Khoury v. Community Memorial Hospital, Inc.

• Decision Date: 15 January 1962
• Docket Number: No. 5350,5350
• Parties: DR. ANTOINE KHOURY, ET AL. v. COMMUNITY MEMORIAL HOSPITAL, INCORPORATED. Record
• Court: Virginia Supreme Court

Page 533

123 S.E.2d 533

203 Va. 236

DR. ANTOINE KHOURY, ET AL. v. COMMUNITY MEMORIAL HOSPITAL, INCORPORATED.

Record No. 5350.

Supreme Court of Appeals of Virginia

January 15, 1962.

Aubrey R. Bowles, Jr. (Aubrey R. Bowles, III; James S. Easley; Franklin M. Slayton; Bowles, Boyd & Herod Easley, Vaughan & Slayton, on brief, for the appellants.

J. Segar Gravatt and John Y. Hutcheson, for the appellee.

Eppa Hunton, IV and Harry Frazier, III (Lewis T. Booker; Hunton, Williams, Gay, Powell & Gibson, on brief), for Virginia Hospital Association, amicus curiae.

JUDGE: CARRICO

CARRICO, J., delivered the opinion of the court.

Dr. Antoine Khoury filed a bill of complaint and, with leave of court, an amended bill of complaint against Community Memorial Hospital, Incorporated, hereinafter referred to as the hospital, seeking to enjoin his dismissal from the associate medical staff of the hospital and the withdrawal of his privilege to practice therein. The hospital filed a demurrer, which was overruled, and thereafter filed its answer. The chancellor heard the testimony ore tenus and entered a final decree dismissing the original and amended bills of complaint. We granted an appeal from this ruling.

There are twelve assignments of error to the rulings of the chancellor, which present the following questions for our determination:

1. Did Dr. Khoury have a contract with the hospital for the use of its facilities as an associate staff member and, if so, may such contract be enforced by a court of equity?

2. Is the hospital a public hospital and, if so, have any rights of Dr. Khoury and his patients been contravened as a result of the hospital's denial of staff privileges to Dr. Khoury?

3. Was Dr. Khoury accorded a fair hearing with respect to the denial of staff privileges in the hospital?

R. G. Waters, the president of the town council of La Crosse, Virginia, C. W. Moseley, the then mayor of La Crosse and W. B. Kirkland, former mayor, were permitted to intervene by the chancellor as amici curiae. Their petition prayed that Dr. Khoury be granted the relief he sought. The Virginia Hospital Association has, with leave, filed a brief in this court as amicus curiae, in opposition to Dr. Khoury's contention that the hospital is a public institution.

The hospital is a non-stock, non-profit corporation chartered on July 6, 1950, pursuant to the provisions of Chapter 13, Title 13, Code of Virginia, 1950, as amended, 'to establish, construct and maintain a regional hospital for the counties of Mecklenburg, Brunswick and Lunenburg, Virginia, to be located at South Hill . . . for the treatment, healing and care of ill, wounded, disabled and diseased persons. . . ..'

The hospital was originally constructed at a total cost of approximately $825,000.00, $415,000.00 thereof contributed by the federal government in the form of funds authorized by the Hill-Burton Act (42 U.S.C.A., § 291, et seq.), $39,000.00 by the Commonwealth of Virginia and $372,000.00 by local subscriptions. An addition was constructed later at a total cost of approximately $322,000.00, consisting of $165,000.00 in Hill-Burton funds and $156,000.00 in local subscriptions.

By virtue of the charter, and the by-laws adopted pursuant thereto, management of the hospital is vested in a self-perpetuating board of trustees. The by-laws provide for the appointment of an administrator to serve as a representative of the board in the management of the hospital.

All appointments to the medical staff are made by the board of trustees. The staff is divided into five categories: honorary, consulting, active, associate and courtesy. An application for appointment to the staff is presented by the administrator to the staff secretary and thence to the staff itself, which may either reject the application or refer it to the credentials committee. If it is referred to the committee, the applicant is then investigated and a recommendation is made by the committee to the medical staff, The staff thereafter makes its recommendation to the board of trustees. All such appointments are for a period of one year, renewable by the board without re-application.

Dr. Khoury is a native of Lebanon, but a naturalized citizen of the United States. He studied extensively in Lebanon, France, Jerusalem and England. After coming to this country he served an internship in the Aultman Hospital in Canton, Ohio, and became chief resident in surgery of that institution.

