Title: Salvagno v. Frew

State: maryland

Issuer: Maryland Supreme Court

Document:

In the Circuit Court for Washington County
Case No. 21-C-02-14637-OT
IN THE COURT OF APPEALS OF MARYLAND
No. 105
September Term, 2004
______________________________________
RALPH T. SALVAGNO, M.D., ET AL.
v.
WILLIAM M. FREW, ET AL.
______________________________________
Bell, C.J.
Raker
Wilner
Cathell
Harrell
Battaglia
Greene,
   JJ.
______________________________________
Opinion by Wilner, J.
______________________________________
Filed:     June 10, 2005
1 As a result of subsequent legislation, the Health Claims Arbitration Office has
been renamed the Health Claims Alternative Dispute Resolution Office.  We shall use the
former name or its acronym (HCAO).
This is a medical malpractice action arising from surgery performed on plaintiff,
William Frew’s, right ankle.  The claim, as it reached the Circuit Court for Washington
County, was based solely on the alleged lack of informed consent.  The claim had previously
been dismissed by the Health Claims Arbitration Office (HCAO) because Frew had not
identified an expert witness, presumably to testify as to what advice was required and
whether the failure to give it constituted a departure from the applicable standard of care.1
Frew treated the dismissal as an award for the defendants, rejected it, and filed a
petition to nullify it and a Complaint.  Though it made no prediction as to any likely success,
the Circuit Court concluded that Frew could, if he wished, choose to rely on what he hoped
would be favorable testimony from the defendant physician, so it nullified the HCAO award
and set the case in for further judicial proceedings.  Although that ruling obviously did not
constitute a final judgment in the matter, the defendants noted an appeal to the Court of
Special Appeals, urging that the ruling was immediately appealable because it exceeded the
subject matter jurisdiction of the Circuit Court.  The intermediate appellate court accepted
jurisdiction of the appeal, concluded that the Circuit Court was correct in its substantive
ruling, but decided that the case should be remanded to HCAO, rather than proceed in the
Circuit Court.  See Salvagno v. Frew, 158 Md. App. 315, 857 A.2d 506 (2004).
We shall vacate the judgment of the Court of Special Appeals.  The ruling of the
Circuit Court was not immediately appealable.  The intermediate appellate court should have
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dismissed the appeal as not allowed by law.
BACKGROUND
Maryland Code, § 3-2A-04 of the Cts. & Jud. Proc. Article (CJP), requires a person
who wishes to pursue a claim against a health care provider for damages due to medical
injury to file the claim with the Director of HCAO.  The scheme envisioned by that subtitle
of the Code is that, subject to waiver by any party, settlement or abandonment by the
claimant, or dismissal on procedural or other limited grounds, such a claim will be submitted
to non-binding arbitration before a panel consisting of an attorney, a health care provider, and
a person who is neither an attorney nor a health care provider.  One of the pre-conditions to
proceeding to arbitration, or waiver, is provided by CJP § 3-2A-04(b).  That section requires
that, unless the sole issue presented in the claim is the lack of informed consent, the claim
is subject to dismissal without prejudice unless, within a certain time deadline or extensions
thereto, the claimant files with the Director a certificate from a qualified expert that attests
(1) to the defendant’s departure from standards of care, and (2) that the departure was the
proximate cause of the alleged injury.
On March 16, 2000, Mr. Frew and his wife filed a claim with HCAO against three
health care providers – Ralph T. Salvagno, Altizer-Salvagno Center for Joint Surgery at
Robinwood, and Michael Fitzgerald.  The only allegation in the Statement of Claim was that,
on March 26, 1997,  Dr. Salvagno performed an operative procedure on Frew, at which time
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a tourniquet was improperly applied, and that, as a result of the improper application of the
tourniquet and the performance of the surgery, Frew sustained injuries to his right calf and
right foot.  The sole basis of the claim was negligence in performing the procedure and
failing to follow up complaints of pain.  No particular negligence was alleged against anyone
other than Dr. Salvagno.  
