You can
search the entire site.
or go to the recent opinions, or the chronological or subject indices.
Eufemio v. Kodiak Island Hospital (7/24/92), 837 P 2d 95
<![CDATA[
Notice: This is subject to formal correction
before publication in the Pacific Reporter.
Readers are requested to bring typographical
or other formal errors to the attention of
the Clerk of the Appellate Courts, 303 K
Street, Anchorage, Alaska 99501, in order
that corrections may be made prior to
permanent publication.
THE SUPREME COURT OF THE STATE OF ALASKA
JOHN J. EUFEMIO, M.D., )
) Supreme Court
Appellant, ) Nos. S-4202/4260
Cross-Appellee, ) Superior Court
) 3AN-86-7210 Civil
v. )
)
KODIAK ISLAND HOSPITAL, LUTHERAN ) O P I N I O N
HOSPITAL AND HOMES SOCIETY OF )
AMERICA, INC., RON BROCKMAN, M.D., )
ROBERT JOHNSON, M.D., )
)
Appellees, )
Cross-Appellants. )
) [No. 3868 - July 24,
1992]
Appeal from the Superior Court of the
State of Alaska, Third Judicial District,
Anchorage,
Karen L. Hunt, Judge.
Appearances: John Eufemio, pro se, C.
R. Kennelly, Stepovich, Kennelly & Stepovich,
P.C., Anchorage, for Appellant/Cross-
Appellee. Ronald L. Bliss, Jean E. Kizer,
Bradbury, Bliss & Riordan, Anchorage, for
Appellees/Cross-Appellants.
Before: Rabinowitz, Chief Justice,
Burke, Matthews, Compton and Moore, Justices.
COMPTON, Justice.
John J. Eufemio, M.D., was denied renewal of his staff
privileges at Kodiak Island Hospital (KIH) in 1982. He
reapplied in 1985 and was again rejected. He then
filed suit in the superior court seeking damages and
injunctive relief against KIH. He appeals the superior
court's grant of summary judgment in favor of KIH. KIH
cross-appeals on the issue of whether Eufemio's
complaint was timely filed.
I. FACTUAL AND PROCEDURAL BACKGROUND
John J. Eufemio, M.D., practiced as a general surgeon
in Kodiak with staff privileges at KIH, an acute care
facility managed by Lutheran Hospitals and Homes
Society of America, Inc. (LHHSA), from 1966 until 1980.
In 1979, KIH suspended Eufemio's orthopedic and hand
surgery privileges. KIH revoked the suspensions in
1980 after concluding that it had not followed proper
procedures. Eufemio left Kodiak in the fall of
1980 to attend law school. He reapplied for annual
staff privileges in 1981 and 1982.1 The executive
committee notified Eufemio in October 1982 that his
application for staff privileges for 1982 was denied.
Following a hearing in which Eufemio participated, the
Hearing Committee agreed with the executive committee.
Eufemio appealed to the ARC, which recommended
affirmance of the denial of Eufemio's staff privileges.
The LHHSA board issued a final decision affirming the
denial of privileges on June 26, 1984.
In 1984-85, Eufemio completed a surgical fellowship at
the New York Medical Center and regained his
eligibility to take the surgical boards. Eufemio
returned to Kodiak in the summer of 1985 and again
applied for appointment to the medical staff. The
executive committee recommended denial. The Hearing
Committee considered the executive committee's decision
early in 1986, and in March recommended denial of
Eufemio's application. Eufemio appealed to the ARC,
which recommended that the LHHSA board deny Eufemio
staff privileges.
On June 18, 1986, before the LHHSA board made its final
decision, Eufemio commenced this suit against KIH,
LHHSA and three Kodiak physicians who participated in
the peer review process, alleging three counts of
constitutional claims, noting due process and civil
rights violations, as well as two counts sounding in
tort and one in contract. Eufemio sought damages and
injunctive relief. KIH moved for summary judgment,
asserting that Eufemio's complaint was improperly pled
as an original action, that Eufemio had failed to
exhaust the hospital's internal remedies, and that
judicial review of the denial of his 1982 application
was time-barred. At argument Eufemio withdrew his
request for injunctive relief and reduced his complaint
to his contract and constitutional claims. Also at
argument the superior court ruled that Eufemio could
not appear both with counsel and as a pro per litigant.
Moreover, the count ruled that Eufemio's law partner,
George Vogt, could not represent Eufemio.
