Lipson v. Anesthesia Services, P.A.

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

IN AND FOR NEW CASTLE COUNTY

)
ROBERT A. LIPSON, M.D., and
ANESTHESIOLOGY/CRITICAL
)
CARE PHYSICIANS OF DELAWARE, )
P.A.,
)
)
)
)
) C.A. NO. 00C-08-105-JRS
)
)
)
)

ANESTHESIA SERVICES, P.A.,

Plaintiffs,

Defendant.

Date Submitted: July 9, 2001
Date Decided: October 3, 2001

MEMORANDUM OPINION

Upon Consideration of Defendant’s
Motion for Summary Judgment.
GRANTED in part, DENIED in Part.

James S. Green, Esquire, SEITZ, VAN OGTROP & GREEN, P.A., 222 Delaware
Avenue, Wilmington, DE 19899. Attorney for the Plaintiffs.

Jeffrey M. Weiner, Esquire, 1332 King Street, Wilmington, DE 19801. Attorney for
the Defendant.

SLIGHTS, J.

I. INTRODUCTION

This controversy illustrates the unfortunate sequelae of professional separation

on less than amicable terms. Plaintiffs, Robert A. Lipson, M.D. (“Lipson”), and his

solely owned medical practice, Anesthesiology/Critical Care Physicians of Delaware

P.A. (“ACCP”) (collectively “Plaintiffs”), initiated this action against Lipson’s former

medical practice, Anesthesia Services P.A. (“ASPA”), after Lipson’s departure from

ASPA. Plaintiffs recite facts in their complaint that they shape into themes quite

familiar to professional separation litigation: Lipson’s partners improperly discharged

him from ASPA in violation of his contract with the practice; his partners slandered

him by publicly criticizing his professional competence; his partners unfairly

prevented him from competing in the community; and his partners inappropriately

interfered with his current or prospective professional relationships with patients,

colleagues and the hospitals where he practiced medicine.

The defense themes are also familiar: ASPA’s concerns regarding Lipson’s

competency and unprofessional conduct were justified; ASPA’s responses to these

concerns were appropriate; and ASPA’s actions after Lipson’s separation from ASPA

in no way improperly interfered with Lipson’s ability to practice medicine in the

community and, if anything, constituted ASPA’s exercise of its right freely to compete

with Lipson or any other provider of anaesthesia services.

But there is a twist in this case that has prompted a defense motion for summary

judgment on all counts of the complaint long before the discovery record has been

completed. During most of the events in question, ASPA constituted, in essence, the

entire department of anaesthesiology at Christiana Care Health Services (“CCHS”),

the largest hospital system in the State of Delaware. ASPA has argued that it was

engaged in peer review activity on behalf of (and at the request of) CCHS when it

responded to staff complaints about Lipson’s competency and unprofessional behavior

at the hospital and thereafter implemented the corrective action which ultimately led

to Lipson’s departure from ASPA. Accordingly, ASPA contends that its conduct

implicates the peer review immunity codified in the Federal Health Care Quality

Improvement Act1 and Delaware’s Medical Practices Act.2

To dispose of ASPA’s motion for summary judgment, the Court must interpret

the boundaries of the peer review immunity enjoyed by Delaware health care

providers in a case of first impression. The Court also must address whether common

law privileges that have developed in Delaware’s libel/slander jurisprudence apply

when medical professionals purportedly make slanderous statements while engaged

142 Del. C. § 11101 et seq.

224 U.S.C. § 1701, et seq.

in quality assurance activities. This too is an issue of first impression in Delaware.

The remaining issues raised by the motion, while not novel in their legal complexity,

are fact intensive against the backdrop of a rather limited but complicated record and,

in that sense, are challenging in their own right.

After full briefing, oral argument and supplemental briefing, the matter is ripe

for decision. For the reasons that follow, the motion for summary judgment is

GRANTED in part and DENIED in part.

II. FACTS

A. The Parties

ASPA is a Delaware corporation with over twenty equity partners, more than

30 anesthesiologists (including the partners), and more than 60 certified registered

nurse anesthetists (“CRNAs”). From February 1987 through November 1999, ASPA

provided non-cardiac anesthesia services on an exclusive basis for CCHS at its two

hospital campuses and its various surgicenters. This relationship, described by ASPA

as a “de facto exclusive provider” arrangement, apparently was not governed by

contract. Nevertheless, the parties do not dispute that, during the time frame relevant

to this dispute, ASPA ran the hospital’s anaesthesia department. (D.I. 24, Ex. B at 1-

The parties also agree that one of ASPA’s partners, Lennart Fagraeus, M.D.

(“Fagraeus”), was the Chairman of the Department of Anaesthesiology and that he

received a salary from CCHS to perform that function over and above the salary he

received from ASPA. In his role as Chairman of the department, Fagraeus undertook

various administrative tasks, including the scheduling of anesthesiologists for

operating room coverage. Specifically, through a committee of physicians comprised

of ASPA physicians, Fagraeus scheduled, on a random and rotational basis,3 each

anesthesiologist and CRNA for each operation performed in a CCHS operating room.

(D.I. 24, Ex. B at 3)

Lipson joined ASPA in 1987. He became a stockholder of ASPA and a

member of its board of directors in November 1988. (D.I. 24, Ex. B at 2) He is a

board certified anesthesiologist with a particular interest in critical care medicine.4

From the time he joined ASPA through early 1999, Lipson enjoyed an excellent

reputation at CCHS among his fellow anesthesiologists and the community of

3According to ASPA, although the operating room assignments were random, the
physicians’ committee would accommodate requests for a specific anaesthesiologist made by either
the surgeon or patient. (D.I. 24, Ex. B at 3)

4Critical Care Medicine, as best as the Court can discern, involves post-surgical care of
critically ill patients, typically in the setting of an intensive care unit.

surgeons with whom he worked. The state of Lipson’s reputation thereafter is the

subject of some dispute in the record.

B. Lipson’s Relationship with ASPA and CCHS Falters

1. Lipson and ASPA Disagree on ASPA’s Business Plan and
Personnel Issues

Lipson came to ASPA from Yale/New Haven and New London Hospitals in

Connecticut where he was the Director of the Intensive Care Units. Prior to his

arrival, Lipson expressed to ASPA his desire to develop a critical care medicine

component to ASPA’s hospital-based anaesthesiology practice. His plans initially

were endorsed by ASPA’s upper management. Over time, however, Lipson began to

sense that his ASPA partners were reluctant to allow him to develop this sub-specialty

at CCHS.5 According to Lipson, ASPA’s opposition to his plan to expand the

practice to include critical care medicine was based primarily on the partners’

perception that health insurance carriers pay less for critical care services than for

5For instance, Lipson perceived that his ASPA partners were blocking his efforts to attract
qualified critical care anaesthesiologists to join ASPA by treating them poorly when they would
interview for positions and by expressing to potential candidates less than genuine enthusiasm for
Lipson’s plan to develop a critical care practice. (D.I. 21, Int. 2)

surgical services. According to Lipson, it is a generally known fact that

anaesthesiologists engaged in critical care medicine perform more work than their

colleagues working in the operating room but receive less pay. (D.I. 21, Int. 2)

Lipson alleges that eventually Bruce Wales, M.D. (“Wales”), the President of

ASPA, advised him that if he wished to practice critical care medicine “he should

consider leaving the group.” (D.I. 21, Int. 2 at 2) Nevertheless, Lipson continued his

efforts to convince CCHS to incorporate anaesthesiology in its Critical Care Medicine

service and to allow him to develop this component of the service.

Lipson also began to speak out against what he perceived to be unfair treatment

of the non-partner physicians by ASPA. According to Lipson, his partners believed

that he was the architect (if not author) of a letter from “non-partnered members” of

ASPA to the ASPA partners in which several concerns were raised including the

disparity in salaries between partners and non-partners. (D.I. 21, Int. 2 at 38-39)

While the letter ultimately resulted in an improved working relationship between

partners and non-partners, Lipson believes that his partners believed he was the

instigator of the non-partners’ demands and that this belief was the source of much

animosity directed towards him by his partners.

Lipson alleges that he also openly supported higher salaries and better working

conditions for ASPA’s CRNAs. This effort likewise was not well received by ASPA

partners. During the course of the discussions regarding the CRNAs, Lipson raised

questions about whether ASPA physicians were spending enough time at the hospital

and whether physicians were delegating too many responsibilities to CRNAs. Lipson

couched these questions as concerns for patient safety. His partners were not pleased.

2. ASPA Investigates Lipson’s Professional Behavior

The relationship between Lipson and ASPA deteriorated further in the early

months of 1999. On March 11, 1999, while Lipson was the “on-call”

anaesthesiologist at Christiana Hospital, he was called to respond to an incoming

trauma patient. Along with another doctor, Lipson transported the patient directly to

an operating room. During the transport, and after the patient was in the operating

room, Lipson was heard using offensive language. Lipson also allegedly breached

hospital protocols by admitting the patient directly to the operating room, thereby

bypassing the admission protocol of the emergency room. The failure to admit the

patient through the emergency room, inter alia, prevented attendants from

immediately placing an identification band on the patient.6 (D.I. 24, Ex. B, Attach.

12 at 2)

Lipson’s actions on March 11, 1999, generated numerous complaints from

those present. The complaints ranged from general complaints of offensive behavior

6The failure to secure an identification band for the patient purportedly placed the patient at

risk for mistaken medical procedures caused by confusion of identification.

to more specific complaints that he failed to observe proper admission procedures and

thereby jeopardized patient safety.

On the evening of March 31, 1999, Lipson again displayed questionable

behavior. While “on-call” at Christiana Hospital, he responded to an emergency page

for an anesthesiologist. When Lipson returned the page, the operator was unable to

inform him of the nature or location of the emergency. Aware that he was needed on

an emergent basis, and apparently frustrated that the operator could not direct him to

the emergency, Lipson, in an angry tone, began to shout out profanities, although it

is not clear to whom, if anyone, these comments were directed. This incident also led

to complaints about Lipson’s behavior. (D.I. 24, Ex. B, Attach 13)

Fagraeus briefly described the two incidents in a letter dated April 5, 1999,

addressed to Lipson. The letter was written on CCHS letterhead and was signed by

Fagraeus as “Chairman [of the] Department of Anesthesiology.” Fagraeus concluded

the letter with an admonition: “In summary, your behavior cannot be tolerated any

more. By copy of this letter I am informing Dr. Wales of my concerns and suggesting

that [ASPA] consider appropriate action.” (D.I. 24, Ex. B, Attach. 5)

Lipson confirmed the incidents of unprofessional behavior during a subsequent

telephone conversation with Wales. According to Wales, Lipson then was invited to

attend the regularly scheduled ASPA board of directors’ meeting on April 14, 1999

to discuss the incidents. (D.I. 24, Ex. B at 5) Lipson denies that he was invited to

attend the meeting and, indeed, he maintains that he “was not permitted to attend.”

