Case Title: Garrison v. Board of Trustees of Memorial Hosp. of Laramie County, Wyo.

Citation: 

Docket Number: 89-200

State: wyoming

Court: Wyoming Supreme Court

Date: 1990-07-19T00:00:00Z

Document:
Garrison v. Board of Trustees of Memorial Hosp. of Laramie County, Wyo.1990 WY 76795 P.2d 190Case Number: 89-200Decided: 07/19/1990Supreme Court of Wyoming
RICHARD L. GARRISON, 
M.D., 

APPELLANT 
(PLAINTIFF),

v.

BOARD OF TRUSTEES OF 
MEMORIAL HOSPITAL OF LARAMIE COUNTY, WYOMING, 

APPELLEE 
(DEFENDANT).

Petition for review from 
the public hospital board.

Daniel E. White 
of Vines, Gusea & White, P.C., Cheyenne, for appellant.

Gregory C. 
Dyekman of Dray, Madison & Thomson, P.C., Cheyenne, for 
appellee.

Before 
CARDINE, C.J.*, and THOMAS, URBIGKIT, MACY and GOLDEN, 
JJ.

* Chief Justice at time of 
oral argument.

CARDINE, Chief 
Justice.

[¶1]      This appeal 
addresses the propriety of the appellee's, Board of Trustees of Memorial 
Hospital of Laramie County (Trustees), denial of appellant's, Richard L. 
Garrison, M.D., application for appointment to the medical staff at Memorial 
Hospital (Hospital). The Trustees denied Dr. Garrison's application on November 
4, 1988. On December 5, 1988, Dr. Garrison filed a complaint in the district 
court seeking declaratory, monetary and injunctive relief. The district court 
upheld the decision of the Trustees and, on appeal, Dr. Garrison challenges that 
order.

[¶2]      We 
affirm.

ISSUES

[¶3]      Dr. Garrison 
states the issues to be:

"I. Whether the appellant 
was denied due process of law by virtue of appellee's consideration of his 
medical competency where the appellant was systematically precluded from 
developing a record on that issue.

"II. Whether the trial 
court erred in relying upon the fact that appellant has not held obstetrical 
privileges since 1985 as a justification for its finding that the appellee's 
conduct was not arbitrary or capricious."

[¶4]      The Trustees 
summarize the case in one issue:

"I. Whether the decision 
of the Board of Trustees of Memorial Hospital of Laramie County to deny 
appellant's application for appointment to the medical staff was arbitrary, 
capricious or without foundation in fact."

BACKGROUND

[¶5]      On May 26, 1988, 
Dr. Garrison submitted an application for appointment to the medical staff of 
the Hospital. He used a form supplied by the Hospital which 
provides:

"I hereby apply for 
appointment to the Medical Staff of Memorial Hospital of Laramie County. I 
understand and agree that I, as an applicant for Medical Staff membership, have 
the obligation to produce adequate information for proper evaluation of my 
professional competence, character, ethics, physical and mental health and other 
qualifications, and for resolving any doubts about such 
qualifications.

"I hereby authorize all 
hospitals, medical institutions or organizations, my references, personal 
physicians, employers, business and professional associates and governmental 
agencies to release to the Hospital and its Medical Staff information and 
records for evaluation of my professional, ethical and physical qualifications 
for membership on the Staff and practice in the Hospital.

"I hereby release from 
liability all representatives of the Hospital and its Medical Staff for their 
acts performed in good faith and without malice in connection with evaluating my 
application and my credentials and qualifications, and release from liability 
any and all individuals and organizations who provide information to the 
Hospital or its Medical Staff, in good faith and without malice, concerning my 
qualifications for staff appointment and clinical privileges. I hereby consent 
to the release of such information.

"I fully understand that 
any significant misstatements in or omissions from this application constitute 
good and sufficient cause for denial of appointment or cause for summary 
dismissal from the Medical Staff. All information submitted by me in this 
application is true to my best knowledge and belief.

"If I am granted 
membership on the Medical Staff, I agree to abide by its Bylaws, Rules and 
Regulations and those of the Governing Board of the Hospital. I understand that 
initial and continued Staff membership are dependent upon professional 
competence and ethical practice.

