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Cancel v. The Medical Center of Central Georgia, Inc.

Court of Appeals of Georgia, Fifth Division

March 15, 2018

CANCEL et al.
v.
THE MEDICAL CENTER OF CENTRAL GEORGIA, INC. et al. (two cases).

          MCFADDEN, P. J., BRANCH and BETHEL, JJ.

          Branch, Judge.

         This is the third appearance of this matter before this Court. In late 2002, Louis Goolsby, M.D., the chief executive officer of The Medical Center of Central Georgia, Inc. ("the Medical Center"), and Angel Cancel, M.D., the chief executive officer of Central Georgia Anesthesia Services, Inc. ("CGAS") learned of apparent billing and medical irregularities by CGAS members working at the hospital. After an investigation and the voluntary dissolution of CGAS, the Medical Center declined to rehire four former CGAS members (including Dr. Cancel), all of whom later brought this action against three of their former colleagues ("the individual defendants") as well as the Medical Center, its president and chief executive officer A. Donald Faulk, and Dr. Goolsby ("the hospital defendants").

         In Cancel v. Sewell, 321 Ga.App. 523 (740 S.E.2d 870) (2013) ("Cancel I"), we affirmed the trial court's grant of summary judgment as to Dr. Cancel's claims. Id. at 530-536.[1] In Sewell v. Cancel, 331 Ga.App. 687 (771 S.E.2d 388) (2015) ("Cancel II"), we reversed the denial of summary judgment to the individual defendants as to the remaining plaintiffs' claims for breach of fiduciary duty and fraud. Id. at 689-695 (2), (3). In the same decision, we vacated the trial court's denial of summary judgment and remanded with direction that the trial court "clarify" whether the hospital defendants were immune from prosecution because they had relied on a peer review panel in reaching their decision to terminate CGAS and not to rehire plaintiffs. Id. at 698 (4). On remand from Cancel II, the trial court held that the Medical Center had indeed relied on a peer review panel in reaching its decision to terminate CGAS and held the hospital defendants immune from plaintiffs' claims. On appeal from that judgment in Case No. A17A1708, the remaining plaintiffs assert that the trial court erred in this and other holdings. In Case A17A1709, plaintiffs argue that the trial court erred in denying their motion to supplement the record on appeal. We find no error and affirm in both cases.

To prevail at summary judgment under OCGA § 9-11-56, the moving party must demonstrate that there is no genuine issue of material fact and that the undisputed facts, viewed in the light most favorable to the nonmoving party, warrant judgment as a matter of law. OCGA § 9-11-56 (c). A defendant may do this by showing the court that the documents, affidavits, depositions and other evidence in the record reveal that there is no evidence sufficient to create a jury issue on at least one essential element of plaintiff's case.

Lau's Corp. v. Haskins, 261 Ga. 491 (405 S.E.2d 474) (1991).

         Although we thus view the record in a light favorable to plaintiffs, the relevant facts are not in dispute. In 2000, CGAS entered into a contract to provide the Medical Center with all of its anesthesia services. In the fall of 2002, Dr. Cancel and Dr. Goolsby became aware of potentially fraudulent medical chart documentation by some CGAS members. See Cancel I, 321 Ga.App. at 524. Dr. Cancel also became aware of nurses' complaints that anesthesiologists were sometimes absent from surgeries and other procedures for which those doctors were medically responsible. As a result of these allegations of billing and medical improprieties, CGAS sought an evaluation by the American Society of Anesthesiologists (ASA), but Dr. Goolsby, then the Medical Center's vice president for medical affairs, cancelled a scheduled ASA visit without notifying Dr. Cancel. See Cancel I, 321 Ga.App. at 525. The Medical Center then retained Ann Atkinson, a psychological consultant, who interviewed the hospital staff and the CGAS physicians by phone in "listening sessions" held in December 2002 and January 2003. The notes to these sessions, which were produced during discovery, show that Atkinson spoke with all 14 anesthesiologists in nearly 15 hours of conversation and with 41 of 43 nurses in over 11 hours of conversation. On the basis of these sessions, Atkinson concluded that CGAS was suffering from acute dysfunction, including power struggles, threats, "lack of trust, " and allegations of sexual misconduct.[2]

         Shortly before a meeting with Atkinson in early 2003, Dr. Pravin Jain, another CGAS anesthesiologist, showed Dr. Goolsby examples of what Dr. Jain considered to be improper medical chart documentation. Over the next three months, Dr. Jain also uncovered billing irregularities by CGAS members. See Cancel I, 321 Ga.App. at 525-526. On April 25, 2003, after receiving Dr. Jain's allegations, and without further review of CGAS's billing records, Faulk notified CGAS in writing that the group's contract would be terminated "for cause" as of May 31, 2003, "unless CGAS can demonstrate by such date that it is in substantial compliance" with its contract with the Medical Center. Faulk's letter also represented that the Medical Center "cannot guarantee that any current member of CGAS . . . will be offered a contract of employment within the restructured Department of Anesthesiology, " that applications for rehiring "will and must be evaluated carefully in light of the serious concerns that have arisen in regard to CGAS, " and that the Medical Center "commits to evaluate every application . . . fairly, objectively, and on its individual merits." See Cancel I, 321 Ga.App. at 526.

