Court Opinion

ID: 4250111
Source: CourtListenerOpinion
Date Created: 2018-02-28 21:23:17.104308+00
Date Added: 2024-06-11T13:27:19.668741
License: Public Domain

IN THE SUPREME COURT OF IOWA
                            No. 56 / 04-1724

                        Filed November 30, 2007

DENNIS L. CAWTHORN,

      Appellant,

vs.

CATHOLIC HEALTH INITIATIVES IOWA CORP. d/b/a MERCY
HOSPITAL MEDICAL CENTER, a Corporation,

      Appellee.

      On review from the Iowa Court of Appeals.

      Appeal from the Iowa District Court for Polk County, Artis Reis,

Judge.

      Plaintiff in medical malpractice case appeals from district court’s

order for conditional new trial and rejection of his claim for punitive

damages. The defendant cross-appeals from the district court’s ruling on

evidence issues.    DECISION OF COURT OF APPEALS VACATED;

JUDGMENT OF DISTRICT COURT REVERSED ON CROSS-APPEAL;

CASE REMANDED.

      Gary R. Fischer of Dreher, Simpson & Jensen, P.C., Des Moines,

and Verle W. Norris, Corydon, for appellant.
                                  2

     Thomas A. Finley, Jack Hilmes, and Kami M. Lang of Finley, Alt,

Smith, Scharnberg, Craig, Hilmes & Gaffney, P.C., Des Moines, and

Roberta M. Anderson of Schroeder & Anderson, Mason City, for appellee.
                                     3

LARSON, Justice.

         Dennis L. Cawthorn sued Catholic Health Initiatives Iowa Corp.

d/b/a Mercy Hospital Medical Center, as well as other defendants who

were later dismissed (including Dr. Daniel Miulli), for damages arising

out of the defendants’ treatment of the plaintiff.     The jury returned a

substantial verdict for the plaintiff and allocated seventy percent of the

fault to Dr. Daniel Miulli, the plaintiff’s treating doctor (who had settled

prior to trial), and thirty percent to Mercy. Mercy moved for a new trial

on the ground the verdict was excessive.      The district court ordered a

new trial unless the plaintiff agreed to a remittitur reducing the verdict of

$10,590,000 to $1,190,000.      Cawthorn appealed, contending the trial

court abused its discretion in ordering the conditional new trial and in

refusing to submit his claim for punitive damages.            Mercy cross-

appealed, claiming error in the admission of evidence of an independent

review of Dr. Miulli’s qualifications by the Iowa Board of Medical

Examiners (IBME). The court of appeals affirmed on Cawthorn’s appeal,

but did not address Mercy’s cross-appeal. We vacate the decision of the

court of appeals, reverse on Mercy’s cross-appeal, and remand for a new

trial.

         I. Facts.

         Dennis Cawthorn was treated at Mercy in May 2000 for a work-

related injury to his spine. Dr. Miulli performed surgery, but Cawthorn’s

pain persisted.      On May 22, 2000, Cawthorn underwent a second

surgery to remove disc and bone fragments that were missed during the

first surgery. After the second surgery, Cawthorn’s pain worsened, and

he was readmitted to Mercy in June, suffering from pain, cold sweats, a

low-grade fever, and an “oozing drainage” at the point of the prior

surgeries. Cawthorn was again evaluated by Dr. Miulli who, instead of
                                    4

performing recommended tests for infection, relied on week-old tests

showing no infection.   He prescribed pain medication.     Cawthorn was

released after four days, but his pain persisted at an eight on a scale of

one to ten.

      II. The Issues.

      The appeal and cross-appeal raise three issues:         the court’s

conditional order for a new trial, its refusal to submit the issue of

punitive damages, and the court’s admission of evidence concerning the

IBME investigation of Dr. Miulli and resulting disciplinary hearing. The

IBME investigation had been prompted by concerns expressed to the

IBME by doctors who had doubts about Dr. Miulli’s care of patients in

cases unrelated to Cawthorn’s. An issue initially raised by Mercy in the

trial court, whether Iowa recognizes a claim against a hospital for

negligent credentialing of doctors practicing in the hospital, is not an

issue on appeal. We reverse and remand on the evidentiary issue raised

in Mercy’s cross-appeal and, therefore, need not address the district

court’s order for new trial based on the alleged excessiveness of the

verdict.

