Tom Curtis (SBN 63997)
Charles Bond (SBN 60611)
Alexander W. Kirkpatrick (SBN
61731)
BOND CURTIS LLP
140 South Lake Avenue, Suite 208
Pasadena, California 91101-4904
Telephone: (626) 585-9800
Facsimile: (626) 585-4186
Attorneys for Plaintiff,
MEDICAL STAFF OF COMMUNITY MEMORIAL
HOSPITAL OF SAN BUENAVENTURA
SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF VENTURA
PLAINTIFF
1. Plaintiff is the Medical Staff of Community Memorial Hospital of San Buenaventura (the “Medical Staff”), an unincorporated association of licensed physicians, dentists and podiatrists practicing at Community Memorial Hospital of San Buenaventura pursuant to Bylaws adopted by the members of the Medical Staff and approved by the Board of Trustees. Plaintiff brings this suit in its own right and in its representative capacity, as an unincorporated association of members, on behalf of its members and their patients. (Code Civ. Proc. § 369.5.)
2. Plaintiff Medical Staff is an unincorporated association within the meaning of Corporations Code section 24000 as constituting an unincorporated organization of two or more persons whether organized for profit or not, but excluding a government subdivision or agency.
3. Membership on the Medical Staff is governed by and subject to the provisions of Article III of the Medical Staff Bylaws. Pursuant thereto, membership on the Medical Staff is limited to those physicians and other healthcare professionals “...who continuously meet the qualifications, standards and requirements” of the Medical Staff Bylaws. Medical Staff appointment “...shall confer on the appointee or member only such privileges and prerogatives as have been granted by the Board in accordance with these bylaws.” (Medical Staff Bylaws, § 3.1, a true and correct copy of said Bylaws is attached hereto as Exhibit 1. See also 22 C.C.R. §70703(a), (b).)
4. Only members of the Medical Staff who have been specifically granted the privilege may admit patients to the hospital and only a member of the Medical Staff with defined clinical privileges may effect treatment pursuant to State law and the criteria for standards of medical care established by the Medical Staff of Community Memorial Hospital. (Medical Staff Bylaws, § 3.1.)
DEFENDANTS
5. Defendant COMMUNITY MEMORIAL HOSPITAL OF SAN BUENAVENTURA, INC. ("Defendant Hospital") is a non-profit corporation duly organized and existing under and by virtue of the laws of the State of California, the principal asset of which is a general acute care hospital commonly known as Community Memorial Hospital of San Buenaventura, located at 147 North Brent Street, Ventura, California 93003-2854. This hospital facility and its parent corporate entity are collectively referred to herein as “Hospital.”
6. Caduceus Medical Management, Inc. (hereinafter, “Caduceus”), is a California not-for-profit corporation, whose principal place of business is in Ventura, California. Plaintiff is informed and believes that Caduceus is the owner or manager of the Hospital.
7. Defendant, Michael Bakst (hereinafter, “Bakst”), at all times relevant hereto, was and is the Executive Director or Chief Executive Officer (CEO) of the Hospital. Plaintiff is informed and believes that Bakst is also an Officer and Director of Caduceus.
8. The true names and capacities, whether individual, corporate, associate or otherwise, of the Defendants sued herein as Does 1 through 100, inclusive, are unknown to Plaintiff, who therefore sues said Defendants by said fictitious names.
9. Plaintiff will seek leave of court to amend this Second Amended Complaint, if required, to show the true names and capacities of said Doe Defendants when the same have been ascertained. Plaintiff is informed and believes, and thereon alleges, that said Defendants, and each of them, are in some manner responsible for the events and happenings referred to in this Second Amended Complaint and are liable to Plaintiff as hereinafter alleged.
CALIFORNIA
LAW AND REGULATIONS
10. Under
the Corporate Practice of Medicine Bar, only physicians and physician groups
may employ physicians or provide physician services. (Business &
Professions Code section 2400.) The
Corporate Practice of Medicine Bar applies to hospitals.
11. The existence of an organized Medical
Staff is a condition for licensure for a general acute care hospital in
California. (Health & Saf. Code
§ 1250(a); 22 C.C.R. §§70701(a)(1)(D), (F), 70703(a).) To promote the quality
of medical care provided in hospitals, California law requires the Governing
Body of each general acute care hospital to provide for the formal organization
of a medical staff with appropriate officers and by-laws (22 CCR §
70701(a)(1)(D) [...“The governing body shall:
(1) Adopt written bylaws in accordance
with legal requirements and its community responsibility which shall include
but not be limited to provision for:
(D) Formal organization of the
medical staff with appropriate officers and bylaws.”]
12. The Medical Staff is mandated to be “self-governing”
in all its “professional work.” (22 CCR § 70701(a)(1)(F).) Professional work is not limited to
diagnosis and treatment of patients.
Rather, it includes all of the functions of a Medical Staff in a
hospital. In addition to patient care
services for which physicians are to be responsible (22 CCR § 70703(a)), the
Medical Staff’s professional work also includes peer review and credentialing
procedures (22 CCR § 70701(a)(7); 22 CCR § 70703(b)); the quality assurance
function of reviewing patient care services, including but not limited to the
review of medical records (22 CCR § 70703(d), § 70749 and § 70751); review of
surgery performed within the hospital (22 CCR § 70703(d) and § 70223(b)(h));
review of the efficient utilization of health care resources (22 CCR §
70703(d)); evaluating the prevention and control of infections in the hospital
(22 CCR § 70703(d) and § 70739); evaluation and control of the handling and
distribution of drugs (22 CCR § 70703(d) and § 70263); supervision of nurses and
physician assistants (22 CCR § 70706, et seq.); and the evaluation and
development of procedures governing laboratories and radiology and
anesthesiology practices (22 CCR §§ 70233, 70243 and 70253), among others.
