Case Law Update
Article Date: Tuesday, December 07, 2010
Written By: Darlene S. Davis, Amy L. Mackin & William W. Stewart, Jr.
North Carolina Supreme Court
Brown v. Kindred Nursing Centers East, L.L.C., 364 N.C. 76, 692 S.E.2d 87 (April 15, 2010) Facts
: The son of a deceased patient (the plaintiff) filed a pro se complaint on behalf of his father’s estate, alleging negligence, wrongful death, and medical malpractice against his father’s health care providers. The plaintiff filed his complaint five days before the statute of limitations was set to expire. Two days later, he filed a “Motion for 9 J Extension,” requesting extra time to provide the certification required by North Carolina Rule of Civil Procedure 9(j), i.e., an assertion that the case has been reviewed by a person who is reasonably expected to qualify as an expert witness and who is willing to testify that the medical care provided by the defendants did not comply with the applicable standard of care. The trial court granted the extension, and after the original statute of limitations had passed but within the extension period, the plaintiff filed an amended complaint that also named new parties. The defendants moved for dismissal for, among other things, failure to comply with Rule 9(j). The trial court granted the defendants’ motion to dismiss.
The plaintiff appealed, and the Court of Appeals reversed, holding that the plaintiff had corrected his defective complaint within the extended time granted by the trial judge. The defendants appealed to the Supreme Court (the court).
: The court reversed the Court of Appeals and dismissed the complaint, holding that the trial court was not authorized to extend the time.. The court reasoned that Rule 9(j) only allows an extension of the statute of limitations “to file a complaint,” not to amend a defective complaint that had already been filed. Although the discretionary 120-day extension is designed to ease the burden on a plaintiff of having to comply with the heightened pleading requirements, the rule does not allow a plaintiff to file a complaint before securing an expert’s review. Thigpen v. Ngo, 355 N.C. 198, 558 S.E.2d 162 (2002). Further, the purported extension did not give the plaintiff permission to file an amended complaint adding new parties. Therefore, because the complaint was not timely, it was properly dismissed. Three justices dissented, arguing that “to say that plaintiff has to have complied with the Rule before the extension period renders the extension meaningless.”
North Carolina Court of Appeals
Bryson v. Haywood Regional Medical Center, ___ N.C. App. ___, 694 S.E.2d 416, No. COA09-270 (June 15, 2010) Facts
: The plaintiff physician filed suit against her former employer and the hospital where she was assigned to work, alleging that she was unlawfully terminated in retaliation for complaints she made about patient care. In the course of discovery, the hospital refused to produce a number of internal documents on the grounds that they were protected by the medical review privilege created by N.C. Gen. Stat. § 131E-95(b). After the plaintiff filed a motion to compel, the trial court conducted an in camera review and ordered the hospital to produce some of the disputed documents. The hospital appealed from this interlocutory order based on its substantial right to the statutory privilege.
: The Court of Appeals (the court) affirmed the order to compel, holding that the hospital had not met its burden of showing that the documents were privileged. Regarding three internal documents (an email and two memoranda), the court emphasized that the hospital had not submitted affidavits explaining the authors’ roles or the reasons why the documents were created. Three other documents were from an outside review company and were each labeled as a “confidential peer review document.”
The hospital argued that it was therefore obvious on the face of these documents that they were protected by the privilege. The court noted, however, that there was no evidence in the record about exactly what the role of the outside company was or why it had prepared the reports. Without this evidence, the court held that the hospital’s efforts to claim the medical review privilege were “mere assertions.” Hayes v. Premier Living, Inc., 181 N.C. App. 747, 641 S.E.2d 316 (2007). Therefore, the hospital had not met its burden of showing that the documents were part of a medical review committee’s proceedings or were produced or considered by such a committee, and their production was properly compelled.
