Ewing v. St. Louis-Clayton Orthopedic Group, Inc.

• Decision Date: 12 June 1986
• Docket Number: LOUIS-CLAYTON,No. 85-2065,85-2065
• Citation: 790 F.2d 682
• Parties: Steven EWING, Appellant, v. ST.ORTHOPEDIC GROUP, INC., Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 682

790 F.2d 682

Steven EWING, Appellant, v. ST. LOUIS-CLAYTON ORTHOPEDIC GROUP, INC., Appellee.

No. 85-2065.

United States Court of Appeals Eighth Circuit.

Submitted March 10, 1986.

Decided May 9, 1986.

Rehearing Denied June 12, 1986.

Jona Goldschmidt, Carbondale, Ill., for appellant.

Robert D. Huelskamp, St. Louis, Mo., for appellee.

Before HEANEY and FAGG, Circuit Judges, and WOODS, ^* District Judge.

HENRY WOODS, District Judge.

Steven Ewing appeals from the judgment of the district court dismissing his claim for damages resulting from a physician's allegedly erroneous opinion regarding Ewing's fitness to return to work. For reversal, Ewing claims the district court erred in granting summary judgment in favor of the appellee on the malpractice claim since genuine issues of material fact remain as to the existence of a physician-patient relationship. Appellant also contends the court erred in applying Illinois law and finding he is collaterally estopped from pursuing his claim by a decision of an Illinois circuit court. For the reasons set forth below, we affirm the position of the district court in all respects except as to the application of collateral estoppel.

The plaintiff-appellant, a resident of Illinois, sustained an employment-related injury in Illinois while working for an Illinois company. The employer and its compensation carrier paid benefits under the Illinois Workers' Compensation Act. In order to secure an evaluation of plaintiff's ability to return to work, the employer referred him first to an Illinois physician and subsequently to a St. Louis, Missouri physician affiliated with the defendant-appellee, St. Louis-Clayton Orthopedic Group, Inc. Both physicians, after examining plaintiff at their respective offices, reported to the employer that he was able to return to work. Plaintiff contends that the examinations were negligently performed, that he was not physically able to return to work, and that his premature return resulted in a second injury also sustained in Illinois.

Plaintiff sued both doctors in Illinois state court but was unable to obtain service on the Missouri defendant. The Illinois physician moved to dismiss the action on the grounds that there was lack of a physician-patient relationship and that the action was barred by a provision in the Illinois Workers' Compensation Act which prohibited suits by a compensation claimant against a co-employee. On March 10, 1983 the Illinois state judge dismissed the complaint without specifying the basis for his action. Plaintiff did not perfect an appeal from the judgment of dismissal.

On August 23, 1983 the plaintiff filed suit against defendant St. Louis-Clayton Orthopedic Group, Inc. in the United States District Court for the Southern District of Illinois. Because of the lack of jurisdiction, the cause was transferred to the Eastern District of Missouri on January 6, 1984. In response to a motion to dismiss which the U.S. District Judge converted into a motion for summary judgment, the action for malpractice was dismissed. However, relying on California ¹ and Texas ² cases in the absence of Missouri authority, the district judge recognized a cause of action for common law negligence and denied summary judgment on that issue. "Plaintiff Ewing has sufficiently pled facts from which it could be inferred that either Dr. Scheer performed the examination in a negligent manner or furnished erroneous information to the plaintiff's employer or both, thereby breaching a duty of care owed to the plaintiff." ³

Subsequent to this decision, the defendant moved for summary judgment arguing that pursuant to Missouri's conflict of laws rule Illinois law governed and that plaintiff was collaterally estopped from pursuing this claim due to a prior adjudication of the same cause of action by the Illinois Circuit Court. The district judge granted the motion on this basis. This appeal followed.

I.

