Med. Mut. of Ohio v. Schlotterer (Summary)

DISCOVERY OF MEDICAL RECORDS

Med. Mut. of Ohio v. Schlotterer, No. 2008-598 (Ohio June 3, 2009)

The Supreme Court of Ohio granted an insurance company’s motion for a qualified protective order thereby allowing discovery of patient medical records in order to investigate suspected fraudulent billing. The case arose after the insurance company had reviewed the physician’s billing reports and determined that the physician had been overpaid by $269,576. The insurance company then filed an action against the physician for fraud and breach of contract. To establish the extent of the fraudulent billing, the insurance company filed a motion for a qualified protective order thereby seeking the production of patient records. The physician argued that these documents were protected by the physician-patient privilege.

However, the court found that the certificates of coverage issued to each of the patients included language agreeing to the release of medical information. The court held that the patients’ consent was valid, because it was "voluntary, express, and reasonably specific in identifying to whom the information is to be delivered." Therefore, the court concluded that the patients had waived the physician-patient privilege and the insurance company was entitled to the discovery of these records.

 

Meadowwood Nursing Facility v. Ohio Dept. of Job & Family Svcs.

MEDICAID – NURSING HOME

Meadowwood Nursing Facility v. Ohio Dept. of
Job & Family Svcs., No.
04AP-732 (Ohio App. March 22, 2005)

A nursing home filed an appeal alleging,
among other things, that the lower court was in error when it affirmed
the Department of Job and Family Services’ Medicaid cost report audit and final
settlement. The Ohio Court of Appeals upheld the decision of the lower
court, finding that the nursing home had not provided adequate documentation
to support the expenses it claimed on its cost report. The court concluded
that the unsupported amounts for accrued real estate taxes, renovation interest,
return on equity, and medical supplies were properly disallowed. In addition,
the court found the nursing home’s private pay rate was calculated correctly
and that the nursing home was in violation of federal regulations, as its
private pay rate was lower than its Medicaid rate.

 

Med. Mut. of Ohio v. Schlotterer (Full Text)

[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as
Med. Mut. of Ohio v. Schlotterer, Slip Opinion No. 2009-Ohio-2496.]

NOTICE
This slip opinion is subject to formal revision before it is published in
an advance sheet of the Ohio Official Reports. Readers are requested
to promptly notify the Reporter of Decisions, Supreme Court of Ohio,
65 South Front Street, Columbus, Ohio 43215, of any typographical or
other formal errors in the opinion, in order that corrections may be
made before the opinion is published.

SLIP OPINION NO. 2009-OHIO-2496
MEDICAL MUTUAL OF OHIO, APPELLANT, v. SCHLOTTERER, APPELLEE.
[Until this opinion appears in the Ohio Official Reports advance sheets, it
may be cited as Med. Mut. of Ohio v. Schlotterer,
Slip Opinion No. 2009-Ohio-2496.]
Patient consent to release medical information — Physician-patient privilege — A
patient’s consent to the release of medical information is valid, and waives
the physician-patient privilege, if the release is voluntary, express, and
reasonably specific in identifying to whom the information is to be
delivered.
(No. 2008-0598 — Submitted February 3, 2009 — Decided June 3, 2009.)
APPEAL from the Court of Appeals for Cuyahoga County,
No. 89388, 2008-Ohio-49.
––––––––––––––––––––
SYLLABUS OF THE COURT
A patient’s consent to the release of medical information is valid, and waives the
physician-patient privilege, if the release is voluntary, express, and

SUPREME COURT OF OHIO

reasonably specific in identifying to whom the information is to be
delivered.

––––––––––––––––––––

MOYER, C.J.

I
{¶ 1} The physician-patient privilege generally protects medical records
from disclosure, subject to certain limited exceptions. This case asks us to
determine whether the privilege prevents discovery of medical records by an
insurance company in a civil fraud action against a physician when the patients
have given broad consent to release their records to their insurer. We hold that a
patient’s consent to the release of medical information is valid, and waives the
physician-patient privilege, if the release is voluntary, express, and reasonably
specific in identifying to whom the information is to be delivered.
II
{¶ 2} Defendant, Dr. William Schlotterer, is a practicing physician.
Plaintiff, Medical Mutual of Ohio, provides insurance coverage to many of
Schlotterer’s patients. In 1990, Schlotterer and Blue Cross Blue Shield of Ohio,
Medical Mutual’s predecessor-in-interest, executed a participation agreement,
which provides coverage for policyholders who receive
treatment from
Schlotterer. To document the services Schlotterer provides his patients,
Schlotterer submits reports to Medical Mutual detailing the services rendered, and
he is accordingly reimbursed by the insurance company.
{¶ 3} Medical Mutual’s complaint in this action explains that as part of
the reports Schlotterer provides to Medical Mutual, he assigns AMA-developed
common-procedural-technology codes to each patient visit, based on Schlotterer’s
assessment of the patient’s condition, including the extent of the examination, the
comprehensiveness of the medical history taken, and the complexity of the
diagnosis and treatment. Those codes are detailed in the provider manual, which

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is incorporated into the participation agreement. Schlotterer is correspondingly
compensated by Medical Mutual based on the codes he assigns. Medical Mutual
notes that the code warranting the highest reimbursement, to be used “rarely” and
“only where the provider faces significant and complex medical decisions,” is
99215.

{¶ 4} Medical Mutual’s review of Schlotterer’s billing reports in 2004
revealed a high percentage of 99215 code submissions. Medical Mutual then
requested medical records for ten families, which Schlotterer provided. The
insurer reviewed the records and determined that the 99215 billing code was not
warranted in those cases. A subsequent investigation into Schlotterer’s coding
practices allegedly revealed that Schlotterer had been overpaid by $269,576 for
99215 code submissions.
{¶ 5} Medical Mutual filed this action against Schlotterer for fraud,
breach of contract, and a demand for an accounting of the doctor’s liabilities to it.
Schlotterer denied the allegations in the complaint and filed a counterclaim,
alleging that Medical Mutual had refused to honor any submissions for
reimbursement since February 2005. To determine the extent of the alleged fraud,
Medical Mutual filed a motion “for a Qualified Protective Order and order
[directing Schlotterer] to respond to discovery” of patient records. These records
were to have obscured the information that identified the patients. Medical
Mutual argued that the records were discoverable according to Ohio law, the
participation agreement, and the certificates of coverage issued to insureds.
Schlotterer opposed the motion based on the physician-patient privilege.
{¶ 6} The certificates of coverage issued to each of Schlotterer’s patients
insured by Medical Mutual include the following language in the Claim Review
section:
{¶ 7} “Consent to Release Medical Information — Denial of Coverage

