George v. Jefferson Hosp. Ass'n, Inc.

• Decision Date: 08 April 1999
• Docket Number: No. 98-1134,98-1134
• Citation: 987 S.W.2d 710,337 Ark. 206
• Court: Arkansas Supreme Court
• Parties: Gina GEORGE, Appellant, v. JEFFERSON HOSPITAL ASSOCIATION, INC., d/b/a Jefferson Regional Medical Center and St. Paul Fire & Marine Insurance Company, Appellee.

Page 710

987 S.W.2d 710

337 Ark. 206

Gina GEORGE, Appellant, v. JEFFERSON HOSPITAL ASSOCIATION, INC., d/b/a Jefferson Regional Medical Center and St. Paul Fire & Marine Insurance Company, Appellee.

No. 98-1134.

Supreme Court of Arkansas.

April 8, 1999.

Morgan Welch & Associates by Morgan E. Welch, Jr., Christopher R. Heil, Little Rock, for appellant.

Bridges, Young, Matthews & Drake PLC by Stephen A. Matthews, Pine Bluff, Roy Thomas Beard, III, Little Rock, for appellee.

LAVENSKI R. SMITH, Justice.

This is a medical malpractice action. Appellant, Gina George, appeals grants of summary judgment by the Grant County Circuit Court in favor of appellees, Jefferson Hospital Association, Inc. (JRMC), and St. Paul Fire & Marine Insurance Company (St.Paul) its insurance carrier. The trial court ruled that the doctrine of charitable immunity entitled JRMC to summary judgment and that the statute of limitations on medical malpractice actions entitled St. Paul to summary judgment as well. We agree and affirm. This case was certified to this Court on March 3, 1999, pursuant to Arkansas Supreme Court Rule 1-2(g).

On or about September 3, 1994, appellant, while hospitalized at JRMC for caesarean section, received the drug Parlodel as prescribed by her physician, Dr. Reid G. Pierce, to prevent production of breast milk. JRMC discharged appellant on September 4, 1994. She continued taking the medication as prescribed. The next day, September 5, 1994, after experiencing what seemed like seizures, George was readmitted to the hospital. She alleges this resulted in serious physical harm. She contends that the symptoms directly resulted from the medication Parlodel. She also contends that the negligence of the physician, hospital, and drug manufacturer caused her injury. Apparently, the medication had been withdrawn from the market in mid-August 1994, but notice of the recall had not been given by the manufacturer, Sandoz Pharmaceutical Corporation (Sandoz), to doctors and hospitals, including the defendants in this action, prior to its prescription by Dr. Pierce to appellant.

On August 29, 1996, appellant filed her complaint against JRMC, Dr. Pierce, and Sandoz. Appellee, St. Paul, provided appellee, JRMC, a defense pursuant to a policy of insurance JRMC had purchased. In February of 1997, appellee moved for summary judgment on the basis of the doctrine of charitable immunity. Appellant contended that genuine fact issues existed which would make summary judgment inappropriate. Appellant relied on expert witnesses' interpretation of data about JRMC's structure and operation obtained during discovery. George asserted that a trial was necessary to determine whether JRMC sufficiently met the requirements of a charitable organization in order to raise the shield of immunity. Appellant engaged in extensive discovery to obtain facts relative to JRMC's asserted charitable status. The trial court reviewed the pleadings, affidavits, and arguments of the parties and ruled on June 27, 1998, that although some issues of fact might remain, summary judgment was still appropriate because reasonable minds could not differ as to the charitable status of JRMC.

The court also granted summary judgment to JRMC's insurer, St. Paul's Fire and Marine Insurance Company, on June 12, 1998. The court did so on the basis of the two-year statute of limitations on medical malpractice actions. ¹ Appellant filed her claim against JRMC within two years of her injury. However, she did not file a claim against the insurer directly until January 26, 1998, when she amended her complaint against JRMC. Appellant contends the court erred in granting summary judgment because its claim against St. Paul should be considered to have been filed as of August 29, 1996, under the relation-back provision of Ark. R. Civ. P. 15(c).

