Smith v. Northside Hosp., Inc.
| Decision Date | 30 March 2016 |
| Docket Number | Nos. A15A2303,A15A2304.,s. A15A2303 |
| Citation | 336 Ga.App. 843,783 S.E.2d 480 |
| Parties | SMITH v. NORTHSIDE HOSPITAL, INC., et al. Northside Hospital, Inc., et al. v. Smith. |
| Court | Georgia Court of Appeals |
Jones Day, Lucas Wade Andrews, Peter Crane Canfield, Rebekah N. Plowman, Laura Kolesar Gura, Atlanta, Samantha Rose Mandell, Daniel Joseph Conner Jr., for Appellant.
Dentons US, J. Randolph Evans, Thurbert E. Baker, Bryan E. Bates, Nathan L. Garroway ; Baker & Hostetler, James C. Rawls, S. Derek Bauer, Ian K. Byrnside ; Susan V. Sommers ; Nelson, Mullins, Riley & Scarborough, S. Wade Malone, Charles T. Huddleston, Jessica Rutledge; Kilpatrick, Townsend & Stockton, Sidney S. Welch, Jeremy P. Burnette ; Edward C. Konieczny, for appellees.
Hull Barrett, David E. Hudson, amicus curiae.
In Case No. A15A2303, E. Kendrick Smith, an attorney, appeals the trial court's dismissal, after a bench trial, of his action to compel Northside Hospital, Inc. and its parent company, Northside Health Services, Inc. (collectively, "Northside"), to provide him with access to certain documents in response to his request under the Georgia Open Records Act ("GORA" or "the Act").1 On appeal, Smith argues that the trial court erred in finding that the documents were not "public records" within the meaning of the Act and in ordering a separate trial to determine whether those documents are exempt from the Act as trade secrets. Northside cross-appeals in Case No. A15A2304, arguing that the trial court erred by preventing it from seeking any information regarding the identity of Smith's client or clients, who Northside believed were the actual parties behind the GORA request, and Smith's purpose for bringing this lawsuit. For the reasons set forth infra, we affirm the trial court's dismissal of Smith's case and dismiss Northside's cross-appeal as moot.
The facts relevant to this appeal are largely undisputed.2 In 1966, the Commissioners of Roads and Revenues of Fulton County passed a resolution creating the Fulton County Hospital Authority (the "Authority"), which would "have and exercise all of the powers granted and prescribed in the Hospital Authority Laws."3 The Authority was created because of the need in Fulton County for improved and increased hospital facilities to serve the community. And to that end, the Authority opened Northside Hospital, which it owned and operated for approximately the next 25 years. In the early 1990s, the Authority, recognizing "the rapidly changing healthcare environment in which it operate[d]," undertook a study, with the help of consultants, to determine how best to improve the hospital's operations. Ultimately, the Authority concluded that the best option to achieve its goals was to restructure through a long-term lease of the hospital and related assets for operation by a private, charitable, nonprofit corporation. The Authority further determined that "[r]ecent developments and opportunities affecting the ability of the [h]ospital to remain competitive and to enhance its position as a principal provider of specialty healthcare services ... reinforced the importance of restructuring to the long term competitive position of the [h]ospital."
Based on the foregoing assessments, the Authority created Northside Hospital, Inc., a private, nonprofit corporation, and on November 1, 1991, it executed a lease and transfer agreement with the newly formed entity to facilitate the restructuring.4 Under this agreement, the Authority leased the hospital's facilities and transferred all of its operating assets and existing operations to Northside for a term of 40 years. In exchange, Northside agreed to operate the hospital subject to certain restrictions, pay all of the Authority's debts and assume all of its liabilities incurred in connection with the leased facilities and operating assets, and make a yearly rent payment of $100,000. The leased facilities included the real property, the hospital, a surgery center, office buildings, and improvements.
