### IN THE COURT OF APPEALS OF TENNESSEE AT KNOXVILLE October 16, 2003 Se ssion CARL A. LINDBLAD, M.D., v. PARKRIDGE HEALTH SYSTEM, INC., ET AL 

### . Appeal from the Circuit Court for Hamilton County No. 99C2383 W. Neil Thomas, III, Judge

No. E2003-00221-COA-R3-CV

The Plaintiff re signed h

is position a s Direct

or of the hospital’ s emerg ency

service s. Parkri dge He alth Syst em, Inc . d/b/a Ea st Ridg e Hospita l, [herea fter “the hospita

l” or “De fendant

”] acce pted his resignation

and term inated hi s staff privileges in accordanc e with an employment Ag reement. The hospital’s bylaws require d notice and hearing, which were not followed . The Plain tiff file d this actionasserting that in failing to observe its bylaws the hospital breached its contract with him since the bylaws wer

e an integral part of the contra ct. The Chancellor

granted the hospital’s motion for summary judgment, holding that the Agreement, which provided for ter mination of staff privileges controlled the issue. We affirm. Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Affirmed W IL LI AM H. I

NMAN , S R
. J., delivered the opinion of the court, in which H ERSCHEL P. F RANKS and C HARLES D. S USANO , J R ., JJ, joined. Larry L. Crain, Brentwood, Te nnessee, attorney

for appellant, Carl A. Lindblad. Sue E. Scr uggs and C. Eu gene Sh iles, Chatt anooga , Tenn essee, attor neys for ap pelle e, Par kridge Health Sy stems, I nc. d/b/a East Ridg e Hospita

l. OPINION At relevant times the Plaintiff was a licensed phy sician, and the Director of the Defenda nt hospital’s emerg ency

room. He was the so le share holder of a corpor ation sty led Assoc iates in Emergency

Medicine

[hereaf ter “Ass ociates ”], char

tered in 1995. His practice

was limite d to providing emer gen cy medica l treatment at the hospital; he had no private patients, and he neither sought nor obtained admitti ng or a ttending privileg es at the

hospital.
InJuly 1999, he o rdered, ap pa re nt ly sub rosa , a quantity of nar cotic drugs from Henry Schein, Inc., a distributor of medical supplies and medic ations, whi ch w ere delivered to him, by1 Th e dru gs includ ed 5 00 X anax 200 mg. tab lets, a Sc hed ule IV drug , 500 hydro cod one ASA P tab lets, a

Schedul e II drug, one pi nt of hydr ocodone s yru

p, an d one pi nt of

hydr ocodone wi th h omatr opine syr up. -2- parcel post, at th e hospita l. 1 The package was discover ed by hospital personnel who ope ned it, and examined the contents which were later delivered to the Plaintiff. Narcoti c drugs a

re close ly r

egulat ed by state and feder

al law, a s well as by ho spita l polic y whichprohibits the acquisition or dispensing of drugs except in strict compliance with the applic able laws, re gulations, and po licies of the hospit

al. For the purpose of ascertaining from the plain tiff t he pur pose a nd in tende d use o f thes e drugs a meeting was held, on August 13, 1999, with members of the hospital’s Pharmacy and Therapeutics Committee i

n attenda nce. Pre sent wer

e Bren da Waltz, (C EO of the

hospital) ; Dr. Ame

rica Jone s, (Director of Pharmacy

); Dr. Donald Hartsfiel d, who was the Chair of the Committee, and the Plaintiff. The Plaintiff was informed that an explanation of the matter was necessary because, inter alia , the quantity

of the drugs delivered to him exceeded the amount of the sa me drugs in the ph ar ma cy’ s i nv en to ry, an d h is ac qu is it io n o f t he se dr ug s w as vi ol at iv e o f h os pi ta l p ol ic y. The Plaintiff

stated that he bought the drugs “to keep around the house for family, fr

iends”, as well a s neighb ors. Dr. Hartsfield testified that Dr. L indblad said t hat he had ob taine d the d rugs to do his friends a favor. I t developed that Dr. Lindblad had pre viously purchased

drugs from the same source. He admitted in his deposition that he d id not esta blish a doctor-pati ent rela tionship with family, friends or ne ighbors prior to dispensing drugs/medications and did not maintain any documentation of h is dispensation of drugs. According to Dr. Ha rtsfield, when the Plaintiff was informed by the Director of Pharmacy that he could not take delivery of controlled substances at the hospital, he beca

