Cawthorn v. Catholic Health Initiatives

• Decision Date: 30 November 2007
• Docket Number: No. 04-1724.,04-1724.
• Citation: 743 N.W.2d 525
• Parties: Dennis L. CAWTHORN, Appellant, v. CATHOLIC HEALTH INITIATIVES IOWA CORP. d/b/a Mercy Hospital Medical Center, a Corporation, Appellee.
• Court: Iowa Supreme Court

743 N.W.2d 525

Dennis L. CAWTHORN, Appellant, v. CATHOLIC HEALTH INITIATIVES IOWA CORP. d/b/a Mercy Hospital Medical Center, a Corporation, Appellee.

No. 04-1724.

Supreme Court of Iowa.

November 30, 2007.

Rehearing Denied January 17, 2008.

Gary R. Fischer of Dreher, Simpson & Jensen, P.C., Des Moines, and Verle W. Norris, Corydon, for appellant.

Thomas A. Finley, Jack Hilmes, and Kami M. Lang of Finley, Alt, Smith, Scharnberg, Craig, Hilmes & Gaffney, P.C., Des Moines, and Roberta M. Anderson of Schroeder & Anderson, Mason City, for appellee.

LARSON, Justice.

Dennis L. Cawthorn sued Catholic Health Initiatives Iowa Corp. d/b/a Mercy Hospital Medical Center, as well as other defendants who were later dismissed (including Dr. Daniel Miulli), for damages arising out of the defendants' treatment of the plaintiff. The jury returned a substantial verdict for the plaintiff and allocated seventy percent of the fault to Dr. Daniel Miulli, the plaintiff's treating doctor (who had settled prior to trial), and thirty percent to Mercy. Mercy moved for a new trial on the ground the verdict was excessive. The district court ordered a new trial unless the plaintiff agreed to a remittitur reducing the verdict of $10,590,000 to $1,190,000. Cawthorn appealed, contending the trial court abused its discretion in ordering the conditional new trial and in refusing to submit his claim for punitive damages. Mercy cross-appealed, claiming error in the admission of evidence of an independent review of Dr. Miulli's qualifications by the Iowa Board of Medical Examiners (IBME). The court of appeals affirmed on Cawthorn's appeal, but did not address Mercy's cross-appeal. We vacate the decision of the court of appeals, reverse on Mercy's cross-appeal, and remand for a new trial.

I. Facts.

Dennis Cawthorn was treated at Mercy in May 2000 for a work-related injury to his spine. Dr. Miulli performed surgery, but Cawthorn's pain persisted. On May 22, 2000, Cawthorn underwent a second surgery to remove disc and bone fragments that were missed during the first surgery. After the second surgery, Cawthorn's pain worsened, and he was readmitted to Mercy in June, suffering from pain, cold sweats, a low-grade fever, and an "oozing drainage" at the point of the prior surgeries. Cawthorn was again evaluated by Dr. Miulli who, instead of performing recommended tests for infection, relied on week-old tests showing no infection. He prescribed pain medication. Cawthorn was released after four days, but his pain persisted at an eight on a scale of one to ten.

II. The Issues.

The appeal and cross-appeal raise three issues: the court's conditional order for a new trial, its refusal to submit the issue of punitive damages, and the court's admission of evidence concerning the IBME investigation of Dr. Miulli and resulting disciplinary hearing. The IBME investigation had been prompted by concerns expressed to the IBME by doctors who had doubts about Dr. Miulli's care of patients in cases unrelated to Cawthorn's. An issue initially raised by Mercy in the trial court, whether Iowa recognizes a claim against a hospital for negligent credentialing of doctors practicing in the hospital, is not an issue on appeal. We reverse and remand on the evidentiary issue raised in Mercy's cross-appeal and, therefore, need not address the district court's order for new trial based on the alleged excessiveness of the verdict.

III. The Cross-Appeal.

Mercy cross-appealed from the district court's admission of detailed evidence of an investigation of Dr. Miulli by the IBME. Mercy argues that this evidence was confidential under Iowa Code section 272C.6(4) (1999) and privileged under section 147.135. Mercy also argues that any probative value of this information was outweighed by the prejudice inherent in its admission. See Iowa R. Evid. 5.403.

Cawthorn's purpose in producing evidence of the disciplinary investigation was apparently two-fold: to show that Mercy should have been aware that Dr. Miulli was not qualified to perform the surgery on Cawthorn and to establish willful and wanton disregard for Cawthorn's rights as a patient so as to establish his right to punitive damages.

The plaintiff correctly points out that Dr. Miulli waived his right to confidentiality under section 272C.6(4) for purposes of the disciplinary proceedings. However, section 272C.6(4) bars the admission of investigative materials and information in any proceeding other than licensee discipline:

In order to assure a free flow of information for accomplishing the purposes of this section, and notwithstanding section 622.10, all complaint files, investigation files, other investigation reports, and other investigative information in the possession of a licensing board or peer review committee acting under the authority of a licensing board or its employees or agents which relates to licensee discipline are privileged and confidential, and are not subject to discovery, subpoena, or other means of legal compulsion for their release to a person other than the licensee and the boards, their employees and agents involved in licensee discipline, and are not admissible in evidence in a judicial or administrative proceeding other than the proceeding involving licensee discipline.

(Emphasis added.)

As we have said,

[i]t is obvious from the context, stated purpose and language of section [272C.6(4)] that the disclosure exception applies only when a disciplinary proceeding has been initiated. First, the statute makes a consistent distinction between investigation of a complaint and a disciplinary proceeding. Second, subsection 4 is part of a section dealing only with disciplinary hearings. Third, the stated objective of subsection 4 to assure a free flow of information for complaint and investigative purposes would be defeated if licensees had access to complaint files in these circumstances. Finally, disclosure for use of the information in private litigation would nullify the statutory bar to use of the information "in any judicial or administrative proceeding other than the proceeding involving licensee discipline."

Doe v. Iowa State Bd. of Physical Therapy, 320 N.W.2d 557, 559-60 (Iowa 1982).

At trial, IBME's investigator testified at length about Dr. Miulli's qualifications as a surgeon. However, Mercy's counsel was not permitted to cross-examine her on the basis of her reports prepared during the investigation. The reason for this was that the confidential reports had been subjected to a protective order in the disciplinary case, and the district judge in Cawthorn's trial denied Mercy access to them.

We have not previously considered section 272C.6(4) in light of circumstances such as those in this case. However, the statute's provision that it is intended to "assure a free flow of information" suggests that confidentiality should protect the source of information as well as the person being investigated. Even more important is the statute's express prohibition from admission into evidence of any investigative information in a "judicial or administrative proceeding" other than the disciplinary case. We hold that section 272C.6(4) prohibits admission of such investigative evidence and that introduction of the IBME investigation, including the transcript of the IBME hearing that was introduced at the trial, was improper. Further, we believe the impact of this evidence was so great as to require a new trial and the exclusion of all evidence of the IBME investigation.

Because we order a new trial on this issue raised in Mercy's cross-appeal, we do not address the plaintiff's contention that the trial court erred in ordering a new trial based on alleged excessiveness of the verdict.

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