(D.I. 21, Int. 16) The board meeting took place as scheduled on April 14th; Lipson

did not attend. At the meeting, Wales read the April 5th Fagraeus letter and

recommended that the board respond to Fagraeus’ call for action. The board decided

on the following course of corrective action: (1) ASPA would require Lipson to

undergo a psychological/psychiatric evaluation7; (2) ASPA would receive the results

of that evaluation and respond accordingly; (3) Lipson would be suspended from

ASPA’s board of directors; (4) Lipson would be “removed from all call obligations

[at Christiana Hospital] immediately except C4 and W3 calls8 . . . ”; and (5) Lipson

would be prevented from working on the “ICU [Critical Care Medicine] project.” (D.I.

24, Ex. B, Attach. 8) On April 15, Wales sent an e-mail to all ASPA doctors and

CRNAs stating, in part: “[d]ue to medical reasons, Dr. Lipson will be leaving the call

7ASPA apparently was concerned that certain stressors in Lipson’s personal life may be the
source of his unusual behavior at the hospital. Lipson was evaluated on May 10, 1999, by Dr. Jay
Amsterdam, a psychiatrist chosen by ASPA. The results of this examination have not been supplied
to the Court.

8The Court could find no explanation of “C4 and W3 calls” in the record.

schedule for an indefinite period.” (D.I. 24, Ex. B at 7 & Attach. 9)

The ASPA board held another meeting on May 12, 1999. After discussing

Lipson’s situation again, the board decided to advise Lipson informally, through his

attorney, that it would recommend a one year suspension from ASPA’s board. (D.I.

24, Ex. B, Attach. 16) The board met again on June 9, 1999, and modified its earlier

decisions with respect to Lipson. Specifically, the board: reinstated Lipson to a “full

call schedule” and decided that Lipson would have “regular meetings with the

Department Chairman and members of the Human Resource Committee to assess

progress.” (D.I. 24, Ex. B, Attach. 17)

Lipson contends that after the two incidents at the hospital, his partners began

a campaign to smear his reputation in the medical community. The comments

purportedly involved either misstatements regarding his mental state – – questioning

whether he had or was having an emotional breakdown of some kind – – or inaccurate

recounting of the events at the hospital that gave rise to the complaints against Lipson

– – alleging, in essence, that Lipson nearly had killed the child for whom he was caring

on March 11, 1999.

Lipson Leaves ASPA

Lipson resigned from ASPA’s board on July 15, 1999, and at the same time notified ASPA

of his intent not to renew his employment contract. (D.I. 24, Ex. B, Attachs. 21, 21) Lipson’s letters

to ASPA announcing these decisions, both dated July 15, 1999, were simple and direct: “I hereby

submit my resignation from the Board of Directors of ASPA effective as of the date of termination

of my employment.” (D.I. 21, Ex. B, Attach. 21) “Pursuant to Paragraphs 2 and 12 of my

Employment Contract with [ASPA], I hereby give notice of my intention not to renew my

employment contract at the expiration of the current term.” (D.I. 21, Ex. B, Attach. 22) Lipson did

not provide a written explanation of his reasons for leaving the practice.

4. Lipson Forms ACCP and Attempts to Compete With ASPA

Less than two months after Lipson’s resignation from ASPA, by letter dated August 27,

1999, Dr. Harold Rosen, Senior Vice President for Medical Affairs at CCHS, announced that

CCHS’s executive committee was instituting a six-month moratorium on the credentialing of

physicians to the anesthesiology department. (D.I. 24, Ex. B, Attach. 27) The moratorium was

intended to allow CCHS to “study the current modality by which anesthesia services are provided

. . . .” (Id.) Lipson believes that the true purpose of the moratorium was to prevent him from

importing qualified anaesthesiologists to staff his to-be-formed medical practice. Without privileges

to practice at CCHS, any physicians Lipson would be able to recruit to his new anaesthesiology

practice would be of no value to him.

Nevertheless, in January, 2000, Lipson returned to CCHS as a solo practitioner through his

new medical practice, ACCP. At that time, Lipson was placed back on the call schedule at all CCHS

facilities (ASPA still maintained full control over the schedule). Lipson’s return to CCHS prompted

several disputes with ASPA and CCHS. Not surprisingly, these disputes principally involved

Lipson’s complaint that ASPA and, to a lesser extent, CCHS were scheduling him less frequently

and for less attractive assignments. The parties also disagreed over the manner by which ASPA

responded to special requests for Lipson’s services from physicians and patients. Lipson

complained that these scheduling difficulties were delaying the opening of his practice. (D.I. 29,

Ex. C)

According to ASPA, Lipson began to solicit non-partner physicians and CRNAs from ASPA

to join his practice. Indeed, ASPA contends that Lipson would enter operating rooms in the midst

of surgery to discuss job offers with ASPA physicians and CRNAs. (D.I. 24, Ex. B at 15-16, Attach.

37) Lipson, of course, denies that he improperly recruited ASPA employees. He also contends that

the slanderous comments from his partners continued after he left the practice, particularly in the

context of ASPA’s efforts to dissuade its employees from talking to Lipson about employment. (D.I.

21, Int. 25) The dispute between the parties soon

disrupted the hospital (particularly the department of anaesthesiology) considerably. (D.I. 24, Ex.

In May 2000, CCHS announced a request for proposal for an exclusive anesthesia services

contract for its hospital campuses and surgicenters. ASPA and ACCP submitted proposals. In

October 2000, an ad hoc committee which was formed to review the proposals advised ASPA that

CCHS was considering whether to award two contracts for anesthesia services within its system.

On November 8, 2000, however, the ad hoc committee announced that it would award an exclusive

contract to ASPA. ASPA surmises that CCHS, informed by past experience, determined that

providing contracts to competing anaesthesia practices would be too disruptive because the practices

inevitably would disagree over case assignments and coverage. To date, the contact has not been

executed. (D.I. 24, Ex. B at 12-14)

In August 2001, Lipson accepted a position at the University of Pennsylvania as Associate

Clinical Professor of Anesthesia where he will teach at the medical school and practice full-time in

anaesthesiology and critical care medicine at the hospital there.

III. DISCUSSION

A. The Parties’ Contentions

Lipson alleges that his former partners’ unfounded attacks upon his professional competence

constituted actionable libel and slander. He also contends that ASPA interfered with his contractual

relationship with CCHS by causing the hospital to restrict his privileges to practice there. He

further alleges that ASPA then engaged in a course of conduct that interfered with ACCP’s

prospective business relations with certified registered nurse anesthetists who wished to join ACCP

and with surgeons who sought to refer patients to ACCP. These factual contentions predicate a five

count complaint: (1) intentional interference with contractual and prospective contractual relations,

(2) breach of contract, (3) constructive termination, (4) unfair trade practices, and (5) libel and

slander.

ASPA has filed a Motion for Summary Judgment on all counts. The showcase argument in

support of the motion is that Plaintiffs’ claims fail as a matter of law because ASPA was engaged

in peer review of Lipson’s conduct on behalf of CCHS at the time of the events described in

Plaintiffs’ complaint and, therefore, the practice is immune from suit. ASPA also argues that

Plaintiffs have failed to carry their burden to establish defamatory statements and, in any event, their

statements regarding Lipson’s deficient care are protected by a qualified privilege. Finally, ASPA

maintains that Plaintiffs have failed to identify with requisite specificity the contracts or business

relations with which ASPA interfered. Plaintiffs counter by

arguing that material issues of fact permeate the limited record developed thus far and, consequently,

summary judgment is not appropriate.

B. Summary Judgment Standard

Summary judgment may be granted only when the Court’s review of the record reveals that

there are no genuine issues of material fact and that the moving party is entitled to judgment as a

matter of law.9 The moving party bears the initial burden of demonstrating that the undisputed facts

do not support plaintiff’s legal claims or that such claims are not viable as a matter of law.10 If the

motion is properly supported, the burden shifts to the non-moving party to demonstrate that there

are material issues of fact for resolution by the fact-finder.11 When reviewing the record, the Court

must view the evidence in the light most favorable to the non-moving party.12

Peer Review Immunity

The Federal Peer Review Statute

9Dale v. Town of Elsmere, Del. Supr., 702 A.2d 1219, 1221 (1997).

10Moore v. Sizemore, Del. Supr., 405 A.2d 679, 680 (1979)(citing Ebersole v. Lowengrub,
Del. Supr., 180 A.2d 467 (1962)).

11Brzoska v. Olson, Del. Supr., 668 A.2d 1355, 1364 (1995).

12See United Vanguard Fund, Inc. v. Takecare, Inc., Del. Supr., 693 A.2d 1076, 1079 (1997);
Brzoska, 668 A.2d at 1364.

ASPA contends that it is immune from a suit for damages by virtue of the Health Care

Quality Improvement Act of 1986, 42 U.S.C. §§ 11101-1152 (“HCQIA”). Congress enacted the

HCQIA with the intent to “‘improve the quality of medical care by encouraging physicians to

identify and discipline physicians who are incompetent or who engage in unprofessional

behavior.’”13 The principle means by which the HCQIA encourages physicians and other health

care providers to embrace this policing responsibility is to limit14 the threat of litigation for qualified

health care providers who participate in peer review activities.15 When determining whether ASPA

enjoys the immunity set forth in the HCQIA, then, the Court must focus its inquiry on two issues:

(i) was ASPA acting as a protected “professional review body” when it investigated the complaints

regarding Lipson’s conduct; and (ii) was ASPA engaged in protected “professional review

action”during the events giving rise to plaintiffs’ complaint? Plaintiffs bear the burden of

establishing that ASPA is not entitled to immunity under the statute and, in this regard, the burden

on summary judgment is transferred at the outset of the analysis to the non-moving party.16

13Brader v. Allegheny Gen. Hosp., 3d Cir., 167 F.3d 832, 839 (1999)(quoting H.R.Rep. No.
903, 99th Cong., 2d Sess. 2 (1986), reprinted in 1986 U.S.C.C.A.N. 6287, 6384).

