Kris Crutcher; Tri-Lakes Diagnostic Imaging, LLC v. MultiPlan, Inc.; Private Healthcare Systems, Inc.

United States Court of Appeals
For the Eighth Circuit
___________________________
No. 20-3572
___________________________
Kris Crutcher; Tri-Lakes Diagnostic Imaging, LLC
lllllllllllllllllllllPlaintiffs - Appellants
v.
MultiPlan, Inc.; Private Healthcare Systems, Inc.
lllllllllllllllllllllDefendants - Appellees
____________
Appeal from United States District Court
for the Western District of Missouri - Springfield
____________
Submitted: September 23, 2021
Filed: January 5, 2022
____________
Before SMITH, Chief Judge, GRUENDER and STRAS, Circuit Judges.
____________
SMITH, Chief Judge.
Kris Crutcher, owner of Tri-Lakes Diagnostic Imaging, LLC (TLDI), brought
suit against MultiPlan, Inc. (MultiPlan) and its subsidiary Private Healthcare Systems,
Inc. (PHCS), alleging numerous causes of action, including those relevant to this
appeal—breach of contract and a right to an award of attorneys’ fees. The district
court denied her claim of attorneys’ fees based on a finding that the indemnity clause

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in the Network Agreement to which both parties succeeded did not provide for an
award of attorneys’ fees in litigation between parties to the contract. The court also
held that Crutcher’s conduct waived the contractual amendment-in-writing
requirement and that the revised fee schedule was therefore a valid modification to
the contract. We affirm the denial of attorneys’ fees but reverse as to waiver.
I. Background
A. The Parties
Crutcher and TLDI (collectively, appellants) operated a small medical
diagnostic imaging practice located in Branson, Missouri. MultiPlan and PHCS
(collectively, appellees) are two preferred provider organizations (PPOs) that operate
as intermediaries between providers and payors (i.e., health insurance agencies) in the
healthcare sector. As part of the PPO relationship, MultiPlan enters into agreements
with healthcare providers forming a network. Under these arrangements, providers
agree to charge payors a discounted rate in exchange for “steerage.” Steerage
represents the increase in business that results from being in-network. MultiPlan also
enters into agreements with third-party payors, such as insurance companies, for
access to MultiPlan’s PPO network discounted rates on behalf of their plan members.
Individuals on such plans receive healthcare services from PPO providers at
discounted rates. PHCS is MultiPlan’s nationwide primary PPO network.
B. The Network Agreement
On April 1, 2000, Medical Investments of Branson, LLC, doing business as
Branson Imaging, entered into the Network Agreement with United Payors & United
Providers (UP&UP). Pursuant to this agreement, Branson Imaging, as “Provider,”
agreed to accept discounted rates for UP&UP clients in exchange for UP&UP’s
promise to use best efforts to require clients to create financial incentives or benefits
for their participants to seek out the services of Branson Imaging.
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Section IV.A. of the Network Agreement provides as follows:
Provider shall render Services, subject to the availability of facilities and
services, as are available to Covered Persons in accordance with
Covered Person’s Health Benefit Program. Provider agrees to accept
payment in amounts not exceeding those specified in Attachment A,
attached hereto, as payment in full for all Charges for all Services
rendered to Covered Persons. All entities billing under Provider Tax
Identification Number will be subject to rates specified in Attachment
A.
R. Doc. 295-2, at 15. The original version of Attachment A to the Network
Agreement, titled “Percent of Charges,” states that providers would be paid at a
discounted rate of “75% of Charges for Services rendered.” Id. at 20. Additionally,
Section IV.Q. of the Network Agreement contains an indemnity clause, reading as
follows:
UP&UP shall indemnify and hold Provider harmless from loss, damage
or defense costs (including reasonable attorneys’ and defense fees)
arising from actual or alleged wrongful acts or omissions of UP&UP, its
officers, employees, subcontractors or other agents, in performing
services contemplated under this Agreement.
