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Estate of Fazaldin v. Englewood Hospital & Medical Center

July 26, 2007

ESTATE OF PHUOC FAZALDIN, A/K/A KATHY FAZALDIN, DECEASED, BY RICHARD FAZALDIN, EXECUTOR OF THE ESTATE OF PHUOC FAZALDIN AND RICHARD FAZALDIN, MEERAFZAL FAZALDIN A/K/A MEER FAZALDIN, STEVEN FAZALDIN, FARIDAN FAZALDIN-WATKINS, A/K/A FARAH FAZALDIN-WITKINS, AND ELAINE FAZALDIN, INDIVIDUALLY, PLAINTIFFS-APPELLANTS,
v.
ENGLEWOOD HOSPITAL & MEDICAL CENTER, ROBERT STENSON, JR., M.D., ESTATE OF ROBERT STENSON, JR., M.D., RICHARD SALZER, M.D., ARNOLD J. FRIEDMAN, M.D., FAITH FRIEDEN, M.D., DANIEL KANE, M.D., AND S. HEDLEY, M.D., DEFENDANTS, AND BETH ISRAEL MEDICAL CENTER AND ALLAN JACOBS, M.D., DEFENDANTS-RESPONDENTS.



On appeal from the Superior Court of New Jersey, Law Division, Bergen County, L-3572-02.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued November 9, 2006

Before Judges Stern, Collester and Sabatino.

Phuoc (also known as "Kathy") Fazaldin died as the result of excessive bleeding during the course of a radical hysterectomy performed upon her by a surgeon at Englewood Hospital & Medical Center ("Englewood Hospital" or "Englewood") in May 2000. Her estate and survivors sued the surgeon, Englewood Hospital and various other defendants, including respondents Beth Israel Medical Center ("Beth Israel") and Allan Jacobs, M.D., former chief of obstetrics and gynecology at Beth Israel.*fn1 Plaintiffs' theory against Beth Israel and Dr. Jacobs was that those defendants had improperly failed to disclose the surgeon's poor performance while he was employed at Beth Israel before he severed that relationship and joined the attending staff at Englewood.

After plaintiffs settled with the other defendants before the trial, a jury verdict was rendered, finding that Beth Israel had negligently misrepresented the surgeon's record to Englewood Hospital, but that the misrepresentation had not been a proximate cause of Kathy Fazaldin's death. The jury found no negligence, however, on the part of Beth Israel or Dr. Jacobs.

We remand the matter for an evidentiary hearing, pursuant to N.J.R.E. 104, because of potential errors in the jury instructions that could have had the substantial capacity to produce an unsound result.

I.

On May 22, 2000, Robert Stenson, Jr.,*fn2 a gynecological oncologist, performed an exploratory laparotomy and radical abdominal hysterectomy at Englewood Hospital on fifty-two-year-old Kathy Fazaldin, who had been diagnosed with cervical cancer. After fifteen hours of surgery, Fazaldin bled to death on the operating table. The parties stipulated that before her fatal operation, Fazaldin had an eighty-five percent or greater chance of attaining a complete cure of cancer and a ninety-nine percent chance of surviving the surgery. They also stipulated that Dr. Stenson was negligent in the manner that he performed the surgery and that his negligence was a cause of Fazaldin's death.

Beth Israel is a teaching hospital in Manhattan. At the times in question, Dr. Jacobs, a gynecological oncologist, was the chair of its Department of Obstetrics and Gynecology ("ob/gyn"). He also administered the teaching, residency and medical student programs and was a full clinical professor of ob/gyn at Mount Sinai College of Medicine, which was affiliated with Beth Israel. In 1993, Dr. Jacobs recruited Dr. Stenson to work at Beth Israel on clinical and educational assignments.

Meanwhile, Englewood Hospital in 1993 wanted to build its own gynecological oncology department. It consequently entered into an affiliation agreement with Beth Israel. Dr. Stenson thereby became an affiliate member of Englewood Hospital, and he performed surgeries at both Englewood and Beth Israel.

In 1995 Dr. Stenson adopted a new surgical philosophy and started doing "aggressive" surgery in palliative cases, which Dr. Jacobs thought was not necessary. Dr. Stenson started to be very late for surgery and often failed to attend his rounds with residents. By 1996, Dr. Stenson's operating times were getting longer. According to Dr. Jacobs, he was doing "absolutely nothing academically," indicating that he was not attempting any research.

Dr. Jacobs then noticed billing issues with Dr. Stenson that he perceived were the result of either "irresponsibility or negligence." Their relationship became strained when Dr. Jacobs began to suspect that Dr. Stenson was diverting patients with "lower paying" insurance to Dr. Jacobs and retaining the patients who had better insurance for himself.

