Martinez v. Maruszczak

• Decision Date: 11 October 2007
• Docket Number: No. 44347.,44347.
• Citation: 168 P.3d 720
• Parties: John G. MARTINEZ, M.D., Appellant, v. Mary Dolores MARUSZCZAK and Lisa M. Krol, Surviving Heirs of Robert Maruszczak, Deceased; and Emily Watson, as Special Administratrix of the Estate of Robert Maruszczak, Deceased, Respondents.
• Court: Nevada Supreme Court

168 P.3d 720

John G. MARTINEZ, M.D., Appellant, v. Mary Dolores MARUSZCZAK and Lisa M. Krol, Surviving Heirs of Robert Maruszczak, Deceased; and Emily Watson, as Special Administratrix of the Estate of Robert Maruszczak, Deceased, Respondents.

No. 44347.

Supreme Court of Nevada.

October 11, 2007.

John H. Cotton & Associates, Ltd., and John H. Cotton and Mara E. Fortin, Las Vegas, for Appellant.

Neil G. Galatz & Associates and Neil G. Galatz, Las Vegas, for Respondents.

Lewis & Roca, LLP, and Daniel F. Polsenberg, Las Vegas; Bradley, Drendel & Jeanney and Thomas E. Drendel, Reno, for Amicus Curiae Nevada Trial Lawyers Association.

BEFORE THE COURT EN BANC.

OPINION

By the Court, MAUPIN, C.J.:

In this appeal, we consider the extent to which sovereign immunity protects publicly employed physicians from common-law liability for medical malpractice. Our analysis necessarily turns on Nevada's statutory waiver of sovereign immunity and a statutory exception to that waiver, which immunizes state actors from liability for actions grounded upon the state, actor's exercise or performance of a discretionary function or duty. Because Nevada jurisprudence concerning the scope of the discretionary-function exception is unclear, and because Nevada's statutory language mirrors the Federal Tort Claims Act, we adopt the two-part federal test, as articulated in Berkovitz v. United States¹ and United States v. Gaubert² for determining when the discretionary-function exception to the general waiver of governmental immunity applies. Under this two-part test, state-employed physicians enjoy immunity from medical malpractice liability only when their allegedly negligent acts involve elements of judgment or choice, and the judgment or choice made is of the kind that the discretionary-function exception was designed to shield, that is, a judgment or choice involving social, economic, or political policy considerations. If those two requisites for discretionary-function immunity are not satisfied, state-employed medical professionals are liable for malpractice to the extent of the statutory cap that applies to damages awards in tort actions against state employees.

FACTS AND PROCEDURAL HISTORY

Robert Maruszczak died of accidental injuries at University Medical Center (UMC) in Las Vegas while under the care of appellant, John Martinez, M.D. Mr. Maruszczak's heirs, Mary Maruszczak and Lisa M. Krol, along with the special administratrix of his estate (collectively referred to as "the estate"), filed wrongful death claims for medical malpractice against Dr. Martinez. At trial, by stipulation, the district court converted the matter to an action for declaratory relief. It then resolved questions of whether and the extent to which Dr. Martinez, a contract employee of the University of Nevada, School of Medicine (UNSOM), was immunized from liability under NRS Chapter 41, which sets forth the conditions under which the State of Nevada waives sovereign immunity for itself, its political subdivisions and agencies, certain contractors, and public employees.

Dr. Martinez's employment terms with the University of Nevada, School of Medicine

In order to provide context for the parties' appellate arguments, we first briefly discuss the terms of Dr. Martinez's employment with UNSOM. Dr. Martinez left private medical practice in 1997 to become employed as a full-time, "tenure-track" faculty member of UNSOM. As a condition of his employment, he agreed to join UNSOM's nonprofit medical practice plan entity, University of Nevada, School of Medicine Multispecialty Group Practice, Inc. This entity is also known as "MedAssociates."

Like many medical practices, MedAssociates coordinates and performs administrative services for its member physicians. These include billing, collections, accounting, and credentialing of member physicians; providing clinical practice facilities, equipment, malpractice insurance, and support staff; and securing paying patient referrals through health insurance plans. Patients and medical service insurers remit payments for services to MedAssociates, a portion of which it distributes to UNSOM for physician salaries. The remaining revenues defray MedAssociates' general operating overhead and nonmedical employee salaries.

