Court Opinion

ID: 4249598
Source: CourtListenerOpinion
Date Created: 2018-02-28 21:19:46.852147+00
Date Added: 2024-06-11T14:16:56.643260
License: Public Domain

IN THE SUPREME COURT OF IOWA
                              No. 10–1516

                           Filed April 13, 2012

RHONDA HALL, Individually and as
the Injured Parent of Malika and Miranda,
and BOB HALL, Husband of Rhonda Hall,

      Appellants,

vs.

JENNIE EDMUNDSON MEMORIAL HOSPITAL
and NEBRASKA METHODIST HEALTH SYSTEM, INC.,

      Appellees.

      Appeal from the Iowa District Court for Pottawattamie County,

Gregory W. Steensland, Judge.

      After a bench trial, plaintiffs appeal and defendants cross-appeal

from district court’s judgment in favor of defendants in an action for

negligent credentialing. AFFIRMED.

      John M. French of Law Offices of John M. French, Council Bluffs,
and Joseph B. Muller and Ronald J. Palagi of The Law Offices of Ronald

J. Palagi, P.C., L.L.O., Omaha, Nebraska, for appellant.

      Michael W. Ellwanger and Michael P. Jacobs of Rawlings, Nieland,

Killinger, Ellwanger, Jacobs, Mohrhauser & Nelson, L.L.P., Sioux City,

for appellee Jennie Edmundson Memorial Hospital.

      Robert A. Mooney and Michael J. Whaley of Gross & Welch, P.C.,

L.L.O., Omaha, Nebraska, for appellee Nebraska Methodist Health

System, Inc.
                                           2

HECHT, Justice.

        The plaintiffs in this case sued a surgeon alleging negligent

performance of a pancreaticoduodenectomy and sued a hospital

contending it negligently granted credentials to the surgeon.                  In this

appeal from a bench trial, the plaintiffs contend the district court applied

the wrong standard of care in adjudicating their claim of negligent

credentialing against the hospital.            Because we conclude the district

court applied the standard of care advocated by the plaintiffs and

substantial evidence supported the district court’s conclusion that the

hospital did not breach the standard of care, we affirm the district court’s

judgment in favor of the defendants.

        I. Background Facts and Proceedings.

        On      April      25,    2007,        Rhonda      Hall        underwent      a

pancreaticoduodenectomy, also known as a Whipple procedure, at

Jennie Edmundson Memorial Hospital (JEMH).                     The procedure was

intended to discern whether a mass situated on the neck of Hall’s

pancreas was malignant and to remove it if it was not. Dr. Eric Bendorf,

a board certified general surgeon, performed the surgery.

        Dr. Bendorf had originally sought and was granted temporary

general surgical privileges 1 at JEMH when he concluded his residency in

1997.        Afterwards, JEMH reviewed Dr. Bendorf for reprivileging

approximately every two years.            For each request for renewal of the

doctor’s     privileges,   JEMH     conducted      research       on   Dr.   Bendorf’s

       1The parties acknowledge that the terms “credentialing” and “privileging” were

used interchangeably at trial. However, the plaintiffs note that although the terms are
closely related, they do refer to distinct concepts.        According to the plaintiffs,
“credentialing” refers to the process of determining whether a doctor is qualified to be
on the medical staff. “Privileging” refers to the determination by the hospital as to
which specific procedures a doctor will be allowed to perform within the hospital.
                                     3

experience and qualifications, beginning with a consultation with the

Nebraska Credentialing Verification Organization (NCVO), which gathers

information from schools and teaching hospitals. JEMH also reviewed

internal information about Dr. Bendorf’s work within the hospital,

conducted a criminal record check, and reviewed his history, if any, of

malpractice claims (the record indicates Dr. Bendorf had no malpractice

claims prior to Hall’s surgery).     The information gathered was then

considered by a series of JEMH committees.            The first of these

committees, which includes a physician serving as Vice President for

Medical Affairs, reviewed the packet of information to ensure it was

complete.   Next the packet was forwarded to the chair of the surgical

department. After approval by the surgery department chair, the request

moved on to the credentialing committee which included doctors, the

chief nurse, and several administrators.          After approval by the

credentialing committee, the packet was forwarded to the hospital’s

executive committee, a group comprised of medical staff from each

department of the hospital. After approval by the executive committee,

the packet was submitted to the JEMH board of directors for final

approval. A subcommittee of the board of directors reviewed the packet

and made a recommendation to the board for renewal of Dr. Bendorf’s

privileges. The board, consisting of both doctors and laypeople, granted

Dr. Bendorf’s requests for renewal of his privileges in 1999, 2000, 2002,

2004, 2005, and again in 2007, shortly before Hall’s surgery.

