Firstsource Solutions United States, LLC v. Tulare Reg'l Med. Ctr.

FIRSTSOURCE SOLUTIONS USA, LLC, Plaintiff, v. TULARE REGIONAL MEDICAL CENTER, Defendant.

TULARE REGIONAL MEDICAL CENTER, Counter-claimant, v. FIRSTSOURCE SOLUTIONS USA, LLC, Counter-defendant.

No. 1:15-cv-01136-DAD-EPG

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA

June 12, 2018

ORDER DENYING MOTION TO DEFER CONSIDERATION OF THE MOTION FOR SUMMARY JUDGMENT AND GRANTING MOTION FOR SUMMARY JUDGMENT

(Doc. Nos. 40, 57, 61)

This matter concerns a breach of contract dispute concerning the provision of various fee collection services performed by plaintiff and counter-defendant Firstsource (hereinafter "plaintiff") on behalf of defendant and counter-claimant Tulare Regional Medical Center (hereinafter "defendant"). Now before the court are two motions filed by plaintiff: a motion for summary judgment filed on October 18, 2016 and a motion for terminating sanctions filed on December 9, 2016. (Doc. Nos. 40, 57.) Additionally, in opposition to plaintiff's motion for summary judgment, defendant has filed a request under Federal Rule of Civil Procedure 56(d) to defer consideration of summary judgment and allow it additional time to disclose records it has not yet provided to plaintiff. (Doc. No. 61.) The court held a hearing on these motions on January 19, 2017, at which plaintiff's counsel Emily Feinstein and defendant's counsel Teresa Chow appeared.¹ For the reasons that follow, defendant's request to defer consideration of the summary judgment motion will be denied, plaintiff's motion for summary judgment itself will be granted, and plaintiff's motion for terminating sanctions will be denied as moot.

BACKGROUND

A. Factual Background

This matter concerns a dispute over billing-related services provided by plaintiff to defendant. Virtually all of the salient facts related to this case are undisputed. The parties entered a valid contract on November 18, 2010 wherein plaintiff agreed to perform "revenue cycle services, patient access services, and patient financial services"—essentially billing and other business services—for defendant. (Doc. No. 62 at 4-6.) Plaintiff was to receive a contingency fee of 3.75 percent of the total fee payments it collected for defendant. (Id. at 6.) The contract provided that defendant would pay invoices on a monthly basis, and would be liable for a service charge of 1.5 percent per month for any invoices unpaid after more than thirty days. (Id. at 9.)

Defendant terminated the agreement by letter on September 11, 2014, to be effective May 31, 2015. (Id. at 11.) Plaintiff continued to perform services for defendant between September 11, 2014 and May 31, 2015. (Id. at 12.) Nevertheless, defendant failed to pay plaintiff for services rendered during this period. (Id. at 14-15.) Plaintiff has invoiced defendant for $724,385.08, which defendant has refused to pay. (Id. at 16-23.) Plaintiff began assessing late fees on unpaid invoices in January 2015. (Id. at 25.)

B. Procedural Background

Plaintiff filed this suit on July 21, 2015, alleging one claim for breach of contract in its complaint. (Doc. No. 1.) Defendant answered the complaint on October 13, 2015, and allegedone counterclaim for breach of contract, claiming plaintiff failed to collect between $6.5 and $7 million worth of bills for defendant. (Doc. No. 6.) Fact discovery was initially set to close in this case on June 24, 2016. (Doc. No. 25 at 2.) The court extended this deadline to September 22, 2016 upon the stipulation of the parties. (Doc. No. 32 at 3.) Defendant then sought and obtained, ex parte, a continuance of all deadlines in the case, including those related to discovery, on September 20, 2016. (See Doc. No. 35.) This application was granted by the court on October 21, 2016, and amended by order on November 1, 2016. (Doc. Nos. 45, 46.) Plaintiff, meanwhile, moved for summary judgment on October 18, 2016, arguing that defendant admitted it had been invoiced for the amounts in question and had not paid those invoices, and had provided no admissible evidence on which to base its claim that plaintiff had breached the parties' contract. (Doc. No. 41.) Plaintiff then moved for terminating sanctions related to defendant's affirmative defenses and counterclaim on December 9, 2016, asserting that despite the court's granting of the ex parte continuance it had sought, defendant had still not disclosed the required documents or participated in discovery in good faith. (Doc. No. 57-1.)