13. Hospitals are specifically mandated by
regulation to require that the Medical Staff of the hospital establish and
perform the credentialing function at the hospital. (22 CCR § 70701(a)(7).)
Hospitals must approve all reasonable Medical Staff Bylaws adopted by
the Medical Staff and may not impose unreasonable restrictions on Medical Staff
membership. (22 CCR §§ 70701(a)(8),
70701(a)(1)(E), 70703(b).)
14. In order for the Medical Staff to perform its vital functions, the law mandates that the Governing Body provide for and ensure:
“...(F) Self-government by the medical staff with respect to the professional work performed in the hospital, periodic meetings of the medical staff to review and analyze at regular intervals their clinical experience and requirement that the medical records of the patients shall be the basis for such review and analysis.” (22 CCR § 70701(a)(1)(F).)
15. Business and Professions Code § 2282(c) provides that it is unprofessional conduct for a physician to practice at a general acute care hospital (with a medical staff of five physicians or more) if the medical staff at the hospital is not "self governing with respect to the professional work performed in the hospital."
JCAHO STANDARDS
16. The accreditation standards of the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) are recognized as standards which govern hospitals such that compliance with them qualifies the Hospital for JCAHO accreditation, and also is deemed to constitute compliance with the Medicare Conditions of Participation in order to receive certification as a Medicare participating hospital. (42 U.S.C. § 1395bb(a)(1); 42 C.F.R. § 488.5.) The California courts have taken Judicial Notice of the standards in determining the nature of the relationship of hospitals to their medical staffs. Anton v. San Antonio Community Hospital (1977) 19 Cal.3d 802, 819. The standards which govern Hospital/Medical Staff relationships ("JCAHO Standards" or "accreditation standards") are designated numerically and with the prefix of “MS”. (A true and correct copy of those standards is attached hereto as Exhibit 2.) They require that an accredited acute care hospital have a self-governing medical staff with overall responsibility for the quality of professional services provided by individuals with clinical privileges and responsibility of accounting therefor to the hospital Board (MS. 1), and that “...each medical staff develop and adopt bylaws and rules and regulations to establish a framework for self-governance of medical staff activities and accountability to the governing board.” (MS. 2.)
17. The accreditation standards provide that Medical Staff Bylaws and Rules and Regulations be adopted by the Medical Staff and that neither the medical staff nor the governing body of the Hospital may unilaterally amend the Medical Staff Bylaws or Rules and Regulations (MS. 2.1). The Medical Staff Bylaws and Rules and Regulations must create a framework within which Medical Staff members can act with a reasonable degree of freedom and confidence (MS. 2.2).
18. The accreditation standards further provide that it is the Medical Staff Bylaws which must define the method of selecting Medical Staff Officers, the qualifications, responsibilities and tenure of Medical Staff Officers and the conditions and mechanisms for removing medical staff officers from their positions (MS. 2.3.4.1-MS. 2.3.4.1.3).
19. The accreditation standards further mandate that there must be Medical Staff representation and participation in any Hospital deliberation affecting the discharge of Medical Staff responsibilities (MS. 2.3.8).
20. The accreditation standards further mandate that there be an Executive Committee of the Medical Staff which is responsible for making medical staff recommendations to the governing body and that these recommendations must pertain to the granting of the delineated clinical privileges; the mechanism by which Medical Staff membership may be terminated and the mechanism for fair hearing procedures (MS. 3.1-MS. 3.1.6.1.7).
21. The accreditation standards further mandate that the responsibilities of Departmental Chairmen (referred to in the JCAHO standards as Directors) must be specified in the Medical Staff Bylaws and Rules and Regulations. Each Departmental Chairman must be responsible for all clinically related activities of the Department; continued surveillance of the professional performance of all individuals in the Department; and the recommending of clinical privileges for each member of the Department (MS. 4.2-MS. 4.2.1.5).
22. The accreditation standards further provide that any action on an application for appointment or initial clinical privileges must be withheld until the necessary information about the applicant’s training, experience and current competence is available and verified (MS. 5.4.3.1-5.4.3.1.1).
23. The accreditation standards further provide that decisions on reappointments or on revocation, revision or renewal of clinical privileges must consider criteria that are directly related to the quality of care (MS. 5.4.4).
24. The accreditation standards further provide that a structured procedure, defined in Medical Staff Bylaws, Rules and Regulations and Medical Staff policies, be used for the processing of complete applications for appointment and reappointment and the granting of clinical privileges and that recommendations for appointment to or termination from the Medical Staff and for the granting, revision or revocation of clinical privileges must involve deliberations by the Medical Staff (MS. 5.7, 5.8). The standards further provide that Departmental recommendations are part of the basis for developing recommendations for membership and clinical privileges (MS. 5.13).
25. The accreditation standards further provide that there must be a mechanism designed to ensure that all individuals with clinical privileges only provide services within the scope of the privileges granted (MS. 5.14.2).
26. The accreditation standards further provide that the exercise of clinical privileges within any department is subject to the Rules and Regulations of that Department and they must be subject to the authority of the Department’s Chairman (MS. 5.15.6).
27. The accreditation standards further provide that practitioners who diagnose or treat patients via telemedicine link are subject to the credentialing and privileging processes of the organization that receives the telemedicine service (MS. 5.16) and that the medical staff recommends the clinical services to be provided by telemedicine (MS. 5.16.1).