me defensive and stated that “as a phy sician he could do what he wanted to with the drugs.” Dr. Jones d

escribe d Pl aintiff’s response as “belligerent, very angry , defensive and [he] threatened

me.” Dr. Hartsfi eld

testified that “[h]e didn’t give us a clear sense that he was not g oing to cease getting controlled substanc es.” Dr. Jones was concerned because, as she testified, “. . . Joint Commission for Accreditation of Hospitals makes me solely responsible for e very medica

tion that flows thr ough the hospital” , includin

g sample s broug

ht by doctors f rom their office s. The Plaintiff’s response and the hospital’s concern about the large quantity of drugs ordered by the Plaintiff and delivered to the hospi tal resulted in Ms. Waltz informing the Plaintiff that he should find other

phy sicians to

take his shifts until the drug situation was clarified, but Associates continued to provide exclusive services to the hospital’s emergency department. The

Plaintiff did notprotest a

rrang ements a

nd agr eed that he would n

ot w ork. Apparently, this temporar y arrangement

did not constitute disciplinary action under the bylaws but was take

n pursuant to and consistent with ¶ 1.4 of the Professional Services Agreeme nt [“Agreement”], hereafter discussed. Onth e s am e d ay of the Comm it tee meeting, Ms. Waltz contacted Dr. Gary Olbrich, the M edical Director of the Medical Foundation Phy sicians Health Program, more commonly know n as the “Tennessee Impaired Phy sician’s Program”, who agr eed to confer

with the Pla

intiff, a nd did-3-

so, six days later. The initial assessment by Dr. Olbrich

included a psychosoc ial evaluation, as well as an addiction medicine evaluation, but with no actual drug screening. Dr . Olbrichtestified that he found the Plaintiff to be forthcoming and not an immediate risk to return to work; he testified that he routinely

asks hospi

tals to g ive phy

sicians w ithin the pr

ogram “ a medic al leave of absence pending review of the circumstances.” To for m a reasoned opinion about the Plaintiff’s conduct and perhaps facilitate his return to the hospital, Dr. Olbrich h ad the following discussion with the Plaintiff: Q. Whatdid you tell Dr. L indblad as far as y

our understanding to get back to the hospital administration? A. Iasked him - well, w e discuss ed sever al options . As I

told him, that base d on t he infor mation tha

t I ha d been a ble to obtain from him, I saw no particu lar rea son to tell that we had any collating

[sic] information to indicate that he might be a substance abuser or have a chemical dependency . There was, however, the allegation

that he had

received a large a

mount of mood- alteringdrugs, for what purpose, we don’t know and that it would be in his best interest to he l p resolve the diff iculty and preserve his reputation if we could estab lis h that beyond just my

word and our interview that there was no evidence of chemical dependency . I don’t know – I honestly don’t remember speci ficall y what I discussed with Dr. Lindblad, but the options usually are to ask t he m – th ey – someone lik e th is who has a low leve l of suspic ion, I would offer them the o

pportunit y to do rando m urine drug screens over a period of t ime, usually a y ear, to determine – and almost without que stion if someone is c hemicall y- depende

nt, we will catch

them with the use of – an inappropriate use of a mood -alteri ng drug during that time. An extreme form would be – you know, the ultimate for m actually

is to go into a 3-5 day re sidential evaluation where you have a team of assessors. And I’m certain ba sed on the information I receive d that I did not say

he need ed that un

less he mig

h t need tha t to satisf y pe ople who w ere con

cerned about him. Questions hovered nevertheless, not only about whether Dr. Lindblad mig ht be a dru g abuser , b utwhether he might have improperly distributed drugs to others. In an e arlier telephon e conversation

secretly r ecorded by

the Plaintiff between Dr. Olbrich and himsel f, Dr Olbrich a ppeared to be ala rmed abo ut the Plain

tiff’s a ctivities : Plaintiff: First

off, I wanted to let you know that I don’t have a “problem”. I don ’t take d rugs, I don’t use

alcohol,-4- altho ugh Idid have a toasted almond in the Bahamas three weeks ago. People may consider that . . . Dr. Olbrich: Tell me why so many – such larg e amoun ts of

drugs were ordered. Plaintiff: Well, you know, I ordered them bec au se they wer e cheaper to order them that way , that’s the only reason. Dr. Olbrich: You orde

