# Riley v. Gilmore

> Superior Court of Maine · February 1, 2006

URL: https://www.frixlaw.com/law-library/cases/10808721

## Case

- **Court:** Superior Court of Maine
- **Decided:** February 1, 2006
- **Precedential status:** Unpublished
- **Opinion:** Opinion
- **Judges:** Jeffrey L. Hjelm
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

STATE O F MAINE SUPERIOR COURT
PENOBSCOT, SS. CIVIL ACTION
Docket No. CV-05-180

Plaintiff '
James N. Riley, D.O., .A..
I FILED 8 ENTERED
I SUPERIOR C O U R T
I
I
!
1
Ioo5 O@er (Motion for Partial
I ~ u r g m e n on
t the Pleadings)
1 PENtaflIC@T S c u > j f Y
Michael J. Giimore, ~ . b . , I
Defendant

The defendant has moved for judgment on two of the four counts in the amended
complaint. See M.R.Civ.P. 12(c). The court has considered the parties' written
arguments
A motion for judgment on the pleadings is analytically identical to a motion to
dismiss for failure to state a claim. Cunningham v. Haza, 538 A.2d 265, 267 (Me. 1988).
In both instances, the allegations are taken as true, and the complaint is then examined "in
the light most favorable to the plaintiff to determine whether it sets forth elements of a
cause of actior: or alleges facts that would entitle the plaintiff to relief pursuant to some
legal theory." McAfee v. Cole, 637 A.2d 463,465 (Me. 1994). A dismissal is proper
"only when it appears beyond doubt that a plaintiff is entitled to no relief under any set of
facts that he might prove in support of his claim." Hall v. Board of Environmental
Protection, 498 A.2d 260, 266 (Me. 1985).
In its essence, the plaintiff ("hley"), a business entity, alleges that it employed
the defendant and, by agreement of the parties, advanced to.the defendant amounts of
money in excess of a formula used to determine his compensation. h l e y then alleges
that Gilmore left his employment position and now owes the business the amounts that
had been advanced to him. In addition to claims for breach of contract (count 1) and for
moneys owed (count 4), Riley has asserted claims for unjust enrichment (count 3) and
conversion (count 2). Through the motion at bar, Gilmore seeks judgment on the
pleadings for the latter two claims.
First, challenging count 3, Gilmore argues that Riley is precluded from asserting a
claim for unjust enrichment because the existence of an employment contract between the
parties bars any recovery on a theory of unjust enrichment. See In re: Wage Payment
Litigation, 2000 M E 162,y 19,759 A.2d 217, 224. In his responsive pleading, Gilmore
has admitted that he entered into an employment contract with Riley. See amended
complaint and answer at 2. Although Riley notes the possibility that a contract
ultimately might be found unenforceable for some reason, the fact remains that the
pleadings establish a contractua! relationship between the parties. If the pleadings left
open the possibility that the parties did not have a contractual relationship, then, as Riley
argues here, the claim for unjust enrichment would be proper as an alternative theory of
liability. However, the pleadings in this case would not allow such an outcome.
Accordingly, under Maine law, Riley's claim for unjust enrichment is barred by the
parties' contractual relationship, which is established in the pleadings.
Next, Gi!r;.,o:e makes the simi!ar xgument that he cannot be f~i;r,dliable ir, tort
for converting the money at issue because, among other things, Riley is limited to a claim
for breach of contract. As with his position regarding count 3, Riley urges that it is
entitled to plead alternative claims for relief. This argument reveals Riley's
acknowledgement that the tort claim for conversion could succeed only if its contract
claim fails. However, for the reasons noted above, the pleadings establish the existence
of a contractual relationship between the parties and allegedly actionable conduct arising
from that relationship. As a matter of law, this precludes any opportunity for recovery in
tort. See Innovative Network Solutions, Inc. v. One Star Communications, LLC, 283
F.Supp.2d 295,301 (D.Me. 2003).

