Kadlec Med. Center v. Lakeview Anesthesia Associates

Intentional Misrepresentation

Kadlec Med. Center v. Lakeview Anesthesia Associates,
No. Civ.A.04-997 (E.D. La. May
6, 2005; May
11, 2005; May 19, 2005)

An anesthesiologist was terminated from his medical
group when it was discovered that he was diverting narcotics for his own use.
He then obtained a locum tenens position at another hospital where, while impaired,
he committed malpractice and caused extensive brain damage to a woman undergoing
a routine tubal ligation. After settling the malpractice case for $7.5 million,
the hospital sued members of the anesthesiologist’s former medical group for
intentional misrepresentation, negligent misrepresentation and strict responsibility
misrepresentation, based on the positive letters of reference they provided
regarding the impaired anesthesiologist. The practice group members moved for
summary judgment arguing the hospital had not shown justifiable reliance on
their letters of recommendations. Even though evidence showed the letters were
labeled as "can’t use" by
the hospital, the court found enough additional evidence to raise genuine issues
of material fact as to whether the letters were in fact taken into consideration
by the hospital when hiring the anesthesiologist. Therefore, the Federal District
Court for the Eastern District of Louisiana denied the practice group’s motion
for summary judgment. The court dismissed the claim based on strict responsibility
misrepresentation which has never been recognized as a tort in Louisiana.

A second decision addressed motions for summary judgment brought
by the insurance carriers for two of the defendant physicians, both of whom
had a homeowner’s policy and personal "umbrella" policies with exceptions
for claims related to their business activities. The insurance companies asserted
that these exception clauses excused them from any duty to defend the physicians.
The court agreed that the business exception provisions applied, finding that,
but for their business activities, the physicians would not have been in the
position to write professional recommendations.

A third decision, May 19, 2005, denied the hospital’s motion for summary judgment.