725 A.2d 462 (D.C. 1999), 97-CV-817, Morton v. National Medical Enterprises, Inc.

Docket NºParis MORTON (No. 97-CV-817), Patricia Walker (No. 97-CV-818), Kathryn James (No. 97-CV-819), Russell Cappello (No. 97-CV-855), and Bernard Freed (No. 97-CV-872), Appellants,
Citation725 A.2d 462
Case DateFebruary 11, 1999
CourtCourt of Appeals of Columbia District

Page 462

725 A.2d 462 (D.C. 1999)

Paris MORTON (No. 97-CV-817), Patricia Walker (No. 97-CV-818), Kathryn James (No. 97-CV-819), Russell Cappello (No. 97-CV-855), and Bernard Freed (No. 97-CV-872), Appellants,

v.

NATIONAL MEDICAL ENTERPRISES, INC., n/k/a Tenet Healthcare Corp., et al., Appellees.

Nos. 97-CV-817, 97-CV-818, 97-CV-819, 97-CV-855, 97-CV-872.

Court of Appeals of Columbia District

Feb. 11, 1999

Argued April 22, 1998.

Page 463

Kenneth D. Pack, with whom E. David Hoskins, William G. Minkin, Baltimore, MD, and John Jude O'Donnell Washington, DC, were on the brief, for appellants.

F. Joseph Warin, with whom Julia A. Dahlberg and Thomas G. Hungar, Washington, DC, were on the brief, for appellee Psychiatric Institutes of America, Inc.; Paul D. Krause and Carol Ann Petren, Washington, DC, for appellee Psychiatric Institute of Washington, D.C., Inc.; Lawrence K. Gustafson, Washington, DC, for appellee National Medical Enterprises, Inc.; Steven A. Hamilton and John J. Dillon, Washington, DC, for appellee Gary R. Spivack, M.D.; Andrew E. Vernick and Michael K. Wiggins, Annapolis, MD, for appellees Richard Greenberg, M.D., Shirley Papilsky, M.D., and Jean Smith, M.D.; Thomas V. Monahan, Winchester, VA, and Susan T. Preston, Baltimore, MD, for appellees Alan J. Salerian, M.D., Lawrence A. Brain, M.D., Joseph Marnell, M.D., and Metropolitan Psychiatric Group.

Before SCHWELB and RUIZ, Associate Judges, and KING, Senior Judge. [*]

KING, Senior Judge:

In this consolidated appeal, appellants challenge the trial court's award of summary judgment to appellees on statute of limitations grounds. The litigation arose out of the allegedly negligent treatment appellants received at psychiatric hospitals affiliated with or subsidiary to National Medical Enterprises, Inc. (NME), between 1986 and 1991. Appellants' suits, which were filed in Superior Court on May 1, 1996, therefore are barred by the three-year statute of limitations for medical malpractice, D.C.Code § 12-301 (1995 Repl.), unless appellants have a separate cause of action for fraud that accrued on or after May 1, 1993. Concluding that appellants do not have a cause of action based on NME's fraudulent nationwide conspiracy that is independent of their medical malpractice claims and that the trial court properly granted summary judgment on statute of limitations grounds, we affirm.

I. FACTS

On June 29, 1994, in the United States District Court for the District of Columbia, as a result of criminal investigations conducted by the United States Attorney, Psychiatric Institutes of America (PIA) [1] pleaded guilty to a limited information and agreed to a fine of $379 million in exchange for a promise by the government not to prosecute NME. Appellants here allege that the criminal investigation uncovered a nationwide fraudulent conspiracy to extract maximum

Page 464

insurance benefits from patients without regard for treatment needs.

According to the allegations set forth in the complaint, NME devised and engaged in a nationwide scheme which systematically and fraudulently induced individuals to be admitted to psychiatric hospitals where such admissions were not necessary. [2] As part of that scheme, NME promoted a corporate culture in which doctors and other hospital staff were rewarded for converting potential patients into actual patients without regard to those individuals' treatment needs. [3] Similarly, a network of outside health care providers in the community, [4] were rewarded for guiding patients to NME facilities, again without regard for actual treatment needs. All hospital staff members, as well as outside referral sources, were required to participate in NME's marketing plan, whose sole purpose was to generate claims against patients' health insurers.