Standard of Review

The law is well settled that summary judgment is to be granted by a trial court only when it is clear that there are no genuine issues of material fact to be litigated, and the party is entitled to judgment as a matter of law. Pugh v. Griggs, 327 Ark. 577, 940 S.W.2d 445 (1997). Once the moving party has established a prima facie entitlement to summary judgment, the opposing party must meet proof with proof and demonstrate the existence of a material issue of fact. Id. On review, this court determines if summary judgment was appropriate based on whether the evidentiary items presented by the moving party in support of the motion leave a material fact unanswered. Id. This court views the evidence in a light most favorable to the party against whom the motion was filed, resolving all doubts and inferences against the moving party. Id.; Adams v. Arthur, 333 Ark. 53, 969 S.W.2d 598 (1998). Our review focuses not only on the pleadings, but also on the affidavits and other documents filed by the parties. Angle v. Alexander, 328 Ark. 714, 945 S.W.2d 933 (1997); Wallace v. Broyles, 331 Ark. 58, 961 S.W.2d 712 (1998). After reviewing undisputed facts, summary judgment should be denied if under the evidence reasonable men might reach different conclusions from the undisputed facts. See, Leigh Winham, Inc. v. Reynolds Ins. Agency, 279 Ark. 317, 651 S.W.2d 74 (1983).

Charitable Immunity

The doctrine of charitable immunity has over a ninety-year history in Arkansas jurisprudence. Grissom v. Hill, 17 Ark. 483 (1856); Hot Springs School District v. Sisters of Mercy, 84 Ark. 497, 106 S.W. 954 (1907). The essence of the doctrine is that agencies, trusts, etc., created and maintained exclusively for charity may not have their assets diminished by execution in favor of one injured by acts of persons charged with duties under the agency or trust. Crossett Health Center v. Croswell, 221 Ark. 874, 256 S.W.2d 548 (1953). Through the years we have examined the doctrine in detail, finding it applicable to some entities claiming charitable-entity status and inapplicable to others. ² The doctrine obviously favors charities and results in a limitation of potentially responsible persons whom an injured party may sue. We, therefore, give the doctrine a very narrow construction. Williams v. Jefferson Hospital Association, Inc., 246 Ark. 1231, 442 S.W.2d 243 (1969). But applying it narrowly does not mean that we will avoid its use in any appropriate circumstance.

In a recent case considering charitable immunity, we adopted eight factors for courts to review to aid in determining whether charitable immunity applies to a given set of facts. ³ Masterson v. Stambuck, 321 Ark. 391, 902 S.W.2d 803 (1995). These factors are illustrative, not exhaustive, and no single factor is dispositive of charitable status. oUachita wIlderness INst. v. mErgen, 329 aRk. 405, 947 s.W.2D 780 (1997). These factors include: (1) whether the organization's charter limits it to charitable or eleemosynary purposes; (2) whether the organization's charter contains a "not-for-profit" limitation; (3) whether the organization's goal is to break even; (4) whether the organization earned a profit; (5) whether any profit or surplus must be used for charitable or eleemosynary purposes; (6) whether the organization depends on contributions and donations for its existence; (7) whether the organization provides its services free of charge to those unable to pay; and (8) whether the directors and officers receive compensation. Masterson, supra, at 401, 902 S.W.2d 803.

Of the eight factors listed above, three are clearly established based upon evidence in the record. Those three are 1, 2, and 7. The first and second are perhaps the easiest of the factors to demonstrate as they are merely a matter of possessing corporate documentation reflecting nonprofit and charitable character. This, JRMC has done. Appellant does not even contest the existence of these qualities.

JRMC satisfies the seventh factor as it does provide services free of charge to those who cannot pay. JRMC's response to Plaintiff's Interrogatory 48 asserts its services are available to those who are not pecuniarily able. Patient resources are evaluated, and those whose income falls below the federal poverty line and who have limited assets can have their bills written off. Appellant counters that JRMC only established clear guidelines for charitable cases since 1996. However, there is nothing which indicates the program did not exist prior to this more definitive formalization. As to the fourth, fifth, and eighth, appellant contends that these are all questions of fact and must therefore be tried rather than resolved on summary judgment. We disagree. While there may be fact issues involved, they are not matters of disputed fact. Rather, they are differing legal interpretations of undisputed facts. In such cases, an appellate court should grant summary judgment where reasonable persons would not reach different conclusions based upon those undisputed facts. Leigh Winham, Inc. v. Reynolds Ins. Agency, 279 Ark. 317, 651 S.W.2d 74 (1983). When each of the remaining Masterson factors are analyzed with the relevant undisputed facts, JRMC's charitable status is established.

Factors three and four inquire whether the hospital seeks to "break even or earn a profit." It is undisputed that JRMC does not try to strictly break even, but, in fact, does seek to have some "surplus" or "profit." However, trying to break even is only one factor and certainly not a dispositive one when applied to a hospital. Modern hospitals are complex and expensive, technological, economic and medical enterprises that can ill afford to come short of even in their financial integrity. Running a small surplus should not be seen as totally incompatible with charitable status in such cases. It is undisputed that JRMC's surplus or profit was in the range of 4% to 5%, far below that of for-profit hospitals which typically seek profit margins in the 15% to 20% range. The existence of profit is not determinative of charitable status. In 1961, a $600,000...