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Patel v. Soriano

May 18, 2004


On appeal from Superior Court of New Jersey, Law Division, Essex County, Docket No. L-10978-99.

Before Judges Carchman, Wecker and Weissbard.

The opinion of the court was delivered by: Carchman, J.A.D.


Argued January 28, 2004

Plaintiff Kumar A. Patel, M.D., a board certified surgeon with a subspecialty in vascular surgery, sought vascular surgical privileges at defendant Irvington General Hospital (IGH). According to plaintiff, defendant Jaime R. Soriano,*fn1 M.D., the chief of vascular surgery at IGH,*fn2 sabotaged plaintiff's application and communicated false statements about plaintiff to other members of IGH's medical staff - all to continue his own monopolistic control over IGH's vascular surgery department. As a result, plaintiff filed an action in the Chancery Division, seeking equitable relief as well as damages for both Soriano's and IGH's misconduct.

Following an extended bench trial after transfer to the Law Division, the trial judge found in favor of plaintiff and concluded that both IGH and Soriano had defamed plaintiff and had tortiously interfered with plaintiff's reasonable expectation of economic advantage. In addition, she found that Soriano had violated the New Jersey Antitrust Act, N.J.S.A. 56:9-1 to -19. The judge awarded joint and several damages including prejudgment interest and costs of $1,195,377.61 against IGH and Soriano, and $1,184,316.25, including prejudgment interest and costs, against Soriano individually. The judge dismissed plaintiff's breach of contract claim and concluded that IGH was immune from antitrust liability. Both defendants appeal and plaintiff cross-appeals.

We reach the following conclusions:

1) the trial judge's finding of liability for tortious interference was correct and is affirmed;

2) the judge's factual findings support a cause of action for trade libel rather than defamation and a judgment of liability for the former cause of action shall be entered on remand;

3) the judgment for liability and damages for antitrust violations is reversed;

4) the matter shall be remanded for reconsideration of damages on the causes of action for tortious interference and trade libel as well as punitive damages;

5) the cross-appeal is dismissed;

6) in all other respects the judgment is affirmed.


After completing his medical training, plaintiff ultimately became board certified in both general and vascular surgery. In 1984, plaintiff was named chief of vascular surgery at Metropolitan Hospital, an 800-bed hospital in New York City where among his other duties, he oversaw Metropolitan's vascular laboratory. During his years of practice, plaintiff served as an associate professor of surgery at a medical college, was a member of several medical societies, authored numerous publications, served as a consultant to various insurance companies, and participated in numerous symposia and presentations to the medical profession.

Plaintiff became licensed to practice medicine in New Jersey in 1992. At that time, he decided to leave Metropolitan because of the perceived need to start a private practice in anticipation of his three children going to college. In 1993, plaintiff applied for and was granted attending physician privileges at Mountainside Hospital, St. Joseph's Hospital, and Wayne General Hospital, all in New Jersey.

In February 1995, at the urging of a medical colleague, Dr. Shirish Patrawalla, plaintiff applied for vascular surgical privileges at IGH. Patrawalla, a cardiologist at IGH, felt that IGH needed a vascular surgeon and told plaintiff that other doctors at IGH shared this belief. Plaintiff claimed that Patrawalla told him that he could expect to perform thirty to forty percent of the vascular surgery procedures at IGH.

However, Patrawalla also warned him to expect resistance from defendant, the chair of vascular surgery at IGH. Although he was not board certified in vascular surgery, defendant performed virtually all of IGH's vascular surgery procedures and maintained significant influence at the hospital through his membership on various committees and the board of trustees. Plaintiff decided to apply for privileges at IGH because he realized that he needed more than one hospital in which to develop his practice in vascular surgery and IGH appeared to be a promising opportunity for such development.