In mid-1996 Dr. Jacobs instituted a "four-hour rule" for his department, specifying that if a procedure was not "closing" within four hours, the doctor had to request assistance from another doctor. The new rule applied to all of the ob/gyns, including Dr. Jacobs himself, and continued after Dr. Stenson eventually left Beth Israel.

By the summer of 1996, Dr. Jacobs wanted to terminate Dr. Stenson, regarding him, in Dr. Jacobs's words, as an "administrative nightmare." However, because Dr. Stenson was African-American, Dr. Jacobs feared that he would file a discrimination lawsuit if he were terminated. Therefore, Dr. Jacobs spent the next several months documenting Dr. Stenson's problems. He started that process in August 1996 by writing a critical memorandum to Dr. Stenson's file and then a letter to Dr. Stenson outlining his inadequacies.

In December 1996, Dr. Jacobs consulted with Beth Israel's general counsel about his concerns relating to Dr. Stenson. As a result, Dr. Jacobs wrote a draft letter detailing Dr. Stenson's inadequacies, telling him that if he did not resign, he would be terminated from his full-time staff position. Dr. Jacobs circulated the draft among members of the hospital administration.

The draft letter to Dr. Stenson documented the following perceived deficiencies: (1) he failed to see patients on time, frequently leaving them waiting for one to two hours past their scheduled appointment time; (2) his productivity in the office was unsatisfactory because he took too much time seeing patients; (3) his operative performance was "questionable," reflecting a lack of skill; (4) he was consistently late by an hour to the operating room and failed to advise anyone of the delay; (5) he exercised "poor judgment" in his "choice of surgical indications," and performed operations without a clear-cut clinical goal; (6) his academic performance was unsatisfactory, given that he twice failed the written examination for the certification in gynecological oncology and he did not write any manuscripts or research proposals; (7) he frequently did not show up to make rounds when he was the gynecology attending physician; (8) his contribution to the administration of the department was negative, as he did not come to meetings; and (9) he engaged in "totally unacceptable" billing practices by submitting multiple bills for one procedure.

Dr. Jacobs's draft letter stipulated that Dr. Stenson's continued employment would be contingent upon his immediate improvement in all of the identified deficient areas. In that vein, the letter detailed various procedures that Dr. Stenson would henceforth have to follow.

After circulating the draft letter within the hospital administration, Dr. Jacobs met with Dr. Stenson on December 23, 1996. In that meeting, Dr. Jacobs told Dr. Stenson that he wanted him to resign, and if he did not, he would be fired. However, the firing would only be from Dr. Stenson's full-time position on the paid staff of Beth Israel, as Dr. Jacobs still intended to allow Dr. Stenson to maintain his clinical privileges. Dr. Stenson asked for time to think about his decision, and Dr. Jacobs gave him until January 2, 1997 to do so.

Dr. Stenson soon got back to Dr. Jacobs and told him that he would not resign. Therefore, Dr. Jacobs sent Dr. Stenson a letter on January 6, 1997, outlining the deficiencies in Stenson's performance, consistent with the items listed in his earlier draft letter. The January 6 letter stated that Dr. Stenson's deficiencies precluded his "continuance on the full-time staff," and declared his employment terminated, effective January 21, 1997. The letter added that the termination did not affect Dr. Stenson's clinical privileges, but warned that Dr. Stenson had to comply with certain conditions or face termination of those privileges as well. One of the specified conditions was that Dr. Stenson's surgeries thereafter would be authorized "only on cases with appropriate clinical indications," and would be monitored, concurrently and retrospectively, by Dr. Jacobs and by his designees.

After receiving the January 6 letter, Dr. Stenson asked if Dr. Jacobs would rescind it and instead allow him to resign. Dr. Jacobs agreed. Consequently, Dr. Stenson thereafter submitted a letter of resignation from the Beth Israel department of ob/gyn, effective March 15, 1997, relinquishing both his academic and clinical responsibilities.

The terms of Dr. Stenson's resignation were specifically negotiated with Beth Israel. The resulting formal severance agreement included a provision that neither party would "publicly disparage" the other. Also, as part of the agreement, Dr. Jacobs would write a letter of recommendation for Dr. Stenson. Dr. Jacobs was willing to do so as long as the letter was accurate. In that bargained-for recommendation letter, Dr. Jacobs wrote that Dr. Stenson was "an indefatigable worker" who was "extremely conscientious in the care of his patients," and who "provide[d] meticulous attention to the details of their clinical care." The letter further stated that Dr. Stenson remained "in good standing" through his departure date. Dr. Jacobs avoided making any negative comments in the letter of reference.

