State ex rel. Bd. of Trustees of City of North Kansas City Memorial Hosp. v. Russell

• Decision Date: 18 December 1992
• Docket Number: No. 74606,74606
• Citation: State ex rel. Bd. of Trustees of City of North Kansas City Memorial Hosp. v. Russell, 843 S.W.2d 353 (Mo. 1992)
• Parties: STATE ex rel. BOARD OF TRUSTEES OF the CITY OF NORTH KANSAS CITY MEMORIAL HOSPITAL, Relator, v. Honorable David W. RUSSELL, Judge, Circuit Court, Clay County, Respondent.
• Court: Missouri Supreme Court

Page 353

843 S.W.2d 353

STATE ex rel. BOARD OF TRUSTEES OF the CITY OF NORTH KANSAS CITY MEMORIAL HOSPITAL, Relator, v. Honorable David W. RUSSELL, Judge, Circuit Court, Clay County, Respondent.

No. 74606.

Supreme Court of Missouri En Banc.

Dec. 18, 1992.

Rehearing Denied Jan. 27, 1993.

William L. Yocum, William E. Quirk and Michael S. Ketchmark, Kansas City, for relator.

John H. Norton, Kansas City, John B. Ewing, Jr., Sarasota, FL and John W. McKay, Kansas City, for respondent.

THOMAS, Judge.

This case presents the issue of whether and to what extent sovereign immunity shields a Chapter 96 city hospital from liability for medical malpractice. That a city enjoys immunity from liability arising from operation of a hospital is well settled. See, e.g., Zummo v. Kansas City, 285 Mo. 222, 225 S.W. 934 (1920). We conclude that the result is no different when the hospital is operated by a board of trustees pursuant to Chapter 96, RSMo.

I. FACTUAL AND PROCEDURAL BACKGROUND

The dispute arises from a medical malpractice suit in Clay County and is before us on a petition for a writ of prohibition filed by the Board of Trustees of the City of North Kansas City Hospital ("Board"). In September of 1986, the plaintiffs sued the City of North Kansas City ("City") and the individual members of the Board. ¹ The complaint alleges medical malpractice in the performance of discograms. ² The complaint also alleges negligence in the supervision of discograms, in the lack of procedures for safely conducting this test, and in the use of the test at all. All of the allegations of negligence on the part of the hospital relate, in one way or another, to the provision of a medical service to the plaintiffs.

In April of 1987, the parties stipulated that the Board was the proper party to represent the hospital rather than the City or the individual members of the Board. As a part of this stipulation, the Board agreed not to raise any defense that it was not the proper party. The City and the individual members of the Board were then dismissed from the case. The Board remains as the only representative of the hospital.

In November of 1991, the Board moved for summary judgment based upon sovereign immunity. Judge Russell denied that motion. The Board then sought a writ of prohibition from the Court of Appeals, Western District, to prohibit Judge Russell from continuing to exercise jurisdiction over the Board in this lawsuit. The court of appeals denied the petition for the writ.

II. THE REMEDY OF PROHIBITION

The Board then sought the same writ from this Court. We granted a preliminary writ of prohibition to examine the issue of sovereign immunity and now make our writ absolute. Because, as explained below, the Board is entitled to the protection of sovereign immunity, it is within this Court's discretion to issue a writ of prohibition. See State ex rel. St. Louis Housing Authority v. Gaertner, 695 S.W.2d 460 (Mo. banc 1985). Where a defendant has the defense of sovereign immunity, "prohibition is the appropriate remedy to forbear patently unwarranted and expensive litigation, inconvenience and waste of time and talent." State ex rel. New Liberty Hospital District v. Pratt, 687 S.W.2d 184, 187 (Mo. banc 1985). Where a defendant is clearly entitled to immunity, it is not necessary to wait through a trial and appeal to enforce that protection.

III. STRUCTURE OF THE BOARD OF TRUSTEES

The Board argues that it is a public entity created by the legislature to operate a hospital owned by the City. Under the Board's analysis, it is entitled to sovereign immunity because it is an arm of the state, functioning separately from the City. The plaintiffs respond that the Board is not a public entity because it is neither created by the legislature nor subject to local control. Because it is not a public entity, the plaintiffs argue, the Board is not entitled to any protection from suit.

The parties to this dispute disagree as to whether the Board is a public or private entity, but, in framing the issue in this manner, they ignore the possibility that the Board is not an "entity" but rather a part of the City of North Kansas City. To determine whether the Board is actually entitled to sovereign immunity, we must first decide whether the Board is a cognizable entity at all. A careful examination of the Board and its relationship with the City reveals that it is not.