In its first order, the superior court granted summary
judgment against Eufemio's constitutional claims for
failure to exhaust administrative remedies and rejected
Eufemio's argument that KIH was estopped from denying
Eufemio staff privileges. The court ruled that
Eufemio's claims were not time-barred and that genuine
issues of material fact regarding his contract claim
precluded summary judgment. Following a clarification
of the issues, the superior court indicated that only
one minor contract issue was still before the court.
Eufemio and KIH stipulated to entry of a final judgment
which preserved the remaining contract issue, should
Eufemio prevail in this appeal.
Eufemio appeals the limitation on his representation
and the granting of summary judgment against both the
contract and constitutional issues. KIH cross-appeals
the decision that Eufemio's claim with respect to his
1982 application was not time-barred.
II. DISCUSSION
A. STATUTE OF LIMITATIONS
KIH cross-appeals the superior court's refusal to bar
Eufemio's appeal of his 1982 application on the ground
that it was not timely filed. KIH maintains that since
complaints from decisions of a hospital peer review
process are akin to administrative determinations and
arbitration, we should impose a statute of limitations
of 30 or 90 days.
Eufemio argues that since his claims sound in contract,
the applicable statute of limitations should be two or
six years. He further argues that the delay in filing
the suit did not prejudice KIH.
This question has been addressed by courts in other
jurisdictions. See, e.g., Stringer v. Board of
Trustees of Edward M. Sparrow Hospital, 233 N.W.2d 698,
699-701 (Mich. App. 1975); Edwards v. Fresno Community
Hospital, 113 Cal. Rptr. 579, 580-82 (App. 1974); Debra
T. Landis, Annotation, What Statute of Limitations
Governs Physician's Action for Wrongful Denial of
Hospital Privileges, 3 A.L.R. 4th 1214 (1981).
Generally, the applicable statute of limitations will
depend on the nature of the right sued upon, not the
form of the action or the relief demanded. Edwards,
113 Cal. Rptr. at 580. The California court applied
its miscellaneous tort, contract and quasi-contract
statute of limitations of two years. Id. at 581-82
(choosing the two year limitations period because
hospital privileges were considered a property and not
a personal right). The Michigan court applied its
three year statute of limitations applicable to
injuries to persons or property. 233 N.W.2d at 700-01
(choosing it over a six year omnibus statute). Neither
court considered the statute of limitations applicable
to appeals from administrative hearings or arbitration
decisions.
We believe that the 30 or 90 day statute of limitations
is not appropriate. Because Eufemio's claim arises out
of his contractual relationship with KIH, AS 09.10.050
is appropriate. Thus, Eufemio had six years in which
to file a suit contesting the denial of his 1982
application. See AS 09.10.050. The decision on the
1982 application was issued on June 26, 1984. Eufemio
filed the present action on June 18, 1986.2 The
complaint was timely filed.3
The parties do not contend that the 1985 application
raises any new issues pertinent to this appeal. Thus
we find that it is unnecessary to consider the denial
of the 1985 application.
B. EXHAUSTION OF REMEDIES
The superior court granted summary judgment against
Eufemio on his due process claims4 on the ground that
Eufemio failed to properly raise the issues before the
ARC for both the 1982 and 1985 denials. Thus he could
not seek judicial review on these issues because he
failed to exhaust the remedies provided by the bylaws.
The superior court noted that although Eufemio had
stated his objections in general terms in his letters
of appeal, the objections were not sufficiently
detailed, as required by the bylaws, to raise the
issues.
1. Standard of Review.
It is within the superior court's discretion whether to
require the exhaustion of administrative or
organizational remedies before reviewing an issue or
claim. Standard Alaska Prod. Co. v. State, Dep't of
Revenue, 773 P.2d 201, 206 (Alaska 1989). Thus, we
must determine whether the superior court abused its
discretion. Morgan v. State, Dep't of Revenue, 813
P.2d 295, 297 n.4 (Alaska 1991). We "will reverse a
ruling for abuse of discretion only when left with a
definite and firm conviction, after reviewing the whole
record, that the trial court erred in its ruling." Id.
Also, the superior court's determination that a party
did not exhaust the administrative remedies is subject
to an abuse of discretion analysis. Id. However,
because the superior court granted summary judgment on
these issues, we may reverse that decision if,
considering all inferences from the evidence in favor
of Eufemio, genuine issues of material fact exist. Sea
Lion Corp. v. Air Logistics of Alaska, Inc., 787 P.2d
109, 116 (Alaska 1990).
