Case Name: David W. PEPPLE, M.D., Appellant (Plaintiff Below), v. PARKVIEW MEMORIAL HOSPITAL, INC., Appellee (Defendant Below)
Court: Court of Appeals of Indiana
Jurisdiction: Indiana
Decision Date: 1987-08-10
Citations: 511 N.E.2d 467
Docket Number: No. 92A03-8701-CV-10
Parties: David W. PEPPLE, M.D., Appellant (Plaintiff Below), v. PARKVIEW MEMORIAL HOSPITAL, INC., Appellee (Defendant Below).
Judges: STATON, J., concurs.
Reporter: North Eastern Reporter 2d
Volume: 511
Pages: 467–473

Head Matter:
David W. PEPPLE, M.D., Appellant (Plaintiff Below), v. PARKVIEW MEMORIAL HOSPITAL, INC., Appellee (Defendant Below).
No. 92A03-8701-CV-10.
Court of Appeals of Indiana, Third District.
Aug. 10, 1987.
As Corrected Sept. 14, 1987.
Rehearing Denied Sept. 22, 1987.
Ronald L. Sowers, Robert E. Connolly, Sowers, Larson, Riebenack & Connolly, Fort Wayne, for appellant.
T. Russell Strunk, Jr., Martin T. Fletcher, Rothberg, Gallmeyer, Fruechtenicht & Logan, Fort Wayne, for appellee.
. The dissent takes great issue with footnote 3 in the majority opinion. The footnote accurately states the holding embodied in that opinion. It is inappropriate and improper to go beyond the four corners of an opinion to attempt to add facts not embodied in that opinion.

Opinion:
HOFFMAN, Judge.
Plaintiff-appellant David Pepple, M.D. appeals an adverse summary judgment entered by the trial court in favor of defendant-appellant Parkview Memorial Hospital, Inc. An aspect of this case, concerning the confidentiality of peer review proceedings under IND.CODE § 34-4-12.6-2, was previously determined by this Court on interlocutory appeal. Parkview Memorial Hosp., Inc. v. Pepple (1985), Ind.App., 483 N.E.2d 469. Subsequent to this Court's decision in Parkview, the trial court granted Parkview's motion for summary judgment. On September 4,1986 the trial court concluded inter alia, that Pepple received every due process right conferred by the medical staff by-laws; that Parkview is a private not-for-profit institution; that review of a private hospital's determination to exclude a physician is limited to an examination of the procedures required by the by-laws; that this Court's decision in Parkview, supra, forecloses review of the substantive issues even under an arbitrary and capricious standard because the records, proceedings, and communications within the peer review committee are privileged and confidential; that the privilege has not been waived in this case; and that consequently, the hospital's decision to limit Pepple's surgical privilege is not re viewable. This appeal ensued.
Pepple raises four issues for review. As restated, the issues are:
(1) whether judicial review of a private hospital's actions is limited to a review to insure that the procedures found within the hospital's by-laws have been followed, or may a substantive review be conducted to determine whether the hospital acted arbitrarily and capriciously;
(2) whether there existed a genuine issue of material fact whether the hospital's decision regarding Pepple's surgical privileges was arbitrary and capricious;
(3) whether IND.CODE § 34-4-12.6-4 excepts the communication in the present case from the privilege requirements of IND.CODE § 34-4-12.6-2; and
(4) whether Pepple sufficiently established claims of negligence and breach of contract beyond consideration of the evidence precluded by IND.CODE § 34-4-12.6-2 (The Peer Review Act).
It is generally understood that a private hospital may act at its discretion and its decisions, including denial of privileges to a physician, are not subject to judicial review. See 37 ALR.3d 645, 649 (annotation on the exclusion of physicians by hospitals). Once it is established that the hospital is indeed private, the role of the court is restricted to a determination that the institution complied with the procedures set out in its by-laws.
Kiracofe v. Reid, Memorial Hospital (1984), Ind.App., 461 N.E.2d 1134, 1139; Yarnell v. Sisters of St. Francis Hlth. Serv. (1983), Ind.App., 446 N.E.2d 359, 361.
After reviewing on this basis, several of this Court's decisions have gratuitously added that a hospital's procedures and its decisions should not be arbitrary.
