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Good Shepherd Hospital, Inc. v. Select Specialty Hospital - Longview, Inc.

Court of Appeals of Texas, Sixth District, Texarkana

May 3, 2019

THE GOOD SHEPHERD HOSPITAL, INC. D/B/A CHRISTUS GOOD SHEPHERD MEDICAL CENTER LONGVIEW, Appellant
v.
SELECT SPECIALTY HOSPITAL - LONGVIEW, INC., Appellee

          Date Submitted: April 17, 2019

          On Appeal from the 71st District Court Harrison County, Texas Trial Court No. 18-0718

          Before Morriss, C.J., Burgess and Carter, [*] JJ.

          MEMORANDUM OPINION

          JACK CARTER, JUSTICE

         This is an interlocutory appeal from a trial court's order granting a temporary injunction. See Tex. Civ. Prac. & Rem. Code Ann. § 51.014(4) (West Supp. 2018). The temporary injunction requires appellant, Good Shepherd Hospital d/b/a Christus Good Shepherd Medical Center Longview (Good Shepherd), to continue providing services to Select Specialty Hospital-Longview, Inc. (Select), and its patients pursuant to a service contract terminated by Good Shepherd. On appeal, Good Shepherd argues that the trial court abused its discretion in granting injunctive relief because Select did not establish a probable right to recovery since the service contract was properly terminated in accordance with its express provisions.

         We conclude that Good Shepherd's appeal seeks an advisory opinion from this Court. Because we decline to issue an opinion amounting to an advance ruling on the merits of the case, we affirm the trial court's judgment.

         I. Factual and Procedural History

         A. The Lease Agreement

         Select owns and operates a long-term care facility for patients discharged from intensive care units who require an average future hospitalization of at least twenty-five days. In 2002, Good Shepherd, as Lessor, entered into a lease agreement (Lease) with Select's predecessor. As a result of this Lease, Select's long-term health care facility is housed on the first two floors of Good Shepherd Hospital, which is an acute care facility.[1]

         The Lease of Good Shepherd's property was initially for a five-year term, with an option to "extend the term . . . for two (2) additional consecutive five-year renewal terms." As a result of amendments to the Lease extending its terms, the Lease is effective through June 30, 2023, and provides that the relationship between Good Shepherd and Select "at all times shall remain solely that of Lessor and Lessee and shall not be deemed to constitute a partnership or joint venture." It also states, "Lessee and Lessor may enter into ancillary agreements for the provision of [various] services."

         B. The Ancillary Agreement

         On the same day that the Lease was originally signed, Good Shepherd entered into an Ancillary and Support Services Agreement (Ancillary Agreement) with Select's predecessor, which required it to provide dietary services, radiology/imaging services, laboratory and pathology services, blood banking services, surgery services, laundry and linen services, emergency response services, biomedical equipment maintenance and repair services, transcription services, and other additional purchased services. It also clarified, "The parties agree that [Good Shepherd] is an independent contractor and is not an agent or representative of [Select]. Nothing contained herein is intended, nor shall it be construed or deemed, to make [Good Shepherd] and [Select] partners or joint venturers." The fees for the provision of the services were included in the Ancillary Agreement, in detail.

         While the Ancillary Agreement provided for circumstances under which the parties could terminate the agreement without affecting the Lease, the Lease's termination also constituted termination of the Ancillary Agreement. The Ancillary Agreement further stated,

If the term of the Lease is extended beyond its initial term, this Agreement shall be automatically extended for the same length of time, unless either party hereto gives notice of termination to the other party not later than one hundred eighty (180) days prior to the expiration date of the then current term of the Lease.

         It is undisputed that the Lease has not been terminated and is still in full force and effect.[2]

         C. The Purchased Services Agreement

         On December 18, 2012, Good Shepherd entered into a Purchased Services Agreement (PSA) with Select after renegotiating the provision of and rates of certain services. In addition to the services which had previously been provided under the Ancillary Agreement, Good Shepherd agreed to provide "additional services, such as hyperbaric therapy and wound care services, biomedical engineering services and maintenance repairs, and annual preventative maintenance services."[3] The PSA defined the term "services" as "the services provided by [Good Shepherd] to [Select] pursuant to this Agreement . . . including ancillary and other clinical services as specified in this Agreement." It also specified that the PSA "constitute[d] the entire Agreement between the parties with respect to the subject matter hereof, and supersede[d] any and all other agreements, understanding, negotiations, or representations, oral or written, between them." The PSA defined Select as the "Hospital" and Good Shepherd as "Contractor" and contained the following relevant provisions:

         7. TERM AND TERMINATION OF THIS AGREEMENT

7.1 Term. This Agreement shall be effective as of November 26, 2012[, ] and shall thereafter coincide with the term of the Lease.
7.2 Termination. This Agreement may be sooner terminated on the first to occur of the following: . . . .
7.2.5 Termination Without Cause. Either party may terminate this Agreement at anytime upon ninety (90) days written notice to the other party . . . .
7.2.6 Effects of Termination. Upon termination of this Agreement, as hereinabove provided, neither party shall have any further obligation hereunder except for obligations accruing prior to the date of termination.

         While Good Shepherd provided ancillary services to Select under the PSA, the terms of the PSA specified that Select was "solely responsible for the determination, the planning and the implementation of treatment" for its patients.

         D. ...


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