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{¶ 8} “You consent to the release of medical information to Medical
Mutual when you enroll and/or sign an Application.
{¶ 9} “When you present your identification card for Covered Services,
you are also giving your consent to release medical information to Medical
Mutual. Medical Mutual has the right to refuse to reimburse for Covered Services
if you refuse to consent to the release of any medical information.”
{¶ 10} The participation agreement signed by Schlotterer similarly
contains the following provision in the Record Review section:
{¶ 11} “Provider agrees to furnish, upon request, to [Medical Mutual] or
its agents all requested Records relating to claims filed with [Medical Mutual], as
defined in [Medical Mutual’s] Professional Provider Manual.”
{¶ 12} The trial court granted Medical Mutual’s motion, ordering
Schlotterer to respond to the discovery requests subject to the protective order.
Schlotterer appealed pursuant to R.C. 2505.02(A)(3) and (B)(4), and the court of
appeals vacated and remanded the trial court’s decision. Med. Mut. of Ohio v.
Schlotterer, Cuyahoga App. No. 89388, 2008-Ohio-49. The court of appeals held
that the order to comply with the discovery requests for the medical records
violated the physician-patient privilege, as codified in R.C. 2317.02(B)(1). Id. at
¶ 36. We accepted Medical Mutual’s discretionary appeal. Med. Mut. of Ohio v.
Schlotterer, 118 Ohio St.3d 1505, 2008-Ohio-3369, 889 N.E.2d 1024.
III
{¶ 13} We apply a de novo standard of review in this case. In general,
discovery orders are reviewed under an abuse-of-discretion standard. State ex rel.
Sawyer v. Cuyahoga Cty. Dept. of Children & Family Servs., 110 Ohio St.3d 343,
2006-Ohio-4574, 853 N.E.2d 657, ¶ 9. But whether the information sought is
confidential and privileged from disclosure is a question of law that is reviewed
de novo. Castlebrook, Ltd. v. Dayton Properties Ltd. Partnership (1992), 78
Ohio App.3d 340, 346, 604 N.E.2d 808. When a court’s judgment is based on an

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erroneous interpretation of the law, an abuse-of-discretion standard is not
appropriate. See Swartzentruber v. Orrville Grace Brethren Church, 163 Ohio
App.3d 96, 2005-Ohio-4264, 836 N.E.2d 619, ¶ 6; Huntsman v. Aultman Hosp.,
5th Dist. No. 2006 CA 00331, 2008-Ohio-2554, ¶ 50.
{¶ 14} Medical records are generally privileged from disclosure under
R.C. 2317.02(B)(1). See Hageman v. Southwest Gen. Health Ctr., 119 Ohio St.3d
185, 2008-Ohio-3343, 893 N.E.2d 153, ¶ 9 (“Numerous state and federal laws
recognize and protect an individual’s interest in ensuring that his or her medical
information remains” confidential – R.C. 2317.02(B)(1), the physician-patient
privilege; R.C. 149.43(A)(1)(a), which exempts medical records from the Public
Records Act; and the federal Health Information Portability and Accountability
Act of 1996). Civ.R. 26(B) accordingly states, “Parties may obtain discovery
regarding any matter, not privileged, which is relevant to the subject matter
involved in the pending action * * *.” The physician-patient privilege does not
apply, however, where the patient has given express consent to disclosure. R.C.
2317.02(B)(1)(a)(i).
{¶ 15} The physician-patient privilege is designed to “ ‘promote health by
encouraging a patient to fully and freely disclose all relevant information which
may assist the physician in treating the patient.’ ” State Med. Bd. of Ohio v.
Miller (1989), 44 Ohio St.3d 136, 140, 541 N.E.2d 602, quoting Huzjak v. United
States (N.D.Ohio 1987), 118 F.R.D. 61, 63, citing Floyd v. Copas (C.P.1977), 9
O.O.3d 298, 299-300.
{¶ 16} A consent to the release of medical information is valid, and
waives the physician-patient privilege, if it is voluntary, express, and reasonably
specific in identifying to whom the information is to be delivered. Generally
“[p]ersons may either expressly or impliedly waive statutory provisions intended
for their own benefit.” State ex rel. Wallace (2000), 89 Ohio St.3d 431, 435, 732
N.E.2d 960. But the physician-patient-privilege statute specifically requires a

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patient’s express consent. R.C. 2317.02(B)(1)(a)(i). See State ex rel. Lambdin v.
Brenton (1970), 21 Ohio St.2d 21, 24, 50 O.O.2d 44, 254 N.E.2d 681.
{¶ 17} In Biddle v. Warren Gen. Hosp. (1999), 86 Ohio St.3d 395, 407,
715 N.E.2d 518, we further recognized the importance of specificity in a release
of medical records. The hospital in Biddle released medical records to a law firm
it hired to screen patients for Supplemental Security Disability Income eligibility
to help those patients pay their past-due medical bills. Id. at 396. The hospital
argued that its general-authorization-for-release-of-information form provided the
patients’ consent. Id. at 406. We noted, “By its express terms, this form
authorizes the hospital to release medical information only ‘to [one’s] insurance
company and/or third party payor,’ and then only ‘as may be necessary for the
completion of [one’s] hospitalization claims.’ ” Id. We held that the form was
insufficient to authorize release of the records because it authorized only the
release of information to the patient’s insurance company or third-party payor and
not to the hospital’s lawyers. Id. at 406-407. The requirement of specificity
allows the patients to know exactly who will have access to their medical records
in order for them to make a properly informed decision regarding waiver of the
physician-patient privilege. It is important to note that this requirement also
prohibits a party receiving the records from sharing the information with others
who are not within the scope of the patient’s release. Id. at 407. The limited
nature of the consent would otherwise be defeated.
{¶ 18} We also held in Biddle that the form provided inadequate consent
because it explicitly stated a purpose for releasing the information, namely
completion of hospitalization claims, that was inconsistent with the hospital’s
disclosure to the law firm to determine Supplemental Security Income eligibility.
Id. at 406. If a purpose is provided within an express waiver of privilege, then it
becomes part of the consent. The patient must be able to rely on any limitations
or exclusions if he or she is to be capable of fully understanding the implications

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of the waiver. If medical information is released for a purpose other than what is
agreed to, it is effectively a violation of the express nature of the consent.
IV
{¶ 19} The consent provisions in the certificates of coverage provided to
all Medical Mutual insureds that were patients of Schlotterer meet the necessary
requirements for disclosure. First, there is no contention that the releases were
involuntary. Second, they qualify as express consent, given the language: “You
consent to the release of medical information to Medical Mutual when you enroll
and/or sign an Application.” And third, the provisions are reasonably specific in
identifying to whom the release is made: i.e., Medical Mutual.
{¶ 20} Nor would discovery of the medical records at issue be
inconsistent with any stated purpose in the consent provisions. The releases here
are broader than those in Biddle, 86 Ohio St.3d at 406, 715 N.E.2d 518, where
disclosure was limited to the express purpose of completing hospitalization
claims. Medical Mutual’s consent statement contains no such express purpose.
Schlotterer argues that the release does not authorize Medical Mutual to
investigate fraud; instead he asserts that the statement allows for review of the
medical records only before the insurer makes a coverage determination. We
disagree. The second paragraph in the consent section of the certificates of
coverage states that the patient again consents to release of medical information
upon presenting an identification card and that Medical Mutual has the right to
refuse to reimburse if the patient refuses consent. This language does not limit
the release to permission to determine whether services will be reimbursed, but
merely explains the consequences should a patient withdraw his or her consent.
{¶ 21} Schlotterer also points to the heading above the consent section in
the certificates of coverage, Claim Review. We decline, however, to give
significant weight to it. Medical Mutual’s purpose for obtaining these records
falls within the category of claim review. The insurer is seeking to review prior

