Gilbert v. Board of Medical Examiners of State of Ariz.

Decision Date08 September 1987
Docket NumberNo. 1,CA-CIV,1
Citation155 Ariz. 169,745 P.2d 617
PartiesDavid Bruce GILBERT, M.D.; and Jack J. Rappeport, Plaintiffs-Appellants, v. BOARD OF MEDICAL EXAMINERS OF the STATE OF ARIZONA; Anna Margaret Osborn; Phillip Z. Saba, M.D.; Steven Spencer, M.D.; Michael R. Geyser, M.D.; Scott Alexander; Richard L. Dexter, M.D.; James E. Brady, Jr., M.D.; David M. Ben-Asher, M.D.; Douglas N. Cerf; and Mark Ivey, Jr., M.D., and Pauline Ivey, his wife, Defendants-Appellees. 8587.
CourtArizona Court of Appeals
OPINION

CONTRERAS, Judge.

This appeal presents three primary issues. First, whether the failure of appellant Dr. Gilbert to seek judicial review of revocation of his medical license by the Board of Medical Examiners (BOMEX) precluded him from later maintaining a civil action against BOMEX and its individual members for interference with contractual relations and intentional infliction of emotional distress. We conclude that he was precluded. Second, whether summary judgment was properly granted on similar tort claims in favor of a defendant doctor who testified at the BOMEX hearings and participated in peer review proceedings. We conclude summary judgment was properly granted. Third, whether the trial court properly awarded attorney's fees against the plaintiff doctor and against the doctor's attorney. We conclude the award was proper.

THE PRECEDING ADMINISTRATIVE AND PEER REVIEW PROCEEDINGS

On March 13, 1980, BOMEX issued an administrative complaint against David Bruce Gilbert, M.D. alleging that Dr. Gilbert lacked sufficient medical knowledge and skill, and that his practice of medicine endangered the health of his patients and the public. At the time the complaint was issued, Dr. Gilbert was practicing as a medical doctor in Payson, Arizona, and had staff privileges at Lewis R. Pyle Memorial Hospital.

Dr. Gilbert answered the complaint and an administrative hearing was conducted on February 2-3, 1981. The administrative law judge found that Dr. Gilbert's conduct constituted medical incompetency and unprofessional conduct and that there were grounds for BOMEX to subject Dr. Gilbert to censure, probation, suspension, or revocation of his medical license. The administrative law judge recommended probation.

On June 12, 1981, BOMEX supplemented the March 13, 1980, complaint against Dr. Gilbert with additional allegations of medical incompetence which were discovered or had occurred after the administrative hearing. Dr. Gilbert answered the supplemental complaint and a second administrative hearing concerning only the new charges was conducted on September 26, 1981. The second administrative law judge found that Dr. Gilbert lacked medical competence and recommended probation.

On September 4, 1981, the president of the medical staff at Lewis R. Pyle Memorial Hospital convened a special meeting of the medical staff to evaluate the medical treatment rendered by Dr. Gilbert to a patient who had been admitted to the hospital through the emergency room on August 30, 1981. At the meeting, the medical staff voted unanimously to summarily suspend Dr. Gilbert's staff privileges for at least 30 days. Pursuant to the hospital's bylaws, the president of the medical staff then appointed an investigating committee of three doctors including Mark Ivey, Jr., M.D. The committee was responsible for investigating the quality of the general medical and emergency room care rendered by Dr. Gilbert.

Following their investigation, the committee reported to a joint meeting of the executive committee of the board of directors of the hospital and the medical staff concerning their findings. The committee reported that the general medical and emergency room treatment rendered to several patients by Dr. Gilbert was below the prevailing medical standards in the community. The executive committee approved the medical staff's decision to suspend Dr. Gilbert's staff privileges.

On September 10, 1981, BOMEX conducted a hearing relating to the allegations of professional misconduct by Dr. Gilbert at the hospital. Dr. Ivey was subpoenaed to testify before BOMEX because he was the vice-president of the medical staff and a member of the investigating committee. Dr. Ivey related the committee's findings and answered questions posed by the physician members of BOMEX. During his testimony, Dr. Ivey urged BOMEX to be lenient with Dr. Gilbert and to consider his service to the Payson community. Dr. Ivey recommended that BOMEX place Dr. Gilbert on probation and impose conditions of educational training to improve his general medical and emergency room skills rather than revoke his medical license.