28. The accreditation standards further provide that the Medical Staff must have a leadership role in any performance improvement activities undertaken in the Hospital, including a leadership role in a measurement, assessment and improvement of all aspects of patient care. It is the Medical Staff that is responsible for determining the use of this information in peer review and on-going evaluations (MS. 8-MS. 8.3).
MEDICAL STAFF BYLAWS
29. The professional activities of Plaintiff are governed by the Bylaws of the Medical Staff (the “Medical Staff Bylaws”).
30. The Medical Staff Bylaws are an agreement between the Medical Staff and the Hospital.
31. The Medical Staff Bylaws and all amendments thereto must be adopted and approved by the Medical Staff and approved by the Governing Body of the Hospital.
32. The Medical Staff Bylaws cannot be unilaterally amended by either party.
33. The Medical Staff Bylaws as they were in effect in May, 2002, are the last set of Bylaws that were last amended by adoption of amendments by the Medical Staff and approved by the Governing Body. Those Bylaws provide that it is the responsibility of the Medical Staff to:
(A) “account for the quality and appropriateness of patient care rendered by all practitioners and affiliates authorized to practice in the hospital,” (Medical Staff Bylaws, § 2.2-1) by, among other measures, establishment of a credentials program to regulate appointment and reappointment to the Medical Staff via “the matching of clinical privileges to be exercised or of specific services to be performed with the verified credentials and current demonstrated performance” of the provider (§ 2.2-1(a)); a continuing education program based in part “on the needs demonstrated through the patient care assessment and other quality improvement programs” (§ 2.2-1(b)); a utilization review program (§ 2.2-1(c)); “continuous monitoring of patient care practices and the ethical conduct of professional practices of its members” (§ 2.2-1(d)); and “[r]etrospective review and evaluation of the quality of patient care through a valid and reliable patient care assessment monitoring procedure.” (§ 2.2-1(e).);
(B) to recommend to the Board of Trustees action on appointments, reappointments, staff category, assignments, clinical privileges, and corrective actions (§ 2.2-2);
(C) “...to account to the Board in the quality and efficiency of patient care....(§ 2.2-3);
(D) “...to initiate and pursue corrective action with respect to practitioners, when warranted” (§ 2.2-4);
(E) to develop, administer and seek compliance with all bylaws, rules and regulations and hospital policies that are “patient care related” (§ 2.2-5);
(F) to assist in identifying community health needs and in setting appropriate established goals and implementing programs to meet those needs (§ 2.2-6); and
(G) to “exercise and enforce” its authority under the Medical Staff Bylaws (§ 2.2-7).
34. The Medical Staff Bylaws, with regard to credentialing, further provide that Medical Staff membership is limited to physicians who have “...completed an approved residency program in their specialty and be Board certified if they are medical school graduates after 1989. If the applicant is not Board certified, they must successfully complete their specialty Board examinations as soon as possible within the timeframe permitted by the Board, not to exceed two attempts after appointment to the Medical Staff...” (§ 3.2-1(d).)
35. The procedures for appointment and reappointment to the Medical Staff are contained in Article VI of the Medical Staff Bylaws. Among other provisions, it is thereunder provided that no physician shall exercise clinical privileges at the Hospital until that physician has applied for and received appointment to the Medical Staff or is granted temporary privileges (Article IV, § 6.1(a)); that the “...Medical Staff through its designated departments, services, committees, and officers shall investigate and consider each complete application for appointment or reappointment to the Staff... and transmit recommendations thereon to the Board” (§ 6.1(b)); and that there will be “[p]eriodic appraisal of a staff member’s clinical competence” to be accomplished “through the medical staff quality improvement programs.” (§ 6.1(c)).
36. Under the Medical Staff Bylaws, Article VI, section 6.3-1 et seq., completed applications for Medical Staff privileges are to be submitted to the Medical Staff Credentials Committee which “...shall review the application, supporting documentation, and other information relevant to consideration of the applicant’s qualifications for the staff category, department service affiliation, and clinical privileges requested” and recommend action thereon to the Department Committee for the department in which privileges are sought. (§ 6.4-3) Upon receipt of the Credentials Committee recommendation, the Chair of the department to which the application is submitted shall take action on the application. Within 60 days thereafter, the Chair of the department to which the application is submitted shall transmit a written report to the Medical Staff Executive Committee ("MSEC"). (§ 6.4-4) Following such transmission, the MSEC may adopt or reject the application. If the recommendation of the MSEC is favorable, the MSEC shall forward that recommendation to the Executive Director of the Hospital for transmittal to the Board. (§§ 6.4-5, 6.4-6)
37. Under Article X of the Medical Staff Bylaws, the Medical Staff is organized into six staff Departments (anesthesia, medicine, surgery, obstetrics, pediatrics and family practice). (Art. X, § 10.2-1.) According to the section 10.4:
“The general function of each department is to implement and conduct specific patient care review, to analyze, identify and evaluate important aspects of care that contribute to the quality, appropriateness and efficiency of patient care provided to patients within the department...”
38. In order to carry out the Departmental responsibility of ensuring quality patient care, the Medical Staff Bylaws specifically authorize each Department or Sub-committee thereof to “conduct retrospective and concurrent quality patient care studies;” (§ 10.4(a)); to recommend guidelines for the granting of clinical privileges and the performance of specified services (§ 10.4(b)(1)); to evaluate and make recommendations regarding qualifications of applicants seeking appointment or reappointment and clinical privileges (§ 10.4(b)(2)); to conduct and make recommendations regarding continuing education programs (§ 10.4(c)); to monitor adherence to Medical Staff and Hospital policies, procedures, alternate coverage, consultations, and “sound principles of clinical practice” (§ 10.4(d)(1)-(3)(1)-(3)); to monitor and evaluate patient care and clinical policy in special care areas including ICU, CCU and NICU, patient care support services, respiratory therapy, physical therapy, treatment room and other services (§ 10.4(e)); and other quality-related practices. (§ 10.4(f)-(i).)
