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Briggs Medical Service Co. v. Amedisys, Inc.

United States District Court, M.D. Louisiana

March 29, 2018

BRIGGS MEDICAL SERVICE CO.
v.
AMEDYSIS, INC.

          RULING AND ORDER

          BRIAN A. JACKSON, UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF LOUISIANA.

         Before the Court is the Motion to Reopen Case and Enforce Settlement Agreement and to Award Attorneys' Fees and Costs (Doc. 19), filed by Plaintiff, Briggs Medical Service Company ("Briggs"). Plaintiff alleges that Defendant, Amedysis, Inc. ("Amedysis"), failed to honor the settlement agreement and that it is entitled to money damages and attorneys' fees. For the following reasons, the motion is GRANTED IN PART and DENIED IN PART.

         I. BACKGROUND

         Briggs sells and licenses medical recordkeeping and compliance support systems to the healthcare industry. (Doc. 1 at ¶ 8). Amedysis is a nationwide home health care agency that previously used Briggs' products. (Id. at ¶¶ 5, 16). Briggs's systems are proprietary: it holds numerous copyrights on its recordkeeping systems. (Id. at ¶ 10, 12). In 2004, Briggs and Amedysis entered into a contract (the "Contract"), in which Briggs agreed to supply Amedysis with its copyrighted materials for recordkeeping and compliance purposes. (Id. at 16).

         The Contract expired on August 31, 2007, when negotiations for an extension failed. (Id. at ¶¶ 20-21). Amedysis claimed that it had developed its own internal recordkeeping and compliance software, and as a result, no longer needed Briggs's system. Subsequently, Briggs sued, alleging that Amedysis incorporated its copyrighted material into its internal system. (Id. at ¶ 34).

         On August 14, 2009, upon notice that the parties had reached a settlement agreement (the "Settlement"), the Court entered an order dismissing this action with prejudice, but it retained jurisdiction over the matter and the parties to enforce the settlement agreement. (Doc. 18). Three provisions of the Settlement, which has been amended four times (Doc. 19-2 at ¶¶ 4), are relevant to the instant motion. First, Amedysis had to provide Briggs with a copy of itsis internal system on November 1, 2016 and November 1, 2017 to ensure that its internal system no longer infringed on Brigg's system. (Doe, 23 at p. 10). Second, Amedysis would have until November 1, 2016 to implement all of the changes to its system. (Id. at p. 9). Third, Amedysis would pay Briggs $35, 000 a month from January 2016 to October 2016 for continued use of Brigg's materials. (Id. at p. 10).

         However, in 2015, Amedysis decided to discontinue their internal system and instead licensed a system from a third party. (Doc. 25-1 at ¶¶ 6-7). Although Amedysis claims that it intended to completely switch over to the third-party system by November 2016, Amedysis realized that its internal system was used for some patients until June 28, 2017. (Id. at ¶¶ 7-8).

         On July 7, 2017, Briggs filed the instant motion to reopen the case and enforce the settlement agreement. (Doc. 19).

         II. LEGAL STANDARD

         A "district court has inherent power to recognize, encourage, and when necessary enforce settlement agreements reached by the parties." Bell v. Schexnayder, 36 F.3d 447, 449 (5th Cir. 1994). When exercising its enforcement power, a court applies "principles of state of state law applicable to contracts generally." Lockette v. Greyhound Lines, Inc., 817 F.2d 1182, 1185 (5th Cir. 1987) (citation omitted). The parties agree that Louisiana law applies to the Settlement. (Doc. 23 at § 17); see also Celtic Marine Corp. v. James C. Justice Cos., Inc., 760 F.3d 477, 481 (5th Cir. 2014) (deferring to parties' choice of Louisiana law in a settlement agreement). Under Louisiana law, "[a] settlement agreement is a contract, " meaning "[t]he rules of construction applicable to contracts are therefore used." Celtic Marine Corp., 760 F.3d at 481-82.

         "When the terms of a contract are unambiguous and lead to no absurd consequences, [a court] interpret[s] them as a matter of law." Boudreaux v. Transocean Deepwater, Inc., 641 Fed.Appx. 328, 332 (5th Cir. 2016) (unpublished) (applying Louisiana law). However, "when the terms of a written contract are susceptible to more than one interpretation, or there is uncertainty or ambiguity as to its provisions, or the intent of the parties cannot be ascertained from the language employed, parol evidence is admissible to clarify the ambiguity and to show the intention of the parties." Dixie Campers, Inc. v. Vesely Co., 398 So.2d 1087, 1089 (La. 1981). If a contract is silent regarding a particular situation, the court may consider "whatever the law, equity, or usage regards as implied in a contract of that kind or necessary for the contract to achieve its purpose." La. Civ. Code art. 2054. Under Louisiana law, "the general purpose of contract damages is not to punish breaching parties or enrich non-breaching parties, but rather to produce the same result as would have occurred if there was no breach." In re Bankston, 749 F.3d 399, 403 (5th Cir. 2014).

         III. DISCUSSION

         A. Settlement Agreement

         Briggs seeks (1) specific performance to turn over Amedysis's internal system, and (2) damages in the amount of $35, 000 a month for ...


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