HCA Health Services of Florida, Inc. d/b/a St. Lucie Medical Center, a Florida corporation v. Cyberknife Center of the Treasure Coast, LLC, a Florida Limited Liability Company
204 So. 3d 469
Fla. Dist. Ct. App.2016Background
- CyberKnife and HCA/St. Lucie Medical Center entered a five-year CyberKnife Services Agreement (per-click payment of $5,150 plus tax for each treatment); Hospital staffed site and CyberKnife maintained equipment.
- Parties obtained a fair-market-valuation (FMV) report before contracting, containing volume projections and treatments-per-patient estimates.
- Hospital terminated the Agreement on January 25, 2008; federal Stark-regulation changes later (effective Oct. 1, 2009) made per-click arrangements unlawful.
- CyberKnife sued for breach of contract; at trial its damages expert calculated $1,842,392 in lost revenue for the period Jan. 25, 2008–Oct. 1, 2009 based on FMV volume projections.
- Trial court denied Hospital’s involuntary dismissal motions and entered judgment for CyberKnife for the lost-revenue amount plus interest and costs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CyberKnife’s claimed lost revenue is barred by the contract’s consequential-damages waiver | Lost revenue flows directly from the Agreement and is not consequential; damages should be allowed | Waiver bars consequential damages; but court should decide whether claimed damages are consequential | Court held the damages were general (not barred) because payments flowed directly from the contract |
| Proper measure of expectation damages: lost revenue vs. lost profits | Lost revenue is an appropriate measure (analogized to rent in lease cases) | Expectation damages require proof of lost profits (income minus costs); lost revenue alone is insufficient | Court held lost profits (not gross revenue) is the correct measure because the agreement involved services tied to third-party patients and had no stipulated rent |
| Sufficiency of trial proof on correct damages measure | Expert’s FMV-based lost-revenue calculation sufficed | CyberKnife failed to prove lost profits or reliance damages; proof was inadequate | Court held CyberKnife presented no admissible proof of lost profits or reliance damages; evidence was insufficient |
| Remedy given insufficiency of proof | CyberKnife requested new trial/ability to prove damages | Hospital argued judgment should be entered for defendant | Court reversed judgment for CyberKnife and remanded to enter judgment for Hospital (no second chance to prove damages at trial) |
Key Cases Cited
- Katz Deli of Aventura, Inc. v. Waterways Plaza, LLC, 183 So. 3d 374 (Fla. 3d DCA 2013) (standard of review for damages calculation)
- Del Monte Fresh Produce Co. v. Net Results, Inc., 77 So. 3d 667 (Fla. 3d DCA 2011) (requirement to prove lost profits rather than gross revenue)
- Bird Lakes Dev. Corp. v. Meruelo, 626 So. 2d 234 (Fla. 3d DCA 1993) (lost profits can be general damages when they flow directly from breach)
- Tractebel Energy Mktg., Inc. v. AEP Power Mktg., Inc., 487 F.3d 89 (2d Cir. 2007) (when recovery seeks the breaching party’s promised payments less cost, damages are general)
- Hardwick Props., Inc. v. Newbern, 711 So. 2d 35 (Fla. 1st DCA 1998) (definition and nature of consequential damages)
- E.T. Legg & Assocs., Ltd. v. Shamrock Auto Rentals, Inc., 386 So. 2d 1273 (Fla. 3d DCA 1980) (evidence of gross receipts without expense proof is inadequate for lost profits)
- Kanter v. Safran, 99 So. 2d 706 (Fla. 1958) (landlord reletting measure of damages — discussed and distinguished)
- Teca, Inc. v. WM-TAB, Inc., 726 So. 2d 828 (Fla. 4th DCA 1999) (no second opportunity to prove damages at trial; judgment for defendant if plaintiff failed to prove correct measure)
- Morgan Stanley & Co. v. Coleman, 955 So. 2d 1124 (Fla. 4th DCA 2007) (same principle regarding failure to prove damages)