Jensen v. IHC Hospitals, Inc.

• Decision Date: 14 November 2003
• Docket Number: No. 20010474.,20010474.
• Parties: Sherrie JENSEN and Shayne Hipwell, individually, and on behalf of all other heirs of Shelly Hipwell, and Ashley Michele Hipwell and Kaycie Shaylene Hipwell appearing by Shayne Hipwell as Guardian Ad Litem, Plaintiffs and Appellants, v. IHC HOSPITALS, INC., dba McKay-Dee Hospital, Michael J. Healy, M.D., and Does I through X, Defendants and Appellees.
• Court: Utah Supreme Court

82 P.3d 1076

2003 UT 51

Sherrie JENSEN and Shayne Hipwell, individually, and on behalf of all other heirs of Shelly Hipwell, and Ashley Michele Hipwell and Kaycie Shaylene Hipwell appearing by Shayne Hipwell as Guardian Ad Litem, Plaintiffs and Appellants, v. IHC HOSPITALS, INC., dba McKay-Dee Hospital, Michael J. Healy, M.D., and Does I through X, Defendants and Appellees.

No. 20010474.

Supreme Court of Utah.

November 14, 2003.

Richard D. Burbidge, Stephen B. Mitchell, Salt Lake City, Simon H. Forgette, Kirkland, Washington, for plaintiffs.

Merrill F. Nelson, Philip R. Fishler, Salt Lake City, for defendant IHC Hospitals, dba McKay-Dee Hospital.

Elliott J. Williams, Kurt M. Frakenburg, Andrew G. Deiss, Salt Lake City, for defendant Michael J. Healy, M.D.

DURRANT, Associate Chief Justice:

s 1 Shelly Hipwell died following a series of events that occurred after she had an emergency cesarian section. Ms. Hipwell's mother and her husband ("plaintiffs") filed suit against Dr. Michael J. Healy and IHC Hospitals, Inc. (doing business as McKay-Dee Hospital) for medical malpractice and fraud. The trial court dismissed the fraud claims and refused to allow plaintiffs leave to amend their complaint to allege an agency or privity relationship between Dr. Healy and McKay-Dee for purposes of imputing liability to McKay-Dee for Dr. Healy's actions. The medical malpractice claim proceeded to trial, wherein a jury found that neither defendant was liable for medical malpractice. Plaintiffs appeal.

s 2 Plaintiffs contend that the trial court erred in (1) refusing to allow plaintiffs' medical expert to testify concerning the standard of care for McKay-Dee's emergency room physicians, (2) refusing to admit evidence that allegedly constituted admissions by conduct on the part of Dr. Healy, (3) dismissing their fraud claim, and (4) refusing to grant them leave to amend their complaint to allege an agency or privity relationship between Dr. Healy and McKay-Dee. We affirm.

BACKGROUND

I. MS. HIPWELL'S TREATMENT AT MCKAY-DEE HOSPITAL

s 3 "`On appeal, we recite the facts from the record in the light most favorable to the jury's verdict....'" Diversified Holdings, L.C. v. Turner, 2002 UT 129, s 2, 63 P.3d 686 (quoting State v. Daniels, 2002 UT 2, s 2, 40 P.3d 611). We recite the facts in detail because "[a] detailed recitation ... is necessary to understand the complex legal issues presented by this appeal."¹ Jensen v. IHC Hosps., Inc., 944 P.2d 327, 328 (Utah 1997) (Jensen I).

s 4 Shelly Hipwell was thirty-six weeks pregnant when she entered the emergency room at McKay-Dee Hospital on the morning of December 12, 1988. She complained of sharp epigastric/costal margin pain or, in other words, pain essentially in the area of the liver.

s 5 Blood and urine tests were performed. In comparison to previous tests taken during her pregnancy, the emergency room tests showed that (1) Ms. Hipwell's blood pressure had risen from 90/50 to 124/72, (2) her platelet count had dropped from 315,000 to 172,000, and (3) there were more than trace amounts of protein in her urine for the first time. However, each of the results was still within normal range. No liver function tests were performed while she was in the emergency room. The emergency room physician diagnosed the problem as musculoskeletal pain and prescribed Tylenol.

s 6 The following day, Ms. Hipwell returned to the hospital for a previously scheduled ultrasound and "a planned induction of labor." When tests showed that her baby was in distress, however, she was sent to labor and delivery where Dr. Healy performed an emergency cesarian section. On December 14, 1988, Ms. Hipwell's liver ruptured due to a pregnancy related condition known as HELLP Syndrome, and she had to undergo surgery to repair it. Although the rupture was repaired, she experienced other complications that kept her hospitalized.

s 7 Plaintiffs claim that the liver rupture and other complications Ms. Hipwell experienced at McKay-Dee were the direct and proximate result of negligence on the part of McKay-Dee and her obstetrician, Dr. Healy, because Ms. Hipwell's condition could have been, but was not, diagnosed or treated earlier. They also claim that an injury Ms. Hipwell suffered later at another hospital was a foreseeable, natural consequence of defendants' actions, and, therefore, defendants should be liable for those injuries as well. We now recite the facts related to that later injury.

