United Tort Claimants v. Quorum Health Res., LLC (In re Otero Cnty. Hosp. Ass'n, Inc.)
| Decision Date | 23 December 2016 |
| Docket Number | Adversary No: 12-1271j,Adversary No: 12-1204j through 12-1207j,Adversary No: 12-1238j through 12-1241j,Adversary No: 12-1212 through 12-1215j,Adversary No: 12-1276j,Adversary No: 12-1243j,Adversary No: 12-1244j,Adversary No: 12-1246j,Adversary No: 12-1209j,Adversary No: 12-1248j,Adversary No: 12-1278j.,Consolidated Misc. Adv. No. 13-00007,Adversary No: 12-1261j,Case No. 11-11-13686 JL,Adversary No: 12-1221j,Adversary No: 12-1249j,Adversary No: 12-1210,Adversary No: 12-1235j |
| Parties | In re: OTERO COUNTY HOSPITAL ASSOCIATION, INC., Debtor. UNITED TORT CLAIMANTS, as individuals, Plaintiffs, v. QUORUM HEALTH RESOURCES, LLC, Defendant. |
| Court | U.S. Bankruptcy Court — District of New Mexico |
THIS MATTER is before the Court following a trial on the merits of the second phase of this litigation involving negligence claims against Quorum Health Resources, LLC ("QHR"). The United Tort Claimants (the "UTC")1 and QHR were represented at trial by counsel as noted on the record.
As recited in the Court's Amended Memorandum Opinion ("Amended Memorandum Opinion" - Docket No. 286) entered following the trial on the liability phase of this litigation,this case stems from the suffering of dozens of patients who unwittingly were subjected to experimental procedures on their lower backs by a doctor tasked with alleviating pain. The hospital, doctors, and others involved have reached settlements with the patients. The sole remaining defendant is QHR, the hospital management company that provided non-medical administrative services to the hospital. The Court determined in phase one of the litigation that QHR owed a direct duty to the UTC and breached that duty in two respects: (1) in connection with the granting of temporary privileges to Dr. Christian Schlicht; and (2) by failing to make a formal request that the hospital's medical executive committee initiate an investigation of Dr. Schlicht (i.e., a focused review under the medical staff bylaws) after learning that Dr. Schlicht's proctor asserted Dr. Schlicht was performing experimental surgery on patients of the hospital, and failing to apprise the hospital's board of the proctor's assertion. See Amended Memorandum Opinion. The Court also determined that the doctrine of comparative fault, rather than joint and several liability, applies to any assessment of damages against QHR. Id.
The Court held a trial on the merits of the second phase of the litigation to determine causation; and, if QHR's breach of duty caused harm to the UTC, to determine QHR's comparative fault. After considering the evidence, the Court concludes that, while there is a lack of causation with respect to QHR's breach in granting Dr. Schlicht temporary privileges, the UTC has proven the causation element of their claims regarding QHR's breach in failing to request a focused review of Dr. Schlicht. A focused review would have involved an outside physician independent from the hospital with the necessary expertise to evaluate the procedures and Dr. Schlicht's qualifications, and would have stopped the procedures that caused the UTC harm. Because of QHR's breach, Dr. Schlicht was permitted to continue performing the procedures that form the basis of the UTC's claims.Even so, the physicians and the hospital bear the majority of the responsibility for the harm. The Court has determined that QHR's percentage of fault for the UTC's injuries stemming from its breach is 16.5%.
In the summer of 2012, the UTC removed certain negligence actions pending in state court to this Court in connection with Otero County Hospital Association, Inc.'s Chapter 11 bankruptcy case. A year later, on the parties' stipulation, the Court consolidated certain portions of the UTC's claims against QHR for purposes of conducting a separate consolidated trial "on the liability issues relating to QHR," defined in the consolidation order as the "Corporate Liability Issues." See Order Resulting from Hearing on Motion to Establish Discovery and Case Management Procedures ("Case Management Order"), Adversary Proceeding No. 12-1204 - Docket No. 44.2 The Case Management Order expressly clarified that Corporate Liability Issues "do not include issues regarding whether any medical providers committed malpractice or any issues with respect to damages." See Case Management Order, n. 1. An Amended Case Management Order for Trial on the Bifurcated Issue of Corporate Liability ("Amended Case Management Order") entered July 18, 2014 echoed the Case Management Order's deferral of issues to the second phase of the trial other than the Corporate Liability Issues. See Docket No. 199.