The entry shall be:
For the foregoing reasons, the defendant's motion is granted. Judgment on the
pleadings is entered for the defendant on counts 2 and 3 of the amended complaint.

-1
Dated: February 1, 2006 { j\.f,lf 1 ,.i
Justice, ~ a i n e h u ~ e r iCourt
or
J e f f r e y L. H j ' e l m
02/02/2006 MAINE J U D I C I A L INFORMATION SYSTEM k s m ith
PENOBSCOT COUNTY SUPERIOR COURT rnjxxi013
PAGE A - ATTORNEY BY CASE VIEW
PAUL GAGNON VS ANNE M DODWELL PR EST OF EVERETT GAGNON, ET AL
UTN:AOCSsr - 2 0 0 4 - 0 1 2 7 1 0 8 CASE #:BANSC-CV-2004-00245
................................................................................
SEL VD REPRESENTATION TYPE DATE
03 0 0 0 0 0 0 0 4 8 0 ATTORNEY:TANOUS, WAKINE
ADDR:29 M A I N ST PO BOX 2 4 6 EAST MILLINOCKET ME 0 4 4 3 0 - 0 2 4 6
F F0R:ANNE MARIE DODWELL PR EST OF EVERETT GAG PR RTND 12/38/2804
F F0R:JEANINE J FARRINGTON DE F RTND 12/38/2084
F F0R:RUTH A SHAW DE F RTND 01/05/2005
F F0R:DANIEL P GAGNON DE F RTND 12/38/2804

04 0 0 0 0 0 0 9 3 4 3 ATTORNEY:BENNETT, J U S T I N M
ADDR:PO BOX 7 2 9 ELLSWORTH ME 0 4 6 0 5
F F0R:PAUL GAGNON PL RTND 11/29/2004

SEL VD REPRESENTATION TYPE DA'T E
01 0 0 0 0 0 0 2 5 7 5 ATTORNEY:BERNIER, D A V I D
ADDR:44 ELM STREET PO BOX 708 WATERVILLE ME 0 4 9 0 1 - 0 7 0 8
F F0R:NANCY ANN REYNOLDS DEF RTND 01/14/2005

0 2 0 0 0 0 0 0 0 1 8 5 ATTORNEY:BOWIE, JAMES M
ADDR:THREE CANAL PLAZA PO BOX 4 6 3 0 PORTLAND ME 0 4 1 1 2 - 4 6 3 0
F F0R:WAKINE G TANOUS DE F RTND 12/02/2005

03 0 0 0 0 0 0 0 4 8 0 ATTORNEY:TANOUS, WAKINE
ADDR:29 M A I N ST PO BOX 2 4 6 EAST MILLINOCKET ME 0 4 4 3 0 - 0 2 4 6
F F0R:ANNE MARIE DODWELL DEF RTND 12/38/2084
02/02/2006 MAINE J U D I C I A L INFORMATION SYSTEM k s m it h
PENOBSCOT COUNTY SUPERIOR COURT mjxxi013
PAGE A - ATTORNEY BY CASE VIEW
JAMES N R I L E Y , D.O., P . A . VS. MICHAEL J GILMORE, D.O.
UTN:AOCSsr - 2 0 0 5 - 0 0 7 5 1 8 3 CASE #:BANSC-CV-2005-00180
................................................................................
SEL VD REPRESENTATION TYPE DATE
0 1 0 0 0 0 0 0 3 9 3 1 ATTORNEY:BUTTERFIELD, L O U I S
ADDR:100 MIDDLE ST PO BOX 9729 PORTLAND ME 0 4 1 0 4 - 5 0 2 9
F F0R:MICHAEL J GILMORE DO DE F RTND 01/03/2006

02 0 0 0 0 0 0 3 5 8 2 ATTORNEY:DEBEVOISE, KATE
ADDR:100 MIDDLE ST PO BOX 9729 PORTLAND ME 0 4 1 0 4 - 5 0 2 9
F F0R:MICHAEL J GILMORE DO DE F RTND 11/17/2005