14The HCQIA immunizes designated health care providers from claims for money damages
only as opposed to claims for injunctive relief or other equitable (or legal) non-monetary remedies.
See 42 U.S.C. §§ 11101(4), 11111(a); Pamintuan v. Nanticoke Memorial Hosp., Inc., D. Del., C.A.
No. 96-233-SLR, 1999 U.S. Dist. Ct. 3300, Robinson, J., at * 35 (Feb. 24, 1997). In this case,
however, the immunity provided by the HCQIA would blunt all of plaintiffs’ claims. The relief
sought is limited to money damages; plaintiffs do not seek reinstatement or equitable relief in their
pleadings.

15See Brader, 167 F.3d at 839. See also 42 U.S.C. § 11111(a)(1) (“If a professional review
action . . . of a professional review body meets all the standards specified in section 11112 (a) of this
title” then the participants “shall not be liable in damages under any law of the United States or of
any State (or political subdivision thereof) with respect to the action”).
16Pamintuan v. Nanticoke Memorial Hosp., 3d Cir., 192 F.3d 378, 388 (1999); Brader v.

a. ASPA Was Not Acting as a Professional Review Body

Allegheny General Hospital, 3d Cir., 64 F.3d 869, 879 (1995).

The HCQIA does not codify a blanket immunity for any person or entity engaged in “peer

review” activity. Rather, Congress specifically identified those persons or entities to which the

immunity provisions apply. Specifically, immunity under the HCQIA extends only to: “[a]

professional review body,17 any person acting as a member or staff to the body, any person under

a contract or other formal agreement with the body, and any person who participates with or assists

the body with respect to the action . . . .”18 Although written decisions addressing the extent to which

the HCQIA immunity will reach peer review activity outside of a hospital setting apparently are

scarce (the parties have not directed the Court to any authority on the issue), the statutory language

itself suggests that an entity such as ASPA may be entitled to immunity, either in the context of peer

review functions performed on behalf of a hospital or possibly even in the context of peer review

functions performed on its own initiative. Arguably, if ASPA could establish that it provides health

17“The term ‘professional review body’ means a health care entity and the governing body
or committee of a health care entity which conducts professional review activity, and includes any
committee of the medical staff of such an entity when assisting the governing body in a professional
review activity.” 42 U.S.C. § 11151(11). A “health care entity” includes hospitals, an entity
(including a HMO or “group medical practice”) which follows a formal peer review process, or a
professional society of licensed health care providers. 42 U.S.C. § 11151(4)(A).

1842 U.S.C. § 11111(a)(1). See also 42 U.S.C. § 11111(a)(2), specifically setting forth

care services (which clearly it does) and that it “follows a formal peer review process,” its governing

body would qualify as a “professional review body” when engaged in “professional review action,”

even if such peer review was conducted within its own organization relating to providers within the

practice.19

“[p]rotection for those providing information to professional review bodies[.]”

19See 42 U.S.C. §§ 11151(4)(ii) & (11)(a “group medical practice” or other entity which
provides health care services can qualify as a “professional review body,” but only if it “follows a
formal peer review process”).

ASPA has narrowed the issue, however, by conceding in its papers20 and at oral argument

that the investigation of Lipson was not an investigation initiated by ASPA for ASPA. Rather,

ASPA contends that it conducted the investigation of Lipson and implemented correction action

against Lipson at the request of the Chairman of the Department of Anesthesia on behalf of CCHS.

If the record supported ASPA’s contention, the Court easily would conclude that ASPA was a

“professional review body” which, if engaged in “professional review action,” would enjoy HCQIA

immunity. But the record does not support ASPA’s contention. While it is true that Fagraeus

suggested that ASPA consider taking some action against Lipson, he in no way suggested that such

action should be taken on behalf of the hospital.21 And he certainly made no effort to invoke

CCHS’s extensive peer review machinery in connection with the complaints he received about

Lipson.22 Nor has ASPA presented any evidence that it determined to follow a formal corrective

20E.g. (D.I. 44 at 3; D.I. 60 at 2).

21See (D.I. 24, Ex.B, Attach. 5)(Fagraeus states “By copy of this letter I am informing Dr.
Wales of my concerns and suggesting that ASPA consider appropriate action”) (emphasis supplied).
Fagraeus says nothing of CCHS’s Corrective Action/Fair Hearing Plan, nor does he even direct that
an investigation take place. Instead, he simply suggests that ASPA consider taking some action, be
it corrective or otherwise. Fagraeus’ letter hardly can be characterized as the initiation of peer
review activities on behalf of CCHS as ASPA would have the Court believe.

22See (D.I. 29, Ex. A at 18)(Article V of CCHS’s By-Laws outlines a detailed corrective
action plan which includes fair hearing procedures and appeal rights).

action plan on its own that resembled even slightly the plan followed by CCHS for its staff

physicians. Inviting Lipson to attend a regularly scheduled board meeting was a flaccid substitute

for a fair hearing.

Relying upon the HCQIA’s definitions of “professional review action” and “professional
review activity,” ASPA has attempted to craft an argument that informal peer review activity will
qualify for immunity.23 Specifically, citing Brader,24 ASPA contends that protected peer review can
occur even though a formal, “time-consuming” proceeding is not initiated. Indeed, ASPA may well
be correct that “professional review activity” need not involve formal proceedings for immunity to
attach. But ASPA begs the question of whether it can characterize its activities as “professional
review activit[ies]” when it cannot meet the HCQIA’s definition of a “professional review body”
or “health care entity.” On the record presented here, ASPA meets neither definition. Consequently,
its effort to side-step CCHS’s peer review process and to minimize its own failure to initiate a
formal peer review process will not be countenanced.

b. ASPA Did Not Engage in Professional Review Action or
Activity

As a matter of statutory deduction, because ASPA acted as neither a “professional review

body” nor a “health care entity” when it investigated and then disciplined Lipson, it cannot be said

to have been engaged in “professional review

23See 42 U.S.C. §§ 11151(9) & (10).

24Brader, 167 F.2d at 842.

action” or “professional review activity.”25 The inquiry easily could end here. Nevertheless, even

assuming arguendo that ASPA was acting as a “professional review body” or a “health care entity,”

or both, it still can not credibly maintain that its actions with respect to Lipson constituted peer

review activity.

The Court has been presented with compelling evidence that ASPA employed no peer

review process at all. Lipson has presented a sworn affidavit detailing the formal and established

peer review process employed by CCHS (Lipson served on CCHS’s Peer Review Committee of its

Anesthesiology Department). (D.I. 52 at 2) Anesthesiology Department policy requires that when

taking disciplinary action, Fagraeus, as the department chairman, must be guided by the due process

protections codified in CCHS’s bylaws. (D.I. 29, Ex. A at 18-21 & Ex. B) These protections provide

that in the event of a summary suspension, Fagraeus must refer the matter to CCHS’s credentialing

committee. (Id. at Ex. B) ASPA’s argument that it didn’t feel the need to pursue such formal and

“time-consuming” measures misses the mark.

The CCHS bylaws shine even more light on ASPA’s inadequate process. The act of

removing Lipson from the call schedule and otherwise limiting his ability to practice anesthesiology

can be viewed as nothing less than some sort of “corrective action” under the bylaws (although that

term is not defined). The bylaws, at Article V, § 1(B), set forth the “Process for Corrective Action”:

The events suggesting the need for corrective/remedial action shall be reported in
writing to the departmental chairperson and be considered in the peer review system.

25See 42 U.S.C. § 11151(9)(“professional review action” encompasses actions taken by a
“professional review body”); 42 U.S.C. § 11151(10)(“professional review activity” encompasses
actions taken by a “health care entity”).

The report must be supported by reference to the specific clinical activities or
conduct, which constitutes the grounds for the report. The activities or conduct will
be investigated through the departmental and Staff peer review process and is
reported to Staff Council for appropriate action. (D.I. 24, Ex. B, Attach. 2 at 20)

Wales’ Affidavit does not even attempt to establish compliance with this provision.

Although an argument could have been constructed that Wales himself was conducting the

investigation and that its results were intended to be reported to the “Staff Council” at some point

after ASPA took corrective action against Lipson, ASPA wisely declined to stretch the record so

thin.

Based on the foregoing, the Court has concluded that Lipson has satisfied his burden to

establish that ASPA was not engaged in peer review activity under the HCQIA because it was not

acting as a “professional review body.” By failing to follow CCHS’s Corrective Action/Fair

Hearing Plan, and in the absence of any internal “formal peer review” process to guide their

investigation, ASPA’s conduct – – at least in the eyes of the HCQIA – – was nothing more than

employee discipline, cloaked with no more protection or immunity from suit than any other

personnel

decision it may have made. Accordingly, ASPA’s motion for summary judgment on the ground of

immunity under the HCQIA is DENIED.

D. Delaware’s Peer Review Statute

ASPA has argued that Delaware’s Peer Review statute, entitled “Immunity of Boards of

Review; Confidentiality of Review Board Records”26 (the “Act”), provides an independent basis

for peer review immunity notwithstanding the protections, or lack thereof, provided by the HCQIA.

The Act applies to:

The Board of Medical Practice, the Medical Society of Delaware, their members, or
the members of any committees appointed thereby or the members of any committee
appointed by a certified health maintenance organization, and members of hospital
and osteopathic medical society committees, or of a professional standards review
organization established under federal law (or other peer review committee or
organization), whose function is the review of medical records, medical care and
physicians’ work, with a view to the quality of care and utilization of hospital or
nursing home facilities, home visits and office visits . . . .

The immunity provided by the Act is broader than the immunity provided by the HCQIA in

that immunity under the Act extends beyond claims for damages.