red them for the E merge ncy Room: Plaintiff: No, no, I

just k e ep them a

round the

use for m

y neighb ors, frie

nds, thing s like that

. Dr. Olbrich: Well, I ’ve go t a proble m with that, too, but we’ll talk about that later. Plaintiff: Yeah, okay. Yea h, okay. What – w

hat I d idn’t understand

was that the hospital had

turned me in for – f or wh at ? I me an , is it j ust the dr ug s or wh at ? Dr. Olbrich: Well, apparently, they were concerned about y

ou. Plaintiff: Uh huh. Dr. Orbrich: We ll , i t’ s a lo ng , c om pl ic at ed st or y. Plaintiff: Right. Dr. Orbrich: It’s not okay to be prescr

ibing for friend s, neigh

bors, family and whate

ver. Plaintiff: Uh huh. Dr. Orbrich: Th at ’s si mp ly n ot ok ay. Plaintiff: Right. Dr. Orbrich: Particula

rly in this state. And that’s the antibiotics or any thing – c ertainly

schedule d drugs

. Plaintiff: Right.-5- Dr. Orbrich: And they were just real concerned about what w a s going on. Plaintiff: Right. Dr. Orbrich: It looked like drug traffic king, it could look like there was an addiction with you or some membe r of your team. Plaintiff: Right Dr. Orbrich: They

just felt a

real – and

I would confirm

– responsi bility to investigate it. Plaintiff: Well, I’m t he one wh

o went to the DEA . I don’t know if th ey c alled or not, but I went to the DEA, myself. Dr. Orbrich: Ok ay. Plaintiff: Beca

use I wanted to know if there was some kind of legal problem -

you know, am I

breakin g some kind of law or something? I mean, if I was . . . . Dr. Orbrich: If

the Court of Medical Examiners found out you were orderingthese and giving them to no n -patients, your li ce ns e w ou ld be in re al je op ar dy. Plaintiff: Right, well, I even told them that I would flush them downthe toilet for all I care

. I mean, it’s not that importantfor me. I don’t need the m. Ijust keep them around for the c onvenien

ce of my

se l f and other people. And actually, I

guess the reason I

even order any of that stuff, e

ven the antibiotics and

every thing else t hat went with it, of course, was that nobody detailsanything a

nymore . It used to be every body kept all th is stuff around all the time, and now they don’t even . . . Dr. Orbrich:

. . . . in

all fairness, Doctor, not in large quantitieslike that. Plaintiff: Uh huh.-6- Dr. Orbrich: You know, they mig ht take some samp les home from work, or they might ha ve a prescription for Hydrocodone

or might have a

little bit of cough sy

rup, butyou know, y

ou’ve got enough there to g et a lot of people pretty hig

h. Plaintiff: Well, you

know, in r

etrospe ct, it was

a lot, but it was cheaper to bu y th em th at wa y, so I go t t he m t ha t w ay, you know, but . . . . Dr. Orbrich: That’s showing me a lot of naivete. The day afte

r Dr. Olbrich met with Dr. Lindb lad and discu ssed the hospital’s legitima te concerns and howthey might be a lleviated, including the use of drug testing, the Plaintiff , on beha lf of his corporation voluntarily terminate d the Agreement, including the Exclusive Provider Agree ment, for eme

rgenc y se rvices w ith the hos

p ital. The effec tive term ination da te was Au

gust 24 , 1999. The rea fte r th e Pl ain ti ff s ecr ete d t he d rug s an d t hen flu she d t hem dow n t he t oi let . In describing these actions, Dr. Lindblad in his deposition stated:

A: Yeah. So I took

them home . And, to be

perfectly h

onest with you – I don’t want to be neg ative, too negative, abo ut this ; but, to be per

fectly honest wit

h you, I didn’t know what HCA would do, s o I h id them. I

hid them fo

r about f our months

. Th en I wa sn ’t go in g t o u se th em , s o I t hr ew th em aw ay. Q: Threw them away . Where? A: In the

toilet.
Inresponse to Plaintiff’s cancellation of the Ag reements the hospital sent Plaintiff a letter accepting the termi

natio n of the Agr eement a nd, citing

the Exclusi

ve Provide

r Agre ement, (Addendum

1) advising him that his medical staff privileges were term inated. The Exclusive Provider Agreement provided for the termina tion of staff membership and privileges of any of Associates’ representative after the Agreement had been terminate d for any reason. The Plaintiff had no further contact with the hospital after he terminated the Agree ment. He did not indicate that he considered the termination of his privileges or any other a

ction/position of the hospit al as adv erse or

disciplina

ry , and did not reque st a hear ing unde r the by laws. This action was filed December 27, 1999 as amende d on March 25, 2002 to join Associates inEmergency

