Phelps v. Physicians Ins. Co. of Wisconsin, Inc.

• Citation: 2005 WI 85,698 N.W.2d 643,282 Wis.2d 69
• Decision Date: 22 June 2005
• Docket Number: No. 2003AP580.,2003AP580.
• Parties: Gregory G. PHELPS, Marlene L. Phelps, Estate of Adam Phelps, Deceased, by his Special Administrator, Gregory G. Phelps, and Caroline Phelps and Kyle Phelps, minors, by their Guardian ad Litem, William M. Cannon, Plaintiffs-Respondents-Petitioners, v. PHYSICIANS INSURANCE COMPANY OF WISCONSIN, INC., a Wisconsin insurance corporation, and Matthew Lindemann, M.D., Defendants-Appellants-Cross Petitioners.
• Court: United States State Supreme Court of Wisconsin

282 Wis.2d 69

2005 WI 85

698 N.W.2d 643

Gregory G. PHELPS, Marlene L. Phelps, Estate of Adam Phelps, Deceased, by his Special Administrator, Gregory G. Phelps, and Caroline Phelps and Kyle Phelps, minors, by their Guardian ad Litem, William M. Cannon, Plaintiffs-Respondents-Petitioners, v. PHYSICIANS INSURANCE COMPANY OF WISCONSIN, INC., a Wisconsin insurance corporation, and Matthew Lindemann, M.D., Defendants-Appellants-Cross Petitioners.

No. 2003AP580.

Supreme Court of Wisconsin.

Oral argument March 3, 2005.

Decided June 22, 2005.

For the plaintiffs-respondents-petitioners there were briefs by William M. Cannon, Sarah F. Kaas and Cannon & Dunphy, S.C., Brookfield, and oral argument by William M. Cannon.

For the defendants-appellants-cross petitioners there were briefs by John S. Skilton, Christopher G. Hanewicz, Gabrielle E. Bina and Heller Ehrman White & McAuliffe LLP, Madison; and Michael B. Van Sicklen, Michael S. Heffernan and Foley & Lardner LLP, Madison, and oral argument by Michael B. Van Sicklen and John S. Skilton.

An amicus curiae brief was filed by Emile H. Banks, Jr., Vicki L. Arrowood and Emile Banks & Associates, LLC, Milwaukee, on behalf of OHIC Insurance Company.

An amicus curiae brief was filed by Timothy J. Muldowney and LaFollette, Godfrey & Kahn, Madison, on behalf of the Wisconsin Medical Society, American Medical Association and Wisconsin Hospital Association, Inc.; Laura J. Leitch, Madison, on behalf of Wisconsin Hospital Association, Inc.; Mark L. Adams and Melanie E. Cohen, Madison, on behalf of the Wisconsin Medical Society; and Leonard Nelson and AMA Litigation Center, Chicago, IL, on behalf of the American Medical Association. An amicus curiae brief was filed by Gerald J. Bloch, Frank Crivello and Warshafsky, Rotter, Tarnoff, Reinhardt & Bloch, S.C., Milwaukee, on behalf of the Wisconsin Academy of Trial Lawyers.

¶ 1. ANN WALSH BRADLEY, J.

This medical malpractice case arises out of the death of Adam Phelps at St. Joseph's Hospital in Milwaukee on November 24, 1998. At that time, Marlene Phelps, and her unborn twins, Adam and Kyle, were under the care of Dr. Matthew Lindemann, who was then an unlicensed first-year medical resident. The complaint alleged, and the circuit court found in a trial to the court, that Dr. Lindemann negligently caused Adam's death. The circuit court then apportioned 80% of the causal negligence to Dr. Lindemann and 20% to St. Joseph's hospital. The court of appeals subsequently reversed.¹

¶ 2. The petitioners, Gregory and Marlene Phelps, et al., seek review of the decision of the court of appeals. They contend that the court of appeals erred in holding that (1) excusable neglect warranted granting the defendants' motion to extend the time within which to pay their jury fee thus preserving their right to a jury trial; and (2) Dr. Lindemann was subject to the standard of care applicable to "his class." Additionally, the petitioners argue that the health care services review privilege found in Wis. Stat. § 146.38 (1997-98) does not apply to this case.²

¶ 3. Cross-petitioners, Dr. Lindemann and Physicians Insurance Company of Wisconsin, Inc., also seek review of the decision of the court of appeals. The cross-petitioners assert that the court of appeals erred in narrowly construing the term "health care provider" as it appears in Wis. Stat. § 893.55(4), so as to exclude Dr. Lindemann from its protection. According to the cross-petitioners, such a result is contrary to the legislative intent and inconsistent with this court's prior case law.³

¶ 4. We conclude that (1) the cross-petitioners waived their right to a jury trial by not timely paying the jury fee, and the circuit court properly denied their motion to extend time for paying the fee; (2) Dr. Lindemann should be held to the standard of care applicable to an unlicensed first-year resident; (3) the health care services review privilege found in Wis. Stat. § 146.38 does not apply to this case; and (4) the cap on noneconomic damages imposed by Wis. Stat. § 893.55(4)(b) does not apply to Dr. Lindemann under the facts presented. However, we remand the matter to the circuit court for a determination of whether Dr. Lindemann was a "borrowed employee" of St. Joseph's Hospital and therefore entitled to the cap protection as an "employee" of a health care provider under Wis. Stat. § 893.55(4)(b). Accordingly, we reverse the decision of the court of appeals and remand to the circuit court for further proceedings.⁴

I

¶ 5. The relevant facts are not in dispute. Marlene Phelps (hereinafter "Marlene") discovered that she was pregnant with twins in June 1998. Soon thereafter, she started bleeding and was successfully treated at St. Joseph's Hospital in Milwaukee. After that episode, she was placed on strict home bed rest.

