ÿWPCÞ ª¸ÓB~t&"Hú<0J :R¼Õy&£áÇÓÇt&"ÏuœÌ£>±ÿ2ý¬/çcßCÛo“¸×€ »&ÆV‘‚å÷¢›aCOÀ€7x”ô¡°ÿ”ÖC\IàRKÝYÇF „²èM *p~9;khó2Ú|%¼Y@«BÒŒ:4[‘ˆVLÌî»06bHð̲`ÿѪT éá–­)¤Øýò·£àÙýdgþ­1™}{dit¨é:[C†X:Í)n>Hêu3AˆJ¨ŒmÂBüÜP‰nø%‚ADŠp"¨åžºpA‚‡ç­×Aª\_‡Òd Þ?ôøúÌÎóŠÈ¦„:‘ºhƒ g‰*ËÊàá^Q¬"¨ûó>“¾>¾c[ÌÛê¶¾é—Iø0ÚÉÌÈÁ6+ØQEšCÉì§1–+Ä{ö\Ÿ$‚| £ƒÝi0©iwÜ¶Õ,‚ªÛóë0Ž,~ðh›¾–€:¶ÍÚ´ N˜žùÇ,°îΘ ™³³ÍÞ^~ò©°!ƒÇD³ÁqHZ­]I•Q혎„>®Ù1]&HeF?˧ߊ] °ç‹ƒ>Rþ®a "Ž•ãt¼Él*Ë>´£Ü=ˆ’Ãb#É\ %% ^ + 0ˆ7 UN¿ w 4 z% ÒŸ q € m‚ Ú™ ÆsÆ9ÆÿÆÅÅN‹ 0DEÑÑÑÑÑÑÑÑÑÑÑÑÑÑÑÑÑÑÑÑÑÑÑÑbÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓ 0ëÛÛÛÛ BÆÆ 0¤ã D3‡ D-º 0Kçç AS2Æ… 0¤K 0Dï A«3˜\\ib01s01\clerk1nasÈÈ,,,,ÈÈ0»u h1 (`£ª$¡¡Ñ€.ÑÑ8€½­»»d»»d8ÑÑ ý ÑÓ  Ó(í€"  Z6Times New Roman Regular„‚–0B011C8 ˜C:\PROGRA~1\COREL\WORDPE~1\TEMPLATE\CUSTOM~1\REVISE~1.WPTC:\Program Files\Corel\WordPerfect Office 2000\Template\Custom WP Templates\revised standard opinion.wpt3|x ÿU‹ÿÀÀÀ  P.J.TennCareinserviceceutical PPSforcemajeureHightowerHamblenBratton S.W.HaworthWattersonHartonMcKamyRiversdieTenn.Ct.AppHobbsF.SuppHIllcrestKilcreaseLenoxT.R.A.P. CFR meds t]hepharmaMorristownGuiliano Cleo COAMcClainKimbroughTenn.AppM.D.TennChapdelaineKellettLevel 1Level 2Level 3Level 4Level 5‚Level 1Level 2Level 3Level 4Level 5„Level 1Level 2Level 3Level 4Level 5…Level 1Level 2Level 3Level 4Level 5(#Ã$òòÚ  Ú0Ú  Úóó- ù-(|G2Ç¿$¤¤Ý ƒ£ª!ÝÑ€.ÑÑ8€@»»dd8ÑÑ ý ÑÓ  ÓÝ  Ýà  àòòÚ  Ú0Ú  ÚóóÔ€ôõñò»»Ô d(|3Ç$££Ý ƒ£ª!ÝÑ€.ÑÑ8€@»»dd8ÑÑ ý ÑÓ  ÓÝ  ÝVVVV'ÿÿdxd)!ÈÈÈÈdxdx( ±þ$’’ò òFigure€Ú  Ú1Ú  Úó ó^_X`YEþÿ<<CÿÿƒLevel 1Level 2Level 3Level 4Level 5(|3Ç$¢¢Ý ƒ£ª!ÝÑ€.ÑÑ8€@»»dd8ÑÑ ý ÑÓ  ÓÝ  Ý($$””ò òÚ  Ú1Ú  Úó óX[Z&OLE 2.0 Box <=8ÿÿÿÿÿÿÿÿÿÿCÿÿ HKKKKÝ ƒ£ª!ÝÑ€.ÑÑ8€@»»ddÈ8ÑÑ ý ÑÓ  ÓÝ  ÝÔ_ÔÑ  ÑÔ€¼@»»»ÔÑ8€•XXdì»»d8ÑÑ  Ñà@ü ü ìàÔ‡îKè@ÔIN€THE€COURT€OF€APPEALS€OF€TENNESSEEˆÐ ° Ðà@kk$ìàAT€NASHVILLEÔ#†¼@»îîKè #ԈРÖ& ÐÓ  ÓMay€4,€2004€SessionÐ üL ÐÔ‡X•X»¼@ÔÌò òÔ#†¼@»XX•ð#ÔAMC„TENNESSEE,€INC.òòóó€v.€HILLCREST€HEALTHCARE,€LLC€òòóóÔ‡X•X»¼@Ôó óÐ úJ ÐÌAppeal€from€the€Chancery€Court€for€Davidson€CountyÐ ú J Ðà@@øøìàNo.€99„2675„I€€€€€€Irvin€R.€Kilcrease,€Jr.,€Chancellor€Ð æ 6 ÐÌÌà@@ìì*ìàßA€V) °°` d€÷E<©` AßÐ ªú  ÐÌà@@TTìàNo.€M2003„00882„Ô_ÔCOAÔ_Ô„R3„CV€„€ò òFiled€November€8,€Ô_Ô2004ó óÔ_ÔÐ ¥õ  ÐÌßA€V) °°` dE<€` AßÐ Ñ  ÐÌÓ  ÓIn€this€appeal€arising€from€a€breach€of€contract€claim,€the€appellant,€Hillcrest€Healthcare,€LLC€Ð |Ì  Ðchallenges€the€trial€courtððs€award€of€damages€in€the€amount€of€$337,363.59€including€$219,937€inÐ h¸ Ðlost€profits.€€We€affirm.Ð T¤ ÐÓ²ÓÌò òTenn.€R.€App.€P.€3€Appeal€as€of€Right;€Judgment€of€the€Chancery€Court€Ð ,| ÐAffirmed€and€Remandedó óÐ h ÐÌòòÓ  ÓÔ#†¼@»àX•s#ÔÔ‡X•X.¼@ÔWilliam€B.€Cain,óó€J.,€delivered€the€opinion€of€the€court,€in€which€òòWilliam€C.€Koch,€Jr.,€P.J.,€M.S.,óóÐ ð@ Ðand€òòPatricia€J.€Cottrell,€J.óó,€joined.Ð Ü, ÐÌRobert€A.€Anderson,€Nashville,€Tennessee,€for€the€appellant,€Hillcrest€Healthcare,€LLC.Ð ´ ÐÌR.€Dale€Grimes,€E.€Steele€Clayton,€IV,€and€Gerald€E.€Martin,€Nashville,€Tennessee,€for€the€appellee,Ð ŒÜ ÐAMC„Tennessee,€Inc.Ð xÈ ÐÓzÓÌò òOPINIONó óÔ#†¼@»XX•©#ÔÔ‡X•X»¼@ÔÐ P   ÐÌòòóóÔ#†¼@»XX•Ù#ÔÓ  ÓÔ€X•X»¼@Ôà  àPlaintiff€AMC„Tennessee,€Inc.€d/b/a€The€Pharmacy€is€a€retail€pharmacy€located€at€5764€OldÐ ("x! ÐHickory€Boulevard,€Hermitage,€Tennessee.