Title: Sadler v. Dimensions

State: maryland

Issuer: Maryland Supreme Court

Document:

Sadler v. Dimensions Health, No. 12, September Term, 2002
CIVIL PROCEDURE – SUMMARY JUDGMENT – STANDARD OF REVIEW – The trial
court, on a motion for summary judgment as to contract and tort claims, may not defer to the
results of the hospital’s credentialing process through application of a “substantial evidence”
standard.  Rather, in accordance with Maryland Rule 2-501(e), a motion for summary
judgment is appropriate only when there is no genuine dispute as to any material fact and the
moving party is entitled to judgment as a matter of law.
Circuit Court for Prince George’s County
Case No. 99-13905
IN THE COURT OF APPEALS
OF MARYLAND
No. 12
September Term, 2002
______________________________________
CYNTHIA DENISE  SADLER
v.
DIMENSIONS HEALTHCARE CORP., et al.
______________________________________
Bell, C.J.
         *Eldridge
Raker
Wilner
Cathell
Harrell
Battaglia,
JJ.
______________________________________
Opinion by Raker, J.
Wilner and Harrell, JJ., concur
______________________________________
Filed:   November 26, 2003
*Eldridge, J., now retired, participated in the hearing
and conference of this case while an active member of
this Court; after being recalled pursuant to the
Constitution, Article IV, Section 3A, he also
participated in the decision and adoption of this
opinion.
1The named defendants which are party to the present appeal include: Dimensions Health
Corporation; Allen E. Atzrott, the hospital’s president; Stephen Werner, M.D., the president of the
hospital’s medical staff; Donald M. Goldman, the vice president of medical affairs at the hospital;
and Shahnaz Quraishi, M.D., Raymond Cox, M.D., and Jeanette Ahkter, M.D., obstetricians on staff
at the hospital. 
Cynthia Denise Sadler, M.D., petitioner, was denied privileges to admit patients at
Prince George’s Hospital.  Petitioner filed suit against respondents, parties to the denial
decision,1 alleging a series of counts, including breach of contract, several torts, and an
action for declaratory judgment.  The Circuit Court for Prince George’s County granted
summary judgment in respondents’ favor.  The Court of Special Appeals affirmed, Sadler
v. Dimensions Health, 141 Md. App. 715, 787 A.2d 807 (2001), and we granted Sadler’s
petition for writ of certiorari.  Sadler v. Dimensions Health, 369 Md. 179, 798 A.2d 551
(2002).
In this action, we address the standard by which a circuit court should review, in the
context of contract and tort claims, a decision of the Board of Directors of a privately owned
hospital as to who should have staff privileges at the hospital.  In this case, the trial court
granted summary judgment on all counts in favor of respondents on the ground that the
hospital’s actions, taken in compliance with the hospital’s bylaws, were supported by
substantial evidence.  We shall hold that the trial court, on a motion for summary judgment
as to contract and tort claims, may not apply a “substantial evidence” standard akin to that
applied during judicial review of the final action of an administrative agency.  Rather, in
accordance with Maryland Rule 2-501(e), a motion for summary judgment is appropriate
only when there is no genuine dispute as to any material fact and the moving party is entitled
2
to judgment as a matter of law.  Accordingly, we shall reverse.
I.  Background
Petitioner, a licensed physician in the State of Maryland with a specialty in obstetrics
and gynecology (OB/GYN), applied for privileges at Prince George’s Health Center.  The
hospital is owned and operated by Dimensions Health Corporation, a non-profit corporation.
The protracted relationship which ensued is described in detail in the opinion of the Court
of Special Appeals as follows:
“In April, 1993, three incident reports concerning Dr.
Sadler were filed.  They involved her failure to respond to calls
and initiate timely treatment, a broken humerus and permanent
nerve injury following a birth, and a retained surgical sponge.
The Patient Care Committee of the OB/GYN Department
(‘PCC’) reviewed the reports and concluded that continued
observation of Dr. Sadler’s ‘pattern of practice’ was warranted.
“When Dr. Sadler’s application for medical staff
privileges came before the hospital’s credentials committee,
action was deferred so that additional information could be
obtained on her activities at Laurel Regional Hospital, where
she previously had privileges.  On July 8, 1993, the chairman of
the credentials committee learned that Dr. Sadler was
responsible for 28% of the quality assurance reviews at that
hospital during her tenure there.  Furthermore, he learned that
when Dr. Sadler was informed by Laurel Regional Hospital that
she was going to be monitored for a period of several months,
she did not apply for reappointment to its medical staff. 
“On November 1, 1993, Dr. Sadler was granted
provisional privileges for two years at the hospital.  Her
provisional privileges were extended by the Board of Directors
3
in November 1994. 
“From September 1994 to July 1995, the PCC was
referred sixteen of Dr. Sadler’s cases, seven of which were
found to involve significant opportunities for improvement and
four involved breaches of the standard of care.  On October 24,
1995, at the request of Dr. Cox and Dr. Quraishi, members of
the OB-GYN department, Dr. Sadler met with the Director of
Risk Management of the hospital and reviewed her entire
medical staff credential file, including her incident reports.  The
PCC met with Dr. Sadler on November 13, 1995, to review five
cases.  Three involved non-indicated or precipitous cesarean
sections and two involved delayed responses to calls from the
hospital staff.  Following that review, the PCC recommended
that Dr. Sadler consult with more senior practitioners for second
opinions before performing cesarean sections.
“Dr. Quraishi, who had become the chair of the
OB/GYN department, refused to rate Dr. Sadler satisfactory on
the provisional evaluation of her for the period from November
1994 until April 1995, because of fourteen multiple risk
management reports, five involved substantial opportunities for
improvement and one involved a breach of standard of care.
On August 12, 1996, Dr. Quraishi in the provisional evaluation
of Dr. Sadler’s performance for the period from April 1995 to
October 1995, rated it as unsatisfactory. 
“On September 3, 1996, Dr. Quraishi, as chief of the
OB/GYN department recommended to the credentials
committee that Dr. Sadler’s provisional status be extended for
an additional six months and that her activities be ‘closely
monitored.’  On October 22, 1996, the credentials committee
recommended that Dr. Sadler’s provisional status be extended
for an additional six months with monitoring to be set by the
Medical Executive Committee of the hospital (‘MEC’). 
“On November 11, 1996, the PCC met to review several
of Dr. Sadler’s cases.  That committee discussed the cerclage
procedures performed by Dr. Sadler and recommended that an
4
Ad Hoc Committee review that performance. 
“The MEC, acting on the recommendation of the
credentials committee, voted on November 12, 1996, to extend
Dr. Sadler’s provisional privileges for an additional six months
due to ‘repeated peer review and risk management issues.’  An
oversight committee for all departments of the medical staff
also decided that day to recommend to the OB/GYN department
that it retain the services of an outside consultant to review Dr.
Sadler’s patient care. 
“On December 2, 1996, certain members of the
OB/GYN department met with Dr. Sadler to discuss the
incident reports on her, her professional behavior and other
departmental issues.  At that meeting, Dr. Sadler was provided
copies of all the incident reports.  In reply, Dr. Sadler claimed
that staff members were ‘out to get her’ and questioned why she
was being singled out.  She also stated that there was a group of
nurses who were against her. 
“Harold Fox, M.D., Professor and Chief of OB/GYN at
Johns Hopkins Hospital, and George R. Huggins, M.D.,
Associate Director of OB/GYN at Johns Hopkins Hospital and
Director at Bayview Hospital, were retained by the OB/GYN
department of the hospital on April 4, 1997, to review charts of
a broad spectrum of OB/GYN cases of Dr. Sadler and random
charts of other members of the OB/GYN department of the
hospital.  Following that review, they concluded that there was
‘a significant opportunity for improvement in both
documentation and patient management’ by Dr. Sadler.  They
recommended in their report that Dr. Sadler be subjected to
case-by-case premonitoring for surgical indications.  At an
emergency meeting on April 25, 1997, the MEC considered the
report of Drs. Fox and Huggins, the cerclage review findings,
a chronology of events, and the recommendations of the PCC
and the credentials committee.  Based upon that review, all
members of the MEC (seventeen present), with the exception of
Dr. Frederick Corder, voted not to extend Dr. Sadler’s
provisional privileges beyond July 27, 1997, and until that time
2Sadler’s request for a postponement of the hearing was granted and thus, the hearing,
initially set to commence on June 24, 1997, began on November 12, 1997.
5
to impose monitoring and proctoring. 
“Dr. Sadler was notified of the decision of the MEC on
April 28, 1997, by a hand-delivered letter from Dr. David M.
