Dist. Ct. erred in granting defendant’s motion for summary judgment in plaintiff-hospital’s action, alleging that defendant breached its contract with plaintiff by failing to appropriately handle plaintiff’s “revenue cycle” that required defendant to set up billing codes, bill patients/third-party payors, process paperwork and collect payments. While Dist. Ct. agreed with defendant’s argument that even if it breached said contract, plaintiff could not recover any damages, since plaintiff sought only consequential damages that were impermissible under terms of instant contract in absence of showing willful misconduct, Ct. of Appeals found that plaintiff could proceed on instant action, where lost revenue would have been direct and expected result of defendant’s failures to collect and process revenue as required under instant contract. Moreover, overall language of instant contract for revenue collection services made clear that parties did not intend to insulate defendant entirely from damages for its alleged breaches. Ct. of Appeals further held that: (1) jury could find that at least some of defendant’s alleged breaches amounted to willful misconduct to extent defendant made obviously inadequate efforts to perform on contract while trying to minimize its own out-of-pocket expenses; and (2) contract did not foreclose recovery of all lost revenue, but rather precluded recovery only of revenue that was lost as indirect result of defendant’s breach.
Federal 7th Circuit Court
Civil Court
Contracts