CHARLES W. PLUMMER, M.D.,
Plaintiff
v
.
COMMUNITY GENERAL HOSPITAL OF THOMASVILLE, INC., ALLEGIANT
PHYSICIAN SERVICES, INC., and PREMIERE ANESTHESIA, INC.,
Defendants.
Ronald Barbee for plaintiff-appellant.
Horton and Gsteiger, P.L.L.C., by Elizabeth Horton, for
defendant-appellee Community General Hospital of Thomasville,
Inc.
EAGLES, Chief Judge.
Charles W. Plummer, M.D. (“Dr. Plummer”) appeals from order
granting Community General Hospital of Thomasville, Inc.'s
(“Hospital”) motion to dismiss for failure to state a claim and
expiration of the statute of limitations. After careful
consideration of the briefs and record, we affirm.
The Hospital granted Dr. Plummer medical staff privileges in
anesthesiology in 1983. The Hospital “reappointed [Dr. Plummer] to
the medical staff” in 1984, 1986, 1988, 1990, and 1992 “with full
medical staff privileges in anesthesiology.” In December 1990, the
“Hospital entered into a three year contract with Triad Anesthesia
Associates, P.A. [(“Triad”)], to provide anesthesiology services to
the patients at [the Hospital].” The contract could be terminatedby either party upon ninety days notice. Dr. Plummer had formed
Triad and was its sole shareholder. Triad employed Dr. Plummer as
an anesthesiologist.
On or about 23 March 1993, the Hospital gave Triad notice that
the contract would be terminated effective 23 June 1993. Dr.
Plummer stated in his pleadings that “[w]hile the contract with
[Triad] was terminated by Defendant Hospital, [Dr. Plummer] still
continued to have full medical staff privileges at the said
Hospital with full privileges in anesthesiology.”
The Hospital then contracted with Premiere Anesthesia, Inc.
(“Premiere”) (subsequently d/b/a Allegiant Physician Services, Inc.
(“Allegiant”)) for Premiere exclusively to provide anesthesiology
services to the Hospital. Premiere hired one of Triad's former
anesthesiologists but did not offer employment to Dr. Plummer.
On 16 July 1993, Dr. Plummer requested a hearing before the
Hospital's Executive Committee of the medical staff which was
denied. Dr. Plummer requested a hearing from the Hospital's Board
of Directors on 17 August 1993 which was also denied.
On 20 June 1996, Dr. Plummer commenced this action against the
Hospital, Allegiant and Premiere. Dr. Plummer alleged breach of
contract, misrepresentation, and negligence against the Hospital
and intentional interference of contract against Allegiant and
Premiere.
On 8 August 1996, the Hospital moved to dismiss pursuant to
Rule 12(b)(6) alleging Dr. Plummer's failure to state a claim and
expiration of the statute of limitations. On 27 September 1996,Allegiant and Premiere filed a Rule 12(b)(6) motion to dismiss for
failure to state a claim. The motions were heard before Judge H.W.
Zimmerman, Jr. at the 21 October 1996 Civil Session of Davidson
County Superior Court.
The trial court granted the Hospital's Rule 12(b)(6) motion to
dismiss for failure to state a claim and expiration of the statute
of limitations. By separate order filed 21 October 1996, the trial
court granted Allegiant and Premiere's Rule 12(b)(6) motion to
dismiss. Plaintiff appealed from both orders on 28 October 1996.
On or about 29 October 1996, Allegiant filed a petition in
bankruptcy under Chapter 11 of the United States Bankruptcy Code in
the Northern District of Georgia. The bankruptcy court issued an
automatic stay of all proceedings against Allegiant. Subsequently,
this Court entered a stay of the appeal based on the pending
Chapter 11 proceeding. Based on documents before this Court, it
appeared that the bankruptcy proceedings concluded and by order
dated 21 February 2002, this Court lifted its stay.
On appeal, Dr. Plummer contends that the trial court erred in
granting the Hospital's Rule 12(b)(6) motion to dismiss for failure
to state a claim and expiration of the statute of limitations. The
Hospital cross-assigned error to the trial court's refusal to admit
in evidence the Hospital's Bylaws at the hearing on the Rule
12(b)(6) motion. After careful consideration, we affirm.