Goldman, the Vice President for Medical Affairs of the
hospital.  That letter also advised Dr. Sadler that since the action
to terminate her privileges was an adverse action, she had a
right to request a hearing pursuant to the provisions of the
bylaws.  Dr. Sadler exercised that right on May 10, 1997. 
Sadler, 141 Md. App. at 719-722, 787 A.2d at 809-11.
Following the hospital’s notification to petitioner of the MEC’s decision to terminate
her privileges, petitioner appealed, pursuant to the bylaws, to the Ad Hoc Committee.2  Over
the following year, the hearing committee convened on nine days, hearing testimony from
a variety of witnesses.  The witnesses included the individual respondents in the present
case, as well as petitioner and a number of additional witnesses called by petitioner.
Witnesses provided testimony and presented exhibits.  All were subject to cross-examination
by counsel for the hospital and petitioner.
On April 1, 1999, the hearing committee issued a thirty-page written report, providing
a summation of the evidence presented, its findings with regard to the alleged actions of
petitioner, and the appropriateness of the MEC’s decision not to extend petitioner’s
privileges.  The committee recommended that the MEC’s decision be upheld.
3The bylaws provide, in pertinent part, the following provisions concerning “appellate
review” by the Board of Directors:
“The appellate review shall be conducted by the Board of
Directors as a whole or by a duly appointed committee of the Board
of Directors of not less than three (3) members.  Knowledge of the
matter involved shall not preclude any person from serving as a
member of the appeal board, so long as that person did not take part
in the prior hearing on the same matter.  For the purposes of this
section, participating in an initial decision to recommend adverse
action, shall not be deemed to constitute participation in a prior
hearing on the same matter.
“The affected practitioner shall have access to the report and
record (and transcription, if any) of the ad hoc hearing committee and
all other material, favorable or unfavorable, that was considered in
making the adverse recommendation or decision against him.  He
shall have fifteen (15) days to submit a written statement on his own
behalf, in which those factual and procedural matters with which he
disagrees, and his reasons for such disagreement, shall be specified.
This written statement may cover any matters raised at any step in the
procedure to which the appeal is related, and legal counsel may assist
in its preparation.  Such written statement shall be submitted to the
Board of Directors through the hospital president by certified mail,
return receipt requested, within fifteen (15) days of the date that the
affected practitioner files his request for appellate review.  Thereafter,
the Hospital shall have fifteen (15) days to file a response if so
desired.  In the case of an appellate review scheduled for a suspended
practitioner as provided for in Section F.3. of this Article, the time
frame outlined in this Paragraph will be waived and all applicable
documentation will be presented at the appellate review proceedings.
“The Board of Directors or its appointed review committee
shall act as an appellate body.  It shall review the record created in the
proceedings, and shall consider the written statements submitted for
the purpose of determining whether the adverse recommendation or
decision against the affected practitioner was justified and was not
arbitrary or capricious.  If oral arguments are requested as part of the
appellate review procedure, the affected practitioner shall be present
at such appellate review, shall be permitted to speak against the
6
Petitioner exercised her right under the hospital bylaws for appellate review3 by the
adverse recommendation or decision, and shall answer questions put
to him by any member of the appellate review body.  The Executive
Committee or the Board of Directors, whichever is appropriate, shall
also be represented by an individual who shall be permitted to speak
in favor of the adverse recommendation or decision and who shall
answer questions put to him by any member of the appellate review
body.”
4Respondents filed a Motion to Dismiss in the Circuit Court under Rule 2-322.  Because the
court considered matters outside the pleadings, the court considered the motion as one for summary
judgment.  See Maryland Rule 2-322(c).
7
Board of Directors.  Following oral argument, the Appellate Review Committee
recommended that the Board affirm the decision of the MEC, and the Board followed that
recommendation.
Subsequently, petitioner filed the present action in the Circuit Court for Prince
George’s County, alleging contract and tort claims.  The defendants included the
respondents, as well as Johns Hopkins University Hospital, Harold Fox, M.D., and George
Huggins, M.D.  Respondents filed motions for summary judgment, seeking dismissal for a
variety of reasons including immunity under both state and federal law.  Following a hearing
on respondents’ motions for summary judgment,4 petitioner filed a second amended
complaint, the subject of the present proceeding.  The complaint includes charges of breach
of contract (Count I), breach of the covenant of good faith and fair dealing (Count II),
tortious interference with prospective advantage (Counts IV and VI), tortious interference
with contract (Count V), and civil conspiracy (Count VII).  The amended complaint also
included an action for declaratory judgment (Count VIII).
8
Prior to resolving respondents’ motions for summary judgment, the Circuit Court held
two hearings and requested the parties to “be prepared to address at the hearing the
appropriate standard of review of the pending motions.  The court notes that the parties have
treated some issues under Rule 2-322, others under Rule 2-501 and yet others under
administrative law analysis.”  
The Circuit Court first addressed the threshold issue of the appropriate standard of
review applicable to a hospital credentialing decision.  The court asked the parties to submit
memoranda on the matter and notably, the parties gave the court no assistance.  In its written
Opinion and Order of the Court, the court first observed that there was no Maryland case law
“on the scope of judicial review of the administrative decision of a hospital acting in
conformity with its by laws.”  Continuing down that path, the court noted that, “. . . this kind
of administrative decision must be subject to some form of judicial review.”  Embracing the
statutory framework set out in the Maryland Administrative Procedure Act, Maryland Code
(1984, 1999 Repl. Vol., 2000 Supp.) § 10-222 of the State Government Article, for
reviewing decisions of State administrative agencies, the court then concluded, that “the
appropriate standard of review for the issues generated by the pending motions regarding
the Hospital’s decision is the ‘substantial evidence test.’”  (Emphasis added).  The court
followed the rationale of out-of-state cases that have addressed the issue and that have
likened the judicial review of the actions of private hospitals in the same way that courts
review actions of state administrative agencies, and thus the court held that the “substantial
5The trial judge was sandbagged by the parties in this case.  They gave the trial judge no
assistance on this thorny issue, and then agreed with the standard he proposed to apply.  Before the
Court of Special Appeals, petitioner never argued that the trial court applied the wrong standard—the
issue was raised sua sponte by the respondents in their response brief.  The Court of Special Appeals
agreed with respondents, and held that the trial judge applied the correct standard.  Sadler v.
Dimensions Health, 141 Md. App. 715, 727, 787 A.2d 807, 813-14 (2001).  Because the
intermediate appellate court addressed the matter, and because we disagree with the conclusion, we
shall address this important issue.
9
evidence” test was the appropriate one.  Most significantly, at oral argument on the summary
judgment motion, the parties agreed with the trial court as to the proposed test to be applied.5
The trial court applied this standard in dismissing all counts of petitioner’s amended
complaint.
Sadler noted a timely appeal to the Court of Special Appeals.  The Court of Special
Appeals held that the trial court used the proper standard of review.  We disagree.  
II.
Respondents argue that a hospital’s credentialing decision should be given effect if
supported by substantial evidence and made in conformity with the hospital bylaws.
Respondents point to cases in our sister states that have held that court review of hospital
credentialing decisions should be given “great deference,” and reason that “[b]alancing both
the physician’s economic interests and the need for judicial alertness to unreasonable and
unfair proceedings against a deference for the expertise of hospital authorities and the
desirability of giving them latitude in making reasonable credentialing decisions has led
10
some courts to adopt the substantial evidence test or its equivalent as the standard for limited
judicial review.”  Following this line of argument, respondents then contend that a hospital
credentialing decision, supported by substantial evidence, should preclude common law
causes of action if based on the same facts or issues decided against the physician.  
Respondents ask us, in the context of a hospital’s credentialing process, to modify the
traditional standard for consideration of summary judgment motions.  Where tort and
contract claims challenge the conduct of a medical facility and its peer-review process,
respondents contend that deference to those medical judgments is appropriate.  The Court
is asked to consider the present proceeding as one of “judicial review.”
The concept of “judicial review” was first utilized in the credentialing context where
physicians sought injunctions to prevent the enforcement of a hospital’s decision.  See Levin
v. Sinai Hosp. of Balto., 186 Md. 174, 179-80, 46 A.2d 298, 300-01 (1946) (finding
physician had alleged no right to injunction against hospital which failed to reappoint him
on the visiting staff); Natale v. Sisters of Mercy of Council Bluffs, 52 N.W.2d 701, 710
(Iowa 1952); Berberian v. Lancaster Osteopathic Hosp. Assoc., 149 A.2d 456, 459-60 (Pa.