"Richard Garrison 
MD

 Signature 

05/26/88 

Date"

[¶6]      Dr. Garrison 
completed the application form. In answer to the question: "D. Have your 
privileges at any hospital ever been suspended, diminished, revoked or not 
renewed," he answered "no."1 In response to a routine inquiry to 
former sites of medical practice, the Hospital received a letter from the 
medical director of Thomas Memorial Hospital, South Charleston, West Virginia. 
The letter contained the following passage:

"Concerns over his 
obstetrical practice prompted a summary suspension of his obstetrical privileges 
effective on September 16, 1985. Doctor Garrison then requested that obstetrical 
privileges be deleted from his clinical privileges. In view of this request, 
Doctor Garrison was notified by letter dated December 6, 1985, that the summary 
suspension had been lifted."

The record also 
contains a letter from Dr. Garrison to Thomas Memorial Hospital, dated December 
13, 1985, in which he resigned from the medical staff of that 
hospital.

[¶7]      At the hearing 
before the Medical Staff Joint Hearing Committee of Memorial Hospital, Dr. 
Garrison explained at length his reasons for answering "no" to the question at 
issue. He explained that he felt any questions about his competence had been 
decided in his favor and that he understood that his settlement of the issue 
with Thomas Memorial Hospital included an agreement that the action against his 
privileges had been totally nullified as though it had never happened. The 
record also contains a letter to the Hospital from John W. Traubert, M.D., 
Associate Dean for Student and Curricular Affairs, School of Medicine, West 
Virginia University. He had conducted a review, per request of Thomas Memorial 
Hospital, concerning the quality of obstetrical care rendered by Dr. Garrison. 
Dr. Traubert concluded that Dr. Garrison's care "was above reproach in all 
respects." Dr. Traubert went on to express his opinion that Dr. Garrison's 
problems at Thomas Memorial Hospital were precipitated by that hospital's 
aversion to indigent patients (Dr. Garrison had a "fair percentage" of such 
cases and was the only doctor in the county that would deliver indigent 
patients) and because of Dr. Garrison's involvement in "pro-life" political 
activities. Dr. Traubert could not confirm that these were the motivations for 
Thomas Memorial Hospital's action against Dr. Garrison; but, he concluded, "it 
was clear to me that honest scientific review of patient care was not the 
motive."

[¶8]      By letter dated 
August 23, 1988, the Executive Committee of the Hospital (as well as the 
Credentials Committee) informed Dr. Garrison that it would recommend to the 
Trustees that his application be denied because of his answer of "no" to item D, 
supra. Dr. Garrison was also informed of his right to a hearing before the Joint 
Hearing Committee. A hearing was conducted at Dr. Garrison's request on 
September 13, 1988. By letter dated September 23, 1988, Dr. Garrison was 
informed that the Joint Hearing Committee would recommend denial of Dr. 
Garrison's application to the Trustees. Dr. Garrison was given notice by letter 
dated October 18, 1988, that the Trustees would provide an appellate review of 
the Joint Hearing Committee's decision. That hearing was conducted on October 
31, 1988, and by letter dated November 4, 1988, the Trustees informed Dr. 
Garrison that they affirmed the decision of the Joint Hearing Committee 
saying:

"The Board [of Trustees] 
has limited its consideration in this matter in the same way the Joint Hearing 
Committee, Executive Committee and Credentials Committee previously did. The 
Board does not believe that it can or should attempt to pass judgment upon the 
merits of the summary suspension you suffered in West Virginia. Regardless of 
merit or lack of merit of that action, the fact remains that a summary 
suspension did occur and that your privileges were not renewed at that hospital. 
Both of these events should have been reported on your Medical Staff Application 
to Memorial Hospital of Laramie County, but were not.

"The Board has determined 
that falsification of one or more answers on your Staff Membership Application 
raises legitimate concerns over your veracity and professional 
ethics.

"After reviewing the 
evidence, the Board has determined that a decision of the Joint Hearing 
Committee to deny your staff membership application on the basis of the 
falsification of one or more answers on your application is supported by 
sufficient evidence. You have been given ample opportunity to present evidence 
to the Joint Hearing Committee and to the Board. The Board believes that all 
procedures set forth in the Medical Staff By-Laws have been correctly followed 
with respect to the matter of your application for staff membership. The 
explanations and reasoning given by you for providing information on your 
Medical Staff Application which was factually false were insufficient to justify 
that false answer. Providing false information to the hospital with respect to 
important matters such as medical staff privileges is a sufficient basis for the 
denial of your medical staff application."