€€Defendant€Hillcrest€Healthcare€Center,€LLC€is€a€nursingÐ #d" Ðhome€facility€located€at€111€East€Lenox€Street,€Ashland€City,€Tennessee.€€On€November€26,€1997,Ð $P# Ðthese€parties€entered€into€a€contractual€ð ðpharmacy€services€agreementðð€under€which€The€PharmacyÐ ì$< $ Ðwas€to€provide€pharmacy€services€to€the€nursing€home.€€The€recitals€of€the€contract€state:Ð Ø%(!% ÐÌà8  àA.à0` Ð Ð àThe€FACILITY€is€engaged€in€the€operation€of€a€nursing€facility,€for€which€itÐ °'#' Ðrequires€pharmacy€services€in€accordance€with€applicable€local,€state€andÐ œ(ì#( Ðfederal€laws€and€regulations.Ј)Ø$)` Ð ` Ð  Ðà8  àB.à0` Ð Ð àThe€PHARMACY€is€qualified,€licensed€and€capable€of€providing€approvedÐ t*Ä%* Ðdrugs,€intravenous€solutions,€biologicals€and€pharmaceutical€supplies€asÐ `+°&+ Ðâ ârequired€by€the€residents€of€the€FACILITY€upon€order€of€their€physicians€andÐ L,œ',ý ÐÔ_Ôin€accordance€with€accepted€professional€principles€and€applicable€local,€stateÐ ° Ðand€federal€laws€and€regulations.Мì` Ð ` Ð  Ðâ âà8  àC.à0` Ð Ð àThe€FACILITY€desires€to€utilize€the€PHARMACYððs€services,€and€theÐ ˆØ ÐPHARMACY€is€willing€to€furnish€such€services€as€provided€herein.ÐtÄ` Ð ` Ð  ÐÌà  àThe€nursing€home€breached€the€contract€which,€by€its€terms,€was€a€three€year€contractÐ L œ Ðexpiring€December€31,€2000.€€Hillcrest€wrongfully€terminated€the€contract€on€February€9,€1999,€andÐ 8 ˆ ÐThe€Pharmacy€sued€for€breach€of€contract€and€resulting€damages.€€Following€a€two€day€bench€trialÐ $ t Ðon€October€28€and€29,€2002,€the€chancellor€found€that€Hillcrest€had€breached€the€contract€andÐ  ` Ðentered€a€judgment€for€damages€in€a€total€amount€of€$337,363.59,€such€damages€being€comprisedÐ ü L  Ðof:Ð è 8  Ðà8  àa)à0` Ð Ð à$23,475.00€for€Hillcrest€Healthcareððs€outstanding€balance€due€to€TheÐ Ô$  ÐPharmacy,€plusÐÀ ` Ð ` Ð  Ðà8  àb)à0` Ð Ð à$15,141.59€for€prejudgment€interest€on€the€outstanding€balance,€plusЬü ` Ð ` Ð  Ðà8  àc)à0` Ð Ð à$219,937.00€for€lost€profits€for€the€remaining€twenty„two€months€of€theÐ ˜è  Ðcontract,€plusÐ„Ô ` Ð ` Ð  Ðà8  àd)à0` Ð Ð à$78,810.00€for€prejudgment€interest€on€the€lost€profits.ÐpÀ` Ð ` Ð  ÐÌà  àHillcrest€appeals€neither€the€trial€courtððs€breach€of€contract€findings€nor€the€trial€courtððsÐ H˜ Ðdismissal€of€its€counterclaim,€but€limits€its€appeal€to€the€measure€of€damages€awarded€by€the€trialÐ 4„ Ðcourt.Ð  p ÐÌà  àThe€only€issue€on€appeal€as€stated€in€the€brief€of€Appellant€is:Ð øH ÐÌà8  àà ` àWhether€the€Trial€Court€erred€in€holding€Hillcrest€liable€for€the€profits€lostÐ Ð  Ðby€The€Pharmacy€from€the€failure€of€private€pay€and/or€Medicaid€(TennCare)€patientsÐ ¼  Ðto€remain€customers€of€The€Pharmacy€when€Hillcrest,€by€federal€and€state€regulation,Ð ¨ø Ðcould€not€contract€on€behalf€of€those€patients€and€could€neither€control€the€decisionsÐ ”ä Ðof€those€patients€as€to€the€source€of€their€pharmaceuticals€nor€guarantee€nor€promiseÐ €Ð Ðto€The€Pharmacy€that€The€Pharmacy€would€be€the€source€of€those€patientsððÐ l¼ Ðpharmaceuticals.ÐX ¨Ð Ð  ÐÌà  àFurther€indicative€of€the€limited€scope€of€this€appeal€is€a€footnote€appearing€in€the€brief€ofÐ 0"€  ÐAppellant€which€states:Ð #l! ÐÌà8  àDespite€believing€that€there€was€a€breach€of€contract€by€The€Pharmacy€the€scope€ofÐ ô$D # Ðthis€appeal€is€limited€to€the€proper€measure€of€damages€for€the€claim€of€TheÐ à%0!