1959); Strauss v. Marlboro County Gen. Hosp., 194 S.E. 65, 65 (S.C. 1937); State ex rel.
Wolf, 193 N.W. 994, 996 (Wis. 1923) (declaring mandamus would not lie against private
hospital for denying privileges to physician).  Physicians attempted to prevent the
enforcement of credentialing decisions, arguing that they had been denied due process or fair
hearings by the hospital.  Such actions, not based on common law causes of action but rather
11
on principles of equity, were disfavored by courts.  See Levin, 186 Md. at 179-81, 46 A.2d
at 301-03; Ponca City Hosp., Inc. v. Murphree, 545 P.2d 738, 741-42 (Okla. 1976); Straube
v. Emanuel Lutheran Charity Bd., 600 P.2d 381, 384 (Or. 1979); Khoury v. Cmty. Mem’l
Hosp., Inc., 123 S.E.2d 533, 539 (Va. 1962).  As one court explained:
“Several factors underlie our deference to the decisions
of a hospital pertaining to staff privileges. . . . [M]ost hospitals
have established procedures to make and review decisions
affecting those privileges.  The purpose of such a procedure is
to provide, outside of the judicial system, a fair method for
making decisions concerning staff privileges.  A second
consideration is that hospitals are subject to extensive
regulation, including regulations requiring the board of
directors to appoint and oversee a qualified medical staff.
Finally, governing a hospital requires expertise in both medical
treatment and hospital administration.  In so specialized and
sensitive an activity as governing a hospital, courts are well
advised to defer to those with the duty to govern. . . .
“Although they experience many of the problems of
other corporations, hospitals differ in that they are vitally
affected with a public interest and regularly function in a crisis
atmosphere.  Emergencies arise not only in emergency rooms,
but throughout the hospital: in intensive care units, operating
rooms, and patient rooms.  In so intense a setting, flaring
tempers, harsh words, and bruised feelings are to be expected.
Nonetheless, if a hospital is to care for its patients, the staff,
particularly doctors and nurses, must work together.  As
important as cooperation is to other corporations, it is even
more critical in a modern hospital, where no single doctor cares
for all the needs of any one patient.  Hospital doctors depend on
their colleagues, nurses, technicians, and other employees for
total patient care.  Just how to bring about the necessary
cooperation among them is a matter best left to hospital
authorities: the medical staff, hospital committees, and the
governing body.” 
12
Nanavati v. Burdette Tomlin Mem’l Hosp., 526 A.2d 697, 702-03 (N.J. 1987) (citations
omitted).  In addition to public policy concerns, judicial action, it was argued, interferes with
the business judgment of the hospital as a private entity.  See Natale, 52 N.W.2d at 709-10;
Van Campen v. Olean Gen. Hosp., 205 N.Y.S. 554, 557-58 (N.Y. App. Div. 1924)
(reversing injunction against hospital, “for courts have nothing to do with the internal
management of corporations in the absence of fraud or bad faith, if kept within corporate
powers” (citations omitted)), aff’d 147 N.E. 219 (N.Y. 1925); Khan v. Suburban Cmty.
Hosp., 340 N.E.2d 398, 402 (Ohio 1976) (“A court may not substitute its judgment for that
of the hospital trustees’ judgment.”).  On this basis, some courts declared, and continue to
declare, that a court is without jurisdiction to review the decision of a private hospital
credentialing committee.  See Sarin v. Samaritan Health Ctr., 440 N.W.2d 80, 82-83 (Mich.
Ct. App. 1989); Lakeside Cmty. Hosp., Inc. v. Levenson, 710 P.2d 727, 728 (Nev. 1985),
overruled by Meyer v. Sunrise Hosp., 22 P.3d 1142, 1148 n. 3 (Nev. 2001); Winston v. Am.
Med. Int’l, Inc., 930 S.W.2d 945, 956 (Tex. App. 1996).
This doctrine of non-review has been modified by several jurisdictions to allow for
limited court inquiry to assure that the hospital has complied with its own established
credentialing procedure.  See Clark v. Columbia/HCA Info. Servs. Inc., 25 P.3d 215, 220-21
(Nev. 2001); Straube, 600 P.2d at 383-84; Greisman v. Newcomb Hosp., 192 A.2d 817,
824-25 (N.J. 1963) (recognizing a private cause of action to review exclusions from medical
privileges because of the effect on physician’s ability to practice and public interest in health
13
care); Mahmoodian v. United Hosp. Ctr., 404 S.E.2d 750, 756 (W. Va. 1991) (citing cases).
But see Barrows v. Northwestern Mem’l Hosp., 525 N.E.2d 50, 52-53 (Ill. 1998) (finding
in 1988 that the “large majority of States continue to adhere to the rule of nonreview”).
While recognizing the hospital’s right to determine its own staffing needs, some courts
review the complaints of terminated and adversely affected physicians to assure that they
received a “fair hearing.”  See Adkins v. Sarah Bush Lincoln Health Ctr., 544 N.E.2d 733,
739 (Ill. 1989); Nanavati, 526 A.2d at 704; Mahmoodian, 404 S.E.2d at 756.  Such review,
viewed as the creation of a new cause of action, is limited in scope, generally amounting to
verification that requirements of the hospital bylaws were substantially complied with.  See
Shulman v. Washington Hosp. Ctr., 222 F. Supp. 59, 63 (D.D.C. 1963); Straube, 600 P.2d
at 385.
In such situations, the courts are split as to the appropriate standard of review.  While
some require a showing of “substantial evidence” that the hospital’s actions were in accord
with its adopted procedures, others seek to determine if the decision of the credentialing
panel was “arbitrary and capricious.”  Craig W. Dallon, Understanding Judicial Review of
Hospitals’ Physician Credentialing and Peer Review Decisions, 73 Temple L. Rev. 597,
676-77 (2000) (citing cases).  Under either approach, courts applying such “judicial review”
grant the physician’s requested injunction only where the record of the hospital proceeding
reveals a lack of basic procedural fairness.  See Mahmoodian, 404 S.E.2d at 755-56.  The
courts undertaking such review are especially hesitant to question or undermine the medical
14
evidence of the hospital, or to second-guess the credentialing personnel with regard to such
specialized subject matter.
The justification for limited judicial review, that the private decision of the hospital
is outside the court’s jurisdiction and that the medical professional’s expertise ought to
preclude scrutiny by the court, amounts to public policy determinations of our sister courts.
As stated, this limited review allows the court a role in granting injunctions against hospitals
to prevent the implementation of credentialing decisions.  Such suits, however, undermine
the hospital’s decision, allowing the affected physician to continue to practice medicine.
Courts restrict their review of such cases, preferring that the hospital’s decisions be upheld
largely on public policy grounds.
The Supreme Court of Appeals of West Virginia summarized the limited review
policy as follows:
“The judicial reluctance to review the medical staffing
decisions of private hospitals, by way of injunction, declaratory
judgment or otherwise, reflects the general unwillingness of
courts to substitute their judgment on the merits for the
professional judgment of medical and hospital officials with
superior qualifications to make such decisions.  Furthermore, a
private hospital’s actions do not constitute state action and,
therefore, are not subject to scrutiny for compliance with
procedural ‘due process,’ which is constitutionally required
when there is state action.  However, there are basic,
common-law procedural protections which must be accorded a
medical staff member by a private hospital in a disciplinary
proceeding which could seriously affect his or her ability to
practice medicine.  Such basic procedural protections include
notice of the charges and a fair hearing before an impartial
15
tribunal.  If a private hospital’s medical staff bylaws provide
these basic procedural protections, and if the bylaws’
procedures are followed substantially in the particular
disciplinary proceeding, a court usually will not interfere with
the medical peers’ recommendation and the hospital’s exercise
of discretion on the merits.”
Mahmoodian, 404 S.E.2d at 756 (citations omitted).
Like courts in our sister states, this Court has embraced the concept that internal
hospital decisions should be subject to limited judicial review.  In Levin v. Sinai Hosp. of
Balto., 186 Md. 174, 46 A.2d 298 (1946), we refused to grant the physician injunctive relief
to overturn a credentialing decision of the hospital administration.  Id. at 180, 46 A.2d at
301.  The physician had asked for an injunction against the hospital, claiming that the
hospital decision had been arbitrary and discriminatory.  Having determined that the hospital
was a private institution, we noted that “[i]t is a general rule that a court of equity will not
interfere with the internal management of a corporation, unless the act complained of is
fraudulent or ultra vires.”  Id. at 179, 46 A.2d at 301 (citing Williams v. Ice Co., 176 Md.