2. The Requirement of Exhaustion of Remedies.
In Eidelson v. Archer, 645 P.2d 171, 177 (Alaska 1982),
we held that the doctrine of exhaustion of remedies was
applicable to the judicial review of cases involving
the loss of a physician's hospital privileges.5 In
applying the doctrine, a court must decide the
following: 1) is exhaustion of remedies required; 2)
did the complainant exhaust those remedies; and 3) is
the failure to exhaust remedies excused? Id. at 175-
83.
a. Was exhaustion of remedies required?
In deciding whether to require exhaustion of remedies
in a particular case, a court should "balance the
interest in allowing the hospital to apply its special
competence and expertise, correct its errors, develop a
proper record, and discourage deliberate flouting of
its processes with [the doctor's] interest in the
availability of adequate redress for [the doctor's]
grievances." Eidelson, 645 P.2d at 177.
KIH contends that the superior court properly required
exhaustion of the hospital peer review process. It
contends that the hospital's interest in correcting its
own errors survives because the hospital should be
given the opportunity to avoid costly litigation. KIH
also maintains that it has an interest in applying its
special expertise because medical qualifications were
at issue.
Eufemio contends that exhaustion should not have been
required. He claims that there is no need in this case
for deference to hospital expertise because his
objections are due process objections, that is, they
are issues requiring the special competence of the
courts, not a medical staff. Eufemio also claims that
the interest in creation of a record is not threatened
in this case because a voluminous record has already
been compiled. Furthermore, Eufemio argues that it is
in the interests of judicial economy not to require
exhaustion because the hospital cannot award Eufemio
damages, the remedy he seeks. Lastly, Eufemio contends
that the exhaustion requirement is a harsh rule that
should be applied only in the most egregious cases. He
argues that although the requirement may be appropriate
where the internal review process is ignored
completely, application is not warranted in this case
where the appeal process was pursued, but the court
found that one issue was insufficiently raised. To
support this contention, Eufemio notes that in other
Alaska cases in which exhaustion has been required, the
internal review process was not pursued at all.6
Applying the balancing test required by Eidelson, KIH
has a significant interest in an exhaustion
requirement. KIH's strongest interest is in correcting
its own errors and in discouraging the deliberate
flouting of its processes.7 Even though due process is
not within a hospital peer review committee's "special
competence,"it is still possible for such a committee
to identify unfair or arbitrary processes, such as a
biased tribunal, and correct the deficiency to avoid
litigation.
On the other side of the balance, Eufemio's interest in
the availability of redress for his grievances is not
significantly threatened by requiring exhaustion. The
classic example of the exhaustion requirement hindering
one's ability to seek redress is when "immediate
judicial intervention [is] necessary to insure adequate
protection." Eidelson, 645 P.2d at 178. Here,
however, Eufemio was pursuing other issues, including
his tort, promissory estoppel and breach of contract
claims, as well as arguing the merits of LHHSA's
decision. Eufemio's appeal was in the form of a letter
to the ARC, not an unduly burdensome process. The
availability of adequate redress for Eufemio was not
affected by the superior court's requirement that he
exhaust the hospital review process.
Thus, the Eidelson balance favors KIH. We are not left
with a definite and firm conviction that the superior
court was in error in requiring exhaustion of remedies,
nor do genuine issues of material fact exist.8
b. Did Eufemio exhaust his remedies?
With respect to the second inquiry, we have required at
least a "good faith effort"to pursue the grievance
internally. Casey v. City of Fairbanks, 670 P.2d 1133,
1136-37 (Alaska 1983). Eufemio argues that he made a
good faith effort to resolve his grievances internally.
KIH argues that Eufemio did not adequately pursue the
appeal process provided by the bylaws, but made only a
perfunctory effort.
The internal remedy which Eufemio allegedly did not
adequately pursue was the LHHSA Appellate Hearing which
was to have been conducted in Fargo, North Dakota.
According to the Fair Hearing Plan:
The practitioner seeking the review
shall submit a written statement detailing
all matters with which he disagrees, and his
reasons for such disagreement. If it is the
practitioner's position on appeal that the
action of the Medical Staff Executive
Committee, the Hearing Committee or any other
committee of the Medical Staff was arbitrary
or capricious . . . then the written
statement shall contain a detailed statement
of the basis upon which said claims are made.
In addition, if it is practitioner's position
that he was denied a hearing as provided
under the Medical Staff Bylaws or this Plan,
specific reference shall be made to the
provision of the Medical Staff Bylaws or this
Plan which, the practitioner contends, were
violated and the precise nature of the
alleged violation.
Eufemio's letter appealing the denial of his 1982 application was
not specific on the constitutional or contract claims.
