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Sisters of Providence in Washington v. A.A. Pain Clinic12/19/2003
le injury.
The rule of law is clear that attorney's fees for work in the case under review are not recoverable as damages. Thus, Lewis's fees cannot be considered a part of a damage award. Neither should the superior court consider Chandler's time spent actually preparing this litigation.
However, the cancellation and rescheduling of the procedure led to a disruption in Chandler's professional schedule apart from litigation preparation. Although not specifically quantified, this loss of professional time is without question a compensable injury , entitling Chandler to at least nominal damages. We therefore reverse the superior court on this issue and remand for entry of a nominal damage award in favor of Chandler on this claim.
In view of this disposition, the superior court on remand should reconsider whether APMC is still the prevailing party with regard to Chandler's claim.
Cross-Appeal Issue 2Did the court err in granting j.n.o.v. in favor of Providence on A.A. Pain's claim of violation of the implied covenant and fair dealing on the ground that Providence's contract was with Chandler rather than A.A. Pain?
Citing the hospital privileges agreement between Chandler and Providence and the limited privileges afforded to Borrello, Chandler and Borrello argued at trial that Providence's actions during the exclusive violated the covenant of good faith and fair dealing.
The jury decided against Borrello but in favor of Chandler. Providence moved for j.n.o.v., arguing that in order to prove a breach of the covenant of good faith and fair dealing, one must preliminarily prove the existence of a contract. Providence contended that A.A. Pain "never produced any evidence of a contract between Providence and A.A. Pain Clinic, and it is undisputed that no such contract ever existed." Given that Chandler was suing in the name of A.A. Pain rather than personally, whereas his privileges at the hospital were personal, Providence argued that A. A. Pain was not entitled to maintain this claim. The superior court granted Providence's motion, reasoning that because no contract existed between A.A. Pain and Providence, there could be no breach of the covenant of good faith and fair dealing.
Chandler argues that the superior court erred because it failed to consider that a party who contracts with an agent may be held directly liable to the agent's principal for breach of that contract. Chandler relies on section 292 of the Restatement (Second) of Agency, regarding disclosed agency:
The other party to a contract made by an agent for a disclosed or partially disclosed principal, acting within his authority, apparent authority or other agency power, is liable to the principal as if he had contracted directly with the principal, unless the principal is excluded as a party by the form or terms of the contract.
Comment (a) to section 292 adds that "a principal may be bound as a party to such a transaction even though the other party did not enter into it in reliance upon the appearance of authority in the agent."
Providence argues that the above rules have no application because there is no evidence that Chandler was acting as an agent for A.A. Pain when he "contracted" for his privileges at Providence. Providence notes that A.A. Pain was not incorporated until 1994, more than twenty years after Chandler received his privileges at Providence. Regarding the 1995 Letter of Understanding, which purported not to "reduce Dr. Chandler's existing practice," Providence argues that the language - never mentioning A.A. Pain - simply stresses the continuity of the privileges agreement personal to Chandler.
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