       The Joint Commission on the Accreditation of Hospitals (JCAH) is

a national organization which promulgates standards, conducts surveys,

and accredits hospitals.    JEMH is accredited by the JCAH.       In 2001,

JCAH    issued   requests   that   JEMH    make    improvements    in   its

credentialing of physicians.       They were addressed by JEMH and
                                            4

approved by JCAH. In 2004 and 2007, JEMH passed JCAH’s survey in

credentialing.

       The Whipple procedure is a complicated surgery, involving the

removal and reattachment of portions of several organs, including the

pancreas, the small intestine, the stomach, the gallbladder, and the

common bile duct. Of specific concern is the possibility of severing the

patient’s superior mesenteric vein (SMV).                During the procedure on

April 25, 2007, Dr. Bendorf did sever Hall’s SMV.                   Although he was

initially able to stop the bleeding, Hall began to bleed again when the

surgery was resumed.              Dr. Bendorf ultimately discontinued the

procedure, and Hall was transferred by ambulance to the University of

Nebraska Medical Center where the surgery was completed by another

surgeon.

       Hall was comatose for almost two months.                       She has since

undergone repeated surgeries, including a three-organ transplant

procedure, and continues to have health problems because of the failed

surgery.

       Hall and her husband sued Dr. Bendorf, JEMH, and Nebraska

Methodist Health System, Inc. (NMHS). 2                    The Halls settled with
Dr. Bendorf, but their claims against JEMH and NMHS proceeded to a

bench trial.      The Halls alleged JEMH and NMHS were negligent in

granting Dr. Bendorf privileges to perform the Whipple procedure. 3

       2NMHS      is a nonprofit corporation affiliated with several different health care
facilities, including JEMH, but does not itself provide health care services. Instead,
NMHS provides its affiliates with certain business services, including information
technology and marketing assistance.
       3The   Halls contended NMHS controlled the JEMH credentialing process and was
itself negligent in granting Dr. Bendorf privileges to perform the Whipple procedure.
The allegation of NMHS’s control was based on evidence of the relationship between
                                      5

         The heart of the Halls’ claim against JEMH and NMHS was that

Dr. Bendorf did not have sufficient experience performing the Whipple

procedure to support a grant of privileges for the procedure in 2007. He

had performed only four Whipple procedures in the previous ten years

and none in the three years preceding Hall’s surgery.           The parties

disagreed whether the court should hold JEMH and NMHS to a

“professional” standard of care or a “lay” standard of care when assessing

whether they acted reasonably when they approved Dr. Bendorf’s request

for surgical privileges, specifically to perform the Whipple procedure.

Both sides offered expert testimony and briefed the issue for the district

court.

         The district court issued its findings of fact, conclusions of law,

and ruling on May 27, 2010.         The district court first concluded that

NMHS had the power to exercise control over the credentialing process at

JEMH and accordingly, owed a duty to the Halls. The district court also

concluded that, although this court has not explicitly recognized the tort

of negligent credentialing, the overwhelming majority of courts that have

considered the issue have recognized the cause of action, and the district

court concluded it is a viable claim in Iowa.       Having determined the

plaintiffs had pled a cognizable tort under Iowa law, the district court

concluded it should apply a nonprofessional standard of care in this case

because the decision to reprivilege Dr. Bendorf was made by laypeople

and involved nonmedical, administrative, or ministerial acts by a

hospital. However, the district court concluded JEMH and NMHS did not

________________________________
JEMH and NMHS which authorized NMHS to appoint the CEO of JEMH and some of
the directors serving on the board of JEMH.
                                    6

breach the standard of care by granting Dr. Bendorf privileges to perform

a Whipple procedure and entered judgment in favor of the defendants.

