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DocuTAP, Inc. v. Urgent Care of Mountain View, PLLC

United States District Court, D. South Dakota, Southern Division

August 2, 2019

DOCUTAP, INC., Plaintiff,



         Plaintiff, 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.


         The facts, viewed in the light most favorable to the non-moving party, are as follows:

         DocuTAP 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.

         The 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 12.

         The 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 terms.

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.

         In 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 ...

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