See, Terre Haute Regional Hosp., Inc. v. El-Issa (1984),
Ind.App., 470 N.E.2d 1371, 1382; Kiracofe, supra, 461 N.E.2d at 1141; Yarnell, supra, 446 N.E.2d at 363.
A review for arbitrariness and capriciousness would add a substantive aspect to an unadorned procedural matter. It is the substantive review which Pepple requests. Pepple does not argue that Parkview should be treated as a public hospital because of some state action, which may trigger the review implemented in the case of public institutions. See, e.g., McCray Mem. Hosp. et al. v. Hall (1967), 141 Ind.App. 203, 226 N.E.2d 915, (exclusion of a physician at a public hospital may not be unreasonable, arbitrary or capricious). Instead, Pepple contends that judicial review must necessarily include a substantive component to be effective. The source of this substantive review is not immediately apparent. Absent some state action or state participation, the due process rights found within the Fifth and Fourteenth Amendments are inapplicable to private institutions. Kiracofe, supra, 461 N.E.2d at 1139-1140. Therefore, Parkview's decision may not be reviewed for arbitrariness and capriciousness.
Pepple's issue questioning the hospital's actions as arbitrary and capricious is subsumed in the discussion of the first issue. Pepple is entitled to no such review.
Next, Pepple asserts that IND.CODE § 34-4-12.6-4 (1983 Supp.) excepts the communications in this case from the privilege found within the Peer Review Act, IND.CODE § 34-4-12.6-2 (1983 Supp.). In Parkview Memorial Hosp., Inc. v. Pepple, supra, Ind.App., 483 N.E.2d 469, 470, this Court determined that IND.CODE § 34-4-12.6-2 clearly and unambiguously requires confidentiality of peer review committee proceedings. In Parkview, supra, Pepple urged this Court to limit application of the statute to medical malpractice actions. Failing that, Pepple now takes the approach that IND.CODE § 34-4-12.6-4 allows use of the communications in this case.
The exception, to the confidentiality and privilege, found within IND.CODE § 34-4-12.6-4 provides that "[a] professional health care provider, a peer review committee, and the governing board of a hospital or professional health care organization may use information obtained by peer review committees for legitimate internal business purposes, including their own defense." (Emphasis added.) While this action stems from an internal business proceeding, Pepple now seeks to use the communications in a judicial proceeding. Use of the communications at this stage would be neither for internal business pur poses nor for Pepple's defense, as he suggests. This argument must fail.
In his final issue Pepple alleges that the trial court's determination that no genuine issue of material fact exists as to his claims, was in error. Pepple contends that excluding the privileged information, he has stated sufficient facts to raise a genuine issue of material fact. Specifically, Pepple argues that the affidavits and depositions of his colleagues establish his professional excellence; thus, the hospital's actions were necessarily arbitrary and capricious.
Notwithstanding any failure in Pepple's logic, or insufficiency in the evidence presented, Pepple is not entitled to review on an arbitrary and capricious standard. Having presented no reversible error, the trial court's decision is affirmed.
Affirmed.
STATON, J., concurs.
SULLIVAN, J., dissents with opinion.
. In his concurring opinion in Kiracofe, supra, Judge Ratliff posits a view which, after great simplification, suggests that the differences between private and public hospitals are few; thus, actions by private hospitals should also be subject to some limited review. 461 N.E.2d at 1144. This view stretches normal due process boundaries.
. An arbitrary and capricious standard, if applied to private institutions would be tantamount to the review on unreasonableness, arbitrariness or capriciousness accorded plaintiffs questioning the decisions of public hospitals. Therefore, review for arbitrariness and capriciousness would blur the distinction between public and private hospitals.
. In Kennedy v. St. Joseph Memorial Hosp. (1985), Ind.App., 482 N.E.2d 268, an arbitrary and capricious standard of review was freely applied. There is no indication in Kennedy as to the public or private status of the hospital. See also, Ezpeleta v. Sisters of Mercy Health Corp. (7th Cir.1986) 800 F.2d 119, 123 (Court expressed reservations in applying arbitrary and capricious standard of review to actions of private hospital even though some support for standard found in Kennedy).
.It is interesting to note that apparently privileged communications were available to the Court in Kennedy, supra; El-Issa, supra; Kiracofe, supra; and Yarnell, supra. The privilege may be waived. IND.CODE § 34-4-12.6-2. Pepple presents no question whether Parkview has waived the privilege.