Medicine as a party

Plaintiff, alleging that the Defendant (1) wron gfully revoked his hospital p rivileges , (2) deliberately interfered with his livelihood, (3) defrauded him, and (4)-7-

breach e d his contract. He alleged that throug h his physician gr

oup (AEM), he entered into a Professional Services Agreement to render professional emergency

services at the hospital, effective July 1, 1994, for a period of five y ears, and that he resigned Aug ust 24, 1999. He further alleged that he did not forfe it or surrender his clinic al privileges as a staff physician at the hospital, because under the by laws clinical privileges cannot be terminated without due process, i.e., notice and hearing, whic h was not accorded h im. He alleged that the Defendant Waltz sent him a letter

terminat ing his staff membership and clinical privileges eff ective August 24, 1999. He allege d that on A ugust 13, 1999 he was summoned to the off ice of CE O Baltz wh

o, with others, confronted him about a package a ddre ssed t o him which “contained an order of common medications of the ty

pe routinely

ordere d by

phy si cians. ” He was informed by Ms. Baltz that he could no longer work at the hospital pending an investigation, and that at no time was he afforded a hearing as required by

the bylaws. He lea

rned from Dr. Olbrich

that the D efenda

nts accu sed him of suspec ted drug abuse, d rug tra fficking , and using

the hospit

al’s DEA number to

order dr ugs. The Defendants filed an answer alleging that the Plaintiff resigned his position a s of Aug

ust 24, 1999 following which his medical staff privileges we re te rminated as contractually provided. The answer

was amen

ded to ass ert that M s. Waltz was immune fr

om liability

pursuant to a specif

ic provision of the hos

pital by laws. Fu rther, the hospita

l alleg ed that if

its conduct was “ adverse ”, within the meaning of its by

laws , the act

ions barr ed beca use the Pla

intiff fa iled to exha

ust his administr ative re medies afforde d by

the by laws. On March 5 , 2002 the De fendan ts fi led a j oint moti on for summ ary judgme nt all eging t h e absence of any g enuine issues of material fact and that the Defendants were entitled to judgment as a matter of law. The trial judge filed a memorandum opinion, which, as excerpted, f ound: The plaintiff is a licensed practicing medical doctor w ho was the physician director

of the emergency

room of East Ridge Hospital (“ East Ridge”). He limited his practice to providing emer gency medicine at East

Ridge and

had no pr ivate pr actice or patie nts of his own. His privil ege s were limited to the practice of emerg ency medicine. The plaintiff was th e sole ow

ner of A ssociate s in Emer gen cy

Medicine (“Associates”), a corpor ation which in 1995 contracted

with the hospital to be the exclusive provider of emergency

roomservi ces at E ast R idge. E ast R idge and Associates e ntered into a Prof

essio nal S ervice s Agreem ent to provi de emer ge nc y medicine on March 24, 1995, and an Addendum on January 10, 1996 (hereinafter

both of which are referred to as the “Agreement”). The-8- termof the Agreement was from July 1, 1994, to June 30, 1999, and was not renewed. Section 3.2 of the Ag reemen t provide s as follow s: Either party may

terminate thi s Agree ment, without cause, by providing no less than 60 (sixty) day s’ prior written notice stating the intended day of ter

mination, which shall occur not soone r th an the first annual anniversary

of Effective Date. The Addendum

to the Agr

eement provides i

n [S]ection 6 a s follows: Uponthe t ermi nation of this Agreement for any reason, Facility

may terminat e or othe r wisequalify or limit the medical staff membership and/or clinical privileges of any or a ll of Contractor’ s Represe ntatives. Fu rt he r, up on an y sever ance of the affiliationbetween Contractor and a Contractor’s Representative, Facility may terminat e o r otherw

ise qualify or limit the

medic a l staff membership and/or clinical privi leges of such Contractor’ s Representative. The rig hts of Fa cility under thi s Sectionshall supercede any contrary terms as may be established

