Brief Fact Summary. The circuit court found that Avera St. Luke's (Defendant) did not have the right to initiate actions that affected the privileges of medical staff such as Dr. Mahan (Plaintiff) when they had already delegated this authority.
Synopsis of Rule of Law. A hospital's medical staff bylaws do not outweigh the Board of Directors' ability to make administrative decisions.
In construing the terms of a contract, where the terms are plain and unambiguous, it is the duty of the court to construe it as it stands, even though the parties may have placed a different construction on it.View Full Point of Law
Issue. Do a hospital's medical staff bylaws outweigh the Board of Directors' ability to make administrative decisions?
Held. (Gilbertson, J.) No. A hospital's medical staff bylaws do not outweigh the Board of Directors' ability to make administrative decisions. This is not a case about issues delegated to the expertise of medical staff regarding appointments and privileges. Instead, it was an administrative decision by Defendant's Board to close Defendant's staff for particular procedures in order to secure their economic survival. Permitting the medical staff to pass on valid business decisions by the Board regarding any issue that incidentally affects the medical staff would result in an ineffective Board. In regards to hiring competent doctors, hospitals have a duty of responsibility to do so. Imposing this duty and leaving hospital boards powerless to make any decisions regarding medical staff, as the lower court suggests, would lead to results that are illogical. Reversed.
Discussion. Regardless of the arguments made in Mahan that hospital boards should not act as a rubber stamp in approving doctors for staff privileges that are approved or recommended by staff, this is actually how must hospitals do function.