$ ÐPharmacy.€€Hillcrest€believes€that€there€is€sufficient€proof€in€the€record€for€this€CourtÐ Ì&"% Ðto€sustain€the€Trial€Court€on€the€dismissal€of€its€counter„claim€based€on€T.R.A.P.Ð ¸'#& ÐRule€13(d).Ф(ô#'Ð Ð  ÐÌà  àThe€thrust€of€Appellantððs€argument€is€that€the€base€judgment€awarded€before€computationÐ |*Ì%) Ðof€prejudgment€interest€should€have€been€limited€to€$58,287€as€lost€profits€from€Medicare€patientsÐ h+¸&* Ðonly.€€It€is€asserted€that€the€judgment€erroneously€included€$115,556€for€Medicaid€(TennCare)Ð ° Ðpatients€and€$46,094€for€private€pay€patients.€€Hillcrest€asserts€that€it€was€allowed€by€federal€law€toÐ œì Ðact€only€on€behalf€of€Medicare€patients€when€choosing€a€pharmacy€and€that€since€both€MedicaidÐ ˆØ Ð(TennCare)€and€private€pay€patients€had€an€unconditional€right€to€choose€their€own€pharmacyÐ tÄ ÐHillcrest€is€not€liable€under€the€contract€for€lost€profits€of€The€Pharmacy€as€to€such€patients.€Ð `° ÐSpecifically€Hillcrest€relies€on€the€1998€regulations€for€the€Federal€Governmentððs€Department€ofÐ L œ ÐHealth€and€Human€Services€Healthcare€Financing€Administration€requirements€for€long€term€careÐ 8 ˆ Ðfacilities,€which€rule€states€in€part:Ð $ t ÐÌà8  à42€CFR€ðð€483.15€Quality€of€life.Ðü L Ð Ð  Ðà  àà8 ` àA€facility€must€care€for€its€residents€in€a€manner€and€in€anÐ è 8  Ðenvironment€that€promotes€maintenance€or€enhancement€of€eachÐ Ô$  Ðresidentððs€qualify€of€life.ÐÀ ` x` x ÐÌà  àà ` à...Ð ˜è  ÐÌà  àà8 ` à(b)à0¸ ` x` xàòòSelf„determination€and€participationóó.€€The€resident€has€theÐ pÀ Ðright€to€„Ð\¬¸ x¸ x Ðà  àà8 ` à(1)à0¸ ` x` xàChoose€activities,€schedules,€and€health€care€consistent€withÐ H˜ Ðhis€or€her€interests,€assessments,€and€plans€of€care;Ð4„¸ x¸ x Ѐ€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€42€CFR€ðð€483.15(b)(1)Ð  p ÐÌThe€corresponding€provision€in€state€regulations€appears€in€the€rules€of€the€Tennessee€DepartmentÐ øH Ðof€Health€under€ð ðStandards€for€Nursing€Homesðð€at€Rule€1200„8„6„.02(13)€and€reads:€ð ð(13)€€TheÐ ä4 Ðnursing€home€shall€assure€that€each€patient€has€a€free€choice€of€providers€of€medical€services,€suchÐ Ð  Ðas,€physician€and€pharmacy.€€However,€medications€must€be€supplied€in€packaging€consistent€withÐ ¼  Ðthe€medication€system€of€the€nursing€home.ððà  àÐ ¨ø ÐÌà  àRegarding€this€distinction€between€Medicare€patients€on€the€one€hand€and€MedicaidÐ €Ð Ð(TennCare)€and€private€pay€patients€on€the€other,€the€President€and€founder€of€The€Pharmacy,Ð l¼ ÐCharles€E.€Stephens,€testified:Ð X ¨ ÐÌà8  àQ.à ` àMr.€Stephens,€can€you€tell€me€what€the€general€purpose€of€this€servicesÐ 0"€  Ðagreement€was?Ð#l!Ð Ð  Ðà8  àA.à ` àItððs€a€contract€between€The€Pharmacy€and€the€facility€to€„€„€for€The€PharmacyÐ $X" Ðto€provide€medications€for€the€residents,€to€be€ordered€by€the€facility.Ðô$D #Ð Ð  Ðà8  àQ.à ` àSo€I€want€to€make€sure€I€understand:€Did€The€Pharmacy€agree€to€ship€all€theÐ à%0!$ Ðmedications€that€Hillcrest€ordered€for€its€patients?ÐÌ&"%Ð Ð  Ðà  àA.à0 ` àYes.и'#&` (#` (# Ðà8  àQ.