      The Halls appealed, contending that although the district court

was correct in its conclusion that a lay standard of care applied, the

court actually applied a professional standard of care and the court erred

in concluding JEMH and NMHS did not breach the applicable standard

when granting Dr. Bendorf privileges to perform the Whipple procedure.

The Halls also contend the district court made two erroneous evidentiary

rulings.   JEMH and NMHS cross-appealed, arguing the district court

correctly concluded they did not breach a duty under the circumstances

of this case, but contending the district court erred in failing to apply a

professional standard of care. NMHS also asserts the district court erred

in deciding NMHS owed the Halls a duty to exercise reasonable care in

deciding whether to grant Dr. Bendorf privileges because it had no

control over the granting or denying of privileges at JEMH.

      II. Scope and Standards of Review.

      Our review is for corrections of errors at law.      Iowa R. App. P.

6.907. The district court’s findings of fact have “the effect of a special

verdict,” id., and “are binding on us if supported by substantial

evidence,” Hendricks v. Great Plains Supply Co., 609 N.W.2d 486, 490

(Iowa 2000).   We review the district court’s evidentiary rulings for an

abuse of discretion. Heinz v. Heinz, 653 N.W.2d 334, 338 (Iowa 2002).

      III. Discussion.

      A. Negligent    Credentialing     Cause    of   Action.    The   Halls

encourage us to use this appeal as an opportunity to recognize a cause of

action for negligent credentialing in Iowa.     The district court predicted

that we would and allowed the claim to proceed to trial. However, the

defendants JEMH and NMHS did not contend either in the district court
                                           7

or on appeal that negligent credentialing is not actionable in Iowa. We

assume without deciding that the tort is actionable in this state. As we

find no reversible error in any of the district court’s rulings challenged on

appeal by the Halls, we conclude we need not decide the question

whether the tort is actionable. 4

       B. The District Court’s Application of the Standard of Care.

The parties disagree over the appropriate standard of care that should

apply to allegations of negligent credentialing if the tort is recognized.

The district court concluded a hospital’s duty to its patients stems from

the general duty to exercise reasonable care that arises whenever an

actor’s conduct creates a risk of harm, citing section 7 of the

Restatement (Third) of Torts and Thompson v. Kaczinski, 774 N.W.2d 829

(Iowa 2009).        The district court further concluded that because the

ultimate decision whether to grant privileges at JEMH was made by the

board of directors, consisting of eleven lay members, there was “no basis

for applying a professional standard of care to the decisions made by

laypeople,” relying on Kastler v. Iowa Methodist Hospital, 193 N.W.2d 98,

102 (Iowa 1971) (applying reasonable care standard in case involving an

injury to a patient while showering in a hospital) and University of

Mississippi Medical Center v. Pounders, 970 So. 2d 141, 148 (Miss. 2007)

(applying lay standard of care in case involving injury to a patient caused

by a hospital escort because the escort’s conduct did not involve

professional conduct). The district court concluded that the appropriate

standard of care in this case was “reasonable care under the

       4Prominent  among the reasons we defer a decision on the existence of the tort of
negligent credentialing is the fact that the defendants have not claimed the tort should
not be recognized and we prefer to confront and decide the issue in a case in which the
matter is disputed and briefed by the parties.
                                       8

circumstances” and that expert testimony was not required to establish

the standard.

      The Halls assert the district court correctly concluded a “lay”

standard of care should apply but contend the district court erred in

actually applying a higher “professional” standard of care advocated by

the defendants. The Halls support their argument by noting the district

court’s ruling referred to expert testimony introduced by the defendants

evidencing the “customary practice of hospitals in the Midwest” and

described this evidence as “compelling.” The Halls argue this reference

by the district court to the customary practice of hospitals coupled with

the court’s failure to expressly discuss and apply in its ruling the factors

bearing upon the existence of a general duty to exercise reasonable care

under section 7 of the Restatement (Third) of Torts together demonstrate

the district court did not measure the defendants’ conduct against a “lay”

standard of care as it purported to.