II. MS. HIPWELL'S TREATMENT AT THE UNIVERSITY OF UTAH HOSPITAL AND THE INVOLVEMENT OF ATTORNEY ROGER SHARP IN THE CASE

s 8 On December 23, 1988, Ms. Hipwell was transferred to the University of Utah Hospital (the "University Hospital") for further treatment. On January 18, 1989, a physician resident at the University Hospital attempted to perform a sternum bone marrow biopsy on Ms. Hipwell to determine whether her continued low platelet count was due to an infection or a lack of platelet production. During the procedure, however, the biopsy needle punctured Ms. Hipwell's heart and caused her to suffer anoxic² brain damage. As a result of this injury, she remained in a persistent vegetative state until her death on May 27, 1992.

s 9 Shortly after Ms. Hipwell's heart was punctured, Dr. Healy discussed her case with his brother, attorney Tim Healy. Following this discussion, attorney Healy spoke with the Healys' sister, Diane DeVries. Because Ms. DeVries knew Ms. Hipwell's family, attorney Healy asked her to call them and recommend attorney Roger Sharp, a Salt Lake attorney who specialized in medical malpractice cases. When she did contact the Hipwells, however, she did not tell them that the Healys were her brothers, nor did she tell them that she was Dr. Healy's file clerk.

s 10 Ms. Hipwell's family accepted this recommendation and retained attorney Sharp on February 10, 1989, to represent Ms. Hipwell in her medical malpractice case. In addition to investigating the University Hospital, attorney Sharp said he would investigate all other potential sources of malpractice. Three days later, attorney Healy wrote a letter to attorney Sharp, confirming that they had a fee-splitting arrangement between them for the case. Ms. Hipwell's family was not aware, however, of attorney Healy's involvement in the case. Moreover, the letter evidenced that attorney Healy was communicating with Dr. Healy about attorney Sharp's investigation, and it implied that attorney Sharp's investigation of Dr. Healy's treatment should be minimal.

s 11 As part of his investigation, attorney Sharp received only a portion of Dr. Healy's and McKay-Dee's medical records. Attorney Sharp forwarded the records to a medical expert who determined, based on the records provided, that Dr. Healy and McKay-Dee were not negligent in their care of Ms. Hipwell while she was at McKay-Dee. Three months after being retained, attorney Sharp and plaintiffs settled Ms. Hipwell's claim against the University Hospital for $250,000. This settlement amount became the focus of a legal malpractice claim against attorney Sharp and attorney Healy, which was later settled for an undisclosed amount. It also led to a new investigation of defendants' medical care of Ms. Hipwell as discussed below.

III. ATTORNEY SIMON FORGETTE'S INVOLVEMENT IN THE CASE

s 12 In July 1989, Ms. Hipwell was transferred to a rehabilitation facility in Washington State. Carol Pederson, a social worker at the facility, contacted attorney Simon Forgette on August 10, 1989, to request that he provide an opinion of the $250,000 settlement in Ms. Hipwell's case and to evaluate the conduct of her attorneys in settling the case.³ She also forwarded medical records for him to review.

s 13 Attorney Forgette met with Ms. Hipwell's family in October and learned that Ms. Hipwell's liver "had been either damaged or had burst" while she was at McKay-Dee. Ms. Hipwell's family orally retained him during the meeting and consequently he wrote to attorney Sharp, requesting a copy of Ms. Hipwell's file. On December 14, 1989, attorney Forgette drafted a retainer agreement, which provided that he was to handle claims against McKay-Dee, the University Hospital, attorney Sharp, attorney Healy, and others. This agreement became critical during the trial on the statute of limitations issue.

s 14 Attorney Forgette received attorney Sharp's entire file on February 15, 1990. During his examination of the file, he learned for the first time of attorney Healy's involvement in the case and that attorney Sharp's file did not contain a complete set of medical records. However, plaintiffs delayed filing a notice of intent to commence suit⁴ until December 16, 1991, more than two years after attorney Forgette drafted the retainer agreement.

PROCEDURAL HISTORY

I. SUMMARY JUDGMENT

s 15 Plaintiffs filed suit against Dr. Healy and McKay-Dee for medical malpractice on July 29, 1992.⁵ Following the completion of discovery, the trial court granted summary judgment to Dr. Healy and McKay-Dee on February 21, 1995.⁶ The court ruled that the two-year statute of limitations governing medical malpractice actions had run by December 1991 when attorney Forgette filed his notice of intent. Specifically, the court ruled that plaintiffs' oral retention of attorney Forgette on October 19, 1989, "demonstrated that [attorney] Forgette was in possession of facts whereby he knew or should have known that [Ms.] Hipwell's condition was caused or possibly caused by negligence on the part of McKay-Dee Hospital and Dr. Healy." Jensen I, 944 P.2d at 331. Plaintiffs appealed.

II. JENSEN I DECISION

s 16 In that initial appeal, plaintiffs argued that the trial court erred in granting summary judgment because the statute of limitations was tolled by Dr. Healy's fraudulent concealment of the facts upon which their claims were grounded. Id. at 331, 333. Defendants countered that attorney Sharp's investigation of Dr. Healy and McKay-Dee in early 1989 triggered the...