The initial claim contained two counts – one by Mr. Frew for negligence, and a loss
of consortium claim by him and his wife.  For convenience, we shall hereafter refer to the
claimants collectively as Frew.  In October, 2000, Frew filed an amended claim with HCAO,
adding, as Count Three, a claim of lack of informed consent – that the defendants performed
surgery on Mr. Frew’s right ankle without properly obtaining his informed consent and that,
as a direct and proximate result, he was injured.  
Frew apparently had difficulty obtaining an expert’s certificate attesting to the
defendants’ actionable negligence in the performance of the surgery, and, on or about June
6, 2001, after several extensions had been granted, the HCAO Director dismissed the
negligence claim for failure to meet the requirement of CJP § 3-2A-04(b).  That left only the
alleged lack of informed consent count and the pendent loss of consortium claim, as to which
an expert’s certificate was not required.  
CJP § 3-2A-05(c) provides that the attorney member of the arbitration panel shall act
as chair of the panel and shall decide all prehearing procedures, including issues relating to
discovery and motions in limine.  Section 3-2A-05(a)(1) requires that all issues of law be
2 One of the interrogatories asked: “If you contend that Plaintiff’s injuries were
caused by a known risk or complication, or recognized risk or complication to the
professional services rendered to Plaintiff, state the risk or complication, whether it was
accepted, recognized or known to the professional community at large, whether it was
communicated to the Plaintiff, and if so, when, and by whom, whether the communication
was oral or in writing, and if written, attach a copy.”  Salvagno refused to answer that
interrogatory.  His response was: “Health Care Provider objects to this Interrogatory on
the grounds that it calls for an expert opinion.  Testifying experts have not yet been
(continued...)
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referred to the panel chair.  On December 3, 2001, the panel chair issued a scheduling order
that set a deadline of February 1, 2002 for Frew to name his expert witnesses.  The
defendants were to name their expert witnesses by March 15, 2002, and June 21, 2002 was
established as the end of discovery.  The arbitration hearing was scheduled for July 22, 23,
and 24, 2002.  
When Frew failed to name his expert witnesses by the February 1 deadline, the
defendants filed a motion to dismiss the claim or, in the alternative, a motion for summary
judgment.  They argued in their motion that, under this Court’s decision in Sard v. Hardy,
281 Md. 432, 379 A.2d 1014 (1977), expert medical testimony was required in order to prove
a claim based on lack of informed consent and that, without such a witness, Frew could not
establish a prima facie case.  Frew responded that he had served certain interrogatories on
Dr. Salvagno seeking information relevant to whether Frew might need an expert witness and
that Salvagno had not provided sufficient information for him to make that determination.
He added that, although he might eventually need an expert witness, the law did not require
that “the experts need to be established at the cut-off of Plaintiff’s designation.” 2  Frew asked
2(...continued)
determined.  Once testifying experts have been identified, Claimants will be permitted to
depose and seek such information from those experts.”
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for a 30-day extension to supply an expert witness designation but asserted that Salvagno’s
“admissions” would suffice to establish the standard of care.
That response was not persuasive to the panel chair, who, by Order dated April 18,
2002, dismissed without prejudice the lack of informed consent and loss of consortium
claims because of Frew’s failure to designate an expert witness.  The panel chair concluded,
in relevant part:
“In view of Sard [v. Hardy, supra], without an expert witness,
the Claimants cannot make a prima facie case for lack of
informed consent.  I find no merit in the Claimants argument
that the Health Care Provider, Dr. Salvagno, should in essence
be the Claimants’ expert witness.  The cases cited in Claimants’
Memorandum in Support of Opposition to Motion for Summary
Judgment would appear to indicate that an adverse party may be
called as a witness and interrogated on cross-examination both
as to facts and as to expert opinion – in addition to – and not
instead of – their own expert witness.”
