St. Mary's Hosp. of Athens, Inc. v. Cohen

• Decision Date: 17 March 1995
• Docket Number: No. A94A2490,A94A2490
• Citation: 456 S.E.2d 79,216 Ga.App. 761
• Parties: ST. MARY'S HOSPITAL OF ATHENS, INC. v. COHEN.
• Court: Georgia Court of Appeals

Page 79

456 S.E.2d 79

216 Ga.App. 761

ST. MARY'S HOSPITAL OF ATHENS, INC. v. COHEN.

No. A94A2490.

Court of Appeals of Georgia.

March 17, 1995.

Certiorari Denied May 25, 1995.

Blasingame, Burch, Garrard & Bryant, P.C., E. Davison Burch, J. Ralph Beaird, Wayne R. Allen, Athens, for appellant.

J. Hue Henry, John F. Lyndon, Athens, for appellee.

ANDREWS, Judge.

St. Mary's Hospital of Athens, Inc. (Hospital) appeals from the judgment entered on the jury's verdict after the trial necessitated by this court's interlocutory review of the denial of the hospital's motion for summary judgment. St. Mary's Hosp. of Athens v. Radiology Professional Corp., 205 Ga.App. 121, 421 S.E.2d 731 (1992). There, this court determined that the Hospital was entitled to summary judgment on all the counterclaims of Dr. Cohen and his corporation, Radiology Professional Corporation (RPC), except for Dr. Cohen's "cause of action in tort against St. Mary's for failure to follow existing [medical staff] bylaws with regard to termination of his staff privileges [based on OCGA § 51-1-6]." Id. at 127(3c), 421 S.E.2d 731.

The basic facts of the relationship between the Hospital, RPC, and Dr. Cohen are set forth in that opinion, as well as the procedural history of the litigation, and will be supplemented only as needed. The jury returned a verdict for Dr. Cohen for $11,700,000 in compensatory damages and $1,000,000 in punitive damages.

1. " '(O)n appeal, we must construe the evidence most strongly to support the jury verdict and the judgment' [cit.]; likewise, in considering a ruling on a motion for directed verdict, the evidence must be construed most favorably to the party opposing the motion. [Cit.] The standard for review of a directed verdict and a judgment n.o.v. are the same: 'Where there is no conflict in the evidence as to any material issue, and the evidence introduced, with all reasonable deductions therefrom, shall demand a particular verdict, such verdict shall be directed.' [Cit.]" Mattox v. MARTA, 200 Ga.App. 697(1), 409 S.E.2d 267 (1991); Pendley v. Pendley, 251 Ga. 30(1), 302 S.E.2d 554 (1983).

As held in St. Mary's, supra, "[s]ince the issue is existence of a legal duty to follow procedures established pursuant to state law, not the presence of state action, we see no reason to distinguish between public and private hospitals in this context. Both are required to establish staff bylaws; therefore, both should be required to follow those bylaws. Just as a physician who receives privileges at a hospital '(does) so with the understanding that his appointment (is) subject to its bylaws,' [cit.], a hospital, whether public or private, also should be subject to the bylaws it enacts. Accordingly, we hold that Cohen may assert a cause of action in tort against St. Mary's for failure to follow existing bylaws with regard to termination of his staff privileges.... We agree with St. Mary's that it has the authority to establish exclusive relationships with physicians in a given specialty or area of practice and that such authority may include the concomitant right to terminate staff privileges as necessary to maintain this exclusivity. Nonetheless, this termination right may not be exercised in a manner inconsistent with the [medical] staff bylaws. Consequently, to ensure its right to terminate staff privileges to maintain exclusive relationships, hospitals must so provide either in the bylaws or in a contract with the individual physician (and not just in the contracts with the physician's professional corporation). In this case neither of these steps was followed. However, there is a fact question whether Cohen acquiesced in the limitations St. Mary's placed upon the renewal of his privileges so as to waive his right to insist on compliance with the procedural requirements in the bylaws." (Latter emphasis supplied.) St. Mary's, supra at 127-128, 421 S.E.2d 731.

As to the issue of acquiescence and waiver the material facts are not in dispute.

By letter dated December 31, 1981, Dr. Cohen was reappointed to the medical staff. That reappointment letter was virtually identical to the reappointment letters he had received since 1969, with one exception. Added to the 1981 letter was the following: "In the event your agreement with Radiology Professional Corporation or the agreement between Radiology Professional Corporation and the hospital terminates, your appointment will terminate at the same date; otherwise, your appointment expires on December 31, 1983." Dr. Cohen's reappointment letters of 1983, 1985, and 1987 contained the same limitation. Dr. Cohen also received a letter of April 5, 1989 granting additional privileges, but also containing the same limitation.

In Dr. Cohen's applications for reappointment in 1983, 1985, and 1987 no modifications of prior privileges were sought. Finally, by letter dated April 12, 1989, after the present lawsuit was initiated, Dr. Cohen notified the Hospital as follows: "The purpose of this letter is to respond to the second paragraph of your letter [of April 5, 1989] which purports to condition my clinical privileges on the continuing existence of an 'agreement' between Radiology Professional Corporation (RPC) and the Hospital. This is not the first time in recent years that you have referred to such a conditional grant of privileges. Until the Hospital filed suit recently to remove the RPC physicians from the Hospital, it was not necessary to respond to this attempt to limit our clinical privileges. Now, however, I believe I must respond formally to your suggestion that my clinical privileges are somehow tied to the old contract dated April 1, 1971." After arguing that there had been no contract since 1973, Dr. Cohen closed his letter as follows: "I simply did not want to continue to be silent on this matter now that the Hospital is attempting to remove the RPC physicians from the Hospital." (Emphasis supplied.)

"Acquiescence or silence, when the circumstances require an answer, a denial, or other conduct, may amount to an admission." OCGA § 24-3-36. And more specifically, "[i]n the ordinary course of business, when good faith requires an answer, it is the duty of the party receiving a letter from another to answer within a reasonable time. Otherwise he is presumed to admit the propriety of the acts mentioned in the letter of his correspondent and to adopt them." (Emphasis supplied.) OCGA § 24-4-23. "[M]ere silence is not sufficient to establish a waiver unless there is an obligation to speak. [Cit.]" Jordan v. Flynt, 240 Ga. 359, 364(3)(b), 366, 240 S.E.2d 858 (1977). "In cases of silence there must be not only the right but the duty to speak before failure to do so [becomes] an estoppel. [Cit.]" Tybrisa Co. v. Tybeeland, 220 Ga. 442, 445, 139 S.E.2d 302 (1964). The above cited statutes impose such a duty and obligation.

"While normally the question of waiver is a matter for the jury, where, as here, the facts and circumstances essential to the waiver issue are clearly established waiver becomes a question of law. [Cits.]" Mauldin v. Weinstock, 201 Ga.App. 514, 520(4), 411 S.E.2d 370 (1991).

If he chose not to accept same, Dr. Cohen had an obligation and duty to respond to the imposition of the limitations on his...