39. Election of the Officers of the Medical Staff is specifically provided for under Article XI of the Medical Staff Bylaws. Election to the Officer positions of the Medical Staff is by a secret majority vote of the voting members of the Medical Staff (Art. XI, § 11.1-4).
40. Removal of elected Officers of the Medical Staff is provided for in Article XI, and includes that any “elected officer of the Medical Staff may be subject to recall for reasons of malfeasance in office. ...” Removal of any Officer from the MSEC may be initiated either by the MSEC itself or upon the written request of 20% of the eligible members of the Medical Staff; removal is effectuated by a majority vote of the MSEC and by two-thirds vote of all Medical Staff members. (§ 11.1-7.)
41. The duties of the Chief of Staff of the Medical Staff are defined in Article XI, section 11.1-9(a). Under those provisions, the chief of staff is responsible, and accountable to the Board in conjunction with the MSEC, “...for the quality and efficiency of clinical services and performance within the hospital and for the effectiveness of the patient care audit and other quality maintenance functions delegated to the staff including safety, quality control and performance improvement. (§ 11.1-9(a)(ii)[emph. in original].)
42. Under Article XI, section 11.2-1, each Department Chair bears responsibility to “...account to the [MSEC] for all professional and administrative activities within his department, and particularly for the quality and appropriateness of patient care rendered by members of his department and the effective conduct of the performance evaluation and other quality maintenance functions delegated to his department” (§ 11.2-1(d)(i)); and to “[m]aintain and ensure the continuing review of the quality and appropriateness of patient care rendered in the department and of the professional performance of all practitioners with clinical privileges and of all affiliates with specified services in his department.” (§ 11.2-1(d)(iv)).
43. Each Department Chair is under the Medical Staff Bylaws an automatic member of the MSEC and, in that role is required to:
“[m]aintain and assure the
continuing review of the quality and appropriateness of patient care rendered
in the department and of the professional performance of all practitioners with
clinical privileges and of all affiliates with specified services in his
department.”
(§ 11.2-1(d)(iv)).
44. The creation and function of the MSEC is defined in the Medical Staff Bylaws under Article XII. The duties of the MSEC include, among other things, “representing and acting on behalf of the Medical Staff” in various matters; coordinating and implementing professional and organizational activities and policies of the Medical Staff; recommending to the Board all matters relating to appointments, reappointments, staff category privileges, etc.; assisting in the implementation of and ensuring physician participation in the “hospital-wide Performance Improvement Program;” and to “...account to the Board and to the staff for the overall quality and efficiency of care rendered to patients at the Hospital.” (§ 12.2-2(a-(e)). Other duties of the MSEC are set forth section 12.2-2(f)-(t).)
45. The composition of the MSEC is the Chief of Staff, the Chief of Staff Elect, the immediate past Chief of Staff, the Secretary/Treasurer, all Department Chairs, and two members elected from the Active Staff. In addition, “the Executive Director or his designee, should attend all Medical Staff Executive Committee meetings without vote.” (§ 12.2-1).
46. The MSEC is responsible to delegate to Staff Committees and Interdisciplinary Hospital Committees various other patient quality-related matters including, for example, “[c]onducting patient care reviews for the purpose of analyzing and evaluating the quality and appropriateness of care and treatment provided to patients within the department.” Included in patient care reviews is the coordination of review of the conduct of utilization review activities (§ 12.3(a)); recommending guidelines for granting of clinical privileges (§ 12.3(b)) and various other quality-related matters. (see § 12.3(c)-(j).)
47. There is also a committee of the MSEC entitled the “Performance Improvement Management Continuing Medical Education Committee” (§ 12.4-1) which has the responsibility, intra alia, to “… establish systems to identify potential problems in patient care” as well as other matters. (§12.4-1(b)(1)(a)-(h).)
48. At all times herein mentioned, Plaintiff Medical Staff, each of the duly elected officers of the Medical Staff, and all members of Plaintiff Medical Staff have operated under and carried out their duties as required by the Medical Staff Bylaws to the extent Defendants did not obstruct these activities.
49. By virtue of the foregoing, Plaintiff Medical Staff is entitled to carry out its duties and exercise its rights as alleged herein. As more fully described below, Defendants have interfered and continue to interfere with the rights and efforts of Plaintiff Medical Staff to carry out its duties.
GENERAL ALLAGATIONS
50. Only the Medical Staff can effectively and efficiently seek judicial redress for the interference with the rights of the Medical Staff as alleged herein. Pursuit of such claims by individual members of the Medical Staff would, at best, adjudicate the rights of those individuals and would necessitate a multiplicity of, and repetition of, such claims in order to address the pattern of interference with the rights alleged herein. Even then, no determination could be made of the rights of the Medical Staff as an entity.
51. Accordingly, on March 18, 2003, at a General Meeting of Plaintiff Medical Staff, duly held and with a quorum present, the Medical Staff unanimously affirmed that the members of the MSEC, as elected to office for the calendar year 2003, were empowered to act on behalf of the Medical Staff. At the same meeting, the Medical Staff voted unanimously to oppose the Defendants' “Code of Conduct,” its “Conflict of Interest” policy, and its unilateral amendments of the Medical Staff Bylaws.
52. On April 28, 2003, and again on August 19, 2003, at duly conducted Meetings of the Medical Staff, the filing of this action and the pursuit of the claims herein on behalf of and in the name of the Medical Staff was ratified and approved overwhelmingly.
