Doe v. Community Medical Center, Inc.
Decision Date | 24 November 2009 |
Docket Number | No. DA 08-0397.,DA 08-0397. |
Citation | 2009 MT 395,353 Mont. 378,221 P.3d 651 |
Parties | John DOE, M.D., Plaintiff and Appellee, v. COMMUNITY MEDICAL CENTER, INC., Defendant and Appellant. |
Court | Montana Supreme Court |
For Appellee: Shane P. Coleman, Michael P. Manning, Holland & Hart, LLP, Billings, Montana.
¶ 1 The Community Medical Center (CMC) of Missoula, Montana, appeals the Fourth Judicial District Court's grant of injunctive relief in favor of Dr. Doe1 and the court's denial of CMC's motion to dismiss. We affirm and remand.
¶ 2 We restate the issues presented on appeal as one issue: Did the District Court manifestly abuse its discretion by granting Dr. Doe's motion for a preliminary injunction?
¶ 3 This appeal involves CMC and a licensed physician, Dr. Doe, who, during 2007, applied for and obtained physician privileges with CMC as a hospitalist. To obtain such privileges, Dr. Doe completed CMC's physician privilege application which contained a clause stating that if he was granted privileges he would adhere to CMC's Medical Staff Bylaws and Medical Staff Policies, one of which allowed an investigation if a physician acted in a manner "contrary to the ethical . . . mission of the medical profession." Additionally, the Bylaws provided that if CMC issued an adverse recommendation pertaining to his clinical privileges, the doctor would exhaust "the intra organizational remedies" afforded by the Bylaws before resorting to formal legal action or asserting a claim against CMC.
¶ 4 During 2007 and 2008, Dr. Doe ordered numerous outpatient laboratory tests and imaging studies for himself, his wife, and their children. Both children had been diagnosed some months earlier with a rare, life-threatening medical condition involving panhypopituitarism or partial hypopituitarism. In late 2007, when CMC learned of the quantity and types of tests Dr. Doe ordered, it confronted Dr. Doe, expressing concern that such testing may constitute unethical medical treatment of family members. The chairperson of the Medical Executive Committee (MEC), Dr. Hiller, asked the Medical/Allied Health Staff Assistance Committee (MAHSAC or the Committee) to meet with Dr. Doe to investigate the matter. Prior to the meeting with MAHSAC, Dr. Doe consulted an attorney who suggested that the meeting would probably not be adversarial but if it was, Dr. Doe should not provide any information at that time.
¶ 5 At the meeting held on January 31, 2008, the Committee questioned Dr. Doe about outpatient medical records of Dr. Doe and his family. The Committee had obtained these personal medical records from both CMC and St. Patrick's Hospital without Dr. Doe's or his wife's permission. Additionally, at this meeting, the Committee asked Dr. Doe to disclose the names of all physicians treating each member of his family with regard to the lab tests he ordered, to authorize direct access to those physicians by Committee members, and to authorize access to all related medical records for his family. Dr. Doe was instructed to submit this information to the Medical Staff Coordinator by February 7, 2008.
¶ 6 At the conclusion of the January 31 meeting, Dr. Hiller, with the agreement of all members of the MAHSAC, summarily suspended Dr. Doe's privileges. She later stated this was done because Dr. Doe's "demeanor and refusal or inability to coherently answer routine and legitimate questions regarding the volume and nature of the tests caused me to have serious and legitimate concerns regarding his mental health and ability to exercise good judgment." Dr. Doe later claimed that the Committee was accusatory, adversarial, and had violated his and his family's privacy rights by obtaining their medical records without consent. Dr. Doe did not submit the requested medical information on February 7; rather, he provided it later at a hearing on March 18, 2008. On February 21, 2008, the MEC upheld the suspension of Dr. Doe's privileges.
¶ 7 On February 27, 2008, Dr. Doe filed a complaint in the District Court alleging that CMC breached the terms of its contract with him as embodied in CMC's Bylaws and Policies by summarily suspending his privileges with no demonstration of "a substantial likelihood of imminent impairment of the health or safety of any patient, prospective patient, employee, or other person present in the Medical Center." (The foregoing appears to be the sole basis in the Bylaws for summary suspension.) Dr. Doe sought a declaratory judgment, a preliminary and permanent injunction, and a temporary restraining order (TRO). Dr. Doe petitioned the court to revoke the suspension of his privileges on the ground that it was issued in violation of CMC's Policies and Bylaws. He requested this action because such a revocation of the suspension and reinstatement of his privileges within 30 days would eliminate the requirement that CMC report his suspension to state and federal entities as required by state and federal law.
