Sternberg v. Nanticoke Mem’l Hosp. (Summary)

ATTORNEY’S FEES

Sternberg v. Nanticoke Mem’l Hosp., No. 219, 2012 (Del. Feb. 28, 2013)

The Supreme Court of Delaware affirmed a lower court’s decision to award a hospital attorney’s fees and costs based on release and immunity language in the hospital’s Credentials Policy.

A physician who was known for disruptive outbursts sued the hospital after being precautionarily suspended.  The hospital prevailed in the lawsuit, then sought attorney’s fees from the physician based on language in its Credentials Policy.

The physician claimed that the attorney’s fee provision in the Credentials Policy was against public policy.  He also argued that the policy did not apply to him because the hospital had not complied with its requirements.  Finally, the physician claimed that the lower court abused its discretion in determining the amount of fees and costs to award.

The supreme court held that the hospital’s Credentials Policy was not against public policy. Although the Health Care Quality Improvement Act sets a higher standard for the payment of attorney’s fees, private parties are free to agree to broader standards to protect the peer review process.  The court also noted that the Credentials Policy does not give the hospital’s CEO free rein.  Rather, it releases the hospital from liability “to the fullest extent permitted by law.”

The supreme court also held that the hospital did not violate the Credentials Policy and did not abuse its discretion in awarding attorney’s fees.