Negligence and Intentional Misrepresentation

Kadlec Med. Ctr. v. Lakeview Anesthesia Assoc., No. Civ.A. 04-0997 (E.D.La. May 19, 2005)

An anesthesiologist's employment was terminated from an anesthesia group with a contract with hospital A based on an incident in which he failed to respond to numerous pages and suspicion that he was diverting Demerol. Following his termination, the anesthesiologist sought employment through a staffing company which placed him at hospital B as a locum tenens. Before the anesthesiologist started practicing at hospital B, hospital B sent a detailed reference questionnaire to hospital A. Hospital A did not answer any of the specific questions on the form and, instead, merely provided the dates that the anesthesiologist was on the staff. Hospital A indicated that such limited information was provided "due to the large volume of inquiries received in the office." Hospital B retained the anesthesiologist's services and, about a year later, the anesthesiologist was involved in a surgery in which a patient suffered extensive brain damage and remained in a nonresponsive state due allegedly to the anesthesiologist's negligence.

Hospital B brought a suit against hospital A, claiming, among other things, intentional misrepresentation, negligent misrepresentation and negligence based on hospital A's omission of material facts in the letter representing the anesthesiologist's tenure on the staff. Hospital A filed a motion for summary judgment, which the district court denied on the basis that hospital B provided enough evidence to support its claims by showing materiality, reliance, causation and intent. In reviewing this matter, the court found that, under Louisiana law, hospital A had a duty to disclose to hospital B the reason it terminated the anesthesiologist. Under Louisiana law, a duty to disclose is imposed if there is both a pecuniary interest in the transaction and a special relationship between the parties. The United States District Court for the Eastern District of Louisiana found that hospital A had a pecuniary interest in the matter since the information it provided was given in the course of its business and that the hospitals had a special relationship which existed in part to further communication between health care providers so patients could be protected.