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Lowe v. Zarghami

June 07, 1999

LINDA C. LOWE AND THOMAS LOWE, WIFE AND HUSBAND, PLAINTIFFS-RESPONDENTS,
v.
FARAMARZ C. ZARGHAMI, M.D., DEFENDANT-APPELLANT, AND KENNEDY MEMORIAL HOSPITAL, JOHN DOE, HENRY DOE, MICHAEL DOE, JAMES DOE, FRANCIS DOE, RICHARD DOE, STEPHEN DOE, LOUIS DOE, MARK DOE AND CHARLES DOE, DEFENDANTS.



The opinion of the court was delivered by: Garibaldi, J.

Argued November 30, 1998

On appeal from the Superior Court, Appellate Division, whose opinion is reported at 305 N.J. Super. 90 (1997).

The basic issue in this case, as in Eagan v. Boyarsky, ___ N.J. ___ (1999), also decided today, is whether a clinical professor employed by the University of Medicine and Dentistry of New Jersey ("UMDNJ"), who practices medicine in a UMDNJ affiliated private hospital, is a public employee entitled to notice under the Tort Claims Act, N.J.S.A. 59:1-1 to -14.4 ("TCA").

I.

A. The Medical Malpractice Claim

On September 7, 1994, plaintiff, Linda Lowe, who was seeking treatment for cervical cancer, was referred to Dr. Zarghami by her personal physician. She saw Dr. Zarghami on two occasions in his office. On September 26, 1994, Dr. Zarghami performed a hysterectomy and a lymphadenectomy on Lowe at Kennedy Memorial Hospital-Stratford Division ("KMH"). At least two medical residents were present in the operating room. A week after her release from the hospital, Lowe experienced severe pain in her lower right back and had difficulty urinating. An x-ray revealed an obstruction to Lowe's right distal ureter. The obstruction, a metallic clip apparently left on Lowe's ureter after her hysterectomy, was removed by Dr. Jerome Pietras in December 1994. Approximately two days after that surgery, Lowe claims that Dr. Zarghami called and informed her the urologist found a metallic clip in her body. He also allegedly indicated the clip would not cause any problems.

Lowe had further surgery in January of 1995, so that Dr. Pietras could remove a plastic stent he had used to keep Lowe's ureter open. On February 2, 1995, Lowe was admitted to the KMH emergency room, and diagnosed with a urinary tract infection. In May 1995, doctors discovered hydronephrosis of Lowe's right kidney. Lowe returned to KMH in August 1995, and was diagnosed with a stricture of the right distal ureter. She underwent another operation. After an unidentified medical resident told Lowe that her problems may have resulted from poor medical care, she contacted an attorney. The attorney investigated the medical records, and informed Lowe in December 1995 that she might have a valid malpractice claim. The merits of the underlying claim are not at issue.

B. Defendant's Employment with UMDNJ

In 1983, Dr. Faramarz Zarghami became an Assistant Professor of Clinical Obstetrics and Gynecology of the University of Medicine and Dentistry of the State of New Jersey. Dr. Zarghami's employment is not evidenced by a formal written contract, but rather by two letters verifying his appointment as an Associate Professor. The letter regarding his reappointment as Assistant Professor of Clinical Obstetrics and Gynecology sets forth the duration of the appointment, the job level, and the status of his salary.

UMDNJ is a public entity entitled to the protection of the Tort Claims Act. UMDNJ enters affiliation agreements with private hospitals so that UMDNJ faculty, like defendant, may treat patients and instruct medical students in affiliated hospitals. Such affiliation agreements are provided for by statute. See N.J.S.A. 18A:64G-2. The affiliations provide places for UMDNJ to operate its faculty practice plans. Those faculty practice service plans, designed to complement the policies and development of UMDNJ, are intended to attract patients for teaching purposes, supplement faculty salaries, establish UMDNJ as a patient referral source, and allow UMDNJ faculty to retain and refine their clinical skills.

KMH, a private hospital, entered into an affiliation agreement with UMDNJ that required Dr. Zarghami to work at KMH in accordance with a faculty practice plan. Under that Agreement UMDNJ provided Dr. Zarghami with an office and office staff, in a building that the University either owned or leased, and arranged for him to have staff privileges at KMH. The University also billed for all patient treatment provided by Dr. Zarghami, and Dr. Zarghami's sole compensation consisted of an annual salary paid to him by UMDNJ. The University issued a W-2 Tax Form for Dr. Zarghami. UMDNJ participated in KMH's peer review committee, and the Chief of Obstetrics and Gynecology at KMH was also a UMDNJ employee.