à ` àDid€Hillcrest€agree€to€order€all€of€its€medications€for€its€patients€from€TheÐ ¤(ô#' ÐPharmacy?Ð)à$(Ð Ð  Ðà  àA.à0 ` àYes,€as€they€can.Ð|*Ì%)` (#` (# Ðà8  àQ.à0` Ð Ð àOkay.€€What€do€you€mean€by€that?Ðh+¸&*` Ð ` Ð  Ðà8  àA.à ` àPatients€are€guaranteed,€you€know,€other€than€being€determined€by€the€payerÐ ° Ðsource,€facilities€have€a€right€„€„€the€patient€has€the€right,€freedom€of€choice€ofÐ œì Ðpharmacy.€€Thatððs€guaranteed€federally.ЈØÐ Ð  Ðà8  àQ.à0` Ð Ð àOkay.€€What€do€you€mean€by€ð ðpayer€sourceðð?ÐtÄ` Ð ` Ð  Ðà8  àA.à ` àGenerally€you€have€three€or€four€types€of€payer€sources€in€a€facility.€€YouððllÐ `° Ðhave€Medicare€patients,€who€are€„€„€the€facility€is€the€determining€person€thatÐ L œ Ðdetermines€where€those€medications€are€ordered.€€You€have€Medicaid,€or€in€our€caseÐ 8 ˆ ÐTennCare€patients,€and€they€essentially€have€freedom€of€choice,€but€those€are€usuallyÐ $ t Ðordered€from€the€preferred€pharmacy€by€the€facility.€€Then€you€have€private€pay€orÐ  ` Ðother€insurances,€and€obviously€those€patients€have€the€right€to€order€where€they€„€„Ð ü L  Ðtheir€insurance€or€where€they€want€to.Ðè 8 Ð Ð  Ðà8  àQ.à ` àWhere€did€the€patients€that€were€covered€by€Medicaid€or€private€pay€sourcesÐ Ô$  Ðusually€order€their€pharmaceuticals€from?ÐÀ Ð Ð  Ðà8  àA.à ` àMost€of€the€time€they€will€order€from€the€preferred€pharmacy€by€the€facility.Ьü Ð Ð  Ðà  àQ.à0 ` àWhy?Иè ` (#` (# Ðà8  àA.à ` àConvenience,€standardization€of€the€system.€€You€know,€the€facility€has€theÐ „Ô  Ðability€to€determine€what€medication€dispensing€system€they€will€use€within€theÐ pÀ Ðfacility,€and€normally€the€patients€will€concur€with€that,€the€choice€of€the€facility.Ð\¬Ð Ð  ÐÌà  àThe€chancellor€in€construing€the€contract€held:Ð 4„ ÐÌà8  àà ` àIn€November€1997,€Hillcrest€agreed€with€The€Pharmacy€to€have€TheÐ  \ ÐPharmacy€provide€pharmaceuticals€(ð ðmedsðð)€to€Hillcrestððs€patients.€€The€PharmacyÐ øH Ðhad€an€obligation€to€deliver€medications€ordered€by€Hillcrest€on€behalf€of€its€patientsÐ ä4 Ðand€to€submit€all€bills€for€patients€covered€by€Medicare€directly€to€HIllcrest€forÐ Ð  Ðpayment€on€a€monthly€basis.€€Hillcrest€had€an€obligation€to€order€all€of€its€patientsððÐ ¼  Ðmedications€from€The€Pharmacy,€except€where€the€patient€specifically€requested€thatÐ ¨ø Ðanother€pharmacy€be€used.ДäÐ Ð  ÐÌThe€limited€appeal€in€this€case€stands€or€falls€on€the€correctness€of€this€holding€by€the€chancellor.Ð l¼ ÐÌà  àThere€is€nothing€ambiguous€about€The€Pharmacy€Services€Agreement€in€this€case€and€theÐ D!” Ðchancellor€so€held.€€The€determining€provisions€of€the€contract€are€plain:Ð 0"€  ÐÌà8  à2.2à0` Ð Ð àò òOrderingó ó:€THE€FACILITY€will€order€from€the€PHARMACY€all€drugs,Ð $X" Ðintravenous€solutions,€biologicals€and€supplies€for€individual€residents€whichÐ ø$H # Ðare€not€commonly€stocked€in€the€FACILITY,€except€in€cases€where€a€residentÐ ä%4!$ Ðhas€requested€purchases€be€made€from€another€pharmacy,€in€which€case€theÐ Ð& "% Ðrequest€will€be€honored.€€The€FACILITY€may€also€purchase€ð ðhouse€supplyððÐ ¼' #& Ðitems€from€the€PHARMACY,€as€allowed€by€applicable€local,€state€andÐ ¨(ø#' Ðfederal€laws€and€regulations.Д)ä$(` Ð ` Ð  ÐÌà  àà ` à.€.€.€.