Larsen v. Carle Foundation ( 2008 )

Filed 11/21/08 NO. 4-08-0149
IN THE APPELLATE COURT
OF ILLINOIS
FOURTH DISTRICT
L. ROYCE LARSEN, M.D., ) Appeal from
Plaintiff-Appellant, ) Circuit Court of
v. ) Vermilion County
THE CARLE FOUNDATION, d/b/a CARLE ) No. 06L1
FOUNDATION HOSPITAL, THE CARLE )
SURGICENTER-DANVILLE, and THE CARLE ) Honorable
SURGICENTER-CHAMPAIGN, ) Claudia S. Anderson,
Defendants-Appellees. ) Judge Presiding.
_________________________________________________________________
JUSTICE TURNER delivered the opinion of the court:
In June 2007, plaintiff, L. Royce Larsen, M.D., filed a
second-amended complaint alleging breach of contract against
defendants, Carle Foundation, d/b/a Carle Foundation Hospital,
Carle Surgicenter-Danville, and Carle Surgicenter-Champaign. In
January 2008, plaintiff filed a motion for partial summary
judgment, which the trial court denied. At trial, the court
granted defendants' motion for a "directed verdict," more prop-
erly denominated a directed judgment.
On appeal, plaintiff argues the trial court erred in
(1) denying his motion for partial summary judgment, (2) granting
defendants' motion for directed judgment, and (3) ignoring his
right to a fair hearing. We affirm.
I. BACKGROUND
Plaintiff is a physician specializing in general
surgery. Prior to December 2005, plaintiff was a member in good
standing of defendants' staff and had privileges at the hospital
and surgicenters. Medical staff privileges were subject to
renewal every two years. A physician seeking to continue his
privileges was required to submit a renewal application.
Plaintiff's privileges were due to expire on December 3, 2005.
In June 2007, plaintiff filed a second-amended com-
plaint against defendants, alleging, inter alia, breach of
contract. Plaintiff claimed he made a timely application for
reappointment to the medical staff and clinical privileges and
supplied all necessary information. He also claimed defendants
sent a letter to him on or about November 22, 2005, requesting
additional information be submitted by November 28, 2005.
Plaintiff alleged defendants' demand was unauthorized by the
Carle Foundation Hospital medical staff bylaws, rules, and
regulations (bylaws). Plaintiff claimed he supplied the re-
quested information, albeit after the stated deadline. Plaintiff
stated his application for reappointment was denied as incomplete
on December 1, 2005, and thus his medical staff membership and
clinical privileges expired without renewal on December 3, 2005.
Since then, plaintiff has been unable to practice medicine and
surgery at defendants' facilities. Plaintiff claimed defendants'
refusal to renew his privileges constituted an "adverse action,"
of which he received no formal notice, and defendants failed or
refused to afford him a fair hearing as provided by the bylaws.
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In his breach-of-contract claim, plaintiff alleged
defendants' action in requiring additional information and
denying his application for renewal was a direct and material
breach of the terms and conditions of the bylaws and the Hospital
Licensing Act (Act) (210 ILCS 85/1 through 16 (West 2006)).
Further, plaintiff alleged defendants denied him a fair hearing
and other appeal rights. Plaintiff claimed he had suffered
damages as a direct and proximate result of defendants' breach of
contract.
In January 2008, plaintiff filed a motion for partial
summary judgment pursuant to section 2-1005 of the Code of Civil
Procedure (735 ILCS 5/2-1005 (West 2006)), stating there remained
only an issue of law as to whether defendants' actions consti-
tuted a breach of contract and violation of state law. Plaintiff
claimed the bylaws and the Act conferred upon defendants an
obligation to afford plaintiff a fair hearing when it failed to
grant him a renewal of the staff membership and clinical privi-
leges. The trial court denied the motion.
At the bench trial, G. Lynn Palmer testified she worked
for Carle Clinic and managed plaintiff's office. She had worked
for plaintiff for over 17 years and assisted him in filling out
the biennial renewal application. She stated the office received
plaintiff's renewal application form and a letter from Carle
Foundation Hospital dated August 1, 2005. She set the form aside
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and noted it would normally take her five or six weeks to com-
plete the application. The letter indicated the application was
to be returned by August 23, 2005. Palmer did not return the
application by that date, but she considered it a request and not
a deadline. Although Palmer testified she did not see a memo
from the medical staff coordinator that the application had not
been received and needed to be submitted by October 3, 2005, to
meet the deadlines of the application process, Palmer stated she
complied with that deadline.
On November 22, 2005, plaintiff received a letter
indicating his application for reappointment to the medical staff
and clinical privileges had been reviewed by the credentials
committee on November 17, 2005. The letter stated the committee
sought additional information from three facilities at which he
performed surgical cases and asked that the information be
provided no later than November 28, 2005. Palmer testified she
typed the letters to get the needed information on November 28.