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SUPREME COURT OF OHIO

to

received proper

investigate whether Schlotterer

claims
coverage
reimbursement.
{¶ 22} Schlotterer further contends that disclosing medical records in the
context of this litigation would entail releasing the records to Medical Mutual’s
attorneys, who fall outside the specific language of the consent. This argument
also fails. The disclosure of the medical information to the law firm in Biddle fell
outside the release because it authorized the hospital to release records to the
patient’s insurance company or a third-party payor only. Id. at 406-407.
Although we required that the attorneys be specifically named in the consent,
rather than impliedly included with their client, we do not require this specificity
in all circumstances. The release to Medical Mutual in this case also permits
disclosure to its attorneys who are seeking disclosure on its behalf. Were we to
find otherwise, a party that must turn to the courts to enforce a waiver of privilege
would be compelled to do so on a pro se basis. A party is entitled to attorney
representation in a court of law. The information will be disclosed to Medical
Mutual’s attorneys only because Schlotterer refused to comply with the consent
provision and provide the records directly to Medical Mutual. Biddle involved
considerably different circumstances: the hospital disclosed the medical records to
the law firm on its own terms entirely outside the context of litigation. Id. at 396.
V
{¶ 23} Because Schlotterer’s patients that are insured by Medical Mutual
validly consented to release their medical information to Medical Mutual, we hold
that the consent exception to the physician-patient privilege in R.C. 2317.02(B)(1)
applies. Medical Mutual is therefore entitled to discovery of the medical records
in this action. We do stress, however, that Civ.R. 26(C) still applies to discovery
that is excepted from privilege protection. Trial courts may use protective orders
to prevent confidential information, such as that contained in the medical records
at issue, from being unnecessarily revealed. Whether a protective order is

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necessary remains a determination within the sound discretion of the trial court.
See State ex rel. Citizens for Open, Responsive & Accountable Govt. v. Register,
116 Ohio St.3d 88, 2007-Ohio-5542, 876 N.E.2d 913, ¶ 18. Schlotterer has not
challenged the trial court’s protective order, but only the decision that the records
are not protected by the physician-patient privilege. We therefore reverse the
judgment of the court of appeals and remand to the trial court for further
proceedings.

Judgment reversed
and cause remanded.

LUNDBERG STRATTON, O’CONNOR, O’DONNELL, LANZINGER, and CUPP,
JJ., concur.
PFEIFER, J., concurs in part and dissents in part.

__________________
PFEIFER, J., concurring in part and dissenting in part.
{¶ 24} The insureds in this case did not consent to release medical
information to enable Medical Mutual to pursue a lawsuit against a doctor; they
consented to release medical information to enable Medical Mutual to determine
whether specific insurance claims should be paid. The insureds in this case
upheld their end of the bargain: their medical information was available to the
insurance company before the claims were paid. Now that the claims have been
paid, Medical Mutual is attempting to contort a specific, single-purpose consent to
release into a general, all-purpose consent to release. One thing is abundantly
clear: the insureds in this case did not consent to the release of their medical
information for any purpose other than to determine whether their claims would
be paid. Because the claims have been paid, the consent to release is no longer
available to the insurance company. The majority opinion’s interpretation of the
consent to release in this case is much too broad.

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SUPREME COURT OF OHIO

{¶ 25} Nevertheless, the information sought by Medical Mutual should be
available to it to pursue a claim against Dr. Schlotterer for fraud. I would adopt a
new exception to the physician-patient privilege — one suggested by amici curiae
Ohio State Medical Association and American Medical Association. As they say,
“the exception should be narrowly defined and applied only after a demonstrated
compelling need for the information sought.” They argue that an exception to the
physician-patient privilege should be allowed only “where the insurer (1) has
made a prima facie showing of fraud that could not have been discovered, with
the exercise of due diligence, within the two-year period after payment was made
to the provider as set forth in R.C. 3901.388 [addressing recovery of insurance-
company overpayments to medical professionals], and (2) has demonstrated that
consent of the nonparty patients cannot be obtained.” Adopting this exception
would allow insurance companies to pursue claims against allegedly fraudulent
doctors without eroding the physician-patient privilege. The result that the
majority opinion reaches is laudable because its effect is to allow an insurance
company to combat fraud, but the means used are too general and too likely to
result in further litigation to determine the bounds of the general exception.
{¶ 26} I would remand to the trial court to apply this new exception to the
physician-patient privilege. I dissent.
__________________
Frantz Ward, L.L.P., Stephen F. Gladstone, Brian E. Roof, and Brendan
M. Gallagher, for appellant.
Rengel Law Office, D. Jeffery Rengel, and Thomas R. Lucas, for appellee.
Richard Cordray, Attorney General, Benjamin C. Mizer, Solicitor General,
Stephen P. Carney, Deputy Solicitor, and Scott Myers, Assistant Attorney
General, urging reversal for amicus curiae state of Ohio.
Allen, Kuehnle, Stovall & Newman, L.L.P., and Lisa L. Norris; and Wiley
Rein, L.L.P., Kirk J. Nahra, and Howard Anglin, urging reversal for amici curiae

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January Term, 2009

National Health Care Anti-Fraud Association, National Insurance Crime Bureau,
Coalition Against Insurance Fraud, and America’s Health Insurance Plans.
Thompson Hine, L.L.P., Alan F. Berliner, Jennifer E. Short, and Philip B.
Sineneng, urging reversal for amici curiae Ohio Association of Health Plans and
The Ohio Insurance Institute.
Carrie L. Davis and Jeffrey M. Gamso, urging affirmance for amicus
curiae American Civil Liberties Union of Ohio Foundation, Inc.
Bricker & Eckler, L.L.P., Anne Marie Sferra, and Bridget A. Purdue, not
expressly supporting the position of either party for amici curiae Ohio State
Medical Association and American Medical Association.
__________________

11

McHale v. Tenewitz

PEER REVIEW PRIVILEGE

McHale v. Tenewitz, No. 052003CA054153 (Fla. Cir. Ct.
Feb. 18, 2005)

The plaintiff
in a malpractice action sought information under Amendment 7, Florida’s newly
adopted constitutional amendment which gives patients the right to know about
past adverse medical incidents involving their physician. The Florida Circuit
Court found that the amendment was self-executing and clearly entitled the
plaintiff to the records.

 

 

Md. State Bd. of Physicians v. Eist (Summary)

STATE BOARD OF MEDICINE INVESTIGATION – DUTY TO COOPERATE

Md. State Bd. of Physicians v. Eist, No. 110, Sept. Term 2007 (Md. Jan. 21, 2011)

The Court of Appeals of Maryland reversed the lower court judgments and affirmed the Maryland State Board of Physicians’ decision to reprimand and fine a physician for failing to cooperate with a lawful investigation conducted by the Board.

The estranged husband and father of a psychiatrist’s patients filed a complaint against the physician with the Maryland State Board of Physicians (“Board”). The Board opened an investigation, during which it subpoenaed the medical records of the patients in question. The physician sought, but did not obtain, the consent from the patients to release the records to the Board. After initially refusing to submit the medical records for fear of breaching his patient confidentiality obligations, the physician eventually provided the records to the Board. The Board completed the investigation, found no breach of the applicable standard of care, and dismissed the complaint against the physician, but nevertheless reprimanded and fined the physician for failing to cooperate with a lawful investigation in a timely and appropriate manner.

The physician challenged the Board’s decision on a number of grounds, including that he was untimely in providing the records because his patients had not given him permission to release them, he was acting throughout on the advice of counsel, he had communicated his concerns to the Board, and it was the Board’s responsibility to seek court guidance on the issues involved. The court disagreed, first holding that “when the board is investigating a complaint against a healthcare provider and subpoenas certain medical records in his or her possession, the health care provider is required to provide the medical records to the Board regardless of the patient’s authorization.” The court then held that it was the physician’s burden and responsibility, not the Board’s, to seek judicial review of any issues or concerns by formally filing a motion to quash the subpoena or a motion for protective order.