In plaintiff's IGH application, he listed four references - Dr. Roy Clauss, plaintiff's surgical colleague and immediate predecessor as chief of vascular surgery at Metropolitan; Dr. Herbert Dardik, a nationally renowned vascular surgeon at Englewood Hospital who was professionally acquainted with plaintiff; Dr. Kamalakar Ayyagari, on staff at IGH, but with whom plaintiff had never worked; and Patrawalla. All of these individuals wrote favorable letters of recommendation supporting plaintiff's application. No one from IGH informed plaintiff that his references were deficient.

Janice Nemeckay, IGH's director of medical staff affairs, oversaw the compilation of documents that comprised a doctor's application for medical staff privileges and would be reviewed by the various levels of peer review at the hospital. She contacted both the New Jersey Board of Medical Examiners and the New York Division of Professional Licensing Services and determined that plaintiff was a doctor in good standing in both states with no derogatory information reported. Nemeckay also reached out to every hospital where plaintiff had privileges as of February 1995. As part of plaintiff's application, he had signed releases which allowed IGH to obtain information about him from third parties. These releases all contained the following language:"You are hereby requested and authorized to furnish, make available and release to Irvington General Hospital, its medical staff and their authorized representatives all information concerning professional competence, ethics, character, and other qualifications relevant to my application for medical staff appointment and clinical privileges."

Dr. Francis Wyckoff, the head of surgery at Mountainside, completed the confidential evaluation form for plaintiff. Mountainside did not have a separate section for, or a separate director of, vascular surgery. Because plaintiff had been at Mountainside for less than two years when Wyckoff reviewed him, he was still under supervision at that hospital, a standard practice at most institutions. Wyckoff rated plaintiff"superior" in every category except one, in which he rated plaintiff"good." Wyckoff recommended"without reservation" that plaintiff be granted privileges at IGH"with supervision and observation as required in Irvington General's Dept. of Surgery." His impression of plaintiff was"favorable."

Dr. Joseph Farrell, a general surgeon and the acting chairman of surgery at St. Joseph's at the time of plaintiff's application to IGH, rated plaintiff"good" in all categories. Farrell considered plaintiff a"capable" applicant and recommended him for privileges"without reservation." The surgical department chair at Wayne General was unable to comment on plaintiff's application because plaintiff had little or no surgical activity at that hospital.

Dr. William Stahl, the chief of surgery at Metropolitan, also completed an evaluation form for plaintiff, rating plaintiff"superior" in all categories. Stahl considered plaintiff an"excellent individual and surgeon" and recommended him without reservation.

According to Nemeckay, plaintiff's completed application was referred to Dr. Capistrano Luzano, the director of the department of general surgery at IGH, for his recommendation. Luzano noted on his recommendation to the credentials committee that the"record speak[s] for itself" and elected not to interview plaintiff.

This seemingly routine processing of plaintiff's application appeared on track when plaintiff met with defendant who, as chair of the surgery division and the director of vascular surgery, was next to review plaintiff's file.*fn3 He interviewed plaintiff on June 13, 1995, the same day he reviewed the file. Plaintiff claimed that the interview was brief and defendant did not discuss plaintiff's references.

Defendant considered the interview to be cordial and uneventful and gave no indication that the application was deficient in any way. However, he wrote a letter to Patrawalla, the chairman of the credentials committee, asking that the committee postpone its interview of plaintiff since defendant was still obtaining information.

On June 29, 1995, Nemeckay notified plaintiff that his file was complete and that he would be interviewed by the credentials committee on July 12, 1995. On July 12, 1995, when plaintiff met with the committee, Patrawalla handed him a letter dated July 11, 1995, from defendant. According to this letter, which was addressed to plaintiff, defendant asked plaintiff to send him a list of all the surgical cases he had performed since September 1993. Plaintiff was also asked to include the following information: the patient's name, pre-and post- operative diagnosis, date and type of procedure performed, and any complications or mortality. The list was to be certified by the chief of vascular surgery or general surgery at the appropriate institution. The credentials committee informed plaintiff that defendant, not the committee, was requesting the information. The committee meeting minutes for July 12, 1995, stated that there was nothing adverse in plaintiff's file and that defendant had requested the delay in recommendation until the additional information was received. The committee agreed with plaintiff that defendant's request for two years' worth of information was"highly unusual."