Ð l+¼&* Їà  à2.3à ` àò òBilling€Data€and€Reimbursement€Statusó ó:Ð ° Ðà8  àà0` Ð Ð àThe€FACILITY€will€also€notify€the€PHARMACY€as€to€the€status€of€eachÐ  ð Ðresident€regarding€source€of€reimbursement€for€drugs,€intravenous€solutions,Ð ŒÜ Ðbiologicals€and€supplies.€€The€FACILITY€will€notify€the€PHARMACY€dailyÐ xÈ Ðof€any€changes€in€resident€medication€upon€receipt€of€physiciansðð€orders€orÐ d´ Ðof€changes€as€a€result€of€room€transfer€or€discharge.€€The€FACILITY€willÐ P   Ðgive€the€PHARMACY€reasonable€access€to€all€resident€records,€facilities€andÐ < Œ Ðsupplies€necessary€for€the€performance€of€the€PHARMACYððs€duties€underÐ ( x Ðthis€Agreement,€and€the€PHARMACY€will€furnish€to€the€FACILITY,€uponÐ  d Ðrequest,€all€information€relating€to€the€drugs,€intravenous€solutions,Ð  P  Ðbiologicals€and€supplies€furnished€to€the€FACILITY€or€to€FACILITYÐ ì <  Ðresidents.ÐØ( ` Ð ` Ð  ÐÌà8  àà0` Ð Ð àAdditionally,€the€FACILITY€will€provide€to€each€resident,€or€the€residentððsÐ °  Ðsponsor,€all€applicable€PHARMACY€policies€and€procedures.€€TheÐ œì  ÐFACILITY€will€be€responsible€for€obtaining€appropriate€billing€consentÐ ˆØ  Ðsignatures€with€respect€to€each€resident€for€which€the€PHARMACY€willÐ tÄ Ðperform€billing€and€will€furnish€the€PHARMACY€with€a€copy.Ð`°` Ð ` Ð  ÐÌà  àà ` à.€.€.€.Ð 8ˆ ÐÌà8  à2.5à0` Ð Ð àPolicies€and€Procedures€for€Usage€of€Outside€Pharmacies:€In€order€to€ensureÐ ` Ðconsistent€pharmacy€services,€proper€medical€care,€cost„effective€pharmacyÐ üL Ðservices€and€supplies€and€lower€risk€of€medication€errors€and€nursing€time,Ð è8 ÐFACILITY€will€require€all€outside€pharmacies€which€supply€drugs,Ð Ô$ Ðintravenous€solutions,€biologicals€and€supplies€to€residents€within€FACILITYÐ À Ðto€execute€a€contract€with€FACILITY.€€The€contract€will€specify€the€policiesÐ ¬ü Ðand€procedures€for€the€dispensing€of€drugs,€intravenous€solutions,€biologicalsÐ ˜è Ðand€supplies€to€FACILITY€residents,€including,€at€a€minimum,€provisions€forÐ „Ô Ðreporting,€packaging€and€labeling€of€all€items€dispensed€in€a€mannerÐ pÀ Ðconsistent€with€the€chosen€dispensing€system€of€FACILITY.€€The€FACILITYÐ \ ¬ Ðwill€require€that€each€resident€electing€to€use€a€pharmacy€other€than€theÐ H!˜ ÐPHARMACY€specify€such€election€in€writing,€and€the€FACILITY€willÐ 4"„  Ðprovide€a€copy€of€such€election€to€the€PHARMACY.€€The€PHARMACYÐ  #p! Ðshall€have€no€responsibilities€for€any€such€resident.Ð $\"` Ð ` Ð  ÐÌà8  àà0` Ð Ð àIn€the€event€a€pharmacy€other€than€the€PHARMACY€is€utilized€by€anyÐ ä%4!$ Ðresident,€the€PHARMACY€will€bill€the€other€pharmacy,€and€the€FACILITYÐ Ð& "% Ðwill€require€such€other€pharmacy€to€pay€the€PHARMACY,€the€applicableÐ ¼' #& ÐPOS/MAR€fee€under€Section€1.4€above.€€It€will€be€the€FACILITYððs€orÐ ¨(ø#' Ðoutside€pharmacyððs€responsibility€to€seek€reimbursement€from€the€resident,Ð ”)ä$( Ðwhere€necessary.Ѐ*Ð%)` Ð ` Ð  ÐÐ l+¼&* Ðà  àSpecifically€critical€is€the€requirement€in€paragraph€2.5€of€the€contract€that€ð ð[t]he€FACILITYÐ ° Ðwill€require€that€each€resident€electing€to€use€a€pharmacy€other€than€the€PHARMACY€specify€suchÐ œì Ðelection€in€writing,€and€the€FACILITY€will€provide€a€copy€of€such€election€to€the€PHARMACY.€Ð ˆØ ÐThe€PHARMACY€shall€have€no€responsibilities€for€any€such€resident.