Hollingsworth v. Thompson, 122320 IDSCCI, 47488

Docket Nº47488
Opinion JudgeMOELLER, JUSTICE.
Party NameROCKNE LEE HOLLINGSWORTH and DEBORAH HOLLINGSWORTH, Plaintiffs-Appellants, v. HAROLD K. THOMPSON, M.D., and WALTER KNOX COMMUNITY HOSPITAL, INC., dba VALOR HEALTH, Defendants-Respondents.
AttorneyHepworth Holzer, LLP, Boise, for Appellants. Kurt Holzer argued. Tolman Brizee & Cannon, PC, Twin Falls, for Respondents. Nicole Cannon argued.
Judge PanelChief Justice BURDICK, Justices BEVAN, STEGNER and Justice Pro Tem MELANSON CONCUR.
Case DateDecember 23, 2020
CourtSupreme Court of Idaho

ROCKNE LEE HOLLINGSWORTH and DEBORAH HOLLINGSWORTH, Plaintiffs-Appellants,

v.

HAROLD K. THOMPSON, M.D., and WALTER KNOX COMMUNITY HOSPITAL, INC., dba VALOR HEALTH, Defendants-Respondents.

No. 47488

Supreme Court of Idaho

December 23, 2020

Appeal from the District Court of the Third Judicial District of the State of Idaho, Gem County. George A. Southworth, District Judge.

The order of the district court granting summary judgment to Respondents is reversed and remanded.

Hepworth Holzer, LLP, Boise, for Appellants. Kurt Holzer argued.

Tolman Brizee & Cannon, PC, Twin Falls, for Respondents. Nicole Cannon argued.

MOELLER, JUSTICE.

This is an appeal from a summary judgment ruling in a medical malpractice case. Rockne Lee Hollingsworth[1] brought a malpractice claim against a local hospital and doctor in Gem County district court. The district court found Hollingsworth lacked due diligence in failing to determine the hospital was a political subdivision, subject to the notice requirements of the Idaho Tort Claims Act ("ITCA"), and granted summary judgment for Respondents. Hollingsworth appealed, arguing the corporate filings made by the county-owned hospital created the false impression the hospital was a private corporation. Respondents contend the hospital and corporate entity, both owned by Gem County, are both subject to the ITCA because they are actually one and the same. For the reasons set forth below, we reverse the district court's ruling and remand this matter for further proceedings.

I.

FACTUAL AND PROCEDURAL BACKGROUND

On September 29, 2017, Rockne Lee Hollingsworth sought medical help for persistent chest pain at the Valor Health emergency room in Emmett, Gem County, Idaho. Harold K. Thompson, M.D., a Valor Health employee, conducted tests and discharged Hollingsworth several hours later. Id. On October 5, Hollingsworth returned to the emergency room again with chest pain; however, this time he was transported to St. Alphonsus Regional Medical Center in Nampa where another physician diagnosed Hollingsworth with significant heart damage from "a delayed evaluation for what appears to have been an acute anterior wall myocardial infarction sustained more than a week [earlier]".

On February 21, 2018, Hollingsworth submitted an "Idaho State Board of Medicine Application and Claim for Medical Malpractice Prelitigation Hearing" ("prelitigation hearing application") to the Idaho State Board of Medicine, contending Dr. Thompson breached the standard of care for failing to recognize the heart damage during the examination on September 29, 2017. The prelitigation hearing application was forwarded to Valor Health's CEO and its counsel. After obtaining a positive decision from the prelitigation screening panel,2Hollingsworth filed a complaint in district court against Dr. Thompson, and Walter Knox Memorial Hospital, Inc., d/b/a Valor Health on August 14, 2018. On April 23, 2019, he amended the complaint to change the hospital's name to Walter Knox Community Hospital, Inc., d/b/a Valor Health ("Respondents"). It is undisputed Hollingsworth did not present and file a notice of tort claim with the Gem County clerk within 180 days of his medical visit, as required under Section 6-906 of the ITCA to bring a claim against a political subdivision or its employee.

This appeal focuses on the governmental status of the corporate entity created by the hospital and whether Respondents should have determined that it fell under the ITCA's notice requirements. Walter Knox Memorial Hospital was built after Gem County voters approved a special bond in 1961 for the construction of a county hospital. In 2006, the Idaho Supreme Court ruled that Article VIII, Section 3 of the Idaho Constitution bars a public entity from borrowing money in excess of its income and revenue for that year without first obtaining public approval by a supermajority vote, unless the expenditure was for an "ordinary and necessary" expense. City of Boise v. Frazier, 143 Idaho 1, 2-3, 137 P.3d 388, 389-90 (2006). This ruling negatively impacted the hospital's ability to fund itself. In order to avoid the requirements of the Frazier decision, the hospital created a separate, nonprofit corporation named Walter Knox Community Hospital, Inc., with the intention that the existing Walter Knox Memorial Hospital would sell or lease its assets to the newly created nonprofit corporation, thereby allowing it, as a nonpublic entity, to obtain a loan without having to pass a bond.

