Pippert v. Gundersen Clinic, Ltd.

• Decision Date: 14 January 2004
• Docket Number: No. C02-119 LRR.,C02-119 LRR.
• Citation: 300 F.Supp.2d 870
• Parties: Diane PIPPERT and Thomas Pippert, Individually and as Parents of minor child Brian Pippert, Plaintiffs, v. GUNDERSEN CLINIC, LTD., Defendant.
• Court: U.S. District Court — Northern District of Iowa

300 F.Supp.2d 870

Diane PIPPERT and Thomas Pippert, Individually and as Parents of minor child Brian Pippert, Plaintiffs, v. GUNDERSEN CLINIC, LTD., Defendant.

No. C02-119 LRR.

United States District Court, N.D. Iowa, Eastern Division. Waterloo Division.

January 14, 2004.

Chad Andrew Swanson, Thomas L. Staack, Dutton, Braun, Staack, Hellman, Iversen, Waterloo, IA, for Plaintiffs.

Marlene S. Garvis, Jardine, Logan & O'Brien, PLLP, Lake Elmo, MN, for Defendant.

ORDER

READE, District Judge.

I. INTRODUCTION

This matter comes before the Court pursuant to Defendant Gundersen Clinic, Ltd.'s ("Gundersen") Motion for Summary Judgment (docket no. 18) and the Motion to Strike or in the Alternative to Amend Complaint Alleging Fraudulent Misrepresentation (docket no. 19) filed by Plaintiffs Diane Pippert and Thomas Pippert (the "Pipperts"). The Pipperts have resisted Gundersen's Motion for Summary Judgment and Gundersen has resisted the Pipperts' Motion to Strike. The Court held a telephonic hearing on both motions on January 6, 2004. Attorney Marlene Garvis appeared on behalf of Gundersen. Attorney Thomas Staack appeared on behalf of the Pipperts.

II. FACTUAL BACKGROUND

The Pipperts have invoked this Court's jurisdiction inasmuch as complete diversity of citizenship exists between the parties and the amount in controversy exceeds $75,000.00. 28 U.S.C. § 1332. The Pipperts are Iowa residents. Gundersen is a nonprofit corporation organized under the laws of the state of Wisconsin with its principal place of business in LaCrosse, Wisconsin.

This is a personal injury action arising out of the treatment of Pipperts' minor son, Brian Pippert, by Dr. Chaudri Rasool at the Palmer Lutheran Health Center ("Palmer Lutheran") in West Union, Iowa. The Pipperts allege in their Complaint that on September 2, 2000, Brian Pippert sought treatment in the emergency room at Palmer Lutheran for injuries to his testicles. Dr. Rasool diagnosed Brian Pippert with a left testicular contusion and ordered treatment consisting of certain medications and ice and then discharged him. The Pipperts further allege that on September 5, 2000, Brian Pippert sought further treatment at Covenant Medical Center in Waterloo, Iowa. During Brian Pipperts' visit to Covenant Medical Center, the physicians performed an ultrasound which revealed torsion to the left testicle. Brian Pippert subsequently underwent an orchiectomy of the left testicle and an orchidopexy of the right testicle. The Pipperts then brought suit against Gundersen Lutheran, Ltd., alleging in their Complaint that Dr. Rasool, an employee of Gundersen Lutheran, Ltd., was negligent in the care he provided to Brian Pippert and that such negligence was the actual and proximate cause of injury to Brian Pippert and to the Pipperts as his parents. The Pipperts alleged that Gundersen Lutheran, Ltd., was vicariously liable for Dr. Rasool's negligence.

Prior to filing the Complaint, the attorneys for the Pipperts engaged in conversations with counsel for Gundersen Lutheran, Inc., regarding the substance and potential settlement of the Pipperts' claim. Counsel for the Pipperts specifically requested from counsel for Gundersen Lutheran, Inc. information on the identity of Dr. Rasool's employer. On July 16, 2002, Chad Swanson, one of the Pipperts' attorneys, sent a letter to Pat Skogland, counsel for Gundersen, which stated the following:

RE: Brian T. Pippert v. Palmer Lutheran Health Center Your File No.: 31301 (1075)

We are in receipt of your July 15th, 2002, faxed letter. Be advised that we have completed the draft of the lawsuit, however, pursuant to your request, we will postpone its filing while settlement negotiations continue in earnest. If those negotiations break down, we will file suit immediately. In the meantime, please confirm for us the fact that Dr. Rasool is employed by Gundersen Lutheran, Inc. Thank you for your attention to this matter and we look forward to hearing from you yet this week.

On July 31, 2002, Ms. Skoglund responded to Mr. Swanson's letter with the following e-mail message:

This will confirm my voice mail to you that Dr. Rasool is employed by Gundersen Clinic, Ltd. at the outpatient clinic in West Union, Iowa. He is not employed by Palmer Lutheran. Gundersen Clinic, Ltd., has its principal offices at 1836 South Avenue, La Crosse, WI 54601. Dr. Rasool was working in the ER at Palmer Lutheran when he saw your client.

