1 The Sweetw ater Hospital was voluntarily dismissed. 

# FILED

July 24, 1997 Cecil Crowson, Jr . App ellate C ou rt Clerk IN THE COU RT OF A PPEA LS OF TENN ESSEE

EAST ERN SECTIO N

STEFONE McCL ENDON, father of ) DAMIEN O’SHAY MAURICE ) KNOX CIR CUIT McCLENDON , the next of ki n of ) CYNTHIA VAN ESSA FRANCI S, ) NO. 03A01-9703- CV-00083 ) Plaintiff-Appella nt ) ) v. ) HON. DALE C. W ORKMAN, ) JUDGE DR. BENNETT T. C ROWDER, II, and ) EMERGENCY

COVERAGE ) CORPORATION, ) ) REVERSED and Defendants-Appelle es ) REMANDED
H. Naill Falls, Jr . and James B. Johns on, Nashvi lle, for Appell ant James H. London and M argaret G. Klein, Knox ville, for Appellee
O P I N I O N

INMAN, Se nior Jud ge

This is an action for dam ages for the death of Cynthia Francis allegedly caused by the malpractice of D r. Bennett Cr owder, II, an emergency room physi cian who was a contract physician w ith the defendant Emerg ency Coverage Corp oration which had contracted w ith the Swe etwater H ospital 1 to oper ate it s emerg ency

room. According to the complaint, Ms. Franc is, who w as 19 years

old, on January

29 and 22, 1996, being acutely i ll, presented herself at the emergency r oom and was twice mistakenly diagnosed as suffering fro m an upper respiratory disease by Dr. Crowder , who pres cribed treat ment according ly, w hen in fact she was suffering from diabetes and was in extremis, shortly expiring at another hospital. The plaintiff alleg ed that the medical care rendere d by Dr. Crowder was reckless an d constituted a gross dev iation from accept ed standards of profess ional practice.2 In response to a motion by the p laintiff for a parti al summary j udgment. 2 The only all egation as to the Emergency Coverag e Corporatio n (ECC) i s as follows:
“16. As a patientat Sweetwater Hospital, Cynthia Francis was a third-party

beneficiary

of the cont ract between Emergency Coverage Corporation and Sweetwater Hospital. Plaintiff is therefore enti tled to rec over c omp ensa tory damag es from Emergency Coverag e Corporatio n in the amount of at least $3,000,000.00.”
The ECC filed a R ULE 12.02( c) mot ion to dismi ss for failure to st ate a c laim, asserting that the “compl aint contains a mere conclusor y alleg ati on re garding the decedent’s third-party beneficiary status; even if this w ere the case, there ar e no facts indicating that EEC ever breached the underlyin g contract. ” The sole purpose of a R ULE 12.02(c) moti on is to test the legal s ufficiency of the complaint. Sanders v. Vi nson, 558 S.W.2d 838 (Tenn. 1977); Holloway v. Putnam Count

y, 534 S.W.2d 292 (Tenn. 1976), cited i n Dobbs v. Guenther , 846 S.W .2d 270 (Tenn. App . 1992). This test requires this Court to take all the wellpleaded, material f actual allegations as true and to const rue the complaint liberally in favor of the plai ntiff. Lewis v. Allen, 698 S.W .2d 58 (Tenn. 1985 ). The trial cour

t found that the deceased was a thir d-party be neficiary o f the contract between EEC and Sweetwater Hospital, 2 but that the contr act was not breached by E CC. The motion of EC C to dismiss was therefore granted for fai lure to state a claim. W hether the dismissal of ECC was proper is the sole issue o n appeal.3 The contract between ECC and Sweetwater H ospital prov ides, as pert inent here: AGREEMENT

This Agreement madeeffective the 1st day of October , 1993, by and between SWEETW ATER HOSPITAL ASSOC IATION, a hospit al operating in Sweetwater, Tennessee, (“Hospital”), and EMERGE NCY COVERAGE CORPORATION (“ECC”). RECITALS A. The Hospital operates an Emergency Department, which requires physici ans who have the training , experienc e, and qualificati ons necessary to practice medicine as emerg ency physicians. B. The Hospital has determined th at for proper and e fficient operation of the Emerg ency Depar tment several objectives must be met, including , 24-hour coverage, coor dination of schedul es and assignments, administrati ve ease and effici ency, consi stency and uniformity i n book and recor d-keeping, coordinated direction of nonphysicia n personnel, and quality patient care. C. The Hospita l has determined that the proper , orderly and efficient delivery of qual ity emerg ency serv ices can be ac complished best by entering into an exclusive coverage arrangement with ECC. D. ECC pr

ovides ind ependent contractor physici ans to render emergency medical serv ices at hospi tals. ECC is wil ling to ac cept the responsibil ity of prov iding sai d physici ans to render emer gency medi cal service s in the Emerg ency Depar tment in accorda nce with r ecognize d medical standar

ds, the byl aws of the Medi cal Staff of the Hospital (“Medical Staff”), the polic ies and procedur es of the Hospital , and the terms and condit ions set forth i n this agreement. E. ECC w ill, at it s expense, contract w ith Emergency Physici ans (“Physi cians”) to

render emerg ency medical servic es at Hospital . For purposes of this Agreemen t, the term “Physician” or “Physicians” shall mean physici ans rendering emergency medical serv ices at the H ospital by and throug h contractual agreements between such phys icians and ECC. F. The Hospital and ECC desi re to prov ide a full statement of their agreement in connecti on with the operation of the Depa rtment during the t erm of this Agr eement. Accordingly, the parties agree as follows: I. OBLIGATIONS OF ECC. ECC agrees t o the f ollowing: 1. Medical Services. ECC shall provide P hysician s to staff the Emergency

