2D05-1648 / Naples Community Hospital, Inc. v. Hussey

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State: Florida

Court: Florida Southern District Court

Docket No: 2D05-1648

Case Date: 11/09/2005

Plaintiff: 2D05-1648 / Naples Community Hospital, Inc.

Defendant: Hussey

Preview:NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
MOTION AND, IF FILED, DETERMINED
IN THE DISTRICT COURT OF APPEAL
OF FLORIDA
SECOND DISTRICT
NAPLES COMMUNITY HOSPITAL, INC.,                                                             )
                                                                                             )
Appellant,                                                                                   )
)
v.                                                                                           )   Case No. 2D05-1648
)
F. DESMOND HUSSEY, III,                                                                      )
)
Appellee.                                                                                    )
___________________________________)
Opinion filed November 9, 2005.
Appeal from nonfinal order of the Circuit
Court for Collier County; Daniel R. Monaco,
Judge.
Lawrence A. Farese of Robins, Kaplan,
Miller & Ciresi L.L.P., Naples, for Appellant.
John G. Vega of John G. Vega, P.A.,
Naples, for Appellee.
VILLANTI, Judge.
The trial court found that Naples Community Hospital, Inc. (the Hospital),
violated the express provisions of its Bylaws when it refused to allow Dr. F. Desmond
Hussey, III, to reapply for clinical privileges to provide pain management services at its
Naples Community Hospital because it entered into an exclusive contract with another