Plaintiff felt that it would have taken an exhaustive effort to comply with defendant's request, since he would have had to pull each individual patient's chart and there were over one hundred cases at issue. Also, plaintiff concluded that defendant had not complied with IGH's own credentialing procedures since any deferral by a division chair had to be accompanied by a notice in writing to the applicant, stating the reasons for the deferral. Defendant's letter of July 11, 1995, did not inform plaintiff why the additional information was needed.

On July 13, 1995, the medical executive committee (MEC), including defendant, who was a member, met at IGH. According to the minutes of this meeting, there was a"lengthy discussion" regarding the appropriateness of defendant's"laborious request," given the lack of any negative credentials in plaintiff's file. Also, these minutes noted that defendant"elaborated on certain information received verbally (i[.]e.[,] high mortality rate and unsuccessful aneurysm surgery), which caused him to request such surgical information." No action was taken on plaintiff's application.

According to defendant, after his interview with plaintiff in June, he again reviewed plaintiff's application. Certain matters prompted his attention, such as plaintiff's failure to name as a reference any vascular surgeon at a hospital where he currently had privileges. Also, defendant saw no reference from the director of vascular surgery at Metropolitan.

Defendant wanted to ensure that no quality of care issues surrounded plaintiff's decision to leave Metropolitan. Although the chief of general surgery at Metropolitan, Stahl, had given plaintiff a very positive evaluation, he was not a vascular surgeon, and defendant specifically sought to talk to the director of vascular surgery at Metropolitan. Defendant claimed that he placed three phone calls to Metropolitan, looking for the head of vascular surgery, and that he never received a return call. Defendant did not write a letter, nor did he contact Clauss, the vascular surgeon who had been plaintiff's immediate predecessor as chief of that department. Defendant surmised, incorrectly, that plaintiff and Clauss had been associated together in practice. Defendant claimed that if he had obtained a positive recommendation from the current director of vascular surgery at Metropolitan, that would have been the"end of the story."

Also troubling to defendant was the fact that the positive evaluation given by Wyckoff was accompanied by a caveat that plaintiff be given privileges"with supervision and observation." In defendant's opinion, that caveat was a"red flag" even though such supervision and observation is standard practice at most hospitals for a newly admitted surgeon's first two years. Defendant did not, however, call Wyckoff for clarification.

Instead, defendant placed a call to the main switchboard at Mountainside and asked for the head of vascular surgery. He was directed to Dr. Donald C. Syracuse, someone with whom defendant was familiar on a professional, but not personal, basis.

Syracuse was a cardiothoracic surgeon who had privileges at Mountainside. About seventy-five percent of his practice was vascular surgery. He had never operated with plaintiff and had never seen him perform surgery.

According to defendant's contemporaneous handwritten notes of his conversation with Syracuse, which were later transcribed, Syracuse told defendant that: plaintiff had provisional status at Mountainside; plaintiff's mortality and morbidity rates were"higher than anyone else here"; plaintiff's first six aneurysm patients had complications and died; plaintiff's cases were discussed"almost every month" in mortality and morbidity conferences; and plaintiff should be asked to submit the cases he had done in the past one to two years. Syracuse declined defendant's request to put his comments in writing.

Defendant also placed a call to St. Joseph's and spoke to Dr. Nazmi Elrabie, the chief of vascular surgery. According to defendant's contemporaneous handwritten notes of that conversation, which were also later transcribed, Elrabie told defendant that plaintiff did not do much surgery at either St. Joseph's or Wayne General, and that most of his practice was at Mountainside. Elrabie also told defendant that plaintiff's privileges to read vascular lab studies at St. Joseph's were removed because he was"bad-mouthing" the three other doctors doing the readings, saying they"didn't know what they were doing."

At trial, Elrabie denied having said anything negative about plaintiff to defendant. He denied having said or implied that the decision to terminate plaintiff's lab privileges was because plaintiff"bad-mouthed" other doctors. Rather, Elrabie claimed that he told defendant only that a decision had been made by St. Joseph's surgical department's executive committee to require that doctors have their primary work at the hospital to be allowed to read the lab studies.