¶ 6. Marlene's pregnancy progressed without incident until October 18, 1998, when another bleeding episode occurred. She was admitted to St. Joseph's Hospital and continued her program of bed rest. Two days later, an ultrasound revealed that one of the twins was a breech presentation (legs first). Based on this finding, Marlene was deemed a high-risk patient who required a c-section for delivery of the twins.

¶ 7. In the early morning of November 24, 1998, Marlene was awakened with constant suprapubic pain. The on-call resident, Dr. Matthew Lindemann, was contacted. Dr. Lindemann was an unlicensed first-year resident and, according to the circuit court's findings of facts, was an employee of the Medical College of Wisconsin Affiliated Hospital.⁵ His primary duty was to assess and report findings and differential diagnoses to an upper level senior resident or to the attending obstetrician. He had no authority, however, to provide primary obstetrical care or perform a c-section on Marlene.

¶ 8. Dr. Lindemann ordered lactated ringers to be administered at 2:40 a.m. for suspected contractions. They did not alleviate Marlene's pain. At 3:00 a.m., Dr. Lindemann reached a differential diagnosis of pubic symphysis pain, bladder pain, labor or placental abruption. Accordingly, he ordered a foley catheter to determine if Marlene had a bladder infection. The urinalysis returned at 3:50 a.m. indicated that she did not.

¶ 9. Due to the continued pain she was experiencing, Marlene requested at 4:15 a.m. that the attending nurse call Dr. Lindemann again. Fetal heart monitoring and an ultrasound established that the twins' heart rates were within normal ranges. Dr. Lindemann informed Marlene that he would take a picture of the ultrasound so that he could consult an upper level senior resident.

¶ 10. After this examination, Dr. Lindemann ordered a potent narcotic, Demerol, to be administered to Marlene at 4:50 a.m. and 5:20 a.m. Dr. Lindemann never satisfactorily explained his whereabouts between 4:15 a.m. and 6:00 a.m. However, there is no evidence that he ever contacted an upper level senior resident to discuss Marlene's case.

¶ 11. Marlene remained in pain when Dr. Lindemann examined her again at 6:00 a.m. At 6:45 a.m., her husband Gregory Phelps (hereinafter "Gregory") arrived at the hospital. Marlene informed Gregory that she felt the need to defecate and asked for assistance to get to the commode. At 7:00 a.m., while sitting on the commode, she reached down and felt toes extending from her.

¶ 12. Her husband rushed to the nurses' desk where he found another doctor, who delivered Adam Phelps (hereinafter "Adam") at 7:20 a.m. Adam was immediately rushed to the neonatal intensive care unit where resuscitation efforts began. The efforts proved unsuccessful, and he was pronounced dead at 7:36 a.m. Adam's death was caused from a combination of asphyxia due to cord entrapment and placental abruption, which impaired his oxygen supply.

¶ 13. During this time, Marlene was rushed from her room to the operating room where anesthesia was administered at 7:30 a.m. The second twin, Kyle, was delivered at 7:43 a.m. Afterward, the treating physicians questioned Dr. Lindemann about his decisions, his whereabouts, and his diagnosis. Dr. Lindemann's responses were primarily that he did not know or remember.

¶ 14. Marlene, Gregory, and their two children Caroline and Kyle (collectively, "the Phelpses") subsequently brought suit on the ground of negligence. On April 14, 2000, they filed an amended summons and complaint, naming Dr. Lindemann and his insurer, Physicians Insurance Company of Wisconsin, Inc. (collectively, "PIC"). PIC filed an answer on May 30, 2000, and demanded a trial by jury.

¶ 15. On July 10, 2001, the trial court entered a standard scheduling order, which provided as material to the jury-trial issue: "Jury fees must be paid in accordance with Local Rule #371 on or before 9-1-01 or the jury shall be deemed waived."⁶ PIC missed this deadline, paying the $72 jury fee by letter dated September 12, 2001, which was then filed by the clerk of circuit court on September 13, 2001. PIC did not send a copy of the late payment letter to the Phelpses' counsel.

¶ 16. Assuming that the jury fee had been paid on time, on September 11, 2002, counsel for the Phelpses and PIC filed with the trial court a "stipulation to amend scheduling order," which, among other things, set a "12 person Jury Trial" for December 4, 2002. They later filed their respective proposed jury verdicts and proposed jury instructions with the court.

¶ 17. Two days before the scheduled jury trial, the Phelpses' lawyer contacted the court, having discovered that the jury fee was paid late in violation of the scheduling order and local rule. He argued that such action, coupled with PIC's failure to notify him of the late payment, resulted in a waiver of the right to a jury trial. In a telephone conference the next day, the trial court judge agreed, concluding that PIC had waived its right to a jury trial. The court explained:

This is a highly-complicated matter. I haven't been able to concentrate on anything else because of

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