Renforth v. Fayette Memorial Hospital Ass'n, Inc.

• Court: Indiana Appellate Court
• Writing for the Court: LOWDERMILK; Stevens; LYBROOK, P. J., and ROBERTSON
• Citation: Renforth v. Fayette Memorial Hospital Ass'n, Inc., 383 N.E.2d 368, 178 Ind.App. 475 (Ind. App. 1978)
• Decision Date: 12 December 1978
• Docket Number: No. 1-877A165,1-877A165
• Parties: William RENFORTH, M. D., Plaintiff-Appellant, v. The FAYETTE MEMORIAL HOSPITAL ASSOCIATION, INC., Board of Trustees of Fayette Memorial Hospital Association, Inc., Executive Committee of the Board of Trustees of Fayette Memorial Hospital Association, Inc., Executive Committee of the Medical Staff of Fayette Memorial Hospital, Earl Branson, John J. Darcy, K. Dale Ford, Russell Archibold, Charles R. Bottorff, Martha F. Kennedy, La Verne L. Marsh, F. B. Mountain, J. M. Lockhart, Albert Robinson, Willis Rose, Henry Ruhl, Kathlene Shaver, Dale Sloneker, Edward Thielking, William Thomas, R. Hirsch, R. Taube, Z. Mufti, R. W. Sanders, Defendants-Appellees.

Page 368

383 N.E.2d 368

178 Ind.App. 475

William RENFORTH, M. D., Plaintiff-Appellant, v. The FAYETTE MEMORIAL HOSPITAL ASSOCIATION, INC., Board of Trustees of Fayette Memorial Hospital Association, Inc Executive Committee of the Board of Trustees of Fayette Memorial Hospital Association, Inc., Executive Committee of the Medical Staff of Fayette Memorial Hospital, Earl Branson, John J. Darcy, K. Dale Ford, Russell Archibold Charles R. Bottorff, Martha F. Kennedy, La Verne L. Marsh F. B. Mountain, J. M. Lockhart, Albert Robinson, Willis Rose, Henry Ruhl, Kathlene Shaver, Dale Sloneker, Edward Thielking, William Thomas, R. Hirsch, R. Taube, Z. Mufti, R W. Sanders, Defendants-Appellees.

No. 1-877A165.

Court of Appeals of Indiana, In Banc.

Dec. 12, 1978.

David W. Dennis, Dennis, Reinke & Vertesch, Richmond, Kent Masterson Brown, Lexington, Ky., for plaintiff-appellant.

Ralph A. Cohen, Joan Godlove, Ice, Miller, Donadio & Ryan, William S. Hall, Hall, Render & Helbert, Indianapolis, for defendants-appellees.

LOWDERMILK, Judge.

STATEMENT OF THE CASE

Plaintiff-appellant William Renforth appeals after the Union Circuit Court entered judgment in favor of defendant-appellee Fayette Memorial Hospital Association (Hospital), Et al., in a lawsuit challenging Hospital's bylaw which requires all members of Hospital's medical staff to carry professional liability insurance coverage.

FACTS

Dr. Renforth was terminated as a member of Hospital's medical staff on April 1, 1976, because he failed to acquire professional liability insurance coverage, as required by Hospital's bylaws. He filed suit in Fayette Circuit Court against Hospital, its Board of Trustees, the Executive Committee of its Board of Trustees, and the Executive Committee of its medical staff, seeking a restraining order, preliminary and permanent injunctions, and damages. The suit was transferred to Union Circuit Court on change of venue, where the trial court ultimately entered judgment in favor of all defendants.

We affirm.

ISSUES

1. Did the trial court lose jurisdiction when it violated Ind. Rules of Procedure, Trial Rule 79?

2. Is Hospital a public institution, in the sense that its actions constitute state action and are governed by and subject to the Due Process Clause of the Fifth and Fourteenth

Amendments to the Constitution of the United States?

3. Did Hospital act unlawfully, arbitrarily, and capriciously in imposing the insurance requirement?

Issue One

Dr. Renforth contends that the Union Circuit Court lost jurisdiction of this cause of action when Judge James S. Shepard violated TR 79(1)(b).

Dr. Renforth's lawsuit against Hospital was transferred on change of venue to the Union Circuit Court on May 12, 1976. On January 1, 1977, TR 79 became effective to provide as follows:

"(1) Whenever the regular judge or presiding judge of any court or his spouse, or a person within the third degree of relationship to either of them, or the spouse of such person

(b) Is acting as a lawyer in the proceeding, . . .

the venue of which is before such judge, he shall disqualify himself immediately and cause such fact to be certified to the Supreme Court which shall thereupon appoint a special judge.

* * * " of

The cause came on for trial, without intervention of a jury, on January 18, 1977. The trial court rendered judgment in favor of all defendants on February 2, 1977. Dr. Renforth filed his motion to correct errors on March 31, 1977, which the trial court overruled on May 19, 1977.

On May 20, 1977, Dr. Renforth filed his motion for change of judge, based upon TR 79(1)(b). The judge of the Union Circuit Court is the father-in-law of one of the attorneys who represented Hospital in the trial court proceeding. The trial court did not rule on the motion. Dr. Renforth instituted an original action in the Supreme Court on May 31, 1977, claiming that the trial court had no jurisdiction in the cause of action because of the violation of TR 79. The Supreme Court held that Dr. Renforth should have brought his jurisdictional claim to that court prior to final judgment. Justice DeBruler wrote, at 369 N.E.2d 1078: "As relator did not avail himself of this opportunity, his remedy is by way of appeal."