Armed with the information he claimed to have received from Syracuse and Elrabie, unable to reach the head of vascular surgery at Metropolitan, and having consulted with counsel for the hospital,*fn4 defendant drafted his letter of July 11, 1995, requesting the list of all of plaintiff's surgical cases performed since September 1993. Defendant admitted that this letter did not notify plaintiff of the reasons for the request or deferral of plaintiff's application.

At the MEC meeting on July 13, 1995, defendant was asked to state those reasons. Defendant claimed that he was reluctant to divulge that information since he had not yet had a chance to verify what he had heard. Nevertheless, defendant admitted that he read to the committee the substance of his notes of his conversations with both Syracuse and Elrabie, including Syracuse's allegations about plaintiff's high mortality and morbidity rates and that his first six aneurysm patients died, as well as Elrabie's allegation that plaintiff"bad-mouthed" other doctors.

Plaintiff considered defendant's request for the information about his surgical cases a"declaration of war." In plaintiff's view, he would have to either withdraw his application or seek legal redress. He chose the latter and retained a lawyer, who immediately sent a letter to the president of IGH, objecting to defendant's request. Plaintiff's lawyer also noted that defendant had not notified plaintiff of the reasons for the deferral. On September 22, 1995, plaintiff himself wrote to Dr. Mahesh Desai, the president of IGH's medical staff, to note his objection, among other things, to defendant's review of his application as being an"obvious conflict of interest."

On October 5, 1995, the MEC, including defendant, met again. According to the minutes of this meeting, an"error" was noted on the MEC minutes for July 13, 1995. Those minutes should have read only that:"[Defendant] reported that he is awaiting information regarding [plaintiff's] surgical procedures during the past two (2) years, prior to submitting a recommendation." Notably, this"correction" meant that all reference to the lengthy discussion about defendant's"laborious request" was deleted, as was any reference to the verbal information received by defendant regarding plaintiff's high mortality rate and unsuccessful aneurysm surgery.

At this October 5 meeting, defendant told the MEC that he had not yet received a response from plaintiff regarding his request and that he would elaborate on his reasons for the request in a letter to plaintiff - a letter dated October 25, 1995, which plaintiff received shortly thereafter.

In that letter, a copy of which defendant sent to Romeo Tiu, who had replaced Desai as president of IGH's medical staff, defendant told plaintiff that during his review of plaintiff's application, he learned that plaintiff held only a provisional appointment at Mountainside Hospital. Since plaintiff had been at that hospital for two years, defendant inquired as to whether plaintiff had yet been promoted to full attending. Also, in further discussions with the chief of vascular surgery at Mountainside, defendant learned that plaintiff's mortality and morbidity rates were higher than those of other doctors performing the same procedures and that plaintiff's cases were"consistently discussed almost every month." It was this information that prompted defendant to request the two-year list of plaintiff's cases, a request which defendant viewed as"prudent and not unreasonable."

Defendant also learned from the chief of vascular surgery at St. Joseph's that plaintiff's privileges to read non-invasive laboratory studies had been removed and defendant wanted to know the circumstances surrounding that removal. Finally, defendant sought clarification as to whether plaintiff sought privileges in general surgery or only vascular surgery.

Upon receipt of this letter, plaintiff noted several issues. First, Mountainside did not have a chief of vascular surgery. Second, plaintiff's mortality and morbidity rates were not higher than other doctors' rates, and plaintiff was unaware of any statistics that kept track of such information. Third, plaintiff's cases were not discussed"almost every month" at mortality and morbidity conferences. Prior to July 1995, plaintiff's cases had been discussed on only four occasions and at no time was a conclusion reached that plaintiff had provided inappropriate care.*fn5 Finally, plaintiff noted that St. Joseph's had decided, for economic reasons alone, to allow only those surgeons whose primary practices were at St. Joseph's to read laboratory studies. The decision did not affect plaintiff alone.