[¶9]      We note also that 
the record contains an application for medical staff privileges at Putnam 
General Hospital, Hurricane, West Virginia, which is dated July 22, 1987. In 
that application, Dr. Garrison answered a similar question "yes." At the hearing 
before the district court, Dr. Garrison explained that he had answered that way 
even though he had been advised by Putnam General Hospital personnel that he 
could answer the question "no." It was, at least in part, a result of 
discussions with these Putnam General Hospital personnel, and the fact that the 
problem at Thomas Memorial Hospital had not been reported to the West Virginia 
State Board of Medical Examiners, that he reached the conclusion that he could 
rightfully answer such questions "no" in the future.

[¶10]   Dr. Garrison filed his civil action 
in the district court seeking declaratory, monetary and injunctive relief on 
December 5, 1988. After a trial to the court, the district judge issued an 
opinion letter in which he found the issue before him to be "not whether Dr. 
Garrison had a good faith belief that he was never suspended, but rather whether 
the Hospital undertook to conduct itself in a matter [manner] which can be 
characterized as `arbitrary, capricious, or without foundation of fact.'" The 
district court opined that the controversy may have been over an "honest 
mistake" and that there was "room for an attitude of understanding," but the 
court concluded that the discretion was in the hands of the Trustees and not the 
court. The district judge determined that the Trustees had not abused their 
discretion and their decision was not capricious.

DISCUSSION

[¶11]   We have held that one of the 
primary purposes of a hospital's medical staff committee is to ensure the 
dispensation of quality medical care. Greenwood v. Wierdsma, 741 P.2d 1079, 1089 
(Wyo. 1987). Moreover, the right to practice medicine, while it is a property 
right, is conditional and subject to the police power of the state. Paravecchio 
v. Memorial Hospital of Laramie County, 742 P.2d 1276, 1283 (Wyo. 1987). We have 
recognized that it is improper for any court to substitute its judgment for that 
of the board of trustees concerning management and operation of a hospital. 
Gonzales v. Personal Collection Service, 494 P.2d 201, 206 (Wyo. 1972); and see 
W.S. 18-8-104(a) (1989 Cum.Supp.). A hospital board of trustees has the power to 
make reasonable rules and regulations defining the conditions under which 
physicians might avail themselves of the facilities of the hospital. Board of 
Trustees of Memorial Hospital of Sheridan County v. Pratt, 72 Wyo. 120, 262 P.2d 682, 688-89 (1953). A physician does not have an unqualified right, 
constitutional or otherwise, to practice his profession in a public hospital; 
but a physician may not be excluded by rules, regulations or acts of the 
hospital's governing authorities which are unreasonable, arbitrary, capricious, 
or discriminatory. Id.; Annotation, Exclusion of or Discrimination Against 
Physician or Surgeon by Hospital, 37 A.L.R.3d 645, 666, § 4 (1971); 2 Shepard's 
Causes of Action 597, § 11 (1983); McCall, A Hospital's Liability for Denying, 
Suspending and Granting Staff Privileges, 32 Baylor L.Rev. 175, 188-201 (1980); 
40 Am.Jur.2d, Hospitals and Asylums, § 10 (1968).

[¶12]   In reviewing a decision of a public 
hospital to refuse to grant or to terminate staff privileges of a physician, 
whether the review is conducted in the district court or in this court, the 
applicable standard of review is one which accords great deference to a 
hospital's decision. That review is limited to a determination of whether the 
exclusion was made on a rational basis, supported by substantial evidence, in 
accordance with reasonable hospital bylaws, and was not discriminatory, 
arbitrary, or capricious. We accord deference to the decisions of hospital 
trustees because in making such decisions they are placed between the "rock" of 
answering to actions, such as Dr. Garrison's, and the "hard place" of ensuring, 
as best they can, the avoidance of actions for negligence in selection and 
appointment of staff. Lapidot v. Memorial Medical Center, 144 Ill. App.3d 141, 
98 Ill.Dec. 716, 720, 494 N.E.2d 838, 842 (1986); see Annotation, Hospital's 
Liability for Negligence in Selection or Appointment of Staff Physician or 
Surgeon, 51 A.L.R.3d 981 (1973).

