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HomeMy WebLinkAbout1997-3740 Civil PEGGY STERMER and BARRY STERMER, Plaintiffs, : IN THE COURT OF COMMON PLEAS OF : CUMBERLAND COUNTY, PENNSYLVANIA v. TRANSACT OF SOUTH CENTRAL PENNSYLVANIA and DAVID R. WENNER, D.O., Defendants. : 97-3740 CIVIL IN RE: DEFENDANT'S MOTION FOR SUMMARY JUDGMENT BEFORE BAYLEY and EBERT. JJ. ORDER OF COURT AND NOW, this 6th day of November, 2006, upon consideration of Defendant Transact's motion for summary judgment, and for the reasons stated in the accompanying opinion, the motion is denied. Plaintiff s request to amend the Complaint to name Transact Health Systems, Inc. as a defendant, in place of Transact of South Central Pennsylvania, is granted. BY THE COURT, M.L. Ebert, Jr., 1. James R. Ronca, Esq. 209 State Street Harrisburg, P A 17101 Attorney for Plaintiffs Katherine B. Kravitz, Esq. 126 East King Street Lancaster, P A 17602-2832 Attorney for Defendant Transact Andrew H. Briggs, Esquire 240 Grandview Avenue Camp Hill, PA 17011 Attorney for Defendant Wenner 2 PEGGY STERMER and BARRY STERMER, Plaintiffs, : IN THE COURT OF COMMON PLEAS OF : CUMBERLAND COUNTY, PENNSYLVANIA v. TRANSACT OF SOUTH CENTRAL PENNSYLVANIA and DAVID R. WENNER, D.O., Defendants. : 97-3740 CIVIL IN RE: DEFENDANT'S MOTION FOR SUMMARY JUDGMENT BEFORE BAYLEY and EBERT. JJ. OPINION and ORDER OF COURT Ebert, 1., November 6,2006. This civil case is a medical malpractice action arising out of care and treatment rendered to Plaintiff Peggy Stermer, who alleges that she was misdiagnosed with adult attention deficit disorder and prescribed Ritalin in excessive doses such that it caused her to suffer a permanent substance-induced psychotic disorder. Plaintiffs Complaint states four counts as to Defendant David Wenner, D.O. and/or Defendant Transact of South Central Pennsylvania, a clinic which was operated at the time by Holy Spirit Hospital ("HSH"). An entity calling itself "Transact Health Systems, Inc." has filed this motion for summary judgment, claiming that it has defended this action to date and that although it licensed the "Transact" name to HSH, it is not the "Transact of South Central Pennsylvania" named in the action. Following arguments heard on September 6, 2006, and for the reasons stated herein, Defendant's motion will be denied. STATEMENT OF FACTS On January 24, 1992, Transact Health Systems, Inc. ("Transact") and Holy Spirit Hospital ("HSP") entered into a "License and Consultation Agreement" ("the Agreement") which allowed HSP to "utilize the TRANSACT program in delivering health care to the communities and the patients which it serves in accordance with the 3 terms and conditions of this Agreement."l The "TRANSACT program" is described elsewhere in the Agreement as "a unique TRANSdisciplinary approach to healthcare as it relates to developmental, learning and/or behavioral problems, which TRANSACT has the right to market and desires to establish in certain territories."2 This approach was developed by Transact's principal, Craig Liden, M.D. The Agreement between Transact and HSH resulted in the formation of the HSH/Transact clinic, which is referenced in the Agreement as the "TRANSACT clinic" or as "HOLY SPIRIT's TRANSACT clinic." Regardless of the name used, the parties do not dispute that this is the entity from which Plaintiff sought treatment. Pertinent sections of that Agreement are reproduced below: ARTICLE 111- ESTABLISHMENT OF PROGRAM AND LICENSE Section I. While this agreement is in effect, HOLY SPIRIT agrees to operate at its sole cost one health care facility.. . ("hereinafter "TRANSACT clinic").. .to deliver health care services to patients with developmental, learning and/or behavioral problems exclusively in accordance with the TRANSACT program, and in conformity with the terms and conditions of this agreement. Section 3. Subject to all the terms and conditions specified in this Agreement, TRANSACT hereby grants to HOLY SPIRIT the exclusive right to use the TRANSACT marks described in Attachment II hereof [including the word "Transact"], directly in connection with the operation of the aforesaid TRANSACT clinic. . .3 ARTICLE VII - RECRUITMENT OF PROFESSIONAL AND SUPPORT STAFF Section 2. TRANSACT has final review and approval of all professional, administrative and support candidates for the TRANSACT I.. 4 C 11l1C... ARTICLE XI - ADMINISTRATIVE SERVICES 1 Plaintiff's Brief in Opposition to Defendant Transact's Motion for Summary Judgment, dated August 28, 2006, Exhibit "B," p. 3 (hereinafter "Plaintiff's Exhibit _"). 