Virmani v. Presbyterian Health Services Corp.

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 05-2031
ASHUTOSH RON VIRMANI, M.D.,
Plaintiff - Appellant,
versus
PRESBYTERIAN HEALTH SERVICES CORPORATION,
a/k/a Novant Health Incorporated,
Defendant - Appellee.
Appeal from the United States District Court for the Western
District of North Carolina, at Charlotte. Graham C. Mullen, Chief
District Judge. (CA-99-15-3-V)
Submitted: August 1, 2006 Decided: August 14, 2006
Before MICHAEL, MOTZ, and GREGORY, Circuit Judges.
Affirmed by unpublished per curiam opinion.
Seth R. Cohen, SMITH, JAMES, ROWLETT & COHEN, L.L.P., Greensboro,
North Carolina, for Appellant. John R. Wester, Louis A. Bledsoe,
III, Douglas M. Jarrell, ROBINSON, BRADSHAW & HINSON, P.A.,
Charlotte, North Carolina, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
PER CURIAM:
This case was before us earlier in an interlocutory
appeal taken by the defendant, Novant Health, Inc. (Novant), during
the discovery phase. Now, the plaintiff, Ashutosh Ron Virmani,
M.D., appeals the summary judgment granted to Novant. The district
court concluded that a prior state court judgment precluded
Virmani’s federal claim. We affirm.
We previously described the facts and the case as
follows:
Dr. Virmani is an obstetrician-gynecologist who was
granted medical staff membership and clinical privileges
at Presbyterian Hospital and Presbyterian Hospital
Matthews (collectively, “Presbyterian”). [These
hospitals, located in the Charlotte, North Carolina, area
are subsidiaries of Novant.] During a laparoscopic
procedure in 1994 at Presbyterian Hospital, Virmani
inadvertently punctured the iliac artery of a patient,
creating a life-threatening emergency. Virmani states
that this is a known possible complication of the
procedure. Following a lengthy series of [review]
proceedings, Presbyterian suspended Virmani’s staff
membership and clinical privileges.
The first review (the “First Peer Review”),
conducted by Presbyterian’s OB/GYN Committee, lasted five
months, from March through August of 1995. The Committee
reviewed all cases in which Virmani had been the primary
care physician since August of 1993 and found 24 of the
102 cases to be problematic. Based on the Committee’s
report, Novant suspended Virmani’s privileges, pending a
review by Presbyterian’s Medical Board. At Virmani’s
request, the Hearing Committee of the Medical Board,
which is composed of three physicians, conducted a full
hearing on November 21, 1995. Following that hearing,
the Medical Board voted to terminate Virmani’s medical
staff privileges. Presbyterian’s Board of Trustees
upheld that decision on January 19, 1996.
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On January 22, 1996, Virmani filed an action against
Novant in North Carolina state court, alleging that the
manner in which Presbyterian had suspended Virmani’s
privileges breached its bylaws. The trial court ordered
Novant to give Virmani a new peer review proceeding, to
be conducted by a peer review body composed of physicians
from outside Presbyterian. In August of 1997, the North
Carolina Court of Appeals affirmed the trial court’s
order to the extent it required a second peer review, but
reversed as to the requirement that the second peer
review body consist of an external committee. See
Virmani v. Presbyterian Health Servs. Corp., 127 N.C.
App. 71, 488 S.E.2d 284, 289 (1997) [discretionary rev.
denied, 347 N.C. 141, 492 S.E.2d 38, 39 (1997)].
Presbyterian then began a second internal peer review
(the “Second Peer Review”), using a committee composed of
members different from those who had conducted the First
Peer Review. As a result of the Second Peer Review, the
Medical Board and the Board of Trustees again decided to
terminate Virmani’s staff privileges.
Virmani filed the instant action in federal court on
January 15, 1999, alleging that the termination of his
privileges constituted discrimination against him on the
basis of his race and national origin, in violation of
[42 U.S.C. §§ 1981, 1985]. [Virmani is of Indian
origin.] He claims that the hospital performed its
medical peer review functions in a discriminatory manner,
treating non-Indian physicians differently and
disciplining them less harshly. Virmani also asserted
state law claims for intentional infliction of emotional
distress and negligent infliction of emotional distress.
Virmani v. Novant Health Inc., 259 F.3d 284, 285-86 (4th Cir.
2001).
Novant’s answer and motion to dismiss raised the doctrine
of claim preclusion as an affirmative defense. The case proceeded
to discovery. In the interlocutory appeal we upheld the district
court’s order denying Novant’s motion for a protective order and
granting Virmani’s motion to compel certain records related to the
peer reviews. Id. at 293. The case resumed, and in November 2004
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Virmani took a voluntary dismissal without prejudice of his § 1985
claim and moved to amend the complaint to add a breach of contract
claim. Novant moved for summary judgment. In March 2005 the
district court ordered supplemental briefing on the doctrine of
claim preclusion.
