HOUSTON - The 14th Court of Appeals recently affirmed a $667,666.67 judgment against Texienne Hospital Systems in litigation brought by KKU Surgical Management, a staffing company.
In 2017, KKU filed a breach of contract suit against Apollo Hospital (now known as Texienne Hospital) for failing to pay for services rendered, court records show.
According to the 14th Court’s May 3 opinion, in February 2016 KKU and Apollo entered into a contract in which KKU agreed to staff Apollo’s emergency rooms with qualified physicians. Apollo agreed to pay a flat fee of $290,000 per month. During the term of the contract, Apollo negotiated a sale of its facilities, which became effective in November 2016.
The new hospital system paid KKU for the remainder of the contract term, but a balance still remained because Apollo did not pay KKU for September 2016, October 2016, or the first few days of November 2016, before the sale was completed, the opinion states.
“KKU sued Apollo to recover the unpaid balance, which KKU alleged was $667,666.67,” the opinion states. “The case proceeded to a nonjury trial, where Apollo argued that KKU should recover nothing because KKU was illegally practicing medicine, or alternatively, because KKU’s damages were offset by its own breaches, which were prior and material. The trial court rejected all of Apollo’s defensive arguments. The trial court then signed findings of fact and conclusion of law in favor of KKU, and awarded KKU all of its requested relief.”
On appeal, the hospital argued that the judgment should be reversed because the contract is illegal and unenforceable for having violated the prohibition against the corporate practice of medicine, and because the evidence is legally and factually insufficient to support the trial court’s findings.
The 14th Court overruled both issues and affirmed the trial court’s judgment.
Case No. 14-21-00006-CV