Tenet Healthsystem Surgical v. Jefferson Parish Hospital Service District

426 F.3d 738 (2005)

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Tenet Healthsystem Surgical v. Jefferson Parish Hospital Service District

United States Court of Appeals for the Fifth Circuit
426 F.3d 738 (2005)

Facts

Marrero Shopping Center leased building space to Tenet Healthsystem Surgical (plaintiff). Pursuant to the terms of the lease agreement, Tenet was authorized to use the space for outpatient surgical procedures and general medical offices, including related uses. Tenet was further permitted to assign the lease with the lessor’s consent, which could not be unreasonably withheld. Thereafter, West Jefferson Medical Center (defendant) purchased the space subject to Tenet’s lease. Tenet ceased operation of its surgical center, and wished to assign the lease to Pelican Medical for use as an occupational medical clinic, treating workmen’s compensation cases, as well as the general public. West Jefferson refused to approve the assignment to Pelican. Tenet sued for breach of the lease, contending that West Jefferson’s refusal was unreasonable. West Jefferson argued that its withholding of consent was reasonable because Pelican’s planned use of the space was not permitted under the lease terms and would have brought about competition for a nearby hospital owned by West Jefferson. The district court concluded that West Jefferson’s refusal was not unreasonable. Tenet appealed.

Rule of Law

Issue

Holding and Reasoning (Davis, J.)

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