On certification to the Superior Court, Appellate Division.
(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).
In this matter, the Court considers whether the trial court erred in dismissing on summary judgment all claims, including for medical malpractice and negligent hiring, filed in a common law action by the wife and the estate of the decedent (Estate) against the compensation carrier for the decedent's employer.
John Basil was the Branch Manager at Jasper Engines and Transmission Company (Jasper) in Fairfield, New Jersey, when he was injured in September 1996. Basil experienced pulling in the anterior, inferior and medial right rib cage close to the sternum. On the day of the injury, Basil went to his chiropractor for treatment. About a week later, Basil felt a "ball or knot" in the area that caused sharp pain. Basil's chiropractor treated him until November 1996, by which time he had improved to the point of experiencing only sporadic pain.
In December 1997, Basil experienced an exacerbation of pain without any new injury to the area. The compensation carrier for Jasper, Transportation Insurance Company (TIC), referred Basil to a New Jersey orthopedic surgeon, Frank A. Wolf. Dr. Wolf operated an orthopedic surgery practice from 1968 until 1993, when he closed his practice and cancelled his medical liability insurance because he no longer planned to treat patients. Instead, Dr. Wolf performed independent medical evaluations (IMEs) on a part-time basis for attorneys and insurance companies. TIC's referral letter to Dr. Wolf asked him to examine Basil for "evaluation purposes only." No x-rays or other tests were provided for Dr. Wolf's review. In his report to TIC, Dr. Wolf advised that his evaluation, "as the patient has been advised, does not establish nor imply a patient-physician relationship." Dr. Wolf reported also that the examination area was "moderately tender" and he noted "an area of fullness in the area between the lower rib cage and sternum." Dr. Wolf found a causal relationship with the injury and diagnosed a "probable hematoma." He suggested that physical therapy would be beneficial.
TIC scheduled a physical therapy session for Basil in January 1998. Because the therapist did not receive a referral from Dr. Wolf, the session was rescheduled. TIC's claim file reflected, however, that Basil did not want physical therapy until he had an MRI or x-ray. Meanwhile, in February 1998, TIC sent to Dr. Wolf a standard form letter used to authorize a physician to give or prescribe treatment. TIC's file on the claim contained a notation stating that Dr. Wolf had requested the authorization because he needed to write the prescription for physical therapy. Basil declined physical therapy and instead sought counsel to assist him with his claim. Counsel sought a reevaluation and a new physical therapy prescription. In May 1998, Basil was re-examined by Dr. Wolf, who informed TIC that Basil's problem had increased in severity and that the "logical first step" would be an x-ray "and if necessary an MRI." Dr. Wolf reported further to TIC that Basil wanted to continue treatment closer to his home and that he had advised Basil that his examination did not establish a physician-patient relationship.
No further action was taken by TIC until September 11, 1998, when Basil's counsel was informed that an x-ray would be authorized. An x-ray was arranged by Dr. Wolf for October 20, 1998. The results were negative and an MRI was recommended. Apparently it was not until February 1999, however, that Dr. Wolf advised TIC that an MRI should be ordered and that Basil should be seen by a thoraco-abdominal surgeon for assessment. Thereafter, Dr. Wolf had no further involvement in the matter. In October 1999, a needle biopsy disclosed a spindle cell tumor. Basil died of stage IV sarcoma on September 17, 2000, at the age of 56.
Over a year and a half before the cancer diagnosis, Basil had filed a workers' compensation claim and received a lump sum payment of $19, 975. After Basil's death, the Estate filed this action alleging medical malpractice by Dr. Wolf. That claim settled. The complaint also asserted various causes of action against TIC. These included retention of control, negligent hiring of an incompetent contractor, and a claim that TIC's pre-approval regimen constituted the direct provision of medical care that was negligently delivered. The trial court granted TIC's motions for summary judgment and the Appellate Division affirmed. This Court initially granted only the plaintiffs' petition for certification, Basil v. Wolf,
Argued September 11, 2006
Under our workers' compensation system, employers must compensate workers for injuries caused "by [an] accident arising out of and in the course of . . . employment, of which the actual or lawfully imputed negligence of the employer is the natural and proximate cause." N.J.S.A. 34:15-1. Employers also are obliged to provide care for workers' workplace injuries, including such medical, surgical and other treatment, and hospital service as shall be necessary to cure and relieve the worker of the effects of the injury and to restore the functions of the injured member or organ where such restoration is possible . . . .
If the employer shall refuse or neglect to comply with the foregoing provisions of this section, the employee may secure such treatment and services as may be necessary and as may come within the terms of this section, and the employer shall be liable to pay therefor . . . . [N.J.S.A. 34:15-15.]
In this appeal, an employer satisfied both obligations through its workers' compensation carrier. It is the quality of the medical care that was provided to one of the employer's injured workers that has prompted this negligence action against the employer's compensation carrier.
Specifically, this appeal is taken from the dismissal of all claims filed in a common law action by the Estate of John Basil (Estate) against Transportation Insurance Company (TIC), the compensation carrier of decedent's employer. John Basil (Basil) had been injured in a workplace injury in 1996. In 2000, he died from a Stage IV sarcoma that the Estate claims could have, and should have, been identified and investigated when Basil was evaluated for purposes of insurer-authorized treatment for an exacerbation of pain from his earlier workplace injury.