2624 Del. C. §1768

[Qualified persons or entities] shall not be subject to, and shall be immune from,
claim, suit liability, damages or any other recourse, civil or criminal, arising from
any act or proceeding, decision or determination undertaken or performed or
recommendation made so long as such member acted in good faith and without
malice in carrying out the responsibilities, authority, duties, powers and privileges
of the offices conferred by law upon them under this chapter . . . or any other
provisions of the Delaware law, federal law or regulations, or duly adopted rules and
regulations of the aforementioned committees, organizations and hospitals, good
faith being presumed until proven otherwise, with malice required to be shown by
the complainant.27

The case law interpreting the immunity provisions of the Act focuses mainly on the

requirement that peer review committees conduct their activities in good faith, or the extent to which

the Act protects documents generated during peer review from discovery.28 The Court is not aware

of any precedent directly addressing whether, or to what extent, the Act provides immunity for

alleged peer review activity conducted by a private medical practice like ASPA, even if such peer

review is conducted at the request of a hospital.

2724 Del. C. § 1768(a).

28E.g. Dworkin v. St. Francis Hosp., Del. Super., 517 A.2d 302 (1986)(peer review must be
conducted in a manner consistent with principles of fairness); Danklef v. Wilmington Medical
Center, Del. Super., 429 A.2d 509 (1981)(records generated during peer review are confidential).

Although the case law is silent on the issue, the Act itself does suggest that a private medical

practice could engage in protected peer review activity. First, the Act provides that immunity is

available not only to traditional hospital-based or professional or regulatory organizations, but also

to “other peer review committee[s] or organization[s].”29 With respect to the work of the committee,

the Act not only addresses the review of medical care delivered in hospitals and nursing homes, it

also addresses “peer review” of care delivered in the course of “home visits (presumably referring

to home health care agencies) and office visits.”30 (emphasis supplied) The Court can appreciate no

justification – – either in the text of the Act or its purpose31 – – to deny access to the Act’s protections

to private medical practices which otherwise comply with the letter and spirit of the Act.

Accordingly, the Court declines to invoke such a restricted reading of the Act here.

The Court has concluded that ASPA was not acting on behalf of CHHS at the time it

addressed Fagraeus’ concerns about Lipson. Nevertheless, the Court has determined that immunity

under the Act is available to ASPA to the extent it acted in accordance with the Act’s provisions.

In this regard, the Court has two concerns. First, the Court is unable to determine by what standard

2924 Del. C. §1768(a).

30Id.

31“Title 24, Section 1768 of the Delaware Code is intended to encourage frank and open
discussions of a physician’s qualifications and performance by medical peer review committees.”
Riggs National Bank v. Boyd, Del. Super., C.A. No. 96C-05-122, Quillen, J. (Feb. 23, 2000)(Letter
Op. at 9)(citation omitted).

Lipson’s conduct was considered. Second, the Court is unable to determine by what process ASPA

conducted its review of Lipson. Both issues will be addressed seriatim.

With respect to the Court’s first concern, Sweede v. CIGN Healthplan of Delaware, Inc.32

provides appreciable, albeit general, guidance. In Sweede, the Court considered whether records

generated by a health maintenance organization’s quality assurance committee should be protected

from discovery under § 1768(b).33 The Court’s conclusion that the committee was engaged in

protected peer review activity was based, in part, upon the conclusion that the committee was

working with established procedures that outlined the type of evidence it would consider and the

standards by which the physician’s care would be reviewed.34 The Court reasoned that extending

immunity to the committee’s activities was consistent with the general legislative purpose

underlying the Act: to “establish[] and enforce[] professional standards . . . .”35

32Del. Super., C.A. No. 87C-SE-171-1-CV, Del Pesco, J. (Jan. 12, 1989)(Order). See also
Hagadorn v. Davidson, Del. Super., C.A. No. 88C-MY-116, Stiftel, P.J. (Feb. 12, 1990)(Letter
Op.)(same).

33Sweede, supra, Order at *2..

34Id.

35Id. See also, Riggs National Bank v. Boyd, Del. Super., C.A. No. 96C-05-122, Quillen, J.
(Feb. 23, 2000)(Letter Op.)(same); Quinn v. Kent Gen. Hosp., Inc., D. Del., 617 F. Supp. 1226, 1234
(1985)(same); Danklef, 429 A.2d at 513.

With this stated purpose of the Act as a backdrop, the Court cannot discern, in this case, how

ASPA’s conduct is consistent with or in furtherance of “the Legislature’s goal of creating an

environment for the establishment and enforcement of professional standards.”36 Although ASPA

effectively limited Lipson’s ability to practice medicine under its name, its authority could not reach

issues of credentialing or licensing.37 Moreover, no evidence has been supplied to the Court that

demonstrates that ASPA even considered, much less actively enforced, professional standards in

relation to Lipson. The ASPA board did not rely upon or point to any established medical standard

by which Lipson’s conduct was examined in support of its decision to suspend him from the call

schedule.

36Dworkin, 517 A.2d at 304 (citing Danklef v. Wilmington Medical Center, Del. Super., 429
A.2d 509, 513 (1981)).

37This fact also undermines ASPA’s argument that it was conducting peer review of Lipson
on behalf of CHHS.

ASPA’s failure to measure Lipson’s conduct against established (or, at least, identified)

professional standards, while troubling, is perhaps not dispositive of the immunity issue. The failure

to conduct its “peer review process” in accordance with established procedures or protocols,

however, removes ASPA from under the umbrella of the Act’s peer review immunity. The Act

clearly contemplates such formal procedures as well as clearly defined responsibilities conferred

upon a formal peer review committee or organization. It grants immunity to committee members

who “act[] in good faith without malice in carrying out the responsibilities, authorities, duties,

powers and privileges of the offices conferred by … duly adopted rules and regulations of the

aforementioned committees….”38 The Act provides no protection for members of a medical practice

(or other health care entity) who take steps to discipline a rogue care provider outside of a clearly

defined peer review process, even if the ultimate goals of such action are the enforcement of

professional standards and patient safety.39

3824 Del. C. § 1768(a).

39See Dworkin, 517 A.2d at 306-07 (decision to terminate physician’s privileges for alleged
incompetence in a manner inconsistent with hospital bylaws not protected by the Act’s immunity);
Timblin v. Kent General Hosp., Del. Super., C.A. No. 90C-MR-122, Quillen, J. (April 3,
1995)(Letter Op.)(“routine individual ‘performance appraisal’” prepared outside of the formal peer
review process not protected from discovery under the Act).

The record indicates that ASPA considered Lipson’s conduct on an ad hoc basis at a

regularly scheduled meeting of its board of directors. No process attached to the “peer review”

aspects of the meeting, e.g., there was no formal notice of the meeting or a meeting agenda provided

to Lipson, no explanation of the process to be followed by the board when considering Lipson’s

behavior, no explanation of possible corrective action to be taken by the board, and no explanation

of Lipson’s rights during the process. Whether part of a permanent document such as the practice’s

bylaws or a handbook of some kind, or a temporary document such as one prepared in advance of

a particular peer review effort, or an oral explanation to the participants, some process must be

implemented by the peer review committee to ensure that the Act’s mandate of good faith and

fairness is preserved.40 No such process was followed here.41

ASPA’s Motion for Summary Judgment is DENIED in so far as it relies upon the peer

review immunity afforded by the Act.

E. Breach of Contract

Lipson’s breach of contract claim is based on simple allegations; Lipson’s “[e]mployment

40The quality of the process and the manner in which the process is communicated is not
spelled out in the Act and must, therefore, be addressed by the Court on a case-by-case basis to the
extent immunity under the Act is at issue.

41Once again, the Court feels compelled to distinguish Brader, the principal decision upon
which ASPA relies to support the proposition that peer review need not be a formal process in order
for those who participate in it to enjoy immunity. See Brader, 167 F.3d at 842. Most obvious by
way of distinction, of course, is the fact that Brader was decided under the HCQIA, not Delaware’s
counterpart. More importantly, the Court does not read Brader to dispense with the requirement of
process. Rather, Brader held that not all aspects of the peer review committee’s investigation must
be in accord with a formal process. Nevertheless, the Court in Bader was not confronted with a
case where alleged peer review was conducted in the absence of any process whatsoever. Indeed,
the peer review process initiated to review Dr. Brader’s professional competence did follow specific
guidelines set forth in the Alleghany General Hospital medical staff bylaws. Id. at 836-38.

[c]ontract . . . provided that a unanimous vote of the [b]oard of [d]irectors was necessary to suspend

Dr. Lipson from any duties or services. ” (D.I. 1 at ¶ 23) The complaint then alleges that “[t]he .

. . suspen[sion of] Dr. Lipson . . . was made without unanimous vote of the [b]oard of [d]irectors or

for any cause and, therefore, was in breach of the [c]ontract.” (Id. at 24)

In its Motion for Summary Judgment, ASPA has supplied unreed evidence (Wales’

Affidavit) that “by unanimous vote, the [b]oard . . . removed [Lipson] from all call obligations . .

. [and] suspended [him] as a member of the [b]oard of [d]irectors . . . .” (D.I. 24, Ex. B at 6-7)

ASPA acknowledges, however, that only twelve of the sixteen members of ASPA’s board of

directors were present at the April 14, 1999, board meeting. (Defendant’s. Post-Hr’g Submission

at 11) All members present voted to take the corrective action against Lipson which was later

implemented by Wales’ letter to Lipson of April 20, 1999. (D.I. 24, Ex. B, Attach. 10)

Plaintiffs contend that “[t]he vote was not a unanimous vote of the board because in addition

to Dr. Lipson, three other directors, Drs. Fagraeus, Tolpin and Abello, did not attend and, therefore,

did not vote.” (D.I. 29 at 4) Plaintiffs note that the minutes of the April 14, 1999, board meeting

reflect their absence. (See D.I. 24, Ex. B, Attachs. 8, 15) These facts are not disputed.

Judge Learned Hand once observed: “[t]here is no surer way to misread any document than

to read it literally.”42 Needless to say, the Court does not recite Judge Hand’s apt observation as a

means to undermine this Court’s obligation to interpret a contract in keeping with the “plain

meaning” of its terms.43 Rather, the point to be made is that, when interpreting a contract, the

42Guiseppi v. Walling, 2d Cir., 144 F.2d 608, 624 (1944), aff’d sub nom, Gemsco v. Walling,
324 U.S. 244 (1945).

43Phillips Home Builders, Inc. v. Travelers Ins. Co., Del. Supr., 700 A.2d 127, 129
(1997)(“[I]f the relevant contract language is clear and unambiguous, courts must give the language

“literal” meaning of a term is not always consistent with the “plain” meaning. This is such a case.