13, 26, 3 A.2d 507, 513 (1939), and Murray-Baumgartner Surgical Instr. Co. v. Requardt,
180 Md. 245, 252, 23 A.2d 697, 699-700 (1942)).
The “business judgment rule,” relied upon by the Court in Levin and codified at
Maryland Code (1975, 1999 Repl. Vol., 2002 Supp.) § 2-405.1 of the Corporations and
Associations Article, has been reiterated in a variety of contexts.  See, e.g., NAACP v.
Golding, 342 Md. 663, 672-73, 679 A.2d 554, 558-59 (1996) (applying rule to prevent
16
judicial review of internal voting rules of a voluntary membership organization); Toner v.
Baltimore Envelope Co., 304 Md. 256, 261-62, 498 A.2d 642, 644-45 (1985) (referring to
the rule in denying injunction against closely held corporation on behalf of minority holder
of nonvoting stock requiring corporation to purchase nonvoting stock at specific price);
Devereux v. Berger, 264 Md. 20, 31-32; 284 A.2d 605, 612 (1971) (noting that “[i]t is, of
course, ‘well established that courts generally will not interfere with the internal
management of a corporation’ and that the ‘conduct of the corporation’s affairs are placed
in the hands of the board of directors and if the majority of the board properly exercises its
business judgment, the directors are not ordinarily liable’” (citing Parish v. Milk Producers
Assn., 250 Md. 24, 74, 242 A. 2d 512, 540 (1968))).  Based upon the business judgment
rule, in Levin we upheld the trial court’s refusal to grant the injunction, and held: “a private
hospital has the right to exclude any physician from practicing therein, and such exclusion
rests within the sound discretion of the managing authorities.”  Levin, 186 Md. at 179-80,
46 A.2d at 301.  
Cases such as Levin, seeking injunctions on due process and equity grounds, are in
contrast to cases, like the one sub judice, alleging common law and statutory causes of action
in contract and tort.  Contract and tort actions have proliferated, in large part, because of the
increasingly predominant view that the bylaws of a hospital constitute a contract between
6The parties agree that the law in Maryland, as in the majority of states, recognizes that the
bylaws are enforceable as a contract.  See Volcjack v. Wash. County Hospital, 124 Md. App. 481,
495-96, 723 A.2d 463, 470-71 (1999); Anne Arundel Gen. Hosp. v. O’Brien, 49 Md. App. 362, 370,
432 A.2d 483, 488 (1981).  See also Berberian v. Lancaster Osteopathic Hosp. Ass’n, 149 A.2d 456,
459 (Pa. 1959); Medical Ctr. Hosps. v. Terzis, 367 S.E.2d 728 (Va. 1988) Craig W. Dallon,
Understanding Judicial Review of Hospitals’ Physician Credentialing and Peer Review Decisions,
73 Temple L. Rev. 597, 639-43 (2000) (citing cases).
17
the hospital and the physician holding privileges.6  In those jurisdictions where the bylaws
are held to constitute an enforceable contract, a physician aggrieved by a credentialing
decision may now bring a breach of contract action, as well as actions related to tortious
interference.  See Dallon, 73 Temple L. Rev. at 640-41 (citing cases).
Faced with these tort and contract cases, some courts have chosen to extend the
deferential concept of judicial review, created to review hospital decisions in equity which
sought injunctions, to all cases involving physician credentialing decisions.  See Spindle v.
Sisters of Providence in Wash., 61 P.3d 431, 436-37 (Alaska 2002); Kiester v. Humana
Hosp. Alaska, Inc., 843 P.2d 1219, 1223 (Alaska 1992); Owens v. New Britain Gen. Hosp.,
643 A.2d 233, 241 (Conn. 1994); Brinton v. IHC Hosps., Inc., 973 P.2d 956, 964 (Utah
1998).  Thus, even where a case alleges only common law causes of action, sounding in
contract and tort, many courts view the action as one of judicial review of the hospital’s
decision.  See Owens, 643 A.2d at 241.  Faced with a motion for summary judgment, those
courts limit the inquiry to a review of the hospital proceedings.  If the hospital’s decision to
limit or revoke privileges was made in substantial compliance with the hospital bylaws,
those courts have granted summary judgment, citing the earlier cases which limited the
7We note in the cases using an administrative agency standard of review a certain tension
between the two justifications for deferring to a hospital’s credentialing decisions.  To the extent the
court treats the decision as one of a private business, subject to the business judgment rule, it
removes the hospital from the sphere of public decision-making.  On the other hand, considering the
determination to be one made by a “quasi-public” entity, acting in the public interest, the courts seem
to be undermining the image of the hospital as a private business governed solely by its internal
procedures and beholden to nothing but its own business judgment.
8Section 10-222 provides, in pertinent part:
“(a) Review of final decision.—(1) Except as provided in subsection
(b) of this section, a party who is aggrieved by the final decision in a
contested case is entitled to judicial review of the decision as
provided in this section. . . .
18
court’s power to grant injunctive relief, and declaring an aversion to “second-guessing” the
decision of the medical personnel.  See id. at 239-240 (citing 
Gianetti v. Norwalk Hosp., 557
A.2d 1249, 1252-54 (Conn. 1989)).
In seeking to provide such deference, these courts have treated the hospital’s
credentialing procedure as a “quasi-administrative” proceeding, and accorded its conclusions
the same measure of deference normally given to the findings of a governmental
administrative agency.  The hospital, according to this argument, deserves such treatment
because its credentialing process serves a public function similar to that of an agency which
licenses a professional or entity to serve the public.  See Owens, 643 A.2d at 241-42, 241
n.27.7
The Maryland Administrative Procedure Act, Maryland Code (1984, 1999 Repl. Vol.,
2000 Supp.) § 10-222 of the State Government Article, delineates the procedure for judicial
review of a decision of a State agency.8  Generally judicial review of administrative agency
“(f) Additional evidence before agency.—(1) Judicial review of
disputed issues of fact shall be confined to the record for judicial
review supplemented by additional evidence taken pursuant to this
section. . . .
“(g) Proceeding.—(1) The court shall conduct a proceeding under
this section without a jury.
(2) A party may offer testimony on alleged irregularities in procedure
before the presiding officer that do not appear on the record.
(3) On request, the court shall:
(i) hear oral argument; and
(ii) receive written briefs.
“(h) Decision.— In a proceeding under this section, the court may:
(1) remand the case for further proceedings;
(2) affirm the final decision; or
(3) reverse or modify the decision if any substantial right of the
petitioner may have been prejudiced because a finding, conclusion,
or decision:
(i) is unconstitutional;
(ii) exceeds the statutory authority or jurisdiction of the final
decision maker;
(iii) results from an unlawful procedure;
(iv) is affected by any other error of law;
(v) is unsupported by competent, material, and substantial
evidence in light of the entire record as submitted; or
(vi) is arbitrary or capricious.”
19
action is narrow.  See Jordan v. Hebbville, 369 Md. 439, 450, 800 A.2d 768, 774 (2002).
The court’s task on review is not to substitute its judgment for the expertise of the
administrative agency.  Id. (quoting United Parcel v. People’s Counsel, 336 Md. 569, 576-
77, 650 A.2d 226, 230 (1994)); Board of Physicians v. Banks, 354 Md. 59, 68-69, 729 A.2d
376, 381 (1999).  In determining whether an administrative agency erred, the reviewing
court must determine “(1) the legality of the decision and (2) whether there was substantial
evidence from the record as a whole to support the decision.”  Jordan, 369 Md. at 450-51,
20
800 A.2d at 775 (quoting Balto. Lutheran High Sch. v. Sec. Adm., 302 Md. 649, 662, 490
A.2d 701, 708 (1985)).  “Substantial evidence” has been defined as “such relevant evidence
as a reasonable mind might accept as adequate to support a conclusion.”  Jordan, 369 Md.
at 451, 800 A.2d at 775 (quoting Bulluck v. Pelham Woods Apts., 283 Md. 505, 512, 390
A.2d 1119, 1123 (1978)).
Recently, in Bell Atlantic v. Intercom, 366 Md. 1, 782 A.2d 791 (2001), we reiterated
the reasoning for such a deferential standard of review of agency action:
“When faced with the responsibility of juxtaposing a
statute which provides for judicial review of administrative
agencies with the separation of powers doctrine as it is
enshrined in the Maryland Constitution, it is clear that the
analysis involves contrasting the relative role of the
administrative agency process with that of the judiciary.  We
note initially that both the agencies and the courts are
governmental ministries created to promote public purposes,
and in this sense they are collaborative instrumentalities, rather
than rivals or competitors, in the paramount task of
safeguarding the interests of our citizens.  However, the
agencies and the courts each have their own, separate,
constitutionally-erected fortress of power and responsibility in
the relationship each has to the activities delegated by the
Legislature to administrative agencies.”
