Johnson v. Galen Health Care, Inc.

• Decision Date: 12 January 2001
• Docket Number: No. 1998-CA-000772-MR.,1998-CA-000772-MR.
• Citation: 39 S.W.3d 828
• Parties: Robert J. JOHNSON, M.D., Appellant, v. GALEN HEALTH CARE, INC.; and the Credentials Committee of The Medical Staff of Audubon Regional Medical Center, said Committee being then Composed of Drs. Eldon W. Olson, M.D.; Jeffrey W. Berg, M.D.; Robert L. McQuady, M.D.; James L. Stivers, M.D.; James R. Cundiff, Jr, M.D.; Albert B. Hoskins, III, M.D.; Frederick K. Cressman, Jr., M.D.; George H. Zenger, M.D.; and William L. Weber, M.D., Appellees.
• Court: Kentucky Court of Appeals

39 S.W.3d 828

Robert J. JOHNSON, M.D., Appellant, v.GALEN HEALTH CARE, INC.; and the CredentialsCommittee of The Medical Staff of Audubon Regional Medical Center, said Committee being then Composed of Drs. Eldon W. Olson, M.D.; Jeffrey W. Berg, M.D.; Robert L. McQuady, M.D.; James L. Stivers, M.D.; James R. Cundiff, Jr, M.D.; Albert B. Hoskins, III, M.D.; Frederick K. Cressman, Jr., M.D.; George H. Zenger, M.D.; and William L. Weber, M.D., Appellees.

No. 1998-CA-000772-MR.

Court of Appeals of Kentucky.

Decided January 12, 2001.

Case Ordered Published by Court of Appeals March 9, 2001.

COPYRIGHT MATERIAL OMITTED

Appeal from Jefferson Circuit Court, Ann O'Malley Shake, Judge,¹ ActionNo. 93-Ci-002211.

J. Fox Demoisey, Louisville, KY, Brief for Appellant.

Hiram Ely, III, Louisville, KY, Brief for Appellee.

Before DYCHE, JOHNSON and TACKETT, Judges.

OPINION

JOHNSON, Judge:

Robert J. Johnson, M.D., has appealed from the opinion and order entered by the Jefferson Circuit Court on December 29, 1997, that granted summary judgment to the appellees and dismissed Johnson's claims with prejudice.Having concluded that the circuit court was correct as a matter of law, we affirm.

Dr. Johnson, a cardiovascular surgeon, was recruited in 1992 by Galen of Kentucky, Inc., d/b/a Audubon Regional Medical Center to relocate to Louisville, Kentucky.The doctor and the hospital entered into a contract which required Dr. Johnson to "apply for and receive medical staff privileges at Hospital."In December 1992, Dr. Johnson was granted his medical license in Kentucky.On December 9, 1992, Dr. Johnson was granted temporary privileges at Audubon, but on March 29, 1993, those temporary privileges were terminated.

On May 3, 1993, Dr. Johnson filed a complaint against Audubon and its credentials committee seeking inter alia that he be "afforded a `due process hearing' on" the "termination of temporary clinical privileges"[.]On May 28, 1993, the parties entered into a written agreement "concerning the procedures through which (a) DR. JOHNSON's temporary staff privileges at AUDUBON REGIONAL MEDICAL CENTER (AUDUBON') were terminated, and (b) DR. JOHNSON'S application for staff privileges at AUDUBON was being handled[.]"The parties agreed to specific provisions for disclosure of documents to Dr. Johnson, a written response by Dr. Johnson and a hearing before the appropriate hospital committees.

The Executive Committee of the Medical Staff met on May 4, 1993, and allowed Dr. Johnson "to discuss issues surrounding his application[.]"The Executive Committee gave the following bases for voting to deny Dr. Johnson staff privileges:

1.Misrepresentation of information on his initial application, which is in violation of the Medical Staff Bylaws and the Kentucky Medical Practice Act.

2.Prolonged history of inability to work well with others, as evidenced by references, personal communications, and disciplinary actions.

3.Misrepresentation of information on his application for Medical Licensure to the Kentucky State Board of Medical Licensure.

The hospital's Hearing Committee then met on June 10, 1993, and spent four hours hearing presentations by Dr. Johnson and the hospital, which included evidence from various doctors.On June 17, 1993, the Hearing Committee sent a letter to the Chairman of the Executive Committee which set forth the following action:

The Hearing Committee voted to uphold the Executive Committee's decision not to approve Dr. Robert Johnson's application for appointment to the medical staff.Under Article III, Section 2.A.5.d., a medical staff member shall provide documentation of ability to work and cooperate with the Hospital personnel and staff members.The material that was presented to our Hearing Committee showed a consistent pattern of behavior on Dr. Johnson's part; that being a consistent evaluation by others of Dr. Johnson's ability to work with others to be fair or poor.

