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Miller v. Huron Regional Medical Center, Inc.

United States District Court, D. South Dakota, Southern Division

February 7, 2018

LINDA A. MILLER, M.D.; Plaintiff,
v.
HURON REGIONAL MEDICAL CENTER, INC., Defendant.

          ORDER DENYING DEFENDANT’S MOTION FOR REMITTITUR OR FOR NEW TRIAL

          KAREN E. SCHREIER UNITED STATES DISTRICT JUDGE

         Plaintiff, Dr. Linda A. Miller, filed this action against defendant, Huron Regional Medical Center (HRMC), for breach of contract and defamation. The case proceeded to a jury trial where the jury found in favor of Dr. Miller on her breach of contract claim and in favor of HRMC on the defamation claim. Docket 285. The jury awarded Dr. Miller $586,617 in lost wages incurred before trial and $343,640 for future loss of earning capacity. Id. The jury also awarded $250,000 for pain and suffering that the parties agreed was improper for a breach of contract claim, and the court struck the award from the verdict. Docket 283. HRMC now moves for remittitur or for a new trial. Docket 290. Dr. Miller opposes the motion. Docket 295.

         FACTUAL BACKGROUND[1]

         At trial, Dr. Miller alleged that HRMC violated its Medical Staff Bylaws because “HRMC implemented corrective action through [another doctor’s] request to her to voluntarily reduce her surgical privileges.” Docket 155 at 10. A Surgical Services Agreement (SSA) and HRMC’s Bylaws governed the terms of Dr. Miller and HRMC’s contract. Docket 155 at 2. HRMC’s Bylaws was an enforceable contract that created a procedural right to a hearing where Dr. Miller could have defended any concerns about her standard of care. Id. at 11. Thus, HRMC’s actions violated its Bylaws because Dr. Miller was entitled to a hearing but never received one. Id. at 10-11. The jury found in favor of Dr. Miller on her claim that HRMC violated its Bylaws. Docket 277. Dr. Miller never alleged that HRMC violated any part of the SSA. Dr. Miller also claimed defamation based on HRMC’s report to the National Practitioner Data Bank (NPDB) that gave notice of Dr. Miller’s voluntary reduction of surgical privileges. The jury found in favor of HRMC on the defamation claim. Docket 277.

         Settling Jury Instructions

         Prior to presenting the jury with the court’s Final Jury Instructions, the court settled the instructions with both parties present at two separate hearings. Docket 293. At the May 5, 2017 hearing, HRMC did not object to the court’s Final Jury Instruction Number 10 on “Breach of Contract – Compensatory Damages,” Final Jury Instruction Number 14 on “Future Damages,” or to the court’s Verdict Form. Id. 7:14, 14:22-14:23, 22:22. Further, Dr. Miller specifically stated at the hearing that she was seeking past and future lost wages. Id. 19:18-19:21. When discussing the Verdict Form, the court asked plaintiff’s attorney, “So on the breach of contract claim, are you seeking anything other than lost wages?” Id. 19:18-19:19. Attorney Wilson, representing Dr. Miller, responded, “No – I misspoke, your Honor. Past and future wages on the contract claim.” Id. 19:20-19:21. Plaintiff’s counsel then expressed some concern over the damages section of the Verdict Form in the event that the jury found in favor of Dr. Miller on the breach of contract claim but against her on the defamation claim. In response, the court proposed editing the Verdict Form to have a general section of damages that included a space for lost wages, loss of earning capacity, and mental anguish.[2] The court explained that if the jury improperly awarded damages for mental anguish, the court would simply void the award. Both parties agreed to the suggested change.

         The court then made the changes discussed at the May 5th hearing and emailed the instructions with the changes to the parties over the weekend. Id. 31:23-32:09. At the May 8, 2017 hearing, the parties went over the Final Jury Instructions and neither party objected to Final Jury Instructions Numbers 10 or 14 or to the Verdict Form. Id. 33:1-33:25.

