United States District Court, D. South Dakota, Southern Division
LINDA A. MILLER, M.D., Plaintiff,
HURON REGIONAL MEDICAL CENTER, INC., CY B. HAATVEDT, M.D., as a Member of its Executive Committee and Individually, and MICHAEL N. BECKER, M.D., as a Member of its Executive Committee and Individually, Defendants
Linda A. Miller, M.D., Plaintiff: Bradley P. Gordon, Kenneth
E. Barker, Barker Wilson Law Firm, LLP, Belle Fourche, SD.
Huron Regional Medical Center, Inc., Defendant: Jon C. Sogn,
Michelle Himes Randall, LEAD ATTORNEYS, Lynn, Jackson, Shultz
& Lebrun, P.C., Sioux Falls, SD.
B. Haatvedt, M.D., as a member of its Executive Committee and
Individually, Michael N. Becker, M.D., as a Member of its
Executive Committee and Individually, Defendants: Kathryn
Jean Hoskins, LEAD ATTORNEY, Jon C. Sogn, Jeffrey L.
Bratkiewicz, Siegel, Barnett & Schutz, L.L.P., Sioux Falls,
SD; Michelle Himes Randall, LEAD ATTORNEY, Lynn, Jackson,
Shultz & Lebrun, P.C., Sioux Falls, SD.
ProAssurance Casualty Company, Intervenor: Mary M. Schott,
LEAD ATTORNEY, Sodoro, Daly & Sodoro, P.C., Omaha, NE.
OPINION AND ORDER GRANTING SUMMARY JUDGMENT IN PART AND
DENYING SUMMARY JUDGMENT IN PART
E. SCHREIER, UNITED STATES DISTRICT JUDGE.
Miller, M.D., filed a complaint against Huron Regional
Medical Center, Inc. (HRMC), Cy B. Haatvedt, M.D., and
Michael N. Becker, M.D. The complaint was subsequently
amended. Docket 81. The first amended complaint alleges the
following causes of action against HRMC: breach of express
contract, breach of implied contract, negligence, and
defamation. The first amended complaint alleges the following
causes of action against Dr. Becker and Dr. Haatvedt:
negligence, defamation, and interference with business
relationship and expectation. Defendants, HRMC, Dr. Haatvedt,
and Dr. Becker, move for summary judgment on all claims
asserted by Dr. Miller. Docket 132; Docket 133. Dr. Miller
resists the motion. For the following reasons, the court
grants the motions in part and denies the motions in part.
the evidence in the light most favorable to the nonmoving
party, Dr. Miller, the facts are:
Miller is a general surgeon, who began working at HRMC in
February 2004. Dr. Miller and HRMC entered into a contract in
February 2009 that established that Miller would be employed
as an independent contractor for HRMC. A Surgical Services
Agreement and HRMC Medical Staff Bylaws govern the terms of
Medical Staff Bylaws create a Medical Executive Committee
(MEC). The MEC oversees any request from the HRMC
administration or medical staff that seeks review of a
physician's quality of care. During the relevant time
period, Dr. Haatvedt, Dr. Becker, Dr. Jim Schwaiger, and Dr.
Karl Blessinger were members of the MEC.
August 24, 2010, the HRMC Board of Directors passed a motion
requesting that the MEC conduct a review of Dr. Miller's
medical records to determine whether there were any medical
trends of concern. Docket 135 - 2, at 16. In response, on
October 14, 2010, the MEC met with Dr. Miller and determined
it would review 100% of Dr. Miller's patient charts for a
three month period. The MEC sent a letter to Dr. Miller
confirming the three-month review and stated, " The
charts will be reviewed for improvement in timeliness of
documentation as well as improvement in thoroughness and
quality of content." Docket 135 - 5. The MEC completed
its review and did not report any problem with the charts
during this review period. Despite this finding, the Board of
Directors decided to continue the review for an additional 90
reviewed a grievance filed with the hospital on February 7,
2011. The grievance asserted that Dr. Miller performed an
unnecessary surgery that resulted in a patient's physical
complications. The MEC elected to send the case to
ProAssurance Casualty Company for further review. Docket 135
- 2, at 8. At the time, ProAssurance was HRMC's
professional liability insurance carrier.
March 22, 2011, the HRMC Board of Directors requested that
John Single, HRMC's Chief Executive Officer, meet with
Dr. Miller " regarding medical record deficiencies, the
need to achieve consistent compliance, and that future
deficiencies may result in specific action by the
Board." Docket 135 - 2, at 30.