53. Since
a date unknown to Plaintiff, which Plaintiff is informed and believes to be in
or about May 2002, and continuing to the present time, Defendants, and each of
them, have violated the Medical Staff Bylaws.
Defendants have, among other things:
(a) Interfered with the Medical Staff's role
in privileging and credentialing;
(b) Usurped the Medical Staff's authority in
corrective action and disciplinary proceedings;
(c) Usurped the authority of the Medical
Staff to develop Bylaws and Rules and Regulations;
(d) Directly made unilateral amendments to
the Medical Staff Bylaws;
(e) Indirectly made unilateral amendments to
the Medical Staff Bylaws by amending the Hospital Bylaws in such a manner as to
negate and nullify provisions in the Medical Staff Bylaws;
(f) Precluded the Medical Staff from
applying its authority to “exercise and enforce” the Medical Staff Bylaws;
(g) Interfered with the Medical Staff's
performance of its role in establishing criteria for standards of medical care
in the Hospital;
(h) Interfered with the functioning of the
Medical Staff Departments in performing patient care review functions;
(i) Interfered with the Medical Staff’s
election of its officers and wrongfully altered the method of conducting
elections;
(j) Removed or purported to remove and
replace elected officers of the Medical Staff in contravention of the Medical
Staff Bylaws which provide that removal can only be done by the Medical Staff;
(k) Precluded the duly elected Chief of
Staff from performing his lawful duties identified in the Medical Staff Bylaws;
(l) Precluded the duly elected members of
the MSEC from performing their duties as is called for in the Bylaws;
(m) Removed or purported to remove and
replace the duly elected members of the MSEC.
54. In March 2002, Defendants, without consulting the Medical Staff, changed the providers of radiology at the Hospital, adversely affecting the quality of those services. Certain radiology services previously provided by radiologists at the Hospital began to be provided by radiologists in a foreign country via “telemedicine”, in violation of California law, JCAHO standards and the Medical Staff Bylaws. Defendants have refused to heed the expressions of concern by the Medical Staff regarding deterioration in radiology services.
55. In 2002, Defendants created a “Prostate Institute of America” (hereinafter referred to as the “Prostate Center”). Defendants circumvented the Medical Staff in granting privileges for certain procedures at the Prostate Center. That Prostate Center is now in operation at the Hospital.
56. Defendants interfered with the Medical Staff's review of quality of care at the Prostate Center.
57. On and after April, 2002, the MSEC voted to retain independent counsel. That vote was in accordance with the policy of the California Medical Association that medical staffs should have their own counsel and not use the hospital’s attorney because of the possibility of a conflict of interest. Therefore, Defendants precluded the use of the Medical Staff Treasury funds for the hiring of independent counsel and prohibited the Medical Staff from transmitting to its members' opinions of attorneys retained to evaluate its legal rights.
58. In November, 2002, the Medical Staff duly elected Dr. John Hill as Chief of Staff Elect, Dr. John Edison as Secretary/Treasurer and Dr. Brian Brantner as Member At Large to the MSEC.
59. In an effort to defeat those individuals as candidates in the Medical Staff election, Defendants disparaged and attempted to discredit them, and changed the voting mechanism so that those candidates could not be voted on individually but rather only together on a single “slate”.
60. The Medical Staff Treasury consists of dues, donations, assessments and other payments from the members of the Medical Staff. These funds are to be kept by the Medical Staff Treasurer for use as directed by the democratically elected MSEC.
61. Pursuant to a policies and procedures statement of the Medical Staff promulgated on or about November 4, 1991, and accepted, until the present controversy, by Defendants, it has been the policy of the Hospital and the Medical Staff “…to insure the safekeeping and appropriate use of the Medical Staff Funds, the ultimate responsibility for which lies with the Secretary/Treasurer [of the Medical Staff].”
62. According to the November 4, 1991 policies and procedures statement,
“Incoming funds consist of, but are not limited to, application fees and funds for inadequate attendance at meetings.”
63. Pursuant to the November 4, 1991 policies and procedures statement, checks may be drawn on the Medical Staff Treasury account only at the request of the Treasurer, Chief-of-Staff, or any other individual authorized by the Medical Staff to sign checks.
64. Pursuant to said policies and procedures adopted on or about November 4, 1991:
“An audit may be requested at any time by any member of the Medical Staff Executive Committee but not less than annually. The audits may be conducted under the auspices of the Director of Financial Services, or some other appropriate entity, at the discretion of the Medical Staff Executive Committee.”
65. The Medical Staff Treasury account was maintained in a delineated money management account at a financial institution generally denominated Morgan Stanley Dean Witter or such other names as such financial institution was previously known, account no. 244-XXXXXX-XXX [account number redacted] and pursuant to the “active assets account application,” disbursements on said account required the signatures of at least one member of the Medical Staff.
66. On or about January 7, 2003, Defendants instructed Morgan Stanley Dean Witter, the depository of the Medical Staff Treasury funds, to change the “active assets account application” form so as to require two signatures for early withdrawal, one signature from Medical Staff and one signature from Administration. The amendment to the account identified required one of two signatures on behalf of the Plaintiff Medical Staff to be either the Chief-of-Staff or the Secretary/Treasurer and, on behalf of the Board of Trustees, one of either Philip C. Drescher, President of the Board, Gary Wolfe, Vice President, or Defendant Bakst, Executive Director.
67. On or about November 2002, John M. Edison, M.D., a member of Plaintiff Medical Staff, was duly elected Secretary/Treasurer of Plaintiff Medical Staff. Pursuant to said election and appointment, Dr. Edison requested authorization to fill out a signature card for the Medical Staff Treasury account during December, 2002.