      Our review of the record and the district court’s ruling does not

support the Halls’ argument.     The district court clearly concluded the

appropriate standard of care under the circumstances of this case was

the lay standard advocated by the Halls—“reasonable care under the

circumstances.” Although the district court mentioned the defendants’

evidence of custom, the court’s ruling quoted La Sell v. Tri-States Theatre

Corp., 233 Iowa 929, 943, 11 N.W.2d 36, 44 (1943):
      The standard of custom cannot be substituted for the legal
      standard of reasonable or ordinary care under the
      circumstances. Following an approved method is merely
      evidentiary and is not conclusive on the question of ordinary
      care. The standard of care is ordinary care under the
      circumstances, and not what others have done under like
      circumstances.
The district court then noted it found the evidence of hospitals’

customary    practice “compelling”     but “not   necessarily conclusive.”
                                     9

Ultimately, the district court concluded “under an ordinary negligence

analysis, defendants were not negligent in privileging and re-privileging

Dr. Bendorf to perform a Whipple procedure at JEMH.”

      We conclude the district court applied the standard of care

advocated by the Halls. We also conclude the district court’s finding that

JEMH and NMHS did not breach the standard is supported by

substantial evidence.   The record demonstrates that JEMH researched

Dr. Bendorf’s credentials and surgical record extensively before renewing

his privileges to conduct general surgery.      Dr. Bendorf’s application

received several levels of review from various committees within the

hospital, many of them including surgeons and physicians who had

special knowledge regarding whether a surgeon with Dr. Bendorf’s

experience would be qualified to perform a Whipple procedure even

though he had not performed one in the recent past. Accordingly, we

affirm the judgment of the district in favor of the defendants.

      C. The Defendants’ Cross-Appeal. Because we have concluded

the district court’s judgment in favor of the defendants should be

affirmed, we find it unnecessary to address the defendants’ argument

that the district court should have applied a higher “professional”

standard of care.

      D. NMHS’s Cross-Appeal. NMHS, in its cross-appeal, argues the

district court unnecessarily and incorrectly concluded NMHS controlled

the privileging process at JEMH and thus owed a duty to the Halls for

granting privileges to Dr. Bendorf. NMHS argues that the district court’s

decision was tantamount to an advisory opinion given that the court

concluded no breach of the duty of care occurred. However, because the

district court found, and we now affirm, that NMHS breached no duty,

any error in the district court’s conclusion that NMHS owed a duty to the
                                    10

Halls was rendered harmless.       See Grefe & Sidney v. Watters, 525
N.W.2d 821, 826 (Iowa 1994).

      E.   Evidentiary Rulings.     The Halls contend the district court

erred in two evidentiary rulings. We will address each in turn.

      1. Lack of remedial measures. The Halls contend the district court

erred by refusing to let them present evidence that after the failed

Whipple procedure on Hall, JEMH and NMHS did not change their

credentialing policies or procedures.       The Halls acknowledge that

normally evidence of remedial measures is not admissible. Iowa R. Evid.

5.407 (“When, after an event, measures are taken which, if taken

previously, would have made the event less likely to occur, evidence of

the subsequent measures is not admissible to prove negligence or

culpable conduct in connection with the event.”).        However, the Halls

argue that the failure of JEMH and NMHS to change their credentialing

policies and procedures after the unsuccessful surgery in this case is not

evidence of subsequent remedial measures, but is evidence of a failure to

undertake such measures.         The Halls argue this evidence is not

prohibited under rule 5.407 and is relevant to show that the procedures

utilized by JEMH and NMHS were insufficient and unreasonable because

they would purportedly allow Dr. Bendorf to perform the Whipple

procedure after the disastrous results in Hall’s case.

      The district court excluded the evidence pursuant to rule 5.407 as

evidence of remedial measures and also sustained an objection on

relevance grounds.    We conclude the district court did not abuse its

discretion in excluding the evidence. We agree that the evidence is not

relevant to any issue in this case. The theory actually advanced in this

case was that JEMH and NMHS were negligent in renewing Dr. Bendorf’s

privileges in 2007.   The district court did not abuse its discretion in
                                      11

concluding the fact that JEMH and NMHS did not change their policies

and procedures after the failed surgery is not probative of whether they

acted negligently in granting Dr. Bendorf privileges before Hall’s surgery.

Accordingly, we conclude the district court did not abuse its discretion in

excluding the evidence.

      2. Privileging documents. The Halls also contend the district court

erred in denying them access to the full privileging file on Dr. Bendorf

while allowing the defendants to rely on some evidence from the

privileging file at the trial.   Specifically the Halls contend the district

court erred in denying them access to a portion of the 2007 credentialing

file and the entire 2009 credentialing file.