Lipson’s employment contract with ASPA, the operative document here, does not define

“unanimous.” One additional provision in the employment contract, however, does guide the Court

in its search for the “plain meaning” of “unanimous”: “Incorporation by Reference. Employee

hereby agrees that [ASPA’s] certificate of incorporation and bylaws together with all currently

effective rules, regulations and resolutions made thereunder, are hereby included in this Contract

and made a part hereof.” (D.I. 29, Ex. D at ¶ 14) “Where a contract is executed which refers to

another instrument and makes the conditions of such other instrument a part of it, the two will be

interpreted together as the agreement of the parties.”44

its plain meaning”)(citing Playtex FP, Inc. v. Columbia Cas. Co., Del. Supr., 622 A.2d 1074, 1076
(1992)).

44State v. Black, Del. Super., 83 A.2d 678, 681 (1951). See also Realty Growth Investors v.
Council of Unit Owners, Del. Supr., 453 A.2d 450, 454 (1982)(“A contract can be created by
reference to the terms of another instrument if a reading of all documents together gives evidence
of the parties’ intention and the other terms are clearly identified.”)(citations omitted).

According to ASPA’s Bylaws: “[a] majority of the total number of directors shall constitute

a quorum for the transaction of business . . . .” (D.I. 24, Ex. B, Attach. 1, § 6) The bylaws then

explain: “the vote of the majority of the directors present at a meeting at which a quorum is present

shall be the act of the board of directors.” (Id.) The undisputed facts fall in line with these

provisions. There were twelve of sixteen ASPA directors present at the board meeting where

Lipson’s authorization to work was removed. Under the bylaw’s definition of a “quorum,” this

clearly was “[a] majority of the total number of directors . . . .” Because a quorum was present at

the directors’ meeting, the directors present at that meeting were capable of acting for the practice

as the entire board would be. All twelve directors affirmatively voted for the action; thus, the action

was taken by “unanimous” vote and in compliance with the voting provisions of the employment

contract and bylaws.45

This determination, however, does not touch upon whether the suspension complied with the

contractual requirement that the board of directors form “the opinion [that] . . . the employee [has]

failed to provide or will likely fail to provide, either generally or in any specific instance, that degree

of professional anesthesia services which constitute acceptable medical practice.” (D.I. 29, Ex. D,

¶ 16) Lipson complains that “there were never any departmental or hospital charges or

investigations directed toward [him] and, therefore, no valid basis for any suspension.” (D.I. 1at ¶¶

22-24) ASPA has not addressed specifically this aspect of the complaint in its motion.

Nevertheless, the Court is satisfied that the record submitted supplies a foundation of undisputed

45[U]nanimous is defined as “[a]greeing in opinion; being in complete accord . . . [and
a]rrived at by the consent of all . . . .” Black’s Law Dictionary at 1525 (7th ed. 1999).

factual evidence upon which the Court can base a ruling that ASPA is entitled to judgment as a

matter of law.

Neither ASPA’s bylaws nor Lipson’s employment agreement require that the board’s

decision temporarily to suspend Lipson be prompted by any hospital or departmental action.

Instead, the employment agreement simply requires that the board reach an “opinion” that Lipson,

inter alia, “failed to provide … that degree of professional anesthesia services which constitute

acceptable medical practice.” (D.I. 29, Ex. D, ¶ 16) The process by which this “opinion” is reached,

and the information upon which the board shall rely, is stated nowhere in the contract.

The minutes from the April 14, 1999 director’s meeting reveal that the directors considered:

(1) Fagraeus’ letter of April 5, 1999 discussing the incidents of inappropriate behavior; (2) Fagraeus’

request that Anesthesia Services’ take “appropriate action” in response to the incidents; (3) the

description of the events provided by Wales (including his account of discussions with other

interested parties); and (4) discussion concerning the selection of an appropriate doctor to conduct

a psychological evaluation of Lipson. (D.I. 24, Ex. B, Attach. 8) In Wales’ April 20, 1999 letter to

Lipson, in which he explains the decisions reached by the board on April 14th, Wales states that

Lipson’s conduct in the course of providing professional anesthesia services at CCHS “jeopardized

the health and safety of a young child.” (D.I. 24, Ex. 2, Attach. 10) Right or wrong, this statement

represented the unanimous opinion of the ASPA board. The decision temporarily to suspend Lipson

was then within the board’s discretion, a province expressly (and plainly) granted the board by the

contract.46

46Phillips Home Builders, Inc., 700 A.2d at 129.

As an additional ground for denying the Motion, Plaintiffs have presented evidence

indicating that the board’s action was motivated by factors unrelated to the two incidents of

inappropriate conduct. According to Lipson, ASPA’s actions against him took place one week after

he lodged a grievance against two other ASPA partners. In this grievance, Lipson raised questions

about the quality of care a patient received at a Surgicenter from these two anesthesiologists. Of

particular significance, one of these doctors was Wales, a primary actor in the actions taken by

ASPA against Lipson. (D.I. 55, at 4, 5 & Ex. D) On the basis of this connection and the close

temporal proximity between the complaint and Lipson’s suspension, Plaintiffs now make allegations

of retaliation. Further, Lipson has indicated that “Dr. Golden told me that they wanted me off the

[b]oard because they did not trust me with confidential information. Dr. Golden’s letter of July 13,

1999 confirms [ASPA’s] desire to remove me from the [b]oard because of confidentiality issues.”

(Id.)

Lipson’s allegation of retaliation and subterfuge in the process that led to his suspension

more appropriately would be pled as a breach of the implied covenant of good faith and fair dealing

as opposed to a breach of an express contract, as pled in Count II of the complaint.47 Plaintiffs have

not pled a breach of the implied covenant of good faith and fair dealing and cannot raise the claim

now in response to a motion for summary judgment.

Finally, Lipson has alleged that ASPA’s removal of him from its board of directors violated

his employment contract. (D.I. 1 at ¶ 11) The Court’s review of the employment contract reveals

that it in no way affects Lipson’s relationship with ASPA’s board of directors; the contract governs

47See E. I. DuPont de Nemours and Co. v. Pressman, Del. Supr., 679 A.2d 436, 449
(1996)(holding that “fictionalizing in a material way the employee’s performance to cause dismissal,
may be an actionable breach of the Covenant”).

only his status as an employee. Without further support for the proclamation that dismissing

Lipson from the board violated his employment contract, Plaintiffs’ claim that a breach of contract

has occurred must fail.

Based on the foregoing, ASPA’s motion for summary judgment as to Count II of the

complaint is GRANTED.

F. Constructive Termination

Plaintiffs allege, under a Count styled “Constructive Termination,” that actions taken by

ASPA’s board on April 14, 1999 and thereafter constituted “constructive wrongful termination.”

Specifically, Plaintiffs point to the following conditions in the workplace that forced Lipson to

resign from the practice: (1) the suspension of Lipson from on-call activities at CCHS and the board

of directors; (2) the demand that he undergo psychiatric evaluation prior to returning to on call duty

“coupled with [ASPA’s] refusal to obtain and pay for [such] report” once it was completed; and (3)

“persisting harassment and slander by [ASPA’s] members . . . ” (D.I. 1 at ¶ 26)

ASPA’s motion for summary judgment with respect to the “constructive termination” claim

is two-pronged: (1) the undisputed facts reveal that Lipson voluntarily resigned from ASPA; and (2)

Delaware does not recognize “constructive discharge” as an independent cause of action.

The first prong of ASPA’s argument can be disposed of summarily. Yes, Lipson resigned

from ASPA.

Of course, the determination that Lipson resigned his employment does not end the inquiry;

it is the first step of the inquiry. Constructive discharge claims assume that the employee was not

terminated. They are predicated on the notion that an employer has made the work environment so

intolerable as to leave the employee with no choice but to resign.48 This is precisely what Lipson

48Bali v. Christiana Care Health Services, Del. Ch., C. A. No. 16433, Lamb, V. C. (Sept.,
22, 1998)(Letter Op. at 10).

has alleged occurred in this case. The key question, then, is whether such conduct is actionable in

Delaware.

Delaware has long recognized that an employee has a cause of action for wrongful

termination.49 ASPA does not dispute this indisputable state of Delaware’s jurisprudence. Rather,

it contends that an employee cannot bring a separate claim for “constructive termination” but instead

must weave the allegation of constructive discharge into a claim for “abusive discharge.”50 The

argument amounts to nothing more than an exercise in semantics, and somewhat confusing

semantics at that. To be clear, Delaware recognizes a cause of action for constructive discharge.51

Calling it “constructive termination” or “abusive discharge”does not defeat the claim. Under the

“constructive discharge” theory, the fact that Lipson voluntarily resigned from ASPA is not fatal to

his claim for wrongful termination. Whether ASPA’s conduct forced Lipson from the practice and

whether it did so wrongfully are issues of fact for the jury to decide.52 ASPA’s motion for summary

49Goldman v. Braunstein’s, Inc., Del. Supr., 240 A.2d 577 (1968); Carroll v. Cohen, Del.
Super., 91 A. 1001 (1914).

50See Beye v. Bureau of Nat’l Affairs, Md. Ct. Spec. App., 477 A.2d 1197, 1203 (1987).

51See Bali, supra, Letter Op. at 10 (“The theory of constructive discharge recognizes ‘that
while an employer may not go so far as to actually and formally discharge an employee, he may
nevertheless make conditions of continued employment so intolerable as to result in a constructive
discharge.’”); Thayer v. Tandy Corp., Del. Super., C. A. No. 85C-JA-89, Bifferato, J. (Apr. 29,
1987)(Mem. Op.); Short v. Unemployment Ins. App. Bd., Del. Super., C.A. No. 84A-JL-13,
Gebelein, J. (July 26, 1985).

52ASPA contends that Lipson has acknowledged in prior sworn testimony and in written
correspondence that he left ASPA voluntarily. The Court agrees with ASPA’s characterization of
the evidence to which it has referred the Court in support of this contention. Nevertheless, Lipson
has alleged in other sworn testimony that he was forced from the practice. The Court will leave
this factual discrepancy where it belongs – in the hands of the jury. To resolve the controversy at
this stage would require the Court to weigh conflicting evidence and to make credibility
determinations, both of which are functions incompatible with summary judgment proceedings.

judgment as to Count III, therefore, is DENIED.

G. Defamation

ASPA attacks Lipson’s defamation claim on four fronts: (1) many of the statements about

which Lipson complains were made as part of the peer review process; (2) “statements about Dr.