He did not make specific reference to a provision of
the bylaws or the FHP or detail the precise nature of
the violation.
However, we believe that Eufemio's efforts were
adequate under the circumstances. Eufemio's letter of
appeal to the ARC raised his general constitutional
objections and contract claims in the sections under
the headings "Arbitrary and Capricious Hearing" and
"Ethics." None of Eufemio's contentions of impropriety
in the letter of appeal were new, but had been argued
in full before the Hearing Committee. The records of
those hearings were before the ARC.
Proof of Eufemio's good faith effort was the ARC's
decision to address these issues without comment on
their procedural or substantive adequacy. Although
Eufemio did not detail his objections in the precise
manner specified by the Fair Hearing Plan, he complied
sufficiently for the ARC to respond. The ARC found
that the Hearing Committee's actions were "based on
substantial evidence and [were] not arbitrary and
capricious or based on nonprofessional motives." The
ARC further found that Eufemio was given a fair hearing
in accordance with the FMP. Thus the letter of appeal
was not so vague that a response was not possible. The
ARC waived any objection to the form of the written
statement by reaching decisions on the issues. KIH
cannot now claim that issues on which it was able to
reach a decision were not properly raised in the
administrative appeal. Therefore we hold that Eufemio
exhausted available internal remedies with respect to
both his contract and constitutional claims.
3. Was exhaustion of remedies excused?
Eufemio also claims that the exhaustion requirement
should be excused because pursuit of the internal
remedial process would have been futile. Because we
find that Eufemio adequately exhausted this process we
need not address whether exhaustion was excused.
B. FORM OF REVIEW
Eufemio's action was a civil suit for damages.9 The
superior court ultimately dismissed Eufemio's contract
issues because it concluded that a civil suit was not
procedurally appropriate. The superior court explained
that Eufemio's contract issues should have been
"properly raised in an `appeal' to the court because
challenges to [a] hospital review process [are] treated
as an administrative appeal."10
The issue is whether the judicial review of allegations
of breach of a hospital staff privileges contract must
necessarily be in the form of an appeal of an
administrative decision rather than in an original
civil action.11 We must first decide if there is only
one proper form of review before we can decide whether
"judicial review"contemplates any level of deference.12
We have stated before that in certain circumstances it
is unnecessary to make the distinction between an
original civil action and an appeal to the superior
court for the purposes of the form of review.
Winegardner v. Greater Anchorage Area Borough, 534 P.2d
541, 545 (Alaska 1975). See also Alaska Interstate v.
Houston, 586 P.2d 618, 619 n.3 (Alaska 1978) (noting
that an appeal from a workers compensation board
decision should not be dismissed merely because it was
titled as a complaint). Even in exercising its
appellate jurisdiction, the superior court has leeway
to shape the form of the review. A proceeding before
the superior court arising from the conduct of an
internal review body, such as a governmental agency or
a private appellate committee, may take various forms.
A superior court may be faced with choosing among the
following alternatives, depending on the circumstances:
(1) reviewing the record for an abuse of discretion or
error of law; (2) trial de novo on the record; and (3)
trial de novo in whole or in part.
The second alternative involves the superior court
exercising its independent judgment without deference
to the reviewing body's determinations. In such cases,
the superior court may use only the compiled record, or
the compiled record augmented as necessary. Alaska R.
App. P. 609(b)(1). This procedure is usually applied
when the reviewing body's procedures are found to be
inadequate. State v. Lundgren Pacific Constr. Co., 603
P.2d 889, 896 & n.18 (Alaska 1979).
Under the third alternative, the court may determine
that certain issues are not within the reviewing body's
expertise, or that the present record is inadequate.
In such cases, the court has discretion to take
additional evidence and determine issues anew. Alaska
R. App. P. 609(b)(1). See State v. Dupere, 721 P.2d
638, 639 (Alaska 1986) (noting the superior court's
discretion to order a trial de novo in the review of a
governmental agency determination); Lundgren Pacific,
603 P.2d at 892-94 (noting that "a person may have a
right to a trial de novo of certain matters under some
circumstances even though Rule 45 [now Appellate Rules
602 and 604] is applicable"). The court may also
recognize that certain issues are within the expertise
of the reviewing body and determine that these issues
should be reviewed on the record.
