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Monday, September 17, 2012

Seventh Circuit Finds Doctor Was Entitled To Lost Professional Fees

7th CirWhen Trinity Medical Center (Trinity) terminated Dr. Bassam Assaf’s employment as its medical director, Assaf filed suit for breach of contract.  Assaf and Trinity’s new CEO, Tom Tibbitts, negotiated an out-of-court settlement.  In return for dropping his claim, Assaf agreed to the following terms:

  •  A salary of $50,000 each year from 2009-2011; and
  • Automatic one-year renewal of his employment thereafter unless either party gave 90-days notice of intention to terminate the agreement 
Trinity later claimed that the agreement was incomplete and invalid and refused to reinstate him.  Then, in 2011, it provided notice of termination to Assaf in accordance with the notice terms agreed to.  This must have put Assaf into some perplexity, as he had never been reinstated.  "I haven't been employed for three years, and now on top of that, I'm fired," he might have cried.  In the District Court, the Magistrate decided to enforce the contract, but ultimately found that under Illinois law, he could not order Trinity to reinstate Dr. Assaf. The Magistrate also refused Assaf’s request for professional fees separate from his salary, finding that Assaf had failed to provide adequate evidence of any such lost fees during discovery and thus that Trinity had no opportunity to challenge Assaf's evidence

In Assaf v. Trinity Medical Center, the Seventh Circuit upheld part of the Magistrate's ruling but found that the Magistrate had abused his discretion in preventing Assaf from introducing evidence of lost professional fees.  Assaf sought specific performance of the settlement agreement, entitling him to employment through 2012.  He claimed that Trinity could not terminate him pursuant to an agreement that it had breached.  But while contract law does not permit a party in material breach to benefit from a contract term, the Seventh Circuit was not persuaded that Trinity had taken unfair advantage of the contact terms simply by exercising its right of termination with notice.  

The Magistrate denied Assaf's claims for professional fees because Assaf had disclosed his damage calculations after discovery had ended.   The Seventh Circuit found that excusion of the evidence was an abuse of discretion.  Assaf provided the information a month before trial was set to begin.  Not only was Trinity aware that Assaf sought professional fees, it had access to the information regarding these fees all along, since the information was contained in Trinity's files.  The case was remanded for a determination of the fees owed to Dr. Assaf.

[Christina Phillips & JT]

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