Fahed Fayad, M.D. v. University of Miami, etc.
Not yet published in Southern Reporter (Opinion filed May 8, 2024) (2024)
Sections
Rule of Law:
A breach of contract claim cannot be maintained based on hospital bylaws that expressly disclaim the intent to create a contract, and a fraud claim requires proof of detrimental reliance and resulting damages.
Facts:
- Dr. Fayad was a radiologist who operated his medical practice from the University of Miami Hospital.
- The University temporarily closed the hospital facility.
- The University reorganized the facility as a branch of the Sylvester Comprehensive Cancer Center.
- As a result of the reorganization, the facility became subject to different bylaws.
- The University did not automatically continue Dr. Fayad's existing admitting privileges upon reopening/reorganization.
- The original hospital bylaws contained specific language stating they did not obligate the University to enforce them.
- The bylaws also specifically disclaimed any intent to be construed as creating a contract between the University/hospital and admitting physicians.
Procedural Posture:
- Fayad sued the University of Miami in the Circuit Court for Miami-Dade County alleging breach of contract and fraud in the inducement.
- The trial court granted a directed verdict in favor of the University on the fraud in the inducement claim.
- The case proceeded to a jury trial on the breach of contract claim.
- The jury found the University liable for breach of contract.
- The University moved for a judgment notwithstanding the verdict (JNOV) regarding the contract claim.
- The trial court denied the University's motion for JNOV.
- Fayad appealed the directed verdict on the fraud claim, and the University cross-appealed the denial of JNOV on the contract claim to the Third District Court of Appeal.
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Issue:
Do hospital bylaws create an enforceable contract with a physician when they explicitly disclaim creating a contract, and can a fraud in the inducement claim survive without evidence of detrimental reliance?
Opinions:
Majority - Judge Bokor
No. The court held that no breach of contract occurred because the bylaws expressly disclaimed creating a contract, and the fraud claim failed due to a lack of evidence regarding reliance. Regarding the fraud claim, the court affirmed the lower court's decision because the plaintiff presented no evidence that he acted in detrimental reliance on the University's representations or suffered consequent injury from such reliance. Regarding the contract claim, the court reasoned that the bylaws upon which the claim was based contained no language obligating enforcement and specifically disclaimed creating a contract. Since a valid contract is a prerequisite for a breach of contract claim, and the bylaws were not a contract, the claim failed as a matter of law.
Analysis:
This decision reinforces the protective power of disclaimer clauses in institutional bylaws. By upholding the text of the bylaws which explicitly stated they did not create a contract, the court prevented the physician from using administrative rules as a basis for employment-style litigation. The ruling clarifies that medical staff bylaws are not automatically contracts and that courts will look to the specific language of the documents to determine enforceability. Furthermore, the decision serves as a reminder that fraud claims require more than just a false statement; the plaintiff must rigorously prove they relied on that statement to their detriment.
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