Concurrently, Dr. Stenson applied to Englewood Hospital to change his status from an affiliate staff member to an attending staff member. Arnold Friedman, M.D., who was then the chief of the ob/gyn department at Englewood Hospital, had the responsibility of recommending or not recommending doctors for privileges to the hospital's Credentials Committee. Dr. Friedman had known Dr. Stenson and Dr. Jacobs for the previous four years though Beth Israel's affiliation with Englewood Hospital.

Dr. Jacobs recalled that between 1993 and 1997, he had spoken with Dr. Friedman about Dr. Stenson's lateness, surgical speed, operative indications, and his negative impact on the residency program. Dr. Jacobs particularly remembered telling Dr. Friedman of an incident in 1996, in which Dr. Jacobs felt that Dr. Stenson should not have operated on an elderly, malnourished patient.

The proofs reflect that no one from Englewood Hospital contacted Dr. Jacobs or Beth Israel in 1997 for a reference when Dr. Stenson applied to Englewood Hospital for attending status.

However, Dr. Jacobs did recall telling Dr. Friedman around that time that Dr. Stenson's leaving Beth Israel "may not have been entirely voluntary on his part." Even so, Dr. Friedman was never made specifically aware that Beth Israel had threatened to terminate Dr. Stenson. Dr. Friedman further testified that he was not informed of any billing concerns regarding Dr. Stenson at Beth Israel.

Dr. Friedman did admit to knowing that Dr. Stenson's leaving Beth Israel was "not on his own terms" and that he had the "idea that something . . . was going on even without hearing any specifics." However, Dr. Friedman never saw the rescinded January 6, 1997 termination letter. Nor did he see the letter of recommendation that Dr. Jacobs had written pursuant to Dr. Stenson's severance negotiations.

In retrospect, Dr. Friedman testified that even if he had been told that Dr. Stenson had been fired from his faculty position at Beth Israel, he still would have recommended that Dr. Stenson be hired at Englewood. Dr. Friedman claimed that Dr. Jacobs's concerns at Beth Israel with Dr. Stenson's academic deficiencies would have been inconsequential, given that Englewood was not an academic hospital.

Dr. Friedman also was not made aware of any restrictions on Dr. Stenson's surgeries at Beth Israel, including the so-called "four-hour rule." He testified that if Dr. Jacobs had told him of the concerns with the length of Dr. Stenson's surgeries, which had prompted the rule, Dr. Friedman still would not have been influenced by it in hiring Dr. Stenson. Dr. Friedman noted that he was not convinced that prolonged surgeries were significant factors in increased morbidity. Dr. Friedman was, however, aware prior to Dr. Stenson's hiring at Englewood that Dr. Stenson was a "notoriously slow surgeon." Beyond that reputation, however, Dr. Friedman claimed that he was not aware of any other clinical concerns about Dr. Stenson.

In April 1997, Englewood Hospital inquired about Dr. Stenson with the National Practitioners Data Bank ("NPDB" or the "national data bank"). There was no adverse information about Dr. Stenson on file in the NPDB. This signaled to Englewood Hospital, among other things, that there were no malpractice judgments against Dr. Stenson, no discipline against him by any state board of medical examiners, no adverse professional review actions, and no resignations in the face of investigations by any hospital. According to the testimony of the hospital's general counsel, Englewood Hospital relied on the favorable results of the NPDB inquiry.

After considering Dr. Stenson's application, Dr. Friedman recommended Dr. Stenson for a provisional associate position at Englewood. Even after eventually learning of the contents of Dr. Jacobs' termination letter and the full circumstances behind Dr. Stenson's departure from Beth Israel, Dr. Friedman insisted in his trial testimony that such adverse information "would not have made a difference because I already knew enough of i[t] that I would have still gone ahead and made the decision on my own experience . . . ."

However, Daniel Kane, M.D., the Chief Executive Officer (CEO) of Englewood Hospital, testified quite differently. Dr. Kane contended that without his own personal support as CEO, the prospect of any physician being appointed to the medical staff was "de minimis." Sharply contradicting the categorical assertions of Dr. Friedman, Dr. Kane testified that had he known about the negative concerns raised in the January 6, 1997 letter and the actual circumstances of Dr. Stenson's leaving Beth Israel, he would not have allowed Dr. Stenson to be hired.