The complaint also alleges that potential patients receiving an initial psychiatric evaluation, as well as those calling an NME facility, were immediately requested to give insurance coverage information. Patients with insurance were almost invariably admitted, assuming they consented, without regard for treatment needs. In addition, NME staff researched the terms of the patients' insurance coverage and generated a diagnosis matching the category with the most available benefits. [5] NME staff were often instructed to chart the diagnosis and to omit any notations that might indicate that a patient's hospitalization was unnecessary or inappropriate. NME then submitted the reimbursement claims, which contained knowingly false representations that the admission was medically necessary and appropriate, to the patient's insurer.

It was also contended that, once admitted, patients were typically kept for the maximum length of stay their insurance would cover, which was often twenty-eight days, regardless of their illness. Staff were ordered to keep patients in NME facilities over holidays and weekends to maximize benefits. If a patient asked to leave an NME facility before the expiration of insurance coverage, an AMA (Against Medical Advice) team made up of medical professionals was assigned to persuade that patient to stay until coverage ended.

After the negotiated plea bargain agreement was entered, more than 200 civil actions were filed in the Superior Court beginning in March 1995, on behalf of former patients, and in some cases their parents, against NME-owned psychiatric hospitals in the District of Columbia, Maryland, and Virginia. [6] A group of twenty of these plaintiffs, whose claims were facially barred by the three-year statute of limitations for medical malpractice suits, agreed to limited discovery with respect to the statute of limitations issue only and subsequently responded to defendants'

Page 465

interrogatories on that issue. [7] The responses of eleven of the plaintiffs in this group indicated some awareness of the facts underlying defendants' alleged misconduct, and of injuries resulting from that alleged misconduct, prior to May 1, 1993. [8] On the basis of the responses of these eleven plaintiffs to the interrogatories, the defendants moved for summary judgment, which the trial court granted on April 2, 1997.

In granting the defendants' motion for summary judgment on statute of limitations grounds, the trial judge rejected the plaintiffs' argument that they had reasonably relied on defendants' assurances that their hospitalizations were appropriate, concluding that "such reliances were unreasonable" given "the extreme nature of [the] allegations." The trial judge also rejected plaintiffs' contention that they could not be charged with knowledge of their cause of action for fraud prior to February 1, 1995, when their counsel informed them of defendants' involvement in a " 'nationwide fraudulent conspiracy,' " concluding that all of their causes of action accrued at the time when they learned or should have learned of their medical malpractice claims. Judge Graae explained:

This court sees the medical malpractice claims as the central allegation in these cases. Generally, without a finding of medical malpractice, Plaintiffs do not have a claim for fraud, conspiracy and other related causes of action. Therefore, since the statute of limitations has run as to Plaintiffs medical malpractice claims, Defendants' motion should be granted.

Appellants in this case are five of those eleven plaintiffs whose suits were found to be barred by the statute of limitations by Judge Graae. All five are former patients of the Psychiatric Institute of Washington (PIW), a subsidiary of PIA. In their responses to appellees' interrogatories, each states that he or she suspected, at or around the time of their hospitalizations, that the treatment received at PIW was inappropriate, inadequate, and abusive, and that it caused them injury.

Bernard Freed, who was referred to PIW for anxiety, [9] claims he was not seen by his treating physician until five or six days after admission; his brother, a physician, told him he should have been seen within twenty-four hours. [10] Although "he expected a retreat atmosphere to relieve his anxiety ... he was placed with patients experiencing psychosis, alcoholism, [and] drug withdrawal, all of which heightened his anxiety." [11] Freed claims that he never received individual therapy sessions and that the group sessions, involving only about twenty minutes of "therapy," were dominated by "psychotic patients who [would] ramble incoherently, or scream or yell," and were a "sham." Freed suffered severe withdrawal symptoms during his first three days at PIW, [12] after his medication was taken from him upon admittance. Intending to switch him to a new medication, PIW staff

Page 466

allegedly failed to manage the switchover properly and neglected to provide Freed with any support for his severe withdrawal symptoms or information concerning the switchover.

Russell Cappello alleges that PIW failed to do even a rudimentary screening of roommates and that, as a result, he was improperly placed "in a room with a homosexual/bisexual roommate" who "attempte[d] to force Cappello to have oral sex," which "greatly traumatized him." He claims the hospital failed to provide appropriate treatment, including family therapy and counseling. Cappello also alleges that "medication was withheld from him until the day before discharge, allowing [him] to linger in psychic pain and to suffer ... unnecessarily."

Paris Morton was taken to PIW by his mother due to displays of uncontrollable anger. According to Morton, [13] despite the fact that he had never used drugs and despite his subsequent complaints, he, too, was improperly "housed with addicts and others with drug and alcohol problems." Further, PIW staff "never discussed his anger and how to...