Please let me know if you need any further information. I assume you received my voice mail last week with our settlement offer of $30,000.00 and passed that along to your client.

I will wait to hear from you.

The parties were unable to settle the Pipperts' claim and the Pipperts subsequently filed suit in this Court on August 5, 2002. The Pipperts named as the defendant in their Complaint Gundersen Lutheran, Ltd. On September 6, 2002, Gundersen Lutheran Ltd., filed its Statement of Interest and specifically identified the defendant therein as Gundersen Lutheran, Inc. The Statement of Interest included information about the relationship of Palmer Lutheran to Gundersen and to Gundersen Lutheran, Inc. On October 1, 2002, Gundersen Lutheran, Ltd., filed its Answer and specifically advised the Pipperts' counsel that the Pipperts had named the wrong party as the defendant in the lawsuit. The Answer alleged as an affirmative defense that the Pipperts had failed to name Dr. Rasool and Palmer Lutheran as indispensable parties to the action. Gundersen Lutheran, Ltd., also asserted in its Answer that at all times material to the matter, Dr. Rasool was an employee of Gundersen Clinic, Ltd.

On October 25, 2002, the Pipperts moved to amend their Complaint to name Gundersen Clinic, Ltd., as the proper party defendant. On November 8, 2002, Gundersen Lutheran, Inc. filed a resistance to the Pipperts' motion, asserting that the Pipperts' had sufficient notice that Gundersen Clinic, Ltd., was the proper party defendant when the Pipperts filed their lawsuit. Gundersen Lutheran, Inc., contended the Pipperts therefore should be precluded from amending their Complaint to name the proper party defendant because the statute of limitations on their claims had run. Gundersen asserted the Pipperts should not be excused from their failure to name Gundersen as the defendant when they had actual notice before they filed their Complaint that Gundersen was in fact the proper party defendant. By Order dated November 8, 2002, Chief Magistrate Judge Jarvey granted the Pipperts' Motion for Leave to Amend their Complaint to name Gundersen as the proper party defendant. On November 12, 2002, the Pipperts filed an Amended Complaint naming Gundersen as the defendant.

On February 23, 2003, Gundersen's counsel learned for the first time during a meeting with Dr. Rasool that Dr. Rasool was not working in his capacity as a physician with Gundersen when he provided services to Brian Pippert on September 2, 2000. Dr. Rasool advised counsel for Gundersen during this meeting that when he treated Brian Pippert on September 2, 2000, he was moonlighting as a physician with Palmer Lutheran pursuant to a Personal Services Agreement (the "Agreement") with Palmer Lutheran.

Palmer Lutheran is an Iowa hospital and a non-profit corporation organized under the laws of the State of Iowa. It has a loose affiliation with Gundersen Lutheran, Inc., and Gundersen Lutheran, Inc., has the right to select one member of Palmer Lutheran's Board of Directors. Gundersen Lutheran, Inc., receives indirect benefits through its affiliation with Palmer Lutheran in that Gundersen patients receive treatment at Palmer Lutheran. Dr. Rasool's Agreement with Palmer Lutheran provides that Palmer Lutheran will give to Gundersen, on a monthly basis (1) reports detailing necessary volume and billing data as required by Gundersen for purposes of monitoring Dr. Rasool's performance; (2) gross billings; (3) number of patient visits (excluding nurse only visits); and (4) relative value units. The Agreement further requires that Palmer Lutheran maintain "such books and records as are necessary to establish to the satisfaction of the Physician and his employer Gundersen Clinic, Ltd., the proper discharge of the Hospital's accounting obligations hereunder including, without limitation, those relating to the proper billing of Medicare, Medicaid, insurance carriers and other third-party payors for the services of the Physician." The terms of the Agreement further require that Palmer Lutheran give to Gundersen "access at reasonable times and as often as may reasonably be requested" to Palmer Lutheran's offices to inspect its books and accounts to the extent they relate to matters governed by the Agreement and to "discuss its affairs, finances, and accounts with its officers with respect to such matters." Under the terms of the Agreement, Gundersen is to provide malpractice insurance for Dr. Rasool and Palmer Lutheran is to provide its own malpractice insurance. The Agreement provides that each party is to indemnify the other for "any and all claims, demands, causes of action, losses, liabilities, court costs and attorney's fees arising from or relating to their respective actions and omissions whether intentional, negligent or otherwise." Dr. Rasool is considered an independent contractor of Palmer Lutheran under the terms of the Agreement.

On March 21, 2003, Gundersen filed its Answer to the Pipperts' Amended Complaint. Gundersen asserted in its Answer, for the first time, that "at all times pertinent to this case and, in particular, the date and time when Dr. Rasool was diagnosing and treating Brian Pippert, he was moonlighting at, paid by, and acting as an agent for Palmer Lutheran Health Center, Inc., not Gundersen Clinic, Ltd." The deadline for motions to add parties had expired on February 27, 2003 and the deadline for motions to amend pleadings was set to expire on March 27, 2003. The Pipperts subsequently filed a Motion to...