0 3 0 0 0 0 0 0 2 2 4 7 ATTORNEY: MCGUIRE , FRANK T i b&,\& Leu
ADDR:84 HARLOW ST PO BOX 1401 BANGOR ME 04402-1401
F F0R:JAMES N R I L E Y DO PA PL RTND 07/29/2005

*More A t t o r n e y s *
E n t e r O p t i o n : A=Add, B + S e l = B r o w s e , M=More, R + S e l = R l t n E d i t : M

S e l e c t t h e E X I T KEY f o r p a g e s e l e c t i o n l i n e .
STATE OF MAINE SUPERIOR COURT
PENOBSCOT, SS. CIVIL ACTION
Docket No. CV-05-} 80
J LA~. - fE tJ -·-I~l/)J
f
h) ,)07
I
James N. Riley, D.O., P.A.,
Plaintiff JAN 2- 4: 200B

v. Decision and Judg ~en1= IL·E-6--&-E NTERE 0
SUPERIOR COURT
Michael 1. Gilmore, D.O., DEC 27 2007
Defendant
PENOBSCOT COUNTY
Hearing on the complaint and counterclaim was held on December 20, 21 and 22,
2006. On each hearing date, the parties were present with counsel.
In this action, plaintiff James N. Riley, D.O., P.A. ("Riley PA"), an osteopathic
medical practice located in Brewer, claims that defendant Michael 1. Gilmore, D.O. is
liable for breach of an employment contract between the parties. In his counterclaim,
Gilmore contends that Riley PA is liable to him for unpaid wages under both common
law and statutory principles. For the reasons set out below, the court enters judgment for
Riley PA on both sets of claims.
James N. Riley, D.O. ("Riley") founded Riley PA in 1992. The practice operates
under the trade name, East Bank Health Care. Prior to the time when Gilmore became an
employee of Riley PA in 2003, Riley was the only full-time physician at the office.
Gilmore had practiced osteopathic medicine in Michigan but has ties to the Bangor area.
Gilmore was considering relocating to Maine and, because the two share an alma mater,
contacted Riley in late 2002 about employment in the area. Riley informed Gilmore that
he (Riley) might be in the market to hire "a new associate." See plaintiff's exhibit 7.
Discussions between Riley and Gilmore progressed toward an employment relationship
between Riley PA and Gilmore.
These discussions encompassed a number of issues, including compensation
arrangements. Drawing on his experience as an employee at another medical practice,
Riley wanted a framework where Riley PA would pay him and Gilmore separate amounts

1
based on the income they generated, less a portion of shared expenses. The proportion of
those expenses charged to Riley and Gilmore respectively would be the difference
between 50% and the percentage of gross receipts. For example, if one physician's
billings created 60% of the total income received by the practice, then that physician's
compensation would be calculated by subtracting an amount equivalent to 55% (the mid­
point between 50% and 60%) of the shared expenses from the gross income attributable
to that physician. During the discussions between Riley and Gilmore, Riley' gave
Gilmore several spreadsheets that served as examples of how much money Gilmore
would be entitled to receive, based on hypothetical receipts and expenses. See plaintiff's
exhibits 9-12. Riley provided Gilmore with a written description of the compensation
formula. See plaintiff's exhibit 8. Riley also gave Gilmore financial records and
summaries, and offered Gilmore access to any other financial documents relating to Riley
PA for Gilmore's inspection.
Riley's proposed arrangement would mean, of course, that neither practitioner
would be guaranteed any amount of compensation during a pay period, because the
expenses charged to him might exceed the revenues that Riley PA received for his work.
This was a particular concern to Gilmore. Gilmore raised the issue of a guaranteed level
of compensation and in fact proposed $10,000 per month guaranteed, but Riley refused to
agree to such an arrangement, reasoning that the resources of the practice might not
support it, particularly in light of a history of collection difficulties.
Ultimately, the parties entered into a written agreement under which Gilmore
became an employee of Riley PA for four years. See plaintiff's exhibit 1. Riley was the
principal drafter of the document, although it reflected the terms to which Gilmore agreed
during the parties' negotiations, which were carried out through conversations, emails
and exchanges of written drafts. Gilmore also retained independent counsel to review the
proposed contract.
The instrument included a description of the formula used to determine the
amount of compensation that both Riley and Gilmore would receive from Riley PA. This
compensation was described in the agreement as the "Individual Benefit," which would
be paid to the respective provider on a monthly basis. The contract further provided:

2
The monthly draw to the Doctor [Gilmore] will be not less than $10,000, even
though during an initial period, this will exceed the Individual Benefit according
to the Formula; thus, the excess will constitute a draw against future anticipated
Individual Benefit amounts, and thus will be treated as an advance from the
Corporation [Riley PAl to the Doctor [Gilmore].

Id. l At trial, Gilmore testified that under this contract, he was entitled to guaranteed
monthly compensation payments of $10,000 and, under the contract, would not be liable
for the difference between the amount he would be due under the formula and the
$10,000 monthly payments. This latter aspect of Gilmore's testimony is undermined by
the terms of the written agreement. Although Gilmore correctly stated that Riley PA was
obligated to make $10,000 monthly payments to him, Gilmore's agreement with Riley
PA obligated him to reimburse Riley PA for any amounts it advanced to him that were in
excess of the amount as determined by the compensation formula established in the
agreement.
The parties' written agreement encompassed other employment-related issues. It
included a non-competition agreement prohibiting Gilmore from practicing medicine
within one-half mile of Riley PA's place of business (except as a Riley PA employee),
but allowing Gilmore to engage in non-competitive work outside of that radius. If
Gilmore received income from the latter-described professional work, that income would
be treated as the property of Riley PA.
The remaining term of central relevance to this action recites that Riley PA would
obtain a loan to pay for Gilmore's moving expenses and to cover the additional costs
created by Gilmore's new employment (including the initial draws that Riley PA would
pay to him), because the parties anticipated that Gilmore had only a limited ability to
generate revenue at the outset of his employment with Riley PA. Riley PA would obtain
the funds through a four-year note. Under the agreement, if Gilmore were to leave the
practice during that four-year period, he would be liable to Riley PA for half of the
remaining balance due.

1 While Gilmore's contact with Riley PA gave him the right to receive $10,000 monthly,
Riley himself took a lesser monthly amount of $8,250 and later $9,000, see plaintiff's
exhibit 54, even though he had been practicing longer than Gilmore and even though he
founded the practice.

3
Gilmore began working for Riley PA in mid-August 2003, shortly before parties
formally executed the contract. Riley PA paid him $5,000 for August (which appears to
be a prorated payment for August) and then $10,000 monthly through October 2004. See
plaintiff's exhibit 54. During that period of time, Gilmore's arrearages to Riley PA
steadily increased. As of the end of October 2004, Gilmore had come to owe Riley PA
nearly $107,000. [d. Riley himself had accumulated a debt to Riley PA of nearly
$23,000. [d. In significant part, this financial circumstance was due to ongoing problems
with the practice's ability to collect accounts receivable. Its collection rate hovered
around 50%. This was true prior to the time Gilmore began to practice with Riley PA,
and it continued during the time he was affiliated with the business. Riley PA went
through several administrative employees who were responsible for billing and collection
matters. The firm also received consultations from John Hicks, a CPA who provides
accounting services to a number of medical practices, including Riley PA. Although to a
lesser degree than Riley, Gilmore was involved in Riley PA's efforts to improve
collections and to address the administrative issues accompanying the problem.
Because Gilmore's arrearages had become substantial, Riley approached him
about the issue in late 2004 and, as Riley himself put it, tried to "pressure" Gilmore to
take steps in response to it. The court finds that either directly or indirectly, Gilmore
applied sufficient "pressure" to induce Gilmore to forego the $10,000 payment due in
November. The same occurred in December. Although there are differences in the
testimonial accounts of this situation as offered by Riley and Gilmore, the court finds that
Gilmore did not freely surrender his right to the November and December payments,
because the effects of that loss of income were considerable. Gilmore took steps to sell
several parcels of property he owned; he curtailed his children's involvement in local
recreational programs; and he even was forced to accept financial support from his
mother, who held a low-paying job in the area. Gilmore would not have suffered these
circumstances voluntarily. The monthly payments to Gilmore resumed in January.
Gilmore has never been paid the amounts that were due to him during the last two months
of 2004.
As of March 2005, Riley was continuing to address problems with unpaid
accounts receivable. As was true earlier in time, Gilmore was also involved in the issue.