Id. at 17. The Network Agreement also provided that it would “renew[] automatically
for successive one (1) year terms unless UP&UP or Provider, [gave] written notice
to the other party of its intention to terminate this Agreement no later than ninety (90)
days prior to the expiration of the then current term.” Id. The contract also noted that
“UP&UP [was] contracting for itself and for the benefit of its wholly-owned
subsidiaries or affiliates having common management and control with UP&UP,
including, but not limited to, UP&UP, Inc. d/b/a America’s Health Plan® and any
subsequently acquired subsidiary, company or affiliate.” Id. at 14.
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UP&UP was later acquired by BCE Emergis Corp. (BCE), which was then
acquired by MultiPlan in 2004. MultiPlan acquired PHCS in October 2006. MultiPlan
and PHCS thereby succeeded to the original Network Agreement between UP&UP
and Branson Imaging.
C. TLDT
On April 2, 2001, “Branson Imaging, LLC” was canceled as a fictitious name
by Medical Investments of Branson, LLC, and MultiPlan changed the TIN associated
with the Network Agreement in its electronic systems.
On January 10, 2003, Articles of Incorporation were filed on behalf of Tri-
Lakes Diagnostic Technologies (TLDT). On or around February 8, 2003, Branson
Imaging wrote to Blue Cross Blue Shield of Missouri, advising that Branson Imaging
was operating under the new name of TLDT and that Branson Imaging’s TIN had
changed. MultiPlan accordingly changed the “provider name” and TIN associated
with the Network Agreement in its electronic systems.
D. The August 1, 2007 Letter
On August 1, 2007, appellees sent a letter addressed to Branson Imaging at the
premises then occupied by TLDT. The letter notified Branson Imaging that because
of the integration of MultiPlan and PHCS, reimbursement under the Network
Agreement would be changed from the 25-percent discount rate to an SSRIM1 fee
schedule. The correspondence included a written copy of the new fee schedule. No
one from Branson Imaging or TLDT responded to this letter. TLDT continued to
operate and accept discounts under the Network Agreement, as amended by the
SSRIM fee schedule following the August 1, 2007 letter.
1The SSRIM schedule followed a variable pricing scheme rather than a fixed
discount rate as the original contract specified.
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E. TLDI
In September 2007, Crutcher began providing office management services for
TLDT. On February 5, 2008, Crutcher filed Articles of Organization for TLDI. TLDI
occupied the office space formerly occupied by TLDT and Branson Imaging. On
February 22, 2008, Crutcher wrote to PHCS advising that the imaging facility had
again changed its ownership and name.
On or about May 5, 2008, Crutcher sent a fax to appellees, advising again of
the name change and requesting that TLDI be substituted for Branson Imaging under
the Network Agreement. The fax included a letter from Crutcher to “ATTN: Registrar
Fax 1-781-487-8273,” with the subject line “Name Change/TIN change,” dated April
16, 2008. R. Doc. 295-2, at 30. That letter reads:
Dear Registrar, we have changed our name and EIN. The former name
for our company was Branson Imaging. The address remains the same
as well as the services and imaging capabilities we offer. Please make
the following changes to update your system. See accompanying W-9
form.
Tri Lakes Diagnostic Imaging, LLC (formerly known as Branson
Imaging)
523 State Hwy 248, Suite 300
Branson, MO 65616
417-332-2152
Fax 417-332-0443
Id. Crutcher identified the “NEW EIN” and noted that “[t]he billing address is the
same as the business address above.” Id. She concluded the letter by stating: “We
look forward to continuing to provide imaging services for our clients.” Id. Crutcher
then provided a completed W-9 form with the same name (TLDI), address, and EIN
as indicated in the April 16, 2008 letter.
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Crutcher’s May 5, 2008 fax to appellees had a “Fax Cover Sheet,” with the
handwritten subject line, “Name change/EIN change.” It included a handwritten note
from Crutcher stating, “please make this change in your system.” Id. at 29.
On or about June 9, 2008, Crutcher sent another fax to MultiPlan and PHCS,
again asking for TLDI to be substituted for Branson Imaging under the Network
Agreement. In addition, Crutcher wrote the following:
I have tried to update this information online and noticed that in your
system (find a provider) it is still showing as Branson Imaging. I would
greatly appreciate the assistance with this update and look forward to
continued patient services for your clients. Please let me know if there
is any additional information I need to provide you for this update.
