Plenge v. Russell

• Decision Date: 07 June 1960
• Docket Number: No. 17665,17665
• Citation: 115 S.E.2d 177,236 S.C. 473
• Court: South Carolina Supreme Court
• Parties: Henry E. PLENGE, Plaintiff-Appellant, v. Donald RUSSELL, Robert H. Chapman, Allen S. Dial, C. L. Guthrie, R. T. Thomason, Jr., M. L. Cates and A. J. Cox, Members Of And Constituting the Board of Trustees of The Spartanburg General Hospital and Horace E. Hamilton, Administrator of Spartanburg General Hospital, Defendants-Respondents. Thomas F. JACKSON, Plaintiff-Appellant, v. Donald RUSSELL et al., Defendants-Respondents. John F. BONIFACE, Plaintiff-Appellant, v. Donald RUSSELL et al., Defendants-Respondents.

Page 177

115 S.E.2d 177

236 S.C. 473

Henry E. PLENGE, Plaintiff-Appellant, v. Donald RUSSELL, Robert H. Chapman, Allen S. Dial, C. L.

Guthrie, R. T. Thomason, Jr., M. L. Cates and A. J. Cox,

Members Of And Constituting the Board of Trustees of The

Spartanburg General Hospital and Horace E. Hamilton,

Administrator of Spartanburg General Hospital,

Defendants-Respondents.

Thomas F. JACKSON, Plaintiff-Appellant, v. Donald RUSSELL et al., Defendants-Respondents.

John F. BONIFACE, Plaintiff-Appellant, v. Donald RUSSELL et al., Defendants-Respondents.

No. 17665.

Supreme Court of South Carolina.

June 7, 1960.

Butler & Chapman, Spartanburg, for plaintiffs-appellants.

T. Sam Means, Jr., Spartanburg, for defendants-respondents.

M. L. Meadors, Florence, amicus curiae.

LEGGE, Justice.

The verified complaints in these three actions are susbtantially identical and seek identical relief. Upon rules to show cause issued thereon, and returns thereto, the actions were by a circuit court order, unappealed from, consolidated for argument and future proceedings, without prejudice to the right of any party to present factual or legal matters differentiating any of them. This appeal is from a subsequent circuit court order sustaining a demurrer to the complaints for insufficiency. By leave of this court, South Carolina Medical Association has filed a brief as amicus curiae suggesting error in the order under appeal.

In each case the plaintiff is a doctor of medicine, specializing in the practice of radiology, and a member of the staff of Spartanburg General Hospital. The defendants are the members of the Board of Trustees, and the Administrator, of the hospital. We summarize the other allegations of one of the complaints as follows:

On August 6, 1958, the Board of Trustees adopted the following resolution regulating the practice, in the Hospital, of the plaintiff and other radiologists, the amounts to be paid to them, and the manner of such payment:

'1. Staff open as of September 1, 1958, with no salaried Radiologists and with the patient and attending physician to have free choice of Radiologist.

'2. The Administration immediately will make a thorough cost study of X-ray expense--to include cost of charity, depreciation of equipment, pro rata share of overhead, etc.

'3. Staff members to receive 40% of net profits based on cost study above.

'4. The Board of Trustees will designate the Chief of Radiology Service, who will be responsible for all charity work and who will be compensated in accord with the provisions of the County Supply Bill for the current fiscal year (7/1/58-6/30/59).

'5. The above program to be strictly on a trial basis, subject to revision or cancellation by the Board at its discretion. Provided, further, that the Administration will study the operation of this program and keep the Board informed of its effect on the hospital finances.'

Over plaintiff's objection, the Board and the Administrator have arbitrarily insisted upon controlling the amount of compensation to be received by the plaintiff for his professional services in connection with use of the hospital's radiological facilities, fixing the same, in accordance with the resolution before mentioned, at '40% of net profits based on cost study.' Plaintiff has been further advised by the Administrator that under the provisions of paragraph 4 of Subdivision A(1) of item 5, § 1 of the Spartanburg County Supply Act for the fiscal year ending June 30, 1959 (Act No. 1194 of the 1958 Acts of the General Assembly, 50 St. at Large, p. 2708), neither he nor any other radiologist may receive more than $25,000.00 a year as compensation for professional services in the hospital. (Note: The paragraph of the county supply act to which reference is made reads as follows: 'The Radiologist in charge of the department shall receive an annual salary of ten thousand dollars for directing the work of the department and for interpreting the X-ray pictures of the charity patients. He shall receive as additional compensation forty per cent of the net profit accruing to the department so long as his earnings in the aggregate do not exceed the sum of twenty-five thousand dollars.')