CJP § 3-2A-06(a) permits a party to reject an award for any reason.  In order to do so,
however, the rejecting party must, within 30 days after the award is served on the rejecting
party or within 10 days after denial of a timely application for modification or correction of
the award,  (1) file a notice of rejection with the HCAO Director, and (2) file an action in
court to nullify the award.  Frew’s immediate response to the panel chair’s order was a
motion for reconsideration, which, on May 16, was denied.  Frew filed a notice of rejection
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with the HCAO Director and a petition in the Circuit Court for Frederick County to nullify
the award.  He averred that he had a right to rely on the defendants’ admissions “as to the
particulars of informed consent” and that the panel chair exceeded her authority in dismissing
his claim.  Accompanying the Petition to Nullify, in conformance with Maryland Rule 15-
403, was a two-count Complaint that tracked the amended HCAO claim – Count I charging
lack of informed consent and Count II being a loss of consortium claim – along with a
request for jury trial.  
Five days later, Frew moved to transfer the action to the Circuit Court for Washington
County, noting that the action was filed in Frederick County in the mistaken belief that
Hagerstown was in that county and that proper venue lay in Washington County.  In the
absence of any objection, the case was transferred pursuant to the request.  
The defendants moved to deny the Petition to Nullify and to dismiss the Complaint.
In their response to the petition, they asserted that the panel chair did not exceed her
authority.  In their motion to dismiss, they averred that arbitration was a precondition to any
court action and that, by failing to name an expert witness, Frew had effectively failed to
arbitrate his claim.  In making that argument, they relied principally on Bailey v. Woel, 302
Md. 38, 485 A.2d 265 (1984) and Watts v. King, 143 Md. App. 293, 794 A.2d 723 (2002).
After a non-evidentiary hearing, the Circuit Court, on May 12, 2003, filed an opinion
and order granting Frew’s petition to nullify the award, vacating the panel chair’s order
dismissing the claim, and denying the defendant’s motion to dismiss.  The court concluded
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that, with a claim based solely on lack of informed consent, Frew was not required to
produce a certificate from an expert and that Sard v. Hardy did not “impose a necessary
requirement upon Plaintiffs to present expert testimony in order to meet their burden of proof
as to the materiality of the risk from [Frew’s] perspective.”  It held that the panel chair’s
dismissal of the claim “with no opportunity to present the case, was premature.”
Accordingly, the court ordered that a scheduling conference be set by the Assignment Office,
indicating thereby that the case would remain in the Circuit Court for further proceedings.
The defendants noted an immediate appeal.  Though tacitly recognizing that there was
no final judgment in the case, they relied on Watts v. King, supra, 143 Md. App. 293, 794
A.2d 723 for the proposition that the order was nonetheless immediately appealable.  In
Watts, the Court of Special Appeals concluded that an immediate appeal would lie from an
interlocutory order that is beyond the jurisdiction of the lower court and that, in a health care
malpractice action that the law requires be submitted in the first instance to arbitration in
conformance with CJP §§ 3-2A-01 through 3-2A-09, the Circuit Court has no jurisdiction
until that requirement is satisfied.
The Court of Special Appeals in this case did not address the appealability of the
Circuit Court order but apparently accepted the defendant’s argument that an immediate
appeal would lie where the order appealed from was allegedly outside the lower court’s
3 We note that Frew did not challenge the immediate appealability of the order but
instead argued, on the merits, that the Circuit Court did have jurisdiction to vacate the
panel chair’s dismissal of the claim.
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jurisdiction.3  It concluded, however, that the Circuit Court was correct in vacating the panel
chair’s dismissal of the claim.  That, in turn, was based on its conclusion that, in a lack of
informed consent case, while it may not be prudent to do so, the plaintiff may rely on the
defendant’s admissions “to prove those aspects of the claims that required expert testimony.”
Salvagno v. Frew, supra, 158 Md. App. at 331, 857 A.2d at 515.  The court noted, however,
that, because as a result of the dismissal, the arbitration never proceeded, there was no actual
“award” to be nullified.  In that regard, it equated an “award” with a resolution of the claim
on its merits.  On that premise, and relying on Manzano v. Southern Md. Hospital, 347 Md.