First, Dr. Plummer argues that the trial court erred in
allowing defendant's Rule 12(b)(6) motion to dismiss for failure to
state a claim. Plaintiff argues that the Hospital's Bylaws becamea part of his contract with the Hospital pursuant to Virmani v.
Presbyterian Health Services Corp., 127 N.C. App. 71, 488 S.E.2d
284, disc. review denied, 347 N.C. 141, 492 S.E.2d 38 (1997). Dr.
Plummer argues that the Hospital's exclusive contract with Premiere
to provide anesthesiology services “adversely affected [his] right
as an active medical staff member . . . to have clinical privileges
at the Hospital in the field of anesthesiology.” Dr. Plummer
argues that because it effectively terminated his medical staff
privileges, he was entitled to notice and a hearing as provided by
the Hospital's Bylaws. We disagree.
To determine whether a complaint is sufficient to survive a
Rule 12(b)(6) motion to dismiss, the court must ascertain
“'whether, as a matter of law, the allegations of the complaint,
treated as true, are sufficient to state a claim upon which relief
may be granted under some legal theory.'” Shell Island Homeowners
Ass'n v. Tomlinson, 134 N.C. App. 217, 225, 517 S.E.2d 406, 413
(1999) (citations omitted). Pursuant to Rule 12(b)(6), a complaint
should be dismissed “'if no law exists to support the claim made,
if sufficient facts to make out a good claim are absent, or if
facts are disclosed which will necessarily defeat the claim.'” Id.
(citations omitted).
Although we have not located any North Carolina decision
addressing this issue, there are several relevant cases from other
jurisdictions. In Garibaldi v. Applebaum, 742 N.E.2d 279, 280
(Ill. 2000), the Illinois Supreme Court addressed “what procedural
rights, if any, a physician has under hospital bylaws when ahospital enters into an exclusive contract with a competing group
of physicians for the performance of the same work as the physician
performs.” There, at the time of the hospital's entry into the
exclusive contract, the bylaws stated in pertinent part that:
Actions which limit, reduce, suspend or
revoke membership or clinical privileges of a
practitioner on the staff of the Hospital or
revoke staff membership shall be deemed to be
adverse to the practitioner and shall entitle
the practitioner to notice and the hearing and
appeal procedures as provided in Article VIII.
These actions include:
***
(2) Reduction, suspension or revocation of
clinical privileges and/or admitting
privileges;
***
(4) Suspension or revocation of specific
clinical privileges or Staff membership;
(5) Other similar actions.
Such actions constitute a recommendation by
the Executive Committee to the Governing Body.
Id. at 281. The court stated that “[a]lthough the practical effect
of that decision may be to curtail or even eliminate a
practitioner's ability to exercise his or her privileges at the
particular facility, the hospital's decision does not also signify
that it has reduced or terminated the practitioner's privileges
under its bylaws.” Id. at 285. The court noted that the plaintiff
failed “to distinguish between his privileges and his ability to
exercise those privileges in a 'closed' environment.” Id.
In Holt v. Good Samaritan Hospital & Health Center, 590 N.E.2d
1318, 1319 (Ohio Ct. App. 1990), the plaintiff alleged that hismedical staff privileges were revoked without the benefit of a
hearing when the hospital did not renew his company's contract to
provide emergency room services and entered into an exclusive
contract with another health care provider to provide those
services. The Ohio Court of Appeals in Holt held that the
physician was not entitled to a hearing. Id. The court noted that
“[w]hile Holt has a constitutionally protected right to practice
medicine, he does not have a right to practice in any particular
hospital.” Id. at 1321 (emphasis in original). Moreover, the
court stated that:
We agree with [the hospital] and [the
exclusive provider] that if [plaintiff's]
arguments were to prevail, it would be the
death knell of exclusive contracts for medical
services. Once having entered into a contract
with a provider corporation, a hospital would
be locked into continuing the association
until the unlikely event that every member
physician either ceased practicing medicine or
lost his privileges due to incompetency. We
will not substitute our judgment for that of
hospital boards throughout the nation, by
removing a managerial option that has been
universally acknowledged as valid and
beneficial to the efficient administration of
health care.