¶ 8 On February 28, 2008, the District Court held its first hearing in this matter at which both parties argued their respective positions on the TRO. Unbeknownst to the court at the time the hearing began, CMC had filed its objection to Dr. Doe's TRO request and a motion to dismiss that morning. The court was informed of these filings during the hearing and both parties addressed the issues raised in these documents. At the conclusion of the hearing, the court instructed Dr. Doe and CMC to submit additional briefs and agreed to schedule a future hearing on these issues.
¶ 9 CMC's motion to dismiss Dr. Doe's complaint was not based on the ground that the complaint failed to state a claim for which relief could be granted but on the ground that the District Court did not have jurisdiction over Dr. Doe's complaint because Dr. Doe had not exhausted his "administrative remedies," i.e., those internal hospital remedies provided in the Bylaws. CMC argued that the "exhaustion doctrine" applies to private contracts such as the contracts executed between Dr. Doe and CMC. Relying on several extra-jurisdictional cases, CMC maintained that exhaustion of internal peer review remedies available to aggrieved physicians under a hospital's bylaws is required before the parties may seek judicial review. It asserted that this policy is founded on the recognition of the "special expertise of physician peer review, promoting the legislative objectives of [the Hospital Care Quality Improvement Act of 1986 (HCQIA)],2 enhancing judicial review and promoting judicial economy." CMC argued that this policy applies whether the physician's legal theory is grounded in contract or tort or the doctor is seeking equitable or legal relief. CMC also opined that any alleged failure on its part to follow its own procedures and policies is not a defense to the exhaustion requirement. CMC asserts a similar argument on appeal.
¶ 10 Dr. Doe countered before the District Court and to this Court on appeal that exhaustion of the Hospital's administrative remedies is unnecessary in this case because (1) Montana law allows a private party to seek declaratory judgment and injunctions against another private party without first exhausting his or her administrative remedies; (2) exhaustion of internal hospital remedies in this case would be "useless" because the internal review process did not provide a mechanism for enjoining the reporting obligation during the internal appeals process, and therefore by the time exhaustion occurred, CMC would have already reported the suspension to state and federal entities and (3) because CMC breached its Bylaws and Policies in the manner in which it suspended him, exhaustion of administrative remedies as required by those Bylaws and Policies is not required.
¶ 11 The court held a hearing on March 18, 2008, to address both Dr. Doe's petition for a TRO and CMC's motion to dismiss. It heard witness testimony and admitted numerous exhibits.3 On March 25, 2008, the District Court granted Dr. Doe's application for a TRO. As a result of the TRO, CMC was prohibited from notifying the National Practitioner Data Bank4 and the Montana Board of Medical Examiners (MBME or the Board) of Dr. Doe's suspension as required by 42 U.S.C. § 11133(a)(1)(A) of the HCQIA, and § 37-3-403, MCA. Under the terms of the TRO, Dr. Doe agreed to refrain from practicing medicine at CMC or any other facility until the District Court conducted a preliminary injunction hearing and issued a further ruling.
¶ 12 Following a May 12, 2008 preliminary injunction hearing, the court issued an order amending the TRO. In the amended order, Dr. Doe was authorized to practice medicine at other facilities but continued to be restrained from practicing at CMC. CMC moved for reconsideration of the amended TRO and the District Court denied the motion. On July 30, 2008, the District Court granted Dr. Doe's motion for a preliminary injunction and denied CMC's motion to dismiss Dr. Doe's complaint.
¶ 13 CMC appeals the District Court's denial of its motion to dismiss and the issuance of the court's injunction.
¶ 14 District courts are vested with substantial discretion to maintain the status quo through injunctive relief. Accordingly, we refuse to disturb a district court's decision to grant or deny a preliminary injunction unless a manifest abuse of discretion has been shown. A manifest abuse of discretion is "one that is obvious, evident or unmistakable." Where the district court issues an injunction based on conclusions of law, we review those conclusions for correctness. Cole v. St. James Healthcare, 2008 MT 453, ¶ 9, 348 Mont. 68, 199 P.3d 810 (internal citations omitted).
¶ 15 Where a motion to dismiss is converted by the...
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