NASHVILLE AT LAW: Headache for hospitals?

Monday, May 12, 2008 at 2:43am

Tennessee’s Supreme Court handed down a pair of opinions last Tuesday [May 6] that may or may not cause serious problems for hospitals in the state, depending on whom you ask.

In the malpractice cases Boren v. Weeks and Dewald v. HCA Health Services of Tennessee, the high court set a new standard in how responsible hospitals are for the acts of doctors and nurses who work for them on a contract basis. And some lawyers believe it left hospitals dangerously vulnerable to future malpractice lawsuits.

Both cases involved patients who sued hospitals after receiving emergency care from physicians they thought were employees of the facilities. The hospitals sought to have the cases dismissed on the grounds that the doctors were independent contractors, not employees.

Lawyers for the patients argued that any fine print in the admission forms that supposedly informed patients and their families about the independent-contractor arrangement was not a legitimate notice, given the harried circumstances in which people often sign such forms in the emergency room.

Writing for the court, Chief Justice William M. Barker said each case raised “genuine issues of material fact” as to “whether the hospital provided its patient with adequate notice that the emergency room physicians were independent contractors rather than employees."

Bryan Essary of Gideon & Wiseman PLC leads the defense teams on both cases, which now go back to their original trial courts for further proceedings. He says the ruling means that the admissions forms of hospitals across the state "will not be legally effective" anymore.

Essary says the independent contractor issue comes up often in malpractice cases. His hope when these cases reached the Supreme Court was that either the justices would uphold the current procedures for informing patients or they would give clear guidance on what manner of informing them would pass muster in court.

Neither outcome happened, Essary says. "We got only a 'new' undefined standard of being required to provide 'meaningful written notice to the patient, acknowledged at the time of admission,'” he says. "I suspect that hospitals and attorneys representing hospitals will go back to the drawing board to try to find a way to satisfy this standard."

Steven E. Anderson, a malpractice defense lawyer at Walker, Tipps & Malone who was not involved in the Boren and Dewald cases, says he was "a bit surprised" by the rulings. "It's going to make hospitals look differently at their contracts with ER providers, radiologists and others on their staffs," he predicts.

Anderson notes that hospitals can try to get doctors to indemnify them against future claims, but noted that doing so would mean "a significant change in the allocation of risk." Physician groups, he says, won't accept that change without additional compensation – and asking for the change could be asking for a fight. Medical practices and hospitals frequently have strained relations as it is, so this new element in the equation may not bode well for staff harmony at some hospitals.

Things look differently, though, from the plaintiff's side. John A. Day, an attorney at Day & Blair who files malpractice lawsuits and blogs about tort law, says he wasn't surprised by the rulings and does not expect them to cause big problems for hospitals.

“Hospitals will mandate a higher level of insurance to protect themselves from having to pay for the results of negligence caused by a non-employee,” Day forecasts, but that is the likely extent of the change from the status quo.

“It is true that you can't effectively notify the unconscious or severely injured” that the person treating them does not work for the hospital, Day concedes. “But you shouldn't be able escape responsibility under those circumstances, especially given all of the 'come to our ER' advertising. Hospitals spend millions and millions of dollars per year asking people to use the doctors at the hospital — and most people think that doctors work for the hospital.”

Along with Essary, Alan S. Bean and Christopher A. Vrettos of Gideon & Wiseman represent defendants in the two cases. Murfreesboro attorney Christopher Kim Thompson represents the plaintiff in Boren, William Kennerly Burger and Rodney M. Scott, also of Murfreesboro, are plaintiff's counsel in Dewald.

Other cases of note (May 1-7, 2008)

United States Court of Appeals for the Sixth Circuit:

David E. Danner v. Board of Professional Responsibility of the Tennessee Supreme Court and Lance B. Bracy. Opinion filed May 6.

The appeals court sides with Tennessee's Board of Professional Responsibility in its dispute with Nashville attorney David E. Danner, founder of the Tennessee Black Lawyers Association. Danner sued the board when it proposed a disciplinary action against him, but the district court dismissed his claim, and the circuit affirms that dismissal. Plaintiff's attorney: Danner himself. Defendant's attorney: Charles L. Lewis, Office of the Attorney General.

United States District Court for Middle Tennessee:

Kenneth R. Bennett v. St. Clair Entertainment Group Inc. Filed May 6. Bennett, of Franklin, claims Princeton, N.J.-based St. Clair has wrongfully put out a CD of Christmas songs by Willie Nelson, Lee Greenwood, Glen Campbell and other country stars. Bennett claims he owns the masters of those performances. $900,000 in damages sought. Plaintiff's attorneys: Samuel D. Lipshie, Colin J. Carnahan and Jessica L. Dinan of Boult, Cummings, Conners & Berry PLC.

Arthur J. Gallagher Risk Management Services Inc. v. Stephen L. Farr. Filed May 5. This one has become a federal case in a hurry and was filed just days after Farr and five other employees of insurance broker Gallagher quit their jobs on April 30 to go to work for a competitor. Unspecified amount of damages sought. Plaintiff's attorneys: Robb S. Harvey and Richard G. Sanders of Waller Lansden Dortch & Davis LLP, as local counsel with three lawyers from Chicago.

Davidson County Chancery Court:

Vanderbilt University v. Brigitte Kovacevich. Filed May 5. Kovacevich signed a settlement with VU in January after making florid accusations, in an August 2007 federal lawsuit, of sexual misconduct by superstar anthropology prof Arthur Demarest. VU claims that she has now violated that settlement by complaining again about Demarest in an April filing with the Equal Employment Opportunity Commission. Plaintiff's attorneys: William N. Ozier of Bass, Berry & Sims PLC and Kevin Davis, Office of the General Counsel, V.U.

Eric Lowman v. Bryan Puckett, individually and d/b/a P1 Enterprises LLC and d/b/a Crestview Ventures LLC and d/b/a Century Development LLC; and Tennessee Bank and Trust. Filed May 1. Contract dispute involving a real estate development company in which the Tennessee Titans' Albert Haynesworth is a shareholder (though he and that company are not parties to the lawsuit). The bank is named for notice purposes only. Unspecified amount of damages sought. Plaintiff's attorneys: Gregory L. Cashion and J. Scott Baldwin of Smith, Cashion & Orr PLC.

IV Construction LLC v. Whitney H. Luckett and Hill Center at Green Hills LLC. Filed May 5. Construction dispute. Luckett owns clothing boutique The First Resort on Bandywood Drive in Green Hills, and IV Construction was building out space for her in the new Hill Center. $128,680 in damages sought. Plaintiff's attorneys: S. Joe Welborn and Meghann E. McConnell of Smith Cashion & Orr PLC.

Davidson County Circuit Court:

Jose Antonio and Pamlynne Valenzuela, on behalf of Joshua Ryan Valenzuela (deceased) v. Debra L. Drake M.D. and Smyrna Medical Group LLC. Filed May 2. Medical malpractice claim by parents whose 15-year-old son died of multiple-organ failure. Unspecified damages sought. Plaintiff's attorneys: Randall L. Kinnard and Daniel L. Clayton of Kinnard, Clayton & Beveridge.

Cathi and John Brumley v. Harvest Construction Company LLC. Filed May 1. Injury claim from woman who tripped over cardboard at Woodmont Center office building, 102 Woodmont Blvd. $300,000 in damages sought. Plaintiff's attorney: Malcolm McCune of Blackburn & McCune.

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