 

 

McLeay v. Metro. Hosp. Auth. (Full Text)

IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
Assigned on Briefs September 21, 2007

ANNE MCLEAY v. METROPOLITAN HOSPITAL AUTHORITY

Appeal from the Chancery Court for Davidson County
No. 03-129-III Ellen Hobbs Lyle, Chancellor

No. M2006-01369-COA-R3-CV – Filed November 20, 2008

In this action for common law writ of certiorari, petitioner appeals the trial court’s holdings that
petitioner was justly terminated and that the de novo hearing in the trial court cured any due process
flaws that may have existed in the administrative proceedings below. We affirm.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court
Affirmed

PATR IC IA J. COTTRELL, P.J., M.S., delivered the opinion of the court, in which FRANK G. CLEMENT ,
JR . and ANDY D. BENNETT , JJ., joined.

Martin D. Holmes, Nashville, Tennessee, for the appellant, Anne McLeay.

Rita Roberts-Turner, James Earl Robinson, John Lee Kennedy, Department of Law of the
Metropolitan Government of Nashville and Davidson County, for the appellee, Metropolitan
Hospital Authority.

MEMORANDUM OPINION1

Anne McLeay was employed as a physician’s assistant at Nashville General Hospital, which
is operated by the Metropolitan Hospital Authority (“Hospital”), in 2002. After an incident in which
Ms. McLeay completed a surgical consent form for a non-English speaking patient without the
presence, supervision, or approval of a physician, she received notice that she was charged with
insubordination, neglect or disobedience of instructions by supervisors and violation of regulations

1

T en n . R . C t . A p p . 1 0 s ta te s :

T h is C o u r t , w i th the co n cu r r en c e o f a l l jud g e s p a r t ic ip a t ing in the c a se , m ay a f fi rm , rev e rs e o r m o d i fy
th e a c t io n s o f th e tr ia l co u r t by m em o r andum op in io n wh en a fo rm a l op in io n w o u ld h av e no
p r e c e d e n tia l va lu e . W h en a c a se is d ec id ed by m em o rand um o p in io n it sh a l l b e d e s ign a te d
“M EM O RAN D UM O P IN ION , ” s h a l l no t b e pub l ish ed , and sh a l l no t b e c i ted o r r e lied on fo r any
re a so n in an y u n re la te d c a se .

and procedures of the Hospital. A disciplinary hearing was held by the Chief Nursing Officer on
November 11, 2002, that resulted in Ms. McLeay’s termination on November 13, 2002. Ms.
2
McLeay then appealed her termination to the Hospital’s Chief Executive Officer (“CEO”) at which
hearing she was represented by counsel and allowed to present evidence. Ms. McLeay’s termination
was upheld by the Hospital’s CEO.

On January 13, 2002, Ms. McLeay filed a petition for certiorari in Chancery Court against
the Hospital because of her termination. Ms. McLeay’s petition for certiorari under Tenn. Code Ann.
§ 27-8-101 and § 27-9-101 sought review of the administrative decision to terminate her employment
on the basis that she was deprived of due process and that the decision was fraudulent, illegal,
arbitrary and capricious, and unsupported by substantial and material evidence. According to Ms.
McLeay, she was terminated due to unlawful retaliation. The Hospital filed the administrative record
of the proceedings below.

On July 15, 2002, Ms. McLeay filed a motion seeking a continuance and permission to
present additional proof in these proceedings. In that motion, Ms. McLeay described a “companion”
case she had filed in circuit court against the Hospital based on the same facts wherein she was
seeking monetary damages for her “retaliatory discharge” by the Hospital (“Circuit Court Action”).
Ms. McLeay stated that the Circuit Court Action was scheduled for trial, and she requested a
continuance in this certiorari proceeding on the basis that if she prevailed in the Circuit Court Action,
then her certiorari petition could be rendered moot. In the Circuit Court Action,

Plaintiff [Ms. McLeay] filed suit against her employer for common law and statutory
retaliatory discharge, violation of 42 U.S.C. § 1983, tortious interference with an
employment contract, defamation, and negligence after being terminated from her
position as a physician assistant.

McLeay v. Huddleston, M2005-02118-COA-R3-CV, 2006 WL 2855164, at * 1 (Tenn. Ct. App. Oct.
6, 2006) (perm. app. denied Feb. 26, 2007).

At the same time, Ms. McLeay sought permission to introduce additional proof under the
Administrative Procedures Act (“APA”), Tenn. Code Ann. § 4-5-322(g), on the basis that that
3
provision allows additional proof “in cases of alleged irregularities in procedure before the agency.”
Ms. McLeay alleged the administrative hearings she received below “were nothing more than shams
to terminate her employment based on retaliatory motives.” She specified that the proof she wished
to introduce was garnered in discovery in the Circuit Court Action.

2

A t th a t he a r ing , sev e ra l w i tn e sse s a nd M s . M cL e ay ga v e s ta tem en ts o r te s t im o ny .

3
A l th o u gh th e a c tio n w a s b r o u gh t a s a comm o n law w r i t o f c e r t io r a r i a c t io n , th e m o t io n a nd su p p o r t in g b r ie f
re l ied on p ro v is io n s and stand a rd s ap p l ic ab le to jud ic ia l rev iew o f co n te s ted ca se d ec is io n s und e r th e A PA .

-2-

The trial court denied Ms. McLeay’s continuance request since the Hospital had been granted
summary judgment in the Circuit Court Action, but granted a continuance of the final hearing based
on a scheduling conflict with an attorney. The trial court denied Ms. McLeay’s request to present
additional proof since review of an administrative decision proceeds on the record “unless there is
fraudulent, illegal or irregular conduct which occurred extrinsic to the record . . . . No such
circumstances have been argued by the petitioner to warrant consideration of matters outside the
record.”

Later, the court continued the final hearing to allow Ms. McLeay to file a motion to alter or
amend the order excluding proof outside the record, and she was directed to identify by page all the
deposition excerpts and specifically identify any other evidence outside the record which she sought
to have made a part of the record.

Thereafter, the trial court granted Ms. McLeay leave to file a Third Amended Petition, over
the Hospital’s objections. In the Third Amended Petition, Ms. McLeay alleged that because of
procedural irregularities in the administrative hearings she had been unable to present evidence and
that through the Circuit Court Action she had been able to garner evidence “which would exonerate
her from any wrongdoing which served as the alleged basis for her termination.” The Third
Amended Petition included factual allegations surrounding the incident that led to her discharge.
The Hospital noted that the Third Amended Petition was an attempt to keep the allegations alive that
had been dismissed in the Circuit Court Action.4

Ms. McLeay also asked the trial court to reconsider its order excluding additional evidence.
The Petition included elaborate factual allegations, some attempting to dispute the facts surrounding
the surgical consent form that was the immediate basis of her termination (in other words
challenging the merits of the administrative decision), some pertaining to the procedures surrounding
the hearings at the administrative level, and some offered in support of her claim of retaliatory
discharge.