17, 698 A.2d 531 (1997), the court concluded that the case should be remanded to HCAO
to proceed to arbitration.
We granted the defendants’ petition for certiorari to consider whether, in a medical
malpractice case based solely on the alleged lack of informed consent, the plaintiff (1) is
required to produce expert testimony in order to establish a prima facie case, and (2) if so,
whether the plaintiff may rely on the testimony of the defendant physician to meet that
requirement.  Unfortunately, we shall be unable to decide that issue, as the case is not
properly before us and was not properly before the Court of Special Appeals.  
DISCUSSION
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The Court of Special Appeals, directly or implicitly, made two procedural
determinations that require review.  First, in line with its holding in Watts v. King, supra, 143
Md. App. 293, 794 A.2d 723, it at least tacitly accepted the defendants’ argument that an
immediate appeal lies from an interlocutory order or other ruling that allegedly is beyond the
jurisdiction of the lower court and that a decision by a Circuit Court to entertain a medical
malpractice action that is subject to the arbitration regime established by CJP, title 3, subtitle
2A is jurisdictionally deficient.  Second, it concluded that “[t]he dismissal of a case prior to
the liability determination is, in effect, a non-decision, because there is no award to vacate
pursuant to [CJP] § 3-2A-06(c).”  Salvagno v. Frew, 158 Md. at 334, 857 A.2d at 517.  That
conclusion followed what the court had said in Alfred Munzer, M.D., P.A. v. Ramsey, 63 Md.
App. 350, 492 A.2d 946 (1985).  It was on that basis that the court insisted that the case be
remanded to HCAO rather than remain for adjudication in the Circuit Court.  We disagree
with both of those conclusions.
Appealability
We dealt most recently with the appealability issue in Maryland State Board of
Education v. Bradford,      Md.      ,      A.2d       (2005).  We noted there that, although there
is, indeed, a line of cases, commencing with Gottschalk v. Mercantile Trust Co., 102 Md.
521, 62 A. 810 (1906) and extending through Waters v. Smith, 277 Md. 189, 352 A.2d 793
(1976), in which this Court has indicated that an immediate appeal will lie from an
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interlocutory order that exceeds the jurisdiction of the lower court, we have in more recent
times discarded that view.  Rather, we have made clear that the right to seek appellate review
of a trial court’s ruling ordinarily must await the entry of a final judgment that disposes of
all claims against all parties, and that there are only three exceptions to that final judgment
requirement: appeals from interlocutory orders specifically allowed by statute; immediate
appeals permitted under Maryland Rule 2-602; and appeals from interlocutory rulings
allowed under the common law collateral order doctrine.  We noted in Bradford that in
Gruber v. Gruber, 369 Md. 540, 547, 801 A.2d 1013, 1017 (2002), we held flatly that “a trial
court’s order denying a challenge to its jurisdiction is a nonappealable interlocutory order.”
We further observed in Bradford that a contrary approach would be wholly
inconsistent with the very purpose of the final judgment rule, which is to avoid piecemeal
appeals that create inefficiencies in both the appellate and trial courts:  “The mere allegation
that a clearly interlocutory order is jurisdictionally deficient should not serve to halt
proceedings in the trial court while an appellate court considers whether the allegation has
merit.”  Maryland State Board of Education v. Bradford, supra,   Md. at    ,    A.2d   at   .
The wisdom of that approach is apodictic in this case.  On May 12, 2003, the Circuit Court
directed that the case, involving a claim of only $25,000, proceed.  Two years later, the case
is still in limbo because of these appeals – fourteen months in the Court of Special Appeals
and six months, counting from the granting of certiorari, in this Court, all because of a
questionable allegation regarding the Circuit Court’s jurisdiction to nullify the HCAO award
4 We have made clear that a court’s actions cannot be assailed for lack of subject
matter jurisdiction unless that jurisdiction is lacking in a “fundamental sense.”  First
Federated Com. Tr. v. Comm’r, 272 Md. 329, 334, 322 A.2d 539, 543 (1974). 