Id. at 21-22, 782 A.2d at 803 (quoting Dep’t of Nat. Res. v. Linchester, 274 Md. 211, 221,
334 A.2d 514, 521-22 (1975)).  Thus, judicial review of the actions of an administrative
agency is restricted primarily because of the fundamental doctrine of separation of powers
9Article 8 of the Declaration of Rights of the Maryland Constitution states:
“That the Legislative, Executive and Judicial powers of Government
ought to be forever separate and distinct from each other; and no
person exercising the functions of one of said Departments shall
assume or discharge the duties of any other.”
21
as set forth in Article 8 of the Declaration of Rights of the Maryland Constitution.9  Id. at 21,
782 A.2d at 803.
The present case does not involve judicial review of an administrative agency
decision.  The hospital is a private entity, governed in the instance of credentialing decisions
not by statute but by its bylaws.  The Board of Directors are not officials appointed by the
executive branch of government, and their actions are not the actions of the executive.  Thus,
the constitutional rationale to defer to the actions of an agency does not arise under the
present circumstances.
This Court affirmed the independence of a private, non-profit, hospital in Levin v.
Sinai Hosp. of Balto., 186 Md. 174, 46 A.2d 298 (1946).  In Levin, we considered a court
action based on a hospital’s credentialing decision.  Id. at 177, 46 A.2d at 300.  The
physician brought suit against the hospital which had terminated his status as “visiting staff.”
His complaint alleged that the bylaws of the hospital were arbitrary and discriminatory, and
that the hospital restrained trade in violation of the Sherman Anti-Trust Act, 15 U.S.C.A.
§§ 1-3. Id. at 177-78, 46 A.2d at 300.
As a threshold issue, this Court considered whether the non-profit hospital was a
22
public or private corporation.  We defined a “public corporation” as “an instrumentality of
the state, founded and owned by the state in the public interest, supported by public funds,
and governed by managers deriving their authority from the state.”  Id. at 178, 46 A.2d at
300.  We determined that the hospital, though operated solely for the benefit of the public
and not for profit, was a private institution and, thus, that its decisions were to be treated as
those of a private corporation.  Id. at 179-80, 46 A.2d at 301.  Several of our sister states,
recognizing this distinction between private and public institutions, have likewise
determined that a private non-profit hospital is not to be treated as a “public institution.”  See
Adkins v. Sarah Bush Lincoln Health Ctr., 544 N.E.2d 733, 739 (Ill. 1989) (noting private
hospital action is not state action, and therefore not subject to constitutional due process);
Owens v. New Britain Gen. Hosp., 643 A.2d 233, 239 n.24 (Conn. 1994) (same); Bouquett
v. St. Elizabeth Corp., 538 N.E.2d 113, 116 (Ohio 1989) (same).
As stated previously, in Levin we affirmed the trial court’s refusal to grant the
physician injunctive relief to overturn a credentialing decision of the hospital administration.
Levin, 186 Md. at 180, 46 A.2d at 301.  The Levin Court did not, however, eliminate the
possibility of a doctor bringing an action for damages in tort or contract.  Instead, in that
case, the Court found the hospital had complied with its bylaws, and reviewed the merits of
the doctor’s anti-trust claim, finding that he had not alleged any right to an injunction.  Id.
at 181-83, 46 A.2d at 302-03.  The business judgment rule, which limits the court’s role in
reversing the actions of a corporation, has never precluded full litigation of complaints
10Section 2-103 states in pertinent part:
“Unless otherwise provided by law or its charter, a Maryland
corporation has the general powers, whether or not they are set forth
in its charter to: . . .
(2) Sue, be sued, complain, and defend in all courts; . . .
(5) Make contracts and guarantees, incur liabilities, and borrow
money; . . .”
23
sounding in tort or contract against the corporation.  A corporation, as a private entity, may
be held liable for tortious conduct and breaches of contracts, perpetrated by its officers,
directors, and agents, against third parties.  See Maryland Code (1975, 1999 Repl. Vol.,
2002 Supp.) § 2-103 of the Corporations and Associations Article.10  Nothing in the
jurisprudence of this State would hold otherwise.
Respondents, nonetheless, urge this Court to adopt a deferential attitude, in
determining summary judgment, when reviewing hospital staffing decisions.  In so asking,
they request that we create an exception to a procedure utilized in this State for over fifty
years.  See Nardo v. Favazza, 206 Md. 122, 126, 110 A.2d 676, 678 (1955) (discussing the
adoption of the original Summary Judgment Rules of the Court of Appeals on November
12, 1947); C. Christopher Brown, Summary Judgment in Maryland, 38 Md. L. Rev. 188,
189-93 (1978) (discussing the history of summary judgment in this State).  Since 1947, this
Court has noted that the standard for the entry of summary judgment is where “there is no
genuine dispute as to any material fact and [the movant] is entitled to judgment as a matter
of law.”  Md. Gen. R. Prac. & P., IV. Summary Judgment, rule 4(a), Maryland Code (Cum.
24
Supp. 1947) at 2044;  Maryland Rule 610(d)(1) (enacted 1957); Maryland Rule 2-501(e)
(enacted 1984).
The procedure for granting summary judgment in a civil case is dictated by Maryland
Rule 2-501.  The Rule states, in relevant part:
“(e) Entry of Judgment.  The court shall enter judgment in
favor of or against the moving party if the motion and response
show that there is no genuine dispute as to any material fact and
that the party in whose favor judgment is entered is entitled to
judgment as a matter of law.” 
This Court has discussed the application of this Rule, and appellate review thereof, on
myriad occasions.  See Todd v. MTA, 373 Md. 149, 154-55, 816 A.2d 930, 933 (2003);
Grimes v. Kennedy Krieger, 366 Md. 29, 71-73, 782 A.2d 807, 833-34 (2001); Goodwich
v. Sinai Hosp. of Balto., 343 Md. 185, 204, 680 A.2d 1067, 1076 (1996); Dobbins v.
Washington Suburban, 338 Md. 341, 344-45, 658 A.2d 675, 676-77 (1995); Brewer v. Mele,
267 Md. 437, 441-42, 298 A.2d 156, 159-60 (1972), superseded on other grounds by
Shoemaker v. Smith, 353 Md. 143 (1999); Whitcomb v. Horman, 244 Md. 431, 437, 224
A.2d 120122-23 (1966); Strickler Eng. Corp. v. Seminar, 210 Md. 93, 99-100, 122 A.2d
563, 567 (1956).
“The standard of review for a grant of summary judgment is whether the trial court
was legally correct.”  Goodwich, 343 Md. at 204, 680 A.2d at 1076.
“In reviewing the grant of summary judgment, this Court
must consider the facts reflected in the pleadings, depositions,
answers to interrogatories and affidavits in the light most
25
favorable to the non-moving parties, the plaintiffs.  Even if it
appears that the relevant facts are undisputed, ‘if those facts are
susceptible to inferences supporting the position of the party
opposing summary judgment, then a grant of summary
judgment is improper.’”
Ashton v. Brown, 339 Md. 70, 79, 660 A.2d 447, 452 (1995) (quoting Clea v. City of
Baltimore, 312 Md. 662, 677, 541 A.2d 1303, 1310 (1988)).  This Court has noted that
“tThe purpose of the summary judgment procedure is not to try the case or to decide the
factual disputes, but to decide whether there is an issue of fact, which is sufficiently material
to be tried.”  See Taylor v. Nationsbank, 365 Md. 166, 173, 776 A.2d 645, 650 (2001)
(quoting Jones v. Mid-Atlantic Funding, 362 Md. 661, 675, 766 A.2d 617, 624 (2001)).
Summary judgment unquestionably is an important device, within our court system,
for streamlining litigation and ensuring the application of limited judicial resources to
potentially meritorious claims.  Additionally, it saves the parties expense and the delays of
protracted and non-meritorious litigation.  Nonetheless, dismissal of the case deprives the
parties of a trial and the opportunity to develop their claims and present them to a jury.  This
Court has therefore been careful to restrict application of summary judgment to cases that
present no material facts that may reasonably be said to be disputed.
Respondents suggest that a credentialing decision warrants a unique divergence from
this long -established standard.  Several decisions of this Court have considered similar
credentialing proceedings without abridging the trial court’s original jurisdiction.