Id. The court went on to note that the physician's privileges
were neither reduced nor revoked and that he retained his same
privileges as before the entry of the new exclusive contract. Id.
at 1323. But see Lewisburg Community Hosp., Inc. v. Alfredson, 805
S.W.2d 756, 761 (Tenn. 1991) (holding that the hospital's refusal
to allow a radiologist access to its radiology equipment and staff
after the termination of the radiologist's exclusive contract
“significantly reduced his privileges” and “that the Hospitalbreached its contract by failing to provide him a hearing”
according to the medical staff bylaws).
Several other states have addressed this issue and have
concluded either that entry of an exclusive contract with a
competing group did not necessarily serve as termination of medical
staff privileges or that entry of an exclusive contract with a
competing group did not entitle the current physician(s) to notice
and a hearing concerning their medical staff privileges. See Van
Valkenburg v. Paracelsus Healthcare Corp., 606 N.W.2d 908, 918
(N.D. 2000) (stating that “we agree with the majority of courts,
and we hold the hearing and due process provisions of the
Hospital's medical staff bylaws are not implicated unless there are
allegations bearing on professional competency, conduct, or
character”); Dutta v. St. Francis Reg'l Med. Ctr., Inc., 867 P.2d
1057, 1060 (Kan. 1994) (holding that plaintiff-radiologist was not
entitled to a hearing under hospital bylaws when the hospital
entered into an exclusive contract with another radiologist as
plaintiff-radiologist's “staff membership remained intact and that
the decision to revoke her access to the radiology facilities was
purely a business decision”); Bartley v. Eastern Maine Med. Ctr.,
617 A.2d 1020, 1022-23 (Me. 1992) (“The granting of privileges
signifies that a doctor is qualified to practice at the hospital.
. . . The right to exercise the privileges, however, is a separate
matter.”).
Here, Dr. Plummer alleged in his complaint that according to
“the medical staff Bylaws . . . 'Medical Staff privileges may onlybe terminated according to Articles VIII and IX of the medical
staff Bylaws.'” Dr. Plummer further alleged that:
Because Defendant Hospital entered into a
contract with Premiere Anesthesia, Inc., to
exclusively provide anesthesiology services to
patients at the said Hospital, Plaintiff has
been effectively denied by Defendant Hospital
medical staff privileges at the Hospital in
anesthesiology, notwithstanding the fact that
such medical staff privileges had not been
terminated in accordance with the bylaws of
Defendant Hospital.
Dr. Plummer's three claims all contain allegations that the
Hospital breached its contract with Dr. Plummer by entering into an
exclusive agreement with Premiere or that the exclusive agreement
with Premiere effectively terminated Dr. Plummer's privileges at
the Hospital.
We hold that the termination of the Triad contract and entry
of an exclusive contract with Premiere was not the legal equivalent
of the termination of Dr. Plummer's medical staff privileges. The
complaint shows that Dr. Plummer maintained his privileges at the
Hospital even though the Hospital entered into an exclusive
contract with Premiere. “The right to exercise medical privileges
is separate from the granting or revoking of those privileges, and
a physician with privileges is not guaranteed employment or the
free and unfettered right to use a facility to exercise those
privileges.” Van Valkenburg, 606 N.W.2d at 918. Dr. Plummer was
not entitled to notice and a hearing before the Hospital entered
into an exclusive contract with Premiere because his privileges
were not terminated. Dr. Plummer “fails to appreciate the
difference between his privileges and his ability to provideservices in a 'closed' [hospital].” Holt, 590 N.E.2d at 1323. The
trial court properly dismissed Dr. Plummer's action for failure to
state a claim.
Because we have concluded that the trial court properly
dismissed this action for failure to state a claim, we need not
address Dr. Plummer's remaining issue or the Hospital's cross-
assignment of error.
Affirmed.
Judges GREENE and MARTIN concur.
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