BOMEX conducted a formal hearing on June 3, 1982, during which Dr. Gilbert was represented by attorney Jack J. Rappeport. The board reviewed the transcripts from the proceedings before the administrative law judges, as well as the pleadings, correspondence and other documents in its investigatory file. The board adopted the findings of fact and conclusions of law of the administrative law judges and on June 3, 1982, entered an order revoking Dr. Gilbert's license to practice medicine. Dr. Gilbert did not seek judicial review of the board's decision pursuant to A.R.S. § 32-1453.

THE PRESENT SUPERIOR COURT LITIGATION

On June 6, 1983, slightly more than a year after BOMEX had revoked his medical license, Dr. Gilbert filed the complaint which commenced the present litigation. The complaint was later amended. The first amended complaint consisted of three counts: (1) conspiracy in violation of 42 U.S.C. §§ 1983 and 1985, (2) unlawful interference with contractual and "advantageous" relations, and (3) intentional infliction of emotional distress. These claims were brought against BOMEX, its individual board members, and Dr. Ivey and his wife. Count one was subsequently dismissed by stipulation. This dismissal came after appellee BOMEX filed a motion to dismiss upon the ground that the claim was barred by the statute of limitations.

On April 29, 1985, the trial court granted motions for summary judgment in favor of the BOMEX defendants and the Ivey defendants on the remaining counts. The court found that it was undisputed that Dr. Gilbert had failed to appeal and to exhaust his statutory remedies. Further, the court noted that the evidence presented in the administrative proceedings before BOMEX was sufficient for BOMEX to take some administrative action against Dr. Gilbert. The court concluded that the claims against BOMEX were a collateral attack on the board's decision and must be dismissed for failure to exhaust administrative remedies. In addition, the court found that the board's decision was conclusively presumed to be just, reasonable, and lawful.

The trial court also found that there was no evidence in the record from which a trier of fact could find or infer lack of good faith by Dr. Ivey when he testified before BOMEX and when he participated in peer review proceedings. Therefore, it concluded that Dr. Ivey was immune from liability. Further, the court found that even had there been bad faith, there was no evidence that Dr. Ivey's conduct proximately caused the damages of which Dr. Gilbert complained. Accordingly, the court entered summary judgment in favor of the Ivey defendants.

The trial court later awarded BOMEX attorney's fees of $76,665.50, non-taxable costs of $6,577.37 and taxable costs of $5,534.42 against Dr. Gilbert, and attorney's fees of $50,000 and non-taxable costs of $5,000 against Attorney Rappeport. The court also awarded the Iveys $24,784 in attorney's fees and $3,056.41 in costs against Dr. Gilbert and $12,500 in attorney's fees against Attorney Rappeport. Separate judgments in favor of BOMEX and the Iveys were entered. Dr. Gilbert and Attorney Rappeport filed a notice of appeal to this court from the judgments. We affirm.

CONSEQUENCES OF FAILURE TO APPEAL THE BOMEX ORDER OF JUNE 3, 1982

A.R.S. § 32-1453 provides that "[a]n appeal to the superior court of Maricopa county may be taken from decisions of the board pursuant to title 12, chapter 7, article 6." (A.R.S. §§ 12-901 et seq.)

In their opening brief appellants repeated verbatim the argument contained in their trial court memorandum opposing motions for summary judgment. They contended that the use of "may" as opposed to "shall" in this statute means that an appeal from decisions of BOMEX to the superior court is permissive, not mandatory. In support of this proposition they incorrectly cited Farmers Inv. Co. v. Arizona State Land Dep't, 136 Ariz. 369, 666 P.2d 469 (App.1982). At the hearing on the motions below and again in their reply brief before this court, Dr. Gilbert and Rappeport acknowledged that this case stands for the exact opposite proposition. In Farmers Investment Co., this court expressly held that "the word 'may' renders the appeal 'optional' only in the sense that a party may decide not to attempt further review." 136 Ariz. at 378, 666 P.2d at 479. It does not in any manner excuse a party from the consequences of failure to seek review. Other litigation may not be substituted for an appeal as a mechanism to obtain judicial review of the administrative action. See, e.g., Tanner Cos. v. Arizona State Land Dep't, 142 Ariz. 183, 688 P.2d 1075 (App.1984); State ex rel. Dandoy v. Phoenix, 133 Ariz. 334, 651 P.2d 862 (App.1982).

The consequences of failure to seek review of a board decision are clearly set forth in A.R.S. § 12-902(B) as follows:

Unless review is sought of an administrative decision within the time and in the...

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