The Supreme Court of the State of Delaware (“Delaware Supreme Court”) affirmed a lower court’s decision that an orthopedic surgeon who previously had privileges at a Delaware hospital must pay the hospital’s attorney’s fees in the amount of $412,942.85 and costs in the amount of $25,805.36 as a result of the surgeon losing his lawsuit filed against the hospital, based upon the hospital’s Credentials Policy.
The Underlying Facts
The orthopedic surgeon was on the medical staff at the hospital from December 1999 through February 2008. The surgeon was critical of hospital practices and frequently spoke out about quality of care issues that were not being addressed. The hospital took issue with the manner in which he expressed his views and his general interaction with the staff. Virtually all of the complaints against the surgeon concerned both his loud and antagonistic manner and his demeaning comments.
Every few months, nurses, patients, and/or doctors filed complaints against the orthopedic surgeon. The hospital spoke to the surgeon about the need to improve his communication skills, requiring him to send letters of apology, and threatening him with further action if his conduct did not improve.
In July 2006, there were two inappropriate incidents: in one incident, the surgeon was dissatisfied regarding the manner in which his cases were being scheduled, leading to the surgeon belittling the hospital staff and barging into a doctors’ meeting; and, in the other (which occurred on the following day), the surgeon became very angry when necessary surgical instruments were not in the operating room. As a result, it was recommended that the surgeon’s medical privileges be revoked.
Less than three months later, during October 2006, the orthopedic surgeon, who was running for public office, arranged for a newspaper reporter to be present in the operating room during one of his surgeries, which the surgeon represented to the hospital as being for “educational” purposes. Once the visitor was discovered to be a reporter, the reporter was escorted out of the operating room (and the hospital). That same day, the surgeon was issued a letter advising him that he was placed on a “precautionary suspension,” for breaking the rules by misrepresenting the visitor’s purpose.
The hospital offered the surgeon the option of a leave of absence in lieu of a suspension, which the surgeon ultimately accepted. Nonetheless, the Board of the hospital voted to re-appoint the surgeon, subject to his successful completion of a three day program for physicians who engage in disruptive behavior. Upon completion of the program, the surgeon returned to work in December 2006 and remained at the hospital until he resigned in January 2008.
Just before he resigned, the orthopedic surgeon filed a lawsuit against the hospital, its CEO, and its Medical Executive Committee, for tortious interference with existing business relationships, defamation, and breach of the Medical Staff Bylaws, arising out of the precautionary suspension.
Ultimately, the trial court awarded the hospital its attorney’s fees in the amount of $412,942.85 and $25,805.36 in costs based upon the hospital’s Credentials Policy, which provided that the claimant shall pay the hospital’s attorney’s fees and costs if “an individual institutes a legal action and it does not prevail.” Since the surgeon failed to prevail in his lawsuit, the trial court reasoned that he was obligated to pay the hospital for its attorney’s fees and costs.
The surgeon appealed, challenging the enforceability of the fee shifting provision of the Credentials Policy. The Delaware Supreme Court affirmed the award of attorney’s fees and costs, finding that “private parties are free to contract for broader standards to protect the peer review process, as was done here” and that “[g]iven the acceptance of contractual fee shifting provisions and the absence of an express statutory prohibition of a fee shifting agreement in this context, we find no merit to [the surgeon’s] public policy arguments.” The Delaware Supreme Court further found that the hospital’s CEO and its Medical Executive Committee “followed the prescribed procedures in this case” and therefore affirmed the lower court’s award of attorney’s fees and costs.
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