Porter Memorial Hosp. v. Malak

• Decision Date: 23 October 1985
• Docket Number: No. 3-384A68,3-384A68
• Citation: 484 N.E.2d 54
• Parties: PORTER MEMORIAL HOSPITAL, the Board of Trustees of Porter Memorial Hospital, and Arthur S. Malasto (Appealing Defendants); Sharon Simon, Associated Physicians, Inc., Martin J. O'Neill, M.D., and Clark M. McClure, M.D. (Non-Appealing Defendants), Defendants-Appellants, v. Thaddeus J. MALAK, M.D., Individually and as a Taxpayer and Resident of Porter County, Indiana, on behalf of himself and all others similarly situated, Plaintiff-Appellee.
• Court: Indiana Appellate Court

Page 54

484 N.E.2d 54

PORTER MEMORIAL HOSPITAL, the Board of Trustees of Porter Memorial Hospital, and Arthur S. Malasto (Appealing Defendants); Sharon Simon, Associated Physicians, Inc. Martin J. O'Neill, M.D., and Clark M. McClure, M.D (Non-Appealing Defendants), Defendants-Appellants, v. Thaddeus J. MALAK, M.D., Individually and as a Taxpayer and Resident of Porter County, Indiana, on behalf of himself and all others similarly situated, Plaintiff-Appellee.

No. 3-384A68.

Court of Appeals of Indiana Third District.

Oct. 23, 1985.

Jon F. Schmoll, Robin D. Pierce, Spangler, Jennings, Spangler & Dougherty, P.C., Merrillville, for defendants-appellants.

Delmar P. Kuchaes, Chudom & Meyer, Schererville, for plaintiff-appellee.

GARRARD, Judge.

This is an interlocutory appeal from the granting of a temporary injunction which ordered the hospital to restore Dr. Malak's staff privileges until such time as they might be terminated in compliance with the hospital's bylaws.

From 1978 to 1983 the doctor was employed by Associated Physicians, Inc., and was a member of the hospital's medical staff. In the summer of 1983 trouble developed between the parties. The relationship between the doctor and Associated Physicians, Inc. was ended, and litigation ensued. Then, on October 15, the doctor received a memo from the hospital telling him that he would no longer be allowed to treat patients there.

An amended complaint was filed in the litigation already in progress and in due course, a hearing was held on the doctor's prayer for a preliminary injunction. After considering the evidence, the trial court entered findings of fact, conclusions of law and a preliminary injunctive decree, the provisions of which were as follows:

"FINDINGS OF FACT

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6. Porter Memorial Hospital operated under Medical Staff Bylaws, Rules and Regulations, Policies and Procedures. Plaintiff's Exhibit 1 and Defendant Porter Memorial Hospital's Exhibit 10.

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15. Said hospital staff bylaws provide for yearly reappointment. Article III, Section 6, 'Reappointment to the medical staff will be made by the Board of Trustees each year upon recommendation of the Executive Committee of the medical staff. The procedure for reappointment will be as follows:

'A. All members of the medical staff who do not indicate otherwise shall be considered for reappointment to the same category of the staff with the same clinical privileges they then hold. Each year on September 1, the Credentials and Professional Standard Committee shall submit a list of active staff members their respective committees for the purpose of evaluation for reappointment. It will be the responsibility of each departmental committee to evaluate the performance of each physician who falls within their particular area of service. The departmental committee will complete an evaluation form on each physician who has been assigned to that service and will evaluate the physician for purposes of reappointment and may consider the following criteria: ....'

16. Said bylaws provide that the procedure will be automatic; however, as a practical matter the hospital each year gave to the doctors a new application which the doctors completed and resubmitted.

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22. Following the termination of his contract, Dr. Malak, as a private physician, continued to treat patients in the emergency room of the Porter Memorial Hospital.

23. By a letter dated October 15, 1983, Arthur S. Malasto notified Dr. Malak that he could no longer use the hospital or treat or admit patients therein. Plaintiff's Exhibit 4.

24. Said bylaws, Article III, Section 8, provides the 'Procedure for Corrective Action, Automatic and Summary Suspension, and Leave of Absence,'

25. Said bylaws, Article III, Section 9.03 provides the procedure for notification of the affected person.

'Whenever a decision has been made which entitles a person to a probable cause or evidentiary hearing the person shall be notified in writing of the decision by the chairman of the Credentials and Professional Standards Committee and of the person's right to a hearing before the decision becomes final.'

26. Article III, Section 9.02(b) provides the following decision shall entitle the medical staff member to an evidentiary hearing before the Executive Committee with the right of appeal on the record to the Board of Trustees of the Hospital whose decision shall be final. Section 9.02(b)(4), Revocation of Medical Staff Membership.

