Hospital Corp. of Lake Worth v. Romaguera

511 So. 2d 559, 11 Fla. L. Weekly 1998, 1987 Fla. App. LEXIS 10733
CourtDistrict Court of Appeal of Florida
DecidedSeptember 9, 1987
Docket85-611
StatusPublished
Cited by17 cases

This text of 511 So. 2d 559 (Hospital Corp. of Lake Worth v. Romaguera) is published on Counsel Stack Legal Research, covering District Court of Appeal of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hospital Corp. of Lake Worth v. Romaguera, 511 So. 2d 559, 11 Fla. L. Weekly 1998, 1987 Fla. App. LEXIS 10733 (Fla. Ct. App. 1987).

Opinion

511 So.2d 559 (1986)

HOSPITAL CORPORATION OF LAKE WORTH and Hospital Corporation of America, Appellants,
v.
Raul ROMAGUERA, M.D., Appellee.

No. 85-611.

District Court of Appeal of Florida, Fourth District.

September 17, 1986.
On Rehearing September 9, 1987.

Larry Klein of Klein & Beranek, P.A., West Palm Beach, and Conrad, Scherer & James, Fort Lauderdale, for appellants.

Charles C. Powers of Charles C. Powers, P.A., West Palm Beach, for appellee.

William A. Bell of The Florida Hosp. Ass'n, Tallahassee, and Leonard H. Gilbert, Sylvia H. Walbolt, Barbara R. Pankau, and R. Andrew Rock of Carlton, Fields, Ward, Emmanuel, Smith & Cutler, P.A., Tampa, for amicus curiae, Florida Hosp. Ass'n.

LETTS, Judge.

A hospital here appeals a final judgment predicated on a jury verdict in favor of a pathologist whose exclusive contract with the hospital, and thereafter his staff privileges, were both terminated. We reverse in part.

It is standard practice nowadays to award exclusive franchises to medical doctor groups to perform all of the hospital's work, on a contract basis, in such areas as pathology, radiology and anesthesiology. Dos Santos v. Columbus-Cuneo-Cabrini Medical Center, 684 F.2d 1346, 1351 (7th Cir.1982). The pathologist in this case had such a contract from which, in 1981 for example, his P.A. grossed over $717,000 *560 out of which he only paid two associates $110,000.

By its terms, the contract was terminable without cause upon 120 days' notice by either party. It further provided that upon termination, all medical staff privileges would also be withdrawn. The language was unequivocally lucid and this lawsuit undoubtedly never would have arisen, were it not for a subsequent amendment, not to the contract itself, but to the hospital by-laws. This change in the by-laws provided that physicians:

in a medico/administrative position i.e. physicians who interpret EKGs, EEGs etc. may be terminated according to their contract with the hospital. However this does not affect their staff privileges in attending patients in any way.

Allegedly, this amendment modified the contract between the hospital and any medico/administrative physician so that the latter, even if his or her contract were terminated, could continue on the staff. After the adoption of this by-law amendment, the hospital did terminate the pathologist's exclusive contract, awarded it to a competing medical group and took the position that the amendment to the by-laws did not apply to the pathologist/plaintiff and that he, according to the specific language of his individual terminated contract, was not entitled to retain his staff privileges at the hospital.

BY-LAW AMENDMENT

Addressing first the threshold issue of the by-laws amendment, we note that the trial judge held as a matter of law that it modified the exclusive contract and also applied to the plaintiff. We find nothing reversible in the trial court's ruling on this issue.

The hospital argues that the exclusive contract in question specifically provides that it cannot be modified, changed or amended except in writing. The hospital admits that bilateral contracts are capable of modification, but only if there is mutual assent and consideration, see Murphy v. Royal American Industries, Inc., 188 So.2d 884 (Fla. 4th DCA 1966). The hospital insists there was neither assent nor consideration for the amendment. Not so.

First of all, this hospital-for-profit did not execute the by-laws amendment out of gratuitous compassion for its contract physicians. On the contrary, the highly self-serving purpose, and therefore consideration, was to facilitate retention of the benefits bestowed upon it by the Joint Commission on Accreditation of Hospitals. Obviously, that consideration accrued to the benefit of any doctor eligible as a "medico/administrative" physician. As to assent, the record reflects that the pathologist/plaintiff participated in hospital board meetings, at which the by-laws amendment was discussed and approved. It goes without saying that the hospital would be held to have assented to its own adopted by-laws. The requirement that any modification be in writing was satisfied by the written amendment itself.

Furthermore, while we agree that a hospital cannot constrict any physician's individual rights under a contract, we see no reason why those rights cannot be expanded by way of a by-laws amendment applied hospital-wide. See Palm Beach-Martin County Medical Center, Inc. v. Panaro, 431 So.2d 1023 (Fla. 4th DCA 1983). The hospital's argument that the amendment was a unilateral act which had no bearing on individual contracts with physicians is rejected. Were we to adopt such an argument, it would apply equally to any contract physician in a "medico/administrative position," thus rendering the language, and the very existence, of the amendment illusory. Obviously, the amendment was not adopted as a total non sequitur. We are not unaware of the case of American Medical International, Inc. v. Scheller, 462 So.2d 1 (Fla. 4th DCA 1984), pet. for rev. denied, 471 So.2d 44 (Fla. 1985), which might be construed to stand for the proposition that general by-laws cannot modify an individual contract because of an "appalling lack of mutuality." However, Scheller was concerned with the incorporation into the exclusive contract of 75 pages of by-law provisions "contain[ing] everything but the `kitchen *561 sink'." In the cause at hand, we are interpreting one short by-law provision which specifically alludes to the consequence of termination of contracts such as the very one now before us. That amendment particularly provides that termination of any such contract (which is what transpired) will not carry with it a concomitant loss of staff privileges. So be it.

Finally, we comment on the amicus brief filed by the Florida Hospital Association on this same issue. The Association not only "strongly supports the right of hospitals to enter into an exclusive arrangement," but also points out that in order to "implement such an arrangement it may be necessary to terminate staff privileges of physicians who are not parties to the exclusive contract." We have no quarrel with that laudable aim and it can be easily accomplished by appropriate language in either the exclusive contract, the by-laws, or both. What we do quarrel with is that which smacks of two sets of books, one to present to the Joint Commission on Accreditation to establish that the physician does retain his staff privileges and the other to present to the luckless physician in order to enforce cancellation of those very same privileges which the hospital has led the Joint Commission to believe he could retain.

We cannot agree, under the facts of this particular case, that the trial court's view of this hospital's lack of authority to terminate staff privileges was, as the Association terms it, "restrictive." The trial court was stuck, as are we, with the record and documents presented to it. It should not prove too difficult to persuade physicians, at contract renewal time, to agree to modifications of their contracts, and any by-laws, which will accomplish the laudable aims of all hospitals. [See Blank v. Palo Alto-Stanford Hospital Center, 234 Cal. App.2d 377, 44 Cal. Rptr.

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Bluebook (online)
511 So. 2d 559, 11 Fla. L. Weekly 1998, 1987 Fla. App. LEXIS 10733, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hospital-corp-of-lake-worth-v-romaguera-fladistctapp-1987.