The Hospital responded by pointing out that Ms. McLeay had not raised at the administrative
hearings any of the matters she now said were the real cause of her dismissal and argued that Ms.
Mcleay had “failed to show how any of her new allegations are material to the issue of whether she
improperly generated a surgery consent form for a non-English speaking patient” or why she failed
to bring up her allegations of immoral or negligent conduct in her administrative hearings. The
Hospital also submitted the Circuit Court’s final orders “as evidence of the irrelevancy of the
plaintiff’s proposed additional evidence.” It was the Hospital’s position that the case should proceed
on the previously filed administrative record.

On November 4, 2005, the trial court granted Ms. McLeay’s request to submit evidence in
addition to the administrative record, describing the request as covering “de novo proof that the

4
T h e T h ird Am e nd e d P e t i t io n c le a r ly r e l ie d up o n fa c ts o u ts id e th e a dm in is tra tiv e re co rd in an a t tem p t to show
r e ta l ia t io n , a c la im th a t h ad b e en fo und g round le s s in th e C ir cu it C o u r t A c t io n .

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defendants were motivated by malice and retaliation in terminating the petitioner, and de novo proof
of procedural irregularities not contained in the record developed below.” The trial court imposed
some “regulations” to assure that the Hospital had notice and discovery of any new evidence and “to
maintain the limited scope of a hearing on a writ of certiorari.” The trial court ordered that the
witnesses testify in court, rather than through deposition, and that the parties provide a witness list
for the de novo hearing. Each side was limited to two hours for direct examination and one-half hour
of cross examination for each witness.

Perhaps because both parties had argued the additional evidence issue, including in the
Hospital’s motion to alter or amend that order and Ms. McLeay’s response to that motion, by
reference to Tenn. Code Ann. § 4-5-322, it appeared unclear to the trial court whether Ms. McLeay
5
was challenging the administrative decision to terminate her employment under the Administrative
Procedures Act, Tenn. Code Ann. § 4-5-101 et seq., or by a writ of certiorari. Consequently, the trial
court filed an order dated December 20, 2005 asking Ms. McLeay to file a notice stating whether her
cause of action was a petition for a writ of certiorari or a petition for judicial review of an
administrative order under Tenn. Code Ann. § 4-5-322. In January of 2006, Ms. McLeay filed a
notice that she was proceeding under a common law writ of certiorari.

The trial court then conducted an evidentiary hearing de novo and issued its Memorandum
and Order on May 10, 2006, wherein it considered the record and the witnesses presented by the
parties. The final order addressed three components of the parties’ positions. First, the court
described the respective positions regarding the basis for Ms. McLeay’s termination: Ms. McLeay
alleged she had been fired in retaliation for reporting unethical, criminal conduct committed by the
Hospital, while the Hospital asserted those allegations were false and that she had been fired for
exceeding her authority as a physician’s assistant and usurping the role of physician. As to that
issue, the trial court found that Ms. McLeay was not credible and that the court did not believe her
testimony that the Hospital had acted unethically and criminally. The court also concluded that Ms.
McLeay’s discharge “was not pretextual but was appropriate.”

As to Ms. McLeay’s allegations of procedural irregularity in the administrative hearing, she
alleged she had been denied adequate notice of the hearings and the opportunity to present a defense,
depriving her of due process. The trial court found that the Hospital had violated Ms. McLeay’s due
process rights by not providing her an opportunity to cross examine witnesses and by failing to notify
her of the expanded scope of the second, or administrative appeal, hearing before the agency.
However, the court found that any due process violations had been cured because Ms. McLeay had
been given “an opportunity de novo to present all her claims and defenses” in the hearing conducted
by the trial court. Consequently, the court determined that the due process deficiencies had been

5
W h ile M s . M cL e a y m a in ta in e d th a t h e r a c t io n w a s a c omm o n law w r i t o f c e r t io r a r i , sh e a sk e d to in tro d u c e
e v id e nc e from th e C i rc u i t C o u r t A c tio n to e s ta b lish “p ro c ed u ra l ir re gu la r i t ie s ,” w h ic h is a g ro und fo r ad d i t io n a l p ro o f
und e r th e AP A , T e nn . C od e A nn . § 4 -5 -3 2 2 (g ) . T h e H o sp i ta l o b je c ted to th e re q u e s t b y a l s o r e ly ing up o n A P A
s ta n d a rd s . T h e tr ia l c o u r t re b u ffe d th e H o s p ita l’s o b j e c tio n o n th e b a s is its o b j e c tio n w a s “p r em ise d o n th e a sse r t io n th a t
th e c a se i s c o n t ro l led no t b y p r inc ip le s o f ce r t io ra r i b u t the U n i fo rm A dm in i s tra t ive P ro ce d u re A c t and tha t p rem ise
co n t ra d ic ts the p le ad ing s .”

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rendered moot, stating the “the trial de novo conducted by this Court ‘readjudicated the matter in a
neutral forum, completely eliminating any arbitrariness or capriciousness in the board’s decision’
such that the petitioner’s claims of inadequacy of notice and violation of due process have been
cured,” citing Phillips v. State Board of Regents, 863 S.W.2d 45, 50-51 (Tenn. 1993). Accordingly,
the trial court dismissed “the petitioner’s claims of violation of due process.”

Finally, the court addressed the defense of collateral estoppel raised by the Hospital. After
quoting authority on the issue, the trial court held that it was unable to dismiss the case on the basis
of collateral estoppel because the Hospital had failed to provide “a detailed analysis and comparison
of the facts and issues in the circuit court case which it contends are applicable to this case.”

The court dismissed the petition, concluding that the Hospital did not act arbitrarily,
capriciously, or illegally or in excess of its authority in terminating Ms. McLeay’s employment and
that any due process deprivations had been cured by the proceedings in the trial court. Ms. McLeay
has appealed.

ANALYSIS

As our previous recounting of this case’s progress in the trial court may suggest, this case
took some unusual turns, and, as a result, a number of potential issues could present themselves.
Some issues simply were not raised below, and many of the more problematic aspects of this case
were not raised in this appeal, presumably because the Hospital was ultimately successful below.
While this appeal will be decided based on the issues raised by the parties, our disposition on those
bases should not be read as affirming, approving, or otherwise addressing the treatment of any issues
by the trial court or the parties below.

We begin by repeating that this action was a common law writ of certiorari action brought
pursuant to Tenn. Code Ann. §27-8-101 et seq., which governs the extraordinary remedy of common
law writ of certiorari, and § 27-9-101 et. seq., providing procedures for review, by writ of certiorari,
of decisions by boards and commissions. Accordingly, the trial court’s review was limited by the
rules governing certiorari actions:

Under the limited standard of review in common law of writ of certiorari
proceedings, courts review a lower tribunal’s decision only to determine whether that
decision maker exceeded its jurisdiction, followed an unlawful procedure, acted
illegally, arbitrarily, or fraudulently, or acted without material evidence to support its
decision. Petition of Gant, 937 S.W.2d 842, 844-45 (Tenn. 1996), quoting McCallen
v. City of Memphis, 786 S.W.2d 633, 638 (Tenn. 1990); Fallin v. Knox County Bd.
of Com’rs, 656 S.W.2d 338, 342-43 (Tenn. 1983); Hoover Motor Exp. Co. v.
Railroad & Pub. Util. Comm’n., 195 Tenn. 593, 604, 261 S.W.2d 233, 238 (1953);
Lafferty v. City of Winchester, 46 S.W.3d 752, 758-59 (Tenn. Ct. App. 2001);
Hoover, Inc. v. Metropolitan Bd. of Zoning Appeals, 955 S.W.2d 52, 54 (Tenn. Ct.

