In Re Raintree Healthcare Corp., Debtor. Suncrest Healthcare Center LLC v. Omega Healthcare Investors, Inc.

Omega Healthcare Investors appeals the district court’s judgment in favor of Sun-crest Healthcare Center. The district court reversed the bankruptcy court’s entry of summary judgment in an adversary proceeding brought by Omega to recover Medicare overpayments for cost reimbursements. The district court erred as a matter of law in its interpretation of a written agreement between the principals, and we reverse.

I.

Before February 29, 2000, RainTree Healthcare Corporation leased and operated a nursing home in Phoenix. On February 28, RainTree entered into a Transfer Agreement with Suncrest to transfer operation of the facility and Suncrest began leasing the premises that same day. RainTree filed for bankruptcy on February 29. Eight months later, Omega became the owner of the property in Rain-Tree’s bankruptcy estate pursuant to a settlement approved by the bankruptcy court. Thus, while Omega is now the real party-in-interest seeking to recover the funds, RainTree is the debtor whose rights and liabilities are at issue.

A nursing home facility must enter into a provider agreement and obtain a Medicare provider number in order to be reimbursed for care given to Medicare patients.…