“Fundamental jurisdiction,” we have held, refers to the “power to act with regard to a
subject matter which ‘is conferred by the sovereign authority which organizes the court,
and is to be sought for in the general nature of its powers, or in authority specially
conferred.’”  Pulley v. State, 287 Md. 406, 416, 412 A.2d 1244, 1249 (1980) (quoting
Cooper v. Reynolds’ Lessee, 77 U.S. (10 Wall.) 308, 316, 19 L. Ed. 931, 932 (1870)). 
Thus, a court has fundamental jurisdiction when it has power to render a judgment over a
class of cases within which a particular one falls, First Federated Co. Tr. v. Comm’r,
supra, 272 Md. at 335, 322 A.2d at 543, and the fact that “a statutory provision directs a
court . . . to decide a case in a particular way, if certain circumstances are shown, does not
create an issue going to the court’s . . . subject matter jurisdiction.”  Board of License
Comm. v. Corridor, 361 Md. 403, 417, 761 A.2d 916, 923 (2000).  
In Oxtoby v. McGowan, 294 Md. 83, 91, 447 A.2d 860, 864-65 (1982), we
explained that the Circuit Courts do possess fundamental subject matter jurisdiction over
claims that fall under the Health Care Malpractice Claims Act and that, although the
statute places a precondition on the invocation or exercise of that jurisdiction, it “does not
take away the subject matter jurisdiction of a circuit court to hear and render judgments in
cases involving claims which fall within the Act.”   Any contrary holding in Schwartz v.
Lilly, 53 Md. App. 318, 452 A.2d 1302 (1982) and Watts v. King, supra, 143 Md. App.
293, 794 A.2d 723 is disapproved.  The simple fact is that there was no fundamental
jurisdictional impediment to the Circuit Court’s action in this case.
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and proceed on the Complaint.4
Was There An Award?
In Alfred Munzer, M.D., P.A. v. Ramsey, supra, 63 Md. App. 350, 492 A.2d 946, a
claim was made against five health care providers, and an arbitration panel was appointed
to hear the claim.  Prior to any arbitration, the chairman of the panel, acting alone, signed an
order granting “summary judgment” in favor of one of the providers, upon concluding that
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there was no liability on the part of that provider to the claimant.  No costs were assessed
and, although copies of the order were sent to the parties, the original order was never
delivered to the HCAO Director.  The case against the other providers proceeded but was
eventually settled and, as a result of the settlement, dismissed.  No award of any kind was
made with respect to them.  
The claimant then rejected the award in favor of the one provider and filed an action
in Circuit Court seeking, in the alternative, either nullification or a remand to the panel to
proceed with the arbitration.  The Circuit Court concluded that there was no award to nullify
and that it had no jurisdiction in the matter, and it ordered the case remanded to HCAO.  The
Court of Special Appeals believed likewise and directed that the Circuit Court action be
dismissed without prejudice, to permit the arbitration to proceed.
In reaching that conclusion, the Court of Special Appeals did not resolve whether the
panel chair had the authority to enter a “summary judgment,” and, indeed, it confirmed an
earlier holding in Stifler v. Weiner, 62 Md. App. 19, 488 A.2d 192 (1985), cert. denied, 304
Md. 96, 497 A.2d 819 (1985), that a panel chair did have authority to enter summary awards
in certain situations.  Rather, it held that, whether the panel chair was right or wrong, no
award was ever made.  An award, it said, must not only resolve the issues of liability and
damages but also assess the costs of arbitration and be delivered to the HCAO Director.  In
the Munzer case, there was no assessment of costs and, as noted, the order was never
delivered to the Director.  Until that was done, the court added, the order was entirely
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interlocutory and subject to change by the panel chair.
The case before us is quite different, in part because of changes in the legal landscape.