Please see attached W-9 form.
Id. at 34–35. Following her June 9, 2008 fax, Crutcher repeatedly reached out to
PHCS to complain that appellees had not yet substituted TLDI for Branson Imaging
under the Network Agreement and that appellees’ clients were not treating TLDI as
a participating provider. She also appealed a number of claims on behalf of TLDI to
appellees’ clients, asking that they be reprocessed and paid at the in-network level
pursuant to the Network Agreement.
MultiPlan’s records show that the provider name and TIN associated with the
Network Agreement were eventually changed in MultiPlan’s electronic systems to
TLDI and the pertinent TIN.
F. Subsequent Dealings Between the Parties
On or about February 20, 2009, MultiPlan replied in a letter to questions that
Crutcher had raised about TLDI’s reimbursement on a claim. It stated, “Multiplan has
received your request for pricing review of the above facility bill. Upon review it has
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been determined that no adjustment is required. The correct allowable amount for the
attached claim is $440.51.” R. Doc. 346-3, at 1 (emphasis omitted). In addition, the
letter noted that the claim had been priced according to the “PHCS Facility – SSRIM
fee schedule” and reflected “the correct allowable amount under [the] PHCS Facility
Agreement.” Id. (emphasis omitted). On July 16, 2009, Crutcher telephoned
MultiPlan regarding another claim, and MultiPlan advised her that the claim was
priced according to a “complex fee schedule” associated with the Network
Agreement. R. Doc. 315-16, at 21.
On or about July 17 and 20, 2009, Crutcher, on behalf of TLDI, sent a fax to
MultiPlan requesting a copy of the Network Agreement. MultiPlan responded on July
22, stating that it was having trouble finding a copy of the original Network
Agreement and representing that MultiPlan had been added to the Network
Agreement through integration with BCE effective September 1, 2004, and that
PHCS had been added through acquisition on or about December 1, 2007. MultiPlan
also represented that it had changed the entity name from Branson Imaging to TLDI
as well as the pertinent tax ID number per Crutcher’s request. A week later, on July
29, MultiPlan found a copy of the original Network Agreement and faxed it to
Crutcher. This document reflected a flat 25-percent discount rate rather than the
complex SSRIM fee schedule.
At the time, Crutcher and TLDI did not believe they were bound by a contract
with PHCS to accept the reimbursement rates. Rather than object to the agreement,
opt out of it, or seek its termination, TLDI continued to provide services to patients
covered by MultiPlan’s clients and continued to accept payment for those services
under the SSRIM fee schedule. Approximately six years later, Crutcher began to send
correspondence on behalf of TLDI requesting that they produce a separate written
contract between MultiPlan/PHCS and TLDI as well as the fee schedule applicable
to TLDI since 2008. Subsequently, in August 2015, counsel for Crutcher and TLDI
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sent MultiPlan a letter denying the existence of a valid contract between TLDI and
appellees. The letter asserted that all discounts taken by appellees’ clients were
improper.
MultiPlan responded that TLDI had been substituted for Branson Imaging
under the original Network Agreement in 2008 based on Crutcher’s request and that
neither TLDI nor its predecessors had ever requested to opt out or terminate the
Network Agreement. MultiPlan nonetheless agreed to disenroll TLDI, removing the
company from its systems and provider database and stopping all discounts as of
September 8, 2015. Appellants filed this action on November 6, 2015.
G. Litigation
Crutcher and TLDI filed suit against MultiPlan, alleging several causes of
action. Only two are present before this court—breach of contract and attorneys’ fees.
Crutcher and TLDI allege that MultiPlan breached the agreement (to which both
parties succeeded) by applying discounts to TLDI’s claims in excess of the agreed-
upon 25-percent discount rate. They seek damages as well as attorneys’ fees and costs
under the contractual indemnity clause.