A. The Statutory Scheme

A full understanding of the nature of the Board requires an understanding of the statutory framework under which the Board operates. North Kansas City Hospital was created under Chapter 96, RSMo, specifically sections 96.150, RSMo Supp.1991, through 96.228. ³ The statute creating the predecessors to these sections was entitled "AN ACT to authorize cities of the third class to purchase, erect, lease, equip and maintain grounds and buildings for hospital purposes and to conduct and operate such hospital." 1921 Mo.Laws 46 (1st Extra Session). The act does not describe itself as creating an entity to run hospitals for cities that own them. Rather, the title shows that the act was intended to give third class cities a means of operating hospitals. ⁴

Currently, Chapter 96 provides a mechanism for voters to petition for a tax to support a hospital. Section 96.150.1 provides that "[w]hen one hundred voters of any city of the third class shall petition the mayor and council asking that an annual tax ... be levied for ... a health care facility in such city ... the mayor and council shall submit the question to the voters." § 96.150.1, RSMo Supp.1991. The statute specifies that the form of the question shall be in substantially the following form:

Shall there be .......... cent tax for .......... (establishment of, equipping, operating and maintaining) a .......... (hospital, nursing home, or convalescent home, etc.) in the city for the care and treatment of the sick, disabled and infirm?

§ 96.150.2 (Supp.1991). Upon a two-thirds vote, the tax is levied and set aside in a separate fund for the facility. § 96.150.3, RSMo Supp.1991.

Chapter 96 also includes provisions relating to the powers of boards of trustees. Specifically, "[t]he trustees shall have authority to operate, maintain and manage a hospital and hospital facilities, and to make and enter into contracts ...; to make and enter into leases [with some limitations] ...; and further to provide rules and regulations for the operation, management or use of a hospital...." § 96.150.5 RSMo Supp.1991. Nowhere in Chapter 96 is a board granted a corporate or political existence, perpetual succession, or existence after dissolution of its city. Neither is a board granted the power to sue and be sued, to tax, to issue bonds, or to hold property except as "special trustees."

The structure of a Chapter 96 board of trustees requires a close relationship between a board and its city. The members of a board are subject to control of the city because membership on the board depends upon selection by the city government. The members of a board are selected by the mayor with the approval of the council. § 96.160. The members of a board may be removed for any of the reasons listed in the statute upon a majority vote of the council. § 96.175. Even the size and composition of a board may, within limits, be varied by the city council. § 96.160. Furthermore, the funds of a Chapter 96 hospital are tied to the city. The tax is levied by the city following approval by the voters of the city. § 96.150.3. The tax is levied and collected in the same manner as other municipal taxes. Id.; § 96.220. Any bonds issued for the hospital are issued by the city, upon recommendation of the board. § 96.222. Although a board has control of the expenditures of funds to operate the hospital, the funds are kept in the city treasury. § 96.190. The funds are kept separate from other city monies, but the board must annually make a "detailed report to the city council, showing the receipts of all funds and the expenditures therefrom, and showing each donation and amount thereof." § 96.200.

B. Comparison with Other Boards and Entities

That the Board is not an entity becomes clearer when the Board and Chapter 96 are compared with entities that have been recognized as such. The recent opinions of this Court contain examples of "public entities." See, e.g., State ex rel. Regional Justice Information Service Commission v. Saitz, 798 S.W.2d 705, 707 (Mo. banc 1990) (REJIS, created under authority of § 70.260); State ex rel. Trimble v. Ryan, 745 S.W.2d 672 (Mo. banc 1988) (Bi-State Development Agency, an interstate compact agency formed under authority of § 70.370); State ex rel. St. Louis Housing Authority v. Gaertner, 695 S.W.2d 460, 463 (Mo. banc 1985) (municipal housing authority created under Chapter 99); State ex rel. New Liberty Hospital District v. Pratt, 687 S.W.2d 184 (Mo. banc 1985) (hospital district created under Chapter 206). These diverse entities have varying and distinct powers appropriate to fulfill the purposes for which they were created. However, all of these entities share the common feature of enabling statutes that expressly grant them corporate existence. See, e.g., § 70.260.2, RSMo Supp.1991 (REJIS, "a body corporate and politic"); § 70.370, art. III (Bi-State, "a body corporate and politic"); § 99.080.1 (housing authority "shall constitute a municipal corporation" and have power "to have perpetual succession"); § 206.010.2 (hospital district "shall be a body corporate and political subdivision of state"). The Board, on the other hand, has no existence except through the continued existence of the City of North Kansas City. ⁵

While the Board has some features in common with some of the entities in these cases, it lacks the fundamental feature of an existence separate and distinct from that of the City. Like the St. Louis Housing Authority, the Board is selected and may be removed by the city government. See St. Louis Housing...