2 Id., p. 1. 3 Plaintiff's Exhibit "B", p. 3. 4 Id., p. 8. 4 Section 5. TRANSACT, without cost to HOLY SPIRIT, shall assist in all annual staff performance reviews of the TRANSACT clinic. 5 ARTICLE XII - QUALITY CONTROLS AND OTHER RESTRICTIVE COVENANTS Section I. In operating its TRANSACT clinic, HOLY SPIRIT will use the TRANSACT transdisciplinary team assessment and treatment process, and the TRANSACT philosophy and approach to health care as described in the TRANSACT Training Modules, exclusively, and will not use any approach or program of health care that is not approved in writing by TRANSACT in HOLY SPIRIT's TRANSACT clinic or under any TRANSACT mark. Section 4. HOLY SPIRIT will only employ qualified professional employees to deliver TRANSACT health care services. To be considered qualified, all professionals providing clinical services through HOLY SPIRIT's TRANSACT clinic must have adequate professional qualifications as determined and approved by TRANSACT. They must successfully complete the basic training requirements... These professionals should then be under a twelve (12) month probationary period at the end of which they shall be required to obtain certification by TRANSACT as a TRANSACT TRANS disciplinary Case Coordinator by meeting the following criteria to TRANSACT's satisfaction. Section 6. All professionals must pass recertification examinations by TRANSACT or its designee once every two (2) years.6 Regardless of the name attributed to it, Plaintiff Peggy Stermer was a patient of this clinic that resulted from the Agreement between Transact and HSH, that ostensibly operated under the name "Transact of South Central Pennsylvania" (hereinafter "HSH/Transact clinic"). Plaintiff was a patient of this clinic from July 30, 1992 until March 9, 1994. During this time she was also a patient of Dr. Wenner, who was employed by the HSH/Transact clinic. When Dr. Wenner left the HSH/Transact clinic in March of 1994, he continued to treat Plaintiff through private practice until September 14, 1995. 5 Id., p. 10 6 Id., pp. 11-12. 5 Plaintiff alleges that during the period during which she was a patient of the HSH/Transact clinic and Dr. Wenner, she was diagnosed with attention deficit disorder (ADD) and monitored and prescribed medication for this disorder. At one point Plaintiff alleges that she was taking up to 200 milligrams of Ritalin, or methylphenidate, per day. The average daily dose of Ritalin for an adult with ADD is between 40-90 milligrams per day. Plaintiff avers that she began to experience delusions, hallucinations, and other perceptual impairments, culminating in an incident on September 14, 1995 in which she fled Pennsylvania and was eventually picked up by police in Tennessee. Plaintiff avers that the correct diagnosis for her condition was bipolar affective disorder, and that her psychosis was the result of being prescribed Ritalin in doses far exceeding the amount physicians typically recommend. Plaintiff and her husband, Barry Stermer, filed suit against "Transact of South Central Pennsylvania" and Dr. Wenner on the following counts: (I) Negligence, Peggy Stermer v. Dr. Wenner (II) Respondeat Superior - Negligence, Peggy Stermer v. Transact of South Central P A, in that Dr. Wenner was an employee, servant, agent or ostensible agent of Defendant Transact [of South Central P A] and as against Transact [of South Central P A] individually (III) Loss of Consortium, Barry Stermer v. Dr. Wenner (IV) Loss of Consortium, Barry Stermer v. Transact of South Central P A, in that Dr. Wenner was an employee, servant, agent or ostensible agent of Defendant. 7 The entity "Transact Health Systems, Inc.", which has defended the action to date, now moves for summary judgment on the basis that it is not "Transact of South Central P A." In their Brief in Opposition to the summary judgment motion, Plaintiffs request an Order permitting the Complaint to be amended to name Transact Health Systems, Inc. as a defendant in the action. 