Following the Court's decision on the Corporate Liability Issues, consisting of the duty and breach of duty elements of the UTC's negligence claims, and determining that comparative fault applies to the UTC's claims, the UTC and QHR attended a mediation in an effort to resolveall remaining claims. See Mediation Order - Docket No. 327.3 The mediation was not successful.
QHR sought to dismiss several of the UTC's claims based on the timing of the two breaches in relation to the dates certain members of the UTC underwent their procedures and based on the type of procedure certain members of the UTC received. See Quorum Health Resources, LLC's Combined Motion for Summary Judgment and Statement of Facts ("QHR's Motion for Summary Judgment") - Docket No. 317. The Court dismissed the claims of members of the UTC whose medical procedures occurred before July 21, 2007. See Order Granting, in part, and Denying, in part, Quorum Health Resources, LLC's Combined Motion for Summary Judgment and Statement of Facts - Docket No. 345.4 On a motion for reconsideration filed by the UTC, the Court determined that the UTC waived its argument that the breach in granting temporary privileges to Dr. Schlicht caused harm to the UTC with respect to those members of the UTC that were the subject of QHR's Motion for Summary Judgment, but that other members of the UTC against whom final judgments have not been granted may present evidence at the trial on causation and comparative fault to establish such a causal link. See Docket No. 469.
With the agreement of the parties, the Court again consolidated the adversary proceedings for a separate trial on causation and comparative fault issues. See Order Consolidating Adversary Proceedings for (1) a Trial on Causation and Comparative Fault Issues; (2) Certain Pretrial Discovery; and (3) Certain Pre-trial Matters Relating to Damages("Consolidation Order") - Docket No. 297. The Consolidation Order defined causation and comparative fault issues to mean "the causation element the UTC must prove to establish their claims and the comparative fault defense QHR must prove to limit any awards of damages to its own percentage of comparative fault." Id. The Court also entered a Case Management Order for Trial on Causation and Comparative Fault Issues ("CMO"). See Docket No. 298.5 The CMO provided that "[a]ll evidence admitted at the trial on the Corporate Liability Issues is deemed admitted for purposes of the Causation and Comparative Fault Trial." Id. All evidence admitted in the consolidated trial on corporate liability is, therefore, part of the evidence for the Court to consider in this second phase of the litigation regarding causation and comparative fault. In addition, the Court's findings of fact made as part of its Amended Memorandum Opinion are established for purposes of the consolidated trial on causation and comparative fault. See Pretrial Order for Comparative Fault and Causation Trial - Docket No. 517.
The Court held a trial on the merits of the consolidated adversary proceedings on the issues of causation and comparative fault and took the matter under advisement. QHR agreed to the UTC's motion to dismiss the claims of Joel and Vivian Crossno and Mickie Frances.6 On the Court's request, the parties submitted post-trial briefs. See Scheduling Order Following Trial on Causation and Comparative Fault (Docket No. 526).7
All of the Court's findings of fact set forth in the Amended Memorandum Opinion are incorporated herein by reference.8 In reaching its earlier determinations regarding QHR's breaches of duty in granting temporary privileges to Dr. Schlicht and in failing to request a focused review of Dr. Schlicht, the Court relied on the role and responsibility of QHR as a hospital management company charged with the responsibility of the chief executive officer ("CEO") of the hospital regarding the standard of care of a hospital CEO. See Amended Memorandum Opinion, p. 82. The Court makes these findings of fact from evidence admitted in both phases of the trial.
The Agreement for Hospital Administrative Services.
The Agreement for Hospital Administrative Services ("Services Agreement") between Otero County Hospital Association, d/b/a Gerald Champion Regional Medical Center ("Hospital" or "GCRMC") and QHR provides that QHR will provide the Hospital with a CEO and a CFO, collectively referred to in the Services Agreement as "Special Employees." See Exhibit 6. The Services Agreement defines the relationship between the Hospital and QHR as "one of principal and agent," and provides further that the Special Employees "function as borrowed employees of the Hospital" serving "under the direction, control, and supervision of the Board." Id. at ¶¶ 1.2 and 2.1.1. See also, Services Agreement, ¶ 2.2 ().
The Services Agreement provides that the CEO reports to and is accountable "directly (and only to) the Board." Id. at ¶ 2.2. The Services Agreement provides further that (1) QHR has no right to direct the...
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