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Appellate Court Affirms Verdict for Hospital Credentialing

Posted on in In the News

CHICAGO DAILY LAW BULLETIN

Ruling in a case of first impression, the 1st District Appellate Court on Thursday affirmed that negligent credentialing of doctors by hospitals is a cause of action in Illinois.

In a split decision, the appeals court affirmed a $7.78 million verdict in favor of Jean Frigo, a former critical care nurse who had to have part of her left foot amputated when she developed an infection following a 1998 surgery at Silver Cross Hospital and Medical Center in Joliet. The jury’s verdict came in August 2004 after a trial presided over by Cook County Circuit Judge Donald J. O’Brien Jr.

Frigo, a diabetic, had the surgery to remove a bunion. She alleged that Dr. Paul Kirchner was negligent in performing the operation while she had an ulcer on her foot and in treating the infection that developed afterward. She also alleged the hospital was negligent in allowing Kirchner to perform the surgery because he did not meet the requirements to perform such a procedure outlined in the hospital’s bylaws.

Kirchner settled for $900,000 prior to trial, reducing the judgment entered against the hospital to $6.88 million, the opinion said. According to the Cook Jury Verdict Reporter, the verdict was a record high for podiatric errors, at least in the last 18 years. Mark R. McKenna, one of the attorneys for Frigo, said he also believes it to be a record verdict for institutional negligence in Cook County.

On appeal, the hospital argued that Frigo’s negligent credentialing claim should have been barred by the Hospital Licensing Act and the Medical Studies Act. The hospital also argued that O’Brien should have granted its motion for judgment notwithstanding the verdict because the negligent credentialing claim was barred by the statute of limitations.

As a preliminary matter, the appeals court noted that no Illinois case had previously recognized negligent credentialing as a cause of action. However, writing for the court, Justice P. Scott Neville Jr. said the claim was “a progeny” of hospital or institutional negligence, which, Neville wrote, was first recognized by the Illinois Supreme Court in Darling v. Charleston Community Memorial Hospital, 33 Ill.2d 326, 331 (1965). The court also cited several cases from other jurisdictions in which claims of negligent credentialing were recognized.

According to the opinion, Frigo did not raise the issue of negligent credentialing until her first amended complaint, filed after the statute of limitations had expired. Apparently, questions about Kirchner’s credentials arose during the discovery process after the original complaint was filed. At issue was whether the allegation of negligent credentialing sufficiently related back to Frigo’s original, timely complaint.

A majority of the appeals court found it did sufficiently relate. Justice Michael J. Murphy concurred in Neville’s 50-page opinion. However, Justice Patrick J. Quinn, dissenting in part, said the statute of limitations should have barred the negligent credentialing complaint.

Neville wrote that the key to deciding whether the amended complaint was timely was whether the defendant was on notice, before the statute of limitations expired, “of the facts upon which the claim set out in the amended complaint is based.” Castro v. Bellucci, 338 Ill.App.3d 386, 391 (2003).

“The rationale for this rule is that a defendant will not be prejudiced, so long as his attention has been directed, within the limitations period, to the facts that form the basis of the claim asserted against him,” Neville wrote. Zeh v. Wheeler, 111 Ill.2d 266, 273 (1986).

In this case, Frigo’s original complaint alleged Silver Cross negligently managed or operated the hospital.

“Although the first amended complaint contains more detailed allegations of negligence against Silver Cross, we find that Silver Cross had adequate notice in the original complaint because Frigo alleged that Silver Cross negligently managed the hospital,” Neville wrote.

Quinn disagreed, describing the language in the original complaint as “broad and nebulous.”

“If this language is held to be sufficient to put hospitals on notice for the purpose of holding them directly liable for the medical malpractice of the independent contractor physicians who work there, the relation-back doctrine will essentially be applicable in all such cases, depriving hospitals of the protection of the statute of limitations and statute repose,” Quinn wrote.

However, Quinn did concur with the majority on the rest of the issues presented in the case.

As for the Medical Studies Act, Silver Cross argued information it sought to defend itself with was privileged under two provisions of the law that barred the introduction of evidence about what information its credentialing committee reviewed. 735 ILCS 5/8-2101, 5/8-2102.

But the appeals court rejected that argument, saying that Frigo’s complaint did not focus on the credentialing committee’s decisions or the process it followed, but rather on whether Kirchner met the requirements codified in the hospital’s bylaws.

“We believe that if this court made such an expansive reading of the Act, it would eliminate actions against hospitals for institutional negligence,” Neville wrote.

The appeals court also rejected the hospital’s argument that the Hospital Licensing Act, 210 ILCS 85/10.2, immunized it from any claim based on its credentialing decisions. The court agreed with Frigo that the law did not apply to negligent credentialing cases, but rather was meant to serve as limit on the remedies available to doctors upset by the peer-review process.

Jean Frigo v. Silver Cross Hospital and Medical Center, No. 1-05-1240.

Frigo was represented by McKenna and Christopher T. Hurley of Hurley, McKenna & Mertz P.C., as well as James E. Pancratz, Michael W. Rathsack and Thomas A. Agoglia. Agoglia practices in New York.

Pancratz and Rathsack said negligent credentialing cases are rare, with Rathsack noting that plaintiff’s attorney’s frequently have no reason to suspect it occurred. Pancratz praised O’Brien’s handling of the case.

Hurley said the ruling in Frigo’s case may cause plaintiffs in medical malpractice cases to delve deeper into their doctors’ credentials.

Silver Cross was represented on appeal by David E. Neumeister and Megan A. Byrnes of Querrey & Harrow Ltd. Hugh C. Griffin and Elsa Y. Trujillo of Lord, Bissell & Brook LLP also represented the hospital. Byrnes, Griffin and Trujillo have since left their respective firms.

Neumeister said an appeal was likely both as to the statute of limitations issue and whether the hospital should have been immune from the negligent credentialing claim.

“I think the decision leaves open more than one issue that would be attractive to the Illinois Supreme Court,” Neumeister said.

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