Lindblad v. Parkridge Health Sys., Inc.

EXCLUSIVE CONTRACT – TERMINATION OF PRIVILEGES

Lindblad v. Parkridge Health
Sys., Inc.,
No. E2003-00221-COA-R3-CV (Tenn. Ct.
App. December 22, 2003)

A physician who had an exclusive agreement with a hospital
to provide emergency medical services secretly ordered a quantity of narcotic
drugs, which were discovered
by hospital personnel. When questioned about the drugs, the physician stated
that they were obtained for friends, family, and neighbors. The physician
then voluntarily terminated the agreement with the hospital, which the hospital
accepted,
and it sent him a letter advising him that his medical staff privileges had
also been terminated. The physician brought an action against the hospital,
arguing
that, under the bylaws, his privileges could not be terminated without notice
and a hearing, while the hospital argued that, under the terms of the agreement,
privileges are terminated at the time the agreement is terminated. The lower
court agreed with the hospital, holding that the parties intended to be bound
by the terms of the agreement, which were not superseded by the bylaws. The
physician appealed, and the appellate court agreed with the lower court.