Crutcher and TLDI allege that MultiPlan, pursuant to the Network Agreement,
agreed upon a 25-percent discount rate. They assert that appellees breached the
contract by charging them under the SSRIM fee schedule. The use of the SSRIM
produced, in some cases, discounts exceeding the agreed-upon 25 percent. They
further allege that the Network Agreement provides that “[a]ll amendments or
modifications to this Agreement shall be mutually agreed to in writing” and that the
parties never mutually agreed in writing to any contractual modification, including
the SSRIM fee schedule. R. Doc. 295-2, at 18. Appellees argue in reply, and the
district court found, that appellants consented to the fee schedule change by their
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conduct. The court treated their consent as a waiver of their right to object to the
modification as not occurring by a mutually agreed-to writing.
The parties filed cross-motions for summary judgment on the breach-of-
contract claim. The district court applied Missouri law to deny TLDI’s request for
attorneys’ fees based on a finding that the contractual indemnity clause does not
expressly refer to litigation between the parties. The court granted in part MultiPlan’s
motion based on a finding of contract modification by waiver through conduct on the
part of TLDI.
II. Discussion
Crutcher and TLDI appeal the district court’s grant of partial summary
judgment to MultiPlan, arguing that the court erred in finding that no genuine dispute
of material fact existed as to the issue of waiver. They also appeal the court’s denial
of attorneys’ fees.
A district court’s grant of summary judgment receives de novo review on
appeal. Cottrell v. Am. Fam. Mut. Ins. Co., S.I., 930 F.3d 969, 971 (8th Cir. 2019).
Summary judgment is appropriate where, viewing the evidence in the light most
favorable to the non-moving party, “there is no genuine dispute as to any material fact
and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a).
A. Attorneys’ Fees
Appellants’ breach-of-contract claim included a request for an award of
attorneys’ fees based on Section IV.Q. of the Network Agreement. The question is
whether under Missouri law the contractual language includes costs incurred in
litigation between the parties to enforce the contract’s terms. We hold that the
contract does not include litigation between the contracting parties and that it
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therefore limits recovery for attorneys’ fees to costs incurred in defending third-party
lawsuits.
“Missouri follows the American Rule on attorneys’ fees, which provides that
each party to litigation must pay its own litigation expenses unless a statute
specifically authorizes recovery of attorneys’ fees or a contract provides for them.”
Monarch Fire Prot. Dist. of St. Louis Cnty. v. Freedom Consulting & Auditing Servs.,
Inc., 644 F.3d 633, 637 (8th Cir. 2011) (citing Lucas Stucco & EIFS Design, LLC v.
Landau, 324 S.W.3d 444, 445 (Mo. 2010) (en banc)). The issue before the court in
Monarch was whether a contractual indemnity clause entitled the plaintiff to
attorneys’ fees and costs incurred in a breach-of-contract action between the
contracting parties. The indemnity clause at issue provided that the defendant would
indemnify the plaintiff and hold him harmless “from and against any claim, cause of
action, liability, damage, cost or expense, including attorneys’ fees and court or
proceeding costs, arising out of or in connection with” the defendant’s wrongful acts,
including “breach of the terms of [the contract] by [the defendant] or any person or
entity under [the defendant’s] control.” Id. The court held this language insufficiently
definite to permit recovery of attorneys’ fees under Missouri law. The court relied on
the Missouri Supreme Court’s decision in Nusbaum v. City of Kansas City, 100
S.W.3d 101, 109 (Mo. 2003) (en banc) (per curiam), for the proposition “that in order
for a party to recover attorneys’ fees incurred in enforcing its right to indemnity under
a contract, the indemnity clause at issue must expressly refer to the enforcement of
the right to indemnity.” Monarch, 644 F.3d at 637. In addition, the court noted that
such a requirement “squares with the ‘cardinal principle’ of contract interpretation,
which ‘is to ascertain the intention of the parties and to give effect to that intent.’” Id.
at 638 (quoting Dunn Indus. Grp., Inc. v. City of Sugar Creek, 112 S.W.3d 421, 428
(Mo. 2003) (en banc) (per curiam)). Given that an indemnity clause ordinarily
envisions third-party claims, express language referencing litigation between
contracting parties is needed to ensure that parties know their obligations under the
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contract. See id.; see also Jacobson Warehouse Co. v. Schnuck Mkts., Inc., 13 F.4th
659, 670 (8th Cir. 2021). Finally, the court reasoned that “an express language
requirement reflects the American Rule’s longstanding policy against substantive fee-
shifting as part of a merits award.” Id.