ððÐ tÄ ÐÌà  àTodd€Hightower,€Director€of€Operations€for€the€parent€company€of€Hillcrest€testified:Ð L œ ÐÌà8  àQ.à ` àAll€right.€€Now,€Tab€1€says,€if€youððll€look€for€me€over€at€Section€2.5,€thatÐ $ t Ðdeals€with€the€use€of€an€outside€pharmacy€while€The€Pharmacy€is€providing€servicesÐ  ` Ðto€Hillcrest,€right?Ðü L Ð Ð  Ðà  àA.à ` àThatððs€correct.Ð è 8  Ðà8  àQ.à ` àNow,€am€I€correct€that€you€testified€yesterday€that€in€most€cases€the€MedicaidÐ Ô$  Ðand€private€pay€patients€will€use€the€preferred€provider?ÐÀ Ð Ð  Ðà  àA.à0 ` àThat€is€correct.Ьü ` (#` (# Ðà  àQ.à0 ` àSo€you€agree€with€that€statement?Иè ` (#` (# Ðà  àA.à0 ` àYes.Ð„Ô ` (#` (# Ðà8  àQ.à ` àAll€right.€€And€Section€2.5,€if€youððll€flip€over€on€page€four€and€look€at€the€lastÐ pÀ Ðparagraph,€the€last€sentence€„€„€Iððm€sorry.€€The€paragraph€right€above€the€lastÐ \¬ Ðparagraph,€the€first€paragraph€with€the€sentences€on€page€four,€Iððm€going€to€read€thisÐ H˜ Ðsection€to€you,€just€this€sentence.€€It€says:€The€facility€will€require€„€„€and€the€facilityÐ 4„ Ðis€Hillcrest€„€„€will€require€that€each€resident€electing€to€use€a€pharmacy€other€thanÐ  p ÐThe€Pharmacy€specify€such€election€in€writing€and€the€facility€will€provide€a€copy€ofÐ  \ Ðsuch€election€to€The€Pharmacy.ÐøHÐ Ð  Ðà  àà ` àDid€you€see€where€I€read€that?Ð ä4 Ðà  àA.à0 ` àYes.ÐÐ ` (#` (# Ðà8  àQ.à ` àSo€if€there€was€a€„€„€if€there€were€people€in€1998€that€were€Medicaid€orÐ ¼  Ðprivate€pay€using€an€outside€pharmacist,€i.e.,€not€The€Pharmacy,€the€facility€had€toÐ ¨ø Ðrequire€that€resident€to€specify€it€in€writing,€and€Hillcrest€was€required€to€give€TheÐ ”ä ÐPharmacy€a€copy€of€that;€is€that€how€you€read€that?ЀÐÐ Ð  Ðà  àA.à0 ` àYes.Ðl¼` (#` (# Ðà8  àQ.à ` àAll€right.€€Have€you€seen€any€written€election€from€any€Medicaid€or€privateÐ X ¨ Ðpay€patient€at€Hillcrest€for€1998?ÐD!”Ð Ð  Ðà  àA.à0 ` àNo,€I€have€not.Ð0"€ ` (#` (# Ðà8  àQ.à ` àAnd€you€didnððt,€I€assume,€turn€any€such€elections€in€writing€over€to€yourÐ #l! Ðattorney€to€produce€in€this€case.Ð$X"Ð Ð  Ðà  àA.à0 ` àNo,€I€did€not.Ðô$D #` (#` (# Ðà8  àQ.à ` àDo€you€have€any€knowledge€about€any€of€these€written€elections€beingÐ à%0!$ Ðtransmitted€from€Hillcrest€to€us?ÐÌ&"%Ð Ð  Ðà  àA.à0 ` àNo,€I€do€not.и'#&` (#` (# Ðà  àQ.à0 ` àTo€The€Pharmacy?Ф(ô#'` (#` (# Ðà  àA.à0 ` àNo,€I€do€not.Ð)à$(` (#` (# Ðâ âÐ |*Ì%) Ðà  àSo€it€is€that€Hillcrest€acknowledges€the€contractual€provisions€requiring€it€to€get€from€patientsÐ ° Ðâ âexercising€their€free€choice€of€another€pharmacy€to€serve€their€needs,€a€designation€of€that€choice€inÐ œì Ðwriting,€and€further€acknowledges€that€no€such€designations€have€ever€been€provided€to€TheÐ ˆØ ÐPharmacy.Ð tÄ Ðà8  àÐ Ð Ð  Ðà  àSince€we€find,€as€the€trial€court€did,€that€the€agreement€is€unambiguous,€the€interpretation€ofÐ L œ Ðthe€terms€of€the€agreement€is€a€matter€of€law€before€this€court€on€appeal.€€òòSee€Hamblen€County€v.Ð 8 ˆ ÐCity€of€Morristownóó,€656€S.W.2d€331,€335„336€(Tenn.€1983);€òòsee€also€Guiliano€v.€Cleo,€Inc.óó,€995Ð $ t ÐS.W.2d€88,€95€(Tenn.€1999).