Lipson’s work performance are entitled to a conditional or qualified privilege”; (3) some statements

are not attributable to ASPA; and (4) the statements are “merely personal slights but not actionable.”

With respect to ASPA’s first contention, the Court already has determined that peer review

immunity is not available to ASPA or its board members. Consequently,

Bradley v. Regulatory Ins. Services, Inc., Del. Super., C.A. No. 97C-07-131, Toliver, J. (April 20,
1999)(ORDER at 5).

statements made during the course of or arising out of the board’s review of Lipson’s conduct, if

defamatory, are actionable.

ASPA’s qualified privilege argument relies heavily upon the Wales affidavit. Specifically,

Wales notes that: (i) the statements at issue referred to Lipson’s “character or qualifications; (ii) the

persons involved in the communications shared a common interest in discussing Lipson’s

performance; and (iii) the persons involved in the communications had a legitimate reason for and

interest in learning about that performance. (D.I. 44, citing D.I. 24, Ex. 2 at ¶¶ 11-32, 32-34) It is,

of course, no coincidence that ASPA’s argument tracks the elements of the applicable qualified

privilege: “A qualified privilege ‘extends to communications made between persons who have a

common interest for the protection of which the allegedly defamatory statements are made.’”53

“Additionally, the qualified privilege protects statements disclosed to any person who has a

legitimate expectation in the subject matter.”54

53Henry v. Del. Law Sch. of Widener Univ., Inc., Del. Ch., C.A. No. 8837, Lamb, V.C. (Jan.
8, 1998)(Mem. Op. at 22-23)(citations omitted).

54Id. at 23 (citing Burr v. Atl. Aviation Corp., Del. Super., 332 A.2d 154, 155 (1974),
rev’d on other grounds, Del. Supr., 348 A.2d 179 (1975)).

“The question of whether or not a privilege attaches to a given communication is a question for the

court to determine as a matter of law.”55

Plaintiffs’ response is three-fold. First, they contend that the existence of a conditional

privilege and whether it was abused are fact questions. Second, they claim that ASPA is liable for

statements republished by third parties where the original statement is attributable to ASPA. Lastly,

Plaintiffs assure the Court that “the alleged defamation clearly maligns Dr. Lipson in his trade or

profession.”

The communications concerning Lipson fall into the following categories (as broken down

by participants): Wales and Fagraeus; Lipson and Fagraeus; Fagraeus, Lipson and Wales; Wales

and Lipson; Wales and Drs. Tinkoff and Hoelzer (both were present during the first incident of

inappropriate behavior); Wales, Evelyn Ball and Vicki Nepi (witnesses to the incident with the

paging operator); Wales and all ASPA doctors and medical staff; Wales and Dr. Amsterdam (who

performed a psychiatric evaluation of Lipson at the request of ASPA); ASPA board of directors and

other shareholders and employees; the board and various attorneys; and finally ASPA board

members and Rosen (CCHS’s senior vice president of medical affairs). (D.I. 24, Ex. B at ¶¶ 11-32,

34-35)

55Bickling v. Kent General Hosp., D. Del., 872 F. Supp. 1299, 1307-08 (1994)(citation
omitted).

ASPA is correct that all of the participants in the discussions and correspondence noted in

the categories delineated above did possess “a legitimate expectation in the subject matter.”56 All

were either directors, shareholders, employees or agents of ASPA who would have an “expectation”

(or interest) in Lipson’s behavior as a representative of ASPA, or they were physicians involved in

the CCHS community who would have an “expectation” in the quality of care and competency of

a physician with whom they were expected to practice medicine. Delaware clearly recognizes “a

qualified privilege of employers to make communications regarding the character, qualifications,

or job performance of an employee or former employee to those who have a legitimate interest in

such information.”57 ASPA’s statements regarding Lipson’s care of a patient or

56Id.

57Bloss v. Kershner, Del. Super., C.A. No. 93C-040282, Alford, J. (Mar. 9, 2000)(Mem. Op.
at 16)(citing Stafford v. Air Prods. & Chems., Inc., Del. Super., C.A. No. 84C-JL-85, O’Hara, J.
(Sept. 5, 1985)(Letter Op.); Burr, 332 A.2d at 155). See also Schuster v. DeRocili, Del. Super., C.A.
No. 99C-02-004, Witham, J. (June 15, 2000)(Order at 9-13); Durig v. Woodbridge Bd. of Educ.,
Del. Super., C.A. No. 90C-NO-22, Ridgely, P.J. (Oct. 9, 1992)(Mem. Op. at 13-14)(“Delaware
courts have recognized the conditional privilege is particularly relevant to communications made
in employer/employee relationships.”)(citations omitted); Henry v. Univ. of Delaware, Del. Ch.,
C.A. No. 8837, Lamb, V.C. (Jan. 8, 1998)(Mem. Op. at 22-23).

competency as a physician, therefore, are subject to a qualified privilege. The Court has made this

determination as a matter of law.58

Now that ASPA has established the protections of a qualified privilege, the Plaintiffs must

carry “the burden to show an abuse of that privilege by producing evidence indicating actual malice

on the part of defendant[].”59 Plaintiffs’ burden reflects an understanding in the law that a

conditional privilege “‘must be exercised with good faith, without malice and absent any knowledge

of falsity or desire to cause harm.’”60 Evidence of malice can be presented, for example, through

incidents of excessive or improper publication or making statements known to be false.61

58See Bickling, 872 F. Supp. at 1307-08.

59Durig, supra, Mem. Op. at 14 (emphsis in original)(citing Heller v. Dover Warehouse
Market, Inc., Del. Super., 515 A.2d 178 (1986); Battista v. Chrysler Corp., Del. Super., 454 A.2d
286, 291 (1982).

60Durig, supra, Mem. Op. at 14 (quoting Burr, 348 A.2d at 181).

61See Battista, 454 A.2d at 291.

As the Court noted at the outset of this opinion, ASPA’s motion for summary judgment was

filed at a stage in the litigation when discovery had yet to be initiated in earnest. Consequently, the

record presented to the Court is far from adequate to allow the Court to determine whether material

factual disputes will exist with respect to the issue of actual malice. Accordingly, the Court is

satisfied that it is “desirable to inquire more thoroughly into the facts in order to clarify the

application of law to the circumstances.”62 For example, deposition testimony from the speakers

that addresses the bases for and intent of their statements would be helpful. Also, the Court should

receive testimony from those individuals who allegedly heard defamatory statements, e.g., (i) CRNA

Deckoff who, according to Lipson, was told by an ASPA physician that “Dr. Lipson nearly killed

a kid”; (ii) the CRNAs Lipson contends were told by ASPA physicians that their careers would be

destroyed if they worked for ACCP; and (iii) the physicians outside of ASPA who were told that

Lipson “had screwed up some trauma kid’s case” and that Lipson was having a mental breakdown.63

62Guy v. Judicial Nominating Com’n, Del. Super., 659 A.2d 777, 781 (1995).

63Needless to say, this list of open factual issues is by no means exhaustive. It is offered for
illustrative purpose only.

“The question of whether a conditional privilege has been abused by malice or intent to harm
ordinarily is a factual question for the jury . . . unless, of course, the evidence when considered in
a light most favorable to plaintiff is insufficient to raise a factual question upon which reasonable
men might differ.” 64 ASPA will be afforded an opportunity at the conclusion of discovery to
demonstrate the absence of a material issue of fact with respect to actual malice in a renewed motion
for summary judgment.65 ASPA may also challenge the extent to which the statements are, in fact,
defamatory and whether the statements can be attributed to ASPA.66 For

now, ASPA’s motion for summary judgment with respect to Count V is DENIED.

H. Intentional Interference with Contractual and Prospective
Contractual Relations

1. Interference with Contractual Relations

64Burr v. Atlantic Aviation Corp., Del. Supr., 348 A.2d 179, 181 (1975)(citations omitted).

65Cf. Henry, supra, Mem. Op. at 25 (granting summary judgment on issue of abuse of
qualified privilege after ten years had passed since the initiation of the litigation); Schuster v.
DeRocili, Del. Super., C.A. No. 99C-02-004, Witham, J. (June 15, 2000)(Mem. Op. at 12-13)(“A
bare allegation that an allegedly defamatory statement was made maliciously cannot survive
[summary judgment]”).

66On October 1, 2001, the Court granted ASPA’s motion to compel more complete responses
to interrogatories which sought to bring some focus to Plaintiffs’ defamation claim. It is the Court’s
expectation that these more specific and focused responses will aid the parties and the Court in the
determination of which, if any, of the purportedly defamatory statements will survive summary
judgment.

According to Plaintiffs’ complaint, ASPA has, since July, 1999, “intentionally interfered

with Dr. Lipson’s and ACCP’s contractual and prospective contractual relations with CRNAs,

anesthesiologists, surgeons, hospital staff, patients and CCHS . . . .” (D.I. 1 at ¶¶ 19-21) In order

to sustain a claim of intentional interference with contractual relations, a plaintiff must establish the

following elements: “(1) a contract (2) about which defendant knew and (3) an intentional act that

is a significant factor in causing the breach of such contract (4) without justification (5) which

causes injury.”67 Plaintiff has put forth no evidence to establish the existence of any specific

contracts with those individuals or entities named in his complaint.68 Accordingly, to the extent

Plaintiffs have alleged intentional interference with existing contractual relations, ASPA’s Motion

for Summary Judgment is GRANTED.

2. Interference with Prospective Business Relations

Plaintiffs also allege intentional interference with prospective contractual or business

relations.69 In support of this claim, Plaintiffs have identified the following prospective business

67Irwin & Leighton, Inc. v. W.M. Anderson Co., Del. Ch., 532 A.2d 983, 992 (1987)(citing
Pennzoil Co. v. Getty Oil Co., Del. Ch., C.A. No. 7425, Brown, C. (Feb. 6, 1984)(Mem. Op. at 42-
43); Restatement (Second) of Torts, § 766.

68The Court specifically rejects Plaintiffs’ contention that Lipson enjoyed a contractual right
vis-a-vis his hospital privileges to participate in the anaesthesiology “on-call” schedule. While it
is true that a hospital’s by-laws can give rise to contractual rights and obligations in certain
circumstances, Dworkin, 517 A.2d at 306 n.5 (citations omitted), the Court can find no reference in
the CCHS By-Laws to a “right” to participate in “on-call” coverage at the hospital. To the extent
the right derives from a contract with ASPA, the law is clear that ASPA cannot tortiously interfere
with a contract to which it is a party. Wallace v. Wood, Del. Ch., 752 A.2d 1175, 1182-83 (1999).

