Kadlec Medical Center v. Lakeview Anesthesia Associates

Facts

Dr. Berry (Defendant) was a licensed anesthesiologist who practiced with, among others, Drs. William Preau and Mark Dennis at Louisiana Anesthesia Associates (LAA) (Defendant). From November 2000 until he was terminated on March 13, 2001, Berry (Defendant) was a shareholder of LAA (Defendant), which was the exclusive provider of anesthesia services to Lakeview Medical Center (Lakeview) (Defendant). In November 2000, Lakeview (Defendant) investigated Berry (Defendant) after nurses expressed concern about his undocumented and suspicious withdrawals of the narcotic Demerol. The team that investigated found excessive narcotic withdrawals by Berry (Defendant) and missing documentation. Dennis brought the situation to Berry's (Defendant) attention, however, instead of following the agreement that he would account for his continued narcotic withdrawals, he did not. Three months later, Berry (Defendant) did not answer a page while on-duty at Lakeview (Defendant) and when discovered, he was found asleep, groggy, and unfit to work. On March 27, 2001, Dennis and the other partners at LAA (Defendant) fired Berry (Defendant) "for cause." Although Berry's (Defendant) drug problem and the danger he posed to patients had been recognized, no one reported his impairment to Lakeview's (Defendant) Medical Executive Committee or the Board of Trustees, or to the State Board of Medical Examiners or the National Practitioner's Data Bank. After leaving LAA (Defendant) and Lakeview (Defendant), Berry (Defendant) applied for privileges at Kadlec Medical Center (Plaintiff). When Kadlec received the application, it began the credentialing process and examined a variety of materials, including the referral letters from LAA (Defendant) and Lakeview (Defendant). LAA's (Defendant) Preau and Dennis, two months after they fired Berry (Defendant) for using drugs on the job, submitted referral letters for on his behalf. The letter from Dennis stated he had worked with Berry (Defendant) for four years, that he was an excellent clinician, and that he would be an asset to any anesthesia service. Preau's letter said he had worked with Berry (Defendant) at Lakeview (Defendant) and that he highly recommended him as an anesthesiologist. Plaintiff sent a similar request to Lakeview (Defendant) for credentialing information about Berry (Defendant). Lakeview (Defendant) responded to the request with a short letter, stating, "Our records indicate that Dr. Robert L. Berry was on the Active Medical Staff of Lakeview Regional Medical Center in the field of Anesthesiology from March 04, 1997 through September 04, 2001." LAA (Defendant) did not disclose their termination of Berry (Defendant); his on-duty drug use; the investigation into his undocumented and suspicious withdrawals of narcotics or any other negative information. Plaintiff then credentialed Berry (Defendant), and he began working there. Berry (Defendant) worked at Kadlec (Plaintiff) without incident for a number of months, and was then moved temporarily to another state and suffered a back injury as a result of a car accident he was involved in. After Berry (Defendant) returned to Kadlec (Plaintiff), some nurses thought that he appeared unwell and had mood swings. In the months that followed, Berry (Defendant) gave too much morphine to a patient during surgery, and she had to be revived using Narcan. On November 12, 2002, Berry (Defendant) was assigned to the operating room and one nurse stated he was "screwing up all day" and several of his patients suffered adverse effects because they had not been anesthetized properly. During one procedure, he seemed to almost pass out. Kimberley Jones was admitted for what should have been a routine, fifteen-minute tubal ligation. Following surgery, a nurse noticed that Jone's fingernails were blue and she was not breathing. Berry (Defendant) had failed to resuscitate her which left her in a permanent vegetative state. Berry (Defendant) later admitted to Plaintiff's staff his addiction to narcotics. Jones's family brought suit against Berry (Defendant) and Kadlec (Plaintiff), which ultimately settled the claim. Plaintiff then filed suit against LAA (Defendant) and Lakeview (Defendant) on the basis of intentional and negligent misrepresentation, which arose from the alleged misrepresentations and omissions from the Defendants' referral letters to Berry (Defendant). The trial court set aside the jury's verdict in favor of Plaintiff and granted a motion for a new trial, which was then appealed.