Plaintiff assumed that it was Syracuse who had spoken to defendant about plaintiff's practice at Mountainside, even though Syracuse was not chief of vascular surgery. According to plaintiff, Syracuse was"constantly" critical of him during mortality and morbidity conferences at Mountainside, often with no reasonable explanation and while ignoring basic surgical knowledge.

Plaintiff's attorney wrote to Syracuse, seeking verification of his statements to defendant, as reported by defendant. Syracuse responded in writing, telling plaintiff that he had been"misinformed" regarding the discussion he had with defendant. According to Syracuse, he told defendant to obtain a list of cases performed by plaintiff and their associated mortality and morbidity. He denied making the specific statements referenced in plaintiff's attorney's letter.

At trial, Syracuse contradicted defendant and claimed that his conversation with defendant was very brief. He denied having identified himself to defendant as the chief of vascular surgery at Mountainside. Syracuse admitted that he did not have any statistics regarding plaintiff's mortality and morbidity rates when he spoke to defendant and that he merely tried to convey an impression to defendant about plaintiff's performance. That is, he implied to defendant, truthfully, that plaintiff had more than a representative number of cases discussed at the mortality and morbidity conferences. Syracuse suggested to defendant that he obtain plaintiff's actual mortality and morbidity records or surgical logs. He admitted that the clear implication of this suggestion was that the records would reveal something negative about plaintiff, even though Syracuse was not aware of any instance where it had been found that plaintiff did not provide quality care. Syracuse denied telling defendant that plaintiff's first six aneurysm patients had died or that his cases were discussed every month. In fact, he denied discussing any specific cases with defendant. In essence, Syracuse refrained from making a judgment about plaintiff, and merely asked defendant to do his"homework" so he could make his own judgment. He also denied that defendant ever asked him to put his comments in writing.

Syracuse also claimed at trial, though he denied it at a prior deposition, that he had heard many negative comments about plaintiff's performance from other doctors and nursing supervisors at Mountainside. He also claimed that Wyckoff, the chief of surgery, verbally expressed doubts to Syracuse about plaintiff's competence, outside of the mortality and morbidity conferences. All of these comments were reflected in Syracuse's overall impression of plaintiff when he spoke to defendant.

Plaintiff also wrote to and received a response from Dr. David Bregman, the chief of surgery at St. Joseph's. According to Bregman, Elrabie had decided that only those surgeons who worked primarily at that hospital should be allowed to read non- invasive vascular laboratory studies. Since plaintiff worked primarily at Mountainside, he was asked to stop reading those studies. The decision was purely a financial one and had nothing to do with the quality of care provided by plaintiff, who Bregman noted had"exceptional qualifications and experience in vascular surgery."

Plaintiff sent the written responses of Syracuse and Bregman, along with other material, to Tiu. On December 14, 1995, Tiu wrote to defendant, asking that defendant submit his recommendation regarding plaintiff prior to the next MEC meeting, which was scheduled for January 11, 1996.

Throughout the first half of 1996, the MEC met monthly. At each of these meetings, no action was taken on plaintiff's application because it was noted that the file remained incomplete and could not be considered as plaintiff had failed to comply with defendant's request. During this entire period of time, plaintiff and his attorney were corresponding with Tiu, insisting that a decision be made on plaintiff's application.

On March 29, 1996, plaintiff received notification from Mountainside that he had been promoted to an associate attending physician and that all supervision and observation had been removed. This information was passed along to IGH.

On July 18, 1996, Tiu sent a letter to defendant, with a copy to plaintiff, asking that defendant have his final recommendation ready for the next MEC meeting. The MEC met as scheduled on September 5, 1996, at which time a letter written by defendant to Tiu on September 4, 1996, was considered. According to that letter, IGH tried to accommodate plaintiff by allowing an outside vascular surgeon to review his cases and reducing the number of cases he had to submit to those performed within the last one year, instead of two years. The MEC noted that plaintiff did not intend to comply with the modified request and ...

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