Mission Hospitals, Inc., et al. v. N.C. Department of Health and Human Services, et al., ___ N.C. App. ___, 696 S.E.2d 163, No. COA08-1478 (July 6, 2010) Facts
: In 2005, Asheville Hematology and Oncology (AHO) sought a “no-review” determination from the Certificate of Need (CON) Section of the North Carolina Department of Health and Human Services (DHHS) that its proposals to relocate and acquire radiation therapy and diagnostic equipment did not require CON review because the proposals fell under statutory cost thresholds. Specially, AHO’s four proposals proposed the following: acquisition of a linear accelerator; acquisition of a CT scanner; acquisition of treatment planning equipment; and relocation of its oncology treatment center. The pivotal issue was whether AHO’s costs for each of its proposals were below or above the applicable statutory thresholds.
The CON Section issued four separate “no-review” determinations concluding that the project as proposed did not require a CON. Petitioner Mission Hospitals, Inc., joined by Petitioner-Intervenor North Carolina Radiation Therapy Management Services, Inc. d/b/a 21st Century Oncology, filed a petition for contested case hearing in the Office of Administrative Hearings to challenge each of the four No Review Determinations. On May 26, 2006, an Administrative Law Judge (“ALJ”) entered a 65-page recommended decision affirming each of the CON Section’s no-review determinations.
After a hearing before the Final Agency Decisionmaker, DHHS declined to adopt the ALJ’s Recommended Decision and reversed. AHO appealed and, upon appeal, the North Carolina Court of Appeals vacated and remanded DHHS’ Final Agency Decision due to improper ex parte communications by the Final Agency Decisionmaker. Mission Hospitals, Inc. v. NCDHHS, 189 N.C. App. 263, 658 S.E.2d 277 (2008). On remand, DHHS conducted a second hearing at the final agency decision stage before the Acting Director of the Division of Health Service Regulation. The Acting Director issued another Final Agency Decision that adopted the ALJ’s Recommended Decision, and thus concluded that the acquisition and expansion did not require a CON. Petitioner and Petitioner-Intervenor appealed to the Court of Appeals.
: The Court of Appeals (the court) affirmed the Final Agency Decision. The court found that AHO adequately demonstrated that all of its proposals fell below the applicable statutory thresholds permitting the development of a project without a CON. In deciding which costs to count toward the thresholds, the court permitted AHO to exclude staff costs and allowed AHO to use the fair market value of used diagnostic equipment rather than the full cost.
Of particular note, the court affirmed the CON Section’s narrow definition of the costs required to be counted towards the applicable thresholds. In doing so, the court concluded that physician office buildings are categorically exempt from the requirements of CON regulations under N.C. Gen. Stat. § 131E-184(a)(9). The court stated that this is true even in situations where, such as in this case, parts of the building will house identifiable health services under the CON Law, so long as the construction of the new physician office building is not “essential” to the operation of the health service. Taking a deferential view, the court accepted the CON Section’s definition of “essential” as meaning “those items which are indispensible, the absence of which renders the equipment useless.” The effect of this interpretation rendered most costs in AHO’s project excluded from the thresholds. In essence, costs that were counted included costs for the equipment itself and upfit costs directly related to make the equipment operational.
Carlton v. Melvin, ___ N.C. App. ___, 697 SE2d 360, No. COA09-930 (July 20, 2010) Facts
: On June 6, 2003, four days after his birth, Adam Carlton died. His parents (the plaintiffs) sought to bring a wrongful death action, which, under the applicable statute of limitations, must be filed within two years, or, in this case, June 6, 2005. On June 1, 2005, the plaintiffs requested an extension to file their complaint pursuant to North Carolina Rule of Civil Procedure 9(j), which provides for additional time to comply with the special pleading requirements related to certification of expert testimony. The request was granted on June 2, giving the plaintiffs until Oct. 4, 2005 to file.