Relevant to the instant dispute, between 2011 and 2013, Northside entered into transactions to acquire four privately owned physician groups: Atlanta Cancer
Care ("ACC"), Georgia Cancer Specialists ("GCS"), Atlanta Gastroenterology Associates ("AGA"), and Atlanta Surgery Center, Ltd. ("ASC") (collectively, "the acquisitions"). In 2013, after learning of these transactions, Smith, a partner at an Atlanta law firm, sent a letter to Northside and the Authority, entitled "Open Records Request," seeking access to financial statements and other documents related to the acquisitions. Specifically, the letter identified 15 different categories of requested documents related to each acquisition, including, for example, "[a]ll contracts, agreements, instruments, or other documents by which the [a]cquisition was effected in whole or in part"; "any indemnification agreements and any agreements concerning the management or operation ... of any medical or healthcare practice acquired ..."; documents that "constitute, evidence or reflect any consideration, compensation, or remuneration of any type provided by or on behalf of [Northside]"; and "[a]ll documents that constitute, evidence, or reflect any strategic plan or business forecast for assets, membership interests, or any other property or interest acquired in the [a]cquisition" for the 24 months preceding the acquisition.
In a letter dated October 14, 2013, the Authority responded to Smith, informing him that it did not possess any records or documents that were responsive to his request.5 On the same day, Northside also responded to Smith, asserting that it is a private, nonprofit hospital that is not subject to GORA, and even if it was, the requested documents, which are "highly sensitive," would be exempt under various provisions of the Act, including the trade-secrets exemption. In addition, Northside informed Smith that it had entered into binding confidentiality agreements that prohibited disclosure of the requested documents. For these reasons, Northside declined to comply with Smith's request. Smith replied only to Northside, asserting that it was subject to the GORA because, even though it is a private entity, it performs a service or function for or on behalf of the Authority, which is a public agency within the meaning of the Act, and that no exemption applied. Nevertheless, Northside maintained that it was not subject to the Act and declined to provide Smith with access to any documents related to the acquisitions.
Subsequently, on November 15, 2013, Smith filed a complaint against Northside, requesting that the trial court compel Northside to comply with his GORA request. Northside answered and asserted a counterclaim, alleging that Smith brought this action in bad faith on behalf of one or more of his corporate clients that are competitors of Northside.6 Smith then moved the court to dismiss Northside's counterclaim, arguing that the purpose of his GORA request is immaterial as a matter of law, and the trial court granted the motion. However, throughout discovery, Northside continued to seek information regarding the identity of Smith's client or clients, who Northside contended were the real parties seeking access to its documents, as well as the purpose behind the parties making the GORA request and filing the lawsuit. Rather than answering Northside's discovery requests, Smith filed a motion for a protective order preventing Northside from seeking such information. And after a hearing on the matter, the trial court issued the protective order "prohibiting any discovery concerning ... Smith's purposes in bringing the action, or the identity and purposes of any of his alleged clients."
Discovery continued and, approximately one year into the litigation, three of the private practices that Northside acquired—AGA, ACC, and GCS—moved to intervene in the case to protect their own interests in keeping the requested documents confidential. AGA and ACC sought to intervene as defendants, and GCS sought to intervene as a third-party plaintiff to file a petition for declaratory relief. After a hearing on the matter, the trial court granted their motions.
Following protracted litigation, the case ultimately proceeded to a bench trial, which was bifurcated to resolve the two dispositive issues before the trial court: (1) whether the documents in question were "public records" under GORA; and (2) if so, whether the records contained exempt trade secrets. After Smith presented his evidence as to the first issue, Northside and the intervenors moved for an involuntary dismissal of the case, but the trial court denied the motion. However, when Northside and the intervenors renewed the motion after the close of all the evidence on the first issue, the court granted it. Smith now appeals the trial court's dismissal of his case, and Northside cross-appeals, contending that the court erred in issuing the protective order precluding it from seeking information about the identity and motives of Smith's corporate client or clients behind this action.
1. Smith first argues that the trial court erred in finding that Northside's records concerning its acquisition of the four physician practices are not "public records" subject to GORA. We disagree.
At the outset, we note that on appellate review of a bench trial, the factual findings shall not be set aside unless clearly erroneous, and "due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses."7 Further, in bench trials, the judge sits as trier of fact, and "the court's findings are analogous to a jury's verdict and should not be disturbed if there is any evidence to support them."8 However, we review any questions of law decided by the trial court de novo.9 Further, in ruling on a motion for an involuntary dismissal, "the trial court was not required to construe the...
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