April 2011, Dr. Miller treated a patient suffering from acute
pancreatitis. Dr. Miller performed surgery on the patient
with the assistance of Dr. Haatvedt. The patient later
developed complications and was transferred to Sioux Falls,
South Dakota, for further care. The patient died in Sioux
Falls from unknown complications.
April 25, 2011, three members of the HRMC Board of Directors
met with the MEC to discuss the internal and external reviews
of Dr. Miller's work. Dr. Miller was not present during
this meeting. After the meeting, the MEC decided that Dr.
Blessinger should meet with Dr. Miller to discuss whether she
would be willing to voluntarily reduce her surgical
afternoon of April 25, 2011, Dr. Blessinger met with Dr.
Miller and informed her about the MEC meeting earlier in the
day. Dr. Blessinger notified Dr. Miller that the Board of
Directors requested that the MEC address Dr. Miller's
recent issues associated with patient care. Furthermore, Dr.
Blessinger suggested that Dr. Miller voluntarily reduce her
surgical privileges. Even though the voluntary reduction in
privileges was no guarantee that HRMC would maintain its
contract with Dr. Miller, Dr. Blessinger informed Dr. Miller
that there were no other viable options at that time. In
addition, based on a conversation with Single, Dr. Blessinger
informed Dr. Miller that a voluntary reduction in privileges
was not a reportable event to the National Practitioner Data
Bank (NPDB). The following morning, on April 26, 2011, Dr.
Miller submitted her reduction of privileges paperwork to
Dr. Miller submitted her paperwork to Single, HRMC determined
that Dr. Miller's voluntary reduction in surgical
privileges was a reportable event. Single reviewed the NPDB
Guidebook and sought the advice of Huron attorney Rodney
Freeman. Single believed that the internal and external
reviews of Dr. Miller's quality of care, coupled with a
voluntary reduction in privileges, created a situation where
HRMC was required to report the event to the NDPB. An Adverse
Action Report, dated May 11, 2011, was filed with the NPDB.
It stated that " Dr. Miller voluntarily surrendered a
portion of her surgical privileges while the Medical
Executive Committee was investigating her quality of care.
The Board of Directors approved this surrender of certain
privileges April 29, 2011." Docket 135 - 8, at 3. Dr.
Miller responded to the first Adverse Action Report on June
6, 2011, and stated the following:
In late April, I voluntarily reduced my privileges as I was
concerned about the quality of care I was able to give. At
that time, I was managing some personal issues along with a
demanding call schedule of solo practice. I was working 24/7
and hadn't taken time off in several months. Since that
time, the issues have been resolved, I took some much needed
vacation time, and at the subsequent Board Meeting in May, I
requested and was granted the majority of my privileges. (I
did not request open Thoracic or Vascular as I don't have
the need here.)
Dr. Miller's reduction in surgical privileges, there was
some confusion regarding whether Dr. Miller had any remaining
privileges. On May 18, 2011, Dr. Miller sent a letter to Dr.
Haatvedt that requested the approval of privileges relating
to modified radical mastectomy. Docket 137 - 5, at 4. The
letter also requested that the board consider approving
privileges associated with elective abdominal cases.
Id. Dr. Miller proposed two conditions in support of
obtaining the new privileges: (1) the procedure would be
completed in the presence of another general surgeon; and (2)
the patient's diagnosis, co-morbidities, and proposed
surgery would be presented to Dr. Haatvedt at least 24 hours
before the surgery. Id. On June 3, 2011, Dr. Miller
sent a letter to the MEC that requested a myriad of
additional privileges. Id. at 5. The request
suggested the imposition of the same two conditions listed in
Dr. Miller's first letter. The HRMC Board of Directors
approved the issuance of new privileges with the conditions
suggested by Dr. Miller.
the approval of new surgical privileges, HRMC sent two
additional Adverse Action Reports to the NPDB. These reports
indicated that Dr. Miller received new privileges with the
imposition of the conditions listed above. HRMC sent the
reports on July 21, 2011. Dr. Miller resigned from her
position at HRMC on September 2, 2011.
judgment is appropriate if the movant " shows that there
is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law."
