2004-634, MICHAEL S. SHERMAN, M.D. v. JOSEPH M. GRACIANO, M.D. & a.

shareholder in the Corporation, according to a buy - in formula. After the defendants Joseph M. Graciano, M.D., and Paul T. Berry, M.D., as a plaintiff would be an employee for eighteen months and would thereafter join agreement with the plaintiff. The employment agreement provided that the Dover Internal Medicine, P.A. (Corporation) entered into an employment The record supports the following facts. In December 1995, defendant

remand. languag e of the contract between the parties was ambiguous. We reverse and of the Superior Court (Mohl, J.) upholding an arbitrator’s decision that the GALWAY, J. The plaintiff, Michael S. Sherman, M.D., appeals an order

James H. Schulte, of Dover, on the brief and orally, for the defendants.

plaintiff. Harris and Cathryn E. Vaughn on the brief, and Mr. Harris ora lly), for the McLane, Graf, Raulerson & Middleton, P.A., of Manchester (Scott H.

No. 20 04 - 634 Strafford

page is: http://www.courts.state.nh.us/supreme. a.m. on the morning of their release. The direct address of the court's home reporter@courts.state.nh.us. O pinions are available on the Internet by 9:00 Errors may be reported by E - mail at the following address: errors in order that corrections may be made before the opinion goes to press. Hampshire, One Noble Drive, Concord, New Hampshire 03301, of any editorial Readers are requested to notify the Reporter, Supreme Court of New well as formal revision before publication in the New Hampshire Reports. NOTICE: This opinion is subject to motions for rehearing under Rule p. 2 22 as 2

interest in the Corporation. the date of the event that caused the termination of the ownership period ending at the end of the fiscal quarter which next preceded provided to patients of the Corporation for the twelve (1 p. 2 2) month collections received by the Corporation for medical services [a]n amount equal to twenty - five percent (25%) of the actual

departing shareholder will be paid: amount owed to a departing shareholder. Specifically, it provides that the At issue here is article II, section c in the Agreement, which de scribes the

the facts. See Turcotte v. Griffin, 1 p. 2 20 N.H. 292, 293 (1980). for plain mistake when it is determined that an arbitrator misapplied the law to Co. v. N.H. Ball Bearings, 147 N. H. 352, 356 (2001). An award may be vacated that the arbitrator committed “plain mistake.” RSA 542:8; John A. Cookson An arbitration decision may be corrected or modified upon a showing

54 p. 2 2:10 (1997). was ambiguous. Th e trial court disagreed, and the plaintiff appealed. See RSA committed plain mistake in determining that the Agreement’s buy - out clause decision. See RSA 542:8 (1997). The plaintiff argued that the arbitrator All parties moved for the superior court to modify the arbitrator’s

$99,65 p. 2 2, p lus interest. various offsets urged by [the Corporation]”; and (4) the plaintiff was entitled to shareholder was “ambiguous”; (3) there was not “any factual or legal basis to the Agreement provision describing the amount owed to a departing governed the buy - out of his interest from the practice upon his departure; (2) [Agreement] in accordance with RSA 293 - A:7.32” and, therefore, that it decision, the arbitrator determined that: (1) the plaintiff “is a party to the binding arbitration pursua nt to RSA 542:3 - a (1997). In a February 2004 he filed suit. At the parties’ request, the superior court sent the case to could not agree on the amount the plaintiff was to be paid upon his departure, w ithdrawing as a partner from their medical practice. Because the parties In October 2002, the plaintiff notified the defendants that he was

Agreement; the plaintiff did not. upon the termination of employment. Graciano and Berry signed the value of a departing shareholder’s stock which the Corporation would purchase redemption agreement (Agreement). It included a formula for establishing the In April 1999, the Corporation’s shareholders executed a stock

in the assets of the Corporation. plaintiff completed his installment payments, he acquired a one - third interest p. 3 3

decide. Duke/Fluor Daniel v. Hawkeye Funding, 150 N.H. 581, 582 (2004). contract term is ambiguous, is ultimately a question of law for this court to partnership agreement). The interpretation of a contract, including whether a N.H. 415, 417 (2000) (applying general rules of cont ract interpretation to a contract interpretation in our review. See Robbins v. Salem Radiology, 145 Because the Agreement is a contract, we apply the general rules of

what he and Dr. Berry intended. either way,” and that the interpretation urged by the pla intiff’s counsel was not Graciano’s testimony that the provision of the agreement “could be interpreted the shareholder.” In support of their argument, the defendants rely upon Dr. actual collections received by the Cor poration for medical services provided by would read the disputed provision to say, “twenty - five percent (25%) of the or those provided by all of the employees of the Corporation. The defendants whether the “me dical services” are those provided by the departing shareholder They contend that article II, section c is ambiguous because it does not specify The defendants argue that the arbitrator did not commit plain mistake.