The Hearing Committee also made note of inconsistencies in Dr. Johnson's CAPS applications completed December 22, 1992 and March 31, 1993, respectively.Under Article IV, Section 1.G., the applicant shall completely fill in all parts of the application.Falsification of the application in any material respect shall void the application and cause such application to be deemed withdrawn.Also under Article III, Section 3, each applicant agrees "and fully understands that any significant misstatements in or omissions from his/her application constitutes cause for refusal of his/her application, or for disciplinary action as provided in these Bylaws."

Dr. Johnson was then allowed to present an argument to the hospital's Board of Trustees, but the Board on June 23, 1993, affirmed the Executive Committee's decision.The hospital then reported to the Kentucky Board of Medical Licensure and the National Practitioner Data bank its grounds for denying Dr. Johnson's application for appointment to the medical staff.

On October 8, 1993, Dr. Johnson filed an amended complaint in the Jefferson Circuit Court which updated his allegations of wrongdoing by the hospital by detailing the adverse action the hospital had taken against him in denying him staff privileges.Dr. Johnson claimed that the hospital had stopped its guaranteed payments to him of $25,000.00 per month pursuant to the recruiting agreement and "[t]hat the real reason, and only reason, the Defendants conspired to, and caused Plaintiff's hospital privileges to be termination [sic] and thereafter denied was for the purpose of evading its contractual commitments[.]"Dr. Johnson alleged that the hospital's actions were "arbitrary and capricious" and that he had been denied "due process."Dr. Johnson sought damages for loss of income and loss of professional reputation.

After protracted discovery and motion practice, the case was briefed by the parties on the question of liability and submitted to the circuit court for a decision.The circuit court in its opinion and order observed "that the issue to be resolved was whether Dr. Johnson was provided due process in having his temporary privileges revoked and his full staff privileges denied."The circuit court noted that "Dr. Johnson contends that he was denied meaningful due process, in that no `findings of fact' were produced; there was a lack of properly presented and authenticated evidence; and there was a lack of identifiable and applicable standards during the adjudicative processes."The circuit court correctly stated its standard of review as follows:

The Court has inherent power, under Section 14 of the Kentucky Constitution, to scrutinize the acts of administrative tribunals, or in this instance, the Credentials Committee, wherein the personal or property rights of an individual have been adjudicated.See, McElhinney v. William Booth Memorial Hospital, Ky., 544 S.W.2d 216(1976).

Herein it was [the Credentials Committee's] exclusive province to determine the weight to be given the evidence presented....[T]he [Committee] was composed of a group of [Dr. Johnson's] peers, all being highly trained and possessing expertise as to matters of medical evidence and conduct.In such a situation the substantial evidence rule is correctly applicable.

Kirk v. Jefferson County Medical Society, Ky.App., [577] S.W.2d 419, 422(197[8]).Accordingly, Dr. Johnson is entitled to an appellate-like review of the record of the proceedings.He is not entitled to a de novo review of the medical staff's decision.

"If the Board's decision is unsupported by substantial evidence or law, then it is clearly erroneous or arbitrary.That determination is properly within the [appellate] province of the circuit court."Kentucky Bd. of Nursing v. Ward, Ky. App., 890 S.W.2d 641, 643(1994)."If the findings of fact are supported by substantial evidence of probative value, then they must be accepted as binding and it must then be determined whether or not the administrative agency has applied the correct rule of law to the facts so found."Southern Bell Telephone and Telegraph Co. v. Kentucky Unemployment Ins. Comm'n, Ky.[], 437 S.W.2d 775, 778(1969).Substantial evidence has been defined as being that of substance and relative consequence.Wan v. Ecklar Moore Express, Inc., Ky., 339 S.W.2d 466(1960).The test of substantiality has been set forth as being "... whether when taken alone or in the light of all the evidence it has sufficient probative value to induce conviction in the minds of reasonable men."Kentucky State Racing Comm'n v. Fuller, Ky., 481 S.W.2d 298, 308(1972).

. . .

Additionally, in making his argument before this Court, the [sic] Dr. Johnson refers to evidentiary matters which pertain to the weight of the evidence and witnesses' testimony provided at the administrative-like hearing.Dr. Johnson identifies evidence and testimony which he believes disputes the conclusions of the Committee.A reviewing court is not free to substitute its judgment for that of the agency, unless the latter acted in an arbitrary and capricious manner.Piper v. The Singer Company, Inc., Ky.App., 663 S.W.2d 761, 763(1984).The reviewing court is limited to review the record made before the committee, and, where it has found against Dr. Johnson, the findings of fact of the Committee will not be disturbed unless the evidence is so persuasive that one would have no choice but to find for Dr. Johnson.Kentucky Unemployment Ins. Comm'n v. Murphy, Ky., 539 S.W.2d 293, 294(1976).Kentucky case law establishes that it is the role of the administrative agency, acting as the trier of fact, to determine the credibility of witnesses and pass on the weight of the evidence, not the reviewing court.Kentucky State Racing Comm'n v. Fuller, Ky., 481 S.W.2d at 308;Energy Regulatory Comm'n, v. Kentucky Power, Ky. App., 605 S.W.2d 46, 50(1980).It is beyond the review of this Court to determine the facts of the case.That is the province of the Committee.This Court is...