provider.   The trial court entered its "Order on Cross-Motions for Summary Judgment on
Count II of the Amended Complaint," granting permanent injunctive relief by requiring
the Hospital to give Dr. Hussey a hearing as provided by its Bylaws and to reinstate his
privileges pending the outcome of the hearing.   The Hospital appeals.   We agree with
the trial court that the Bylaws formed an enforceable contract between Dr. Hussey and
the Hospital.   However, these Bylaws did not require the Hospital to give Dr. Hussey a
hearing when it decided not to renew his clinical privileges because of its business
decision to enter into an exclusive contract with another provider of pain management
services.   Therefore, we reverse the trial court's order granting injunctive relief.
The Hospital is a not-for-profit corporation that owns and operates Naples
Community Hospital and other medical facilities.   Dr. Hussey is a licensed physician
who specializes in neurology and interventional pain management.   He has been a
member of the Hospital staff in the Department of Neurology since June 1995.   He also
had clinical privileges to provide pain management services.   But, on November 1,
1996, the Hospital's parent company, Community Health Care, Inc., entered into an
exclusive contract with another provider, Collier Anesthesia, P.A. (Collier).   The
exclusive contract gave Collier the exclusive right to provide anesthetic and pain
management services at the Hospital.   In 1997, Dr. Hussey's clinical privileges in pain
management at the Hospital's facilities expired.   He reapplied for clinical privileges in
pain management, but the Hospital denied his application for reappointment without a
hearing.
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Following the Hospital's denial of his application, Dr. Hussey filed suit
against the Hospital.   In his complaint, Dr. Hussey included claims for both injunctive
relief and damages.   Count I of the complaint asked for temporary and permanent
injunctive relief as a remedy for the Hospital's breach of its Bylaws.   The Hospital and
Dr. Hussey both filed motions for summary judgment.   Dr. Hussey's motion, "Motion
for Summary Judgment of Liability on Count I: Breach of Contract," specifically
requested neither damages nor injunctive relief, but a judgment "on the issue of
liability"--essentially declaratory relief determining that the Hospital had breached its
contract with Dr. Hussey as a matter of law.   The trial court granted partial summary
judgment in favor of Dr. Hussey, concluding that the Hospital's Bylaws required a
hearing when the Hospital refused to reappoint Dr. Hussey's clinical privileges.   Based
on its conclusion, the court granted injunctive relief, requiring the Hospital to give Dr.
Hussey a hearing and allow him to exercise clinical privileges until the hearing.1   The
Hospital appeals.
This court has jurisdiction to review the trial court's order as an appeal
from a nonfinal order granting injunctive relief.   Fla. R. App. P. 9.130(a)(3)(B).   Because
the trial court's grant of injunctive relief was based on its interpretation of the Hospital's
Bylaws, a contract, we apply a de novo standard of review.   See Kaplan v. Bayer, 782
So. 2d 417, 419 (Fla. 2d DCA 2001).
1    The trial court granted permanent injunctive relief based on its decision on the
merits that the Hospital breached its Bylaws.   See Lawler v. Eugene Wuesthoff Mem'l
Hosp. Ass'n, 497 So. 2d 1261, 1264 (Fla. 5th DCA 1986) ("Breach of a Hospital's By-
Laws in terminating a doctor's staff privileges is a sufficient basis upon which to grant
compensatory as well as injunctive relief.").
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Florida has adopted the majority view that hospital bylaws become a
binding and enforceable contract between a hospital and its medical staff when adopted
by a hospital's governing board.   Lawler v. Eugene Wuesthoff Mem'l Hosp. Ass'n, 497
So. 2d 1261, 1264 (Fla. 5th DCA 1986); see also Hosp. Corp. of Lake Worth v.
Romaguera, 511 So. 2d 559, 560 (Fla. 4th DCA 1986) (rejecting a hospital's argument
that a bylaws amendment was not binding for lack of mutuality, stating that the hospital
"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 considera-
tion, was to facilitate retention of the benefits bestowed upon it by the Joint Commission
on Accreditation of Hospitals.").
Here, the Hospital's Bylaws included the "Medical Staff Bylaws," the
"Medical Staff Rules & Regulations," and the "Medical Staff Policy on Appointment,
Reappointment and Clinical Privileges."   The Medical Staff Bylaws, Rules and Regula-
tions, and Policy are contained in a single-volume manual.   Although only the first
section has the word "bylaws" in the title, all three sections collectively form the
enforceable contract between the Hospital and its staff.   On the very first page of the
Medical Staff Policy, there is a definitions section in Article I, and the first statement in
the definitions section says, "The following definitions shall apply to terms used in these
bylaws."   (Emphasis added.)   Additionally, in Article XI of the Rules and Regulations,
section (a) states that "[r]ules and regulations shall have the same force and effect as
the Medical Staff Bylaws and the Policy on Appointment, Reappointment, and Clinical
Privileges"--all three sections have equal force and effect.   Accordingly, when we refer
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to the Hospital's Bylaws, we are referring to all three sections, not just the section
entitled "Medical Staff Bylaws."
The Medical Staff Policy on Appointment, Reappointment and Clinical
Privileges (the Policy) is the only section in the Bylaws that discusses the procedure for
reapplying for clinical privileges at the Hospital.   Having concluded that the Policy is part
of the binding contract between the Hospital and Dr. Hussey, we turn to whether it
included a right to a hearing.   We conclude that it did not.
The Policy section sets forth the procedure for reappointment of clinical
privileges in Article III.   According to the Policy, the person seeking reappointment
completes an application form and submits it to the Chief Executive Officer.   The CEO
sends the application to the Credentials Committee.   The chairperson of each depart-
ment transmits a number of reports, including recommendations for non-reappointment.
The Credentials Committee reviews all information it has received and then makes a
recommendation of its own.   The Credentials Committee sends its report and recom-
mendations to the Board of Directors.   According to Article III, Part A, Section 6, if the
Credentials Committee makes a recommendation that would entitle the applicant to a
hearing, the CEO notifies the applicant and gives the applicant a hearing before for-
warding the recommendation to the Board.
Generally, staff members reapplying for clinical privileges are subject to a
process in which the chairperson of each department makes recommendations based
on ethical behavior, competence, attendance and participation at staff meetings,
compliance with bylaws and policies, behavior at the Hospital, use of the Hospital's
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facilities, ability, capacity to satisfactorily treat patients, satisfaction of continuing
education requirements, other relevant findings from the Hospital's quality assessment
activities, peer recommendations concerning skills, and board certification status.   The
Policy does not expressly state whether a staff member who is reapplying for clinical
privileges in an area under an exclusive contract is subject to the same process of
receiving recommendations based on their ethical behavior, competence, and other
factors.   However, because the Hospital would be denying renewal of such clinical
privileges based on a business decision to enter into an exclusive contract, and not
because of recommendations from department chairpersons, it would seem like a futile
process.   In fact, the entire hearing process, described in Article IV, Section B is based
on the premise that a doctor's competence has been called into question and his or her
reputation is at stake.   The notice of hearing includes "a proposed list of witnesses who
will give testimony or evidence in support of the Credentials Committee or the Board at
the hearing" and "shall contain a concise statement of the practitioner's alleged acts or
omissions, a list by number of specific patient records in question, and any other
reasons or subject matter which form the basis for the adverse recommendation."
We cannot imagine how Dr. Hussey's hearing, if he were to get one, would
proceed.   There would be no statement of acts or omissions, no patients records, and
no testimony casting doubt on his skill--no accusations against which to defend himself.
Ultimately, the decision of reappointment would fall to the Board of Directors of the
Hospital, the very body that made the business decision that adversely affected Dr.
Hussey's clinical privileges at the Hospital.   According to the Policy, the express pur-
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pose of a hearing "shall be to recommend a course of action to those acting for the
hospital corporation."   Here, those acting for the corporation have already entered into
an exclusive contract with another provider, thus making the recommendation and
hearing process useless.   The hearing process described in the Bylaws clearly does not
apply when a staff member is denied reappointment because of a business decision to
enter into an exclusive contract with another provider.
Based on our reading of the Hospital's Bylaws, we cannot agree with the
trial court's decision that Dr. Hussey was contractually entitled to a hearing.   Accord-
ingly, we reverse the trial court's order granting injunctive relief in favor of Dr. Hussey
based on its conclusion that the Hospital breached its contract, and we remand for
further proceedings.
Reversed and remanded.
NORTHCUTT and LaROSE, JJ., Concur.
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