questioned clause.” when they found that reasonable minds could differ on the meaning of the between ‘Stockholder’ and ‘Corporation,’ the arbitrator and the trial court erred contract, and where the parties distinguished throughout their contract submits that, “where the terms ‘Corporation’ and ‘Stockholder’ were defined by provision clause in the Agreement was ambiguous. Specifically, the plaintiff arbitrator did not commit plain mistake when it ruled that the buy - out The plaintiff argues that the superior court erred in finding that the

found no plain mistake in the a rbitrator’s interpretation of the Agreement. arbitrator could have found the defendants’ interpretation to be correct, it evidence should not be excluded). Because the court determined that the agreement that leaves uncertain their mutual intent, relevant extrinsic Susse Int’l, Inc., 119 N.H. 2 p. 3 38, 243 (1979) (stating that where parties draft an Corporation’s finances and the parties’ intentions. See MacLeod v. Chalet “reasonable,” the arbitrator correctly considered parol evidence regarding the the interpretation of the pertinent clause, and bot h interpretations were Upon review, the superior court stated that since the parties disagreed as to

interpretation would lead to an unreasonable and unfair result. prior year, rather than the practice as a whole. A contrary applying to the collections of the departing physician during the of the surrounding circumstances, is properly interpreted as [T]he calculation of the buy - out is ambiguous, and based upon all

arbitrator stated: In addressing the plaintiff’s cla ims regarding article II, section c, the p. 4 4

A: No. No. No.

based strictly upon what patient belonged to which doctor? not the way you were going to have somebody bought out, correct, Q: But when you entered into the shareholder agreement, that’s

. . . .

A: Correct. Correct.

Q: Of course, that’s not what it says thoug h?

generated the collections. like to think it referred to actual collections by . . . the person who way. It could be actual collections by the whole corporation or I’d A: Well, I don’t know. It sounds like it could be interpreted either

corporation as . . . referring to what? Q: And you understand actual collections received by the

c. When asked about his understanding of the section, he testified as follows: Moreover, Graciano’s testim ony supports the lack of ambiguity in section

practice. Corporation — an amount which reflected collections of the entire medical Corporation testified as to the amount of actual collections received by the patients of the medical practice as a whole. Further, the accountant for the medical services provided by the “Corporation” means services provided to refers to the collections received by the medical practice as a whole, and that Berry. Accordingly, it is clear that collections received by the “Corporation” Internal Medicine, P.A., and “Stockholders” are listed as Drs. Gra ciano and Agreement to support this conclusion. “Corporation” is specified as Dover the collections received by the entire Corporation. Language exists in the provides that a departing physician is enti tled to receive twenty - five percent of We conclude that article II, section c is not ambiguous, and that it clearly

agreement. Id. in reaching a determination contrary to the unambiguous language of the are unambiguous, the fact finder ha s improperly relied upon extrinsic evidence the determination of the fact finder where, although the terms of the agreement the parties’ intent to the words of the contract. Id. Accordingly, we will reverse fraud, duress, mutual mistake, or ambiguity, we must restrict our search for its meaning. Appeal of Town of Durham, 1 p. 4 49 N.H. 486, 487 (2003). Absent Id. A clause is ambiguous when the contracting parties reasonably differ as to A ccordingly, we review the trial court’s interpretation of the contract de novo. p. 5 5

concurred. BRODERICK, C.J., and NADEAU, DALIANIS and DUGGAN, JJ.,

to determine whether interest should be awarded). interest based upon an error of law, with instructions to remand to arbitrator N.H. at 362 (remanding to superior court, after arbitrator denied plaintiff should be granted upon departing from the Corporation. See Cookson, 147 instructions to remand to the arbitrator to determine what amount the plaintiff interpreting the Agreement. Ther efore, we remand to the superior court with court erred by finding that the arbitrator did not commit plain mistake in share of the assets based upon an error of law, we conclude that the superior Durham, 149 N.H. at 487. Because the arbitrator calculated the plaintiff’s extrinsic evidence in interpreting the Agreement. See Appeal of Town of the parties’ intent to the words of the contract and should not have considered N.H. at 29 p. 5 5. Accordingly, the arbitrator should have restricted his search for 487, and thus the arbitrator misapplied the law to the facts. S ee Turcotte, 120 agreement was not reasonable, see Appeal of Town of Durham, 149 N.H. at ambiguous. Therefore, any difference in the parties’ interpretation of the the contract, would conclude that t he language of article II, section c is not We thus hold that a reasonable person, considering the plain language of

belonged to which doctor. that the parties would be bought out based strictly upon which patients made it clear that, at the time he signed the Agreement, he did not understand ambiguous, only that he wished the words said something different. He also According to this testimony, Graciano did not say that the Agreement was

A: Yes.

Q: You just would have rather it say something different, correct?

A: Correct.

collections received by the corporation, right? received by the corporation” and understanding that that means have any problems understanding that this says that “collections Q: And, in fact, you . . . can read this . . . language. You don’t