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March 19, 1986

THOMAS K. BILLS, M.D., Defendant

The opinion of the court was delivered by: THOMPSON

 This matter is presently before the court on a motion for summary judgment by the United States. The government seeks an order adjudging the defendant, Thomas K. Bills, M.D. and Ph.D., in breach of contract and imposing treble damages and interest arising from the alleged breach. Dr. Bills had been the recipient of scholarship funds under the National Health Service Crops ["NHSC"] Scholarship Program, 42 U.S.C. § 254l. The plaintiff alleges that the defendant failed to begin his service obligation under the program breaching the contract he signed with the government when he was awarded the scholarship.

 Defendant opposes the motion for summary judgment and has filed his own motion for summary judgment and raises certain affirmative defenses. The defendant contends that the government's finding that he had defaulted in failing to begin obligated service was improper, arbitrary, capricious and unreasonable. Defendant further argues, even if he is found in breach of his contract with NHSC, the treble damages provision of 42 U.S.C. § 254o should not be enforced in this particular case and that any judgment requiring him to pay damages should be limited to the amount of money and aid he received under the program.

 The scholarship program in which defendant participated was established by Congress in an attempt to provide primary health care services in medically underserved locations. We will not for purposes of this opinion set out the laudable purposes and goals of the program, nor its requirements, except when necessary for purposes of this opinion.

 In 1978, while still a student at medical school, Dr. Bills applied for and was accepted into the NHSC Scholarship Program. Prior to completing the application for consideration Dr. Bills had the opportunity to review the Scholarship Program Applicant Information Bulletin which contained all the pertinent details of the program; including the obligations incurred by an applicant upon acceptance to the program. The material explained that the program's intent and focus was to alleviate and rectify the geographical and specialty maldistribution of physicians in the United States. The bulletin put the defendant on notice that participants in the program were to be those individuals who seriously wanted to practice primary care medicine in health manpower shortage areas of the United States.

 The program provided for the payment of medical school tuition and a stipend to those individuals who were selected. In return for this financial assistance participants were to complete their academic training and provide a year of service in an assigned area for every year of financial assistance. This period of service could, under provisions of the program, be deferred to allow for some limited post-graduate training. However, these periods of deferment were restricted by statute; with the period of deferment not to exceed a period of three years unless the applicant came within certain specialized categories. Deferments of less than three years were available; however, the program required that participants undertaking a one-year deferment complete a flexible first year of clinical training, a categorical first year of family practice, internal medicine, or pediatrics program or engage in a rotating internship in osteopathic medicine. These requirements were clearly set forth in the material signed by Dr. Bills in finalizing his application. These documents informed the defendant of the potential consequences which could result in the event the defendant did not fully comply with the service obligation of the program. The statute creating the program clearly provided that participants who failed to either begin or complete their service obligation would be required to repay the government three times the amount of funding provided to the participant while in medical school together with interest. See 42 U.S.C. 254o(b) (1).

 The defendant, a Ph.D prior to entering medical school, submitted an application to the program wherein he stated that he did not intend to follow a research orientation in his career and that he intended to work in an urban setting where, as he stated, there was a need for primary medical care. The import of these statements on his application was that he intended to engage in a career of providing primary medical care in a medically underserved area. Based on these representations, Bills' application was given special consideration and he was accepted and awarded a NHSC scholarship. On April 5, 1978 defendant signed a contract with the NHSC which set forth both the benefits to which he was entitled and his corresponding obligations and duties. The contract clearly stated that Dr. Bills would be obligated to provide one year of service for every year of assistance received. The contract also clearly stated that deferments would not be granted for more than three years. This particular requirement was reiterated by government officials in subsequent correspondence directed to this particular defendant on various occasions. On June 22, 1979 the government notified Dr. Bills that deferments would only be granted to allow program participants to complete either a flexible one year residency program in certain limited areas or a clinical residency program which could be completed within three years. It was incumbent on Dr. Bills to take into account and consider these requirements prior to making any specific post-graduate commitment.

 On October 30, 1979, in defendant's last year of medical school, the same information was repeated by the government in a letter to the defendant. In this letter he was notified that even if he intended to fulfill his obligation to the NHSC by way of a National Research Service Award ["NRSA"], an option available to NHSC participants, he was still obligated to satisfy the eligibility requirements of the NHSC. This meant that any requested deferment by the defendant was limited to either the three years maximum or the one year flexible program. Defendant was advised that if he wanted to enter a surgical internship he was to pursue the one year flexible training program. This letter explicitly stated that deferments of more than three years would not be granted except in certain specialized areas in which the NHSC had a need. Defendant was informed prior to making any formal commitment to a post-graduate program that he was under the duty to pursue training which could be approved by the NHSC. Defendant was also put on notice in this letter that failure to comply with these conditions could result in the finding of breach and the imposition of the treble damages.