The defendants have refused to permit the plaintiff to practice radiology in the hospital or to utilize its radiological facilities except under the terms of the resolution of August 6, 1958 and the provisions of the county supply act before mentioned as interpreted by them.

Such action, resolution, rulings and conduct and management of the hospital on the part of the defendants are unreasonable, arbitrary, invalid and discriminatory, in that:

1. They contravene Section 7 of the Act creating the Spartanburg General Hospital (Act No. 308 of the Acts of 1917, 30 St. at Large, pp. 640, 642); Section 5 of Act No. 252 of the Acts of 1941, 42 St. at Large, pp. 362, 363; and Section 32-818 of the 1952 Code relating to county, township and municipal hospitals;

(Note:

Section 7 of Act No. 308 of 1917 reads as follows:

'In the management and operation of such hospital no discrimination shall be made against the practitioner of any school of medicine recognized by the laws of South Carolina. And all such legal practitioners shall have equal privileges in treating patients in such hospital. All patients shall have the right to employ, at their own expense, his or her physician, and in attending any such patient in such hospital the physician, so employed by such patient, shall have the exclusive care and treatment of such patient, subject only to such rules and regulations as the Board of Hospital Trustees may prescribe.'

Act No. 252 of 1941 created by Board of Trustees of the Spartanburg General Hospital prescribed the powers, authority and duties of the Board, and repealed Act No. 254 of the Acts of 1939, which had abolished the Board and had devolved its duties upon the County Board of Spartanburg County. Section 5 of the 1941 Act is in language substantially identical with that of Section 7 of the 1917 Act before quoted.

Section 32-818 of the 1952 Code is included in Article 3 of Chapter 4 of Title 32, Article 3 being captioned 'County, Township or Municipal Hospitals, Clinics or Tuberculosis Camps.' Section 32-818 reads as follows: 'In the management of such hospital or tuberculosis camp no discrimination shall be made against any practitioner of any school of medicine recognized by the laws of this State and all such legal practitioners shall have the privilege of treating patients in such hospital or tuberculosis camp.')

2. They unreasonably discriminate against the plaintiff and other radiologists by undertaking to regulate and control, on a cost basis, the amount of their compensation for their professional services, whereas all other doctors of medicine, such as general practitioners, surgeons, pediatricians and obstetricians are permitted to utilize the facilities of the hospital appropriate to their general or special practice and to charge and collect directly from their patients for their services without regulation or restriction by the hospital;

3. In the calculation of net profits provided to be paid to the plaintiff and other radiologists under the resolution of August 6, 1958, there are included items of costs, such as purchase and depreciation of equipment, expense of personnel and other items as to charity work, with the result that the plaintiff and other radiologists must not only perform charity work without charge but also pay costs of charity work as to expense of equipment, material, personnel and other like items, whereas in no other field of medicine are professional charges regulated or restricted by the hospital in such manner;

4. A greater proportion of the operating expense of the hospital than is justifiable is charged to charity, resulting in loss to the hospital and improper determination of the cost of operating the radiological department;

5. They unlawfully constitute and provide for the corporate practice of medicine.

Prayer was 'for a declaratory judgment as follows:

'(1) That Plaintiff is entitled to practice radiology in the Spartanburg General Hospital and to use the facilities of such Hospital as any other medical practitioner;

'(2) That Plaintiff is entitled to make charges to his patients, both within and without the Hospital, for his professional services on a professional service basis as all other practitioners do;

'(3) That Plaintiff is entitled to use the facilities of the Spartanburg General Hospital, whether within his specialized field or otherwise, without being charged therefor;

'(4) That patients using the radiological facilities of the Hospital be charged separately for the use of such facilities, as in the case of surgical, obstetrical, pediatrical or other medical departments;

'(5) That the Hospital be required to account to the Plaintiff and remit to him any amounts collected by the Hospital since December 1, 1958, representing the professional services rendered by the Plaintiff;

'(6) That the Resolution of the Board of Trustees undertaking to impose a limit on Plaintiff's income of 40% of the net profits of the Radiological Department be adjudged invalid, discriminatory and unconstitutional;

'(7) That paragraph 4 of subdivision (A) of item 5 of the Spartanburg County Supply Act of 1959 be adjudged to be discriminatory, invalid and unconstitutional;

'(8) That the present operation of the Radiological Department of the Spartanburg General Hospital is invalid and unlawful in that it represents a corporate practice of medicine;

'(9) That the Court determine a proper division of funds collected by the Hospital through the operation of its Radiological Department, said division representing a charge for the professional services of the Radiologists and a charge representing the use of the Hospital's equipment, facilities and personnel;

'(10) That the Court allow the Radiologists practicing at Spartanburg General Hospital to...