Saint Louis v. Baystate Medical Center, Inc.

• Citation: 568 N.E.2d 1181,30 Mass.App.Ct. 393
• Decision Date: 29 March 1991
• Docket Number: No. 89-P-859,89-P-859
• Parties: Andre SAINT LOUIS et al. 1 v. BAYSTATE MEDICAL CENTER, INC., et al. 2
• Court: Appeals Court of Massachusetts

Page 1181

568 N.E.2d 1181

30 Mass.App.Ct. 393

Andre SAINT LOUIS et al. ¹ v. BAYSTATE MEDICAL CENTER, INC., et al. ²

No. 89-P-859.

Appeals Court of Massachusetts Hampden.

Argued Jan. 17, 1991.

Decided March 29, 1991.

Mitchell J. Sikora (Ann Ryan-Small, Boston, and Myles D. Jacobson, Springfield, with him), for plaintiffs.

Francis D. Dibble, Jr., Springfield, for Baystate Medical Center, Inc.

Gordon P. Katz, Boston, for Springfield Anesthesia Service, Inc.

Before KASS, KAPLAN and PORADA, JJ.

KASS, Justice.

When, in 1976, the Medical Center of Western Massachusetts ³ merged with Wesson Memorial Hospital to form Baystate Medical Center, Inc. (Baystate), it became necessary also to fuse, at least in the sense of coordination, the anesthesia services of the previously separate institutions. That process was not successful and provoked a series of legal actions of which this case is the third. A judge of the Superior Court, acting on defense motions for summary judgment, concluded that all issues raised by the complaint had been, or could have been, raised in a prior State action which had been dismissed with prejudice. Accordingly, the judge ruled that further proceedings in the instant case were barred by principles of res judicata. Judgment was entered for the defendants, and the plaintiffs have appealed. ⁴

We think principles of res judicata were aptly applied. It is also possible, on the basis of the summary judgment materials, to affirm the judgment on the merits. The controversy has been so tortuous and combative that we shall express briefly our views on the merits, in hope that doing so will more definitively put the dispute to rest.

1. Facts. Here is the background. Wesson Anesthesia Group, Inc. (WAG), a group practice specializing in anethesiology, had before the merger creating Baystate supplied anesthesia services to Wesson Memorial Hospital. At the Springfield Hospital and Wesson Women's Hospital, those services were furnished by another group, Springfield Anesthesia Service, Inc. (SAS). One the two professional corporations, SAS was the larger, performed teaching functions with residents in training, and seems to have had somewhat greater academic panache.

After the merger, the administrators of Baystate retained both anesthesia groups but designated a single head of the department of anesthesiology of Baystate. The physician so designated was Dr. Franco Dinale, a member of SAS. Members of the groups did not become employees of Baystate; rather, Baystate entered into contracts with the two professional corporations under which they provided physicians who would administer or supervise anesthesia and furnish qualified anesthesiologists on schedule and on call. The groups billed patients for their services and remitted to Baystate costs attributable to space, equipment, medicines, and assisting personnel.

As early as 1979, the record discloses, there was friction about methods, coverage, and style between the two groups. The WAG doctors bridled under Dr. Dinale's leadership. A periodic review in 1980 of practice at Baystate by the Medical Malpractice Joint Underwriting Association of Massachusetts (JUA) generated criticism directed particularly at the WAG anesthesiologists. It was said that they permitted operating rooms to be unattended by an anesthesiologist, leaving only unsupervised nurse anesthetists to care for patients. JUA thought this inconsistent with proper standards and asked that the practice be discontinued. Proposals for reprimand of WAG physicians and remedial policies came before the medical executive committee and the Baystate trustees. After hearings and reports, mild letters of reprimand issued to five WAG doctors, and, more pointedly, the trustees on February 13, 1981, directed Dr. Dinale to prepare a plan for greater integration of the anesthesiology units. A feature of the plan that Dr. Dinale devised was that two doctors from WAG were to rotate through the main Springfield campus, while, reciprocally, two doctors from SAS rotated through the Wesson campus.

For the WAG physicians this was all too much, and they filed an action asserting multiple grievances against Baystate, which we shall detail below, but which added up to the generalized complaint that Baystate and SAS (which was brought in as a party later) were bent on driving WAG out of Baystate. Bringing a lawsuit did not enhance the cause of cooperation, integration, and good feeling. Sporadic outbursts of ill temper, rudeness, and quarrels about scheduling erupted. On one or more occasions, WAG could not supply physicians to Baystate when needed because they had commitments to other hospitals.