€€ð ðThis€determination€of€the€intention€of€the€parties€is€generally€treatedÐ  ` Ðas€a€question€of€law€because€the€words€of€the€contract€are€definite€and€undisputed,€and€in€decidingÐ ü L  Ðthe€legal€effect€of€the€words,€there€is€no€genuine€factual€issue€left€for€a€jury€to€decide.€òòPlanters€GinÐ è 8  ÐCo.€v.€Fed.€Compress€&€Warehouse€Co.óó,€78€S.W.3d€885,€890€(Tenn.€2002).ðð€€òòBratton€v.€Brattonóó,Ð Ô$  Ð136€S.W.3d€595,€601€(Tenn.€2004).€Ð À  Ðà8  àà ` àÐ Ð Ð  Ðà  àThe€plain€language€of€the€contract€makes€no€differentiation€between€served€patients€otherÐ ˜è  Ðthan€identifying€those€who€exercise€their€freedom€of€choice€to€obtain€their€pharmaceuticalsÐ „Ô  Ðelsewhere.€€The€written€contract€clearly€indicates€that€the€parties€contemplated€provision€ofÐ pÀ Ðpharmaceuticals€to€Hillcrest€residents€requiring€those€services,€regardless€of€payment€source,€unlessÐ \¬ Ðthey€exercised€their€choice€to€use€a€different€provider.€€The€profits€based€on€Medicaid€(TennCare),Ð H˜ ÐMedicare€and€private€pay€patients€for€the€fourteen€months€prior€to€Hillcrestððs€termination€of€theÐ 4„ Ðcontract€are€an€adequate€basis€for€measuring€damages€for€lost€profits.€€òòMcClain€v.€KimbroughÐ  p ÐConstruction€Co.,€Inc.óó,€806€S.W.2d€194,€200„201€(Tenn.Ct.App.€1990).Ð  \ ÐòòóóÌà  àMuch€is€made€on€appeal€of€The€Pharmacyððs€alleged€failure€to€mitigate€its€damages.€€TheÐ ä4 Ðplain€language€of€the€partiesðð€contract€accounts€for€Hillcrest€patientsðð€freedom€to€choose€their€ownÐ Ð  Ðprescription€service€provider,€with€the€understanding€that€in€the€absence€of€an€affirmative€exerciseÐ ¼  Ðof€that€freedom,€The€Pharmacy€would€be€expected€to€serve€those€patientsðð€needs.€€It€is€undisputedÐ ¨ø Ðthat,€once€Hillcrest€terminated€the€agreement€with€The€Pharmacy,€the€latterððs€employees€did€notÐ ”ä Ðsolicit€business€from€the€Tenn„Care€and€private€pay€patients.€€The€well€settled€rule€in€this€jurisdictionÐ €Ð Ðprohibits€a€plaintiff€from€recovering€damages€which,€in€the€exercise€of€reasonable€effort€andÐ l¼ Ðexpense,€could€be€prevented€or€diminished.€€òòSee€Arkansas€River€Packet€Co.€v.€Hobbsóó,€58€S.W.€278Ð X ¨ Ð(Tenn.€1900);€òòsee€also€Southeastern€Greyhound€Lines€v.€Grovesóó,€136€S.W.2d€512€(Tenn.€1940);òòÐ D!” ÐCummins€v.€Brodieóó,€667€S.W.2d€759€(Tenn.Ct.App.€1983).€€The€burden€of€showing€that€lossesÐ 0"€  Ðsuffered€from€a€breach€of€contract€could€have€been€avoided€by€reasonable€effort€and€expense€isÐ #l! Ðplaced€squarely€upon€the€breaching€party.€€òòSee€Tampa€Electric€Co.€v.€Nashville€Coal€Co.óó,€214Ð $X" ÐF.Supp.€647,€652€(M.D.€Tenn.€1963)€(citing€Restatement€Contracts€ðð€336(2)).€€In€light€of€the€plainÐ ô$D # Ðlanguage€of€the€contract,€it€would€indeed€seem€unreasonable€and€unduly€burdensome€to€require€TheÐ à%0!$ ÐPharmacy€to€solicit€a€new€exercise€of€the€freedom€of€choice€by€the€very€patients€it€ððlostðð€when€it€wasÐ Ì&"% Ðterminated€from€the€Hillcrest€agreement.€€Although€counsel€for€Hillcrest€elicited€testimony€from€theÐ ¸'#& Ðplaintiff€that€The€Pharmacy€did€not€seek€to€serve€Tenn„Care€and€private€pay€patients,€the€record€doesÐ ¤(ô#' Ðnot€support€any€assertion€that€such€solicitation€would€be€reasonable€under€the€circumstances.€Ð )à$( Ðâ âÐ |*Ì%) Ðà  àHillcrestððs€position€would€require€The€Pharmacy€to€pursue€a€course€relative€to€MedicaidÐ ° Ðâ â(TennCare)€and€private€pay€patients€exactly€opposite€to€their€entitlement€under€the€contract.