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Sisters of Providence in Washington v. A.A. Pain Clinic12/19/2003
Before the drafting of the 1995 Letter of Understanding, Chandler wrote two letters to Dr. Norman of the Group, seeking to delineate the scope of his privileges under the 1994 exclusive. These letters were also provided to Providence Hospital. The letters were on A.A. Pain stationary and list Chandler as A.A. Pain's Medical Director. Chandler elicited testimony at trial showing that these letters led directly to the drafting of the Letter of Understanding. Again, viewing the evidence in the light most favorable to Chandler, we find there was sufficient evidence that A.A. Pain was a known principal when the 1995 Letter of Understanding was drafted.
It is uncontested that Chandler, in practicing chronic pain management at Providence, did so as an employee of A.A. Pain. In Alaska a physician may practice through a professional corporation, and when this occurs the professional corporation, as well as the physician, is considered to be rendering the professional services. Providence knew that Chandler was practicing through A.A. Pain, and when Providence breached Chandler's contractual privileges it knew or should have known that this hindered his performance as an employee of A.A. Pain. It does no damage to established principles of law to allow A.A. Pain to sue for the loss thereby suffered. Just as a professional corporation may recover as damages for lost profits lost compensation to its principals, it should be entitled to recover as damages earnings losses suffered by its principals. We therefore conclude that A. A. Pain had the right to sue for the breach of Chandler's hospital privileges. We thus reverse the superior court on this issue.
Cross-Appeal Issue 3Did the court err in awarding prevailing party attorney's fees of $33,183.35 to APMC?
The only jury verdict not in favor of APMC was on Chandler's claim for interference with contract. This verdict was subsequently overturned by the superior court's grant of j.n.o.v. As a result, the superior court deemed APMC to be a prevailing party and, over objection, granted it attorney's fees of $33,183.25 against both Chandler and Borrello. The award against Chandler should be reconsidered in light of our holding that Chandler was at least entitled to nominal damages on his claim against APMC. The discussion that follows applies to the award against Borrello and may apply to Chandler if the superior court concludes that APMC was the prevailing party on Chandler's claim despite his nominal award.
APMC, because of an indemnification agreement with Providence, was not obligated to pay for its own attorney's fees. As justification for granting attorney's fees, the superior court relied on Gregory v. Sauser and Civil Rule 82. The superior court explained:
Civil Rule 82 mandates the award of attorney's fees to the prevailing party. The fact that a particular defendant or plaintiff did not pay for any attorney's fees out his own pocket does not affect that individual's right to attorney's fees. In discussing whether Civil Rule 82 attorney's fees should be awarded in cases where a party did not have an obligation to pay for those services, the Alaska Supreme Court has stated "any further distinction, based upon whether the client has an obligation to pay for the legal services rendered, is untenable." Therefore, the fact that APMC did not have obligation to pay for attorney's fees is not relevant to its right to recover attorney's fees.
(Citations omitted.)
Chandler and Borrello argue that, though Gregory should indeed be applicable to cases where a party's attorney is provided through legal aid or is paid by an insurer, "where the party's attorney is provided and paid by a non-prev
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