Kadlec Medical Center v. Lakeview Anesthesia Associates

Facts

Dr. Berry was a licensed anesthesiologist who practiced with Drs. William Preau, Mark Dennis, David Baldone, and Allan Parr at LAA (D). From November 2000 until his termination on March 13, 2001, Dr. Berry was a shareholder of LAA (D). LAA (D) was the exclusive provider of anesthesia services to Lakeview Medical (D). Lakeview Medical (D) investigated Dr. Berry after nurses expressed concern about his undocumented and suspicious withdrawals of Demerol. Lakeview Medical (D) discussed the team's findings with Dr. Berry and Dr. Dennis. Dr. Dennis then discussed Dr. Berry's situation with his partners. They all agreed that Dr. Berry's use of Demerol had to be controlled and monitored. But Dr. Berry did not follow the agreement or account for his continued Demerol withdrawals. Three months later, Dr. Berry was discovered in the call-room, asleep, groggy, and unfit to work. Dr. Dennis had Dr. Berry taken away after Dr. Berry said that he had taken prescription medications. Lakeview Medical (D) decided that it was in the best interest of patient safety that Dr. Berry not practice at the hospital. Dr. Dennis and his three partners at LAA (D) fired Dr. Berry and signed his termination letter on March 27, 2001, which explained that he was fired 'for cause.' No one reported Dr. Berry's impairment to the hospital's Medical Executive Committee, eventually noting only that Dr. Berry was 'no longer employed by LAA (D).' No one reported him to Lakeview Medical's (D) Board of Trustees, and no one on behalf of Lakeview Medical (D) reported Dr. Berry's impairment or discipline to the Louisiana Board of Medical Examiners or to the National Practitioner's Data Bank. Dr. Berry briefly obtained work as a locum tenens (traveling physician) at a hospital in Shreveport, Louisiana. He applied through Staff Care, a leading locum tenens staffing firm, for locum tenens privileges at P. P began its credentialing process examining a variety of materials, including referral letters from Ds. LAA's (D) Dr. Preau and Dr. Dennis, two months after firing Dr. Berry for his on-the-job drug use, submitted referral letters for Dr. Berry to Staff Care, with the intention that they be provided to future employers. They stated he was an excellent clinician, that he would be an asset to any anesthesia service, and that they recommended him highly as an anesthesiologist. The letters were submitted on June 3, 2001, only sixty-eight days after they fired him for using narcotics while on-duty and stating in his termination letter that Dr. Berry's behavior put 'patients at significant risk.' P sent Lakeview Medical (D) a request for credentialing information about Berry. The request included a detailed confidential questionnaire, a delineation of privileges, and a signed consent for the release of information. The interrogatories on the questionnaire asked whether '[Dr. Berry] has been subject to any disciplinary action,' if '[Dr. Berry has] the ability (health status) to perform the privileges requested,' whether '[Dr. Berry has] shown any signs of behavior/personality problems or impairments,' and whether Dr. Berry has satisfactory 'judgment.' Nine days later, Lakeview Medical (D) responded to the requests for credentialing information about fourteen different physicians. In thirteen cases, it responded fully and completely to the request, filling out forms with all the information asked for by the requesting health care provider. The fourteenth request, from P concerning Berry, was handled differently. Instead of completing the multi-part forms, Lakeview Medical (D) staff drafted a short letter. In its entirety, it read: Our records indicate that Dr. Robert L. Berry was on the Active Medical Staff of Lakeview Regional Medical Center in the field of Anesthesiology from March 04, 1997, through September 04, 2001. If I can be of further assistance, you may contact me at (504) 867-4076. P then credentialed Dr. Berry who worked without incident for a number of months. He was in a car accident and suffered a back injury. No one investigated whether it would impair his work. Nurses thought that he appeared sick and exhibited mood swings. One nurse thought that Dr. Berry's entire demeanor had changed and that he should be watched closely. In mid-September 2002, Dr. Berry gave a patient too much morphine during surgery, and she had to be revived using Narcan. The neurosurgeon was irate about the incident. On November 12, 2002, a nurse indicated Dr. Berry was 'screwing up all day' and several of his patients suffered adverse effects from not being properly anesthetized. He had a hacking cough and multiple nurses thought he looked sick. During one procedure, he apparently almost passed out. Kimberley Jones was Dr. Berry's fifth patient that day and she is now in a permanent vegetative state. Dr. Berry admitted that he was addicted to Demerol. Jones sued Dr. Berry and P. Dr. Berry's insurer settled the claim against him. P's insurer also settled the claim when P was held to be liable under respondeat superior. Ps sued Ds, (LAA, Dr. Dennis, Dr. Preau, Dr. Baldone, Dr. Parr, and Lakeview Medical,) for intentional and negligent misrepresentation. The jury returned a verdict in favor of Ps on both claims. The jury awarded P $8.24 million, which is approximately equivalent to the amount Western spent settling the Jones lawsuit ($7.5 million) plus the amount it spent on attorneys fees, costs, and expenses (approximately $ 744,000) associated with the Jones lawsuit. The jury also found P and Dr. Berry negligent. The jury apportioned fault as follows: Dr. Dennis 20%; Dr. Preau 5%; Lakeview Medical 25%; Kadlec 17%; and Dr. Berry 33%. The judgments against Dr. Dennis and Dr. Preau were in solido with LAA (D). Because defendants were found liable for intentional misrepresentation, plaintiffs' recovery was not reduced by the percentage of fault ascribed to P. The amount was reduced to $ 5.52 million to account for Dr. Berry's 33% of the fault. The district court entered judgment against Lakeview Medical (D) and LAA (D).

Issues

Rule of Law

Holding and Decision

Legal Analysis

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