We have not before determined that a proceeding arising
from the decision of a hospital peer reviewing body
must be brought as an administrative appeal or face
dismissal. At most we have simply approved of specific
cases being treated by the parties as appeals from an
administrative agency. See McMillan v. Anchorage
Community Hosp., 646 P.2d 851, 860 (Alaska 1982). In
another case in which damages were sought, based on an
alleged failure to adhere to the hospital bylaws, we
declined to consider evidence which was not part of the
administrative record. Storrs v. Lutheran Hosp. &
Homes Soc'y of America, Inc., 609 P.2d 24, 30 n.19
(Alaska 1980). Despite KIH's contentions, there is no
indication in Storrs that the superior court could not
have disposed of the damages issue in the same action.
Other jurisdictions have allowed as an original civil
action a suit for breach of contract based on the
hospital bylaws. See, e.g., Terre Haute Regional
Hosp., Inc. v. El-Issa, 470 N.E.2d 1371, 1373-74 (Ind.
App. 1984) (jury trial for damages). There is no
general prohibition on original civil actions to
contest a breach of hospital bylaws. The only issues
limited to a review of the administrative decision are
those which touch on the merits, that is, the
qualifications of the applicant and the factual
findings of the hospital. "It is when the physician
simply claims that the hospital decision to exclude him
was factually incorrect that the court serves as a
reviewing body." Note, Denial of Hospital Staff
Privileges: Hearing and Judicial Review, 56 Iowa L.
Rev. 1351, 1376 (1971).
Therefore, because the form of review may have limited
substantive effect, we see no reason to dismiss
Eufemio's contract claims merely because they were
brought as an original civil action. Breach of
contract claims, and other claims which look at the
validity of the hospital's review processes and not at
those findings within the special expertise of the
hospital, need not be framed as an appeal from an
administrative decision.
C. PROMISSORY ESTOPPEL
The 1982 decision of the KIH Hearing Committee
contained the following language:
None of the problems which resulted in
the denial of his medical staff privileges
appear to be irreparable, but they provided
sufficient cause for the medical staff's
decision. We support that decision, but we
also encourage Dr. Eufemio to pursue his
stated goal of obtaining additional residency
training and his surgical board
certification. We speculate that a year's
additional training in a structured setting,
surrounded by examples of current good
medical and surgical practice, would
substantially improve his qualifications for
medical staff membership.
In 1984-85, Eufemio received further medical training in New York
and received his surgical board certification. Eufemio
now claims that his privileges should be reinstated
based on promissory estoppel. He claims that KIH is
estopped from denying him staff membership based on the
hearing committee's decision which anticipated that his
qualifications would be "substantially improved."
Eufemio claims that, at minimum, the committee promised
him that his application would be reviewed anew.
We will apply promissory estoppel if:
1) The action induced amounts to a
substantial change in position;
2) it was either actually foreseen or
reasonably foreseeable by the promisor;
3) an actual promise was made and
itself induced the action or forbearance in
reliance thereon; and
4) enforcement is necessary in the
interest of justice.
Crook v. Mortenson-Neal, 727 P.2d 297, 300-01 (Alaska 1986). The
superior court granted summary judgment, finding as a
matter of law that there was neither a promise made nor
action induced. We agree.13
We are not persuaded that even with the factual
inferences favoring Eufemio, the hearing committee's
language indicates a promise. Rather, the decision
plainly indicates that the committee merely
"speculated"about what effect the additional training
would have on Eufemio's qualifications. Similarly, the
hearing committee noted that attending the training was
already Eufemio's "stated goal." Eufemio, who was
already planning on obtaining the additional training,
cannot argue that his attendance was induced by the
hearing committee's recommendation.14
D. EUFEMIO'S APPEARANCE PRO PER AND WITH CO-COUNSEL
The trial court held that 1) Eufemio could either
represent himself or be represented by counsel, but not
both; and 2) counsel could not be a member of the same
law firm as Eufemio. Eufemio contests both holdings.15
Although ordinarily these questions are
straightforward, they are confusing here because of
Eufemio's many roles. He is party, pro per litigant,
attorney, law partner and witness. Originally Eufemio
was represented by C.R. Kennelly. Later, George Vogt,
Eufemio's law partner, appeared as co-counsel.
Finally, Eufemio signed a memorandum to the court
himself. Eufemio, however, never entered an order of
substitution.16
The court based the first holding on Alaska Civil Rule
81(c) which provides: "Except as otherwise ordered by
the court, a party who has appeared by an attorney may
not thereafter appear or act in his own behalf in any
action or proceeding, unless order of substitution
shall have been made by the court after notice to such
attorney." Alaska R. Civ. P. 81(c).
Eufemio argues that the rule did not contemplate the
situation where the party was also an attorney.