68. On or about January, 2003, Defendants implemented a change of the attachment to active assets account application pursuant to which the required signatures of the duly-elected Medical Staff Officers were eliminated.
69. Following the alteration to said attachment, Defendants notified the depository institution of the Medical Staff Treasury, to wit, Morgan Stanley Dean Witter, to release, transfer and forward all funds of the Medical Staff to the possession of Defendants, and each of them, and that Morgan Stanley Dean Witter acceded to that instruction.
70. At the time of said transfer, the approximate balance of the Medical Staff Treasury was $250,000.
71. Plaintiff has made demand upon Morgan Stanley Dean Witter that it replace and refund the $250,000 that was converted from the Medical Staff Treasury by virtue of the foregoing, but despite demand, Morgan Stanley Dean Witter has failed and refused to do so.
72. Plaintiff Medical Staff has demanded that Defendants return the converted Medical Staff Treasury but, at all times herein mentioned, Defendants and each of them have refused to do so.
73. In order to further the conversion of the Medical Staff Treasury, Defendants failed and refused to recognize the selection of John M. Edison, M.D. as Secretary/Treasurer of the Plaintiff Medical Staff.
74. The Medical Staff Bylaws (at §11.1-9(a)(viii), (ix)) provide for Medical Staff representation on the Hospital's Board of Trustees. Defendants have terminated that representation and have purported to amend that provision of the Bylaws.
75. The Medical Staff Bylaws (at §12.5) provide for a "Joint Conference Committee" composed of Medical Staff and Hospital representation as a mechanism for facilitating direct communication and resolving disagreements. Defendants have terminated that Committee and have purported to replace it with a "Special" Committee whose members are selected by Defendants.
76. Prior to the present controversy, Medical Staff meetings had been held on the Hospital’s grounds with the Hospital’s concurrence and with support services from Hospital employees. Since November, 2002, Defendants have prevented the MSEC from conducting its meetings on the Hospital grounds and have prevented the Standing Committees of the Medical Staff designed to promote and ensure quality from meeting on the Hospital grounds as well. Thus, the regular functioning of the Medical Staff has been disrupted and its statutorily-mandated activities have been impaired by the actions of Defendants, to the potential detriment and harm of patients.
77. Since November, 2002, Defendants have prevented the general Medical Staff from meeting as a whole on the Hospital grounds. The MSEC and the Medical Staff have attempted to continue to perform their lawful functions and have held meetings off the Hospital campus for that purpose. Defendants have acted to thwart such meetings, and have refused to recognize their validity.
78. Since the November, 2002 election of the independent Medical Staff leaders, Defendants have interfered with the Medical Staff’s keeping of minutes of its meetings and meetings of its Departments and Committees.
79. Since the November, 2002 election, Defendants have prevented the Medical Staff, its Departments and Committees from meeting on the Hospital campus.
80. Since November, 2002, Defendants have unilaterally created a “Code of Conduct” which purports to remove from the Medical Staff its authority over Medical Staff disciplinary proceedings and to transfer power to the Board so as to unilaterally take disciplinary action against physicians. The Code of Conduct is vague, overbroad and susceptible to arbitrary and capricious application.
81. The Code of Conduct violates the Medical Staff Bylaws and interferes with the responsibility of the Medical Staff to govern the conduct of its members.
82. Since November, 2002, Defendants have adopted a “Conflict of Interest” statement and have unilaterally mandated that this document must be signed in order for a member physician to vote as a Medical Staff member or to be elected to Medical Staff office. This Statement was sent to Drs. Hill, Brantner and Small, among others. The Statement purports to make “ineligible” from Medical Staff office, service, and even voting, Medical Staff members who have even an insubstantial ownership interest in any entity engaged in any business deemed by Defendants to be “competing” with the Hospital.
83. On behalf of the entire Medical Staff, the attorneys hired by the Medical Staff objected to the Conflict of Interest statement as being unlawful. Despite such objection, Defendants have purported to disenfranchise Drs. Hill, Dr. Brantner, Dr. Small and others from leadership positions based upon failure to sign the unlawful Statement.
84. In or about May, 2003, Defendants purported to appoint and empower a new “Medical Staff Executive Committee.” The purported new Medical Staff Executive Committee was not established pursuant to the applicable provisions of the Medical Staff Bylaws or California law and violates JCAHO standards. Said Medical Staff Executive Committee lacks any lawful authority.
85. In or about May, 2003, Defendants purported to appoint new Medical Staff Officers, in violation of the Medical Staff Bylaws, California law and JCAHO Standards. Said Officers lack any lawful authority.
I.
FIRST
CAUSE OF ACTION FOR DECLARATORY RELIEF
REGARDING
DIRECT UNILATERAL BYLAW AMENDMENTS
[Against All Defendants--Code Civ. Proc. § 1060]
86. Plaintiff repeats and repleads and incorporates by reference those allegations set forth at paragraphs 1 through 85, supra.
87. An actual controversy has arisen between and among the parties hereto. Plaintiff Medical Staff contends that the aforesaid conduct of the Defendants, and each of them, by directly and unilaterally amending the Medical Staff Bylaws, violates California law and administrative regulations as well as JCAHO standards and that said unilateral amendments are unlawful and a nullity.
88. The Defendants, and each of them, contend that they are authorized to unilaterally amend the Medical Staff Bylaws when they deem it necessary.
89. Plaintiff Medical Staff therefore seeks a declaration of the respective rights and duties of the parties, including, but not limited to a declaration that Defendants have no right of unilateral amendment of the Medical Staff Bylaws and Rules and Regulations, and that all such amendments are a nullity.