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App. 1997); Hemontolor v. Wilson Co. Bd. of Zoning Appeals, 883 S.W.2d 613, 616
(Tenn. Ct. App. 1994).

Under the certiorari standard, courts may not (1) inquire into the intrinsic correctness
of the lower tribunal’s decision, Arnold v. Tennessee Bd. of Paroles, 956 S.W.2d
478, 480 (Tenn. 1997); Powell v. Parole Eligibility Rev. Bd., 879 S.W.2d 871, 873
(Tenn. Ct. App. 1994); (2) reweigh the evidence, Watts v. Civil Serv. Bd. for Colum.,
606 S.W.2d 274, 277 (Tenn. 1980); Hoover, Inc. v. Metro Bd. of Zoning App., 924
S.W.2d 900, 904 (Tenn. Ct. App. 1996); or (3) substitute their judgment for that of
the lower tribunal. 421 Corp. v. Metropolitan Gov’t of Nashville, 36 S.W.3d 469,
474 (Tenn. Ct. App. 2000). It bears repeating that common law writ of certiorari is
simply not a vehicle which allows the courts to consider the intrinsic correctness of
the conclusions of the administrative decision maker. Powell, 879 S.W.2d at 873;
Yokley v. State, 632 S.W.2d 123, 126 (Tenn. Ct. App. 1981).

Moore & Associates, Inc. v. West, 246 S.W.3d 569, 574 (Tenn. Ct. App. 2005).

A court’s review of a lower tribunal’s decision under the common law writ of certiorari is
limited to questions of law. Watts v. Civil Service Board for Columbia, 606 S.W.2d 274, 276 (Tenn.
1980). Whether or not there is any material evidence to support the action of the agency is a
question of law to be decided by the reviewing court upon an examination of the evidence introduced
before the agency. Id. at 277. Our scope of review is the same. Id.

The trial court did not mention in its final order any proof from the administrative record or
indicate there was material evidence in the record to support the termination decision. Instead, the
court discussed the testimony taken in the hearing before it and relied on its evaluation of that
testimony.

Nonetheless, we have reviewed the record created at the administrative level and find that
there was material evidence introduced upon which to terminate Ms. McLeay’s employment. The
emergency room attending physician and others present at the time of the completion of the surgical
consent form testified as to the events surrounding that form, Ms. McLeay’s failure to discuss the
patient with the attending before contacting a surgeon, the consequences of the completion of the
form without the surgeon or the attending present, including the administration to the patient of pre-
surgery medication and the avoidance of procedures usually performed by nurses. They also
explained how Ms. McLeay had been previously instructed on the proper procedures and the
necessity for those procedures. While Ms. McLeay offered various explanations or claimed
misunderstandings on her part, she did not rebut the basic facts regarding the completion of the form
or her failure to discuss the patient with the attending physician. Her statements included
6

6
O f c o u rse , e ve n if s he d isp u te d th e te s t im o n y o f o th e rs , th e ir te s t im o n y w o u ld s t i l l c o n s t i tu te m a te r ia l e v id e n c e
to sup p o r t th e H o sp i ta l’s d e c is io n .

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recounting her version of several prior occurrences whose relevance was not readily apparent. The
decision to terminate her employment was supported by material evidence.

As is clear from the trial court’s final order, the court based its decision regarding Ms.
McLeay’s termination on the “de novo proof” taken in court. The trial court allowed the taking of
evidence because it found that Ms. McLeay had “made a colorable claim” that her termination was
motivated by malice and retaliation and that the decision was based on procedural irregularities not
contained in the administrative record. It is debatable whether the trial court’s decision to hear
additional evidence beyond that contained in the administrative record was appropriate as to the issue
of the merits of the termination itself.

Generally, under the common law writ of certiorari, the reviewing court is limited to the
record made before the administrative body below. Davison v. Carr, 659 S.W.2d 361, 363 (Tenn.
1983); B.J. Boyd v. General Motors Acceptance Corp., 330 S.W.2d 13, 17 (Tenn. 1959); Brigham
v. Lack, 755 S.W.2d 469, 471 (Tenn. Crim. App. 1988). The “grant” of the writ is simply an order
requiring the respondent to send up its record for review. Tenn. Code Ann. § 27-9-109; Hawkins
v. Tenn. Dep’t. of Correction, 127 S.W.3d 749, 757 (Tenn. Ct. App. 2002). The purpose of the writ
is to have the record placed before a reviewing court so that the court can decide whether relief is
appropriate. Hawkins, 127 S.W.3d at 757.

The introduction of additional evidence beyond that in the administrative record is limited
in scope because of the limited scope of review in a certiorari action. “Any additional evidence
introduced in the court granting certiorari must necessarily be limited to the legal question presented,
to-wit; whether the administrative agency . . . exceeded . . . its jurisdiction or acted illegally or
arbitrarily.” Peoples v. Bank of VanLeer, 397 S.W.2d 401, 406 (Tenn. Ct. App. 1965); Davison, 659
S.W.2d at 363. “Courts have limited the introduction of additional evidence to the question of
whether the Board exceeded its jurisdiction or acted illegally, arbitrarily or capriciously.” Weaver
v. Knox Co. Bd. of Zoning Appeals, 122 S.W.3d 781, 786 (Tenn. Ct. App. 2003) (quoting
Hemontolor v. Wilson Co. Bd. of Zoning Appeals, 883 S.W.2d 613, 618 (Tenn. Ct. App. 1994);
Watts v. Civil Service Bd. for Columbia, 606 S.W.2d 274, 277 (Tenn. 1980) Since the reviewing
court may not inquire into the correctness of the decision, it follows that extrinsic evidence cannot
be introduced to show that the administrative decision was wrong.

The narrow exceptions that allow extrinsic proof to supplement the record on a common law
writ of certiorari must be handled substantively so as to prevent their erosion. In other words, a
request to submit additional proof should not be allowed where it is a subterfuge to effectuate
relitigation of the merits of the administrative decision. There is some question in this case as to
whether the issue of the cause of Ms. McLeay’s termination was properly subject to additional proof
and relitigation in the trial court. Since there was material evidence in the administrative record to
support the Hospital’s decision to fire Ms. McLeay, the “matter is foreclosed unless the [agency] has
acted fraudulently, illegally or arbitrarily.” Watts, 606 S.W.2d at 281; see also Weaver v. Knox
County Bd. of Zoning Appeals, 122 S.W.3d 781, 786 (Tenn. Ct. App. 2003) (holding that a trial court
cannot consider evidence not presented to the lower tribunal in determining whether material

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evidence in the record supports that tribunal’s decision). Additionally, Ms. McLeay did not raise her
allegations of retaliation in the administrative proceedings. 7

In any event, the trial court heard the evidence as to the cause of Ms. McLeay’s firing and
made a number of findings of fact regarding the incident leading to Ms. McLeay’s termination,
including:

The plaintiff was charged and found guilty by the Hospital of completing the entirety
of a surgical consent form outside the presence of and without the authority of a
surgeon. The Hospital’s proof establishes that there are certain parts of the form
which only the surgeon can discuss and complete with the patient because the
surgeon knows all of the treatment complications. Additionally, the surgical consent
form, once completed, triggers the administration of drugs and anesthesia. If the
form is completed without the input of a surgeon, drugs are administered outside the
knowledge and presence of the surgeon.