Eufemio claims that since this rule was to protect the
lay litigant, it serves no purpose to apply it to a pro
per litigant who is also an attorney.
The rule makes no distinction on its face between
lawyers appearing pro per and lay persons appearing pro
per. Although there may not be a compelling reason for
applying this rule to a lawyer appearing pro per, we
conclude that the superior court did not abuse its
discretion. The court reasoned:
I think one of the purposes behind Rule
81 is to avoid a whipsawing of the other
side, and a song and dance around procedure
and around rules and around responsibility;
well, I know that interrogatory says that but
I didn't sign that, that was somebody else
who signed that, the party or the attorney or
whatever.
We affirm the superior court on this holding.
The superior court based its second holding on
Disciplinary Rule 5-102 of the Code of Professional
Responsibility, which requires withdrawal of a lawyer
if a lawyer in his or her firm ought to be called as a
witness. Code of Prof. Resp. DR 5-102. Thus, read
literally, Vogt should be disqualified.
The Supreme Judicial Court of Massachusetts has held
that Disciplinary Rule 5-102 does not prevent a lawyer
from representing his law partner in litigation.
Borman v. Borman, 393 N.E.2d 847, 856 (Mass. 1979).
The Borman court reasoned:
To apply DR 5-102 when the testifying
advocate is a litigant in the action
misconprehends the thrust of the rule. DR 5-
102 regulates lawyers who would serve as
counsel and witnes for a party litigant. It
does not address that situation in which the
lawyer is the party litigant. Any perception
by the public or determination by a jury that
a lawyer litigant has twisted the truth
surely would be due to his role as litigant
and not, we would hope, to his occupation as
a lawyer. As a party litigant, moreover, a
lawyer could represent himself if he so
chose. Implicit in the right of self-
representation is the right of representation
by retained counsel of one's choosing. A
party litigant does not lose this right
merely because he is a lawyer and therefore
subject to DR 5-102. Consequently, [the
party litigant's law partnership] cannot be
disqualified simply because the husband, as a
party litigant, will testify.
Id. (citations, footnote omitted). We agree with this rationale
and believe that the superior court abused its
discretion in disqualifying Vogt.17
III. CONCLUSION
The superior court's grant of summary judgment to KIH
on the issue of exhaustion of remedies is reversed.
The superior court also erred in precluding review of
the contract claims in an original civil action. The
superior court correctly granted summary judgment for
KIH on the promissory estoppel issue. On remand, Mr.
Vogt should be allowed to appear as Eufemio's counsel,
although Eufemio cannot both represent himself and
appear with co-counsel.
AFFIRMED in part, REVERSED in part, and REMANDED for
further consideration.
_______________________________
1. Under Alaska law, medical and surgical privileges for
each member of a hospital's medical staff are reviewed
annually. 7 Alaska Administrative Code (AAC)
12.110(c)(1). The hospital medical staff must review
its own members and make recommendations to its
governing body regarding renewal of staff privileges.
The governing body must also establish procedures for
appeals of these decisions. 7 AAC 12.630(b)(5).
KIH's reappointment process is governed by its bylaws
and a fair hearing plan (FHP). The FHP was adopted in
1983 and applied to Eufemio's hearing held in November
1983. According to the bylaws, a physician's completed
application is filed with the hospital administrator
and first considered by the executive committee of the
medical staff. If the executive committee recommends
denial of staff privileges, the applicant may request a
hearing before the Hearing Committee, in accordance
with the FHP. The Hearing Committee presents its
recommendations back to the executive committee, which
then presents its final recommendation to the LHHSA
board of directors. The board then appoints an
appellate review committee (ARC) of at least three
members. The ARC may recommend that the board affirm,
modify or reverse the executive committee, or may refer
the matter back to the Hearing Committee. The LHHSA
board makes the final decision.
2. The superior court noted that Eufemio filed suit on
June 17, 1984. This error does not affect the holding
that the complaint was timely filed.
3. In the alternative, KIH argues that Eufemio should be
held to his election of remedies. That is, his choice
of reapplying in 1985 precludes his contesting the
denial of his 1982 application. However, KIH has
offered no support and little discussion of the
doctrine of election of remedies in its brief. It
argues only that without the "election" doctrine
"needless, burdensome and very expensive duplication of
procedures"will occur. We do not believe that KIH has
presented compelling reasons for holding Eufemio to an
election of remedies.
4. Eufemio's allegations of inadequate procedural due
process include the following: he claims that the FHP
did not allow for sufficient time to review the
materials used against him, that he was denied the
right of cross-examination, that the denial of staff
privileges was arbitrary, capricious and founded on
improper motives, that the tribunal was not impartial,
and that his 1985 application was not reviewed on its
own merits.