Plaintiff testified his formal employer is Carle Clinic
and he had been working with the clinic for 20 years. He never
practiced at Carle Foundation Hospital in Urbana. Plaintiff
stated that as a surgeon with staff privileges he is required to
renew his privileges through an application process. Plaintiff
testified he signed his application on August 25, 2005. He
signed it again when the application was ready to be forwarded on
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September 28, 2005. He received a letter from Dr. Napoleon
Knight, the vice president of medical affairs for Carle Founda-
tion Hospital, on November 22, 2005, requesting additional
information by November 28. Plaintiff responded by letter on
November 28, 2005, noting the difficulty in supplying the re-
quested information given the Thanksgiving holiday (Thursday,
November 24, 2005). Plaintiff also sent letters to various
health-care facilities to comply with Knight's request. Plain-
tiff testified to letters sent by various facilities in response
to his request for information.
On December 1, 2005, plaintiff received a letter from
Dr. Knight, informing him the requested information had not been
received by November 28, 2005, and thus plaintiff's privileges
would expire on December 3, 2005. The letter indicated plaintiff
would have to make arrangements to reschedule any procedures at
another facility at which he had privileges. Plaintiff testified
he sought a fair hearing in regard to the denial of his staff
privileges but he did not receive one.
Following the close of plaintiff's evidence, defense
counsel moved for directed judgment. The trial court found
plaintiff's evidence failed to establish a prima facie case. The
court dismissed the second-amended complaint. This appeal
followed.
II. ANALYSIS
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A. Summary Judgment
Plaintiff argues the trial court erred in denying his
motion for partial summary judgment. "In general, when a motion
for summary judgment is denied and the case proceeds to trial,
the order denying the motion for summary judgment merges with the
judgment entered and is not appealable." Labate v. Data Forms,
Inc., 288 Ill. App. 3d 738, 740, 682 N.E.2d 91, 92 (1997).
In the case sub judice, plaintiff filed a motion for
partial summary judgment, claiming there were no genuine issues
of material fact as to the actions of the parties. Plaintiff
argued only questions of law remained as to whether defendants'
actions constituted a breach of contract and violation of state
law. The trial court denied the motion and conducted a bench
trial on plaintiff's second-amended complaint. Thus, plaintiff's
motion for partial summary judgment merges with the January 2008
directed finding. Accordingly, we will not address plaintiff's
argument on this issue.
B. Directed Judgment
Plaintiff argues the trial court erred in granting
defendants' motion for directed judgment at the close of plain-
tiff's evidence. We disagree.
Section 2-1110 of the Code of Civil Procedure (735 ILCS
5/2-1110 (West 2006)) provides that "[i]n all cases tried without
a jury, defendant may, at the close of plaintiff's case, move for
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a finding or judgment in his or her favor."
"In ruling on this motion, a court must en-
gage in a two-prong analysis. [Citation.]
First, the court must determine, as a matter
of law, whether the plaintiff has presented a
prima facie case. A plaintiff establishes a
prima facie case by proffering at least 'some
evidence on every element essential to [the
plaintiff's underlying] cause of action.'
[Citation.] If the plaintiff has failed to
meet this burden, the court should grant the
motion and enter judgment in the defendant's
favor. [Citation.] Because a determination
that a plaintiff has failed to present a
prima facie case is a question of law, the
circuit court's ruling is reviewed de novo on
appeal. [Citations.]
If, however, the circuit court deter-
mines that the plaintiff has presented a
prima facie case, the court then moves to the
second prong of the inquiry. In its role as
the finder of fact, the court must consider
the totality of the evidence presented, in-
cluding any evidence which is favorable to
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the defendant. *** After weighing the qual-
ity of all of the evidence, both that pre-
sented by the plaintiff and that presented by
the defendant, the court should determine,
applying the standard of proof required for
the underlying cause, whether sufficient
evidence remains to establish the plaintiff's
prima facie case. If the circuit court finds
that sufficient evidence has been presented
to establish the plaintiff's prima facie
case, the court should deny the defendant's
motion and proceed with the trial. [Cita-
tion.] If, however, the court determines
that the evidence warrants a finding in favor
of the defendant, it should grant the defen-
dant's motion and enter a judgment dismissing
the action. [Citation.] A reviewing court
will not reverse the circuit court's ruling
on appeal unless it is contrary to the mani-
fest weight of the evidence." People ex rel.
Sherman v. Cryns, 203 Ill. 2d 264, 275-76,
786 N.E.2d 139, 148-49 (2003).
In this case, defense counsel moved for a directed
finding after the close of plaintiff's case. The trial court
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found plaintiff failed to present a prima facie case and dis-
missed the action. As this presents a question of law, we review
the trial court's determination de novo.