Fed.R.Civ.P. 56(a). The moving party can meet this burden by
presenting evidence that there is no dispute of material fact
or by showing that the nonmoving party has not presented
evidence to support an element of its case on which it bears
the ultimate burden of proof. Celotex Corp. v.
Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91
L.Ed.2d 265 (1986). To avoid summary judgment, " [t]he
nonmoving party may not 'rest on mere allegations or
denials, but must demonstrate on the record the existence of
specific facts which create a genuine issue for
trial.'" Mosley v. City of Northwoods, Mo.,
415 F.3d 908, 910 (8th Cir. 2005) (quoting Krenik v. Cty.
of Le Sueur, 47 F.3d 953, 957 (8th Cir. 1995)).
judgment is precluded if there is a factual dispute that
could affect the outcome of the case. Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91
L.Ed.2d 202 (1986). For purposes of a motion for summary
judgment, the court views the facts and the inferences drawn
from such facts " in the light most favorable to the
party opposing the motion." Matsushita Elec. Indus.
Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 588, 106
S.Ct. 1348, 89 L.Ed.2d 538 (1986).
HRMC's motion for summary
Is HRMC entitled to summary judgment on the breach of implied
Dakota Codified Law 53-1-3 establishes that a contract is
either " express or implied." An express contract
is " one, the terms of which are stated in words,"
whereas " [a]n implied contract is one, the existence
and terms of which are manifested by conduct."
Id. " A contract can either be express or
implied, but not both." Humble v. Wyant, 2014
SD 4, 843 N.W.2d 334, 343 (S.D. 2014) (citing SDCL 53-1-3).
HRMC asserts that the court should grant summary judgment on
count two of Dr. Miller's complaint, alleging a breach of
implied contract, because the dispute involves a written
Surgical Services Agreement and HRMC Medical Staff Bylaws.
Because the parties signed and operated in accordance with
the written agreement, HRMC's motion for summary judgment
regarding count two of the complaint, alleging a breach of
implied contract, is granted.
Is HRMC entitled to summary judgment on the breach of express
It is well settled in South Dakota that 'a hospital's
bylaws constitute a binding contract between the hospital and
the hospital staff members.'" Mahan v. Avera St.
Luke's, 2001 SD 9, 621 N.W.2d 150, 153 (S.D. 2001).
When analyzing whether a party has breached the bylaws, the
court applies " the normal principles for construction
and interpretation of a contract." Id. at 154.
Typically, a jury determines whether a party's conduct
constitutes a breach of contract. Harms v. Northland Ford
Dealers, 1999 SD 143, 602 N.W.2d 58, 63 (S.D. 1999).
Miller alleges that HRMC breached the contract by
disregarding the Bylaws' procedural mandates relating to
corrective action. Specifically, Dr. Miller argues that HRMC
and the MEC breached the Bylaws by requesting that Dr. Miller
voluntarily reduce her surgical privileges without providing
a formal hearing. In its motion, HRMC asserts that the
corrective action procedures were inapplicable because formal
corrective action proceedings were never instituted against
contractual provisions relied upon by each party are found in
the HRMC Medical Staff Bylaws. Bylaw 10.2 provides the
criteria and procedures associated with corrective action.
Docket 135 - 4, at 33. Bylaw 10.2(a) provides:
Whenever the medical activities or professional conduct of
any Member are, or are reasonably probable to be, contrary to
the delivery of quality patient care or to effective hospital
operations, corrective action against such Member may be
requested by any member of the Medical Staff, Board,
President/CEO or any employee of the Medical Center.
Initiation of any corrective action proceedings shall be the
responsibility of the Executive Committee.
Bylaw 10.2(b) states that " all requests for corrective
action shall be in writing, shall be made to the Executive
Committee and shall be supported by reference to the specific
activities or conduct which constitutes the grounds for the
request." Id. According to Bylaw 10.2(d),
within fifteen days of the date the request for corrective
action is filed, the Executive Committee must determine
whether to dismiss the complaint or to appoint three
physicians, who are not in direct competition with the
affected physician, to investigate the charges. Id.
the investigation is complete, under Bylaw 10.2(h), the
Executive Committee may recommend the following corrective
(i) Reject or modify the request for corrective action;
(ii) Issue a warning, a letter of admonition, or a letter of
(iii) To impose terms of required clinical education,
probation or consultation;
(iv) Recommend reduction, suspension or revocation of
(v) Recommend reduction of staff category or limitation of
any staff prerogative directly ...