SECOND
CAUSE OF ACTION FOR DECLARATORY RELIEF
REGARDING
INDIRECT UNILATERAL BYLAW AMENDMENTS AND BYLAW VIOLATIONS
[Against All Defendants--Code Civ. Proc. § 1060]
90. Plaintiff repeats and repleads and incorporates by reference those allegations set forth at paragraphs 1 through 89, supra.
91. Plaintiff contends that the conduct of the Defendants, and each of them, as alleged herein, including, but not limited to, adopting the policies which the Defendants refer to as the Code of Conduct and the Conflict of Interest Policy, appointing Medical Staff Officers, Committee members, Departmental Chairmen, and performing activities assigned to the Medical Staff by the Medical Staff Bylaws, constitute indirect unilateral Bylaw amendments or otherwise violate the Medical Staff Bylaws.
92. Defendants, and each of them, contend that they are empowered to take the aforesaid actions when they independently deem such actions necessary.
93. Plaintiff Medical Staff therefore seeks a declaration of the respective rights and duties of the parties including, but not limited to a declaration that all such indirect amendments and violations of the Medical Staff Bylaws and Rules and Regulations, are a nullity and that the Code of Conduct and Conflict of Interest policies are void and unenforceable against members of the Medical Staff.
THIRD
CAUSE OF ACTION FOR DECLARATORY RELIEF
REGARDING
INTERFERENCE WITH ELECTIONS AND RECALL OF OFFICERS
[Against All Defendants--Code Civ. Proc. § 1060]
94. Plaintiff repeats and repleads and incorporates by reference those allegations set forth at paragraphs 1 through 93, supra.
95. Plaintiff Medical Staff contends that the conduct of the Defendants, and each of them, as herein alleged, including, but not limited to, attempting to alter the mechanisms by which the Medical Staff election of November 2002 was conducted, refusing to recognize the elected leaders of the Medical Staff, purporting to remove the elected Officers of the Medical Staff, purporting to remove members of the MSEC elected by the Medical Staff, and purporting to appoint individuals chosen by Defendants, all constitute actions in violation of California law and regulation and the JCAHO standards and are therefore unlawful and a nullity.
96. Defendants, and each of them, contend that they are empowered to take each of the actions alleged herein.
97. Plaintiff Medical Staff therefore seeks a declaration of the respective rights and duties of the parties including, but not limited to a declaration that the duly elected Officers of the Medical Staff are entitled to hold their respective positions and avail themselves fully of the powers granted to them by the Medical Staff Bylaws and Rules and Regulations.
FOURTH
CAUSE OF ACTION FOR DECLARATORY RELIEF
REGARDING
INTERFERENCE WITH SELECTION AND DUTIES OF DEPARTMENT CHAIRMEN
[Against All Defendants--Code Civ. Proc. § 1060]
98. Plaintiff repeats and repleads and incorporates by reference those allegations set forth at paragraphs 1 through 97, supra.
99. Plaintiff Medical Staff contends that the actions of the Defendants, and each of them, as herein alleged, including, but not limited to, removing Departmental Chairmen, replacing Departmental Chairmen, precluding Departmental Chairmen from conducting chart reviews, precluding Departmental Chairmen from holding Departmental meetings at the Hospital and circumventing the responsibilities of the Department Chairmen in reviewing, privileging and credentialing matters, constitute unlawful violations of California law and regulation and the JCAHO standards and are therefore unlawful and a nullity.
100. Defendants, and each of them, contend that they are empowered to take such actions.
101. Plaintiff Medical Staff therefore seeks a declaration of the respective rights and duties of the parties including, but not limited to a declaration that the Department Chairmen duly elected in accordance with the Medical Staff Bylaws are the only ones that may serve in such positions, and are thereby entitled to hold their respective positions and avail themselves fully of the powers granted them in the Medical Staff Bylaws and Rules and Regulations.
FIFTH
CAUSE OF ACTION FOR DECLARATORY RELIEF
REGARDING
INTERFERENCE WITH APPOINTMENT AND REAPPOINTMENT OF MEDICAL STAFF MEMBERS
[Against All Defendants--Code Civ. Proc. § 1060]
102. Plaintiff repeats and repleads and incorporates by reference those allegations set forth at paragraphs 1 through 101, supra.
103. Plaintiff Medical Staff contends that the conduct of the Defendants, and each of them, as alleged herein, including, but not limited to, the purported granting of Medical Staff membership without the review or recommendation of the Medical Staff, the purported review of applications for reappointment without the participation of the Medical Staff, the purported granting of reappointment and denial of reappointment without the participation of the Medical Staff, are in violation of California law and regulation and the JCAHO standards and are therefore unlawful and a nullity.
104. Defendants, and each of them, contend that they are empowered to take the alleged actions.
105. Plaintiff Medical Staff therefore seeks a declaration of the respective rights and duties of the parties with respect to the initial granting and reappointment of Medical Staff membership.
SIXTH
CAUSE OF ACTION FOR DECLARATORY RELIEF
REGARDING
INTERFERENCE WITH ROLE OF MEDICAL STAFF IN PRIVILEGING AND CREDENTIALING
MEDICAL STAFF MEMBERS
[Against All Defendants--Code Civ. Proc. § 1060]
106. Plaintiff repeats and repleads and incorporates by reference those allegations set forth at paragraphs 1 through 105, supra.
107. Plaintiff contends that the actions of Defendants as alleged herein, including, but not limited to, the purported review of the qualifications and the granting of clinical privileges without the participation of the Medical Staff, the purported granting of temporary privileges without the review and participation of the Medical Staff and the use of “telemedicine” medical services without the review and participation of the Medical Staff constitute violations of California law and regulation and the JCAHO standards and are therefore unlawful and a nullity.