For one thing, as we have observed, it is now clear that the panel chair may resolve issues
of law and “decide all prehearing procedures including issues relating to discovery.”  CJP
§ 3-2A-05(a)(1) and (c).  The dismissal ordered here was a sanction for what the panel chair
believed was the failure to provide discovery as required in her scheduling order.  In that
regard, we note that CJP § 3-2A-02(d) makes the Maryland Rules applicable to “all practice
and procedure issues arising under this subtitle,” that CJP § 3-2A-05(b)(2) specifically makes
the Maryland Rules relating to discovery applicable to proceedings under the subtitle, and
that Maryland Rule 2-433 permits a court, upon a plaintiff’s failure to provide discovery, to
dismiss an action.  Moreover, unlike the situation in Munzer, the order here did assess costs
– they were split equally between the parties – and it was filed with the HCAO Director. 
When Munzer was decided, the term “award” was not defined, either in the statute or
in the Maryland Rules implementing the statute.  In 1997, we revised the rules relating to
health claims arbitration and, in the process, adopted Maryland Rule 15-402(b), which
defines “award” as “a final determination of a health care malpractice claim by an arbitration
panel or by the panel chair.”  (Emphasis added).  Unquestionably, the order by the panel
chair dismissing Frew’s claim constituted a final determination of that claim.  There was
nothing left before HCAO, especially when Frew’s motion for reconsideration was denied.
Whether the order was right or wrong, authorized or unauthorized, it clearly disposed of the
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claim and thus constituted an award in favor of the defendants.  It was therefore subject to
rejection by Frew and an action in court to nullify it.  
One question raised in Munzer and addressed by the intermediate appellate court in
this case – what ultimate relief should be granted – still lingers.  The effect of vacating the
judgment of the Court of Special Appeals and directing that court to dismiss the appeal
would leave the case pending in the Circuit Court, which would be inconsistent with the
approach taken in Munzer.  When Munzer was decided in 1985, the law did not permit a
waiver of the arbitration procedure unless all parties agreed.  It was thus clear, at that time,
that, subject to a limited and undefined right of a panel chair to make certain kinds of
summary dispositions, each party had a statutory right to have the claim resolved on its
merits, either as a matter of fact or as a matter of law, by an arbitration panel, and, as the
Munzer court noted, the plaintiff in that case asked, as alternative relief in the Circuit Court,
that the case be remanded to the arbitration panel.  If a claim was improperly dismissed by
a panel chair, the appropriate course of action was to have the matter remanded to HCAO so
that the statutorily mandated arbitration could occur.  
In 1995, the General Assembly, through the enactment of CJP § 3-2A-06B, permitted
a claimant or any defendant, unilaterally, to waive arbitration and permit the case to be
resolved initially in the Circuit Court.  Section 3-2A-06B(b) provides that a waiver by a
claimant may be made “at any time after filing the certificate of qualified expert required by
§ 3-2A-04(b) of this subtitle.”  If, as here, no such certificate is required in the particular
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case, the waiver may be made prior to the time that a certificate otherwise would be due.
Unlike in Munzer, Frew did not ask that the case be remanded to HCAO for any further
proceeding; when the panel chair dismissed his claim, he filed a Complaint in the Circuit
Court and asked for a jury trial.  We shall treat that as an election to waive arbitration before
an HCAO panel.  Section 3-2A-06B(b) requires that a waiving claimant file a written waiver
with the HCAO Director and serve a copy on all other parties.  That was done.  A copy of
the Complaint that effected the waiver was delivered to the Director of HCAO and was
served on the other parties, as required.  There is no occasion, therefore, to cause the matter
to be remanded to HCAO.
JUDGMENT OF COURT OF SPECIAL APPEALS VACATED; CASE
REMANDED TO THAT COURT WITH INSTRUCTIONS TO DISMISS
APPEAL; COSTS IN THIS COURT AND IN COURT OF SPECIAL APPEALS
TO BE PAID BY PETITIONERS.