Walter Knox Community Hospital, Inc., filed articles of incorporation as a nonprofit corporation with the Idaho Secretary of State in 2009. The corporation's purposes listed in the articles include providing care for those in Gem County and enhancing the quality and availability of medical care in Gem County. That same year, the corporation filed a Certificate of Assumed Business Name indicating Walter Knox Community Hospital, Inc., was doing business as Walter Knox Memorial Hospital, which was then the hospital's public name.

In 2010, the Idaho Legislature adopted an amendment to Article VIII, Section 3C of the Idaho Constitution, which Idaho citizens ratified that same year, to allow public hospitals to incur long-term indebtedness to meet health care needs, thereby exempting such hospitals from the ruling in Frazier. Except for a brief lapse in 2015, Walter Knox Community Hospital, Inc., kept its filings current with the Secretary of State. In 2015, after the hospital changed its name to Valor Health, Walter Knox Community Hospital, Inc., filed a Certificate of Assumed Business Name with the Idaho Secretary of State, indicating Valor Health was a d/b/a of the corporation. Hollingsworth's medical records show Valor Health as his medical care provider. Today, Walter Knox Community Hospital, Inc.'s corporate status with the Secretary of State is listed as "Inactive-Dissolved (Administrative)."

Respondents filed a Motion for Summary Judgment on May 21, 2019, arguing Hollingsworth's claim was time-barred because he failed to comply with the notice requirements of the ITCA. The district court granted Respondents' summary judgment motion without discussing the corporate entity's filings or their legal effect. It found that there was no genuine issue of material fact concerning Valor Health's status as a political subdivision under the ITCA and Dr. Thompson's status as a public employee. Further, the district court found Hollingsworth's attempt to ascertain Valor Health's governmental status did not satisfy due diligence because he only searched the associated business filings with the Idaho Secretary of State and did not inquire further about the hospital.

Notably, Respondents asserted before the district court that Walter Knox Community Hospital, Inc., the corporate entity, had never been the hospital in Gem County nor had anything to do with patient care. Respondents maintained Hollingsworth had named the wrong defendant when he relied on the Secretary of State filings to identify the corporate entity as the party to the suit. However, on appeal, Respondents have attempted to "clarify" their position, stating: Defendants understand that certain aspects of the record are conflicting and regret any inconvenience caused to the Court. In order to clarify any confusion, Defendants hereby confirm the facts clearly established by the record, that Walter Knox Community Hospital, Inc.[,] provided patient care and preserved and enhanced the quality and availability of medical care in Gem County, Idaho, as specified in the Articles of Incorporation of Walter Knox Community Hospital, Inc. ... Therefore[,] Plaintiffs correctly identified Walter Knox Community Hospital, Inc.[,] d/b/a Valor Health as a defendant in this case.

(Citations to the record omitted).

II.

STANDARD OF REVIEW

"When reviewing an order for summary judgment, the standard of review used by this Court is the same standard used by the district court in ruling on the motion." Van v. Portneuf Med. Ctr., 147 Idaho 552, 556, 212 P.3d 982, 986 (2009). Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." I.R.C.P. 56(a). "A genuine issue of material fact exists when the evidence is such that a reasonable jury could return a verdict for the non-moving party." Marek v. Hecla, Ltd., 161 Idaho 211, 220, 384 P.3d 975, 984 (2016); see also Houpt v. Wells Fargo Bank, Nat. Ass'n, 160 Idaho 181, 186, 370 P.3d 384, 389 (2016) ("If reasonable people could reach different conclusions or inferences from the evidence, summary judgment is inappropriate."). "This Court liberally construes the record in favor of the party opposing the motion for summary judgment and draws any reasonable inferences and conclusions in that party's favor." Robison v. Bateman-Hall, Inc., 139 Idaho 207, 209, 76 P.3d 951, 953 (2003).

III.

ANALYSIS

A. Hollingsworth exercised due diligence in ascertaining whether the ITCA applied to Valor Health.

The parties now agree the proper defendants are Dr. Thompson and Walter Knox Community Hospital, Inc., d/b/a Valor Health. Valor Health is the assumed business name of the nonprofit corporation Walter Knox Community Hospital, Inc. Yet, prior to this appeal, Respondents maintained that Hollingsworth incorrectly named the corporate entity in the suit because the corporate entity is not the county hospital, Valor Health. Now on appeal, Respondents seek to "clarify any confusion" and acknowledge the corporate entity is a correctly named party. The filing of the 2009 Articles of Incorporation, they now assert, made "Walter Knox Community Hospital, Inc.," the county hospital's official business name.

The...

To continue reading

FREE SIGN UP