4
That month, Riley had contact with an outside consultant and, beginning in April 2005,
responsibility for collections was assigned to an outside agency, Laboratory Billing
Service, Inc. See plaintiff's exhibit 33. Since the time that Laboratory Billing Services
has managed Riley PA's accounts receivables, the collection rate has increased modestly,
from approximately 50% when Riley PA tried to collect its own amounts due, to 57%
under Laboratory Billing Services. See defendant's exhibit 26A. Although Gilmore
presented expert testimony that higher collection rates should be expected, the fact that
the performance of an outside agency such as Laboratory Billing Services was not
substantially better than Riley PA's own collection rate indicates that the problems
affecting Riley PA's internal collection processes did not have as substantial of an effect
on the end result as Gilmore argues. Further, the testimony of Gilmore's expert that one
should expect a collection rate as high as 70% is also weakened by her acknowledgement
that even a 50% rate, such as that of Riley PA prior to its decision to assign its collection
work to an outside agency, is not unreasonable, although still on the low side.
Even prior to the time Riley PA began to outsource its collection work, Gilmore
began to look for work elsewhere. In February 2005, he initiated contact with MedNow,
a medical clinic in Orono, instructing its representative not to contact him (Gilmore) at
his office at Riley PA and not to contact Riley himself about his interest in MedNow. See
plaintiff's exhibit 25. By early April, Gilmore had visited MedNow's offices and agreed
to work there several days that month. See plaintiff's exhibit 27. Again, Gilmore
instructed MedNow's representative not to identify himself if he had to call Gilmore at
this office. He continued to cover shifts there through the end of June, earning $6,120.
In the meantime, Riley PA did not pay Gilmore in May, and Gilmore scheduled a
vacation beginning in late May 2005. In fact, he saw patients at Riley PA for the last
time on May 24. Gilmore sent a memorandum to Riley, advising that he would not work
during June and July and would correspondingly forego pay that would be due to him for
June and July. See plaintiff's exhibit 39. In the middle of June, Gilmore's attorney
notified Riley's attorney that Gilmore was terminating his employment with Riley PA,
and Gilmore's attorney then send Riley PA a written demand for compensation payments
the firm failed to make to Gilmore in November and December 2004 and May 2005. See