The indemnity clause in Section IV.Q. does not contain express language
referring to the recovery of attorneys’ fees relating to litigation between Crutcher and
TLDI and MultiPlan. This clause promises indemnity, including attorneys’ fees, in
the event of loss or damage to the provider through MultiPlan’s “wrongful acts or
omissions.” R. Doc. 295-2, at 17. It contains no explicit reference to litigation
between the contracting parties. Cf. Sheppard v. East, 192 S.W.3d 518, 523 (Mo. Ct.
App. 2006) (“In the event of litigation between the parties, the prevailing party shall
recover . . . the cost of litigation including reasonable attorney’s fees.” (alteration in
the original)); Jackson v. Christian Salvesen Holdings, Inc., 978 S.W.2d 377, 384
(Mo. Ct. App. 1998) (“In the event any dispute between the parties hereto concerning
this . . . Agreement should result in litigation, the prevailing party shall be reimbursed
by the other for all reasonable costs, including . . . reasonable attorney’s fees . . . .”).
Nor does it refer to the enforcement of contractual rights. Cf. Lee v. Invs. Title Co.,
241 S.W.3d 366, 368 (Mo. Ct. App. 2007) (awarding attorneys’ fees where contract
expressly provided for “attorneys’ fees . . . in connection with [plaintiff’s]
enforcement of its rights under this Agreement”); RJF Int’l Corp. v. B.F. Goodrich
Co., 880 S.W.2d 366, 369 (Mo. Ct. App. 1994) (awarding attorneys’ fees where
contract expressly provided for indemnity for “each and every failure or breach of any
representation, warranty, covenant and indemnification”).
Rather, the language of Section IV.Q. limits recovery of attorneys’ fees to
circumstances where liability to third parties is created through MultiPlan’s
“wrongful acts or omissions . . . in performing services contemplated under this
Agreement.” R. Doc. 295-2, at 17. That language is insufficient to meet the express
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language requirement that applies to litigation involving the contracting parties. And
even if the appellants could recover attorneys’ fees for litigation between the parties,
they could only recover “defense costs (including reasonable attorneys’ and defense
fees),” id., which would not include attorneys’ fees incurred in a suit they brought
against MultiPlan. See Stahlhuth v. SSM Healthcare of St. Louis, 289 S.W.3d 662,
670 (Mo. Ct. App. 2009) (“In determining the parties’ intent, the courts look to the
language of the contract, giving the terms their plain, ordinary, and usual meaning
and so construing the terms to avoid rendering other terms meaningless.”).
Since Monarch, Missouri courts have not departed from its logic. The
requirement for express language protects the intent of the contracting parties and
comports with the American Rule. Accordingly, we hold that the Network
Agreement’s indemnity clause does not permit recovery of attorneys’ fees in this
dispute between the contracting parties.
B. Modification of Contract by Waiver
Section VI.H. of the Network Agreement dictates that any amendment to the
contract must be mutually agreed to in writing. The implementation of the SSRIM fee
schedule changed the discount rate, which Attachment A to the original Agreement
originally set at 25 percent. The record contains no signed writing showing that
appellants consented to the change from a 25-percent discount to the SSRIM fee
schedule. Hence, without a signed writing, MultiPlan must show that appellants
waived the amendment-in-writing requirement. The district court found that Crutcher
and TLDI’s continuation of business under the SSRIM evinced an intent to waive this
requirement. Appellants claim that this conclusion was error on three distinct
grounds. First, they argue that appellees forfeited the affirmative defenses of waiver
and modification by failing to plead them in their answer. Second, they argue that
waiver is unsupported in the record. Finally, they argue that the proposed
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modification must fail for lack of consideration. We will consider each argument in
turn.