On Oct. 4, 2005, the plaintiffs requested an additional 20 day extension pursuant to North Carolina Rule of Civil Procedure 3, which was granted by an Assistant Clerk of the Superior Court. The plaintiffs filed their complaint for wrongful death and negligent infliction of emotional distress on Oct. 24, 2005. Subsequently, the defendants filed a motion to dismiss on the grounds that the complaint was not filed timely, which was granted as to the wrongful death claim and denied as to the negligent infliction of emotional distress claims. The plaintiffs voluntarily dismissed the latter claims and appealed the dismissal of the wrongful death action.
: The Court of Appeals (the court) affirmed the trial court’s dismissal. The plaintiffs argued that the extensions provided for in Rule 9(j) and Rule 3 can be used cumulatively, so that the applicable statute of limitations could be extended up to a total of 140 days. The court rejected this argument, citing to a Supreme Court holding that Rule 9(j) controls the initiation of a medical malpractice action, which includes meeting the special pleading requirements. See Thigpen v. Ngo, 355 N.C. 198, 203-04, 558 S.E.2d 162, 166 (2002). The court also relied upon the statutory interpretation principle that, absent contrary legislative intent, a more specific rule (here, Rule 9(j)) trumps a more general rule (here, Rule 3). Since the case in question was a medical malpractice case, it was governed by Rule 9(j) which provides for only a 120-day extension period.
Day v. Brant, ___ N.C. App. ___, 697 S.E.2d 345, No. COA09-573 (July 20, 2010) Facts
: On Oct. 27, 2003, the plaintiffs’ son Duncan was injured in a car accident and was treated by the defendants in the hospital emergency room. The defendant practitioners examined Duncan and ordered a number of tests, but they did not order an ultrasound or CT scan of Duncan’s abdomen. Duncan was released from the hospital with pain medication, but he was found unresponsive the next morning and was pronounced dead on arrival at the hospital. The cause of his death was determined to be internal bleeding from a ruptured liver.
The plaintiffs filed suit, alleging that the defendants were negligent in not discovering Duncan’s injured liver and not admitting him to the hospital. At the close of trial, the defendants moved for a directed verdict on the grounds that (1) the plaintiffs’ standard of care expert was not qualified to testify regarding the applicable standard of care and (2) the plaintiffs’ causation expert did not present adequate evidence of proximate causation. The trial court granted the directed verdict, and the plaintiffs appealed.
: The Court of Appeals (the court) reversed the directed verdict on de novo review, holding that the plaintiffs’ evidence was sufficient for submission to the jury. The defendants argued that the plaintiffs had not provided an adequate foundation for their standard of care expert, in that the expert never testified that he was a licensed physician and did not demonstrate adequate familiarity with the defendants’ community. The court held that a jury could reasonably infer the expert’s possession of a medical license on the basis of his other testimony. In addition, the court stated that the expert only needed to testify about how he evaluated the standard of care in the defendants’ community; he did not need to testify specifically about what he learned from his research. Furthermore, failure to provide this specific testimony did not mean that the expert was inappropriately testifying as to a national standard of care.
The defendants also argued that the testimony of the plaintiffs’ causation expert amounted to mere speculation. The court reviewed several places in the trial record where the expert had admitted that he could not be certain whether Duncan would have survived if he had received the proper standard of care. The court held that the expert’s testimony was sufficient to create a jury question, however, because he had explained the steps that could have been taken to treat Duncan had a CT scan been performed, and he had testified that “most” patients with similar injuries survive if admitted to the hospital. Although on cross-examination he had referred to his own testimony as speculation, the court concluded that the he was merely acknowledging that assigning a percentage chance of survival is “inherently speculative” and that only probability, not certainty, is required to support proximate cause.