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  • 818 A.2d 974 (D.C. 2003), 99-CV-1386, Hardi v. Mezzanotte
    • United States
    • District of Columbia Court of Appeals of Columbia District
    • 20 Marzo 2003
    ...its cause in fact, and (3) some evidence of wrongdoing on the part of the person responsible. Morton v. National Med. Enterprises, Inc., 725 A.2d 462, 468 (D.C.1999) (citing Bussineau, 518 A.2d at Appellants argue that appellee had actual knowledge of her injury, its cause and evidence of D......
  • Gray v. Staley, 081015 DCDC, 1:14-cv-00937 (APM)
    • United States
    • Federal Cases United States District Courts District of Columbia
    • 10 Agosto 2015
    ...law applies the "discovery rule" to determine when the limitations period started running. Morton v. Nat'l Med. Enters., Inc., 725 A.2d 462, 467-68 (D.C. 1999). Under this rule, a cause of action only begins to accrue once a party "knows or, through the exercise of reasonable......
  • 902 A.2d 784 (D.C. 2006), 02-CV-649, Brin v. S.E.W. Investors
    • United States
    • District of Columbia Court of Appeals of Columbia District
    • 13 Julio 2006
    ...841 A.2d 776 (D.C.2004); Hardi v. Mezzanotte, 818 A.2d 974 (D.C.2003); Doe, supra, 814 A.2d 939; Morton v. Nat'l Med. Enters., Inc., 725 A.2d 462 (D.C.1999); Cevenini v. Archbishop of Washington, 707 A.2d 768 (D.C.1998); Hendel v. World Plan Executive Council, 705 A.2d 656 (D.C.1997); Diamo......
  • 738 A.2d 783 (D.C. 1999), 97-CV-1473, Burgess v. Pelkey
    • United States
    • District of Columbia Court of Appeals of Columbia District
    • 30 Septiembre 1999
    ...is "completely dependent upon and intertwined with" his negligence claim for the same injury. Morton v. Nat'l Med. Enter., Inc., 725 A.2d 462, 471 "It is well settled that in a determination of the applicable statute of limitations, the plaintiff's characterization of the cla......
  • Free signup to view additional results
25 cases
  • 818 A.2d 974 (D.C. 2003), 99-CV-1386, Hardi v. Mezzanotte
    • United States
    • District of Columbia Court of Appeals of Columbia District
    • 20 Marzo 2003
    ...its cause in fact, and (3) some evidence of wrongdoing on the part of the person responsible. Morton v. National Med. Enterprises, Inc., 725 A.2d 462, 468 (D.C.1999) (citing Bussineau, 518 A.2d at Appellants argue that appellee had actual knowledge of her injury, its cause and evidence of D......
  • Gray v. Staley, 081015 DCDC, 1:14-cv-00937 (APM)
    • United States
    • Federal Cases United States District Courts District of Columbia
    • 10 Agosto 2015
    ...law applies the "discovery rule" to determine when the limitations period started running. Morton v. Nat'l Med. Enters., Inc., 725 A.2d 462, 467-68 (D.C. 1999). Under this rule, a cause of action only begins to accrue once a party "knows or, through the exercise of reasonable......
  • 902 A.2d 784 (D.C. 2006), 02-CV-649, Brin v. S.E.W. Investors
    • United States
    • District of Columbia Court of Appeals of Columbia District
    • 13 Julio 2006
    ...841 A.2d 776 (D.C.2004); Hardi v. Mezzanotte, 818 A.2d 974 (D.C.2003); Doe, supra, 814 A.2d 939; Morton v. Nat'l Med. Enters., Inc., 725 A.2d 462 (D.C.1999); Cevenini v. Archbishop of Washington, 707 A.2d 768 (D.C.1998); Hendel v. World Plan Executive Council, 705 A.2d 656 (D.C.1997); Diamo......
  • 738 A.2d 783 (D.C. 1999), 97-CV-1473, Burgess v. Pelkey
    • United States
    • District of Columbia Court of Appeals of Columbia District
    • 30 Septiembre 1999
    ...is "completely dependent upon and intertwined with" his negligence claim for the same injury. Morton v. Nat'l Med. Enter., Inc., 725 A.2d 462, 471 "It is well settled that in a determination of the applicable statute of limitations, the plaintiff's characterization of the cla......
  • Free signup to view additional results