Baptist Memorial Hospital-Mississippi County, Inc. v. Kalyan

2014 Ark. App. 699, 450 S.W.3d 681, 2014 Ark. App. LEXIS 1028
CourtCourt of Appeals of Arkansas
DecidedDecember 10, 2014
DocketCV-14-450
StatusPublished

This text of 2014 Ark. App. 699 (Baptist Memorial Hospital-Mississippi County, Inc. v. Kalyan) is published on Counsel Stack Legal Research, covering Court of Appeals of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Baptist Memorial Hospital-Mississippi County, Inc. v. Kalyan, 2014 Ark. App. 699, 450 S.W.3d 681, 2014 Ark. App. LEXIS 1028 (Ark. Ct. App. 2014).

Opinion

RITA W. GRUBER, Judge.

|! This is a breach-of-contract case. The sole issue on appeal is whether substantial evidence supports the jury’s award of damages. We hold that substantial evidence does not support the jury’s award, and, accordingly, we reverse the trial court’s denial of appellant’s motion for judgment notwithstanding the verdict (JNOV) and remand with instructions to the trial court to enter judgment consistent with this opinion.

Appellant, Baptist Memorial Hospital-Mississippi County, Inc., d/b/a Baptist Memorial Hospital-Blytheville, and d/b/a Baptist Memorial Hospital-Oseeola (BMH), recruited Dr. Madhu Kalyan, M.D., appellee, in the spring of 2002 to come to Mississippi County, Arkansas, to practice medicine. In connection with this, the parties entered into several agreements in May 2002, including a Physician Agreement, Promissory Note and Security Agreement, Lease Agreement for Medical Office Building, and Lease Agreement 12for Use of Shared Physician Office Space. Pursuant to these agreements, BMH guaranteed Dr. Kalyan monthly draws for income assistance and practice expenses in exchange for Dr. Kalyan’s agreement to practice medicine full-time in Mississippi County. The draws were guaranteed for two years, at which point Dr. Kalyan would be obligated to repay the total amount advanced to him. If Dr. Kalyan continued practicing medicine in Mississippi County longer than two years, the debt would be forgiven at a rate of twenty-five percent per year. In July 2002, Dr. Ka-lyan moved with his family from the Chicago area to Mississippi County and began practicing medicine.

On May 16, 2003, Dr. Kalyan’s attorney wrote a letter to BMH terminating the Physician Agreement. Thereafter, Dr. Kalyan left Mississippi County and began practicing in Fayetteville, Arkansas. BMH filed a complaint against Dr. Kalyan, alleging breach of contract and seeking damages. Dr. Kalyan filed an amended answer and counterclaim. He admitted in his answer that he had agreed in the Physician Agreement to repay the amount of all advances, loans, and draws but denied that he was obligated to repay the amounts to BMH, pleading set-off as an affirmative defense. His amended answer included the additional affirmative defense of estoppel, pursuant to which he contended that he relied to his detriment on BMH’s representations that there was a need for his services as a pulmonologist when BMH knew or should have known that there was not adequate demand for his specialty. He alleged two counts in his counterclaim: (1) BMH negligently recruited him, and (2) BMH misrepresented material facts while recruiting him.

The case was tried before a jury on October 24-26, 2011. The parties agreed to a 1 sstipulation of facts, which the judge read to the jury before trial began, stating that the jury should consider these facts to be admitted. Included in the stipulation was Dr. Kalyan’s acknowledgment that he had received the sum of $228,350.74 from BMH under the Physician Agreement and Promissory Note and that he had not repaid any of this amount. The parties also stipulated to certain exhibits, including all four agreements between the parties and a statement reflecting all amounts advanced by BMH to Dr. Kalyan, the amounts repaid by Dr. Kalyan, and the monthly rent due, which totaled $228,350.74.