Generally, a public or quasi-public hospital is
required to afford its physicians procedural due
process in determining suspension or termination of
hospital staff privileges. Storrs v. Lutheran Hosp.
and Homes Soc'y of America, Inc., 609 P.2d 24, 28
(Alaska 1980). At a minimum, a public hospital's
hospital peer review appeal process must afford an
applicant an ample opportunity to confront witnesses
and present evidence before an impartial tribunal.
McMillan v. Anchorage Community Hosp., 646 P.2d 857,
867 (Alaska 1982).
In this case Eufemio assumes and KIH does not dispute
that KIH is a quasi-public hospital. The superior
court, noting that neither the parties nor the record
before the court indicated that KIH should not be held
to the constitutional standards, would have reviewed
the procedural adequacy of KIH's appeal process.
5. This is the first case dealing with the hospital peer
review decision to deny renewal of hospital privileges.
Prior cases dealt with suspension and termination of
privileges. See, e.g., McMillan v. Anchorage
Community Hosp., 646 P.2d 857, 858 (Alaska 1982);
Eidelson, 645 P.2d at 176; Storrs v. Lutheran Hosp. and
Homes Soc'y of America, Inc., 609 P.2d 24, 25 (Alaska
1980). We do not believe that the distinction between
suspension, termination and denied renewal is
significant in applying the doctrine of exhaustion of
remedies.
6. Eufemio argues that Eidelson is not relevant to this
case because the doctor in Eidelson did not pursue the
hospital peer review appellate process at all, but
contested his suspension directly in court. However,
the cases which have interpreted Eidelson confirm that
the case enunciates a general doctrine of exhaustion
and should not be limited to its facts. See, e.g.,
Standard Alaska Prod., 773 P.2d at 207; Reed v.
Municipality of Anchorage, 741 P.2d 1181, 1186 (Alaska
1987).
7. We agree with Eufemio that the other two potential
hospital interests, applying its own expertise and
creating a record, are not threatened in this case by a
direct appeal to the courts. The points which the
superior court found had not been exhausted were the
due process claims, not any disagreements with the
findings of the executive committee. Thus, the
executive committee's ability to analyze medical
qualifications is not in question here. Instead, the
relevant issue is the manner in which the committee
operates. See Garrow v. Elizabeth General Hosp. and
Dispensary, 401 A.2d 533, 543-44 (N.J. 1979) (Pashman,
J. concurring in part and dissenting in part) (arguing
that due process issues require no hospital expertise
or detailed factual record). See also Karen A. Aviles,
Note, Eidelson v. Archer: Exhaustion of Remedies in a
Private Hospital, 1 Alaska L. Rev. 277, 280-83 (1984)
(applying Justice Pashman's reasoning in Garrow to
Eidelson).
8. Eufemio's argument raises the general question whether
exhaustion of remedies should be required for
constitutional questions. We have held that exhaustion
of remedies is not required when the constitutionality
of a statute or bylaw is the only issue raised in the
case. Ben Lomond, Inc. v. Municipality of Anchorage,
761 P.2d 119, 122 (Alaska 1988). However, "exhaustion
may be required when non-constitutional issues are
present or when a factual context is needed for
deciding the constitutional issues." Ben Lomond, 761
P.2d at 122 (citing 4 Kenneth Culp Davis,
Administrative Law Treatise 26:6, at 435 (2d ed.
1983)). Accord Standard Products, 773 P.2d at 207-08.
We have emphasized that a court should not "entertain
`legal' or `constitutional' claims which have been
severed from the remainder of a controversy otherwise
subject to the doctrine of administrative exhaustion."
Standard Products, 773 P.2d at 207.
Although each of Eufemio's issues may be characterized
as legal determinations, and thus not within the
specialized expertise of the hospital, they necessarily
involve resolution of the factual context in which
Eufemio was denied privileges. They each require some
analysis of the legitimacy of the executive committee's
determination. Thus, the requirement of exhaustion of
remedies was not foreclosed as a matter of law.
9. Eufemio's claim for injunctive relief was abandoned.
10. KIH contends that the superior court was correct. It
maintains, citing McMillan v. Anchorage Community
Hosp., 646 P.2d 857, 860 (Alaska 1982), that the proper
appellate procedure is limited to the following: 1)
review of the hospital bylaws for substantive and
procedural due process; and 2) review of claims that
the bylaws were not followed. KIH contends that if the
court finds that the peer review process is flawed, it
should direct the hospital to comply, and only then
permit a civil suit for damages. However, this
procedural method was used by stipulation in McMillan
and we are not required to employ it in this case. See
McMillan, 646 P.2d at 860.
