks. This request was granted, but the request for the reprocessing of the RR Office's claims was denied.

         The plaintiffs commenced this action, asserting causes of action sounding in breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment, and quantum meruit. The plaintiffs alleged that the defendants unilaterally altered the terms of the Beech Street Agreement by placing the RR Office in the Multiplan network and repricing its claims under the Multiplan fee schedule without affording the plaintiffs with notice or an opportunity to object as required under the Beech Street Agreement. Following joinder of issue and the completion of discovery, the plaintiffs moved for summary judgment on the complaint, and the defendants cross-moved for summary judgment dismissing the complaint. The Supreme Court denied the plaintiffs' motion and granted the defendants' cross motion. The plaintiffs appeal.

         The Supreme Court properly granted that branch of the defendants' motion which was for summary judgment dismissing the breach of contract cause of action. The elements of a cause of action to recover damages for breach of contract are the existence of a contract, the plaintiff's performance pursuant to the contract, the defendant's breach of its contractual obligations, and damages resulting from the breach (see Tudor Ins. Co. v Unithree Inv. Corp.,137 A.D.3d 1259, 1260; PFM Packaging Machinery Corp. v ZMY Food Packing, Inc., 131 A.D.3d 1029, 1030). "[A] contract is to be construed in accordance with the parties' intent, which is generally discerned from the four corners of the document itself. Consequently, 'a written agreement that is complete, clear and ...

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