8 7 Complaint, filed August 28, 1997. 8 Plaintiffs' Brief in Opposition to Defendant Transact's Motion for Summary Judgment, dated August 28,2006, p. 9. 6 DISCUSSION A. Motion for Summary Judgment A party properly moves for summary judgment where there is no genuine issue of any material fact as to a necessary element of the cause of action or defense that could be established by additional discovery. Pa.R.c.P. 1035.2(1). Summary judgment is only properly granted in those cases where there is an evidentiary record that entitled the moving party to judgment as a matter of law. In deciding whether summary judgment is proper, the court must construe the facts on the record in a light that is most favorable to the non-moving party. Washington v. Baxter, 719 A.2d 722 (Pa. 1998). All doubts as to the existence of a genuine issue of material fact must be resolved in favor of the non- moving party. Jones v. SEPTA, 772 A.2d 435 (Pa. 2001). B. The Clinic Established by HSH and Transact In reviewing the Agreement between HSH and Transact in setting up the HSH/Transact clinic, a genuine issue of material fact exists as to the role Transact played in the operation of that clinic. Transact, which has defended the action up to now, wishes to be removed from the lawsuit on the basis that Transact is not the clinic. However, the Agreement states that the HSH/Transact clinic was to be operated "exclusively in accordance with the TRANSACT system." There is factual basis for the proposition that the program in operation at the clinic was developed and exclusively under the control of Transact. Viewed in the light most favorable to the Plaintiff, the harm she suffered was a direct and proximate result of the "unique TRANSdisciplinary" Transact protocols and actions of the Transact-trained staff, sponsored by HSH. While Transact and the HSH/Transact clinic may indeed be separate entities, a genuine issue of material fact exists as to the degree of separateness and therefore summary judgment is not appropriate to dismiss Transact from defending this action on these grounds. C. Transact Not Immune from Corporate Negligence This Court finds no credence to Defendant Transact's argument that it is immune from a corporate negligence suit. Defendant tries to maintain that "the Pennsylvania Supreme Court first recognized the doctrine of corporate negligence in Thompson v. 7 Nason Hospital, 591 A.2d 703 (Pa. 1991)," and goes on to argue that the factors outlined in Thompson for applying the corporate negligence doctrine to hospitals do not apply to this case, because Transact is not a hospital. Corporate negligence as a doctrine was not first recognized in Thompson; rather, it was where the Supreme Court recognized that corporate negligence theory could, in some cases, apply to hospitals. No party asserts that Transact was operating as a hospital or that an issue of fact exists over whether corporate negligence should be extended to include Transact. As Defendant more correctly points out, Pennsylvania law indicates that in determining whether to allow claims for corporate negligence against health-care entities other than hospitals, courts focus on factors such as whether the entities were involved with the patient's total health care (Shannon v. McNulty, 718 A.2d 282 (Pa. Super. 1998)), and whether the patient was constrained to stay at the particular facility or whether he could leave to seek treatment elsewhere (Milan v. Am. Vision Ctr., 34 F. Supp.2d 279 (E.D. Pa. 1998)). However, in Defendant Transact's own words in the Agreement, it is a treatment system using a "unique TRANSdisciplinary approach to health care as it relates to developmental, learning and/or behavioral problems." The "TRANS disciplinary approach" was ostensibly the use of different methods of treatment - in Plaintiffs case including a medical doctor, medication, and counseling - in the course of offering mental health care. A genuine issue of material fact exists as to the involvement of Transact in treating Plaintiff s disorders. Viewed