1. Adequacy of the Pleadings
Appellants contend that appellees failed to plead the affirmative defenses of
waiver and modification in their answer, such that they forfeited those defenses,
precluding the district court from raising them sua sponte. Appellants argue that these
defenses were not among the 29 affirmative defenses set forth in the answer.
Appellees only raised modification in MultiPlan’s motion for summary judgment.
Waiver was not raised by a party at all but was instead inserted by the court in its
decision.
“Waiver is an affirmative defense which must be affirmatively pleaded.”
Barnwell & Hays, Inc. v. Sloan, 564 F.2d 254, 255 (8th Cir. 1977) (per curiam); see
also Fed. R. Civ. P. 8(c). The failure to plead an affirmative defense results in its
forfeiture and exclusion from the case. Wood v. Milyard, 566 U.S. 463, 470 (2012).
“[T]he Rule 8(c) pleading requirement is intended to give the opposing party
both notice of the affirmative defense and an opportunity to rebut it,” but we decline
to adhere to a construction of the Rule that would privilege “form over substance.”
First Union Nat’l Bank v. Pictet Overseas Tr. Corp., 477 F.3d 616, 622 (8th Cir.
2007). As long as “an affirmative defense is raised in the trial court in a manner that
does not result in unfair surprise, technical failure to comply with Rule 8(c) is not
fatal.” Id. (alterations and internal quotation marks omitted). This includes the “bare
assertion” of a defense without being “articulated with any rigorous degree of
specificity.” Zotos v. Lindbergh Sch. Dist., 121 F.3d 356, 361 (8th Cir. 1997)
(emphasis and internal quotation marks omitted).
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Appellees argue that they in fact asserted the defenses of waiver and
modification in their answer to the second amended complaint, in which they averred
that “Plaintiffs’ claims are barred in whole or in part under principles of equitable
estoppel, waiver, notification, ratification, confirmation, acquiescence[,] and/or
consent.” R. Doc. 361, at 34. The explicit assertion of waiver in their the answer
constitutes an adequate pleading for Rule 8(c) under Zotos. Additionally, appellees
argue that these defenses were sufficiently pleaded because the answer expressly
“adopt[ed] and incorporat[ed] by reference . . . all allegations and averments” made
in previously-filed summary judgment pleadings, which discussed modification with
respect to the SSRIM fee schedule. Id. at 37. These instances were sufficient to put
appellants on notice of the defenses of waiver and modification. Accordingly, we
hold waiver and modification to have been pleaded adequately.
2. Record Evidence of Waiver
A valid waiver requires “intentional relinquishment of a known right.”
Carroll’s Warehouse Paint Stores, Inc. v. Rainbow Paint & Coatings, Inc., 824
S.W.2d 147, 151 (Mo. Ct. App. 1992) (quoting Bartleman v. Humphrey, 441 S.W.2d
335, 343 (Mo. 1969)); see also Horne v. Ebert, 108 S.W.3d 142, 147 (Mo. Ct. App.
2003). Absent an express declaration, waiver may be implied by conduct in “a clear,
unequivocal, and decisive act.” Star Dev. Corp. v. Urgent Care Assocs., Inc., 429
S.W.3d 487, 494 (Mo. Ct. App. 2014) (internal quotation marks omitted); see also
Robb v. Bond Purchase, L.L.C., 580 S.W.3d 70, 79–80 (Mo. Ct. App. 2019); Fritts
v. Cloud Oak Flooring, Co., 478 S.W.2d 8, 14 (Mo. Ct. App. 1972). “[T]he conduct
must be so manifestly consistent with and indicative of an intention to renounce a
particular right or benefit that no other reasonable explanation of [the] conduct is
possible.” Horne, 108 S.W.3d at 147 (second alteration in original) (internal
quotation marks omitted).
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Does the record support a finding of waiver? The district court thought so. The
court noted that the new fee schedule went into effect after Crutcher asked that
MultiPlan substitute TLDI for Branson Imaging. From this, the district court inferred
appellants’ intent to comply with whatever fee schedule was in effect at the time.
