Bonzani v. Goshen Health Sys.

• Decision Date: 10 March 2022
• Docket Number: 3:19-CV-586 DRL-MGG
• Parties: ROBERT BONZANI MD, Plaintiff, v. GOSHEN HEALTH SYSTEM INC., et al., Defendants.
• Court: U.S. District Court — Northern District of Indiana

ROBERT BONZANI MD, Plaintiff,
v.
GOSHEN HEALTH SYSTEM INC., et al., Defendants.

No. 3:19-CV-586 DRL-MGG

United States District Court, N.D. Indiana, South Bend Division

March 10, 2022

OPINION & ORDER

Damon R. Leichty, Judge, United States District Court.

Dr. Robert Bonzani practiced urology at Goshen Hospital under an employment agreement with its parent, Goshen Health System, Inc. After a patient died during a procedure performed by Dr. Bonzani, Goshen Health suspended his surgical privileges. Not long thereafter, he signed a separation agreement with Goshen Health. Goshen Health and Goshen Hospital reported his suspension and resignation to the National Practitioner Data Bank (NPDB). In this suit, among other claims, Dr. Bonzani alleges that they knowingly included false and misleading statements in the NPDB report, which damaged his professional reputation and medical practice. Today the court must decide whether to grant a motion to dismiss a second amended complaint, and it does so only in part.

BACKGROUND

This case has a bit of a complex procedural history, but first the court paints the landscape of facts that root this suit. These facts emerge from the well-pleaded allegations in the second amended complaint, and they generally mirror those from the background section in the court's prior ruling on the first motion to dismiss because the factual allegations have changed little. The court must accept these facts as true for purposes of deciding the motion today.

In 2016, Dr. Bonzani began discussing with Goshen Health an opportunity to practice urology in Goshen, Indiana [ECF 80 ¶ 9]. On December 14, 2016, Dr. Bonzani and Goshen Health signed an

1

employment agreement [id. ¶ 16]. Goshen Hospital was not a signatory, though the agreement identified it as a subsidiary of Goshen Health [ECF 81 at 1]. Having privileges at Goshen Hospital was a condition of Dr. Bonzani's employment with Goshen Health [ECF 80 ¶ 14].

Dr. Bonzani began working for Goshen Health on March 15, 2017 [id. ¶ 20]. In the fall 2017, a patient died from complications during surgery [id. ¶ 31]. Goshen Hospital's Chief Medical Officer suspended Dr. Bonzani's surgical privileges [id. ¶ 34]. Goshen Hospital's Medical Executive Committee (MEC) formed an investigation committee to conduct the peer review process [id. ¶ 40]. Dr. Bonzani complied with this process by submitting recommendation letters, providing operative logs from other hospitals where he worked, and tendering proof of board certification [id. ¶ 41].

More than fourteen days into his suspension, Dr. Bonzani requested an expedited hearing, a right provided in the bylaws [id. ¶ 39]. On his own, he initiated a review of his work and found that, in his opinion, only nine of 96 cases were worth examining [id. ¶ 42]. The peer review process included sending information to an outside reviewer [id. ¶ 46]. Dr. Bonzani challenged the report on several grounds [id. ¶ 47]. The investigative committee agreed with Dr. Bonzani and ordered a new peer review report [id. ¶¶ 48-49].

That second peer review report underway, Dr. Bonzani appeared before a hearing committee to discuss the October 2017 incident [id. ¶ 54]. The hearing (rescheduled once) occurred 43 days after Goshen Hospital initiated the precautionary suspension [id. ¶ 51]. Dr. Bonzani was exonerated [id. ¶ 56]. The hearing committee recommended to the MEC that the precautionary surgical suspension be lifted [id.].

The MEC thereafter received the second peer review report, now critical of Dr. Bonzani, and decided to ignore the hearing committee's recommendation [id. ¶ 59]. The MEC scheduled a final meeting for January 9, 2018 [id. ¶ 60]. Seven days beforehand, officers at Goshen Health confronted Dr. Bonzani with the second peer review report and told him it was time to transition out of Goshen

2

Hospital [id. ¶¶ 62-63]. Dr. Bonzani had two options: voluntarily leave with severance pay or involuntarily leave without severance pay [id. ¶ 72].

On January 5, 2018, Dr. Bonzani's attorney emailed him a copy of the separation agreement from Goshen Health [id. ¶ 76]. Goshen Health told Dr. Bonzani that unless he signed the separation agreement before the MEC meeting on January 9, 2018, he would be immediately terminated with no severance pay [id. ¶ 79]. Dr. Bonzani signed the agreement on January 8, the day before he had been led to believe the MEC would find against him resulting in his involuntary termination [id. ¶ 80]. The separation agreement defined Goshen Health to include its subsidiaries, and contained provisions addressing waiver and release, confidentiality, and non-disparagement [id. ¶¶ 81-85].

