Fung-Schwartz v. Cerner Corporation

Background

Jennifer Fung-Schwartz, D.P.M, LLC, and Jennifer Fung-Schwartz, D.P.M. sued Cerner Corporation and Cerner Healthcare Solutions, Inc. over agreements between the parties. Cerner asserted counterclaims for breach of contract, quantum meruit damages, and declaratory judgment. The plaintiffs moved for summary judgment on the breach-of-contract and quantum-meruit counterclaims. Summary judgment is a decision without a trial when the evidence shows that no important fact is genuinely disputed and the moving party is entitled to judgment under the law.

In 2006, Fung-Schwartz entered a Master Agreement with Cerner Physician Practice, Cerner Healthcare’s predecessor. The agreement included a Missouri choice-of-law provision, a clause stating that failing to exercise a right would not waive it, and a requirement that modifications or amendments be in writing and signed by authorized representatives of both parties. Fung-Schwartz later signed a 2011 sales order for an electronic medical-record system and a 2014 sales order for business office services. Cerner Healthcare did not sign either sales order, although both sales orders incorporated the Master Agreement.

Arguments and analysis

For the breach-of-contract counterclaim, the plaintiffs argued that the sales orders never became effective because Cerner did not sign them. The defendants argued that the parties had a meeting of the minds—a definite offer and unequivocal acceptance—and that agreement could be shown through conduct rather than signatures alone. Applying Missouri law, the court found that a reasonable jury could consider Fung-Schwartz’s signing of the sales orders, acceptance of Cerner’s services, and correspondence confirming an obligation to pay. The court therefore found a factual dispute about whether the sales orders were enforceable and denied summary judgment on the breach-of-contract counterclaim.

For the quantum-meruit counterclaim, the plaintiffs argued that an enforceable contract governed the same subject matter, which would prevent recovery for the reasonable value of services outside a contract. The defendants argued that the Master Agreement did not cover the full scope of the services and that the validity of the 2011 and 2014 sales orders was disputed. Applying New York law, the court explained that a claimant generally must show services performed in good faith, acceptance of those services, an expectation of payment, and the services’ reasonable value. The court also explained that a quantum-meruit claim may proceed when there is a genuine dispute about whether a contract exists or when the contract does not cover the dispute. Because factual disputes remained about which agreements were valid and enforceable, the court denied summary judgment on the quantum-meruit counterclaim.

Ruling

Judge Vernon S. Broderick denied Plaintiffs’ motion for summary judgment. The ruling was based on genuine disputes of material fact concerning the validity and enforceability of the 2011 and 2014 sales orders. The court directed the Clerk of Court to terminate the motion’s docket entry, Doc. 160.