Diggs v. Forsyth Memorial Hospital, Inc., ___ N.C. App. ___, 698 S.E.2d 200, No. COA09-890 (July 20, 2010) (unpublished) Facts
: In 2002, Mary Diggs (the plaintiff) brought a medical malpractice action against a number of individuals and entities, including Sheila Crumb, Joseph McConville, M.D., and Piedmont Anesthesia & Pain Consultants, P.A. (collectively, the anesthesia defendants), as well as Forsyth Memorial Hospital (the defendant), Novant Health, Inc., and Novant Health Triad Region, L.L.C. The plaintiff voluntarily dismissed her claims against the anesthesia defendants in 2004, so that that the trial court’s grant of summary judgment in favor of the other defendants could be immediately appealed. The plaintiff subsequently filed another complaint against the anesthesia defendants based on the same claims. In 2006, the Court of Appeals (the court) reversed the grant of summary judgment only as to the defendant, and the plaintiff entered into a settlement agreement with the anesthesia defendants. In accordance with the terms of the settlement agreement, the court dismissed with prejudice the plaintiff’s claims against the anesthesia defendants. On the basis that the claims against its apparent agents, the anesthesia defendants, were dismissed with prejudice, the defendant sought partial summary judgment in 2007, which was denied by the trial court.
The case was tried twice before a jury, each time resulting in a hung jury and a mistrial. Subsequent to the second trial, the defendant made a motion for the judge to reconsider the previous motion for summary judgment. The motion was granted, as was summary judgment in favor of the defendant. The plaintiff appealed to the court as to both the granting of the motions for reconsideration and summary judgment.
: The court affirmed the granting of reconsideration and summary judgment. As to the motion for reconsideration, the court held that a judge could reconsider his or her own rulings and the motion did not have to specifically cite a procedural rule that would permit such reconsideration. As to the motion for summary judgment, the court affirmed on the grounds that judgment on the merits in favor of the agent bars claims against the principal whose liability is based on the doctrine of respondeat superior. Here, the claims against the anesthesia defendants were dismissed twice, once in 2004 voluntarily by the plaintiff and again in 2006 with prejudice by the trial court in accordance with the terms of the settlement agreement. The court held that either the dismissal with prejudice or the fact that the claims against the anesthesia defendants had been dismissed twice, which would operate as res judicata, was sufficient to preclude the claims against the defendant.
Parkway Urology, et al. v. N.C. Dep’t of Health and Human Services, et al., ___ N.C. App. ___, 696 S.E.2d 187, 2010 WL 2816244, No. COA08-1548 (July 20, 2010) Facts
: Cancer Centers of North Carolina (CCNC) applied to the Certificate of Need (CON) Section of the Department of Health and Human Services (DHHS) for a CON to acquire a new linear accelerator (“LINAC”). Parkway Urology, P.A. d/b/a Cary Urology, P.A. (Cary Urology) and Wake Radiology Oncology Services (WROS) each filed competing CON applications to acquire a LINAC, and opposed the CCNC application. Rex Hospital, Inc. (“Rex”) opposed all three applications and filed comments in opposition to the proposed projects. In Rex’s comments, Rex specifically noted that CCNC’s project would be located less than three-tenths of a mile from Rex’s existing LINACs that had excess capacity, and the approval of CCNC’s project would unnecessarily duplicate Rex’s existing radiation oncology services. DHHS approved CCNC’s application, with conditions, and disapproved the applications of Cary Urology and WROS.
Cary Urology, WROS and Rex each filed a petition for a contested case hearing with the Office of Administrative Hearings (OAH) challenging the approval of CCNC’s application. After a contested case hearing, the Administrative Law Judge (ALJ) concluded that the CON Section did not err in approving the CCNC application and disapproving the Cary Urology application and the WROS application. Thereafter, DHHS issued a final agency decision, which upheld the determinations of the ALJ and the CON Section. Cary Urology, WROS and Rex each appealed the final agency decision.