27. Dr. Malak received no notice from the chairman of the Credentials and Professional Standards Committee of any investigation, problem, or decision, nor that he was entitled to a hearing.

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CONCLUSIONS OF LAW

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1. Dr. Malak held, from Porter Memorial Hospital, an 'active staff' membership with privileges in the Emergency Department.

2. Under the 1981 Bylaws of said hospital there is a distinct division between 'active staff' and 'emergency room staff' positions.

3. Dr. Malak was not required by said bylaws to request reappointment yearly.

4. The hospital administrator has no authority to suspend a doctor under said bylaws.

5. Dr. Malak was not suspended pursuant to any of the 1981 Bylaws. Defendant's Exhibit 10.

6. Dr. Malak was given no notice of suspension containing notice of appeal.

7. The hospital must abide by its own bylaws.

8. Dr. Malak has been illegally prohibited by Porter Memorial Hospital from exercising his staff privileges.

9. Dr. Malak has no adequate remedy at law.

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"INJUNCTIVE DECREE

"... [T]he Court finds that plaintiff is entitled to be restored by defendant Porter Memorial Hospital to his staff privileges until legally removed.

IT IS THEREFORE ORDERED, ADJUDGED, AND DECREED by the Court that defendant Porter Memorial Hospital is hereby ordered to restore Dr. Thaddeus J. Malak, M.D., to the privileges he held on October 15, 1983, to-wit: active staff membership.

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that defendant Porter Memorial Hospital is further enjoined from prohibiting Dr. Thaddeus J. Malak from using said hospital until and unless he is legally removed from said staff."

To this order the hospital has filed eighty-five assignments of error. The assigned errors fall into six major classes:

1. That the 1978 and 1981 bylaws did not control the rights and duties of the parties on October 15, 1983. Thus, since the 1983 bylaws were not in evidence, there was no proof as to what the rights and duties of the parties were.

2. That since there was undisputed testimony that the 1981 bylaws had been amended, and no testimony as to the contents of such amendments, the court could not base its decision on the 1981 bylaws.

3. Since the doctor had not submitted an application for 1984 it was incorrect to order that he be given staff privileges in that year.

4. That ordering staff privileges in 1984 invaded the authority of the hospital's board of trustees.

5. That the injunction was incorrect since the doctor failed to exhaust his administrative remedies by failing to apply.

6. That there was no showing that the doctor's remedy at law was inadequate.

In its proper turn, and without regard to whether there was any logical connection between the assigned defect and the reason it was supposed to be wrong, ¹ each of these classes of error was alleged to make the preliminary injunction:

A. Clearly erroneous;

B. An abuse of discretion;

C. Contrary to the law;

D. Contrary to the evidence;

E. Supported by insufficient evidence.

The standard of review for preliminary injunctions was set out in some detail by the Court of Appeals last year:

"We initially note that the grant or denial of a preliminary injunction rests within the sound equitable discretion of the trial court. This court will not interfere with the exercise of that discretion unless it is shown that the trial court's action was arbitrary or constituted a clear abuse of discretion. The discretion to grant or deny preliminary injunctive relief is measured by several factors, including whether the plaintiff's remedies at law are inadequate thus causing irreparable harm pending resolution of the substantive action if the injunction does not issue, whether the plaintiff has demonstrated at least a reasonable likelihood of success at trial by establishing a prima facie case, whether the threatened injury to the plaintiff outweighs the threatened harm the grant of the injunction would occasion upon the defendant, and whether by the grant of a preliminary injunction the public interest would be served."

Steenhoven v. College Life Ins. Co. of America (1984), Ind.App., 458 N.E.2d 661, 664 [citations and footnotes omitted].

A judgment is not clearly erroneous if the record discloses facts or inferences from facts which support the decision. Lafayette Realty Corp. v. Vonnegut's Inc. (1984), Ind.App., 458 N.E.2d 689, 692; Kimbrell v. City of Lafayette (1983), Ind.App., 454 N.E.2d 73, 74.

I.

Many of the hospital's allegations of error hinge on the trial judge's right to rely on the 1981 hospital bylaws in making its decision.

The hospital argues that there was no evidence to support the conclusion that the hospital acted wrongfully or illegally in prohibiting the doctor from admitting or treating patients at the hospital. More specifically, the hospital urges that since findings of fact and the conclusions of law were based on copies of the 1978 and 1981 hospital bylaws, granting the injunction was clearly erroneous, an abuse of discretion, contrary to the law, contrary to the evidence and not supported by sufficient evidence.

In its brief, the hospital argues that its bylaws control the relationship between the parties and so the exact content of the bylaws on October 15, 1983 ² had to be proved in order for the injunction to stand.

Copies of the bylaws were placed into evidence both by the doctor, whose exhibit was the 1978 version, and the hospital, which...