Crutcher and TLDI went on to accept payment and steerage from MultiPlan for six
years, from 2008 to 2014. The court concluded that the only reasonable explanation
for their lengthy compliance with the revised rates is that appellants intended to waive
their right to object to the introduction of the new fee schedule.
Appellants argue that the record does not support a finding of waiver. Their
argument focuses on the lack of evidence that either TLDI or its predecessor Branson
Imaging received an August 1, 2007 letter, sent by MultiPlan to Branson Imaging.
This letter advised Branson Imaging of MultiPlan’s acquisition of PHCS as well as
the institution of the SSRIM fee schedule. They argue that whether this letter was
received constitutes a material fact question affecting the issue of appellants’
knowledge of their right to object to the modification’s lack of a signed writing.
Missouri law presumes receipt of duly mailed materials. Am. Fam. Mut. Ins.
Co. v. Vein Ctrs. for Excellence, Inc., 912 F.3d 1076, 1083 (8th Cir. 2019). To raise
this presumption, evidence must be introduced that the letter was properly addressed,
stamped, and placed in the mail. Shelter Mut. Ins. Co. v. Flint, 837 S.W.2d 524, 528
(Mo. Ct. App. 1992). When direct proof that a particular letter was mailed is
infeasible because of the volume of mail, “evidence of the settled custom and usage
of the sender in the regular and systematic transaction of its business” will suffice to
give rise to this presumption. Id. (internal quotation marks omitted). However, even
if this presumption is established with evidence of custom and usage, it nevertheless
“may be rebutted by evidence it was not, in fact, received.” Ins. Placements, Inc. v.
Utica Mut. Ins. Co., 917 S.W.2d 592, 595 (Mo. Ct. App. 1996). “Evidence of
non-receipt, however, does not nullify the presumption but leaves the question for the
determination of the jury under all of the facts and circumstances of the case.” Id.
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Even assuming arguendo that appellees have presented evidence sufficient to
establish the presumption of receipt, appellants have countered with evidence that it
was not received. The letter was sent prior to the formation of TLDI as a legal entity.
Moreover, it was addressed not to TLDT, the business that occupied the premises at
the time, but to Branson Imaging, its predecessor. The letter failed to turn up after a
subpoena request for the business records of Branson Imaging and TLDT. Testimony
from Crutcher’s husband, the sole employee of TLDT in October 2007, indicates that
he had not seen the letter prior to his deposition; Crutcher herself testified to the same
effect. These facts, among others, are sufficient to rebut the presumption of the
letter’s receipt.
MultiPlan allegedly sent this letter, addressed to Branson Imaging, to advise
of changes to its provider arrangements, including the revised fee schedule. Whether
it was ever received or seen by appellants or their predecessors is in dispute. The
receipt of the letter advising appellants of the new fee schedule, together with their
long-term practice of accepting payment and steerage may make for convincing
evidence of waiver. However, not having received the letter, appellants may not have
known of their right to object. Such ignorance is inconsistent with a knowing waiver.
Giving the nonmoving party the benefit of all reasonable inferences,
appellants’ knowledge of MultiPlan’s unilateral amendment of the contract should not
be presumed without proof of notice. Crutcher may have known what the fee schedule
was at a later date, but that does not necessarily mean she knew that the fee schedule
was a contractual change to which she, as the contracting party’s successor, could
have objected under the amendment-in-writing provision. That is to say, knowledge
of the fee schedule then in place should not be equated with knowledge that it
constituted an amendment to which she could have objected. Moreover, when
Crutcher requested a copy of the Network Agreement in July 2009, MultiPlan sent
her the original contract, which reflected the flat 25-percent discount, not the SSRIM
fee schedule. And MultiPlan failed to advise her of this key difference. This, along
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with the alleged non-receipt of the 2007 letter, makes it less likely that appellants
were on notice of the change and therefore would have had no reason to raise an
objection.
