21 Jun Citation: Dutta v. St. Francis Reg’l Med. Ctr., 85
Citation: Dutta v. St. Francis Reg’l Med. Ctr., 850 P.2d 928 (Kan. Ct. App.1993)FactsOn July 1, 1987, Dr. Dutta, a radiologist, began working in the radiologydepartment of the hospital as an employee of Dr. Krause, the medical18317director of the hospital’s radiology department. On August 5, 1988, thehospital terminated Krause’s employment as medical director. On August 8,1988, Dutta and the hospital entered into a written employment contract witha primary term of 90 days. The contract provided that if a new medicaldirector had not been hired by the hospital within the 90-day period, theagreement was to be automatically extended for a second 90-day period.Following a period of recruitment and interviews, the hospital offered Dr. Tanthe position. Tan and the hospital executed a contract making him themedical director of the radiology department. The contract granted Tan theright to provide radiation oncology services on an exclusive basis subject tothe exception of allowing Dutta to continue her practice of radiation oncologyat the hospital. On April 24, 1989, the hospital notified Dutta that the 90-daycontract had expired and that Tan was appointed as the new medicaldirector. The letter provided in part:It is our intent at this time to establish an exclusive contract with Dr.Donald Tan for medical direction and radiation therapy at SFRMC. Yourmedical staff privileges to practice radiation therapy at SFRMC will notbe affected by this action. You will be allowed to maintain your currentoffice space for radiation oncology activities; however, you should makealternative arrangements for your billing and collection activities. [Id. at931]Dutta and Tan then practiced independently of each other in the samefacility. On October 13, 1989, Tan became unhappy with this arrangementand requested exclusive privileges, stating he could not continue as medicaldirector without exclusivity. On February 2, 1990, an exclusive contract wasauthorized by the hospital. Dutta was notified that she would no longer bepermitted to provide radiation therapy services at the hospital after May 1,1990. By letter, Dutta twice requested a hearing on the hospital’s decision torevoke her right to use hospital facilities. Both requests were denied.Dutta sued the hospital for breach of employment contract after the hospitalentered into an exclusive agreement with Tan, thereby denying Dutta theuse of the hospital’s radiology department and equipment. Dutta presentedevidence about the purpose of the requirement in her contract with thehospital that provided that the new medical director be mutually acceptableto both parties. A hospital administrator testified that the hospital and Duttaincluded the phrase mutually acceptable in the contract because [w]e bothagreed that we wanted the person being recruited to be compatible withDutta [Id. at 932].318IssueWas the language, mutually acceptable, ambiguous in the employmentcontract between the hospital and Dutta?HoldingThe Kansas Court of Appeals held that substantial evidence supported thejury’s verdict that the hospital breached its written employment contract withDutta by hiring a medical director who was not mutually acceptable to boththe hospital and Dutta.ReasonThe language in the contract is ambiguous if the words in the contract aresubject to two or more possible meanings. The determination of whether acontract is ambiguous is a question of law. Paragraphs 4 and 5 of thehospital’s employment agreement with Dutta, dated August 8, 1988, read asfollows:4. During the term of this Agreement the Medical Center shall be activelyrecruiting for a full-time Medical Director for the Radiation Therapydepartment. . . . Dr. Dutta shall be involved in the interviewing process.The person selected for [the] above positions shall be mutuallyacceptable to the Medical Center and Dr. Dutta. Dr. Dutta may discusspotential business arrangements with each individual interviewed.5. Once the full-time Medical Director or part-time radiation therapist isselected, Dr. Dutta will, in good faith, attempt to reach a satisfactorybusiness arrangement with the selected individual. [Id. at 936]The testimony of Dutta, the hospital administrator, and the attorney whorepresented Dutta in contract negotiations provides a factual basis for thejury to find that the phrase, mutually acceptable, in the contract wasintended by Dutta to ensure that the hospital would select a medical directorwho indicated a willingness to form a partnership or otherwise acceptablebusiness relationship.
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