69“[T]he principle distinction between [the two causes of action] being the availability to the
defendant of a privilege to interfere within the limits of fair competition with prospective business
opportunities.” First Nat’l Consumer Discount Co. v. Fuller, Del. Supr., 419 A.2d 940, 947 (1980).

relations with which ASPA or those acting on behalf of ASPA have interfered: (i) prospective

relations with surgeons and patients; (ii) prospective

relations with CRNAs and physicians who might have come to work for ACCP; and (iii) prospective

relations with CCHS. (D.I. 1 at ¶ 20)70

ASPA attacks Plaintiffs’ tortious interference assertions on several fronts. First, it contends

that Plaintiffs have failed to present sufficient facts to demonstrate the existence of prospective

relationships. Second, ASPA emphasizes again that Lipson voluntarily resigned from ASPA and,

therefore, he should not be heard to complain that ASPA now is competing with him. Third, ASPA

contends that Lipson cannot establish that ASPA has used “improper or unlawful” means to

compete with Plaintiffs. (D.I. 24 at 3) Finally, ASPA alleges that its conduct amounted to nothing

more than“fair competition” which, as a matter of law, is not actionable. (D.I. 24 at 3)

70Lipson contends that ASPA conspired with CCHS to interfere with his prospective
business relations with CRNAs and physicians and also to preclude ACCP from securing a contract
with CCHS to provide anesthesia services at its hospital campuses. (D.I. 1, ¶¶ 20(g), (j), (k)) These
components of the intentional interference with prospective business relations claims will be treated
by the Court as just that, components of a claim, as opposed to a separate cause of action for civil
conspiracy. See Ramunno v. Cawley, Del. Supr., 705 A.2d 1029, 1039 (1998)(“civil conspiracy is
not an independent cause of action in Delaware, . . . it must arise from some underlying
wrong”)(citation omitted).

To sustain a claim for intentional interference with prospective contractual relations, a

plaintiff must establish: “(a) the reasonable probability of a business opportunity, (b) the intentional

interference by defendant with the opportunity, (c) proximate causation, and (d) damages, all of

which must be considered in light of defendant’s privilege to compete or protect his business

interests in a fair and lawful manner . . . .”71 These elements direct the Court’s analysis of the

viability of Plaintiffs’ claim here.

a. The Existence of Prospective Business Relations

The prospective business relations which are subject to the protection of this cause of action

are any which are of “potential … pecuniary value to the plaintiff,” including “the prospect of

obtaining employees … and any other relations leading to potentially profitable contracts.”72 But

plaintiffs’ mere “perception” of a prospective business relationship or contract will not “form the

basis of a bona fide expectancy.”73

71DeBonaventura v. Nationwide Mut. Ins., 419 A.2d 942 (1980)(citing Bowl-Mor, supra;
Regal Home Distribs., Inc. v. Gordon, Del. Super., 66 A.2d 754 (1949)).

72Restatement (Second) of Torts, § 766B, comment c (1979).

73See Dionisi v. DeCampli, Del. Ch., C.A. No. 9425, Steele, V.C. (June 28, 1995)(Mem. Op.
at 24). See also Bohatiuk v. Delaware Chiro. Services Network, L.L.C., Del. Super., C.A. No. 95C-
10-277, Del Pesco, J. (Apr. 11, 1997)(Letter Op. at 6)(granting summary judgment when plaintiff
failed to supply a factual basis to establish “a realistic expectancy” of a business relationship).

Unfortunately, Plaintiffs have declined to direct the Court to any evidence of specific

prospective business relations with which ASPA interfered within the voluminous record of

interrogatories, supplemental interrogatories, documents, supplemental documents, affidavits and

supplemental affidavits, supplied to the Court in connection with the motion sub judice.

Nevertheless, the Court has culled through the record in search of evidence to support Plaintiffs’

claim. The results of this search are reflected in the conclusions which follow.74

74The specific prospective business relations identified by the Court here may not be
exhaustive of the prospective business relations identified thus far in the discovery record. The
narrative nature of the Plaintiffs’ answers to interrogatories has made it extraordinarily difficult for
the Court to distill this information from the record. Targeted contention interrogatories are favored
by courts as a means to identify and narrow claims for trial. See Carlton Investments v. TLC
Beatrice Int’l. Holdings, Inc., Del. Ch., C.A. No. 13950, Allen, C. (March 15, 1996)(Mem. Op. at
* 11-12). To serve their intended purpose, however, the answers must be commensurately targeted.
Id. No such responses have been provided by Lipson thus far. Accordingly, the Court, by separate
Order, has directed Lipson to provide supplemental responses to contention interrogatories which
enumerate in list form the specific prospective business relations with which ASPA allegedly
interfered. If additional prospective opportunities are identified, ASPA may address them in a
renewed motion for summary judgment at the conclusion of discovery if it deems such a motion to
be appropriate.

With respect to Plaintiffs’ allegation that ASPA interfered with their prospective business

relations with surgeons and referral patients, ASPA contends that Plaintiffs have failed to identify

with competent evidence any specific surgeon or patient whose request for Lipson’s services was

denied.75 Moreover, ASPA argues that Plaintiffs have failed to identify a single specific instance

where ASPA “manipulated” the operating room or call schedules to the detriment of Lipson or

ACCP. Thus, according to ASPA, Plaintiffs, at best, have established with their

75The Court notes that business relations with prospective patients can form the basis of an
intentional interference claim to the extent the physician plaintiff is able to identify specific patients
and/or classes of patients. See e.g. Olaf v. Christie Clinic Ass’n, Ill. App., 558 N.E.2d 610, 614
(1990).

general allegations nothing more than a “perception” of business relations with these constituencies.

ASPA’s reading of the record is incorrect. For example, Plaintiffs have presented evidence

that at least nine surgeons (who requested Lipson’s services) were consistently prevented from

scheduling Lipson as their anaesthesiologist. (D.I. 29, Ex. C at 21) Plaintiffs also have presented

evidence suggesting that, after he severed his relationship with ASPA, Lipson was assigned

disproportionately to Wilmington Hospital operating rooms, where the typical day brings less

profitable assignments. (D.I. 29, Ex. C at 4) Viewing these facts most favorably to Plaintiffs, a

rational trier of fact could determine that the prospective relations with these surgeons and patients

could have yielded profitable contracts in the form of claims for reimbursement for services rendered

with respect to these patients.76

As to the relations with potential CRNAs with whom ACCP sought to establish an

employment relationship, Plaintiffs have identified several candidates for employment who allegedly

were approached by ASPA with threats or misinformation about Lipson or the viability of his new

medical practice. Accordingly, in so far as

76Restatement (Second) of Torts, § 766B, comment c (1979).

these CRNAs represented potential employees of ACCP, Plaintiffs have adequately identified

prospective business relations with which ASPA allegedly has interfered.77

Plaintiffs also contend that a moratorium on the credentialing of new physicians and

CRNAs imposed by CCHS interfered with their prospective employment relations with these

unidentified putative candidates. Specifically, Lipson avers that during the moratorium, two doctors

with whom he was negotiating (Drs. Blumberg and Lowson) summarily were denied requests to be

credentialed. These potential employment relationships are sufficient to satisfy this element of the

claim.78

Finally, Plaintiffs contend that ASPA interfered with their ability to secure an exclusive

provider arrangement with CCHS. The undisputed record establishes that CCHS announced a

request for proposal to provide exclusive anaesthesia services at all CCHS facilities. (D.I. 24, Ex.

B at §§ 34-44) Certainly, to the extent this arrangement was available to Plaintiffs, it would qualify

as “a potentially profitable contract” with CCHS and, as such, would be a valid “prospective

business relation.”79

77Id.

78Id.

79Id.

b. The Interference with Prospective Relations

Having determined that Plaintiffs have identified several viable prospective business

relations, the Court must now consider whether the factual record would allow a reasonable fact-

finder to conclude that ASPA interfered with these prospective relations. In doing so, the Court

must be mindful of the privilege enjoyed by competitors in the same market to compete aggressively

for market share. “‘One is privileged purposely to cause a third person not to enter into or continue

a business relation with a competitor of the actor if (a) the relation concerns a matter involved in the

competition between the actor and the competitor, and (b) the actor does not employ improper

means, and (c) the actor does not intend thereby to create or continue an illegal restrain of

competition, and (d) the actor’s purpose is at least in part to advance his interest in his competition

with the other.’”80 Courts are obliged to consider these factors carefully because torts based on the

notion of interference with existing or prospective business relations “may have the effect of chilling

third

80Regal Home Distributors, 66 A.2d at 754 (citing Restatement of Torts, § 768). See also
Shearin v. E.F. Hutton Group, Inc., Del. Ch., 652 A.2d 578 (1994).

parties from vigorously competing for business…”81 “Mindful of this risk, courts have tended to

narrowly circumscribe the scope of this tort.”82

In this case, ASPA contends that it is particularly entitled to avail itself of this privilege

because Lipson voluntarily resigned from ASPA for the purpose of forming a competing medical

practice. The Court already has determined that a factual dispute exists with respect to whether

Lipson resigned or was constructively discharged from ASPA. Thus, the privilege to compete, on

this record, is no more or less available to ASPA than it would be to any other competitor of

Plaintiffs.

The elements of the tort of intentional interference and the elements of the privilege to

compete ultimately lead the Court to the same inquiry: did the defendant improperly interfere with

the plaintiffs’ prospective business relations? In determining whether an interference with

prospective business relations is improper, the Restatement (Second) of Torts identifies the

following factors:

(a) the nature of the actor’s conduct,

(b) the actor’s motive,

(d) the interests sought to be advanced by the actor,

(e) the societal interests in protecting the freedom of action of the other and

81Shearin, 652 A.2d at 589.

82Id. (citation omitted).

the contractual interests of the other,

(f) the proximity or remoteness of the actor’s conduct to the interference,

and

(g) the relations between the parties.’83

Plaintiffs bear the burden of proof with respect to all elements of the claim of intentional

interference, including that the interference was improper.84 Whether Plaintiffs have carried their

burden to establish improper interference is typically a question of fact for the jury.85

Turning to Plaintiffs’ specific allegations of interference, it appears to the Court that some

of the claims are sufficiently grounded in facts to proceed to the next step of the prescribed analysis;

some are not.