 On March 3, 1980 the NHSC again restated its requirements as to the procedure for obtaining deferments and set forth what post-graduate programs satisfied NHSC provisions. Defendant was also notified that in the event he requested a deferment for a program which could not be approved by the NHSC he would only be entitled to a flexible first year of clinical training deferment. He again was specifically told that he was to pursue training which could be approved by officials of the NHSC. Thus by March 1980 defendant had been adequately advised of the requirements of the NHSC program and what programs would be eligible for deferment and what was the maximum period of deferment available to him. At no point up to this time was there any indication that Dr. Bills was not aware of his duties and requirements under the program. Nor was there any evidence that prior to March 1980 defendant sought or obtained approval for any program not specifically provided for under the contract or notices mailed to him.

 On March 3, 1980 defendant signed a contract with the Rutgers Medical School accepting a one year surgical residency. In the literature previously sent to Dr. Bills no allowances had been made for this type of post-graduate training. Dr. Bills subsequently wrote a letter to the NHSC on April 9, 1980 wherein he stated his intention, apparently for the first time, to enter a five year orthopedic surgical program at Rutgers and satisfy his NHSC obligation by way of NRSA award. In the materials previously sent to Dr. Bills no allowances had been made for this kind of program for NHSC participants.

 On April 22, 1980 defendant was informed by the NHSC that his deferment request did not comply with the type of training for which deferments were available and that it exceeded the three year maximum. Defendant was told that he would be granted a one year deferment to complete a flexible or categorical training program in family practice, internal medicine or pediatrics as previously outlined to Dr. Bills in prior correspondence to him. As for his desire to satisfy his service obligation by way of a NRSA grant, defendant was reminded that under his contract he was obligated to satisfy the requirement that he be eligible to serve in the NHSC. On the NRSA issue the government remained otherwise non-committal. Defendant was also reminded that failure to satisfy NHSC standards would result in the imposition of financial liability in the amount of treble damages. This warning came on May 26, 1980, well before Dr. Bills commenced his training with Rutgers that summer. Dr. Bills then wrote to NHSC officials requesting a one year deferment, representing in his letter that his program with Rutgers would qualify him to serve in the NHSC. At the time he wrote the letter to the NHSC his proposed Rutgers' program failed to adhere to the published specifications and requirements of the NHSC. On May 28, 1980 the government wrote to Dr. Bills informing him that it would not approve Dr. Bills' Rutgers' program unless he made provisions to include at least three months of primary care rotations in limited areas as set forth in their earlier correspondence. The defendant was advised that failure to meet this express condition could result in the imposition of the financial penalty. In November 1980 Dr. Bills was informed by the NHSC that he was not in compliance with the specifications of the program and was in danger of being declared in default.

 In response to this letter Dr. Bills asserted that he had been led to believe that he was satisfying all the NHSC requirements. He claimed he was not aware of any primary care rotation requirement until it was too late to make an adjustment of his program. Bills also contended that his program satisfied NHSC standards. NHSC, in response to Bills' assertions elected to place him in default thereby triggering the damages provision of 42 U.S.C. § 254o.

 The primary purpose of a motion for summary judgment is to avoid a useless trial. Dworman v. mayor and Bd. of Aldermen of Morristown, 370 F. Supp. 1056, 1063-64 (D.N.J. 1974). To earn a summary decision, the moving party must merit judgment as a matter of law upon genuinely indisputable material facts. FED. R. CIV. P. 56 (c), Ely v. Hall's Motor Transit Co., 590 F.2d 62, 66 (3d Cir. 1978). The non-moving party is entitled to the benefit of all reasonable doubts and inferences drawn from the underlying facts. Goodman v. Mead, Johnson & Co., 534 F.2d 566, 574 (3d Cir. 1976), cert. denied, 429 U.S. 1038, 50 L. Ed. 2d 748, 97 S. Ct. 732 (1977).

 In this case it is clear that Dr. Bills entered into a valid and binding contract with the NHSC in 1978. This same contract was subsequently renewed by the parties in 1979. There is no contention that the formation of the contract in issue here was in any way improper or deficient. The contract, as entered into by the parties, is enforceable. Our task in this motion is to interpret the contract and determine whether or not its terms have been breached. In construing the contract in issue here we apply general contract law. Priebe & Sons v. United States, 332 U.S. 407, 411, 92 L. Ed. 32, 68 S. Ct. 123 (1947). Under principles of contract law the construction and legal effect of an unambiguous writing is for the court and not for a jury. County of Erie v. American States Insurance Co., 573 F. Supp. 479, 483 (W.D. Pa. 1983), aff'd 745 F.2d 45 (3d Cir. 1984). Summary judgment may be entered in a case where ...

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