Marymount Medical Center, Inc. v. Palmaris Imaging, LLC

The Honorable Sandra S. Beckwith, United States District Judge for the Southern District*
of Ohio, sitting by designation.
NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 10a0680n.06
No. 09-5720
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
MARYMOUNT MEDICAL CENTER, INC.,
Plaintiff-Appellee,
v.
PALMARIS IMAGING, LLC,
Defendant-Appellant.
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ON APPEAL FROM THE UNITED
STATES DISTRICT COURT FOR
THE EASTERN DISTRICT OF
KENTUCKY
Before: KETHLEDGE and WHITE, Circuit Judges; and BECKWITH, District Judge.*
KETHLEDGE, Circuit Judge. This case arises from a contract dispute between Palmaris
Imaging, LLC and Marymount Medical Center, Inc. The contract said that Palmaris would provide
radiology services to Marymount, a hospital. Palmaris terminated the contract less than a year after
it began. Palmaris cited two reasons for the termination: First, it said Marymount had not employed
and retained competent non-physician personnel in Marymount’s radiology department. Second, it
said that Marymount’s radiology equipment was inadequate. The question presented at trial was
whether these reasons amounted to “cause” for termination under § 4.5 of the contract.

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The district court conducted a five-day bench trial on that question, after which it entered an
order comprising 38 pages of factual findings (none of which Palmaris challenges here) and 18 pages
of legal conclusions. The court construed “cause,” as used in § 4.5 of the contract, to require some
violation of the contract itself, since that same section gives the “violating party” 30 days to cure.
We think that is an eminently sensible reading of the words and structure of the provision. The
district court then held that neither of Palmaris’s asserted grounds for termination amounted to cause.
We find no error in that conclusion. The personnel problems were not due to a breach by
Marymount of its obligation to “employ and retain” non-physician personnel, see § 2.6. Instead, the
district court said, those problems were the result of a breach of a different obligation—namely, that
of Palmaris to provide Marymount a “Medical Director” whose duties expressly included
supervision of the personnel that Palmaris said were not doing their jobs well. We see no basis for
disagreement with the facts or reasoning that underlay that conclusion.
Palmaris’s second ground for termination fares no better. The record amply supports the
district court’s conclusion that Palmaris knew or should have known what kind of radiology
equipment Marymount possessed at the time of the agreement. Palmaris in fact asked Marymount
to purchase only one piece of equipment—a “multi-plate CR.” Marymount promptly bought that
piece of equipment. Palmaris can hardly complain now that Marymount did not buy more than
Palmaris asked it to buy. And we otherwise have no disagreement with the district court’s findings
and conclusions in its careful and exhaustive opinion.
The district court’s judgment is affirmed.

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