Philips v. Pitt County Memorial Hosp.

• Citation: 503 F.Supp.2d 776
• Decision Date: 02 August 2007
• Docket Number: No. 4:05-CV-97.,4:05-CV-97.
• Court: U.S. District Court — Eastern District of North Carolina
• Parties: Sherif PHILIPS, M.D., Plaintiff, v. PITT COUNTY MEMORIAL HOSPITAL, Inc., Sanjay Patel, M.D., Paul Bolin, M.D., Ralph E. VVhatley, M.D., and Cynthia Brown, M.D., Defendants.

503 F.Supp.2d 776

Sherif PHILIPS, M.D., Plaintiff, v. PITT COUNTY MEMORIAL HOSPITAL, Inc., Sanjay Patel, M.D., Paul Bolin, M.D., Ralph E. VVhatley, M.D., and Cynthia Brown, M.D., Defendants.

No. 4:05-CV-97.

United States District Court, E.D. North Carolina, Eastern Division.

August 2, 2007.

Deborah N. Meyer, Lisa M. Schreiner, Meyer Law Offices, P.A., Cary, NC, for Plaintiff.

C. David Creech, Walter G. Merritt, Harris, Creech, Ward & Blackerby, New Bern, NC, for Defendants.

ORDER

FOX, Senior District Judge.

This matter is before the court upon a motion to dismiss [DE-11] by Defendants Pitt County Memorial Hospital, Inc. [PCMH], Sanjay Patel, M.D. [Dr. Patel], Paul Bolin, M.D. [Dr. Bolin], Ralph E. Whatley, M.D. [Dr. Whatley], and Cynthia Brown, M.D. [Dr. Brown] and upon Plaintiffs response to Magistrate Judge William A. Webb's order of March 15, 2006 [DE-52] allowing in part the Defendants' Amended Motion to Compel [DE-36]. These matters are now ripe for disposition.

I. BACKGROUND

This case arises out of the temporary suspension of Plaintiffs medical privileges at PCMH. PCMH was originally established as a public hospital, but on June 1, 1998, the Pitt County Board of County Commissioners executed a Transfer Agreement changing PCMH's status from a public hospital to a private, nonprofit hospital pursuant to North Carolina General Statute Section 131E-8, which provides that "a municipality may ... sell or convey to a nonprofit corporation ... any rights of ownership the municipality ... has in a hospital facility...." See Mem. in Support of Mot. to Dismiss [DE-12] at Ex. A. in a North Carolina Bill of Conveyance and General Warranty Deed, Pitt County, North Carolina, acting through its Board of County Commissioners, conveyed the hospital and its associated property to PCMH, which acted by and through its Board of Directors. Id.

The Transfer Agreement purported "to change the status of Pitt County Memorial Hospital from a Public Hospital to a Private Not For Profit Hospital," to further the following objectives:

To maintain the viability of Pitt County Memorial Hospital to provide the highest quality healthcare to the Citizens of Pitt County and the Region.

To maintain Pitt County Memorial Hospital as an open facility to provide care to all patients regardless of ability to pay.

To maintain Pitt County Memorial Hospital as the academic medical teaching hospital for the East Carolina University School of Medicine pursuant to the terms of the Affiliation Agreement.

To maintain local control.

To strive to maintain financial integrity of Pitt County Memorial Hospital at the highest bond rating achievable for similarly situated hospitals.

To provide appropriate compensation to, the County for transfer of Pitt County Memorial Hospital.

Id. As consideration for the sale, PCMH agreed to pay the Pitt County Board of County Commissioners $15 million at the time of conveyance and an additional $7.5 million on the first and second anniversary of the conveyance.

Pursuant to the Transfer Agreement, Pitt County placed some restrictions on PCMH. Specifically, the Transfer Agreement provided that: (1) PCMH would "provide community general hospital services to the citizens of Pitt County without regard to their ability to pay for those services;" (2) PCMH could not be sold without the prior consent of the Pitt County Board of County Commissioners; (3) disposition of PCMH assets exceeding certain limitations would require the approval of the Pitt County Board of County Commissioners; (4) PCMH was required to "maintain its affiliation with the East Carolina University School of Medicine" and "continue to serve as the primary academic teaching [h]ospital of the University;" and (5) the mechanism for selecting members of the PCMH Board of Trustees could not be changed without the prior. written consent of Pitt County. See id.

Plaintiff is a doctor who became a member of PCMH's medical staff in 1996. In January 1998, Plaintiff contracted with Total Renal Care to provide Medical Services at a free-standing dialysis unit in eastern North Carolina. After Plaintiff was named in a malpractice lawsuit in connection with his work at Total Renal Care and was suspended at two other facilities for failure to maintain the requisite records, PCMH's Department of Risk Management began observation of Plaintiffs interaction with patients at PCMH.