[¶13]   Dr. Garrison asserts that he was 
denied due process of law because the Trustees considered his medical competency 
despite the fact that he was systematically precluded from developing a record 
on that issue. We have carefully reviewed the evidence summarized above and can 
only conclude that the Trustees did not consider evidence of medical competency 
in reaching their decision to sustain the recommendation that Dr. Garrison be 
denied hospital privileges. To the extent that subject was discussed, it was 
largely at the behest of Dr. Garrison and incidental to considering the 
falseness of his answer as it related to his summary suspension from obstetrical 
privileges at Thomas Memorial Hospital.

[¶14]   As a second issue, Dr. Garrison 
asserts that the district court erred in relying on the fact that he had not 
held obstetrical privileges since 1985 as a justification for its finding that 
the Trustees' conduct was not arbitrary or capricious. We have likewise 
carefully read the district court's opinion letter, and we are unable to 
conclude that its decision was premised, even in part, upon the fact that Dr. 
Garrison had not held obstetrical privileges since 1985. The district court's 
discussion was limited to one which noted that fact, along with many others, to 
reach a conclusion that Dr. Garrison had deliberately answered the disputed 
question "no," when it should have been answered "yes."

[¶15]   Moreover, the review accorded Dr. 
Garrison in the district court was no broader or greater than the review he 
receives here. So far as review of the reasonableness of the regulation which 
Dr. Garrison offended, and the soundness of the decision ultimately reached by 
the Trustees is concerned, those matters are fully reviewed in this court 
without any deference being given to the intermediate decision of the district 
court. The review process of this case, a declaratory judgment action in the 
district court, does not differ significantly from the review process under the 
Administrative Procedure Act. We hold that the Trustees' policy, which provides 
that medical staff privileges may be denied if the application contains 
significant misstatements or omissions, is reasonable and nondiscriminatory. 
Lapidot v. Memorial Medical Center, 98 Ill.Dec. at 723, 494 N.E.2d  at 845; 
Dunbar v. Hospital Authority of Gwinnett County, 227 Ga. 534, 182 S.E.2d 89, 92 
(1971); and see Bucknum v. Johnson, 21 Wyo. 26, 127 P. 904, 907-08 
(1912).

[¶16]   We think it relevant to note that 
under W.S. 33-26-402(a)(i), the Wyoming State Board of Medical Examiners may 
refuse to grant, renew, revoke, suspend or restrict a license or take other 
disciplinary action, where a physician obtains, renews or attempts to obtain or 
renew a license by fraud or misrepresentation. Although it played no part in the 
decisions below, and it plays no part in our decision, we note that Dr. Garrison 
was officially reprimanded by the Wyoming State Board of Medical Examiners on 
June 6, 1989, for supplying a negative answer to a similar question on his 
license application. It follows that if a license to practice may be denied on 
these grounds, then the privilege of serving on a hospital medical staff may be 
denied for the same reason. See 61 Am.Jur.2d, Physicians, Surgeons, and Other 
Healers, § 81 (1981). Concealment of material facts may, and did under the 
circumstances of this case, constitute a fraud on the Trustees. Meeker v. 
Lanham, 604 P.2d 556, 558 (Wyo. 1979); Steadman v. Topham, 80 Wyo. 63, 338 P.2d 820, 827 (1959); see Bucknum v. Johnson, 127 P.  at 907-08.

[¶17]   We hold that the decision of the 
Trustees was not arbitrary or capricious, rather it was based on substantial 
evidence that Dr. Garrison's application for medical staff privileges contained 
significant misstatements or omissions.

[¶18]   The order of the district court 
dismissing the complaint with prejudice is affirmed.

FOOTNOTES

1 If a false answer, it 
proves again one of Mark Twain's adages: "One of the most striking differences 
between a cat and a lie is that a cat has only nine lives." Twain, Pudd'nhead 
Wilson, Pudd'nhead Wilson's Calendar, Ch. 1 (1894), as quoted in Bartlett, 
Familiar Quotations, p. 624:16 (Little, Brown and Co. 1980).