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Tharp v. St. Luke's Surgicenter-Lee's Summit, LLC

Supreme Court of Missouri, En Banc

December 10, 2019

THOMAS E. THARP, et al., Appellants/Cross-Respondents,
v.
ST. LUKE'S SURGICENTER-LEE'S SUMMIT, LLC, Respondent/Cross-Appellant.

          APPEAL FROM THE CIRCUIT COURT OF JACKSON COUNTY The Honorable Kenneth R. Garrett, III, Circuit Judge

          GEORGE W. DRAPER III, JUDGE

         St. Luke's Surgicenter-Lee's Summit LLC appeals the circuit court's judgment against St. Luke's, following a jury trial, on a negligent credentialing claim brought by Thomas E. Tharp and Paula M. Tharp. The jury found in favor of the Tharps and awarded damages. On appeal, St. Luke's argues the Tharps failed to make a submissible case of negligent credentialing. This Court agrees. The circuit court's judgment is reversed, and the case is remanded for a new trial.[1]

         Factual and Procedural History

         This case arises from a medical malpractice action against a surgeon operating out of St. Luke's Surgicenter in Lee's Summit. In December 2011, Thomas Tharp underwent a laparoscopic cholecystectomy - a surgical procedure to remove his gallbladder. The Tharps allege the surgeon damaged Mr. Tharp's hepatic duct and common bile duct during the procedure, causing bile leakage, inflammation, and liver damage. The Tharps settled with the surgeon but proceeded to trial against St. Luke's, alleging St. Luke's negligently granted the surgeon staff privileges at its hospital.

         Mr. Tharp's surgeon applied for staff privileges at St. Luke's in 2005 and renewed his privileges several times thereafter. Staff privileges allow physicians to utilize a healthcare facility to admit and treat patients as independent care providers rather than as employees of the facility. Among other requirements, St. Luke's requires physicians applying for staff privileges to disclose whether they have ever been sued for professional malpractice and, if so, the number of lawsuits they have defended. Under St. Luke's bylaws, failing to provide complete information in the application for staff privileges is grounds to automatically remove a physician from consideration. Evidence presented at trial established Mr. Tharp's surgeon had defended more lawsuits at the time he operated on Mr. Tharp than he had reported to St. Luke's on his application.

         St. Luke's filed a motion for directed verdict at the close of all evidence, arguing there was insufficient evidence to establish St. Luke's breached any duty owed to Mr. Tharp. St. Luke's also argued its act of granting the surgeon staff privileges was not a proximate cause of Mr. Tharp's injuries. The circuit court overruled the motion for directed verdict. The jury returned a verdict in favor of the Tharps. St. Luke's then filed a post-trial motion for judgment notwithstanding the verdict (JNOV), again arguing the Tharps introduced insufficient evidence to support their claim of negligent credentialing. Again, St. Luke's argued there was insufficient evidence to establish St. Luke's breached any duty owed to Mr. Tharp or St. Luke's actions were the proximate cause of Mr. Tharp's injuries. The circuit court also overruled this motion.

         After the verdict, the circuit court entered judgment in favor of the Tharps. St. Luke's filed a motion to modify the judgment, asking the circuit court to order damages awarded by the jury based on future medical expenses to be paid in periodic installment payments instead of a lump sum pursuant to § 538.220.[2] The circuit court sustained St. Luke's motion and amended its judgment accordingly. The Tharps appeal the circuit court's application of § 538.220.2, challenging the constitutional validity of this section, and St. Luke's cross-appeals the circuit court's overruling of its motions for directed verdict and JNOV.

         Jurisdiction

         The Tharps challenge the constitutional validity of § 538.220.2 as applied by the circuit court. This Court has exclusive appellate jurisdiction over cases challenging the constitutional validity of a statute. Mo. Const. art. V, § 3. This Court adheres to the "important principle of not reaching constitutional issues unless necessarily required." Hink v. Helfrich, 545 S.W.3d 335, 343 (Mo. banc 2018). This Court, therefore, declines to reach the Tharps' points because St. Luke's appeal is dispositive.

         Standard of Review

         "The standard for reviewing a denied motion for JNOV is essentially the same as for reviewing the denial of a motion for directed verdict." Sanders v. Ahmed, 364 S.W.3d 195, 208 (Mo. banc 2012). "A case may not be submitted unless legal and substantial evidence supports each fact essential to liability." Id. This Court views all evidence in the light most favorable to the jury's verdict and draws all reasonable inferences in the plaintiff's favor. Id. This Court must disregard all conflicting evidence and inferences. Id. "A court may reverse the jury's verdict for insufficient evidence only when there is a complete absence of probative fact to support the jury's conclusion." Id.

         Analysis

         Generally, modern hospitals staff their facilities with two classes of physicians: staff physicians who are hospital employees and independent physicians to whom the hospital grants staff privileges. Under this arrangement, physicians working under staff privileges are typically independent contractors, not hospital employees. Injured patients in the past, therefore, had difficulty recovering against a hospital for injuries caused by an independent physician because the doctrine of respondeat superior does not apply to independent contractors. See Central Trust and Inv. Co. v. Signalpoint Asset Mgmt., 422 S.W.3d 312, 323 (Mo. banc 2014) ("An employer generally is not held vicariously liable … for the acts of its independent contractors, who are not considered employees for purposes of respondeat superior."). Beginning in the 1960s, however, courts began to realize hospitals are businesses that hire, utilize, and benefit from independent contractors similarly to other types of businesses. See, e.g., Darling v. Charleston Comm. Mem. Hosp., 211 N.E.2d 253, 257 (Ill. 1965), cert. denied, 383 U.S. 986 (1966). The trend toward allowing recovery against hospitals for injuries caused by independent physicians began to accelerate under the theory that "an employer is liable for an independent contractor's negligence when the employer fails to exercise reasonable care in hiring a competent contractor." LeBlanc v. Research Belton Hosp., 278 S.W.3d 201, 206 (Mo. App. 2008) (internal quotations omitted) (emphasis added). Indeed, this Court, citing Darling, explained, "The fact the defendant doctors here were not employees of the defendant hospital does not necessarily mean the hospital cannot be held liable for adverse effects of treatment or surgery approved by the doctors." Gridley v. Johnson, 476 S.W.2d 475, 484 (Mo. 1972).