UNSOM employed Dr. Martinez under a written contract signed by his department chairman the dean of UNSOM, and the chairman of MedAssociates' board of directors. According to the terms of his agreement with MedAssociates, Dr. Martinez could not provide private patient care outside the scope of his services with MedAssociates without the written approval of his direct supervisor, the UNSOM department chairman. Although UNSOM determined Dr. Martinez's compensation and issued his pay-checks, his salary upon annual contract renewal was dependent in part upon his annual revenue production through MedAssociates. This arrangement notwithstanding, Dr. Martinez received a regular paycheck even if MedAssociates did not collect enough revenue to cover the agreed base salary. Finally, by virtue of his association with UNSOM, Dr. Martinez received retirement and other benefits through the State of Nevada.

In summary, although MedAssociates manages the employment of its support staff, UNSOM manages the employment of MedAssociates' member physicians and nurse practitioners.

District court proceedings

The district court ultimately issued a judgment declaring that Dr. Martinez was not entitled to the benefits of sovereign immunity. In particular, the court concluded (1) that Dr. Martinez's treatment of Mr. Maruszczak was a nongovernmental function performed on behalf of MedAssociates, a revenue-generating entity separate from UNSOM; and (2) that, regardless, "proprietary" activities of government, such as the practice of medicine, do not enjoy sovereign immunity protections, qualified or otherwise, as a matter of law. Dr. Martinez appeals.³

DISCUSSION

In NRS Chapter 41, the Nevada Legislature has, with some exceptions, waived Nevada's sovereign immunity from liability.⁴ Under this waiver, the State's liability for damages in tort actions is limited to $50,000 per claim.⁵ One exception to the general waiver of immunity is set forth in NRS 41.032(2), which provides that the State and its employees are immune from liability for actions stemming from the exercise of discretionary functions or the performance of discretionary duties.

Dr. Martinez claims that, as a public employee performing discretionary functions in treating Mr. Maruszczak, within the scope of his public duties, he is completely immune from the estate's suit.⁶ Absent immunity, Dr. Martinez claims that his liability for damages related to Mr. Maruszczak's death is "capped" under NRS 41.035(1) at $50,000.

In response, the estate asserts that the practice of medicine is not a governmental function protected by notions of sovereign immunity and that, in any event, Dr. Martinez was not a state employee because of his affiliation with MedAssociates. From this, the estate reasons that the district court properly declared that Dr. Martinez was not entitled to sovereign immunity protection or the statutory damages cap. The estate argues, in the alternative, that capped damages for negligently performed public endeavors that compete with the private sector violates constitutional notions of due process and equal protection.

We agree with the estate that Dr. Martinez is not entitled to discretionary-act immunity under NRS 41.032(2), but we conclude that he is a state employee protected by NRS 41.035(1)'s $50,000 damage limitation. Accordingly, we begin with a discussion of the sovereign immunity doctrine's application to the practice of medicine, and Dr. Martinez's status as a state employee for the purposes of NRS 41.032(2) and NRS 41.035(1). Next, we discuss discretionary-act immunity under NRS 41.032(2) and clarify that actions against medical providers for allegedly negligent medical diagnosis or treatment decisions are not barred under NRS 41.032(2)'s discretionary-function exception to the state's general waiver of immunity, unless those decisions were grounded on public policy considerations. Finally, we discuss NRS 41.035(1)'s damages cap and address the estate's argument that this limitation on damages is unconstitutional.

Standards of review and statutory construction

The application of sovereign immunity under NRS Chapter 41 presents mixed questions of law and fact. This court reviews conclusions of law, such as those entailing statutory construction, de novo.⁷ This court will not disturb a lower court's findings of fact if supported by substantial evidence.⁸ Because the primary legislative intent behind the qualified waiver of sovereign immunity from tort liability under NRS Chapter 41 was to waive immunity, we "strictly construe limitations upon that waiver."⁹

The practice of medicine as a governmental function

In response to Dr. Martinez's claims of immunity under NRS Chapter 41, the estate first argues that medical treatment is governed by distinct obligations discrete to the doctor-patient relationship and that governmental immunity does not apply. In this, the estate seeks our embrace of a line of cases represented by Keenan v. Plouffe, in which the Georgia Supreme Court determined that a state-employed physician was not entitled to official immunity because he was not acting in the course of his "official duties" in his treatment of a patient.¹⁰ The court concluded that the physician's obligations to his patient were independent of his official state duties¹¹ and that the physician was subject to the common-law duty to treat his patient with reasonable care and skill.¹² For similar reasons, the Virginia Supreme Court, in James v. Jane,¹³ determined that physician faculty members of a state university medical school were not immune from negligence actions brought by university hospital patients. More specifically, the Virginia court...