In Goodwich v. Sinai Hosp. of Balto., Inc., 343 Md. 185, 680 A.2d 1067 (1996), this
26
Court reviewed the application of the Health Care Quality Improvement Act of 1986
(HCQIA), 42 U.S.C.S. §§ 11101-11152 (1994), to a peer review committee’s decision to
abridge a doctor’s privileges.  The physician brought suit against both the hospital and the
committee, alleging civil conspiracy, denial of procedural due process, breach of contract,
intentional interference with contractual relations, and tortious interference with prospective
economic advantage.  The trial court dismissed the conspiracy and due process claims, and
subsequently granted the defendants’ motion for summary judgment as to all remaining
claims, based on the immunity provisions of the HCQIA.  The physician appealed the grant
of summary judgment, arguing, among other things, that the trial court incorrectly had
applied the standard for summary judgment.  This Court reviewed Rule 2-501 and the case
law interpreting it.  Id. at 204-07, 680 A.2d at 1076-78.  We concluded that, in light of the
immunity provisions, the physician bore the burden of production in showing that the
hospital was subject to suit.  Id. at 207, 680 A.2d at 1078.  We stated as follows:
“In Maryland, when there is a genuine issue of material
fact, the evidence, or the inferences deducible therefrom, is
sufficient to permit the trier of fact to arrive at more than one
conclusion; consequently, the moving party is not entitled to
judgment as a matter of law.  Because the applicable standard
in civil cases is preponderance of the evidence, when the
evidence the non-movant presents, or the inferences from that
evidence, demonstrate that there is a genuine issue of material
fact, it is at least arguable that he or she has met that burden.  In
other words, the generation of a genuine dispute of material fact
is, in this context, the equivalent of meeting a preponderance of
the evidence standard at trial.  We thus conclude that the proper
summary judgment standard in this case is whether Dr.
27
Goodwich produced sufficient evidence of the existence of a
genuine dispute as to the material fact of whether Sinai was
entitled to the qualified immunity prescribed by the HCQIA.”
Id., 680 A.2d at 1078 (citations omitted).
In Volcjack v. Wash. County Hospital, 124 Md. App. 481, 723 A.2d 463 (1999), the
Court of Special Appeals considered claims by a physician that, without a hearing, his
clinical privileges had been terminated improperly by the hospital.  The trial court had
granted the hospital’s motion for summary judgment on both breach of contract and tortious
interference claims.  The intermediate appellate court reversed the ruling as to one of the
contract claims and affirmed as to the tort claims and other contract claim.  The hospital
argued that its staffing decision, as a “business decision,” ought not be the subject of review.
Considering the standard of review, the court reiterated:
“Maryland Rule 2-501(e) provides that a court may grant
a motion for summary judgment ‘in favor of or against the
moving party if the motion and response show that there is no
genuine dispute as to any material fact and that the party in
whose favor judgment is entered is entitled to judgment as a
matter of law.’  In considering a motion for summary judgment,
the trial court does not determine any disputed facts, but instead
rules on the motion as a matter of law.  The court views the
facts, including all inferences, in the light most favorable to the
party against whom the court grants the judgment.
“In reviewing the trial court’s decision, we must
determine whether the trial court was legally correct in granting
summary judgment, since a trial court decides issues of law, not
fact, when granting summary judgment.  We are therefore
confined to the basis relied on by the trial court in our review.”
28
Id. at 495, 723 A.2d at 470 (citations omitted).  The Court of Special Appeals held that,
under the normal summary judgment standard, the physician had made a sufficient showing
to allege a breach of contract under the hospital bylaws.  Id. at 508, 723 A.2d at 477.  See
also Bender v. Suburban Hospital, 134 Md. App. 7, 37-38, 758 A.2d 1090, 1106-07 (2000)
(applying traditional standard of review, governed by Rule 2-501, to consider trial court’s
grant of summary judgment for hospital against physician’s contract and tort claims).
Respondents argue that, without deference accorded to the hospital’s decision, the
court will be forced to reconsider and second-guess the medical judgment of the
credentialing committee.  We find this claim unconvincing in light of the State and Federal
immunity statutes and the opinions of this Court interpreting their scope.
Both Federal and State law seek to insulate from liability the people who make
medical credentialing decisions.  The Federal HCQIA and this State’s Peer Review
Immunity Statute, Maryland Code (1974, 2002 Repl. Vol.) § 5-638 of the Maryland Courts
and Judicial Proceedings Article, each grant limited immunity to participants in a hospital’s
credentialing procedure.  The trial court, in the instant matter, dismissed several of
petitioner’s claims on the basis of such immunity, and those rulings are not the subject of
the present appeal.  On the other hand, although respondents challenged, in their motion for
summary judgment, the claims at issue in the appeal before us on immunity grounds, the trial
court does not appear to have dismissed the tort and contract claims on that basis.  Petitioner
11As indicated, although respondents did not argue immunity before this Court, the defense
was included in their motion for summary judgment.  It is unclear whether the trial court considered
the immunity defense, and the judge made no mention of it with regard to the claims at issue.
“Ordinarily, an appellate court should review a grant of summary judgment only on the grounds
relied upon by the trial court.”  Blades v. Woods, 338 Md. 475, 478, 659 A.2d 872, 873 (1995).  We
therefore decline to address the applicability of immunity to petitioner’s tort and contract claims.
When the case is remanded, however, and the action reinstated, respondents will have the
opportunity, should they choose, of renewing their motion for summary judgment alleging this or
any other defense which may be asserted during the course of litigation.  See Rule 2-501(a) (“Any
party may file at any time a motion for summary judgment on all or part of an action on the ground
that there is no genuine dispute as to any material fact and that the party is entitled to judgment as
a matter of law.”).  Because the “denial of a motion for summary judgment is an interlocutory order
. . . it is within the power of the trial court later to grant a renewal of a summary judgment motion.”
Yamaner v. Orkin, 313 Md. 508, 516, 545 A.2d 1345, 1349 (1988).
29
asserts, and respondents do not contest before this Court,11 that the tort and breach of
contract claims lie outside the scope of state and federal immunity.  Our decision in
Goodwich, however, leads us to believe that the claims may well lie within either or both of
the immunity provisions.  343 Md. at 214, 680 A.2d at 1081-82.  See also Bender, 134 Md.
App. at 50-51, 758 A.2d at 1113.
In Goodwich, this Court affirmed the trial court’s dismissal of the physician’s tort and
contract claims, finding the claims to be within the scope of the State and Federal immunity
statutes.  Goodwich, 343 Md. at 214, 680 A.2d at 1081-82.  The physician argued that,
because he had asserted that the hospital did not act with reasonableness in furtherance of
quality health care, and further, that a reviewing physician had acted in bad faith, his claims
were outside immunity protections.  We held that, under the federal immunity statute, the
physician had the burden to produce “sufficient evidence of the existence of a genuine
dispute as to the material fact of whether [the hospital] was entitled to the qualified
30
immunity prescribed by the HCQIA.”  Id. at 207, 680 A.2d at 1078.  Reviewing the
evidence, we concluded that the physician’s claims failed to meet such a burden, their
allegations of bad faith and unreasonableness notwithstanding.  Writing for this Court, Judge
Bell, now Chief Judge, concluded:
“In this case, the record reflects that the restriction of Dr.
Goodwich’s privileges was limited to the activity prompting it,
namely his repeated failure to comply with the second opinion
requirement—a requirement he voluntarily consented to many
times over a four-year period.  In light of that noncompliance
and the record of patient care-related issues raised with him
over an extended period, the summary judgment record reflects
clear evidence sufficient to establish that the hospital, conscious
of the need to protect its patients, acted in an objectively
reasonable fashion in restricting Dr. Goodwich’s privileges. 
“The evidence proffered by Dr. Goodwich, rather than
rebutting the objective reasonableness of those actions,
addressed preliminary and tangential matters, thus failing to
demonstrate a genuine dispute of material fact as to that issue,
the only one before the court.  We hold, therefore, as did the
Court of Special Appeals, that the trial court was legally correct
in its grant of summary judgment.”
Id. at 214, 680 A.2d at 1081.  
In the present case, according to respondents:
“Dr. Sadler was afforded a full and fair opportunity to
participate in an evidentiary hearing process to resolve whether
the hospital credentialing actions recommended and imposed
were appropriate.  In this case, she renews the same fight,
dressed in contract and tort claims.  The facts and issues,
however, were decided adversely to her in a process that she
agreed to.”
31
Moreover, according to respondents, the credentialing decision reached was objectively
reasonable, and made with the intent of protecting patients and promoting patient care.
