Lawnwood Med. Ctr. v. Sadow (Summary)

EXCLUSIVE CONTRACT

Lawnwood Med. Ctr. v. Sadow, No. 4D08-1968 (Fla. Dist. Ct. App. Mar. 24, 2010)

The Florida District Court of Appeal affirmed a trial court’s decision that a physician’s breach of contract claims were not barred by the state statutory immunity provisions and that the jury-awarded punitive damages of $5 million were not excessive.

A cardiovascular surgeon brought a breach of contract claim against a hospital because its Board of Trustees (Board) repeatedly rejected his application for cardiovascular surgery (CVS) privileges after having received a favorable recommendation from the Credentials Committee and the Medical Executive Committee (MEC). The Board also adopted a resolution, decidedly against the surgeon, which barred further applications from current staff members. Subsequently, the then CEO attended an MEC meeting to persuade the committee to reject the surgeon’s application in accordance with the Board’s resolution.

The hospital asserted a claim of immunity pursuant to § 395.0191, which lays down the general rules for hospitals in setting up procedures and standards for staff membership and clinical privileges. The court affirmed the trial judge’s ruling that the surgeon’s contract claim was not barred by the statutory immunity provision on the basis that "the physician did not rely on a violation of the statute, but instead alleged and proved that, contrary to its own Medical Staff Bylaws, the hospital invalidly granted an outside surgeon exclusive cardiovascular surgical privileges, and used it to stop him from performing cardiovascular surgery." Specifically, the surgeon proved that "the Medical Staff Bylaws, which had been approved by the Board, did not authorize exclusivity in CVS." The surgeon also proved that the hospital’s refusal to accept the MEC’s recommendation was not supported by "a valid reason under the circumstances" and that this ultimately culminated in a breach of contract.

In conjunction with the breach of contract claim, the surgeon also successfully brought a slander per se claim in which a jury awarded him $5 million in punitive damages. The court ruled that "the amount of punitive damages assessed conformed to applicable law and were neither excessive nor arbitrary, and thus did not exceed federal Constitutional norms."