Dr. Renforth, accordingly, presents the following issue on appeal: Is TR 79(1) (b) mandatory and will violation thereof divest the trial court of jurisdiction?

If a court has jurisdiction of the class of actions to which a particular case belongs, the court has jurisdiction of the subject matter of the action. When a court does not have subject matter jurisdiction, the parties cannot confer such jurisdiction by consent. Farley v. Farley (1973),157 Ind.App. 385, 300 N.E.2d 375.

If a court does have jurisdiction of the subject matter of the action, the parties may give consent, express or implied, to jurisdiction of the particular case. Farley v. Farley, supra.

Dr. Renforth does not challenge the jurisdiction of the Union Circuit Court to entertain the class of actions to which his particular case belongs. He contends that the Union Circuit Court, by violating TR 79(1)(b), lost jurisdiction of his particular case.

An affidavit signed by the attorney who represented Dr. Renforth in the trial court proceeding reveals that Dr. Renforth's attorney became aware of the relationship existing between the judge and one of Hospital's attorneys in August or September 1976. The effective date of TR 79 was January, 1, 1977, yet Dr. Renforth made no effort to challenge the jurisdiction of the trial court until more than three months after the trial court entered judgment adverse to him on February 2, 1977. Certainly these facts warrant a holding that Dr. Renforth gave implied consent to jurisdiction of his particular case, unless the wording of TR 79 dictates a contrary conclusion.

TR 79 does provide that the trial court judge Shall disqualify himself when he is closely related to one of the attorneys participating in the action. Obviously, Judge Shepard was in a far better position to know of the relationship than was Dr. Renforth. We cannot ignore the fact, however, that Dr. Renforth's attorney did in fact know of the relationship and did permit the matter to go to trial without objection.

A complete reading of TR 79 reveals that its primary purpose is to set forth a procedure for selecting special judges rather than to define who shall and who shall not be eligible to sit as judge in a particular case. The rule should be enforced in a manner that does not emasculate the unambiguous wording contained therein, but it should also be enforced in a manner which prevents a party with knowledge of the relationship from remaining silent until he suffers an adverse judgment.

With these considerations in mind, along with due regard for the rule that consent to jurisdiction of a particular case can be given impliedly, we deem it to be appropriate to enforce TR 79(1)(b) as follows: A judge has a duty to disqualify himself when he or his spouse, or a person within the third degree of relationship to either of them, or the spouse of such person is acting as a lawyer in the proceeding. Failure of the judge to disqualify himself will not result in loss of jurisdiction, however, if the party who raises the issue on appeal knew, or had reason to know, of the relationship prior to the time final judgment was entered. ¹

We hold that Dr. Renforth impliedly consented to the jurisdiction of the Union Circuit Court.

Issue Two

Fayette Memorial Hospital is organized as a private, not-for-profit hospital. Dr. Renforth contends that Hospital, for a number of reasons, has become a public institution in the sense that its actions constitute state action and are governed by and subject to the Due Process Clause of the Fifth and Fourteenth Amendments to the Constitution of the United States.

The Due Process Clause of the Fourteenth Amendment provides: "(N)or shall any State deprive any person of life, liberty, or property, without due process of law; . . . " The Due Process Clause applies to state action, but it offers no shield against private conduct regardless of how wrongful such private conduct may be. Jackson v. Metropolitan Edison Co. (1974), 419 U.S. 345, 95 S.Ct. 449, 42 L.Ed.2d 477; Shelley v. Kraemer (1948), 334 U.S. 1, 68 S.Ct. 836, 92 L.Ed. 1161. As the Supreme Court noted in Jackson v. Metropolitan Edison Co., supra, at 95 S.Ct. 449, 453:

" . . . While the principle that private action is immune from the restrictions of the Fourteenth Amendment is well established and easily stated, the question whether particular conduct is 'private,' on the one hand, or 'state action,' on the other, frequently admits of no easy answer. . . . "

Dr. Renforth first argues that Hospital's action is state action because Hospital has accepted governmental funds and thereby subjected itself to governmental regulation.

The impetus for the challenged activity need not originate with the state. State action may be found if the state simply enforces the activity which originates privately. Moose Lodge No. 107 v. Irvis (1972), 407 U.S. 163, 92 S.Ct. 1965, 32 L.Ed.2d 627. However, a nexus must exist between the governmental involvement and the particular activity being challenged. Doe v. Bellin Memorial Hospital (7th Cir. 1973), 479 F.2d 756. ² Or the evidence must show that the state "has so far insinuated itself into a position of interdependence" with the private institution that the state has become "a joint participant" in the challenged activity. Burton v. Wilmington Parking Authority (1961), 365 U.S. 715, 725, 81 S.Ct. 856, 862, 6 L.Ed.2d 45.

In Doe v. Bellin Memorial Hospital, supra, Jane Doe and her physician brought an action seeking an injunction to prevent a hospital and its officials from denying use of the facilities for an abortion. She argued that the hospital acted "under color of" state law within the meaning of the civil rights statutes because it accepted financial support...