5
plaintiff's exhibit 46. Riley PA accepted Gilmore's resignation effective June 30, 2005.
See plaintiff's exhibit 47.
In this action, Riley PA seeks to recover three elements of damages from Gilmore
for breach of contract. First, it claims the amount by which shared expenses charged to
him exceeded the amount of actual revenue that he generated. Riley PA argues that this
sum is $153,088. See plaintiff's exhibit 54. Second, it seeks recovery of the income that
Gilmore received from MedNow, $6,120. Finally, Riley PA seeks recovery of half of the
amount that it owed to the lender-bank on the note it executed to obtain operating money
when Gilmore began to work with the practice; this amount claimed is approximately
$7,450. See plaintiff's exhi bit 41A.
In defense of these claims for relief, Gilmore first argues that the written
employment agreement assures him of a monthly salary of $10,000 and that none of this
money is subject to recoupment, even if the receipts he generated were exceeded by his
share of common expenses as defined in the compensation formula. For the reasons
noted above, however, the history of the parties' negotiations and the written provisions
of the contract undermine this argument. Riley PA agreed to pay Gilmore $10,000 per
month. However, to the extent that Gilmore's share of expenses were not covered by
amounts paid for his work, then Gilmore would be liable for that difference. And in the
circumstance where Gilmore's liability to the firm exceeded $10,000, the"monthly
payment would be deemed an advance rather than as a salary. Gilmore's arguments to
the contrary are not persuasi ve.
Gilmore next contends that he is excused from any liability to Riley PA because
Riley PA engaged in a material breach of the employment contract when it failed to pay
him in November and December 2004 and again in May 2005.
When one party breaches a contract, the nonbreaching party may, depending on
the circumstances, either treat the breach as partial or total. A total breach of
contract is a non-performance of duty that is so material and important as to
justify the injured party in regarding the whole transaction as at an end ... If [the]
breach is not sufficiently material and important for this, the breach is called a
partial breach. If a party elects to treat the breach as partial, however, it must still
perform its obligations in order for it to avoid also breaching the contract.

Down East Energy Corp. v. RMR, Inc., 1997 ME 148,' 10,697 A.2d 417, 421.

6
For purposes of this analysis, the court assumes -- without deciding -- that under
the factual circumstances of this case, Riley PA's failure to make the November and
December 2004 payments to Gilmore as the employment contract required could have
been treated as a material breach. Proceeding from this predicate, Gilmore would have
been warranted in declining to perform his obligations under that contract. However, he
continued to provide professional services to Riley PA, and in January 2005 Riley PA
resumed its monthly payments to him. This means that Gilmore elected to treat Riley
PA's non-performance in November and December as a partial breach, because
Gilmore's own ongoing performance under the contract demonstrated that he did not
view the contractual employment relationship "as at an end." Down East Energy, 1997
ME 148, , 10,697 A.2d at 421. Consequently, he himself was required to continue to
perform under the contract, just as he did.
When Riley PA failed to pay Gilmore again, this time in May 2005, Gilmore's
response was different. In its essence, he declined to continue working full-time, or
perhaps at all, for Riley PA. 2 The court views this as an election by Gilmore to treat
Riley PA's failure to pay him then as a total material breach. Gilmore was justified in his
response. The employment contract obligated Riley PA to pay Gilmore $10,000 per
month as actual compensation, or as an advance against future compensation, or as a
combination of the two. The contract did not create any deadline that would terminate
Riley PA' s obligation to pay the advance component of any such monthly payment.
Thus, as of May 2005, Gilmore was still contractually entitled to receive his monthly
payment of $10,000. When Riley PA declined to tender that payment to him, Gilmore
was justified in concluding - particularly when that non-payment was seen against the
backdrop of prior failures to pay money Gilmore had the right to receive - that the
employment relationship was at an end. Thus, as of the date when Riley PA failed to
perform, Gilmore himself was excused from performing his reciprocal obligations under
the contract. Thus, Gilmore's liability must be fixed as of the date Riley PA failed to
perform. Although the record does not appear to reveal when, during a pay period,

2 There is conflicting evidence about whether or not he made a sincere offer to work for
Riley PA on a limited schedule or whether, in reality, he completely separated himself
from the practice. Either way, his decision was one to not perform his obligations under
the employment agreement.