In response to a call from the hospital administration for a more unified anesthesiology department, a majority of the department proposed a staffing plan which included two elements WAG found particularly unpalatable: (1) all members of the department of anesthesiology were to be full time; and (2) the chief of the department would make all hiring decisions. The trustees adopted the department's staffing recommendations on August 13, 1982. At the same meeting, Baystate's vice president for medical affairs suggested that a contract with a single practice corporation might be the best way to achieve a truly integrated department. The suggestion quickly became policy. In early October, 1982, Baystate requested that SAS and WAG submit proposals for being the sole staffing source for the anesthesiology department. SAS received the nod from the hospital board, and an exclusive contract was made in February, 1983, to be effective September 1, 1983. That triggered a second lawsuit by WAG and its member physicians, this time brought in the United States District Court and filed May 25, 1983.

1. Res judicata. Thus far we have mentioned two legal actions brought by WAG and its constituent physicians: the first action, filed on April 27, 1981, in Superior Court, and the second action, filed in Federal court on May 25, 1983. The case before us, the third action, was begun by complaint filed in Superior Court on June 4, 1985. In all three cases the plaintiffs were WAG and four (originally five) ⁵ of its shareholder-physicians. The defendants named in the first action were Baystate, Dr. Dinale in his role as chairman of the department of anesthesiology, and SAS. In the second and third actions the defendants were Baystate and SAS. No party involved in the third action was absent from the first action and the identity of parties necessary to invoke principles of res judicata or former adjudication (the phrase preferred by the Restatement [Second] of Judgments [1980] ) is present. Fidler v. E.M. Parker Co., 394 Mass. 534, 539, 476 N.E.2d 595 (1985). Bradford v. Richards, 11 Mass.App.Ct. 595, 597, 417 N.E.2d 1234 (1981). Cf. Morganelli v. Building Inspector of Canton, 7 Mass.App.Ct. 475, 480-482, 388 N.E.2d 708 (1979). Restatement (Second) of Judgments § 17(3).

The complaint in the first action alleged unlawful interference with contractual relations; bad faith violation of agreements between the plaintiffs and Baystate; deprivation without fair hearing of the plaintiffs' rights to practice medicine; unfair and unconstitutional retaliation against the plaintiffs because they gave voice to opinions contrary to those held by the hospital administration and Dr. Dinale; unfair and deceptive practices in violation of G.L. c. 93A; unlawful restriction of the plaintiffs' rights to practice medicine in violation of G.L. c. 93, §§ 1-14A (the Massachusetts Antitrust Act); and defamation. In addition to damages, WAG ⁶ asked that Baystate be enjoined from interfering with the clinical privileges of the WAG physicians or establishing work schedules which would interfere with commitments of those physicians to other hospitals. WAG's attack had not been unleashed on a narrow front.

For some years the first action lurched through the discovery phase. In 1982, WAG moved for leave to claim a jury, and that motion was denied. The second action, initiated in 1983, appears to have been instituted for two reasons. First, it afforded WAG an opportunity to claim a jury; second, a Federal court would be a promising forum in which to press Federal antitrust claims based on an opinion of the United States Court of Appeals for the Fifth Circuit favorable to the idea that an exclusive agreement with a professional medical corporation (in fact, a group of anesthesiologists) violated Federal antitrust law. See Hyde v. Jefferson Parish Hosp. Dist. No. 2, 686 F.2d 286 (5th Cir.1982). The complaint in the second action contained a mere ninety-six paragraphs. In addition to the Federal antitrust points, it restated the G.L. c. 93 and 93A claims, tortious interference with contractual relations, and breach of contract.

The life of the Hyde decision was short. The Supreme Court reversed it in Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2, 104 S.Ct. 1551, 80 L.Ed.2d 2 (1984), holding that an exclusive staffing arrangement by a hospital was not an unlawful tying arrangement. WAG moved on August 24, 1984, to dismiss the Federal claims and certain State claims with prejudice but to dismiss without prejudice State claims founded on breach of contract, tortious interference with contractual relations, and violations of G.L. c. 93A. An immense amount of effort had been expended on discovery in the second action, and the defendants were reluctant to allow the Federal action to expire until WAG had responded to certain residual discovery by the defendants. On November 14, 1984, a United States District Court judge, acting on a proposed order by a United States magistrate, dismissed the complaint in the second action, expressly disavowing any attempt to approve subsequent action in a State forum or any attempt to modify the existing State action. The dismissal, insofar as it was with prejudice, was limited as to those Federal and State claims which asserted...