Van Valkenburg v. Paracelsus Healthcare

• Citation: 2000 ND 38,606 N.W.2d 908
• Decision Date: 03 March 2000
• Docket Number: No. 990265.,990265.
• Parties: Michael J. VAN VALKENBURG, M.D., Mark D. Lindquist, M.D., and Daniel S. Hunt, M.D., Plaintiffs and Appellants, v. PARACELSUS HEALTHCARE CORPORATION, Dakota/Champion Partnership, d/b/a Dakota Heartland Health System, Defendants and Appellees
• Court: North Dakota Supreme Court

606 N.W.2d 908

2000 ND 38

Michael J. VAN VALKENBURG, M.D., Mark D. Lindquist, M.D., and Daniel S. Hunt, M.D., Plaintiffs and Appellants, v. PARACELSUS HEALTHCARE CORPORATION, Dakota/Champion Partnership, d/b/a Dakota Heartland Health System, Defendants and Appellees

No. 990265.

Supreme Court of North Dakota.

March 3, 2000.

Franklyn G. Gokey, Vogel, Weir, Bye, Hunke & McCormick, Ltd., Fargo, N.D., for plaintiffs and appellants.

Sara Gullickson McGrane, Felhaber, Larson, Fenlon & Vogt, PC, Minneapolis, MN, for defendants and appellees.

SANDSTROM, Justice.

[¶ 1] The plaintiffs, Michael J. Van Valkenburg, Mark D. Lindquist, and Daniel S. Hunt, appealed from a summary judgment dismissing their breach of contract action against the defendants, Paracelsus Healthcare Corporation and Dakota/Champion Partnership, d/b/a Dakota Heartland Health System. We hold the plaintiffs' appeal is not moot, and they have not raised any material issues of fact to preclude summary judgment dismissal of their breach of contract action. We affirm.

I

[¶ 2] The plaintiffs are emergency room physicians who were employees and shareholders of Dakota Clinic, Ltd., in Fargo. The plaintiffs also were medical staff appointees at Dakota Heartland Hospital in Fargo, with clinical privileges for the Hospital's emergency department. The defendants are owners and operators of the Hospital.

[¶ 3] Before February 23, 1998, the plaintiffs provided physician services at the Hospital's emergency department. In 1997, Dakota Clinic announced it would build a competing hospital with an emergency department in Fargo. The defendants subsequently contracted with EMCARE for exclusive physician services at the Hospital's emergency department after February 23, 1998. The defendants informed the plaintiffs that physician staff coverage at the Hospital's emergency department would be handled by EMCARE, effective February 23, 1998, and the plaintiffs' "medical staff privileges will continue, however, to the extent that you wish to exercise your privileges, arrangements will have to be made through EMCARE." The plaintiffs did not affiliate themselves with EMCARE, and after February 23, 1998, they were not assigned staff coverage at the Hospital's emergency department.

[¶ 4] The plaintiffs sued the defendants, alleging the defendants' conduct in barring the plaintiffs from the Hospital's emergency department (1) breached the Hospital's medical staff bylaws and effectively revoked the plaintiffs' medical staff and clinical privileges at the Hospital, (2) violated "open medical staff provisions" of a partnership agreement between Dakota Medical Foundation and Paracelsus, and (3) violated the hearing and due process provisions of the Hospital's medical staff bylaws. The plaintiffs sought to enjoin the defendants from violating the Hospital's medical staff bylaws and to require the defendants to permit appropriately credentialed members of the Hospital medical staff to continue to exercise their medical staff privileges. The plaintiffs also sought damages in excess of $50,000.

[¶ 5] The plaintiffs sought a temporary restraining order and a temporary injunction to preclude the defendants from excluding the plaintiffs from the Hospital's emergency department. The district court issued a temporary restraining order allowing the plaintiffs to work at the Hospital's emergency department. After a hearing, the court rescinded the temporary restraining order and denied the plaintiffs' motion for a temporary injunction, ruling they had not shown irreparable injury, in part, because they had failed to show money damages were an inadequate remedy.

[¶ 6] The defendants thereafter moved for summary judgment, conceding for purposes of their motion that the Hospital's medical staff bylaws constituted a contract, but arguing they had not breached the contract. While the summary judgment motion was pending, the defendants terminated their exclusive contract with EMCARE, effective December 31, 1998. The plaintiffs moved to reopen the summary judgment proceeding and to compel the defendants to respond to discovery requests, claiming the applicable law had changed after the defendants terminated the exclusive contract with EMCARE. The plaintiffs claimed the defendants' contract with EMCARE was an intermediate step to allow the defendants to staff the Hospital's emergency department with Hospital physicians and to exclude the plaintiffs from the emergency department. The defendants responded the law was the same whether they exclusively contracted with EMCARE, or with individual physicians to staff the emergency department. After the court conducted an in camera review of documents, the court refused to compel further discovery, but permitted the parties to file additional briefs regarding the defendants' termination of their contract with EMCARE.