Plaintiffs’ allegation that ASPA interfered with Lipson’s and ACCP’s prospective relations

with physicians and referral patients finds support in Plaintiffs’ answers to interrogatories. There,

Plaintiffs explain that ASPA exercised at least de facto control over the operating room schedule

and that after Lipson departed from ASPA he was assigned less lucrative cases for no apparent

83Elder v. El Di, Inc., Del. Super., C.A. No. 96C-09-007, Graves, J. (April 24, 1997)(Mem.
Op. at 26)(quoting Restatement (Second) of Torts, § 767). See also Regal Homes, 66 A.2d at 754.

84See Local Union 42 v. Absolute Environ. Services, D. Del., 814 F. Supp. 392, 401 n. 10
(1993).

85See Grand Ventures, Inc. v. Paoli’s Restaurant, Inc., Del. Super., C.A. No. 95C-03-013,
1996 Del. Super. LEXIS 3, Graves, J. (Jan. 4, 1996)(Mem. Op. at *9).

reason. Lipson also has supported with specific examples his contention that ASPA’s control over

the assignment of cases allowed it to decline requests from surgeons and patients for Lipson’s

services. If proven, this sort of control over the applicable market, exercised arbitrarily by one

empowered to do so by means other than competitive merit (e.g. hospital authority), is more

inconsistent than consistent with notions of free competition. Based on the foregoing, the Court

cannot conclude that the privilege to compete bars this claim, nor can it conclude that there are no

material issues of fact to present to a jury with respect to this claim.

For its part, ASPA has identified several instances in which it honored special requests for

Lipson’s services. This sounds like a good factual controversy for the jury to resolve. Accordingly,

the motion for summary judgment is DENIED as it relates to the allegations in Count I which

address interference with prospective relations with surgeons and referral patients.

Plaintiffs also contend that ASPA improperly interfered with their prospective relations with

CRNAs who were candidates to join ACCP. Specifically, Plaintiffs contend that ASPA’s CRNAs

were threatened with retribution within the Department of Anaesthesiology if they went to work for

Lipson. (D.I. 29, Ex. C, Attach. 22) In addition, Lipson has averred that CRNA Paul Olivere

actually tendered his resignation to ASPA so that he could work for Lipson, but after a stern talk

with physicians from ASPA’s Executive Committee, he withdrew his resignation. (D.I. 25,

Interrog. Answer 25) Lipson also contends that Dr. Golden raised unfounded questions with CRNAs

regarding Lipson’s ability to pay them. Viewing the facts most favorably to Plaintiffs, these actions

would be consistent with a plan by ASPA to prevent Lipson and/or ACCP from establishing

employment relationships with CRNAs; relationships which were, of course, essential to the success

of Lipson’s new practice. Moreover, these facts, if proven, could establish that ASPA’s actions were

wrongful and motivated by malice. The motion for summary judgment is DENIED as it relates to

the allegations in Count I which address interference with prospective employment relationships

with CRNAs.

Plaintiffs contend that ASPA conspired with CCHS to impose a moratorium on staff

privileges within the Department of Anaesthesiology just as ACCP was trying to develop its

practice. The elements of a civil conspiracy claim are: “1) a confederation or combination of two

or more persons; 2) an unlawful act in furtherance of the conspiracy; and 3) actual damages.86

“[C]ivil conspiracy is not an independent cause of action in Delaware, . . . it must arise from some

86S & R Assocs. v. Shell Oil Co., Del. Super., 725 A.2d 431, 440 (1998)(citing Nicolet Inc.
v. Nutt, Del. Supr., 525 A.2d 146, 149-50 (1987)).

underlying wrong.”87 Here, Plaintiffs have alleged a conspiracy in the context of their claim that

ASPA interfered with their prospective relationship with physicians and CRNAs who were poised

to join the practice.

87Ramunno v. Cawley, Del. Supr., 705 A.2d 1029, 1039 (1998)(citation omitted).

A claim of conspiracy may be proven with circumstantial evidence.88 It may not, however,

be sustained on bare allegations supported by no more than speculation and innuendo.89 But

speculation is all that supports Plaintiffs’ “conspiracy theory” with respect to the moratorium.

Plaintiffs have presented absolutely no evidence — circumstantial or otherwise — that ASPA and

CCHS reached a meeting of the minds to impose a moratorium on credentialing within the

Department of Anaesthesiology for the purpose of harming Lipson or his medical practice. The

moratorium appears to have been a matter of internal hospital administration which, as best as the

Court can tell from the record, had little if anything to do with Lipson. And, moreover, in the

context of an intentional interference claim against ASPA, one cannot lose sight of the fact that the

moratorium was imposed by CCHS, not ASPA. (D.I 24, Ex. B, §50 & Attach. 24) The facts of

record simply do not support Plaintiffs’ contention that, by virtue of the moratorium, ASPA

interfered with their prospective relations with physicians or CRNAs, either individually or in

conspiracy with CCHS.90 Consequently, the motion for summary judgment is GRANTED as it

relates to the allegations in Count I which address the alleged civil conspiracy to effect a moratorium

on staff privileges within CCHS’ Department of Anaesthesiology.

Likewise, the record provides no support for Plaintiffs’ contention that ASPA interfered with

Plaintiffs’ prospective business relation with CCHS by somehow improperly influencing CCHS’

88It is clear that “a conspiracy may be proved by circumstantial evidence as well as by direct
evidence . . . .” Connolly v. Labowitz, Del. Super., 519 A.2d 138, 144 (1986).

89See Tuckman v. Aerosonic Corp., Del. Ch., C.A. No. 4094, Hartnett, V.C. (May 20,
1982)(Mem. Op. at 34)(declining to find civil conspiracy based on “speculation and circumstantial
evidence”).

90Bickling, 872 F. Supp. at 1304 (party with burden of proof must present evidence in
support of claim to survive summary judgment).

decision to embark on an exclusive provider relationship with ASPA. The Court begins its analysis

with the undisputed

proposition that a hospital is free to enter into exclusive provider contracts.91 ASPA was free to bid

for this opportunity. To overcome ASPA’s privilege to compete, Plaintiffs must, inter alia, present

some evidence to suggest that ASPA competed by improper means. But instead, Plaintiffs simply

allege that ASPA “conspired with senior administrative officers of CCHS and their counselors to

create the [exclusive contracting] process so as to ‘legitimize’ the institutionalization [sic] of

[ASPA’s] monopoly.” (D.I. 21, Interrog. Answer 57) Plaintiffs have not supplied the Court with

legal or factual authority to counter ASPA’s right to negotiate to become CCHS’s exclusive provider

of anaesthesia services, or even to suggest that ASPA’s motives were anything other than legitimate

competition.92 Plaintiffs’ “belief” or bare allegation that a conspiracy was in the works is not

sufficient to survive a motion for summary judgment. Consequently, the motion for summary

judgment is GRANTED as it relates to the alleged civil conspiracy to interfere with Plaintiffs’

ability to secure an exclusive provider agreement with CCHS.

91See, e.g., Belmar v. Cipolla, N.J. Supr., 475 A.2d 533, 539-40 (1984)(approving of
exclusive contracts where hospital motivated by desire to provide high quality medical services);
Tenet Health, Ltd. v. Zamora, Tex. App., 13 S.W.3d 464, 470 (2000)(holding that a hospital entering
into an exclusive services contract did not alter the privileges of a physician credentialed but not
associated with the recipient of the contract).

92See Restatement (Second) of Torts, § 767.

c. Proximate Causation and Damages

The final elements of Plaintiffs’ prima facie case for intentional interference with

prospective business relations are proximate causation and damages. Generally, the issues of

causation and damages are left for the jury.93 The Court is content that Plaintiffs should be

permitted an opportunity to develop their causation and damages case in discovery with respect to

the interference with prospective business relations claims which have survived this motion for

summary judgment.

I. Unfair Trade Practices

In Count IV of their complaint, Plaintiffs have repackaged most of their defamation and

intentional interference claims and have placed the title of “Unfair Trade Practices” on the label,

presumably in an effort to avail themselves of the favorable damages associated with such claims.94

In Dionisi, supra, then Vice Chancellor Steele explained the narrow scope of the Unfair Trade

Practices cause of action:

93See Naidu v. Laird, Del. Supr., 539 A.2d 1064, 1075 (!988); Faircloth v. Rash, Del. Supr.,
317 A.2d 871 (1974); Ebersole v. Lowengrub, Del. Supr., 180 A.2d 467, 469 (1962).

946 Del. C. §2531 et seq. is Delaware’s Deceptive Trade Practices Act.

A party seeking to recover [for Unfair Trade Practices] must have a basis for
injunctive relief. The Act is designed to encourage immediate or at least timely
enforcement of its provisions to halt unfair or deceptive trade practices between
businesses with “horizontal relationships.” … Injunctive relief coupled with the
possibility of treble damages and counsel fees looms as a powerful deterrent against
wrongdoers and an incentive to litigate for the wronged. It is not a vehicle for
damages long after the immediacy of the grievance dissipates. When the press for
instant action eases, so does the basis for possible concomitant damages. The
[Unfair Trade Practices Act] is not a platform for an independent common law
damage suit.95

Plaintiffs have declined to seek injunctive relief, and wisely so. The incidents of which they

complain occurred more than one year before the complaint was filed and more than two years from

the time of this writing. Lipson has moved on to new challenges as a professor and attending

physician at the University of Pennsylvania Hospital. The “press for instant action” eased long ago.

Accordingly, the claim for Unfair Trade Practices is misplaced and the motion for summary

judgment as to Count IV of the complaint is GRANTED.

95Dionisi, supra, Mem. Op. at 25-26 (emphasis supplied).

IV. CONCLUSION

For the reasons set forth above, ASPA’s motion for summary judgment: is DENIED to the

extent it relies upon peer review immunity; is GRANTED in part and DENIED in part as to Count

I of the complaint; is GRANTED as to Count II; is DENIED as to Count III; is GRANTED as to

Count IV; and is DENIED as to Count V.

IT IS SO ORDERED.

Original to Prothonotary

Judge Joseph R. Slights, III