"To succeed on a claim for breach of contract, a
plaintiff must plead and prove the existence of a contract, the
performance of its conditions by the plaintiff, a breach by the
defendant, and damages as a result of the breach." Kopley Group
V., L.P. v. Sheridan Edgewater Properties, Ltd., 376 Ill. App. 3d
1006, 1014, 876 N.E.2d 218, 226 (2007). In this case, the trial
court found the parties had a quasi-contract under the bylaws.
See also Lo v. Provena Covenant Medical Center, 356 Ill. App. 3d
538, 542, 826 N.E.2d 592, 598 (2005) (finding the medical-staff
bylaws created a contract between the doctor and the medical
center). Plaintiff claims the trial court erred in finding he
failed to perform certain conditions when he did not return the
renewal application by the date set by defendants.
The only witnesses to testify at the bench trial were
plaintiff and his office manager. Plaintiff did not call wit-
nesses who could testify to the renewal application or creden-
tialing process in a general sense or in reference to plaintiff's
situation. Plaintiff's evidence indicated defendants sent the
renewal application two months late, as the medical staff office
was required to notify the applicant of when his privileges would
expire six months prior to the expiration date. Here, plain-
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tiff's privileges expired on December 3, 2005. Thus, defendants
were required to notify him and send an application packet on or
around June 3, 2005. Palmer stated she received plaintiff's
renewal application form on or around August 1, 2005. Although
the notification was late, plaintiff presented no evidence
indicating he could then fill out and return the application at
the time of his choosing. Instead, the bylaws plainly indicated
an applicant must complete his reappointment application on time
or risk an automatic denial and expiration of privileges at the
end of the term.
The application letter indicated it must be returned by
August 23, 2005. Plaintiff argues the hospital bylaws and
policies did not allow for the unilateral imposition of "this
arbitrary early return date." Plaintiff, however, presented no
evidence indicating how the bylaws and policies impacted the
timing of his return of the application. Moreover, it appears
defendants informed plaintiff he could still submit his applica-
tion for renewal by October 3, 2005, thereby allowing him more
time. Without authority to support his position, plaintiff
simply contends defendants could not impose a deadline, notwith-
standing defendants' need to verify the application materials and
make a decision on renewal prior to the expiration date.
Plaintiff indicated he signed the application on
September 28, 2005, when it was ready to be forwarded. On
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November 22, 2005, plaintiff received a letter from Dr. Knight
requesting additional information by November 28. Plaintiff
argues nothing in the bylaws or the Act granted defendants the
authority to request additional information after the application
had been deemed complete. However, plaintiff did not present
evidence as to the stage of the application process at the time
of the request for additional information, and plaintiff cannot
now put forth evidence on appeal when he failed to do so at
trial. Further, that a health-care entity might see the need to
request additional information prior to renewing a staff member's
credentials is a matter of common sense. See also 410 ILCS
517/15(i) (West 2006) (indicating nothing in the Health Care
Professional Credentials Data Collection Act restricts a hospital
from requesting "additional information necessary for creden-
tialing or recredentialing"). Defendants' request for more
information on surgical outcomes and any disciplinary proceedings
against plaintiff can neither be viewed as out of the ordinary
nor, without evidence to the contrary, as a "spurious" attempt by
defendants to spite plaintiff or frustrate the renewal process.
Plaintiff also argues defendants acted in bad faith
when they requested additional information the day before Thanks-
giving. Plaintiff's argument of bad faith is pure speculation.
Moreover, plaintiff received the request for additional informa-
tion on November 22 with the information to be furnished by
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November 28. Instead of giving immediate attention to the
matter, plaintiff waited until November 28 to send out letters to
the facilities. One of the facilities replied the same day,
indicating a quick response was not impossible. Further, Dr.
Knight's December 1 letter noted the medical executive committee
gave plaintiff an extension of time until November 30, 2005, to
provide the requested information, but plaintiff failed to do so
by that time. Based on the foregoing, we find plaintiff's
evidence failed to establish he performed the conditions under
the bylaws to satisfy his claim for breach of contract.
C. Fair Hearing
Plaintiff argues the trial court ignored his right to a
fair hearing where his privileges were not renewed. Section
10.4(b)(2)(C) of the Act provides a medical staff member has the
right "to request a fair hearing" as to an adverse decision
before a hearing panel. 210 ILCS 85/10.4(b)(2)(C) (West 2006).
An adverse decision is defined as "a decision reducing, restrict-
ing, suspending, revoking, denying, or not renewing medical staff
membership or clinical privileges." 210 ILCS 85/10.4(b)(4) (West
2006).
