Pursuant to Ind.Appellate Rule 65(D),
this Memorandum Decision shall not be
regarded as precedent or cited before
any court except for the purpose of
establishing the defense of res judicata,
collateral estoppel, or the law of the case.
ATTORNEY FOR APPELLANT:
APPELLEE PRO SE:
JOSEPH N. WILLIAMS
Starr Austen Tribbett Myers & Miller
PREFERRED HEALTH CARE
c/o Fred Torres
COURT OF APPEALS OF INDIANA
GRANGER FAMILY DENTISTRY,
PREFERRED HEALTH CARE,
APPEAL FROM THE ST. JOSEPH SUPERIOR COURT
The Honorable Richard L. McCormick, Magistrate
Cause No. 71D01-0608-SC-8452
May 30, 2007
MEMORANDUM DECISION - NOT FOR PUBLICATION
Appellant-Defendant/Counterclaimant Granger Family Dentistry (“Granger”) appeals
a decision of the St. Joseph Superior Court, Small Claims Division, awarding AppelleePlaintiff/Counterclaim Defendant Preferred Health Care (“Preferred Health”) a breach of
contract judgment for $900.00 and denying Granger’s counterclaim for $600.00 restitution.
Granger presents a single issue for review: whether the small claims court decision is
contrary to law.
Facts and Procedural History
During 2002, Preferred Health, a sole proprietorship owned by Fred Torres, began to
provide employee health care reimbursement services for Granger. On June 1, 2004,
Granger entered into a fiscal year contract with Preferred Health, entitled “Employee
Reimbursement Plan.” 1 It provided in pertinent part as follows:
[Preferred Health] will
Set up your account for the [Employee Reimbursement Plan]
Set up the computer system for your specific account
Educate the employees with written notification
Set up all legal documentation, it will be the responsibility of the
employer to notify any new employees
Review all options including present carrier.
It will be the responsibility of the employer to notify Preferred Health Care
when they reach their deductible limits. PHC will then monitor and do a
follow up report to the health-covered employer and employee every month.
Granger’s office manager, Nanette Esler, testified that Granger and Preferred Health began working together
in 2002. In addition to the June 1, 2004 contract in the record, there is a second identical contract with the
date of May 1 and no calendar year.
This agreement will remain in force as long as the deductible exceeds $1,000.
Preferred Health Care assumes no responsibility or guarantee on deductibles or
numbers of deductibles.
With 10 employees, the fee will be $1800.00 = $150.00 per month.
(Plaintiff’s Ex. 1.) Granger also adopted a Medical Reimbursement Plan, applicable to fulltime employees of Granger.
Granger paid Preferred Health on an annual basis for 2002 through 2005. On June 8,
2006, Granger sent Preferred Health a check for $900.00 and a note that provided as follows:
Here is ½ of the invoice #364. Due to our current cash flow situation, Dr.
Williams is hoping you’ll accept $900 down and $900 in 6 months. Thank you
for your consideration.
(Plaintiff’s Ex. 3.) At some point, Granger changed insurance carriers and assigned the task
of monitoring deductibles to internal personnel. On August 1, 2006, Dr. Patrick Williams of
Granger issued a letter addressed to Fred Torres, stating in relevant part “we feel your
services should be prorated @ $150/month” and requesting reimbursement “of $600.00 for 4
months paid in advance of receiving your service.” (Defendant’s Ex. 6.)
On August 15, 2006, Preferred Health filed a small claims complaint against Granger,
seeking $985.00 and court costs. On September 9, 2006, Granger filed a counterclaim
seeking $600.00, courts costs, interest and attorney fees from Preferred Health. The matter
was set for a small claims hearing on September 27, 2006.
On the hearing date, the small claims court entered an order providing in pertinent part
Plaintiff and Defendant had a contract for services. It appears that Defendant
had consistently paid Plaintiffs the annual $1800.00 billing until this year
when Defendant experienced a cash flow problem. Eventually, Defendant
terminated services. The contract has no provisions for refund on a prorated
basis. The Court is not persuaded that Defendant escapes liability and is due a
refund. Rather, Defendant agreed to a service, the cost of which was $1800,
and elected to terminate services after sending a partial payment. The
remaining payment is due.