As it turned out, Dr. Stenson became a regular attending staff member at Englewood in the spring of 1997. Thereafter, Dr. Friedman developed his own concerns with Dr. Stenson's performance. He raised those concerns with the Englewood Hospital Ob/Gyn Peer Review Committee (the "Peer Review Committee"). Consequently, in August 1998 the Peer Review Committee requested an outside expert, Jeffery Lin, M.D., of the George Washington University Medical Center, to review three of Dr. Stenson's cases at Englewood. Dr. Lin concluded from his review that the three cases reflected "overly extensive procedures utilized for symptom palliation [and] unnecessary small procedures performed for little benefit." Dr. Lin noted that one of Dr. Stenson's operations that he reviewed had lasted some twenty-seven hours.

In January 1999, the Peer Review Committee examined a case in which Dr. Stenson's patient had bled to death six hours after surgery. As a result of that examination, the Peer Review Committee recommended an ongoing monitoring of all of Dr. Stenson's proposed cases, as well as a review of a sampling of his actual past cases by a gynecological oncology specialist. Such review was performed by David Schonholz, M.D., of the Mount Sinai School of Medicine.

Dr. Schonholz issued his report to Englewood Hospital in March 1999. The report determined that out of the eleven cases he reviewed, four contained departures of care and management by Dr. Stenson. In a confidential addendum he sent to Dr. Friedman, Dr. Schonholz recommended a review of one hundred of Dr. Stenson's cases. He suggested such a more extensive review in order to set a "departure standard." Such a standard would gauge whether Dr. Stenson had performed excessive procedures based solely on his personal opinions and not warranted by anticipated surgical results. Despite that recommendation, no such extensive review of Dr. Stenson's cases at Englewood was thereafter undertaken.

Dr. Friedman did, however, convey to Dr. Stenson his ongoing concerns about the poor quality of his work. These concerns echoed concerns which had been raised by Dr. Jacobs at Beth Israel. In April 12, 1999, Dr. Friedman wrote, in response to a letter from Dr. Stenson:

I told you that many of your surgeries are excessively radical, that many of your patients undergo multiple surgeries, the benefits of which are not clear, and that you have repeatedly demonstrated exceedingly poor judgment in performing prolonged and overly aggressive procedures on patients whose condition[s] clearly warranted only simple palliation. I told you that we cannot allow you to continue this type of practice at this Medical Center. I informed you that you must demonstrate better judgment if you want to continue caring for these patients here. We discussed this in great detail at our two meetings last July, at which time you assured me you would monitor your own practice to eliminate these problem cases. Since July, however, these issues continue to arise.

Nonetheless, no corrective action was subsequently taken against Dr. Stenson at Englewood. However, Dr. Kane, the hospital's CEO, conceded in his testimony that by May 1999, Englewood should have taken corrective action.

Dr. Friedman left Englewood Hospital in September 1999 and, coincidentally, assumed Dr. Jacobs's supervisory position at Beth Israel. He was replaced at Englewood Hospital as ob/gyn department chair by Faith Frieden, M.D. That same month, Dr. Frieden took part in a peer review process in which Dr. Stenson was asked to explain his handling of three more of his cases. That review, however, did not lead to any adverse action.

Dr. Stenson's provisional status at Englewood Hospital was set to expire at the end of June 2000. This meant that Englewood either had to promote him to associate attending physician, or discharge him. Anticipating that deadline, Dr. Frieden sent a letter to Beth Israel on March 27, 2000, specifically directing it to Dr. Friedman, asking for information regarding Dr. Stenson's 1997 departure from Beth Israel. She requested a response by April 7, 2000. Dr. Frieden did not get an immediate response from Beth Israel, which indicated to her that there may have been issues with Dr. Stenson and his former employer. Nevertheless, on May 17, 2000, without having received a response*fn3 from Beth Israel, Dr. Frieden recommended to the Credentials Committee of Englewood that Dr. Stenson be promoted to associate attending staff.

Five days later, Dr. Stenson operated on Kathy Fazaldin. She died on May 22, 2000.

On April 25, 2002, a ten-count wrongful death and survivorship action was filed by Kathy Fazaldin's estate, her husband Meerafzal, her son Richard, her son Steven, and her two daughters, Faridan and Elaine, against Englewood Hospital, Dr. Stenson, Dr. Friedman, Dr. Frieden and Dr. Kane. The initial complaint also named as defendants Richard Salzer, M.D., who was president of the medical staff at Englewood and a Dr. "S. Hedley," a resident who had assisted Dr. Stenson in the decedent's surgery. As originally pleaded, the complaint alleged medical malpractice against Dr. Stenson. It also alleged administrative negligence ...


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