in the Med

ical Sta ff By laws. Contractor shalldeliver to Facility a

written statement form each Contractor’s Represe

n tative acknowledging and agree ing to the se concu

rrent te rmination provision s. InJune or July of 1999, the Plaintiff received a pack age of drugs, whichwas addr essed to the Plaintiff but which utilized the hospital’s street addres s. The drugs purchased by the Plaintiff inclu ded controlled substances such as xanax, benzodiazepine, a n d hydrocodone. The delivery ticket fo r the p ackag e was ad dressed to Dr. Carl Lindblad, not East Ridge, and a t all times it was Dr. Lindblad’s property. Af

ter the disco very of th e drugs a meeting was he ld among the hospital’s chief executive officer, the pha rmacy director, and the chairman of the Pharmacy and Th erapeu

tic Committee on August 13, 1999, after which the Plaintiff was placed onleave. D

uring th is meeting

the Plain ti ff responded to all of the questions put to him r egarding the drugs and stated that the medications we re fo r h is fa mi ly, friends and neighbors. No records were kept of me dication s dispense d to family, friends or neighb ors in need of such medications. After th is meeting Brenda Waltz, the chief executive officer of East Ridge, contacted Dr. Gary Olbhrich [sic] of the medical foundation kn own as the “Tennessee I mpaired Physician’sProgram,” to “clar ify ” the situa tion with Pla

intiff’s use of-9- drugs. The Plaintiff met

with Dr. [ Olbrich] on August 19, 1999, and after this meetin g Dr. [ Olbrich] assured the Plaintiff that there was nothing for him to

wo rr y about. Aside from his being naive, Dr. Lindblad was advised that in Dr. [ Olbr ich’s] o pinion there was no problemwhich warranted any further action. Dr. [ Olbrich] informed Brenda Waltz of his conclus ion on or about August 20, 1999. On August 20, 1999, the Plaintiff

submitted a notice of termination, the effective date of which was August 24, 1999. That letter reads a s follows: This is to inform you that as of 7 a.m. on Tuesda y August 24, 1999, Associates in Emergency Medicine, will no lo ng er be pr ov id in g E me rg en cy Ph ysician Service s at East Ri dge Hos pital.
Inresponse, the Hospital sent the Plaintiff a letter acknowledging the receipt of his letter, and, citing the Agree ment, advised the Plaintiff that his medical staff privileges were ter minated. That lette

r reads in part as f ollows: Please be a dvised that in accordance with the provisio ns o f Section 6 of Addendum 1 of the Agree ment, the Hospital has elected to ter minateyour medical staf

f membership and clinical privileges effective on the date of termination of the Agreement as set forth above. The medical staff membership and clinical privileges of the other members of the Group will continue unaffected. Please note that it is our position that term

ination a s set fort

h here is not a reporta ble action under

the Health Ca

re Quali ty Impr ovement Act and its i

nterpre tive reg ulations. The Plaintiff submitted the af fidav it of Dr. Ja

mes H. Cre el, the medical d

irector for the e

merge ncy department at E

rl anger Hospital, in opposition to the motion. In his affidavit Dr. Creel states that the conduct of East Ridge constituted a violation of the medical staf f Byl aws in effect at East Ridge in Aug ust of 1999. Dr. Creel opines that the due process provision of Article 7 o f the Bylaws requires init iation by

East Ridg e of proc eeding s to terminate his privileg es. This opinion, however, begs the question of whether the Bylaws a pply to the situation presented in this lawsuit.

* * * * *2 In footnote 5 on page 12 of his brief the Plai nti ff concedes th e if “the Defendants had automat ical ly ex tended Dr. L indb lad’s co ntract the n the b ylaws wo uld no t have c ontro lled the o utcom e.” -10- The Plaintiff argues that the East Ridge By laws constitute the contract, since the Agreement expired by its terms on June 30, 1999. Under [S]ection 3 of

the East Ri dge Hos

pital Medi c al Staff Byla

ws each pr actitione r at East Ridge a greed to abide by th e by

laws, rul es, and regula tions and p olicies a s ame n ded and is sued fro m time to time. The Plaintiff argues that once t he form al contract between East Ridge and Associates expired on June 30, 1999, the legal relation ship between the Plaintiff and Eas t Rid ge was governed wh olly unde r the ter