: In affirming the final agency decision, the Court of Appeals (the court) concluded that substantial evidence supported the approval of the CCNC application and disapproval of the competing applications. The court deferred to DHHS on its analysis of the competing applications. The court also found that Rex failed to demonstrate that it was substantially prejudiced by the CON Section’s original decision to approve the CCNC application. Relying upon Britthaven, Inc. v. N.C. Dep’t of Human Res., 118 N.C. App. 379, 382, 455 S.E.2d 455, 459 (1995) and Presbyterian Hosp. v. N.C. Dep’t of Health and Human Servs., 177 N.C. App. 780, 785, 630 S.E.2d 213, 216 (2006), the court rejected the contention that a petitioner is not required to demonstrate substantial prejudice under N.C. Gen. Stat. § 150B-23(a) in a challenge to a CON application. The court set forth the following test that Rex was required to satisfy to demonstrate substantial prejudice: “Rex was required to provide specific evidence of harm resulting from the award of the CON to CCNC that went beyond any harm that necessarily resulted from additional LINAC competition in Area 20….” Parkway Urology, et al. v. N.C.Dep’t of Health and Human Servs., et al., ___ N.C.App. ___, 696 S.E.2d 187, 195 (2010). The court found that Rex, despite its claims to the contrary, did not satisfy this test.
Total Renal Care of North Carolina, LLC v. N.C. Dep’t of Health and Human Services, et al., ___ N.C. App. ___, ___ S.E.2d ___, No. COA09-879 (Sept. 7, 2010) Facts:
Total Renal Care of North Carolina, LLC d/b/a TRC-Leland (“TRC”) and Bio-Medical Applications of North Carolina, Inc. d/b/a Fresenius Medical Care of Brunswick County (“BMA”) each filed a Certificate of Need (“CON”) application to develop and operate a new dialysis facility. The CON Section of the Department of Health and Human Services (“DHHS”) approved BMA’s application and denied TRC’s application. TRC filed a petition for contested case hearing to challenge the CON Section’s decision. After a contested case hearing, the Administrative Law Judge (“ALJ”) recommended that BMA and TRC be granted “a new review of the applications utilizing reviewers not involved in the initial review, and in the alternative, reverse[d] the CON Section’s decision” to approve BMA’s application and deny TRC’s application.” Total Renal Care of North Carolina, LLC v. N.C. Dep’t of Health and Human Servs., et al., ___ N.C. App. ___, 698 S.E.2d 446, 449 (2010). DHHS issued a final agency decision, which rejected the ALJ’s recommendation and affirmed the CON Section’s original decision to approve BMA’s application. TRC appealed to the Court of Appeals (the court).
The court affirmed the final agency decision, thereby upholding the approval of BMA’s application and the disapproval of TRC’s application. The court’s opinion reinforces the deference given to DHHS in CON reviews. The court stated, “[a]s long as both applications are reasonable and supported by substantial evidence, this [c]ourt will not overturn the decision of DHHS through the use of contrary evidence.” (citing Craven Reg’l Med. Auth. v. N.C. Dep’t of Health and Human Servs., 176 N.C. App. 46, 59, 625 S.E.2d 837, 845 (2006)). By deferring to DHHS, the court rejected most of TRC’s arguments.
The court also rejected TRC’s argument that the CON Section erred because neither the project analyst nor the supervisor attended the public hearing on the applications. While acknowledging that the CON Section is required to conduct a public hearing under N.C. Gen. Stat. § 131E-185(a1)(2) (2007), the court refused to impose a requirement that the project analyst or the supervisor be personally present for the public hearing. The court stated that the information gathered at the public hearing must be considered in a CON review, but there is no law requiring “what specifically must be done with the information.” Total Renal Care of North Carolina, LLC., ___NC. App. at 451, 698 S.E.2d at 44.
Davis, Mackin and Stewart are members of the health care team in the Research Triangle Office of K&L Gates LLP.
Views and opinions expressed in articles published herein are the authors' only and are not to be attributed to this newsletter, the section, or the NCBA unless expressly stated. Authors are responsible for the accuracy of all citations and quotations.