The trial court stated it did not believe Ms. McLeay’s testimony surrounding the consent form
and specifically credited the testimony of Dr. Moore “who testified before the court” that he did not
authorize Ms. McLeay to complete the entire form and that the infraction was a serious one because
it places a patient in jeopardy and that it, in and of itself, merited a discharge.

In this appeal Ms. McLeay argues that the trial court erred in its independent conclusion that
her termination was not retaliatory. Ms. McLeay was afforded an opportunity to present witnesses,
including herself. The trial court simply did not believe her; instead, it believed the witnesses
presented by the Hospital. Given the credibility issue here as well as our review of the evidence, we
cannot find that the evidence presented in the de novo hearing preponderates against the trial court’s
conclusions. Tenn. R. App. P. 13(d); Clark v. Nashville Machine Elevator Co. Inc., 129 S.W.3d 42,
46 (Tenn. 2004); Jones v. Garrett, 92 S.W.2d 835, 839 (Tenn. 2002).

Accordingly, we affirm the trial court’s holding that Ms. McLeay’s termination was based
on her failure to follow policies and procedures and was, therefore, justified. Stated another way,
we affirm the trial court’s denial of relief to Ms. McLeay in this writ of certiorari action.

Ms. McLeay’s other argument on appeal is that the due process error in the administrative
proceedings below was not cured by the de novo hearing held by the trial court. While it is not clear
to us from the record below that Ms. McLeay had a property interest in retaining her job sufficient

7

S h e d id , h ow e ve r , b r in g a se p a ra te law su it c la im in g re ta lia to r y d isc h a rg e .

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to invoke constitutional due process protections, we need not resolve that question in order to decide
8
the issues raised in this appeal.

Ms. McLeay was given a de novo hearing in the trial court on her termination, whether or not
she was entitled to it under the rules governing common law writ of certiorari. While the trial court
found that Ms. McLeay had not received adequate notice of the scope of the second administrative
hearing and had not been given the opportunity to cross-examine witnesses against her, the court
found those inadequacies had been cured by the proceeding in the trial court.

Two fundamental requirements of due process in the context of termination of employment
that involves a property interest in its continuation are notice and an opportunity to be heard. Wells
v. Tenn. Bd. of Regents, 9 S.W.3d 779, 787 (Tenn. 1999); Phillips v. State Bd. of Regents, 863
S.W.2d at 50-51. The primary purpose of the notice requirement is “to allow the affected party to
marshal a case” against the firing. Wells v. Tenn. Bd. of Regents, 9 S.W.3d at 787. Whether or not
the notice Ms. McLeay received was constitutionally adequate is not before us in this appeal. We
note, however, that Ms. McLeay did not raise the issues of inadequate notice, the scope of the
hearing, or cross-examination at the hearing before the Hospital CEO. Generally, issues cannot be
raised for the first time in a proceeding to review an administrative agency’s decision, and
administrative decision makers must be given the opportunity to correct any procedural errors at the
administrative level. McClellan v. Bd. of Regents, 921 S.W.2d 684, 690-91 (Tenn. 1996).

Even if we assume that there was a denial of due process in the administrative proceedings
and also assume that Ms. McLeay could raise that denial for the first time on judicial review, it is
well settled that “[e]laborate procedures at one stage may compensate for deficiencies at other
stages.” Phillips v. State Bd. of Regents, 863 S.W.2d at 50 (quoting Armstrong v. Manzo, 380 U.S.

8
T h e tr ia l co u r t’s fin a l o rd e r r e c o u n ts th a t th e p a r t ie s d isp u te d w he th e r M s . M cL e ay q ua lifie d fo r p ro te c t io n
un d e r c iv i l se rv ice ru le s , an d the re c o r d d o c um en ts tha t d isp u te . A s ea r ly a s the sec o nd adm in i s tra t ive he a r ing , M s .
M cL ea y and he r a t to rne y w e re in fo rm ed tha t und e r H o sp i ta l p o l icy l ice n se d p ro fe s s io na ls , inc lud ing p hy s ic ian a s s i stan ts ,
w e re no t c o v e re d b y th e H o s p ita l’s c iv il se rv ic e ru le s a n d p r o c e d u re s . In som e o f h e r fi l in g s , M s . M cL e a y a ck now le d g e s
tha t th e H o sp i ta l a sse r te d tha t she w a s no t en t i tled to the sam e r igh ts a s a c iv i l se rv ic e em p lo ye e . H e r re sp o n se w a s tha t ,
d e sp i te b e ing an “a t w i l l” em p lo ye e , sh e w a s s t i l l a p ub l ic em p lo ye e a nd , th e re fo re , en t i tled to c e r ta in d u e p ro c e ss r igh ts
b e fo r e sh e c o u ld b e te rm in a te d . H e r c o n c lu s io n th a t a ll p u b l ic em p lo ye e s h a ve a p r o p e r ty in te r e s t in c o n t in u e d
em p lo ym en t su ffic ien t to tr igg e r du e p ro c e s s is s im p ly w rong .

A p r o p e r ty in te re s t e n t i t le d t o d u e p ro c e ss p r o te c tio n m u s t b e m o re th a n a “u n i la te ra l e xp e c ta tio n ” o r a n
“a b s tra c t n ee d o r d e s ire ;” in s te a d , i t m u s t b e a “ le g it im a te c la im o f e n t i t lem e n t.” B d . o f R e g e n ts o f S ta te C o l le g e s v .
R o th , 4 0 8 U .S . 56 4 , 57 7 (19 7 2 ) ; R ow e v . B d . o f E d u c . o f C h a t ta n o o g a , 9 3 8 S .W .2 d 3 5 1 , 3 5 4 (T enn . 1 9 9 6 ) ; M a r tin v .
S izem o re , 7 8 S .W .3 d 2 4 9 , 2 6 2 (T e n n . C t . A p p . 2 0 0 1 ) . T h a t e n t i t lem e n t m u s t b e c r ea te d in sta te law , in c lu d in g p o l ic ie s
o r re gu la tio n s , th a t e s ta b lish th a t a d e p r iv a tio n o f th e sp e c ific b en e fi t , h e re in co n t inu e d em p lo ym e n t , m u s t b e b a se d o n
c au se . S izem o re , 7 8 S .W .3 d a t 2 6 2 . O b v io u s ly , a n a t-w il l em p lo ye e d o e s n o t h av e a le g it im a te en ti t lem e n t to c o n t in ue d
em p lo ym e n t . M s . M cL e a y a dm i t te d in he r fi l in g s th a t sh e w a s a n a t-w il l em p lo ye e , b u t a sse r te d th a t a s a go v e rnm e n ta l
em p lo ye e sh e w a s e n t i tled to p ro c ed u ra l d u e p ro c e ss . T h e t r ia l c o u r t d e c id ed tha t th e H o sp i ta l h ad w a ive d any r igh t to
a sse r t th a t its c iv il se rv ic e ru le s d id no t a p p ly to M s . M cL e a y b e c a u se i t h a d vo lu n ta r i ly “a g re e d to a p p ly th em ,” b a se d
o n lan gu ag e in a le t te r f rom the H o sp i ta l to M s . M cL e ay se n t a f te r h e r f i rs t adm in is t ra t ive he a r ing .