in the light most favorable to the Plaintiff, it was Transact's "unique system" in offering total mental health care to Plaintiff that led to an uncorrected misdiagnosis and medication prescribed in amounts so far over accepted dosages that she began to experience psychotic symptoms. D. Issue of Material Fact as to Transact's Right to Control Dr. Wenner Defendant Transact next argues that it cannot be vicariously liable for the actions of Dr. Wenner because he was not Transact's actual or ostensible agent. Dr. Wenner testified that he was an HSH employee, that he had an employment contract with HSH, 8 that HSH signed his paychecks and that he tendered his resignation to HSH.9 Defendant further argues that Dr. Wenner was not an ostensible agent of Transact's because the patient looked to Dr. Wenner, and not the clinic or Transact for care, and because Transact did not hold Dr. Wenner out as its employee.lo Plaintiff does not argue that Dr. Wenner was an actual or ostensible agent and agrees that Dr. Wenner was an employee of HSH. However, Plaintiff argues, the employment contract between HSH and Dr. Wenner does not control the issue of whether Transact was also responsible for the actions of Dr. Wenner. Plaintiff argues that vicarious liability attaches to Transact on the "servant" principle of liability, citing the case of Smalich v. Westfall Twp., 269 A.2d 476 (Pa. 1968), which held that if a principal controls or has the right to control the manner in which the work is done, then the principal is held liable for the agent's negligence. The hallmark of a master-servant relationship is that the master possesses the right to control the manner in which the servants work shall be accomplished. Myszkowski v. Penn Stroud Hotel, 634 A.2d 622 (Pa. Super. 1993). Proof that control was actually exercised is not required; it is the right to control the servant that triggers the liability. Most important to our inquiry is that where the facts of the relationship between the master and the servant are in dispute, it is the jury that should decide the issue. Id. at 625. Here, a genuine issue of material fact exists in the relationship between Transact and Dr. Wenner even with regard solely to the Agreement which set up Transact's relationship with HSH. Transact was involved in the selection of HSH staff, retaining final approval of everyone hired to work at the clinic and providing such administrative assistance, without charge, as salary structures, job notification announcements, etc. Furthermore, Transact was to determine whether hired professionals had adequate qualifications and required that they complete the basic training requirements of the Transact program and undergo a 12-month probationary period at the end of which the employees were required to obtain certification by Transact as a "Transact 9 See Defendant Transact's Exhibits 10, 11 and 15. 10 Defendant's Brief. 9 Transdisciplinary Case Coordinator" by meeting a series of criteria to Transact's satisfaction.ll Noticeably in the Agreement, these references to "Transact" are obviously distinguishable from references to "Holy Spirit" or "Holy Spirit's Transact clinic." A genuine issue of material fact exists as to the degree of control Transact maintained over Dr. Wenner and other employees of the HSH/Transact clinic. Accordingly, Defendant Transact's Motion for Summary Judgment must be denied. 11 Plaintiff's Exhibit "B", p. 11-12. 10 IN RE: DEFENDANT'S MOTION FOR SUMMARY JUDGMENT BEFORE BAYLEY and EBERT. JJ. ORDER OF COURT AND NOW, this 6th day of November, 2006, upon consideration of Defendant Transact's motion for summary judgment, and for the reasons stated in the accompanying opinion, the motion is denied. Plaintiff s request to amend the Complaint to name Transact Health Systems, Inc. as a defendant, in place of Transact of South Central Pennsylvania, is granted. BY THE COURT, M.L. Ebert, Jr., 1. James R. Ronca, Esq. 209 State Street Harrisburg, P A 17101 Attorney for Plaintiffs Katherine B. Kravitz, Esq. 126 East King Street Lancaster, P A 17602-2832 Attorney for Defendant Transact Andrew H. Briggs, Esquire 240 Grandview Avenue Camp Hill, PA 17011 Attorney for Defendant Wenner 11