The district court granted summary judgment to Novant on
August 12, 2005. The court reasoned that Virmani’s failure to
raise his § 1981 claim in the state court action precluded him from
pursuing that claim in federal court. It also concluded that the
breach of contract claim Virmani sought to add through amendment
was precluded. This appeal followed. We review de novo the
district court’s grant of summary judgment. Laber v. Harvey, 438
F.3d 404, 415 (4th Cir. 2006) (en banc).
We must determine whether the judgment in Virmani’s North
Carolina state court action precluded his subsequent federal
action. Pursuant to 28 U.S.C. § 1738, state judicial proceedings
shall have the same full faith and credit in every court within the
United States as they have in the courts of the state from which
they are taken. As a result, “a federal court must give to a
state-court judgment the same preclusive effect as would be given
that judgment under the law of the State in which the judgment was
rendered.” Migra v. Warren City Sch. Dist. Bd. of Ed., 465 U.S.
75, 81 (1984). Here, we apply North Carolina law of claim
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preclusion (also called res judicata) to determine the effect of
the North Carolina judgment.
In North Carolina “under res judicata as traditionally
applied, a final judgment on the merits in a prior action will
prevent a second suit based on the same cause of action between the
same parties or those in privity with them.” Thomas M. McInnis &
Assocs., Inc. v. Hall, 318 N.C. 421, 428, 349 S.E.2d 552, 556
(1986). “The doctrine prevents the relitigation of ‘all matters
. . . that were or should have been adjudicated in the prior
action.’” Whitacre P’ship v. BioSignia, Inc., 358 N.C. 1, 15, 591
S.E.2d 870, 880 (2004) (quoting id.); see Gaither Corp. v. Skinner,
241 N.C. 532, 535-36, 85 S.E.2d 909, 911 (1955) (“The bar of the
judgment . . . extends not only to matters actually determined, but
also to other matters which in the exercise of due diligence could
have been presented for determination in the prior action.”). As
a result, “a final judgment is conclusive not only as to all
matters actually litigated and determined, but also as to matters
which could properly have been litigated and determined in the
former action.” Moody v. Able Outdoor, Inc., 169 N.C. App. 80, 87,
609 S.E.2d 259, 263 (N.C. Ct. App. 2005) (punctuation omitted).
It is undisputed that Virmani’s state court judgment was
final and that the parties in this case are the same as those in
the earlier one. Only the requirement that there be a single cause
of action in the earlier and later suits is contested. Although
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Virmani’s state court complaint asserted a breach of contract claim
and his federal complaint asserted a § 1981 claim, we conclude that
the § 1981 claim could properly have been litigated and determined
in the former action, and thus there was a single cause of action.
Virmani contends that at the time he commenced his state court
breach of contract action, he could not have reasonably known that
he had a § 1981 claim and that the cause of action therefore is not
the same in the two suits. We reject this argument.
To begin with, the conduct underlying the § 1981 claim
preceded filing of the state suit. Virmani’s federal complaint
alleged that Novant’s acts of contract-related discrimination began
as early as December 1994, when the hospital “conducted a 100
percent focused ‘peer review’ of [Virmani’s] performance in utter
secrecy.” J.A. 112. This was long before he filed his state court
action. Next, there is evidence that Virmani suspected he was
being treated differently because of his national origin even
before the laparoscopy accident that triggered Novant’s focused
review of his work. In a letter dated January 1997, Virmani
stated, “During the 2 year period, October, 1993 – August, 1995,
that I worked at Presbyterian, I felt ‘marked.’ I was treated very
differently from the other ‘native’ physicians who worked there.’”
J.A. 1284. Although the word ‘native’ may be susceptible to more
than one interpretation, in the same letter Virmani made clear that
his concern was focused on racial or national origin discrimination
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when he alleged that “[w]hat is happening to me as the first Asian-
Indian OB-GYN in Charlotte has not happened to anybody in Charlotte
before me.” J.A. 1286. Finally, nearly all of the public
information on which Virmani relied in alleging that Novant treated
him less favorably than white physicians with equivalent or worse
performance records concerned events that transpired before the
state suit commenced. In particular, Virmani’s complaint alleged
that Novant did not conduct an extensive peer review or suspend the
privileges of several white physicians, even though patients
accused them of medical malpractice in North Carolina state courts.
Those alleged incidents of malpractice occurred in 1982, 1990,
1992, and 1994, before Virmani filed his state court suit. J.A.
107-08.
In sum, the record shows that Virmani could properly have
presented and litigated his § 1981 claim at the time he sued Novant
in state court. The § 1981 claim is therefore a matter that
“should have been adjudicated in the prior action,” Whitacre
P’ship, 358 N.C. at 15, 591 S.E.2d at 880 (punctuation omitted),
and the doctrine of claim preclusion prohibited Virmani’s federal
action. The district court’s denial of leave to amend the federal
complaint to add the breach of contract claim was likewise correct,
as that claim was also precluded by the state court action.
For these reasons, we affirm the judgment of the district
court. We deny the pending motion by Novant for leave to file a
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surreply. We dispense with oral argument because the facts and
legal contentions are adequately presented in the materials before
the court, and argument would not aid the decisional process.
AFFIRMED
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