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545, 552, 83 S.Ct. 1187, 1191 (1965)). In both Phillips and Wells, the tenured teachers received
hearings at the administrative level and a de novo review at the trial court level, including the
opportunity to present additional evidence, in accordance with statutory procedures governing
termination of tenured teachers. The Tennessee Supreme Court, in both cases, found that any alleged
procedural deficiencies in the administrative proceedings, including the adequacy of notice, had been
cured by the trial court proceedings. Wells, 9 S.W.3d at 787; Phillips, 863 S.W.2d at 50-51.

In this appeal, Ms. McLeay argues that the boundaries set by the Chancellor on the hearing
in the trial court deprived her of a meaningful hearing, and also argues that the lapse of years
between the de novo hearing and the termination could not be cured. Although the trial court set
limitations on the time allowed for examination of witnesses, Ms. McLeay did not object to these
limitations. She was allowed to present evidence in court, including her own testimony, even though
many of those witnesses had appeared at the administrative hearings. She was also allowed to
present evidence outside, or additional to, the administrative record. While Ms. McLeay may now
take issue with the boundaries set by the trial court, it is clear that she was afforded abundant
opportunity to present her case before a neutral judge. She has not demonstrated how those
limitations deprived her of the opportunity to present evidence to support her allegations. Also, the
record shows that the delays in hearing this matter were occasioned by Ms. McLeay’s actions.
Consequently, we agree with the trial court that any alleged procedural deficiencies at the
administrative level were cured by the de novo hearing in the trial court.

Ms. McLeay was afforded two hearings at the administrative level, and she was represented
by counsel at the second. She was given a hearing in the trial court in this proceeding to present
evidence to establish her allegations of retaliation or to rebut the proof of conduct justifying
termination. Additionally, she brought a separate lawsuit in another court alleging, inter alia,
retaliatory discharge, and the dismissal of that lawsuit received full appellate review. She has
received a great deal of process and had ample opportunity to present her case.

In this appeal, the Hospital filed a motion to dismiss the appeal on the ground of collateral
estoppel in view of the appellate decision in the Circuit Court Action. The dismissal of Ms.
9
McLeay’s claims in the Circuit Court Action was affirmed on appeal in McLeay v. Huddleston, 2006
WL 2855164. In that opinion this court held that (1) Ms. McLeay failed to establish either an
exclusive causal connection between her discharge and her alleged refusal to participate in illegal
practices or that her exercise of rights was a substantial factor in her discharge; (2) she was
terminated because she violated hospital policies and procedures by improperly initiating a surgery
consent form, and her prior evaluation had included a number of areas needing improvement; (3) she
failed to establish that the Hospital had any policy or practice that impinged upon or violated her free
speech, due process, or equal protection rights, thereby failing to establish a cause of action under
§ 1983; and (4) she had failed to establish that the Hospital had published any defamatory
information about her and failed to present proof of injury.

9
In c e r ta in c i rc um s tan c e s , a p a r ty m ay a sse r t co l la te ra l e s to p p e l fo r th e f i rs t t im e o n ap p e a l . S e e F irs t N . B . S .
C o r p . v . G a b r ie lse n , 22 5 C a l . R p tr . 25 4 , 25 6 -5 7 (C a l . A p p . D is t. 1 1 9 8 6 ) .

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We decline to dispose of this appeal on the basis of the motion to dismiss. While some of
the issues Ms. McLeay litigated in this action, i.e., whether her termination was the result of
wrongful retaliation, were the subject of the Circuit Court action, it is not entirely clear that all of
Ms. McLeay’s issues were. We have determined this appeal based on examination of all the issues
raised by Ms. McLeay.

The result reached by the trial court is affirmed. Costs of appeal are assessed against Anne
McLeay, for which execution may issue if necessary.

____________________________________
PATRICIA J. COTTRELL, P.J., M.S.

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McNamee v. Sandore

MALPRACTICE – APPARENT AGENCY

McNamee v. Sandore, No. 2-05-0739 (Ill. App. Ct. June 7, 2007)

The Appellate Court of Illinois, Second District reversed a trial court’s order granting summary judgment in favor of a physician in a malpractice action, holding that judicial estoppel applies to statements of fact, not legal conclusions and that res judicata is inappropriate when there is a factual dispute on an issue material to the element of privity.

A patient’s husband alleged that the physician who treated his wife during labor was negligent and as a result caused their child to have a severe neurological disorder. In an earlier action against the hospital, the patient and her husband argued that the physician was an agent of the hospital where she was treated. They eventually settled with the hospital then brought suit against the physician. In the suit against the physician, the appellate court ruled that the husband could deny that the physician was an agent of the hospital even though he and his wife had asserted the opposite in the earlier action. The court reasoned that judicial estoppel only applies to inconsistencies in assertions of fact and not to legal conclusions, such as when a party alleges an agency relationship. The court also held that there was a factual dispute on an issue material to the privity element of res judicata because the patient denied signing a consent form which acknowledged that physicians on staff at the hospital are not its employees but independent contractors.

 

McIntyre v. Ramirez

File: 011203 –
From documents transmitted: 06/26/2003

McLeay v. Bergan Mercy Health Sys. Corp. (Summary Only)

HCQIA

McLeay v. Bergan Mercy Health Sys. Corp., No. S-04-117 (Neb. May 19, 2006)

A surgeon sued a hospital for damages and reinstatement of privileges after the hospital’s peer review board suspended his privileges. The trial court granted the hospital’s motion for summary judgment based on HCQIA immunity. On appeal, the surgeon contended his suspension came without warning, that he was denied a hearing, and that expert testimony of physicians who appeared on his behalf showed the peer review board acted unreasonably. The Nebraska Supreme Court ruled that the hospital adequately notified the surgeon of its intention to monitor his actions and properly scheduled a hearing to address quality of care concerns, which the surgeon failed to attend. Moreover, the court held that expert testimony of physicians asserting the surgeon acted with the requisite standard of care did not by itself rebut HCQIA’s presumption of reasonableness in peer review actions. As such, the hospital was entitled to HCQIA immunity for the damages claim. However, since HCQIA only applies to damages suits and not to actions for equitable relief, the court remanded the surgeon’s claim for reinstatement of privileges to the trial court.

 

 

McLeod v. Mount Sinai Med. Ctr.

Vicarious Liability

McLeod v. Mount Sinai Med. Ctr., Nos. 85286, 85574,
85605 (Ohio Ct. App. May 4, 2006)

The guardian of a child
born with cerebral palsy and severe retardation brought a medical malpractice
suit against the doctor who performed the cesarean section and hospital where
the birth took place. A trial jury found the defendants liable for $30,000,000
in damages. The hospital filed a post-judgment motion to overturn the verdict,
arguing that the anesthesiologist involved in the case was an independent
contractor and, therefore, the hospital could not be held vicariously liable
for the acts of this non-employee.

In addressing the motion, the Court of Appeals of Ohio ruled that a health
care facility may be held liable for the negligence of independent medical
practitioners if the facility holds itself out to the public as a provider
of medical services and the patient viewed the hospital as something more than
a site where a physician would treat her. In this case, the court held that
credible evidence was presented at trial suggesting the patient satisfied this
standard. Additionally, the court found facts in the record indicating possible
negligence on the part of nursing staff and other hospital employees.

Accordingly, the hospital’s motions for a new trial or judgment, notwithstanding
the verdict, were properly denied. The court concluded that the case should
be sent back to the trial court to consider reducing the damage award.