Operating room activities, however, were governed by KMH procedures, and KMH provided the equipment, attending nursing staff, and anesthesiologist for the surgery. Under the affiliation agreement, UMDNJ billed plaintiff for all patient treatment provided by Dr. Zarghami, and KMH billed plaintiff for her hospitalization. Plaintiff's insurer paid those bills. Plaintiff claims that she never saw the bill from UMDNJ for her surgery because her medical bills were handled by her insurance company.

At the time of plaintiff's surgery, three classes of obstetrics and gynecology physicians practiced at KMH: (1) university doctors; (2) care source doctors, who are employed by the hospital; and (3) outside physicians in private practice.

Prior to Lowe's surgery, Dr. Zarghami met with Lowe in his office. The office building's sign indicates that it is a part of UMDNJ. Dr. Zarghami typically wears a badge indicating his affiliation with UMDNJ; however, he could not recall wearing the badge during his meeting with Lowe. Dr. Zarghami testified that the University requires him to disclose his faculty status to all potential patients, but he did not remember discussing his employment status with Lowe. Plaintiff, who worked as a nurse at KMH, claims in a signed affidavit that she was at all times unaware of defendant's employment relationship with UMDNJ.

C. Procedural History

Lowe filed a malpractice complaint against Dr. Zarghami and KMH on February 8, 1996. Dr. Zarghami delivered a copy of the complaint to UMDNJ on March 4. On April 19, 1996, Dr. Zarghami filed a motion to dismiss based on his status as a UMDNJ employee and Lowe's failure to provide notice within 90 days of the accrual of the claim as required by the Tort Claims Act. The court denied Dr. Zarghami's motion.

On July 19, 1996, Lowe filed a motion for leave to file a late notice of claim pursuant to N.J.S.A. 59:8-9 of the TCA. That section permits a court to allow a plaintiff to file a late notice of a claim under "extraordinary circumstances," if the motion is made within one year of the accrual of the claim. Alternatively, Lowe argued that Dr. Zarghami was not a state employee within the meaning of the Tort Claims Act. The court denied that motion, concluding that Lowe's claim accrued in December 1994, when she became aware that a foreign object had been left in her body after the surgery. As a result, the motion had not been made within one year of the accrual of the claim. The court observed that even if the claim had not accrued until August 1995, this case did not present the extraordinary circumstances required to justify a late notice of claim.

Lowe sought partial reconsideration of the court's decision, asking the court to review again whether Dr. Zarghami was a state employee entitled to the protection of TCA. Dr. Zarghami moved for summary judgment. After a hearing, the court again denied the motion to file a late notice of a claim. On that same day, Dr. Zarghami's motion for summary judgment was granted.

Lowe sought interlocutory review of the order granting summary judgment, again contending that Dr. Zarghami was not a state employee. The Appellate Division granted interlocutory review and concluded that because Dr. Zarghami did not act under the control of UMDNJ when he operated on Lowe at KMH, a non-state institution, he acted as an independent contractor. Lowe v. Zarghami, 305 N.J. Super. 90, 97 (1997). Because the Tort Claims Act does not require a plaintiff to provide notice to the State's independent contractors, the court reversed summary judgment and remanded for trial. The court did not reach the question of extraordinary circumstances, because it concluded that Dr. Zarghami was not a public employee.

The Attorney General assumed responsibility for Dr. Zarghami's defense and filed a motion for leave to appeal the interlocutory order of the Appellate Division to this Court. The sole issue presented by that appeal was whether Dr. Zarghami was a state employee entitled to the protection of the TCA. Plaintiff did not file a cross-appeal. We granted defendant's motion for leave to appeal.

II.

A. The TCA

UMDNJ is a public entity entitled to immunity under the Tort Claims Act. See Fuchilla v. Layman, 109 N.J. 319, 330-31, cert. denied sub. nom., University of Medicine and Dentistry of New Jersey v. Fuchilla, 488 U.S. 826, 109 S. Ct. 75, 102 L. Ed.2d 51 (1988). As initially enacted in 1972, the TCA did not extend immunity to public employees, nor were they protected by the notice requirements contained in the Act. However, in 1994 in response to this Court's ruling in Chatman v. Hall, 28 N.J. 394 (1992), that held that the notice requirements of the TCA are not applicable to actions brought against public ...


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