108. Defendants, and each of them, contend that they are empowered to take such actions.
109. Plaintiff Medical Staff therefore seeks a declaration of the respective rights and duties of the parties with respect to the initial and ongoing credentialing of, and the granting and reappointment of clinical privileges to, Medical Staff members and those eligible to become Medical Staff members.
VII.
SEVENTH
CAUSE OF ACTION FOR DECLARATORY RELIEF
REGARDING
INTERFERENCE WITH MEDICAL STAFF ROLE IN PERFORMANCE IMPROVEMENT ACTIVITIES
[Against All Defendants--Code Civ. Proc. § 1060]
110. Plaintiff repeats and repleads and incorporates by reference those allegations set forth at paragraphs 1 through 109, supra.
111. Plaintiff Medical Staff contends that the conduct of the Defendants, and each of them, as alleged herein, including, but not limited to, the establishment of a Board Quality Improvement Committee and the review of quality issues therein in circumvention of the Medical Staff processes outlined in the Medical Staff Bylaws constitutes a violation of California law and regulation and a violation of the JCAHO standards and is therefore unlawful and a nullity.
112. Defendants, and each of them, contend that they are empowered to take such actions.
113. Plaintiff Medical Staff therefore seeks declarations of the respective rights and duties of the parties with respect to performance improvement activities.
EIGHTH
CAUSE OF ACTION FOR DECLARATORY RELIEF
REGARDING
INTERFERENCE WITH MEDICAL STAFF RIGHTS TO SELF-GOVERNANCE
[Against All Defendants--Code Civ. Proc. § 1060]
114. Plaintiff repeats and repleads and incorporates by reference those allegations set forth at paragraphs 1 through 113, supra.
115. Plaintiff Medical Staff contends that the actions of the Defendants, and each of them, as alleged herein, constitute violations of the Medical Staff’s right to self-governance in violation of California law and regulation and JCAHO standards and are therefore unlawful.
116. Defendants, and each of them, contend that they are empowered to take each of said actions.
117. Plaintiff Medical Staff therefore seeks declarations of the respective rights and duties of the parties including a declaration that it has, at minimum, the following rights: To meet on Hospital grounds in any meeting duly called as authorized by the Medical Staff Bylaws; to control the nature and content of meeting agendas; to prepare and finalize minutes of any and all meetings of the Medical Staff as a whole and any of its Departments and Committees; to determine who shall and shall not attend such meetings consistent with the requirements of the Medical Staff Bylaws; to determine when it shall retain independent legal counsel and arrange therefor, and accept, act upon and communicate such attorney's advice as it deems necessary; to elect and remove Medical Staff Officers; to elect and remove Department Chairmen; to initiate, develop and adopt Medical Staff Bylaws and Rules and Regulations; to establish and enforce criteria and standards for Medical Staff membership; to establish patient care standards; to control its Treasury; and otherwise to perform those functions set forth in the Medical Staff Bylaws and Rules and Regulations, California law and regulations, and JCAHO standards, without hindrance or interference by Defendants.
IX.
[Civ. Code §§ 1712, 3336--Against All Defendants]
118. Plaintiff repeats and repleads and incorporates by reference those allegations set forth at paragraphs 1 through 117, supra.
119. Pursuant to duly-adopted written policies and procedures of the Medical Staff, effective November 4, 1991, revised February 4, 1992, Plaintiff Medical Staff was required to, and did, impose annual Medical Staff membership fees and other fees upon its approximately 240 member physicians. Such funds are hereinafter referred to as the “Membership Dues.”
120. The Membership Dues were deposited to a bank account maintained and controlled by Plaintiff Medical Staff which contained dues, donations, assessments and other payments and which was utilized for the purpose of inter alia, payment of recurring and special obligations of Plaintiff Medical Staff.
121. At all times herein mentioned, the account constituted the lawful property of Plaintiff Medical Staff.
122. Pursuant to Code of Civil Procedure section 663, the account is presumptively the legal property of Plaintiff Medical Staff and such presumption may be overcome only by clear and convincing proof to the contrary.
123. At all times herein mentioned, Plaintiff Medical Staff, acting by and through its duly constituted and elected MSEC, had the discretion to collect and expend the funds in the account.
124. On or about January, 2003, the Defendants, without any prior notice to Plaintiff Medical Staff wrongfully took possession of the account.
125. Said taking by Defendants constitutes a conversion of the funds of Plaintiff Medical Staff within the meaning of Civil Code sections 1712 and 3336.
126. By virtue thereof, Plaintiff Medical Staff
has been damaged in a sum according to proof, and is entitled to the value of
the property at the time of the conversion, to interest from that time, and to
a fair compensation for the time and money properly expended in pursuit of the
property. (Civ. Code § 3336(b).)
WHEREFORE, Plaintiff Medical Staff prays for judgment at follows:
1. For the First through Eighth Causes of Action for Declaratory Relief:
(a) for a declaration of the respective rights and duties of the parties as prayed.
(b) for the attorneys’ fees according to proof;
2. For the Ninth Cause of Action for Conversion:
(a) for the value of the property converted at the time of the conversion;
(b) for interest from the time of the conversion; and
(c) for costs incurred as fair compensation for the time and money properly expended in pursuit of the property.
3. For All Causes of Action:
(a) for costs of suit herein incurred; and
(b) for such other and further relief as the Court may deem to be just and proper under circumstances.
Dated: September 8, 2003 Respectfully submitted,
BondCurtis llp
By: _____________________________
Tom Curtis
Attorney for Plaintiff,
THE MEDICAL STAFF OF COMMUNITY MEMORIAL HOSPITAL OF SAN BUENAVENTURA