In this case, plaintiff failed to present evidence that
he supplied a completed application and the necessary information
requested by defendants prior to the date his privileges expired.
Further, plaintiff failed to present evidence that defendants
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issued an adverse decision here. Instead, the evidence indicated
plaintiff's privileges simply expired because of his own doing.
As defendants did not issue an adverse decision, plaintiff was
not entitled to a hearing.
III. CONCLUSION
For the reasons stated, we affirm the trial court's
judgment.
Affirmed.
STEIGMANN, J., concurs.
COOK, J., dissents.
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JUSTICE COOK, dissenting:
I respectfully dissent. I would reverse and remand for
a new trial.
Granting a directed verdict in a jury trial is an
extraordinary step. A motion for directed verdict in a jury
trial should only be granted when "all of the evidence, when
viewed in its aspect most favorable to the opponent, so over-
whelmingly favors [the] movant that no contrary verdict based on
that evidence could ever stand." Pedrick v. Peoria & Eastern
R.R. Co., 37 Ill. 2d 494, 510, 229 N.E.2d 504, 513-14 (1967). A
court should be very reluctant to take a case away from a jury
and substitute its own view of the facts.
In a bench trial, however, the court does not take the
case away from the jury when it enters a directed judgment (735
ILCS 5/2-1110 (West 2006)). The court is the trier of fact in a
bench trial. In a bench trial, a directed judgment at the close
of all the evidence is no different from a decision on the
evidence. A court conducting a bench trial also has the power to
enter a directed judgment in favor of the defendant at the close
of the plaintiff’s evidence. 735 ILCS 5/2-1110 (West 2006).
There are limitations, however, on that power. As with jury
cases, the essential question is whether the plaintiff has
established a prima facie case, i.e., whether he has presented
some evidence on every element essential to his cause of action.
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If he has not, the trial court, in nonjury cases as in jury
cases, may enter a directed judgment in the defendant’s favor.
Kokinis v. Kotrich, 81 Ill. 2d 151, 154-55, 407 N.E.2d 43, 45
(1980).
There is a further step in a nonjury case. In a bench
trial, even if the plaintiff has presented some evidence on every
element essential to his cause of action, the trial court may go
on to weigh the plaintiff’s evidence, including any evidence
favorable to the defendant.
"This weighing process may result in the
negation of some of the evidence necessary
to the plaintiff’s prima facie case, in which
event the court should grant the defendant’s
motion and enter judgment in his favor. On
the other hand, if sufficient evidence neces-
sary to establish the plaintiff’s prima facie
case remains following the weighing process,
the court should deny the defendant’s motion
and proceed as if the motion had not been
made." Kokinis, 81 Ill. 2d at 155, 407
N.E.2d at 45.
That weighing process, however, may not simply assume that the
defendant would present evidence in his case that would negate
the evidence presented by the plaintiff and the reasonable
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inferences to be drawn therefrom.
Plaintiff established a prima facie case here. He
presented some evidence on every element essential to his cause
of action. Plaintiff presented evidence (1) there was a con-
tract, (2) the practice under the contract was not to insist on
strict compliance with date requirements, (3) he submitted his
application within the time limits, (4) defendants asked for
additional information and arbitrarily imposed a deadline not
provided by the contract, (5) the information was eventually
supplied, and (6) the procedure employed by defendants allowed
defendants to terminate plaintiff’s privileges by a technicality,
thereby depriving plaintiff of the hearing to which he was
entitled under the contract. Defendants has presented no evi-
dence to negate plaintiff’s evidence.
The defense argument that some of the evidence estab-
lishing plaintiff’s case has been negated incorrectly rests on
evidence not presented, which the defense argues plaintiff should
have presented:
"The Plaintiff did not present any witness
from the Medical Staff Office, the Credentials
Committee[,] or anyone affiliated with Carle
Foundation Hospital who was involved in the
application process for medical staff member-
ship and hospital privileges. No evidence
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was presented on how the renewal application
would be processed or what was involved in
any decision making, whether in general or
specifically to these facts."
The argument that plaintiff must call defendants'
witnesses (who will then be recalled by defendants) does not
promote judicial economy. The fact that the whole story has not
been told does not entitle defendant to a directed judgment. All
plaintiff had to do was establish a prima facie case. The fact
that additional evidence might eventually be presented does not
prevent the establishment of a prima facie case. The majority
asserts plaintiff’s argument that defendants acted in bad faith
when they requested additional information the day before
Thanksgiving is "pure speculation." Slip op. at 11. Plaintiff,
however, has presented circumstantial evidence suggesting bad
faith. Defendants have not presented any witness who would deny
that motive. The trial court should have heard all the evidence
before making its ruling.
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