On July 23, 2004, following the observation period, Plaintiff met with several PCMH administrators to discuss allegations that Plaintiff had falsified medical records. Plaintiff contends that he was not told who had made the allegations and did not receive written documentation describing the allegations. PCMH Chief of Service for Internal Medicine Dr. Whatley subsequently wrote a letter to then-PCMH Chief of Staff Dr. Barrier on August 26, 2004, indicating that he believed-corrective action should be taken against Plaintiff for professional misconduct, including failing to examine patients and falsifying patent records.

On September 14, 2004, Dr. Barrier notified Plaintiff that a Request for Investigation prior to Corrective Action had been initiated and that he would be afforded an opportunity to appear before the Medical Executive Committee [MEC] of PCMH to respond to the allegations. Plaintiff contends that the letter did not identify the name of the individual requesting the investigation or the specific patients involved in the investigation and that such notice is required by the PCMH By-laws. Plaintiff met with the MEC on September 20, 2004. Thereafter, the MEC determined that further action was warranted and Dr. Whatley appointed an Ad Hoc Committee to investigate the allegations and report back to the MEC. Dr. Whatley selected Dr. Brown to act as chair of the Ad Hoc Committee.

Plaintiff appeared before the Ad Hoc Committee without the assistance of counsel and the Committee issued a report to the MEC on November 2, 2004, indicating that Plaintiff was not performing at the level required of PCMH medical staff. Accordingly, Plaintiff was given another opportunity to appear before the MEC on November 15, 2004. The MEC subsequently issued a report on November 16, 2004, adopting the conclusions and recommendations of the Ad Hoc Committee, but adding a recommendation for a six month suspension of Plaintiffs privileges.

On December 23, 2004, Plaintiff gave notice of his intent to appeal the MEC's decision and have a fair hearing pursuant to PCMH by-laws. For the appeal, a hearing was conducted before a panel consisting of Drs. John Olsson, Beverly Harris, and Sanjay Patel, in which Plaintiff was represented by counsel, cross-examined witnesses, and presented evidence. In a report dated April 4, 2005, the panel issued its Hearing Report to the MEC. The panel did not recommend suspension of Plaintiffs privileges. Plaintiff did not appeal this decision to the Board of Trustees.

The PCMH Board of Trustees then met on May 17, 2005, to discuss the issues raised in Plaintiffs fair hearing process. The Board of Trustees declined to accept the recommendations of the panel and decided to consider the matter further at a subsequent meeting. Plaintiff was notified of the decision and told that the Board of Trustees would not make a final decision until it received a recommendation from the Chief of Staff, Chief of Staff-Elect, Secretary of the Medical Staff and the Chairman of the Credentials Committee. The Board of Trustees met on June 22, 2005 and decided to reappoint Plaintiff to the medical staff for two years, but also imposed a 90 day suspension of Plaintiffs medical staff privileges, with 31 days of "active suspension." PCMH subsequently reported the Board's decision to the North Carolina Medical Board.

On July 29, 2005, Plaintiff initiated the instant action against Defendants PCMH and Drs. Patel, Bolin, Whatley, and Brown, asserting claims pursuant to 42 U.S.C. § 1983 and 42 U.S.C. § 1981 and alleging claims of breach of contract and defamation. Defendants filed a Motion to Dismiss on September 20, 2005, arguing that Plaintiffs 42 U.S.C. § 1983 and 42 U.S.C. § 1981 claims should be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted. Additionally, Defendants contend that upon dismissal of Plaintiffs federal claims, his remaining state law claims should be dismissed pursuant to Rule 12(b)(1) for lack of subject matter jurisdiction. Plaintiff has responded [DE-14] to Defendant's Motion to Dismiss and Defendants have replied [DE-14].

On January 30, 2006, Defendants filed an Amended Motion to Compel. On March 15, 2006, United States Magistrate Judge Webb entered an order allowing the Amended Motion to Compel and directing Plaintiff to advise the court in writing under oath whether he had complied with the order compelling him to produce specific records. In the order, Judge Webb recommended that this action be dismissed should Plaintiff choose not to comply with his order compelling production of documents. Plaintiff timely responded by filing an Affidavit [DE-54] indicating that he would not produce the requested documents, invoking his Fifth Amendment right against self-incrimination. These matters are now ripe for disposition.

II. MOTION TO DISMISS

A. Standard

An action will be dismissed pursuant to Rule 12(b)(6) for failing to state a claim if it appears that the plaintiff can prove no set of facts that would entitle him to relief. See Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 90, 2 L.Ed.2d 80 (1957). When reviewing a motion to dismiss, the court assumes the facts alleged in the complaint are true, see McNair v. Lend Lease Trucks, Inc., 95 F.3d 325, 327 (4th Cir. 1996), and construes the allegations in the light most favorable to the pleader. See Scheirer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974).

However, "[i]f matters outside the pleadings are presented to and not...