7
Gilmore accrued the right to receive that month's payment, the evidence establishes that
Gilmore chose to work for Riley PA through May 24, 2005. Because this date is
therefore when Gilmore justifiably treated the employment relationship to have ended,
his liability to Riley PA shall be fixed as of that date.
As is noted above, Riley PA contends that Gilmore is liable for the amount by
which his share of the practice's expenses exceeded income received by the practice on
account of his work; for amounts he earned from MedNow; and for half of the unpaid
balance the practice owed on the start-up loan.
Riley PA first argues that Gilmore is liable for $153,088, representing the excess
of shared expenses charged to Gilmore above receipts he generated for the practice. See
plaintiff's exhibit 54. In fact, that debt as of April and May was greater. Id. Because
Riley PA does not contend that these higher amounts of debt should be the basis for
liability, the court uses the lower figure noted above. Gilmore contests this calculation
primarily on the basis of evidence that Riley PA's collection process was deficient and
that, if the practice had better success in its collection efforts, Gilmore would be credited
with greater income and the resulting deficiency would be reduced or eliminated.
The record establishes without dispute that the practice's collection system was
flawed. Riley himself engaged in ongoing efforts to improve the process by changing
personnel who were responsible for collecting accounts receivable, by consulting with the
practice's accountant, by retaining another outside consultant, and finally by delegating
the collection work to an outside firm. Gilmore was also either a participant in these
efforts or had the opportunity to be involved. The question presented here, however, is
whether and to what extent improvements in collection efforts would have realized an
increase in receipts for Gilmore's billings. The court addresses this issue on the
assumption that Gilmore has preserved this issue in his pleadings, notwithstanding Riley
PA's argument that he has not done so.
For the reasons noted above, the court concludes that the evidence does not
support the opinion testimony of Gilmore's expert on the issue, who said that the practice
should be able to achieve a collection rate of 65%-70%. The better evidence is that the
firm's own collection rate of roughly 50% is within an expected and reasonable

8
standard. 3 Even when Riley PA retained a collection agency, which presumably could
invoke expertise and efficiency to the process, the collection rate increased only
marginally, to 57% -- still far short of the goal advanced by Gilmore's expert. More
significantly, the employment contract that articulated Gilmore's compensation formula
did not establish any quantitative standard that Riley PA was required to meet in its
collection efforts. Rather, the contract obligates the practice to bill patients and payors.
Riley's compensation was the product of the same type of formula used to determine
Gilmore's, and so he had the same interest of maximizing collections.
Here, in the end, the evidence demonstrates that there were aspects of the
practice's collection system that were flawed. There were instances, for example, when
claims were not submitted in a timely way, and some members of the practice's staff who
were assigned to collections were not fully trained. However, even as Gilmore's expert
describes the process, a substantial amount of accounts receivable are not collected in the
end. Even under her analysis, at least one-third of billings are never paid or are written
off. And the dedicated collections agency that Riley PA retained in 2005 secured
payments on little more than half of the practice's billing. Because the amount that Riley
PA actually received from its accounts receivable was not outside of the parameters of a
reasonable rate, and because much of a practice's billing is uncollectible, the court cannot
conclude on this record that even if Riley PA had an obligation to improve its collections
practices, and even if it did so, it would have realized a material increase in receipts of
billings attributable to Gilmore's work. In this analysis, the court also bears in mind the
evidentiary principal that an aggrieved party is not required to prove damages to a
mathematical certainty. Rather, a "probable estimate" and "judgmental approximation"
are a sufficient basis for the computation of damages, so long as the amount of such

3 As of the time when Riley PA assigned its accounts receivable for collection by
Laboratory Billing Services, the total amount due to the practice was nearly $245,000.
Gilmore's expert testified that within several months after the collection agency became
involved, the practice's accounts receivable had doubled. She acknowledged that this
was a "guesstimate," and it is not a figure supported by the evidence. She used the larger
figure, however, in support of an opinion that Gilmore should be given credit of roughly
$250,000 of additional receipts. The foundation for this analysis has not been proven,
and the court does not accept the conclusion.