      III. The Cross-Appeal.

      Mercy cross-appealed from the district court’s admission of

detailed evidence of an investigation of Dr. Miulli by the IBME. Mercy

argues that this evidence was confidential under Iowa Code section

272C.6(4) (1999) and privileged under section 147.135.        Mercy also

argues that any probative value of this information was outweighed by

the prejudice inherent in its admission. See Iowa R. Evid. 5.403.

      Cawthorn’s purpose in producing evidence of the disciplinary

investigation was apparently two-fold: to show that Mercy should have

been aware that Dr. Miulli was not qualified to perform the surgery on
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Cawthorn and to establish willful and wanton disregard for Cawthorn’s

rights as a patient so as to establish his right to punitive damages.

      The plaintiff correctly points out that Dr. Miulli waived his right to

confidentiality under section 272C.6(4) for purposes of the disciplinary

proceedings.     However, section 272C.6(4) bars the admission of

investigative materials and information in any proceeding other than

licensee discipline:

             In order to assure a free flow of information for
      accomplishing the purposes of this section, and
      notwithstanding section 622.10, all complaint files,
      investigation files, other investigation reports, and other
      investigative information in the possession of a licensing
      board or peer review committee acting under the authority of
      a licensing board or its employees or agents which relates to
      licensee discipline are privileged and confidential, and are
      not subject to discovery, subpoena, or other means of legal
      compulsion for their release to a person other than the
      licensee and the boards, their employees and agents involved
      in licensee discipline, and are not admissible in evidence in a
      judicial or administrative proceeding other than the proceeding
      involving licensee discipline.

(Emphasis added.)

      As we have said,

             [i]t is obvious from the context, stated purpose and
      language of section [272C.6(4)] that the disclosure exception
      applies only when a disciplinary proceeding has been
      initiated. First, the statute makes a consistent distinction
      between investigation of a complaint and a disciplinary
      proceeding. Second, subsection 4 is part of a section dealing
      only with disciplinary hearings. Third, the stated objective of
      subsection 4 to assure a free flow of information for
      complaint and investigative purposes would be defeated if
      licensees had access to complaint files in these
      circumstances. Finally, disclosure for use of the information
      in private litigation would nullify the statutory bar to use of
      the information “in any judicial or administrative proceeding
      other than the proceeding involving licensee discipline.”

Doe v. Iowa State Bd. of Physical Therapy, 320 N.W.2d 557, 559–60 (Iowa

1982).
                                     6

      At trial, IBME’s investigator testified at length about Dr. Miulli’s

qualifications as a surgeon. However, Mercy’s counsel was not permitted

to cross-examine her on the basis of her reports prepared during the

investigation. The reason for this was that the confidential reports had

been subjected to a protective order in the disciplinary case, and the

district judge in Cawthorn’s trial denied Mercy access to them.

      We have not previously considered section 272C.6(4) in light of

circumstances such as those in this case.          However, the statute’s

provision that it is intended to “assure a free flow of information”

suggests that confidentiality should protect the source of information as

well as the person being investigated.      Even more important is the

statute’s express prohibition from admission into evidence of any

investigative information in a “judicial or administrative proceeding”

other than the disciplinary case.        We hold that section 272C.6(4)

prohibits admission of such investigative evidence and that introduction

of the IBME investigation, including the transcript of the IBME hearing

that was introduced at the trial, was improper. Further, we believe the

impact of this evidence was so great as to require a new trial and the

exclusion of all evidence of the IBME investigation.

      Because we order a new trial on this issue raised in Mercy’s cross-

appeal, we do not address the plaintiff’s contention that the trial court

erred in ordering a new trial based on alleged excessiveness of the

verdict.

      IV. Punitive Damages.

      The district court granted Mercy Hospital’s motion for directed

verdict on Cawthorn’s punitive-damage claim and denied his motion for

new trial on punitive damages. Because the submissibility of punitive

damages will likely arise again on retrial, we will address that issue now.
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      We review a district court’s ruling on a motion for directed verdict

for errors at law. Iowa R. App. P. 6.4; Riniker v. Wilson, 623 N.W.2d 220,

230 (Iowa Ct. App. 2000).      “Where no substantial evidence exists to

support each element of a plaintiff’s claim, the court may sustain a

motion for directed verdict. Evidence is substantial when a reasonable

mind would accept it as adequate to reach a conclusion.” Riniker, 623
N.W.2d at 230 (citations omitted).    The evidence is viewed in the light

most favorable to the party against whom the motion was directed. Id.