11. This issue is a question of law to which this court
applies its independent judgment. Jackson v. Power,
743 P.2d 1376, 1379 n.5 (Alaska 1987).
12. Any judicial inquiry into the compliance with
contractual provisions will not be a review of the
"merits"of the hospital's decision but of the process.
Even the authority cited by KIH allows for judicial
review of the process used. See, e.g., Lew v. Kona
Hosp., 754 F.2d 1420, 1425 (9th Cir. 1985). This is
true even with respect to private hospitals. Shulman
v. Washington Hosp. Center, 222 F. Supp. 59, 63 (D.D.C.
1963) (holding that a private hospital is not subject
to judicial review except when an allegation of a
failure to conform to procedural requirements set forth
in the hospital's bylaws is made: "the extent of
judicial review is to require compliance with the
prescribed procedure. Beyond that, the courts do not
interfere.").
13. Summary judgment was granted on this question. Thus,
"this court must determine whether there is a genuine
issue of material fact and whether the moving party is
entitled to judgment on the law applicable to the
established facts. All reasonable inferences of fact
from proffered materials must be drawn against the
moving party . . . and in favor of the non-moving party
. . . ." Sea Lion Corp. v. Air Logistics of Alaska,
Inc., 787 P.2d 109, 116 (Alaska 1990) (citation
omitted).
14. Eufemio is not entitled to either the granting of staff
membership or a new review of his application. It is
notable, however, that the 1985 hearing was not merely
a repeat of the 1982 hearing. New evidence, such as
Eufemio's new licensing and training, was considered by
the executive committee. However, the executive
committee's decision was based on the old allegations.
"The records submitted to this committee did indicate a
possibility that Dr. Eufemio has made an effort to
correct his deficiencies in two areas -- competence and
medical records. . . . It is the judgement of this
committee that for reasons set forth below the other
deficiencies of Dr. Eufemio are so fundamental as to
preclude reappointment to the medical staff."
(Emphasis added). The Hearing Committee then limited
its review to whether these old allegations were
adequate grounds for denial.
15. "A trial court's decision concerning a motion to
disqualify opposing counsel will only be reversed when
it constitutes an abuse of discretion." Munn v.
Bristol Bay Housing Auth., 777 P.2d 188, 196 (Alaska
1989).
16. Eufemio's situation is the stuff of which television
shows are made, as evidenced by this exchange between
counsel and the court:
[Counsel]: Your Honor, just as a side point,
not that it has any bearing on it, but I was
watching a TV program last night, L.A. Law, and
some lawyer, some famous plaintiff lawyer was
being sued, and in that case I would suppose the
people that researched that transcript knew what
they were doing because they had him both as a
witness, a party and acting on his own behalf, and
also having another counsel from his own firm
representing him in the case. Not that that's
precedent, but I thought it might be interesting,
coming up the night before this argument.
THE COURT: Well, I must share with you, [Counsel]
that I do find that more interesting than
persuasive. Thank you.
17. The Code of Professional Responsibility should not be
used as an offensive pretrial maneuver. As the Borman
court stated:
Notwithstanding the purposes
served, application of the rule may have
harsher consequences for the client than the
continued service of the attorney. Most
obviously, the rule may deny a litigant of
the right to counsel of his choice. When
disqualification occurs after employment has
begun, it temporarily (and possibly
permanently) disables the litigant in his
effort to prosecute a claim or mount a
defense. It is not surprising therefore that
the code has been used increasingly as a
catalog of pretrial tactics. When needless
disqualification occurs as a result of these
tactics, the very rules intended to prevent
public disrespect for the legal profession
foster a more dangerous disrespect for the
legal process. We therefore take this
opportunity to state that first and foremost,
the code is self-executing. We expect
lawyers to know and comply with its
provisions. If an attorney is unsure whether
in a given case his conduct violates the
code, he should terminate the questionable
conduct or seek the advice of the appropriate
Committee on Ethics and Professional
Responsibility. If he persists in
questionable conduct, he risks disciplinary
action including disbarment. When a lawyer,
exercising his best judgment, determines that
his employment will not bring him into
conflict with the code, disqualification may
occur only if the trial court determines that
his continued participation as counsel taints
the legal system or the trial of the cause
before it.
393 N.E.2d at 855 (citations, footnotes omitted).
]]>