These facts, if alleged by respondents in a motion for summary judgment, should shift the
burden of production to petitioner to demonstrate that the actions taken were not within the
statutory immunity. 
Where a hospital decision is made in conformity with its bylaws, and those bylaws
are not illegal, the action of the hospital is entitled to the deference due any internal
corporate decision.  The court should not interfere with internal corporate decisions, nor
prevent the officers and agents of the company from exercising their discretion in hiring and
retaining personnel.  Absent evidence of fraud or ultra vires activity, management of a
corporation is the responsibility of the officers and directors, and not the proper subject of
judicial scrutiny.  Thus, where the hospital follows its bylaws in the credentialing decisions
and there is no dispute to that material fact, the hospital may be entitled to summary
judgment. If the hospital followed its bylaws during the credentialing proceedings,
respondents may present that argument as a basis for summary judgment, and the trial court
will apply the proper standard, i.e., is there a legitimate dispute as to that fact.  If petitioner’s
claims are as alleged by respondents, her claims are liable to meet with the same result as
those of Dr. Goodwich.
Whether or not petitioner’s tort and contract claims are determined to lie within the
scope of State or Federal immunity, it is evident that where the Legislature has intended to
32
protect the medical profession from liability for credentialing, it has done so through express
legislation.  See Maryland Code (1974, 2002 Repl. Vol.) § 5-638 of the Maryland Courts
and Judicial Proceedings Article.  We find no evidence of an intent on the part of the
Legislature to limit the court’s traditional ability to consider such claims pursuant to the
normal rules of civil procedure.  We therefore reject the suggestion by the respondents that
a private, non-profit hospital constitutes a “quasi-public” entity, or that it should be subject
to the judicial review which we accord to a governmental administrative agency action.
Credentialing decisions by a private hospital do not constitute public, administrative agency
action.  Thus, they are not subject to judicial review under the substantial evidence test.
The Supreme Court of Pennsylvania reached the same result in Cooper v. Delaware
Valley Med. Ctr., 654 A.2d 547 (Pa. 1995).  In Cooper, a physician brought suit against the
hospital and members of the review panel which denied him privileges to treat certain
patients.  The complaint, alleging a variety of claims including tort and contract counts, was
dismissed by the trial court on the defendants’ motion for summary judgment.  As a
threshold matter, the Pennsylvania Supreme Court considered the level of review applicable
to a private hospital’s medical staffing rules and regulations, peer review and credentialing
decisions.  The court examined the competing interests at stake in such decisions:
“Peer review can best be understood if one realizes that
in most cases doctors with hospital privileges are not employees
of the hospital[;] instead, they are independent contractors who
must be granted permission to admit patients and make use of
the hospital’s resources.  A physician receives permission to use
12Although the Supreme Court of Pennsylvania is the only court to have made this distinction
expressly, we note that several other states’ decisions are in accord.  See, e.g., Shulman v.
33
the hospital when he [or she] receives a vote of approval from
his [or her] colleagues.  Peer review is the common method for
exercising self regulatory competence and evaluating physicians
for privileges.  The purpose of this privilege system is to
improve the quality of health care, and reflects a widespread
belief that the medical profession is best qualified to police its
own.  Thus, it is beyond question that peer review committees
play a critical role in the effort to maintain high professional
standards in the medical practice. 
“The goal of protecting patients and the general public
from less than competent physicians is balanced against the
rights of the private physician.  The worst possible punishment
for a physician is a ‘denial of privileges based upon a
physician’s poor performance, inferior qualifications, or
disruptive behavior.’  Finding gainful employment in the
hospital setting after a poor review is unlikely as a result of the
provisions of the Health Care Quality Improvement Act of
1986, 42 U.S.C. §§ 11101-52 (1986), which requires that
doctors who have been denied privileges be reported to a
national service.  Hospitals must check with this service that
keeps track of inadequate and poorly qualified physicians
before hiring a new doctor to assure that he [or she] has not
been rejected by other health care facilities.”
Id. at 551 (citations omitted).
The Pennsylvania court noted the deference sometimes accorded to credentialing
decisions.  The court found such deference applicable where the physician sought injunctive
relief, in the form of asking the court simply to overturn the peer review committee’s
decision.  Id. at 552.  Where the physician sought damages under tort and contract theories,
however, the Cooper court found the traditional summary judgment standard applicable.12
Washington Hosp. Ctr., 222 F. Supp. 59, 65 (D.D.C. 1963) (refusing to review hospital’s decision
for purposes of requested injunction, yet considering merits of defamation count without deference
to the hospital’s decision); Barrows v. Northwestern Mem’l Hosp., 525 N.E.2d 50, 55 (Ill. 1988)
(invoking rule of non-review to deny judicial review of hospital decisions, yet reserving judgment
on sufficiency of antitrust, fraud, and conspiracy counts).  Indeed, even State ex rel. Wolf, 193 N.W.
994 (Wis. 1923), cited by several other courts as a formative case in the rule of nonreview, appears
to distinguish actions for damages at law from equitable actions.  Id. at 996.  Finding judicial review
of a private hospital’s decision improper, the Wisconsin Supreme Court concluded:
“The power to manage the affairs of the corporation includes the
power to exclude physicians from the privilege of practicing therein.
If the exercise of this power constitutes a breach of contractual
relations, the rights of the other party must be enforced in a
proceeding to recover damages or to enforce specific performance.
Mandamus will not lie.”
Id.
34
Id.  With regard to such claims, the court looked to the state and Federal immunity granted
to peer review proceedings to provide hospitals and the reviewing physicians with sufficient
protection from litigation.  Id.
We find this reasoning persuasive.  Moreover, it is consistent with the jurisprudence
of this Court.  See Goodwich, 343 Md. at 207, 680 A.2d at 1078 (applying no additional
deference to summary judgment motion in tort and contract action); Levin v. Sinai Hosp. of
Balto., 186 Md. 174, 179-80, 46 A.2d 298, 301 (1946) (refusing to grant injunctive relief
to reverse business judgment of hospital in absence of contract claims).  See also Bender v.
Suburban Hospital, 134 Md. App. 7, 37-38, 758 A.2d 1090, 1106-07 (2000); Volcjack v.
Wash. County Hospital, 124 Md. App. 481, 495, 723 A.2d 463, 470 (1999).  
We have recognized, as have other courts, that if a private entity, including a hospital,
35
through bylaws or otherwise, establishes either procedures in the nature of a grievance
mechanism, to review adverse decisions affecting continued employment or affiliation, or
substantive standards to govern those kinds of decisions, those procedures or standards may,
under some circumstances, be regarded as contractual in nature.  To the extent that they are
so regarded and an allegation is made that they have been violated in some material way, an
action for breach of contract may lie.
Such an action is to be treated like any other breach of contract action.  It is
incumbent upon the plaintiff to show what the contract was and how it was violated.  If there
is no genuine dispute of material fact regarding the nature, existence, or relevant terms of
the alleged contract and it is clear as a matter of law that the applicable procedures were
followed, no breach has occurred and summary judgment is entirely permissible.  It is not
the court’s role to second-guess the decision emanating from the hospital’s grievance or
review procedure, for that is not the focus of the action.  The contract, if there is one, is not
one of perpetual affiliation, but only the procedure and standards for terminating the
affiliation.  The hospital, as a private institution, has within its discretion the right to control
its staffing procedures, and the court will not interfere with such business decisions.  See
Levin, 186 Md. at 179-80, 46 A.2d at 301.  When considering, on the other hand, a
hospital’s motion for summary judgment in the context of the claims of a physician arising
out of a credentialing decision, contract and tort claims should be dismissed upon a showing
that there is no genuine dispute as to any material fact and that the defendant is entitled to
13As an alternative argument, the respondents argue that the petitioner agreed, pursuant to the
bylaws, to accept the decision of the Board of Directors as “final” and “conclusive.”  Respondents
never raised this argument below, and raise it for the first time before this Court.  We therefore do
not believe it is necessary to consider it.  We provide the following analysis merely as guidance for
the lower court on remand.
The scope of a judicial proceeding may be narrowed by the agreement of the parties and thus
without an act of the Legislature.  In the absence of procedural rules or statute, the parties themselves
may, by agreement, limit the issues that a court will consider within a given dispute.  Examples of
such agreements include a proceeding on stipulated facts, the pre-trial entry of a consent order
defining the issues for trial, or a more formal arbitration agreement under which the parties agree to
limited judicial review of the arbitration determination.