Appellants’ course of conduct, accepting payment and steerage over the course
of six years, certainly constitutes evidence of waiver. But it is also compatible with
ignorance of their contractual right to object to a contract modification to which they
never manifested consent in writing. Continuing with business as usual, absent proof
of knowledge of the contractual right was not, on these facts, “a clear, unequivocal,
and decisive act,” given multiple successive changes in ownership. Star Dev. Corp.,
429 S.W.3d at 494 (internal quotation marks omitted). Appellants had the right (as
successors to Branson Imaging) to object to the new fee schedule. Proof of their
awareness of the newness of the fee schedule is needed to establish whether their
contractual right to object was known, thus whether their conduct constituted
“intentional relinquishment of a known right,” i.e., waiver. Carroll’s Warehouse, 824
S.W.2d at 151 (internal quotation marks omitted). The 2007 letter’s receipt could aid
in establishing such knowledge. Whether the letter was received is a material fact
dispute. For this reason, we reverse the district court’s grant of partial summary
judgment to MultiPlan on the issue of waiver.
3. Consideration
Finally, appellants contend that the proposed change to the SSRIM fee
schedule failed as a modification to the contract for lack of consideration. Under
Missouri law, parties to a contract are free to modify it as they please, but a valid,
enforceable modification requires all the ingredients necessary to form a contract in
the first instance. Zumwinkel v. Leggett, 345 S.W.2d 89, 93–94 (Mo. 1961) (per
curiam). “The essential elements of a valid contract include offer, acceptance, and
bargained for consideration.” Johnson v. McDonnell Douglas Corp., 745 S.W.2d 661,
662 (Mo. 1988) (en banc). The requirement for consideration calls for the exchange
of something of value as between the parties, which may include a promise. Baker v.
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Bristol Care, Inc., 450 S.W.3d 770, 774 (Mo. 2014) (en banc) (citing Morrow v.
Hallmark Cards, Inc., 273 S.W.3d 15, 25 (Mo. Ct. App. 2008)). The consideration
requirement is not met, however, “when one party merely agrees to do that which it
was already legally liable to do for a greater consideration, nor . . . when one party
agrees to do less than it is already obligated to do for the same or greater
consideration.” Medicare Glaser Corp. v. Guardian Photo, Inc., 936 F.2d 1016, 1020
(8th Cir. 1991) (quoting Twin River Constr. Co. v. Public Water Dist. No. 6, 653
S.W.2d 682, 690 (Mo. Ct. App. 1983)). Simply put, a valid modification is one that
actually changes both party’s obligations.
Appellants rely on one case in particular for their contention that the
modification fails for lack of consideration. In Medicare Glaser Corp., Medicare
agreed to provide Guardian with its photofinishing business for at least two years in
return for payment of certain advertising allowances. Id. at 1017. The court found that
an attempted modification failed for lack of consideration, reasoning as follows:
We find that no consideration existed in the February 1986 attempt to
modify the contract. Guardian was already legally liable for the 6%
advertising accrual payment; Guardian simply agreed to make this same
payment on a monthly rather than quarterly basis. Similarly, no
consideration is evidenced by Guardian’s May 1986 agreement to
increase the 6% advertising accrual payment to 13% since this increase
was entirely offset by the 7% increase in charges to Medicare. In both
cases, Guardian merely agreed to do that which it was already obligated
to do, while Medicare received less than what it had contracted for under
the original agreement.
Id. at 1020.
In Medicare Glaser Corp., changing the schedule of payments did not
constitute consideration, as it did not change the obligation itself, but only how
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regularly the balance had to be paid. Nor did the payment increase add up to valuable
consideration, being completely offset by an increase in charges. Neither change
altered the card game, but merely shuffled the deck. The clear lack of consideration
in Medicare Glaser Corp. contrasts sharply with the present facts. When the new fee
schedule went into effect, MultiPlan opened up the PHCS network to providers,
allowing for additional patient steerage sources. The revised fee schedule together
with the increased potential patient pool changed the obligations of both parties.
TLDI, as a provider, would be subject to different rates accompanied by new and
different steerage sources, and MultiPlan would be obligated to honor its new
discount rates as to those new sources. These alterations in position suffice as
consideration.
III. Conclusion
Accordingly, we affirm the district court’s denial of appellants’ request for an
award of attorneys’ fees and reverse the court’s grant of partial summary judgment
on the matter of waiver.
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