This case involves several aspects of the law of conflict of laws. The district judge properly held that Missouri has adopted "the most significant contacts" as its conflict of laws rule. ⁴ A Missouri federal court in a diversity case must apply the Missouri law of conflict of laws. ⁵ In holding that Missouri would look to Illinois law to decide at least one of the issues in this litigation, the district judge did not err. Clearly, the significant contacts were with Illinois. Plaintiff, an Illinois resident, sustained both injuries in Illinois while covered by the Illinois Workers' Compensation Act by virtue of employment by an Illinois company. It was therefore proper to look to the Illinois compensation act and Illinois interpretive decisions to ascertain whether an action against defendant was barred. Defendant argues that the Illinois Act bars a suit against a co-employee and that the defendant doctor falls in this category. ⁶ This argument is totally without merit. ⁷ The indicia that bring a doctor within the purview of the above statute are set forth in a recent Illinois case ⁸ as follows:

(1) examination and treatment only of company employees injured at work;

(2) services made available to employees without charge;

(3) an annual salary not contingent upon the number of employees treated;

(4) a fixed number of hours at the company plant;

(5) social security contributions by the company on doctor's behalf;

(6) eligibility for company pension and company medical benefits identical to other company employees;

(7) doctors' medical support personnel and facilities provided by the company; and

(8) company retention of the power and authority to discharge the doctor from his employment.

All the above indicia need not be present, but a substantial number are required. ⁹ In this case none of these indicia were operative. By no stretch of the imagination could Dr. Scheer be considered an employee of United Parcel. It follows that the Illinois Workers' Compensation Act does not bar this suit since Dr. Scheer was not a co-employee of the plaintiff.

II.

The district court erred, however, in failing to apply the Missouri collateral estoppel rule. "[W]here the first action was brought in state court and involved non-federal matters, the overwhelming view is that the federal district court is required under Erie ¹⁰ to follow the res judicata law of the forum state." ¹¹

The Missouri law of collateral estoppel is well summarized in Oates v. Safeco Inc. Co. of America, 583 S.W.2d 713 (Mo. banc 1979). ¹² A court considering whether to apply collateral estoppel should consider the following factors:

(1) whether the issue decided in the prior adjudication was identical with the issue presented in the present action;

(2) whether the prior adjudication resulted in a judgment on the merits; and

(3) whether the party against whom collateral estoppel is asserted was a party or in privity with a party to the prior adjudication.

583 S.W.2d at 719 (citations omitted). "Most courts have added a fourth factor ... whether the party against whom the collateral estoppel is asserted had a full and fair opportunity to litigate the issue in the prior suit." ¹³ Id.

Tested by the Missouri collateral estoppel rule, three of the above requirements were not met. The issue was not identical. It involved a different examination by different doctors at different times and the basis for the respective opinions of the two doctors could have been entirely different. Furthermore, there was no judgment on the merits in the prior litigation. The plaintiff did not have a full and fair opportunity to litigate the issue against the present defendant in the prior suit.

Significantly, the Illinois state court judge did not state the precise basis of his decision on the collateral estoppel issue. The exact issues must have been "unambiguously decided in the earlier case." Owens v. Government Employees Insurance Co., 643 S.W.2d 308, 310 (Mo.App.1982). In Owens the trial court did not specify the exact reasons for its action and it was unclear which issues were determined. "Sufficient ambiguity exists to deny the application of collateral estoppel." Id. Just as in the judgment rendered by the Illinois trial court herein, the trial court could have relied on one of several theories in Owens. The same situation occurred in Kansas City v. Graybar Electric Co., Inc., 485 S.W.2d 38 (Mo.1972). In that case the defendant pleaded several defenses (as was done in the Illinois trial court). Since it was not clear on what basis the trial court relied to enter judgment for the defendant, the Missouri Supreme Court refused to apply collateral estoppel. We hold the district court erred when it applied collateral estoppel to the present litigation.

III.

Before reaching the issue of collateral estoppel which he found dispositive, the district judge held that a cause of action was stated for common law negligence even though a claim of malpractice was inappropriate. ¹⁴ Noting an absence of Missouri cases, reliance was placed on decisions from other jurisdictions, which are cited above. ¹⁵ The view of the experienced district judge that the Missouri courts would sustain the allegation of common law negligence is entitled to great respect, particularly in the absence of governing Missouri authority.

Did he, however, erroneously apply Missouri law in this situation? Having properly referred to Illinois law in deciding the issue of whether the suit was barred by the Illinois compensation act, can he now look to Missouri law in determining whether a suit for negligence can be maintained against the Missouri doctor? Should the law of different states be applied to resolve different issues in the same case? Under the conflict of laws doctrine of "depecage," such an approach is perfectly permissible and even considered desirable in many instances. ¹⁶ Professor Willis L.M. Reese, ¹⁷ a leading commentator, states as follows:

Amid the chaos and tumult of choice of law, there is at least one point...