Respondents allege that petitioner agreed to be bound by the credentialing procedure under
the bylaws.  Article VII, Section G of the bylaws, entitled “Final Decision by the Board of
Directors,” states in part: “[t]he decision of the Board of Directors of Prince George’s Hospital
Center, after Appeal, is conclusive.”  While the bylaws indicate that there are no further sources of
appeal of such decisions within the hospital administration, the quoted language is far from
conclusive in establishing a binding agreement not to pursue court action.  By contrast, a binding
arbitration agreement is generally clear and comprehensive in expressing the will of the parties to
restrict their opportunity for judicial action.  See, e.g., Allstate Ins. Co. v. Stinebaugh, 374 Md. 631,
367-68 n.3, 824 A.2d 87,  91 n.3 (2003); Hartford v. Scarlett Harbor, 346 Md. 122, 124-25 n.3, 695
A.2d 153, 154 n.3 (1997).  But cf. Medical Ctr. Hosps. v. Terzis, 367 S.E.2d 728, 729 (Va. 1988)
(finding provision of bylaws stating hospital board’s decision not “subject to further hearing or
appellate review” precluded the court’s “judicial review” of the hospital’s decision).
36
judgment as a matter of law.  If the gravamen of the action is the credentialing decision
itself—not, for example, a published statement that may be unprivileged and defamatory—
and a resolution of the complaint would require a judge or jury to determine whether, in their
view, the decision was right or wrong or fair or unfair, the action simply will not lie.13
JUDGMENT OF THE COURT OF
SPECIAL APPEALS REVERSED,
CASE REMANDED TO THAT COURT
WITH INSTRUCTIONS TO REVERSE
THE JUDGMENT OF THE CIRCUIT
COURT FOR PRINCE GEORGE’S
COUNTY AND REMAND THE CASE
TO THAT COURT FOR FURTHER
PROCEEDINGS CONSISTENT WITH
37
THIS OPINION.  COSTS IN THIS
COURT AND IN THE COURT OF
SPECIAL APPEALS TO BE PAID BY
RESPONDENTS.
In the Circuit Court for Prince George’s County
Case No. 99-13905
IN THE COURT OF APPEALS OF MARYLAND
No.  12 
September Term, 2002
___________________________________
___
CYNTHIA DENISE SADLER
v.
DIMENSIONS HEALTHCARE CORP., et al.
___________________________________
___
Bell, C.J.
         *Eldridge
Raker
Wilner
Cathell
Harrell
Battaglia,
   JJ.
___________________________________
___
Concurring Opinion by Wilner, J.,
joined by Harrell, J.
___________________________________
___
Filed:   November 26, 2003
*Eldridge, 
J., 
now 
retired,
participated in the hearing and
conference of this case while an
active member of this Court; after
being 
recalled 
pursuant 
to 
the
Constitution, 
Article 
IV, 
Section 
3A,
he also participated in the decision
and adoption of this opinion.
-1-
I concur in the result because I agree that private
hospitals are not governmental administrative agencies and, in
considering common law breach of contract or tort actions
based on hospital credentialing decisions, courts should not
apply the test applicable to judicial review of agency
decisions.  The Court of Special Appeals, in my view, made two
errors.  First, because the parties conceded at trial that the
administrative law test was applicable, the intermediate
appellate court should have held any complaint about the use
of that standard unpreserved for appellate review.  The second
error was the substantive one of adopting that standard. But
for the fact that the Court of Special Appeals chose to reach
the issue and apply that erroneous standard of review in a
reported decision, this case would not even merit attention by
this Court.
Unfortunately, in attempting to state the proper standard
of judicial review, this Court has sown some confusion and has
not given clear guidance to the trial courts in how to handle
motions for summary judgment (or to dismiss for failure to
state a claim upon which relief can be granted) in these kinds
of cases.  I believe that the standard was set in Levin v.
Sinai Hosp. of Balto., 186 Md. 174, 46 A.2d 298 (1946) – a
-2-
standard that has been adopted in other States and that works
quite well.  I would hold, without embellishment, that the
appropriate standard to apply when a credentialing decision
made by a private hospital is challenged, whether in an action
for injunctive relief or in an action to recover money damages
for breach of contract or tort, are those set forth in Levin.
In Levin, we established the basic principle that “a
private hospital has the right to exclude any physician from
practicing therein, and such exclusion rests within the sound
discretion of the managing authorities.”  Id. at 179-80, 46
A.2d at 301.  That principle is, of course, now subject to
supervening civil rights laws that were not in effect when
Levin was decided and that prohibit discrimination on the
basis of race, religion, national origin, gender, age, or
disability, the remedy for which is ordinarily committed by
statute to Federal or State administrative agencies.  Applying
the normal “business judgment rule” that generally precludes
judges 
and 
juries 
from second-guessing basic business
decisions 
made 
by 
a 
private 
corporation 
and 
thereby
interfering with the internal management of the corporation,
we further held in Levin that it was not the policy of the
State “to interfere with the power of the governing body of a
-3-
private hospital to select its own medical staff.”  Id. at
180, 46 A.2d at 301.  That principle, I believe, should apply
consistently, whether the relief sought is an injunction to
restrain the hospital from denying or terminating privileges,
as in Levin, or damages for breach of contract or tort.  The
nature of the relief sought should not affect the underlying
principle of judicial restraint.
We have recognized, and the Court seems to confirm today,
that, if a private entity, including a hospital, through by-
laws or otherwise, establishes either procedures in the nature
of a grievance mechanism, to review adverse decisions
affecting continued employment or affiliation, or substantive
standards to govern those kinds of decisions, those procedures
or standards may, under some circumstances, be regarded as
contractual in nature.  See Suburban Hospital v. Dwiggins, 324
Md. 294, 596 A.2d 1069 (1991).  To the extent that they are so
regarded and an allegation is made that they have been
violated in some material and prejudicial way, an action for
breach of contract may lie.
As the Court notes, such an action should be treated like
any other breach of contract action.  It is incumbent upon the
plaintiff to show what the contract was and how it was
-4-
violated.  If there is no genuine dispute of material fact
regarding the nature, existence, or relevant terms of the
alleged contract and it is clear as a matter of law that the
applicable procedures and standards were followed, no breach
has occurred and summary judgment or dismissal is permissible.
It is not the court’s role to second-guess the decision
emanating from the hospital’s grievance or review procedure,
for that is not the focus of the action.  The contract, if
there is one, is not one of perpetual affiliation, but
embraces only the procedure and standards for terminating the
affiliation.  
The Court seems to waffle with respect to tort actions,
however.  In my view, tort actions should also be governed by
the principles enunciated in Levin.  Courts are enjoined not
to interfere with the internal management and basic business
decisions of private corporations, and, as the West Virginia
court so aptly stated in Mahmoodian v. United Hosp. Ctr., 404
S.Ed.2d 750 (W. Va. 1991), that includes decisions by private
hospitals regarding their medical staff.  Obviously, a
decision to terminate privileges will interfere with the
doctor’s ability to treat patients at the hospital, and, if
the decision becomes public, it may disparage the doctor’s
-5-
professional reputation.  Those are simply consequences of the
business and medical decisions made by the hospital, however,
the same that may be suffered by any person whose employment
or affiliation is terminated by an employer.  Application of
the normal business judgment rule in this context does not
immunize the hospital or its officials from all tort
liability, but it does preclude plaintiffs from circumventing
the rule by dressing their complaints about the decision
itself in the form of a tort action.  If, under the standards
set forth in Levin, the plaintiff would not be entitled, as a
matter of substantive law, to injunctive relief to preclude
the hospital from taking the action in the first instance, the
plaintiff should not be able to recover tort or contract
damages based on the consequences of the action having been
taken.
The rules set forth in Levin can and should be applied in
a consistent manner.  If the gravamen of the action is the
credentialing decision itself – not, for example, published
statements about it that may be unprivileged and defamatory –
and a resolution of the complaint would require a judge or
jury to determine whether, in their view, the decision was
right or wrong or fair or unfair, the action simply will not
-6-
lie.  That should be the focus of the court in response to a
motion for summary judgment.
The Court’s opinion states some of these principles but
then 
blurs 
them 
by 
scattering 
among 
them 
seemingly
inconsistent statements, including diversions into Federal or
State statutory immunity, which the Court acknowledges is not
at issue in this appeal, and the Court’s apparent embrace of
Cooper v. Delaware Valley Med. Ctr., 654 A.2d 547 (Pa. 1995),
which drew a distinction between actions for injunctive relief
and actions for damages that the Court acknowledges no other
court has made.  This case calls out for clear guidance to the
trial courts, and, regrettably, the guidance provided in the
Court’s opinion is anything but clear.
Judge Harrell has authorized me to state that he joins in
this Concurring Opinion.