Kiracofe v. Reid Memorial Hosp.

• Decision Date: 11 April 1984
• Docket Number: No. 1-383,1-383
• Citation: 461 N.E.2d 1134
• Parties: George KIRACOFE, M.D., Appellant (Plaintiff Below), v. REID MEMORIAL HOSPITAL, Appellee (Defendant Below). A 77.
• Court: Indiana Appellate Court

Page 1134

461 N.E.2d 1134

George KIRACOFE, M.D., Appellant (Plaintiff Below), v. REID MEMORIAL HOSPITAL, Appellee (Defendant Below).

No. 1-383 A 77.

Court of Appeals of Indiana,

First District.

April 11, 1984.

Gregory F. Hahn, David J. Cutshaw, Dillon, Hardamon & Cohen, Indianapolis, for appellant.

Ralph A. Cohen, Myra C. Selby, Ice, Miller, Donadio & Ryan, Indianapolis, George R. Reller, Reller, Mendenhall, Kleinknecht & Milligan, Richmond, for appellee.

ROBERTSON, Judge.

George Kiracofe, M.D. (Kiracofe) appeals the judgment upholding Reid Memorial Hospital's (hospital) suspension and termination of Kiracofe's privileges to practice medicine at the hospital.

We affirm.

Kiracofe is a licensed physician practicing medicine in Richmond, Indiana, and specializes in family practice. Most of his patients reside in the area. Reid Memorial Hospital is a general hospital and is organized as a not-for-profit corporation. The hospital has a Board of Trustees consisting of twenty-one members, with one member being appointed by each of the following governmental organizations: Richmond City Council, Wayne County Council, Wayne Township Trustees, and Wayne County Commissioner. The hospital receives tax support from the state and county and it also participates in programs with federal funding.

Kiracofe was initially admitted to the medical staff of the hospital in 1975 with privileges in family practice. His history at the hospital has been replete with the filing of approximately ten unusual occurrence reports. Some of the reports have resulted in disciplinary action being taken against Kiracofe. The reports were initiated because of Kiracofe's refusal to explain orders to nurses, abusive behavior towards nurses who questioned his orders, entering inappropriate and defamatory statements in medical records, failure to complete medical records in a timely fashion, and giving orders which were inappropriate and potentially harmful. These incidents led the medical staff to require Kiracofe to obtain counseling, to his censure, and to a recommendation to suspend his privileges.

Kiracofe's privileges were placed on probation by the medical staff in January, 1981. His privileges were limited and his work was subject to scrutiny by the officers of the medical staff and the family practice section. Additionally, the terms of his probation also required Kiracofe to undergo psychiatric counseling and evaluation from a psychiatrist approved by the Executive Committee of the medical staff.

Kiracofe was summarily suspended by the hospital's Chief of Staff for his treatment of a fourteen year old patient. Kiracofe admitted the girl into the hospital on January 21, 1982, with a diagnosis of pelvic inflammatory disease (PID). The diagnosis was not substantiated by the laboratory tests, nor did the tests indicate the presence of disease or infection. Moreover, the probability of the existence of PID in a fourteen year old girl is extremely unlikely. Kiracofe ordered the patient be treated with several antibiotics. The Chief of Family Medicine questioned the hospitalization of the girl because her charts indicated that the treatment was not working and her hospitalization was quite extended. He requested Kiracofe obtain consultation, which Kiracofe initially refused.

The consulting physician examined the patient and concluded that her problems were primarily emotional. He recommended against the use of antibiotics. Kiracofe continued to treat her for PID and prescribed Piperocil, an extremely strong antibiotic. This order was questioned and the Chief of the Medical Staff requested a consultation with Kiracofe. Kiracofe met with the Chief of Staff, who demanded Kiracofe turn over treatment to another doctor on March 2, 1982. Kiracofe requested that the antibiotic be continued. Kiracofe was summarily suspended by the Chief of Staff that day and he filed formal charges against Kiracofe that day.

The Executive Committee met to review the suspension on March 9, 1982, and hear evidence on behalf of Kiracofe. The Committee received Kiracofe's personal file which included a chronological summary of past grievances against Kiracofe. The Committee upheld the suspension and voted to terminate Kiracofe's privileges. Kiracofe appealed this recommendation to the Ad Hoc Committee, which voted to uphold the suspension and termination. Kiracofe then appealed to the Appellate Review Committee, which affirmed the termination. The Board of Directors subsequently upheld the actions of these committees.