Dr. Khoury had a family, and since his position in the Aultman Hospital was not well paying, he decided to enter private practice. He became interested in coming to Virginia through the Virginia Council on Health and Medicine. He was licensed on December 6, 1958, to practice his profession in Virginia. He learned, from the health council, that the town of La Crosse was attempting to find a doctor to establish his practice there.

Dr. Khoury visited La Crosse on two occasions. On his second visit he conferred with the town officials, and also visited the hospital and conferred with its administrator, Thomas W. Leggett, and members of its medical staff. In these conferences Dr. Khoury stated that he would not consider moving to La Crosse unless he could secure the privilege of using the hospital for his patients.

On his return to Ohio, after his second visit to La Crosse, Dr. Khoury wrote to Mr. Leggett, stating that his decision to come to Virginia depended upon whether he would be afforded limited privileges in the hospital to perform certain surgical operations. Mr. Leggett sent Dr. Khoury the form to be used for applying for medical staff privileges, and in a forwarding letter stated, 'As I discussed this matter with you the staff application goes to the credentials committee of the medical staff and then to the active staff for their action. After the active staff has acted on the application, it goes to the Board of Trustees for their action.' Dr. Khoury returned his completed application to the hospital with a letter to Mr. Leggett, again stating that his decision to come to La Crosse depended upon his securing the privilege of 'doing some surgery' in the hospital.

The officials of the hospital made inquiries concerning Dr. Khoury's background and received favorable responses thereto. Accordingly, his application was submitted to the credentials committee, which recommended to the medical staff that it be approved for associate 'either in general medicine or general surgery not both.' On May 19, 1959, the medical staff approved the recommendation of the credentials committee.

On June 4, 1959, Dr. M. L. Lacy, the secretary of the medical staff, wrote to Dr. Khoury advising him of the action of the staff, and explaining why privileges could not be granted for both medicine and surgery. In this letter it was stated that the staff approval 'will be forwarded to the governing board of the hospital for final approval. . . .' In this letter Dr. Khoury was asked to decide which type of privilege he desired and to make a new application therefor so that it 'may be submitted to the governing board of the hospital.'

Upon receipt of this letter, Dr. Khoury telephoned Dr. Lacy. The details of this telephone conversation, upon which Dr. Khoury bases so much of his case, were in hopeless conflict in the testimony. Dr. Khoury testified that he asked Dr. Lacy if he should wait until the board of trustees had approved his application. According to Dr. Khoury, Dr. Lacy replied that the board approval was a formality and that he should come at once. Dr. Lacy, in his testimony, denied that he made any such statement to Dr. Khoury. However, as a result of this telephone conversation, Dr. Khoury's application was treated, by the hospital, as one for surgical privileges only.

Dr. Khoury resigned his position with the Ohio hospital and moved to La Crosse, arriving on July 3, 1959. He found it necessary to secure two loans to move his family and to equip his office.

Several days after his arrival in La Crosse, Dr. Khoury visited Mr. Leggett and had a conversation with him upon which Dr. Khoury places great emphasis. He testified that Mr. Leggett told him not to worry about the board of trustees, stating, 'When the medical staff recommends somebody for privileges it has never happened that the Board of Trustees denied it so it is a question of formality only.' Although called as a witness by Dr. Khoury, Mr. Leggett was not questioned concerning this phase of their conversation.

Dr. Khoury's name was placed on a list, in the lobby of the hospital, containing names of the members of the active and associate staffs. He was placed on a 'rotating list' for the treatment of free patients. He was permitted to admit his own patients. He directed orders to the hospital personnel, which were honored. Mr. Leggett testified that these privileges were extended to Dr. Khoury on a temporary basis under authority of the by-laws of the medical staff.

On July 18, 1959, Dr. Khoury was called to the scene of an accident. He found that one Grant Thomas had been struck and run over by a train. Thomas was believed, by a constable and an undertaker at the scene, to be dead but Dr. Khoury detected a sign of life. He administered emergency treatment and then removed Thomas to the hospital. Dr. Lacy and other members of the staff assisted Dr. Khoury in treating Thomas and his life was saved.

The incident which led to Dr. Khoury's dismissal arose out of the Thomas case. On July 19 Dr. Khoury ordered an x-ray of the patient's spine. The next day, Dr. J. A. Boyd, Jr., the radiologist at the hospital, took the x-rays and found that Thomas had suffered a severe fracture of the spine.

Dr. Boyd testified that when he reported the x-ray findings to Dr. Khoury, the latter, in the presence of hospital personnel, became highly excited when he found that Thomas was paralyzed and could not move his legs; that he pounded on the table and tried to 'browbeat' Thomas into...