      Iowa Code section 668A.1 (2003) governs the award of punitive

damages. Punitive damages may only be awarded when the plaintiff has

shown “by a preponderance of clear, convincing, and satisfactory

evidence, the conduct of the defendant from which the claim arose

constituted willful and wanton disregard for the rights or safety of

another.”   Iowa Code § 668A.1(1)(a).     Willful and wanton conduct is

shown when an

      “actor has intentionally done an act of an unreasonable
      character in disregard of a known or obvious risk that was
      so great as to make it highly probable that harm would
      follow, and which thus is usually accompanied by a
      conscious indifference to the consequences.”

Kiesau v. Bantz, 686 N.W.2d 164, 173 (Iowa 2004) (quoting Vlotho v.

Hardin County, 509 N.W.2d 350, 356 (Iowa 1993)).         Punitive damages

serve as a form of punishment, and as such, mere negligent conduct is

not sufficient to support such a claim.     McClure v. Walgreen Co., 613
N.W.2d 225, 230–31 (Iowa 2000). Punitive damages are only recoverable

when the defendant acted with actual or legal malice.

      “Actual malice may be shown by such things as personal
      spite, hatred, or ill-will and legal malice may be shown by
      wrongful conduct committed with a willful or reckless
      disregard for the rights of another.” . . . “Thus, merely
      objectionable conduct is insufficient. . . . To receive punitive
                                      8
      damages, plaintiff must offer evidence of defendant’s
      persistent course of conduct to show that the defendant
      acted with no care and with disregard to the consequences of
      those acts.”

Wolf v. Wolf, 690 N.W.2d 887, 893 (Iowa 2005) (quoting Jones v. Lake

Park Care Ctr., Inc., 569 N.W.2d 369, 378 (Iowa 1997), and Hockenberg

Equip. Co. v. Hockenberg’s Equip. & Supply Co., 510 N.W.2d 153, 156

(Iowa 1993)) (citation omitted).

      Cawthorn does not contend that Mercy had any actual malice

toward him, but he argues that the record was sufficient for the court to

submit punitive damages on the basis of legal malice. We have defined

legal malice as wrongful conduct, committed with a willful or reckless

disregard for the rights of another. Wolf, 690 N.W.2d at 893.

      Cawthorn’s claim for punitive damages rests on his contention that

Mercy Hospital was aware that Dr. Miulli was likely to injure a patient

through negligent treatment.        Though evidence certainly exists that

Mercy Hospital was aware that Dr. Miulli’s competency was at issue, the

evidence does not support a finding of willful and wanton conduct, as

required by section 668A.1(1)(a).

      Much of Cawthorn’s punitive-damage claim is based on the fact

that the Iowa Board of Medical Examiners investigated Dr. Miulli and,

ultimately, suspended his license to practice medicine.      However, the

substance of the investigation was not made known to Mercy until after

Dr. Miulli treated Cawthorn.        Peer review of Dr. Miulli prior to his

treatment of Cawthorn was generally positive.         Prior to Cawthorn’s

treatment by Dr. Miulli, Mercy had received at least one complaint about

Dr. Miulli’s care, but an internal peer review committee did not identify

any practice problems regarding infection—the cause of the injuries
                                          9

suffered by Cawthorn. Further, Mercy took steps to monitor Dr. Miulli’s

practice to ensure the safety of their patients.

         Viewing the evidence in the light most favorable to Cawthorn’s

punitive-damage claim, we do not believe a reasonable fact finder could

find

         by a preponderance of clear, convincing, and satisfactory
         evidence [that] the conduct of the defendant from which the
         claim arose constituted willful and wanton disregard for the
         rights or safety of another.

Iowa Code § 668A.1(1)(a).        In other words, we do not find evidence to

support a claim that Mercy had intentionally done an act of such

unreasonable character as to make it highly probable that harm would

follow or that Mercy’s actions were accompanied by a conscious

indifference to the consequences. See Kiesau, 686 N.W.2d at 173.

         We   affirm   the   district   court’s   rulings   denying   Cawthorn’s

submission of his punitive-damages claim to the jury and denying a new

trial on that issue. We reverse on the cross-appeal and remand for a new

trial.

         DECISION OF COURT OF APPEALS VACATED; JUDGMENT OF

DISTRICT        COURT        REVERSED         ON      CROSS-APPEAL;       CASE

REMANDED.

         All justices concur except Hecht, J., who takes no part.