Kiracofe initiated the lawsuit. The trial court found that Kiracofe failed to establish a nexus between the suspension and termination by the hospital and the government involvement or functions. It also found there was evidence consisting of Kiracofe's past record and his current treatment to support Kiracofe's suspension and termination. It held that the hospital's actions were not unlawful, arbitrary or capricious, and entered judgment in favor of the hospital.

The primary issue Kiracofe presents for review is whether he was entitled or accorded due process prior to his suspension and termination of his privileges. He raises numerous preliminary issues regarding due process which will be combined in this opinion for purposes of clarity. The thrust of Kiracofe's argument is that the hospital has become a public institution such that its actions constitute state action. Kiracofe alleges the state has insinuated itself into a position of interdependence with the hospital so as to become a joint participant with the hospital. Kiracofe raises other issues regarding the procedures which will also be discussed.

The Due Process Clause of the Fourteenth Amendment applies to state action, but it offers no shield against private conduct regardless of how wrongful such conduct may be. Renforth v. Fayette Memorial Hospital Association, Inc., (1978) 178 Ind.App. 475, 383 N.E.2d 368, cert. denied, 444 U.S. 930, 100 S.Ct. 273, 62 L.Ed.2d 187; Jackson v. Metropolitan Edison Co., (1974) 419 U.S. 345, 95 S.Ct. 449, 42 L.Ed.2d 477. Kiracofe argues the hospital is a public institution, thus, he was entitled to due process prior to his suspension and termination of his privileges.

Kiracofe argues the following facts establish that the hospital is a public institution: the hospital's Board of Directors consists of twenty-one members, four of which are appointed by the Richmond City Council, the Wayne County Council, the Wayne Township Trustee, and the Wayne County Commissioners; the legal title to the land upon which the hospital rests is held by the City of Richmond; the hospital receives federal, state, county, and township funds; the hospital is subject to extensive state regulation; it is the best staffed and best equipped hospital in the area, such that it has a monopoly in the area; the hospital receives tax revenues from Wayne County; and the hospital's bylaws contain a statement that it is owned by the people of Richmond.

In Renforth v. Fayette Memorial Hospital Association, Inc., supra, we rejected the arguments that a hospital was a public institution because it had members of its Board of Directors appointed by local governmental units, because the hospital enjoyed a monopoly position, and because it received public funds and tax revenues. This court held that in order to find state action, one must establish a nexus between the governmental involvement and the particular activity being challenged.

The fact that a business or industry is heavily regulated does not convert the business or industry into a public institution. In Jackson v. Metropolitan Edison Co., supra, the Supreme Court stated:

The mere fact that a business is subject to extensive state regulation does not by itself convert its action into that of the state for purposes of the Fourteenth Amendment. Nor does the fact that the regulation is extensive and detailed, ..., do so ... 419 U.S. 351-352, 95 S.Ct. 453-354.

We also fail to see what significance the statement in the bylaws has to do in this case.

Kiracofe argues Renforth is distinguishable because the legal title to the land on which the hospital is situated is held by the City of Richmond. He argues this case is controlled by Burton v. Wilmington Parking Authority, (1961) 365 U.S. 715, 81 S.Ct. 856, 6 L.Ed.2d 45.

In Burton, the operator of a private restaurant, which leased space in a building which was financed by public funds and owned by the public parking authority, refused to serve a customer solely because he was a Negro. The Supreme Court reversed the opinion of the Supreme Court of Delaware which held the restaurant acted in a purely private capacity. The Supreme Court held there was state action because the public parking authority had "insinuated itself into a position of interdependence with Eagle [the restaurant] that it must be recognized as a joint participant ..." Kiracofe argues that state action should be found in the present case because the title to the land is held by the City of Richmond. He also argues the state has insinuated itself into a position of interdependence.

The Supreme Court also limited its opinion in Burton with the following language:

Because readily applicable formulae may not be fashioned, the conclusions drawn from the facts and circumstances of this record are no means declared as universal truths on the basis of which every state leasing arrangement is to be tested. Owing to the very "largeness" of government, a multitude of relationships might appear to fall within the Amendment's embrace, but that, it must be remembered, can be determined only in the framework of the peculiar facts and circumstances present. 365 U.S. 725, 81 S.Ct. 862.

Other cases interpreting Burton have limited its holding.

Doe v. Bellin Memorial Hospital, (7th Cir.1973) 479 F.2d 756, involved an appeal by a woman seeking an abortion at a private hospital which received federal funds. The hospital denied...