ms of the E ast Ridge

By laws. 2 In his brief, however, Dr. Lindblad

cites no c ase to establi sh that the relation ship between two contr acting parties i s not governed by the contract where the contract has expired. Before deciding whet her the Agreement applies or t he By la ws apply the Court w

ill discuss

a case r

elied on by bo th partie s. Lewisburg

Community Hospital, Inc. v. Alfredson , 805 S. W. 2d 756 (Tenn. 1991). In Lewisburg H ospital the Hospit

al te rminated a doctor’s privileg es and de nied him a

ccess . As her e, the hospital maintained

that its bylaws di d not constitute a contract with the doctor and that he w as not ent

i tled to a hearing. The doctor arg ued to the con t rary. The

Supreme Court held that the bylaws were an integral part of the contract with the doctor. The fac ts, however, depart from the f

acts of th is case at that p oint. The d

octor’s first contract with L ewisb urg Hospital e xpressly stated tha

t either p arty could cancel onninety day

s’ notice, and, in the event of termination, the clinical privileges would also terminate. The second contract, however, deleted that provision, thereby kicking in the application of the bylaws. The Supreme Court required the hospital to abide by i ts bylawsand give the doctor a fair hearing. I n rejecting

the argument of the hospital the Supreme Court held: The Hospital’s argument ignores the fact that it made a business dec is ion when it agreed to delete the automatic termination of Alfredson’s clinical privileges from th e 1984 exc lusive ra diology contrac t. Had it not made

that business deci sion, Alf r edson would hav e no clai

m for bre ach of c ontract

.-11- If, therefore, the Bylaws a pply, the Plaintiff prevails. I f they did not, then, as Pl aintiff c oncede s, the De fendant s prevai l. It now must be determined whether the Agre ement applies or the Bylaws a

pply. I n doing so the intention of the parties must be determined. In that rega

rd, the “ascertainment of the intention of the parties to awritten c ontract is a question of law rather than a question of fact.” Doe v. H

CA Health S

erv ices of Te nnessee , 46 S.W.3d 191 (Te nn. 20 01); see also, Allman v. Boner , 1993 Tennessee A ppeals LEXI S 793 (Ct. App.1993). The next issue t o be considered, therefore, is whether a contract existed between the

parties on August

20, 19 99, and, if so, its terms. Althoug

h the Ag reemen t expired by its

terms on June 30, 1999, that does not end the inquiry. I f the par ties t o an expired agre ement w ith a definite term continue to perform as if the agreement

were still in effect, it is pres umed t hat they are serving under a new contract with the same terms as the old. Delzell v. Pope , 294 S.W.2d 690 ( Tenn. 195 6). I n order t o make thi s d etermin ation the conduct of the parties will be examined. On July 7, 1999, the Plaintiff applied f or reap pointment t

o East Ridge. Until August 13, 1999, the Plaintiff continued to provide services to East Ridge, and East Ridge accepted

those ser vices on a n exclusive

basis. On Augu st 20, 1999, it is significant that the Plaintiff gave notice to terminate the Agreement

between Associates and Eas t Ridge. Fi nally, Dr. L indblad has testifie d that h e belie ved the Agreement to be s till in eff ect. Ac co rd in gl y, the Bylaws

are not applicable to the termination, and the Defendants are entitled to partial summary judgment on this issue. * * * * * The Standard of Review The standard of review

on appeal of a

grant o f summary

judgmen t is de novo upon the record witho ut a presum

p tion of correctness to determine whether the abse nce of genuine and material factual issues en

title the movant to a j udgmen t as a matter law. Goodloe v

. State , 36 S.W.3d 62, 65 (Tenn. 2001). The movant must either affirmatively negate an essential element of the non-movant’s clai m or conclusively e stablish an affirmative defense; mere conc lusory assertions that the non movant has no evidence are insufficient; and if the movant does not ne gate a

claimed b asis for the suit, the non-movant’s burden to produce evidence esta blishing the existence of a genuine issue for trial is not triggered and the motion for summary judgment mus t fail, If, however , the movant success fully

negate s a claime d basis for the suit, the non-movant may no longe r simp ly r el y u pon the pleadings, but must then establish the existen

ce of the essentia l element s of the claim or the non--12-

existence of the defense. Finister v. Humboldt General Hosp., Inc., 970 S.W.2d 435, 438 (Tenn. 1998).
Inreviewing the record to deter mine whether summary

judgme nt requirements have been met, this Court must view the e vidence in the lig ht most favorable t