€€InsteadÐ œì Ðof€having€the€benefit€of€the€non„selection€by€such€patients€of€an€outside€pharmacy€they€would€beÐ ˆØ Ðcompelled€to€be€the€outside€pharmacy,€and€actively€solicit€such€patients€to€exercise€their€freedomÐ tÄ Ðof€choice€and€make€individual€written€designations€of€The€Pharmacy.€€This€cannot€be€reasonable:Ð `° ÐÌà8  àà ` àòòAnderson„Gregory€Co.,€Inc.€v.€Leaóó,€51€Tenn.App.€612,€370€S.W.2d€934Ð 8 ˆ Ð(1963),€held€that€in€an€action€for€a€breach€of€contract€the€injured€party€is€bound€to€useÐ $ t Ðall€proper€means€and€efforts€to€protect€himself€from€loss€and€can€charge€the€otherÐ  ` Ðparty€only€for€such€damages€as€by€reasonable€endeavors€on€his€part€he€could€notÐ ü L  Ðprevent.€€In€accord€with€this€statement€is€òòTampa€Electric€Company€v.€Nashville€CoalÐ è 8  ÐCompanyóó,€214€F.Supp.€647€(M.D.Tenn.€1963).€€However,€this€later€case€also€says:€Ð Ô$  Ðð ð.€.€.€the€burden€of€showing€that€losses€could€have€been€avoided€by€reasonable€effortÐ À  Ðand€expense€is€on€the€party€who€breached€the€contract....ðð€€Also€see:€òòState€ex€rel.Ð ¬ü  ÐChapdelaine€v.€Torrenceóó,€532€S.W.2d€542€(Tenn.€1975),€and€òòUnited€States€ofÐ ˜è  ÐAmerica€for€the€use€of€E€&€R€Construction€Co.,€Inc.€v.€Guy€H.€James€ConstructionÐ „Ô  ÐCo.óó,€390€F.Supp.€1193€(M.D.Tenn.€1972).ÐpÀÐ Ð  Ðà  àà ` àòòTampa,€supraóó,€further€holds:Ð \¬ ÐÌà0  àà8` (#(#àThe€critical€factor€in€determining€fulfillment€of€a€plaintiffððs€duty€to€mitigateÐ 4„ Ðis€whether€the€method€which€he€employed€to€avoid€consequential€injury€wasÐ  p Ðreasonable€under€the€circumstances€existing€at€the€time.€€The€rule€withÐ  \ Ðrespect€to€the€mitigation€of€damages€may€not€be€invoked€by€a€contractÐ øH Ðbreaker€ð ðas€a€basis€for€hypercritical€examination€of€the€conduct€of€the€injuredÐ ä4 Ðparty,€or€merely€for€the€purpose€of€showing€that€the€injured€person€mightÐ Ð  Ðhave€taken€steps€which€seemed€wiser€or€would€have€been€more€advantageousÐ ¼  Ðto€the€defaulter.ðð€€òòIn€re€Kellett€Aircraft€Corp.óó,€186€F.2d€197,€198„199€(3dÐ ¨ø ÐCir.,€1950).€€As€stated€in€McCormick,€Damages,€Sec.€35€(1935),€ð ða€wideÐ ”ä Ðlatitude€of€discretion€must€be€allowed€to€the€person€who€by€anotherððs€wrongÐ €Ð Ðhas€been€forced€into€a€predicament€where€he€is€faced€with€a€probability€ofÐ l¼ Ðinjury€or€loss.€€Only€the€conduct€of€a€reasonable€man€is€required€of€him.ðð€...ÐX ¨` Ð ` Ð  ÐÌòòAction€Ads,€Inc.€v.€William€B.€Tanner€Co.óó,€592€S.W.2d€572,€575€(Tenn.Ct.App.€1979).Ð 0"€  ÐÌà  àThus,€Hillcrestððs€assertion€that€The€Pharmacy€failed€to€mitigate€its€damages€amounts€toÐ $X" Ðð ðhyper€critical€examinationðð€of€a€course€of€conduct€which€never€would€have€been€considered€hadÐ ô$D # ÐHillcrest€performed€in€accordance€with€the€agreement.€€òòóóÐ à%0!$ ÐÌà  àThe€judgment€of€the€trial€court€is€in€all€respects€affirmed€and€the€case€is€remanded€to€the€trialÐ ¸'#& Ðcourt€for€collection€of€the€judgment.Ð ¤(ô#' ÐÌà  àCosts€on€appeal€are€assessed€against€Appellant.Ð |*Ì%) ÐÐ h+¸&* Ðà  àÌà  àà ` àà ¸ àà  àà h àà À àà  à___________________________________€Ð œì Ðà  àà ` àà ¸ àà  àà h àà À àà  àWILLIAM€B.€CAIN,€JUDGE