9
damages are established to a probability. Merrill Trust Co. v. State, 417 A.2d 435, 440­
41 (Me. 1980), quoted in Down East Energy Corp., 1997 ME 148, ~ 7,697 A.2d at 420.
Gilmore may also be seen to argue that Riley PA's bookkeeping practices were
not reliable, and that as a result, the amount of income attributable to him was
understated and the amount of shared expenses charged to him under the formula is not
supported by the evidence. Riley PA's accountant testified that he developed an in-house
set of computer queries based on a standard and commonly used bookkeeping software.
From his observations, the practice's staff used the program correctly. In other external
contexts, the system was problematic. For example, some of Gilmore's biJJings were
submitted to third-party payors under Riley's name because Gilmore was not credentialed
with some of them. However, particularly in the absence of any specific persuasive
challenges to the income and expense figures, the court credits evidence that by use of
patient schedules and other data, receipts were properly allocated between the two
doctors and that any misallocation of those receipts was not material.
Based on this evidence, the court concludes that Gilmore is liable to Riley PA in
the amount of $153,088.
Next, Riley PA seeks recovery of the amount of income that Gilmore received
from MedNow. As is noted above, Gilmore treated Riley PA's failure to pay him in May
2005 as a total material breach when he last saw patients there, on May 24, 2005. As of
that date, he had earned $2,100 from MedNow. See plaintiff's exhibit 38. This income is
treated as the property of Riley PA. Income that Gilmore received from MedNow after
that date is not subject to recovery by Riley PA.
Finally, Riley PA seeks recovery for half of the balance on the loan associated
with Gilmore's new employment at the practice in August 2003. The parties have
presented evidence of the loan balance as of the end of May 2005 and as of the end of
June 2005. See plaintiff's exhibit 41A. The former date is closest to the time when
Gilmore is deemed to have terminated the employment relationship. The balance at that
time was $15,400. Half of this amount is $7,700, and Gilmore is contractually liable to
Riley PA for this sum.

10
In his counterclaim, Gilmore alleges that Riley PA breached the employment
contract by failing to pay him in the three months discussed above and that it is liable to
him pursuant to 26 M.R.S. § 626. He has not proven either of these claims.
First, as is discussed above, Riley PA did breach the employment agreement
because it did not pay him $10,000 in November 2004, December 2004 and May 2005.
However, Gilmore has not suffered any damages as a result of those breaches. As of the
dates when each of those payments was due from Riley PA, Gilmore was in considerable
debt to the practice, because the expenses chargeable to him substantially exceeded the
revenue he had brought into the office. Therefore, the payments of $10,000 that Riley
PA should have paid Gilmore were merely advances against Gilmore's future net
revenue. In fact, if Riley PA had made those payments to Gilmore, Gilmore's debt to the
practice would only have increased further. "As a general rule, the purpose of an award
of compensatory damages for a breach of contract is to place the plaintiff in the same
position that he or she would have enjoyed had there been no breach." Lee v. Scotia
Prince Cruises Ltd., 2003 ME 78, ~ 22, 828 A.2d 210,216. Because the money that was
due from Riley PA during the three months at issue was not Gilmore's to keep but rather
was an advance, Gilmore has not demonstrated that he was harmed when Riley PA did
not pay him those sums.
Gilmore's claim pursuant to section 626 also fails. When Gilmore terminated his
employment with Riley PA, Riley PA did not owe Gilmore any wages. Rather, Gilmore
owed the firm for the negative difference between expenses charged to Gilmore and
receipts he generated. His written demand for payment of allegedly outstanding wages
was premised on his contention that he was entitled to a guaranteed salary of $10,000 per
month, and his demand frames the unpaid wages based on this calculation. Because,
however, the contractual payments did not constitute a salary, his characterization of the
unpaid amount as wages was incorrect.

The entry shall be:
For the foregoing reasons, judgment on the second amended complaint is entered
for the plaintiff. On count l,judgment is entered in the amount of $153,088. On count 2,
judgment is entered in the amount of $2,100. On count 3, judgment is entered in the
amount of $7,700. Count 4 is dismissed as moot. On each count, the plaintiff is awarded

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pre-judgment interest at the annual rate of 5.77% and post-judgment interest at the annual
rate of 10.99%. The plaintiff is awarded its costs of court.

On the counterclaim, judgment is entered for the counterclaim defendant (the
plaintiff).

Dated: December 27,2007
Justice,

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10808721. Public record. Not legal advice.