      JEMH contends that the Halls have not preserved error on this

claim, that they have not shown they were prejudiced by the denial of

access to any part of the credentialing files, and that the Halls could

have obtained the information elsewhere but did not try.

      We conclude the Halls failed to preserve error on this issue. The

record indicates most of the credentialing files were voluntarily disclosed

to the Halls during discovery. When the Halls sought the remainder of

the 2007 file and the 2009 file, the district court, relying on the court of

appeals decision in Day v. Finley Hospital, 769 N.W.2d 898, 901 (Iowa Ct.

App. 2009), concluded credentialing files were protected from disclosure

under the peer review statute, Iowa Code section 147.135 (2009).         We

recently held the privilege protecting peer review documents was not

waived by a hospital despite its use of some of them as exhibits in a prior

trial in the same case. Cawthorn v. Catholic Health Initiatives Iowa Corp.,

806 N.W.2d 282, 291 (Iowa 2011).

      However, the Halls contend on appeal this case is distinguished

from Cawthorn because JEMH and NMHS used some of the peer review
                                    12

records as a sword while relying on the peer review privilege as a shield.

We adverted to the “sword and shield” problem in Cawthorn, noting that

other cases have held that “as a matter of fairness, a party cannot

simultaneously rely on peer review materials for its defense while

asserting the privilege” against disclosure of the materials to the other

party. Id. at 290. However, as we were not presented with a sword and

shield scenario in Cawthorn, we have not determined how the peer review

privilege would apply in such a situation.       Id.   Although the Halls

objected when the district court refused to order the discovery of the

privileging files (when the privilege was being used as a shield), the Halls

expressly waived any objection when JEMH sought to use the privileged

documents by introducing them as evidence during trial.        Because an

objection to the admission of evidence at trial is required for our review

on appeal, we conclude error has not been preserved on this issue. See

Iowa R. Evid. 5.103(a); State v. Martin, 704 N.W.2d 665, 669 (Iowa 2005).

      IV. Conclusion.

      We affirm the judgment of the district court in favor of the

defendants. As we noted in our order denying the appellants’ motion to

strike the appellees’ designation, we have considered the appellants’

argument that the appellees caused unnecessary matters to be included

in the appendix and conclude costs should be taxed to the appellant.

      AFFIRMED.

      All justices concur except Wiggins, J., who concurs specially.
                                          13

                                       Hall v. Jeannie Edmundson Mem’l Hosp.

WIGGINS, Justice (concurring specially).

       I concur, but write specially concerning the evidentiary ruling

regarding the district court’s failure to grant the Halls access to portions

of the 2007 credentialing file and the entire 2009 credentialing file. The

Halls, in requesting the credentialing files, failed to limit their request to

the items contained in the credentialing files that did not include the

credentialing committee’s work product in determining whether the

hospital    should     have    credentialed     Dr.   Bendorf     to   do    Whipple

procedures. 5      As I wrote in my concurring opinion in Cawthorn v.

Catholic Health Initiatives Iowa Corp., we have not adopted the court of

appeals’ decision in Day v. Finley Hospital, 769 N.W.2d 898 (Iowa Ct.

App. 2009).      Cawthorn v. Catholic Health Initiatives Iowa Corp., 806
N.W.2d 282, 293 n.7 (Iowa 2011) (Wiggins, J., concurring specially). The

Halls only claimed that they were entitled to the credentialing files

because the hospital used some of the items in the credentialing files in

litigating its case.     The Halls did not claim that Iowa Code section

147.135 (2009) did not protect certain items contained in the

credentialing files.    Accordingly, I concur that, under this record, the
Halls were not entitled to the credentialing files they sought to obtain

from the hospital.

       5Examples    of items in a credentialing file that are not work product of the
credentialing committee may include the application submitted by the physician
seeking credentialing, any medical records reviewed by the credentialing committee, any
transcripts of the physician’s training, any records not generated by a peer review
committee as to a physician’s prior discipline, or any written material provided by a
third party to the committee commenting on a physician’s qualifications. Work product
may include analysis of the records reviewed by the credentialing committee or other
written documents containing the credentialing committee’s mental thoughts regarding
the physician’s qualifications.