2017 Mass. App. Div. 145

February 12, 2016 - September 18, 2017

Appellate Division Northern District

Court Below: District Court, Springfield Division

Present: Noonan, Despotopulos & McGill, JJ. [Note 3]

Stephen L. Holstrom for the plaintiff.

William Tait and Bruce Medoff for the defendant.

Michael H. Hayden for the intervener.

MCGILL, J. This matter is before the Appellate Division on appeal by Innovative Physician Services, LLC, d/b/a Team Rehab and Wellness Center ("Team") from an adverse ruling granting summary judgment on all counts in favor of The Premier Insurance Company of Massachusetts ("Premier"). [Note 4]

This case arises from two contracts: (1) between Premier's parent company, Travelers Insurance, and CorVel Healthcare Corporation ("CorVel"), adding Travelers and its subsidiaries to CorVel's "Payor" list; and (2) between Team and CorVel ("Team-CorVel contract"), adding Team to CorVel's "Provider" list. The Payors and Providers make up CorVel's preferred services network ("PPO").

On appeal, the issues before this Division are whether the Team-CorVel contract is invalid ab initio, whether summary judgment was incorrectly granted to Premier, whether the Team-CorVel contract includes sufficient consideration, and whether Premier has a right to enforce the Team-CorVel contract.

The standard of review of a grant of summary judgment is "whether, viewing the evidence in the light most favorable to the nonmoving party, all material facts have been established and the moving party is entitled to a judgment as a matter of law." Augat, Inc. v. Liberty Mut. Ins. Co., 410 Mass. 117, 120 (1991). Entry of summary judgment "will be upheld when there are no genuine issues of material fact and the nonmoving party 'has no reasonable expectation

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of proving an essential element of its case.'" Farynaz v. Burwen, No. 09-P-49 (Mass. App. Ct. Dec. 18, 2009) (unpublished Rule 1:28 decision), quoting Miller v. Mooney, 431 Mass. 57, 60 (2000). An opposing party "cannot not rest upon his or her pleadings and mere assertions of disputed facts." LaLonde v. Eissner, 405 Mass. 207, 209 (1989).

The first part of Team's argument is that its contract is void ab initio for lack of valuable consideration. However, the "reciprocal exchange of benefit and detriment constitutes consideration." Miller v. Cotter, 448 Mass. 671, 684 n.16 (2007). Legal detriment means "giving up something which immediately prior thereto the promisee was privileged to retain, or doing or refraining from doing something which he was then privileged not to do, or not to refrain from doing. Benefit correspondingly must mean the receiving as the exchange for his promise of some performance or forbearance which the promisor was not previously entitled to receive." Graphic Arts Finishers, Inc. v. Boston Redev. Auth., 357 Mass. 40, 42-43 (1970), quoting Williston, Contracts § 102A (3d ed.). Consideration that is of some value, however slight, is justified. [Note 5] Cocchi v. Morais Concrete Serv., Inc., 2015 Mass. App. Div. 49, 51-52. See also Cannon v. Cannon, 69 Mass. App. Ct. 414, 422 (2007); [Note 6] Barnett v. Rosen, 235 Mass. 244, 249 (1920). [Note 7]

In this case, the Team-CorVel contract allows Team access to marketing services offered by CorVel, it requires CorVel make "commercially reasonable efforts" to expedite payment between PPO members, and it allows for CorVel's assistance in dispute settlements between PPO members. In return, Team was to deliver healthcare services that meet legal standards of care, provide services it is licensed to provide, maintain medical records in compliance with the law, allow CorVel to review its bills, and accept 5% less than the usual, customary, and reasonable charge as defined in the contract. Although it is undisputed that CorVel did not "steer" clients directly to Providers like Team, CorVel did add Providers' details in its directory for Payors to recommend to their insureds. The motion judge found "no objection to the successive renewals of the Contract, and submission of bills for payment supports the recognition of a contract."

These efforts by CorVel suggest a valuable service, thus a benefit, even though minimal, in execution of its contract with Team. Such valuable service is enough to constitute proper consideration and, therefore, the Team-CorVel contract is not invalid for lack of valuable consideration. The contract between Team and CorVel is valid as a matter of fact and law. There was no error in granting summary judgment.

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Next, Team argues that because Premier is not a named party in its contract with CorVel, it cannot enforce its provisions and therefore should not be entitled to summary judgment as a matter of law. To enforce a contract, the third-party beneficiary must be an "intended beneficiary." Ayala v. Boston Hous. Auth., 404 Mass. 689, 699 (1989). [Note 8] The PPO Agreement rubric describes CorVel as "an independent provider of disability management and cost containment services, organized to operate on behalf of Payors." Specifically, "services provided under this Agreement are for the benefit of Payors participating with CorVel and that such Payors shall have the right to any provision specified herein" (emphasis added). Section 7.13 of the PPO Agreement. On these facts, the motion judge found that Premier was an intended third-party beneficiary of the Team-CorVel contract and was entitled to enforce its provisions. On appeal, Team does not successfully raise issues as a matter of law with the trial court's decision. Because Premier was entitled to enforce the provisions of the Team-CorVel contract, summary judgment was correctly decided in favor of Premier.

Summary judgment on all counts to Premier was appropriately decided as a matter of law. The Team-CorVel contract was a legally valid document with valuable consideration that Premier was entitled to enforce. Therefore, the decision of the trial court is affirmed.


[Note 1] Doing business as Team Rehab and Wellness Center.

[Note 2] CorVel Healthcare Corporation, intervener.

[Note 3] The Honorable David P. Despotopulos participated in the hearing of this appeal, but completed his Appellate Division service prior to the issuance of this opinion.

[Note 4] Team filed a complaint against Premier on February 20, 2013. One year after the complaint was filed, CorVel Healthcare Corporation joined as an intervening party, and both Premier and Team moved for summary judgment. The motion judge decided in favor of Premier and granted summary judgment on all counts, denying Team's complaint. Team then appealed to the Appellate Division.

[Note 5] This rule is based upon the concept of freedom of contract and the reluctance of courts to protect someone from the effects of having made an unwise choice or a bad bargain. J.M. Perillo, Calamari and Perillo on Contracts § 4.4, at 154-155 (6th ed. 2009).

[Note 6] Cannon concludes, "The law is not concerned with the adequacy of the consideration, as long as it is 'valuable.'" Id. at 421, quoting V. & F.W. Filoon Co. v. Whittaker Corp., 12 Mass. App. Ct. 932 (1981).

[Note 7] Barnett holds, "It is enough that the consideration is valuable, it need not be adequate." Id. at 249.

[Note 8] A beneficiary is an intended beneficiary "if recognition of a right to performance in the beneficiary is appropriate to effectuate the intention of the parties and either (a) the performance of the promise will satisfy an obligation of the promisee to pay money to the beneficiary; or (b) the circumstances indicate that the promisee intends to give the beneficiary the benefit of the promised performance." Id. at 699 n.13, quoting Restatement (Second) of Contracts § 302(1) (1981).