United States District Court, D. South Dakota, Southern Division
ORDER DENYING PLAINTIFF'S MOTION FOR SUMMARY
E. SCHREIER, UNITED STATES DISTRICT JUDGE
DocuTAP, Inc., filed a complaint alleging that defendant,
Urgent Care of Mountain View, PLLC, breached the parties'
contract by failing to pay for both electronic medical record
services (EMRS) and revenue cycle management services (RCMS)
provided by DocuTAP. Docket 1. Urgent Care filed a
counterclaim alleging that DocuTAP breached the contract by
failing to perform its duties “in a competent,
reasonable, workman-like manner . . . .” Docket 7
¶ 13. DocuTAP moves for partial summary judgment,
requesting that the court find that Urgent Care breached the
parties' contract by failing to pay all existing amounts
due on both EMRS and RCMS services. Dockets 18, 22. DocuTAP
also requests that the court find that the parties'
contract bars Urgent Care's counterclaim for loss of
profits. Docket 22 at 1. Urgent Care opposes the motion.
Docket 26. For the following reasons, the court denies
DocuTAP's motion for summary judgment.
facts, viewed in the light most favorable to the non-moving
party, are as follows:
and Urgent Care entered into a contract on December 20, 2013.
Docket 21 ¶ 1; Docket 19-1 at 2. The contract included a
service order dated December 20, 2013, a “Clinical
Services and License Agreement, ” “Support
Services Agreement, ” and “Patient Discharge
Instructions Terms and Conditions” (collectively the
Agreement), and a second service order dated June 24, 2014.
Docket 19-1 at 1-11; Docket 27-1 at 12. Under the terms of
the contract, Urgent Care would pay DocuTAP for EMRS and
RCMS. Docket 21 ¶¶ 4-10. The first service order,
dated December 20, 2013, notes that DocuTAP would provide
both EMRS and RCMS services, including “insurance
eligibility verification, ” patient portals, billing
services, electronic medical records, electronic remittance
advice, software updates, RCMS, and support to the clinic.
Docket 19-1 at 1. Under the terms of this service order,
Urgent Care agreed to pay DocuTAP $2.90 each time Urgent Care
used DocuTAP's EMRS, and was required to use the EMRS a
minimum of 400 times per month. Id.; Docket 21
¶¶ 6-7. Also under the terms of this service order,
DocuTAP would receive 7% of all revenue collected by Urgent
Care using the RCMS. Docket 21 ¶ 11; Docket 27-1 at 1.
Late payments would accrue interest at the rate of 1.5% per
month until paid. Docket 27-1 at 6, ¶ 7.1.
Agreement allowed Urgent Care to “request additional
products and services through a Service Order and such
additional products and services will be governed by [the]
Agreement.” Id. at 5, ¶ 2.1. A second
service order, dated June 24, 2014, states that DocuTAP would
offer services for Urgent Care's “Wound Care Clinic
Addition, ” in part, by “supply[ing] networks
with credentialing information for Brian Bechtol and
supervising physician” as well as “mak[ing]
applications on behalf of [Urgent Care] for network
participation” to area health plans. Id. at
December 20, 2013 service order states that “[t]he
initial term of the Agreement is 36 months.”
Id. at 2, ¶ 8. “Term” is defined in
the Agreement as including “the initial term set forth
on the Service Order and any renewal terms.”
Id. at 5, ¶ 1. The Agreement also states:
Unless either party decides not to renew this Agreement by
notifying the other, in writing, at least ninety (90) days
prior to the expiration of the initial term, this Agreement
will automatically renew for successive twelve (12) month
Id. at 6, ¶ 6.1. The Agreement also has a
clause concerning material breaches:
Either party may terminate this Agreement, without prejudice
to any other remedy it may have, immediately and without
further obligations to the other party, in the event of (i)
any material breach by the other party which is not remedied
within sixty (60) days of the non-breaching party's
notice to the other party of the breach . . . .
Id. at 6, ¶ 6.2. Upon terminating the contract
or the expiration of the parties' Agreement, Urgent Care
was required to stop using DocuTAP's medical interface.
Id. at 6, ¶ 6.3. Finally, there is a
“limitation of liability and indemnity” provision
in the Agreement that states:
Neither party is liable for special, incidental,
consequential, indirect or other similar damages, even if it
has been advised of the possibility of such damages. In no
event shall either party be liable for damages or costs
incurred as a result of loss of time, loss of data, including
client data, loss of profits or revenue, or loss of use of
the computer system.
Id. at 7-8, ¶ 12.1.
2015, Urgent Care expressed to DocuTAP concerns regarding
DocuTAP's handling of previous Medicare billing for the
clinic, as well as issues with credentialing for Urgent
Care's new wound care center and two newly hired
providers. Docket 21 ¶ 14; Docket 25 ¶ 14; Docket
28-1 at 1-15. The parties engaged in a series of emails and
telephone conferences to resolve the issues. Docket 28-1 at
1-15; Docket 19-2 at 1-4. On July 29, 2015, Urgent Care wrote
to DocuTAP that “[a]s an organization, DocuTAP has
failed to hold up its end of the service contract [Urgent
Care] signed with you.” Docket 28-1 at 3. On August 26,
2015, DocuTAP was informed that Urgent Care had
“ERA's back from the beginning of June that have
not been posted” and that Urgent ...