o the nonmoving pa

rty and must drawall reasonable inferences in the nonmoving pa rty’s favor

. Byrd v. Ha

ll , 847 S.W.2d 208, 210- 11 (Tenn. 1993). A summary judgment may be

prope r, ther efore, only

“when th ere is no

dispute over the evidence establishing the facts that control the application of a rule of law.” Ib . at 214-15: Tenn. R. Civ. P. 56. The Issue The restated is sue is whether summary judgment was properly

granted with respect to the Plaintiff’s claim

for breach of contract ar

ising out of

his summary suspension from the medica l staff of the Ho spital. Analysis The issue is neces sarily

resolva ble either by (1)

the bylaws of the H ospital, or (2) the contract betwee n the par ties. The contract, described as a Professional Service s Agreement, became ef fective July 1, 1994 and expire d June 30, 19 99. I t provide s that Either party may

terminate this Agreement, witho ut caus e, by providing not less than 60 days prior wr itten notice s tat ing the intended date of ter

mination, which shall occur not sooner than the first a annual anniversary of the effective date. It further provides that Either party may

termi nate this Agreement at any time in the event the other party

engages in an act or

omission constituting a material breach of any ter m or condition of this Agreement . . . . and upon any termination of

this Agr eement, neither

party shall have further right agains t, or obligations to, the other party, e xcept . . . . this Agreement

. . . . su persed es all prior Agreeme nts, contr acts an d unde rstan dings . . . .betw een the p arties. AddendumOne to the Agreement, Section 6, described a s the Exclusive Provider Agreemen t, provides Uponthe terminationof this Agreement for any reason, Facility

may terminat e . . . the medical staff membership and/or clinical privilege s-13- of any or all of c ontractor’s representative

. . . . the rig hts of Fa cility

. . . Shall supersede any

contrary terms as may

be established in the Medical Staff By

-laws . . . The original By

laws, adopted April 12, 1994 made no provision for a due p rocess hearin g, but in Apri l 1999 the B yla ws were amended to provide

that: Any practiti oner who se contr actual e ngag ement by the Hospital req uires membership on the medical staff shall not have his/her medical staff membership or admitt ing and clinical privileged terminated without the right to hearing and appe al. . . . Dr. Olbr ich inform ed Ms . Walt

z, the Hospital’s CEO, on August 20, 1999 that there was no problemwith the Plaintiff which warranted further action. On that same day, the Plaintiff tendered his resig nation ef fective August 2 4, 1999. H e wrote This is to inform you that as of 7 a.m. on Tuesda y, Aug ust 24, 1999, Associates in Emergency Medicine will no longer be providing Emerge ncy Phys ician Ser

vices at East Ridg e Hospita

l. The Hospital responded by citing the Agreement and informing the Plaintiff that his medical staff pr ivilege s were te

rminated in accor dance w ith Section

6 of Adde

ndum 1 of the Agre ement. The Plaintiff argues that the Agree ment expire d June 30, 19 99 and thu s his leg al relat ionship with th e H os pi ta l w as go ve rn ed by i ts byl aws which required notice and hearing by virtue of the April 1999amendme

nt. The Defend

ant arg ues that a lthough t he forma l Agre ement expir

ed by its own terms on June 30, 1999, both parties continued to perform as though the Agreement wa s still ineffect, thereby

giving rise to the presumption that they are performing under a ne w contract

with the same terms as the old. This is the rule in Tennessee. Delzell v. Pope , 294 S.W.2d 690 (Tenn. 1956); Ward v. Berry and Associates , 614 S.W.2d 372 (Tenn. Ct . App. 198 1); McCall v. O ldenburg 382 S.W.2d 537 (Tenn. 1964). We note that the Plaintiff cannot, as is sometimes said, have it both way s; if he had been instructed to vacate the premises when his Agreement expired, he would have no justiciab le reas on whate ver to ma intain this

action. B ut with the

consent of the Hospital he continued to work, thereby

implicatin

g the ru le announ ced in Delzell. The Ag

reemen t remaine d in effec t andwas not invalidated by the Apr il 1999 Amendment to the Bylaws. I t follow that the Hospital acted

within its contractual rights when it terminated the Plaintiff’s staff privileges. The judgmen t is affir med at the

costs of the Appella

nt.

___________________________________ WILL IAM H. I NMAN, SENIOR JUDGE