BMH presented the testimony of four witnesses, three of whom were involved in recruiting Dr. Kalyan, who testified that, while Dr. Kalyan was recruited to practice as a pulmonologist, they all knew that there was not sufficient need at the time for a full-time pulmonologist in Mississippi County and, thus, they all told Dr. Kalyan that he would need to supplement his practice with general internal medicine. The fourth witness, Debbie Lassiter, worked for BMH as manager of planning and research. She testified that she prepared the community-needs assessment for the area for pulmonology. The results of her analysis indicated the need at .86 (1.0 means the need is for one full-time doctor). She testified that the need for internal medicine in the area at the time of the assessment was 3.68.

Dr. Kalyan presented the testimony of Dr. Joe Jones, who had lived and practiced internal medicine in Mississippi County since his graduation from medical school in 1979. He testified that he gave his opinion to BMH that specialists needed to be affiliated with a group and begin in the area by working part-time, such as a day a week, and build up a practice slowly. He testified that there was not enough business in the area for a pulmonary ^specialist to make a living without spending years developing a practice. He said that he got the impression from talking with Dr. Ka-lyan that Dr. Kalyan thought that he needed to practice internal medicine in addition to pulmonology to stay busy. Dr. Jones said that he told Dr. Kalyan this could be a mistake because few internal-medicine physicians would refer to him for pulmonary issues if they were concerned he might keep their patient referrals for their internal-medicine needs, too.

Phillip Koonce, a Blytheville accountant, testified that he had been Dr. Kalyan’s accountant while he lived in Mississippi County. The essence of his testimony was that, in his opinion, Dr. Kalyan was having financial problems.

Finally, Dr. Kalyan testified that he was board certified in internal medicine, pulmonary medicine, critical-care medicine, and sleep medicine. He said that BMH recruited him for a full-time pulmonary position. He testified that he was never told that he would be required to practice internal medicine. He said that the demand was not sufficient in his area of expertise and that he began having financial difficulties because of the insufficient number of patients. He testified that he had other opportunities when he accepted the BMH position that would not have required him to incur debt. He testified that he had not paid back any of the money advanced under the Physician Agreement. He admitted that his wife, also a doctor, wanted to move to a place where she could practice and that he began looking elsewhere because he was not seeing the volume of patients that he needed to be successful. Both Dr. Kalyan and his wife found jobs in Fayetteville. He signed a contract with his new Fayetteville employer on March 26, 2003. He testified that he understood the forgiveness ^provisions of the Physician Agreement but did not think that he had to repay the money BMH had advanced to him through draws because “there was not enough pulmonary medicine for me to practice even if I stayed for six years.”

The case was submitted to the jury with the following three interrogatories (followed by the jury’s responses): 1) Do you find from a preponderance of the evidence that Dr. Kalyan breached the contract with Baptist Memorial Hospital? Yes; 2) Do you find from a preponderance of the evidence that Baptist Memorial Hospital should be estopped from enforcing the contract against Dr. Kalyan? No; and 3) How much are the damages Baptist Memorial Hospital is entitled to recover from Dr. Kalyan? $46,478.38. The trial court’s instructions to the jury included the following statement with regard to damages:

If any interrogatory requires you to assess the damages of [BMH] you must then fix the amount of money that [BMH] proved will reasonably and fairly compensate it for the element of damage resulting from the breach of contract. The element of damage that [BMH] claims is the amount of money that [BMH] loaned to Dr. Madhu Kalyan.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Willis v. Elledge
413 S.W.2d 636 (Supreme Court of Arkansas, 1967)
Stewart Title Guaranty Co. v. American Abstract & Title Co.
215 S.W.3d 596 (Supreme Court of Arkansas, 2005)
Continental Carbonic Products, Inc. v. Cohen
241 S.W.3d 296 (Court of Appeals of Arkansas, 2006)
Coleman v. Utley
240 S.W. 10 (Supreme Court of Arkansas, 1922)

Cite This Page — Counsel Stack

Bluebook (online)
2014 Ark. App. 699, 450 S.W.3d 681, 2014 Ark. App. LEXIS 1028, Counsel Stack Legal Research, https://law.counselstack.com/opinion/baptist-memorial-hospital-mississippi-county-inc-v-kalyan-arkctapp-2014.