Jackson HMA, LLC v. Morales (Summary)

BREACH OF CONTRACT

Jackson HMA, LLC v. Morales, No. 2011-CA-01785-SCT (Miss. Nov. 21, 2013)

The Supreme Court of Mississippi affirmed a judgment entered in favor of an ophthalmologist in his breach of contract suit brought against a hospital that was attempting to recruit him, but reversed on the issue of damages and remanded to the trial court for a new trial solely on damages.

During attempts to recruit the ophthalmologist, the hospital provided him with a letter of intent outlining the hospital’s proposed offer.  This proposed offer had to be pre-approved by the hospital’s corporate parent.  The corporate parent did not approve the terms, but revised them.  These revised terms were sent to the ophthalmologist in a second letter.  This second letter did not use the phrase “letter of intent,” nor did it reference a requirement for corporate approval of the terms.  Moreover, the hospital informed the ophthalmologist, through an e-mail exchange with the recruiter, that the hospital received pre-approval from the corporate parent.  Subsequently and following an organizational restructuring, the corporate parent indicated that recruitment of an ophthalmologist was not a good return on investment and did not go through with the agreement.  The ophthalmologist sued, claiming that the hospital breached its contract with him.  After a trial, the jury returned a verdict in favor of the ophthalmologist and awarded damages of over $2,000,000.  The hospital appealed the denial of its post-trial motions.  The appellate court concluded that there was sufficient evidence for the jury to find that the second letter formed a contract.  However, the court reversed and remanded on the issue of damages because the award of lost income was based on a calculation of gross revenue as opposed to net income.