[¶ 7] The district court thereafter granted summary judgment dismissing the plaintiffs' action. The court decided the defendants' exclusive contract with EMCARE was not a sham or an intermediate step to staff the Hospital's emergency department with Hospital physicians. The court said whether the defendants contracted with EMCARE or directly with individual physicians did not change the applicable law. Section 3.8 of the medical staff bylaws provides:

3.8 ATTENDANCE OF PATIENTS. Appropriately credentialed Staff appointees have the right to attend patients or consult with other appropriately credentialed Staff appointees even if such physician services are contracted by the Hospital.

The court concluded Section 3.8 was unambiguous and interpreted it to allow the defendants to enter into exclusive contracts for the Hospital's emergency department while permitting the plaintiffs to attend patients who presented at the emergency department and asked to see one of the plaintiffs. The court decided the defendants had not prevented the plaintiffs from attending patients who presented at the Hospital emergency department and asked to see one of the plaintiffs. The court also concluded the defendants did not violate the hearing and due process provisions of the medical staff bylaws, because the plaintiffs' staff privileges were not canceled or curtailed for disciplinary reasons.

[¶ 8] The district court had jurisdiction under N.D. Const. art. VI, § 8, and N.D.C.C. § 27-05-06. The plaintiffs' appeal is timely under N.D.R.App.P. 4(a). This Court has jurisdiction under N.D. Const. art. VI, §§ 2 and 6, and N.D.C.C. § 28-27-02.¹

II

[¶ 9] The defendants argue the plaintiffs' appeal is moot, because the plaintiffs have all voluntarily resigned their medical staff privileges at the Hospital. The defendants argue the plaintiffs' appeal will not provide them effective relief, because a favorable decision will not enable them to practice at the Hospital's emergency department without renewing their privileges.

[¶ 10] In Nord v. Herrman, 1998 ND 91, ¶ 12, 577 N.W.2d 782 (citations omitted), we outlined our framework for analyzing mootness claims:

This Court cannot render advisory opinions. The premise behind the prohibition of advisory opinions is there must be an actual controversy to be determined before a court can properly adjudicate. An actual controversy does not exist when an issue has been mooted by a lapse of time, or the occurrence of related events which make it impossible for a court to render effective relief. Nevertheless, an issue technically moot will not be considered moot if it is capable of repetition yet evading review, or if the controversy is one of great public interest and involves the power and authority of public officials.

[¶ 11] Here, the plaintiffs' complaint sought injunctive relief and damages in excess of $50,000. A viable damage claim defeats a mootness challenge. See City of Richmond v. J.A. Croson Co., 488 U.S. 469, 478 n. 1, 109 S.Ct. 706, 102 L.Ed.2d 854 (1989); Deakins v. Monaghan, 484 U.S. 193, 201, 108 S.Ct. 523, 98 L.Ed.2d 529 (1988); Board of Pardons v. Allen, 482 U.S. 369, 370-71 n. 1, 107 S.Ct. 2415, 96 L.Ed.2d 303 (1987); Powell v. McCormack, 395 U.S. 486, 495-500, 89 S.Ct. 1944, 23 L.Ed.2d 491 (1969). See generally 13A Wright, Miller & Cooper, Federal Practice and Procedure: Jurisdiction 2d § 3533.3 p. 262 (1984). The defendants' reliance on other "employment" cases to support their mootness argument is misplaced, because those cases do not involve claims for damages. See Beattie v. United States, 949 F.2d 1092, 1093 (10th Cir.1991); State ex rel. Stephan v. Johnson, 248 Kan. 286, 807 P.2d 664, 666 (1991); In re Moriarty, 156 Vt. 160, 588 A.2d 1063, 1064-65 (1991); Smith v. Board of Cty. Comm'rs, 891 P.2d 88, 92 (Wyo.1995).

[¶ 12] Relying on Arizonans for Official English v. Arizona, 520 U.S. 43, 117 S.Ct. 1055, 137 L.Ed.2d 170 (1997), the defendants argue the plaintiffs' claim for damages does not preclude dismissal on mootness grounds. In Arizonans, the United States Supreme Court considered a mootness claim in an Arizona state employee's First Amendment challenge under 42 U.S.C. § 1983 to Arizona's state constitutional provision declaring English to be the official state language for all government functions and actions. The state employee sought injunctive and declaratory relief, counsel fees, and " `all other relief that the Court deems just and proper under the circumstances.' " Arizonans, 520 U.S. at 50-51, 117 S.Ct. 1055, 137 L.Ed.2d 170. After the state employee voluntarily quit her job and became employed in the private sector where her speech was not governed by the state constitutional provision, the lower courts decided her claim for " `all other relief that the Court deems just and proper' " justified an award of $1 in nominal damages against the state and precluded a mootness determination.

[¶ 13] The United States Supreme Court said the former state employee's claim for nominal damages did not lie against the state, because states are not amenable to suits for damages under 42 U.S.C....