Department and render emergency medical serv ices twenty- four (24) hours

per day, s even (7) d ays per week, fifty-two (52) weeks per

year to al l patients w ho present themsel ves in the Emergency

Department, pr

ovided those patients desir e treatment by said Physi cians. Physicians are not responsib le for any pati ent who presents to the Emergency Department and ch ooses any othe r4 examination and treatment options offered by Hospi tal personnel. Hospita l acknowle dges tha t ECC will perf orm its ob ligation s through contracts w ith Physi cians who are independent con tractors and not employees of ECCor Hospital , provided Physici ans meet the requirements set forth herein with respect to qualifications.

. . . . . . . The thrust of the plai ntiff’s argument on appeal is dir ected to the Contract Rec ital that: “ . . . ECC is willing to accept the responsibility of providing said Physicians to render emergency medical services in the Emergency Department in ac cordance w ith recogni zed medical standards . . . “

The argument conti nues that the contr act was br

eached since EC C agreed to accept the responsibility to provide physicians to render medical services in accordance with recognized medical standards, and that Dr. C rowder fail ed to do so. Sin ce the deceased was

a third-par

ty beneficiar

y of the contra ct, plaintiff arg ues that, ipso facto, she is entitl ed to damages for s uch breach. The plaintiff does not al lege that EC C is vi cariously liable for the alleged negligenc e of Dr. Crow der, and it i s well- settled that or dinarily a party i s not liable for the neglig ence of an independent con tractor, Carr v. C arr, 726 S.W.2d 932 (Tenn. App. 1986). ECC

is a “staffing ” company, and initiall y fulfilled i ts contractual obligations

by furnishi ng a Medica l Directo r and independent contractor phy sicians acceptable to the Hospital. The plaintiff does not al lege that Dr . Crowder was incompetent or unl icensed or that ECC was

neglige nt in presenti ng him to the Hospital for ap proval; r ather, the plai ntiff argues that b ecause of the lang uage of the Recital, EC C breached the contract w hen Dr. Cr owder failed to render medic al services in accordance with recognized medical standards. The plaintiff also argues that the r uling by the trial court that ECCdid not breach its contract w ith the Hospi tal went i mpermissibly beyond the scope of the R ULE 12.02(c) moti on, because ECCexpressl y agreed to be liable w hen its contractual phy

sicians “failed to perform up to recogniz ed medical standar ds.”3 Willard v. Cl aborn, 419 S.W.2d 168 (Tenn. 1967) is ex plicative of the doctrine. A b eneficiary may maintain an action in his own name aga inst the promi sor where the pr

omise between the promisor an d the promisee i s made upon sufficient consideration for the benefit of the thi rd-party beneficiary , who w ill be one of three types: a donee beneficiary, a creditor beneficiary, and an incidental beneficiary . The latter had no s tanding to sue . Presumably , the trial judge wh o held that the dec edent was a thir

d-party be neficiary, did so under the creditor theory. The appellee does not question this holding. The trial court went fu rther, as stated, and held no breach was proved.

4 Recitals may

have a materi al influence in construing the contract a nd determining the intent of the par ties, and in s uch respect the y should, as far as possible, be reconciled with the operative clauses and be given effect. Generally if the recitals in a contract are clear and the op erative part is ambiguous, the recitals govern . . . 17 Am Jur Contracts sec. 268. 5 The quoted Recital, to which we may look to ascertain the inten t of the parties, 17 Am Jur Contracts, Sec. 268, reci tes that the physicians pr ovided by

it wil l render medical serv ices “in ac cordance w ith recogni zed medical standards.” Any act of medical malprac

tice result ing in inj ury as a pr oximate causearguably falls below

the recogniz ed standard, and i f the theory of the a ppellant is correct ECCthereby becomes liable under the Reci tal to any E R patient w ho by vi rtue of seeking ER treatment becomes a t hird-party beneficiary

to the contrac

t. 3 Did the all eged negligent acts of Dr. C rowder constitute a bre ach of the contract between ECC

and the Hospital? W e think so, in light of the language of th e Recital. The Recital 4 is the only provision of the contract which identifies the spe cific duties that ECC

agreed to per

form. It wi ll be seen that ECC did not merely agree to provide “ qualified” ph ysicians ; it agreed to provi de physici ans to render services “in accordance with recogniz ed medical

standards.” In the case at hand, we must “take it as tr ue” that Dr. Crowder failed to “rend er service s in accordan ce with r ecognize d medical standar ds.” We must also ‘take as true’ that the deceased was a third-party beneficiary of the contract between ECC and the Hospital , since thereis no appeal from t he holding of the trial cour t to that effect. Th e conclusion thereupon logically follows that ECC was improvidently dismissed from thi s case. Reversed and remanded, with costs assessed to ECC.

_____________________________ W illiam H. I nman, Senior Ju dge6

CONCUR:

_______________________________ Housto n M. Godd ard, Pre siding Jud ge

_______________________________ Don T. Mc Murray, Jud ge