         Dr. Huntoon’s Expert Testimony at Trial

         During the trial, Dr. Lawrence Huntoon, one of Dr. Miller’s experts, testified as to why HRMC’s actions were indicative of a sham peer review. Dr. Huntoon’s expert disclosure identified[3] that, in his opinion, HRMC conducted a sham peer review of Dr. Miller because: (1) the Medical Executive Committee (MEC) conducted a “review” of Dr. Miller under Section I.C. of the Bylaws; (2) the “review” was not done in anticipation of a corrective action; (3) a request for a corrective action would have required an investigation under the Bylaws; (4) no “investigation” as defined in the Bylaws ever occurred; (5) HRMC manipulated the language of meeting minutes to convert the term “review” to “investigation” in an attempt to explain the wrongful report to the NPDB; (6) and HRMC took an adverse action against Dr. Miller when it coerced her to reduce her privileges at the hospital. Docket 175-2 at 34-35. Specifically, Dr. Huntoon’s report contains a section titled “Tactics Characteristic of Sham Peer Review Identified in This Case” that includes a sub heading titled “Violation of Medical Staff Rules and Regulations,” which details all of the provisions of the Bylaws that Dr. Huntoon believed HRMC violated. Id. at 39-45.

         HRMC now moves for remittitur or, alternatively, for a new trial because the jury’s award of damages is not supported by South Dakota law, and one of Dr. Miller’s experts, Dr. Huntoon, testified at trial outside the scope of the opinions stated in his expert witness disclosure. Docket 290; Docket 291.

         DISCUSSION

         I. Objections to Final Jury Instructions and Verdict Form

         To the extent that HRMC objects to the court’s Final Jury Instructions and Verdict Form, it has failed to preserve the issues raised in the motion. “In order to properly preserve a claim of instructional error for appellate review, a party is not only required to make a sufficiently precise objection before the district court, but it must also propose an alternate instruction.” Caviness v. Nucor-Yamato Steel Co., 105 F.3d 1216, 1220 (8th Cir. 1997) (quoting Kehoe v. Anheuser–Busch, Inc., 96 F.3d 1095, 1104 (8th Cir. 1996)). Federal Rule of Civil Procedure 51(c)(1) states that “[a] party who objects to an instruction or the failure to give an instruction must do so on the record, stating distinctly the matter objected to and the grounds for the objection.” Fed. R. Civ. P. 51(c)(1). Where a party fails to preserve an issue at trial, the remaining question for the court is whether the instruction constitutes plain error. Lincoln Composites, Inc. v. Firetrace USA, LLC, 825 F.3d 453, 462 (8th Cir. 2016).

         A. Failure to Object at Trial

         HRMC never objected to the court’s Final Jury Instructions Numbers 10 or 14, to the Verdict Form, or to plaintiff’s stated intention to pursue future damages related to the breach of contract claim. HRMC states that it agrees that the court’s jury instructions are correct statements of law (Docket 298 at 4), but that it was unforeseeable that the jury would “confuse” the instructions and “erroneously” award Dr. Miller damages for lost wages and loss of earning capacity on her breach of contract claim. Id. Thus, HRMC argues, it could not object because “there is simply no procedure for objecting to such error.” Id. at 6.

         HRMC’s argument that it could not have properly objected because the jury’s award of lost wages and loss of earning capacity for Dr. Miller’s breach of contract claim was unforeseeable, is unfounded. During the jury instruction settlement hearing, plaintiff’s counsel specifically discussed the possibility of the jury finding in favor of Dr. Miller on her breach of contract claim, but not her defamation claim, and what effect that would have on any award of damages. See Docket 293 18:4-19:17. The court then clarified with plaintiff’s counsel what damages plaintiff was seeking on the breach of contract claim asking, “So on the breach of contract claim, are you seeking anything other than lost wages?” Id. 19:18-19:19. Plaintiff’s counsel responded, “No-I misspoke, your honor. Past and future wages on the contract claim.” Id. 19:20-19:21. The court then went on to propose structuring the damages section of the verdict form to state, “If you found in favor of Dr. Miller on either the breach of contract claim or the defamation claim, determine the total amount of damages, if any, for lost wages, loss of earning capacity and mental anguish.”[4] Id. 19:25-20:4.

         Defendant’s counsel did not object or raise any concern at that time with counsel’s statement or with the court’s suggested alteration. In fact, defendant’s counsel only clarified that there was no mental anguish damages for the breach of contract claim, and that if the jury did incorrectly award mental anguish damages on the breach of contract claim, that the court would strike that allocation.[5] Id. 20:9-20:25. Defendant’s counsel did not raise any objection to the jury awarding future damages on the breach of contract claim or argue that the court should strike such an award in the event that the jury awarded future damages on the breach of contract claim. Thus, defendant had ample notice that plaintiff sought damages for lost wages and loss of earning capacity on her breach of contract claim and failed to object. Because HRMC failed to preserve the issue at trial, the court’s review is limited to whether the instructions constitute plain error.

         B. ...


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