After the agreement was signed, Goshen Health and Goshen Hospital filed a report with the National Practitioner Data Bank (NPDB) relating to Dr. Bonzani [id. ¶ 86]. The separation agreement made no mention of the NPDB report [id. ¶ 88]. Dr. Bonzani says the NPDB report contained false and misleading statements [id. ¶ 93]. He says Goshen Health and Goshen Hospital have known about the deficiencies, omissions, and misrepresentations in the NPDB report since January 2018 [id. ¶ 96].

To mitigate the damage, Dr. Bonzani submitted his own statement objecting to it [id. ¶ 99]. Despite his attempts to mitigate the damage, he wasn't able to find any work as a urologist and was forced to open his own medical practice in Chicago [id. ¶ 100]. He hasn't been able to procure staff privileges at any hospital or same-day surgery center [id.]. He says the NPDB report has alarmed health insurance carriers to the point where many have refused to admit Dr. Bonzani to their network of healthcare providers [id.].

Dr. Bonzani sued Goshen Health and Goshen Hospital. He filed his first complaint on August 1, 2019. He then filed an amended complaint on October 18, 2019. The amended complaint included six counts: (1) a request for declaratory judgment on the separation agreement's enforceability; (2) breach of the separation agreement; (3) breach of the medical staff bylaws; (4) disparagement; (5)

3

defamation; and (6) fraudulent inducement [ECF 19]. Goshen Health and Goshen Hospital moved to dismiss the amended complaint. On May 11, 2020, the court granted the motion in part, dismissing Dr. Bonzani's claim for declaratory judgment on the fraudulent inducement theory, his claim that Goshen Hospital breached its medical staff bylaws by denying him an expedited hearing, and his fraudulent inducement claim [ECF 39]. The rest of the claims survived [id.].

After the court's ruling, Goshen Health and Goshen Hospital filed an answer to the amended complaint [ECF 43]. The magistrate judge entered a scheduling order on October 1, 2020, and discovery ensued [ECF 46]. Since then, the parties have filed four motions to extend the discovery deadline, largely because the parties had been attempting to mediate [ECF 52; 54; 59; 103]. On October 8, 2021, Dr. Bonzani filed an uncontested motion to amend his complaint [ECF 78]. He sought to remove his claim for declaratory relief related to his mental capacity theory and fraudulent inducement theory [ECF 78 at 1]. He also sought to remove the fraudulent inducement claim [id.]. The magistrate judge granted the uncontested motion [ECF 79], and Dr. Bonzani filed his second amended complaint on November 1, 2021 [ECF 80].

The second amended complaint largely puts this case in the same place that it was in on May 11, 2020, except that Dr. Bonzani is no longer pursuing the theory that he lacked the mental capacity to enter the separation agreement and he is realleging that Goshen Hospital breached its medical staff bylaws by denying him an expedited hearing. The fraudulent inducement claim remains out.

Goshen Health and Goshen Hospital filed a motion to dismiss the second amended complaint for lack of jurisdiction and for failure to state a claim, seeking once again to dismiss all claims [ECF 84; 85]. Though Dr. Bonzani has alleged a litany of claims and the parties have tossed back and forth many arguments, there is largely one key issue that remains in this case: did Goshen Health and Goshen Hospital knowingly publish a false statement about Dr. Bonzani in the NPDB report? The court now grants the motion to dismiss in part.

4

STANDARD

A Rule 12(b)(1) motion “can take the form of a facial or a factual attack on the plaintiff's allegations.” Bazile v. Finance Sys. of Green Bay, Inc., 983 F.3d 274, 279 (7th Cir. 2020). When evaluating a facial challenge to subject matter jurisdiction, the court must accept alleged factual matters as true and draw all reasonable inferences in favor of the plaintiff. See id.; Silha v. ACT, Inc., 807 F.3d 169, 174 (7th Cir. 2015). On the other hand, a plaintiff facing a factual attack doesn't enjoy the treatment of his allegations as true. See Bazile, 983 F.3d at 279. In a factual attack, “the court may consider and weigh evidence outside the pleadings to determine whether it has the power to adjudicate the action.” Id. The plaintiff bears the burden of establishing the jurisdictional requirements. Ctr. for Dermatology and Skin Cancer, Ltd. v. Burwell, 770 F.3d 586, 588-89 (7th Cir. 2014).

Under Rule 12(b)(6), the court accepts all well-pleaded factual allegations as true and draws all reasonable inferences in the plaintiff's favor. Reynolds v. CB Sports Bar, Inc., 623 F.3d 1143, 1146 (7th Cir. 2010). A complaint must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). The statement must contain enough factual matter, accepted as true, to state a plausible claim, not a speculative one. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim must be plausible, not probable. Indep. Trust Corp. v. Stewart Info. Servs. Corp., 665 F.3d 930, 935 (7th Cir. 2012). Whether a claim is sufficiently plausible to survive a motion to...