         In LeBlanc, the court of appeals recognized "Missouri precedent does not bar a negligence claim against a hospital for injuries caused by independent doctors authorized to practice in that hospital." 278 S.W.3d at 206. This theory is called negligent credentialing. See id. at 204. The theory focuses on whether a hospital gathered "all the pertinent information to make a reasonable decision as to whether physicians should have access to hospital facilities." Steven R. Weeks, Comment, Hospital Liability: The Emerging Trend of Corporate Negligence, 28 Idaho L. Rev. 441, 454 (1992). Negligent credentialing "is merely the application of principles of common law negligence to hospitals in a manner that comports with the true scope of their operations." LeBlanc, 278 S.W.3d at 207 (internal quotations omitted). Accordingly, before a hospital can be held liable for an independent physician's negligence, the plaintiff must show "the hospital's duty owed to the patient, the breach of the duty, and the resulting injury from the breach." LeBlanc, 278 S.W.3d at 207; see also Hoover's Dairy, Inc. v. Mid-Am. Dairymen, Inc., 700 S.W.2d 426, 431 (Mo. banc 1985) (holding the basic elements of a prima facie negligence claim are duty, breach of that duty, causation, and damages).

         Issue preserved for appellate review

         In response to St. Luke's cross-appeal, the Tharps initially argue St. Luke's failed to preserve its insufficient evidence claim. "To preserve a question of submissibility for appellate review in a jury-tried case, a motion for directed verdict must be filed at the close of all the evidence …." Howard v. City of Kansas City, 332 S.W.3d 772, 790 (Mo. banc 2011); see also Sanders 364 S.W.3d at 207 ("[I]f defendant chooses to put on evidence … [a] motion for directed verdict at the close of all evidence becomes the meaningful motion to preserve the issue…."). Further, "in the event of an adverse verdict, an after-trial motion for a new trial or to set aside a verdict must assign as error the trial court's failure to have directed such a verdict." Howard, 332 S.W.3d at 790 (internal quotations omitted). Accordingly, to preserve a jury-tried issue for appellate review, a party must include the issue in both a motion for directed verdict at the close of all evidence, if the defendant puts on evidence, and in a motion for JNOV. Id.

         The Tharps do not dispute St. Luke's made both a motion for directed verdict and a motion for JNOV. Instead, the Tharps argue the motions were not sufficiently specific to preserve St. Luke's insufficient evidence claim for appellate review. Rule 72.01(a) states a motion for directed verdict "shall state the specific grounds therefor." The Rule 72.01(a) standard, however, is not a demanding one. Indeed, this Court has held an oral motion for directed verdict which stated, "We think plaintiff failed to make a submissible case on issues of negligent causation," sufficiently preserved the issue for appellate review. Sanders, 364 S.W.3d at 208. Here, St. Luke's motion for directed verdict asserted in pertinent part, "[T]he evidence fails to satisfy all of the necessary elements of … negligent credentialing …. [T]here is no evidence that would support the conclusion that there was any breach of duty on the part of defendant that constituted a proximate cause of the event complained of." St. Luke's motion for JNOV stated in pertinent part, "[P]laintiffs failed to present submissible evidence that [St. Luke's] breached any legally-recognizable negligence duty …. [P]laintiffs' evidence … fails to adequately demonstrate proximate cause." These specifically articulated grounds were sufficient to preserve St. Luke's insufficient evidence challenge for appellate review.

         Insufficient evidence to support a finding of negligent credentialing

         St. Luke's argues the circuit court erred in overruling its motion for JNOV because the Tharps failed to make a submissible case of negligent credentialing. Specifically, St. Luke's argues the evidence was insufficient to support a negligent credentialing claim because there was no evidence showing Mr. Tharp's surgeon was incompetent to conduct the procedure he performed and credentialing the surgeon was not the proximate cause of Mr. Tharp's injuries. "A court may reverse the jury's verdict for insufficient evidence only when there is a complete absence of probative fact to support the jury's conclusion." Sanders, 364 S.W.3d at 208.

         A. Duty

         St. Luke's must owe a duty to Mr. Tharp before it can be liable to him for negligence. Hoover's Dairy, 700 S.W.2d at 431; see also LeBlanc, 278 S.W.3d at 207. "Whether a duty exists is purely a question of law." Lopez v. Three Rivers Elec. Coop., Inc., 26 S.W.3d 151, 155 (Mo. banc 2000). In general, "a duty exists when a general type of event or harm is foreseeable." Pierce v. Platte-Clay Elec. Co-op., Inc., 769 S.W.2d 769, 776 (Mo. banc 1989). The scope of a defendant's duty is a question of law for the court to resolve. See Harris v. Niehaus, 857 S.W.2d 222, 225 (Mo. banc 1993). This Court has never before considered the scope of the duty hospitals owe to their patients when deciding whether to grant staff privileges to a physician. The Restatement of Torts, however, is instructive:

         Section 411 of the Restatement of Torts reads in pertinent part:

An employer is subject to liability for physical harm to third persons caused by his failure to exercise reasonable care to employ a competent and careful contractor:
(a) to do work which will involve a risk of physical harm unless it is skillfully ...

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