Citrus Memorial Health Foundation, Inc. v. Citrus County Hospital Board
108 So. 3d 675
Fla. Dist. Ct. App.2013Background
- Citrus Memorial Health Foundation appeals a final summary judgment in Citrus County Hospital Board’s favor, which held chapter 2011-256 does not impair contracts or violate Article I, Section 10.
- In 1990 the Board transferred control of Citrus Memorial Hospital to the Foundation via a Lease and an Agreement for Hospital Care, with amendments extending this arrangement to 2033.
- Chapter 2011-256 imposed Board oversight over the Foundation’s budget, borrowing, and capital improvements, and amended the Foundation’s Articles and bylaws with Board-director influence.
- The Foundation sued for declaratory judgment challenging the law as impairing vested contractual rights and affecting its Articles of Incorporation.
- The circuit court granted summary judgment for the Board, reasoning the Foundation is a public or quasi-public entity and that the law does not impair contracts.
- The lead opinion reverses, concluding the Special Law constitutes an unconstitutional impairment of contracts under Article I, Section 10.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does chapter 2011-256 impair vested contract rights? | Foundation contends impairment under Contracts Clause due to altered contractual rights. | Board contends regulation and oversight do not impair contracts; Foundation is public/quasi-public. | Yes; impairment found; reversed. |
| Is the Foundation a public or quasi-public entity for Contracts Clause analysis? | Foundation argues status as private entity; impairment analysis should apply with protections. | Circuit court treated Foundation as public; O’Malley framework applies. | Foundation not treated as public per reasoning; impairment still governs, and reversal stands. |
Key Cases Cited
- O’Malley v. Florida Insurance Guaranty Association, 257 So.2d 9 (Fla. 1971) (defines public vs private corporations for public-law analysis)
- Dewberry v. Auto-Owners Insurance Co., 363 So.2d 1077 (Fla. 1978) (immediate contract impairment prompts per se scrutiny under Contracts Clause)
- Pomponio v. The Claridge of Pompano Condominium, Inc., 378 So.2d 774 (Fla. 1979) (balancing test for impairment with police power; least restrictive means)
- Yamaha Parts Distributors Inc. v. Ehrman, 316 So.2d 557 (Fla. 1975) (frames limits on impairment under Contracts Clause)
- In re Advisory Opinion to the Governor, 509 So.2d 292 (Fla. 1987) (antem per curiam on interpretation of constitutional provisions)
- Cohn v. Grand Condominium Ass’n, Inc., 62 So.3d 1120 (Fla. 2011) (Contracts Clause considerations in governance of associations)
- State Farm Mutual Automobile Ins. Co. v. Gant, 478 So.2d 25 (Fla. 1985) (Contracts Clause context and limitations)
- Lee County v. Brown, 929 So.2d 1202 (Fla. 2d DCA 2006) (discussion of per se vs balancing approaches in contract impairment)
- Aztec Motel, Inc. v. State ex rel. Faircloth, 251 So.2d 849 (Fla. 1971) (charter and corporate governance as contract with the state)