Hovorka v. COMMUNITY HEALTH SYSTEMS, INC.

262 S.W.3d 503, 2008 Tex. App. LEXIS 6343, 2008 WL 3870310
CourtCourt of Appeals of Texas
DecidedAugust 21, 2008
Docket08-06-00209-CV
StatusPublished
Cited by22 cases

This text of 262 S.W.3d 503 (Hovorka v. COMMUNITY HEALTH SYSTEMS, INC.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hovorka v. COMMUNITY HEALTH SYSTEMS, INC., 262 S.W.3d 503, 2008 Tex. App. LEXIS 6343, 2008 WL 3870310 (Tex. Ct. App. 2008).

Opinion

OPINION

KENNETH R. CARR, Justice.

Appellant, John W. Hovorka, M.D., appeals the trial court’s grant of partial summary judgment in favor of Appellees, Community Health Systems, Inc. (“CHS”), Big Bend Hospital Corporation d/b/a Big Bend Regional Medical Center (the “Hospital”), and Big Bend Regional Hospital District, on their breach of contract counterclaims. Hovorka also appeals the jury’s verdict against him on his fraud claim. We affirm the judgment of the trial court.

I. BACKGROUND

The Hospital is a fifty-bed general acute-care hospital in Alpine, Texas, which is owned and operated by Big Bend Regional Hospital District (the “District”). In 1997, the District and Big Bend Hospital Corporation (the “Corporation”), a subsidiary of CHS, entered into a Management Agreement and a Development Agreement. Under the Management Agreement, the District contracted to operate and manage the Hospital. Under the Development Agreement, the Corporation agreed to construct and operate a new general acute-care hospital for the District, and the District agreed to lease the Hospital and assign its operation to the Corporation for a term of thirty years.

Mary Ann Smokier, an employee of a CHS subsidiary, worked as a consultant to the District for the recruitment of a general surgeon to the medical staff of the Hospital. Smokier received information regarding Hovorka from a recruiting firm and sent it to the Hospital. Hovorka, a medical doctor, was near completion of his residency training in Kansas City, Missouri. In March 1999, Hovorka and his fiancée, Wendy DeHoff, visited Alpine to meet with some of the local doctors and hospital administrators and to tour the hospital. Hovorka and DeHoff were in *506 formed that a new hospital was being constructed.

Subsequent to Hovorka’s visit, Smok-ler’s office prepared a letter and contract for Hovorka. The letter and contract were a standard agreement that Smokier used.. Smokier forwarded the letter to the Hospital, which then sent it to Hovorka.

The letter, dated March 17, 1999, offered a general surgeon position to Hovor-ka. Hovorka and DeHoff reviewed and discussed the letter. Hovorka executed the proposed agreement (the “Agreement”) on March 23, 1999, and returned it to the Hospital.

The Agreement was for a three-year term, to begin on August 1, 1999. Among other things, Hovorka agreed to engage in the private practice of medicine in Alpine, within a reasonable distance from the Hospital, beginning on August 1, 1999. The Hospital agreed to guarantee Hovorka cash collections of $29,167 per month for the first year of the Agreement. It was agreed that this monthly payment would be offset by any amount Hovorka collected during each month. For each month that Hovorka remained in practice in Alpine after this period, the Hospital would forgive l/24th of the amount paid. The Agreement also provided that, if Hovorka ceased to practice general surgery full-time in Alpine during the term of the Agreement, Hovorka would reimburse the Hospital for any amount that it had paid him. Among the statements contained in the letter is the following:

You recognize that Hospital is a convenient acute care medical facility for the majority of patients likely to utilize your services for medical treatment and that the Hospital is duly accredited by the Joint Commission on Accreditation of Healthcare Organizations and is qualified for participation in the Medicare and Medicaid programs, and has excellent facilities and treatment capabilities.

According to Hovorka, Smokier told him either the day he executed the Agreement, or the prior day, that the Hospital was accredited by the Joint Commission on Accreditation of Healthcare Organizations (“JCAHO”). Hovorka maintained that Don Edd Green, the Hospital’s Chief Executive Officer, told him on his initial visit in March of 1999 that JCAHO reviewers were coming to review the Hospital for accreditation and subsequently told him over the telephone that the Hospital was JCAHO accredited. However, in May 1999, Hovorka learned that the Hospital was not JCAHO accredited. Hovorka claimed that he attempted to talk with Green about the lack of accreditation on several occasions, but that Green refused to talk about it. Hovorka was told by another Hospital administrator, as well as by the chief nursing officer, that JCAHO accreditation would be done. However, the lack of accreditation did not concern Hovorka, because he believed that lapsed accreditation was very common in rural hospitals.

The new hospital facility was completed and opened in October 1999. The new facility became JCAHO accredited in 2001. The Hospital was qualified to participate in Medicare and Medicaid at the old facility. The new facility was not qualified for Medicare and Medicaid until February 3, 2000. The lack of certification did not prevent physicians from admitting and treating patients at the new facility and did not prevent physicians from being paid by Medicare and Medicaid. Although he was aware that the Hospital did not have JCAHO accreditation and that the new location of the Hospital was not immediately certified for Medicare or Medicaid when it opened, Hovorka did not ask to be let out of the Agreement.

*507 Before he began practicing at the Hospital, Hovorka and his wife 1 decided to purchase a house in Alpine. Hovorka requested an advance of $85,000 from the amount guaranteed in the Agreement, in order to make a down payment. Hovorka and the Hospital executed an amendment to the Agreement to this effect, dated June 2, 1999. The Hovorkaes moved to Alpine in July 1999 and Hovorka began performing services pursuant to the Agreement. Hovorka moved into an office located in a building leased by another doctor. The office had to be wired in order to get telephone service. According to Hovorka, this took approximately six weeks. In November 1999, Hovorka moved his office into a triple-wide trailer located behind the new location of the Hospital.

Business was very slow during the first few months of Hovorka’s practice, because he had few patients. The Hospital brought in Connie Voltz to assist Hovorka to develop his practice. Voltz recommended that Hovorka get involved in the community. He attempted to do so by joining the Kiwanis Club. Nevertheless, Hovorka’s practice remained slow during his time in Alpine.

On November 18, 1999, Dr. David Sanchez, the Chief of the Medical Staff, suspended Hovorka’s privileges to perform laparoscopic cholecystectomies (gallbladder removal), after a member of the Hospital’s Medical Executive Committee voiced concerns about three laparoscopic chole-cystectomies performed by Hovorka, each of which resulted in complications for the patients. At a meeting concerning the matter two days later, Hovorka voluntarily relinquished his privileges to perform the procedure.

Hovorka resigned his position with the Hospital by a letter dated January 27, 2000. He accepted a position at Spohn Hospital, located in Alice, Texas, 2 and closed his practice in Alpine in February of 2000. Hovorka testified that he understood the Agreement’s requirement that he stay in Alpine for three years and that, if he failed to do so, he was obligated to repay all payments made to him.

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Bluebook (online)
262 S.W.3d 503, 2008 Tex. App. LEXIS 6343, 2008 WL 3870310, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hovorka-v-community-health-systems-inc-texapp-2008.