(App. 9) Granger now appeals.
Discussion and Decision
A. Standard of Review
The claim was tried before the bench in small claims court. Indiana Small Claims
Rule 8(A) provides: “The trial shall be informal, with the sole objective of dispensing
speedy justice between the parties according to the rules of substantive law, and shall not be
bound by the statutory provisions or rules of practice, procedure, pleadings or evidence
except provisions relating to privileged communications and offers of compromise.”
We review for clear error. Flint v. Hopkins, 720 N.E.2d 1230 (Ind. Ct. App. 1999). A
judgment is clearly erroneous if the record leaves us with a firm conviction that the trial court
has made a mistake and when the record contains no facts or inferences therefrom supporting
it. Robinson v. Gazvoda, 783 N.E.2d 1245, 1248 (Ind. Ct. App. 2003), trans. denied. We
presume the trial court correctly applied the law. Barber v. Echo Lake Mobile Home Cmty.,
759 N.E.2d 253, 255 (Ind. Ct. App. 2001). Additionally, we give due regard to the trial
court’s opportunity to judge the credibility of the witnesses, and do not reweigh the evidence,
but consider only the evidence and reasonable inferences therefrom that support the trial
court’s judgment. Id. A deferential standard of review is particularly appropriate in small
claims actions, where trials are informal, with the sole objective of dispensing speedy justice
according to the rules of substantive law. Id.
Granger claims that it had a right to cancel Preferred Health’s services and cease
payments at any time. According to Granger, the right of cancellation is found in the
Medical Reimbursement Plan, which includes the following provision: “[T]he Corporation
reserves the right to amend or cancel the MRP at any time. Employees will be notified
should such amendment or cancellation occur.” (App. 15.) In response, Preferred Health
contends that the language merely provides that Granger could cancel its group health
insurance plan at any time.
Construction of the terms of a written contract is a pure question of law for the court,
reviewed de novo. Harrison v. Thomas, 761 N.E.2d 816, 818 (Ind. 2002), trans. denied. The
reviewing court looks to the entire contract to glean the intention of the parties at the time the
contract was made. Ind. & Mich. Elec. Co. v. Terre Haute Indus., Inc., 507 N.E.2d 588, 598
(Ind. Ct. App. 1987), trans. denied. “In construing a contract, we must adopt the construction
which appears to be in accord with justice, common sense and the probable intention of the
parties in light of honest and fair dealing. Industry practice or usage is admissible to show
the intention of the parties as to those matters not clearly expressed.” Id.
The “Employee Reimbursement Plan” sets forth Preferred Health’s obligations to
Granger and provides that Granger will pay “$1800.00 = $150.00 per month.” (Plaintiff’s
Ex. 1.) During the first four years of their relationship, Granger made an annual payment of
$1,800.00 to Preferred Health. When Granger made a partial payment in 2006, it was
accompanied by a request for the acceptance of the partial payment due to Granger’s “cash
flow problem.” (Plaintiff’s Ex. 3.) Thus, it is clear that at the time of contracting, the parties
did not intend that Granger make monthly installment payments. Nevertheless, Granger
claims that its right of cancellation is embodied in the Medical Reimbursement Plan. An
examination of this document reveals that it “is intended to provide a plan of payment or
partial payment of employees’ medical insurance plan” and governs the rights and
responsibilities of Granger employees in this regard. (Defendant’s Ex. 1.) It appears to be a
collateral document, as it does not define the respective contractual obligations and rights of
Granger and Preferred Health.
The small claims court did not err as a matter of law by determining that Granger was
contractually obligated to pay Preferred Health $1,800.00 annually and owed the unpaid
balance for the contract year of mid-2006 to mid-2007.
SHARPNACK, J., and MAY, J., concur.