Defendant opposed plaintiff's summary judgment motion on January 4, 2017. (Doc. No. 61.) In doing so, defendant requested additional time under Rule 56(d) to produce documents it failed to produce during discovery in order to allow the case to be decided on the merits. (Id. at 15-17.) Defendant also opposed plaintiff's motion for the imposition of terminating sanctions on January 10, 2017. (Doc. No. 71.) Thereafter, this entire action was automatically stayed pursuant to defendant's bankruptcy filing on October 11, 2017. (Doc. No. 84.) The parties submitted a stipulation, approved by the bankruptcy court, on June 5, 2018, lifting the stay. (Doc. No. 91.)

LEGAL STANDARD

Summary judgment is appropriate when the moving party "shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a).

In summary judgment practice, the moving party "initially bears the burden of proving the absence of a genuine issue of material fact." In re Oracle Corp. Sec. Litig., 627 F.3d 376, 387 (9th Cir. 2010) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). The moving partymay accomplish this by "citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials" or by showing that such materials "do not establish the absence or presence of a genuine dispute, or that the adverse party cannot produce admissible evidence to support the fact." Fed. R. Civ. P. 56(c)(1)(A), (B). When the non-moving party bears the burden of proof at trial, "the moving party need only prove that there is an absence of evidence to support the nonmoving party's case." Oracle Corp., 627 F.3d at 387 (citing Celotex, 477 U.S. at 325.). See also Fed. R. Civ. P. 56(c)(1)(B). Indeed, summary judgment should be entered, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial. See Celotex, 477 U.S. at 322. "[A] complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial." Id. In such a circumstance, summary judgment should be granted, "so long as whatever is before the district court demonstrates that the standard for entry of summary judgment . . . is satisfied." Id. at 323.

If the moving party meets its initial responsibility, the burden then shifts to the opposing party to establish that a genuine issue as to any material fact actually does exist. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). In attempting to establish the existence of this factual dispute, the opposing party may not rely upon the allegations or denials of its pleadings but is required to tender evidence of specific facts in the form of affidavits, and/or admissible discovery material, in support of its contention that the dispute exists. See Fed. R. Civ. P. 56(c)(1); Matsushita, 475 U.S. at 586 n.11; Orr v. Bank of Am., NT & SA, 285 F.3d 764, 773 (9th Cir. 2002) ("A trial court can only consider admissible evidence in ruling on a motion for summary judgment."). The opposing party must demonstrate that the fact in contention is material, i.e., a fact that might affect the outcome of the suit under the governing law, see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987), and that the dispute is genuine, i.e., theevidence is such that a reasonable jury could return a verdict for the nonmoving party. See Wool v. Tandem Computs., Inc., 818 F.2d 1433, 1436 (9th Cir. 1987).

In the endeavor to establish the existence of a factual dispute, the opposing party need not establish a material issue of fact conclusively in its favor. It is sufficient that "the claimed factual dispute be shown to require a jury or judge to resolve the parties' differing versions of the truth at trial." T.W. Elec. Serv., 809 F.2d at 631. Thus, the "purpose of summary judgment is to 'pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial.'" Matsushita, 475 U.S. at 587 (citations omitted).

"In evaluating the evidence to determine whether there is a genuine issue of fact," the court draws "all reasonable inferences supported by the evidence in favor of the non-moving party." Walls v. Central Contra Costa Cty. Transit Auth., 653 F.3d 963, 966 (9th Cir. 2011). It is the opposing party's obligation to produce a factual predicate from which the inference may be drawn. See Richards v. Nielsen Freight Lines, 602 F. Supp. 1224, 1244-45 (E.D. Cal. 1985), aff'd, 810 F.2d 898, 902 (9th Cir. 1987). Finally, to demonstrate a genuine issue, the opposing party "must do more than simply show that there is some metaphysical doubt as to the material facts . . . . Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no 'genuine issue for trial.'" Matsushita, 475 U.S. at 587 (citation omitted).

ANALYSIS

A. Rule 56(d) Request

Defendant requests the court defer ruling on plaintiff's summary judgment motion under Rule 56(d) and to reopen discovery in this action. (Doc. No. 61 at 15-17.) Unde...