         In early May 2003, and after consultation with counsel, the officers of CGAS voted unanimously to terminate its contract with the Medical Center, with the termination effective on August 31, 2003, "so as to avoid earlier termination for cause, " with all physician contracts with CGAS to terminate at the same time. Cancel II, 331 Ga.App. at 691. Also in May 2003, the Medical Center formed a panel with members including Faulk, Dr. Goolsby, another senior CGAS anesthesiologist, Atkinson, and a nurse ("the Goolsby panel"), which was charged with evaluating the applications of any CGAS members seeking a position in the restructured department. On June 2, 2003, after an audit conducted off-site and limited to "medical direction review, " the Medical Center notified CGAS that in light of the panel's evaluation, eight CGAS members, including individual defendants Alvin Sewell, M.D., Sanjiwan Tarabadkar, M.D., and Miles McDonald, M.D., would be offered positions at the hospital.

         In August 2005, the four physicians not re-hired by the Medical Center - Drs. Cancel and Jain, as well as Grace Duque-Dizon, M.D. and Monahja Sanjeev, M.D. - brought this action against the Medical Center, the individual defendants, and the hospital defendants for breach of fiduciary duty, fraud, and other claims. See Cancel I, 321 Ga.App. at 523, 527-528. Years later, in Cancel II, this Court affirmed the trial court's grant of summary judgment to the individual defendants because plaintiffs had not produced any evidence that any of the individual defendants had "breached a fiduciary duty in connection with the termination of CGAS's contract with the Medical Center" or made any "false misrepresentation" to plaintiffs. Cancel II, 331 Ga.App. at 692 (2), 694 (3). In the same decision, we affirmed the denial of summary judgment as to the hospital defendants because the evidence before the trial court "[did] not establish that the [Goolsby] panel, even if a peer review committee, was evaluating the quality and efficiency of actual medical care services."Id. at 697 (4) (a). We also noted, however, that the trial court had appointed a special master "to make recommendations upon discovery matters, " including whether the Medical Center was required to produce "certain documents" or whether those documents were "protected by the peer review privilege" codified at OCGA § 31-7-133. Id. at 697-698 (4) (b). We therefore remanded the case

so that the trial court may clarify whether its orders adopting the special master's discovery recommendations further determined that, for purposes of immunity under OCGA § 31-7-132 (a), the [Goolsby] panel was a peer review committee that was evaluating the quality and efficiency of actual medical care services.

Cancel II, 331 Ga.App. at 698 (4) (b) (footnote omitted), citing Hosp. Auth. of Lowndes County v. Meeks, 285 Ga. 521, 523 (678 S.E.2d 71) (2009).

         On April 30, 2015, after the return of the remittitur in Cancel II, the trial court entered an order holding that "[b]ased upon the special master's analysis and conclusion that the [Goolsby] panel was a review organization conducting peer review functions, " as well as the trial court's "earlier adoption of the special master's recommendation, " the court was "again adopt[ing] the findings of the special master that the panel was in fact a review organization conducting peer review functions[.]" The trial court thus concluded that the hospital defendants were entitled to immunity under OCGA § 31-7-132 (a). After plaintiffs moved for reconsideration of the April 30 order, the trial court held a hearing on June 17 as to the scope of the special master's findings. One issue at that hearing was whether the hospital defendants had acted with malice in terminating and not re-hiring plaintiffs such that the hospital defendants could not claim the benefit of immunity. In the course of the hearing, the trial court noted that because the issue of malice "may be one of several issues" remaining for determination, "a motion needs to come forward as it relates to this issue so that we can decide that before we proceed." Plaintiffs did not object to this procedure. After the hearing, the trial court denied the motion for reconsideration.

         In a new motion for summary judgment, filed on June 30, 2015, the hospital defendants cited evidence including Dr. Goolsby's deposition testimony, as well as statements in plaintiffs' own brief in Cancel II, and argued that plaintiffs had not adduced any evidence of malice. Plaintiffs filed a 68-page response, including accounts of the 2002-2003 allegations, Atkinson's activities prior to the formation of the Goolsby panel, and the panel's decision not to rehire plaintiffs, with 500 pages of exhibits.

         On August 21, 2015, the trial court entered an order granting the hospital defendants' new motion, finding that the law-of-the-case rule did not prevent it from revisiting the peer review issue. The trial court also held that plaintiffs were not authorized to obtain further discovery of Atkinson's sessions of December 2002 and January 2003 because "that information was privileged under the peer review statute" and that plaintiffs were not authorized to "use the lack of evidence in the record to draw an inference of malice" against the hospital defendants, with the result that the hospital defendants were entitled to immunity under OCGA § 31-7-132 (a). On September 17, 2015, plaintiffs filed a notice of appeal from this judgment.

         On November 5, 2015, plaintiffs filed a motion to supplement the record on appeal with three documents not previously filed below: a February 2011 email from the initial judge on the case (now retired) to the parties suggesting that a jury issue existed on the question whether any of the hospital records had been falsified; this Court's April 2013 order denying plaintiffs' motion for reconsideration in Cancel I; and an April 2015 email from the court clerk notifying the parties that the case had been reassigned to a new judge. After the hospital defendants filed a response, the trial court denied the motion to supplement.[3] On September 13, 2016, plaintiffs filed their notice of appeal from this order, and we consolidated the cases for purposes of appeal.

         Case No. A17A1708

         On appeal from the trial court's grant of summary judgment to the hospital defendants, plaintiffs argue that the trial court erred when it concluded that the hospital defendants were entitled to immunity under OCGA § 31-7-132 (a).[4] Plaintiffs also argue that questions of material fact ...


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