The Estate sued TIC for the alleged medical malpractice of the physician who performed the independent medical examination for TIC as part of its pre-approval of Basil's treatment. The Estate also sued the physician. The Estate's claims against TIC were based on various vicarious liability theories, including retention of control and negligent hiring of an incompetent contractor. In addition, the Estate filed a direct action against TIC, claiming that its pre-approval regimen amounted to the direct provision of medical care, which was negligently delivered to Basil. The trial court granted the insurer's motions for summary judgment and the Appellate Division affirmed. We initially granted only plaintiff's petition for certification, Basil v. Wolf, 185 N.J. 596 (2005). After oral argument, we granted the defendant insurer's protective cross- petition and ordered re-argument. 190 N.J. 253 (2007). We now affirm.
Our factual statement is based on the summary judgment record in this matter. Therefore, we view the facts in the light most favorable to plaintiff, the non-moving party. R. 4:46-2; Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). Our recitation focuses on the facts relating to Basil's interactions with the allegedly negligent physician and TIC.
Basil was the Branch Manager at Jasper Engines and Transmission Company (Jasper), in Fairfield, New Jersey, when he suffered a compensable workplace injury on September 27, 1996. At the time of the injury, he experienced pulling in the anterior, inferior and medial right rib cage close to the sternum. About a week later he felt a "ball or knot" in the area, which caused sharp pain when sitting in certain positions even for short periods.
On the day of the injury, Basil went to his chiropractor, Dr. Brett Coryell, who administered standard manipulation for Basil's injuries to his rib cage. Basil saw Dr. Coryell five additional times until he was discharged on November 19, 1996, having improved to the point of experiencing only "sporadic episodes" of pain. Although Jasper's workers' compensation insurer did not authorize the chiropractic visits, it paid for them.
More than a year after the accident, on December 1, 1997, Basil experienced an exacerbation of the pain without any new injury to the area. He asked TIC for approval to resume chiropractic treatment at the insurer's expense. TIC refused to approve additional chiropractic treatment, but offered to have Basil examined by an orthopedist. While Basil resumed the chiropractic treatment nonetheless at his own expense, one of TIC's claims representatives, Pamela Hudson, referred him to Dr. Frank A. Wolf, a New Jersey-licensed physician, for evaluation.
Dr. Wolf operated an orthopedic surgery practice in Phillipsburg, New Jersey from 1968 until late 1992/early 1993, when he closed his practice and terminated his attending privileges at Warren Hospital. Because he no longer planned to treat patients, he also terminated his medical liability insurance at about the same time. He kept his Phillipsburg office, however, and began to perform independent medical evaluations (IMEs),*fn1 on a part-time basis, for insurance companies and attorneys.
Hudson sent Dr. Wolf a standard referral letter, which asked Dr. Wolf "to examine John Basil for evaluation purposes only," and explained that "[t]he purpose of this examination is to determine whether John Basil has sustained any permanent disability as a result of [the 9/27/96] injury." The letter asked Dr. Wolf to obtain "a detailed medical and work history and [to] comment on causal relationship, diagnosis, and need for additional treatment."
Dr. Wolf saw Basil on January 20, 1998. His examination notes indicated that Basil "prefer[red] chiropractic treatment due to established and positive relationship," and Dr. Wolf concluded that Basil should continue to see a chiropractor or physical therapist if he wished. In his January 20, 1998, report to the insurer, Dr. Wolf stated that
[t]he examination include[d] a review of all medical information provided, a history, physical examination, review of studies and or reports and an opinion as to diagnosis(es) with summary. This evaluation, as the patient has been advised, does not establish nor imply a patient-physician relationship.
[Basil] believes that at present he is again at a point where occasional ibuprofen is all that may be required but also feels that, based on the recent experience, exacerbations requiring greater or "in depth" treatment cannot be excluded. [H]e . . . is unable to blow his nose without using a hand to splint the right costal cage.
Back and chest evaluation reveals that the right inferior coastal margin and intercostal muscle areas overlying the lowermost three to four ribs are moderately tender and there is an area of fullness in the area between the lower rib cage and sternum. Posteriorly there is some muscle tenderness along the lateral margin of the latissimus dorsi. . . .
There are no x-rays, special studies nor reports of same [made available for my review].
The diagnoses are: - probable hematoma resulting from stretching and tearing mechanism of injury involving abdominal muscle, (such as rectus abdominus) and fascial attachments to the right inferior costal cage- healing with normal fibrous tissue or scar. The area remains tender and therefore symptomatic . . . .
There is a causal relationship, assuming the accuracy of the history relevant to the right rib cage injury and there does appear to be a causal relation based on the chronology only relevant to the right middle trigger finger. Both problem areas should benefit from additional treatment in the form of physical therapy.
My standard procedure is to provide a physical therapist (RPT) or physical therapy facility with the diagnoses, a general recommendation and request their recommendation or the specific treatment plan and modalities, followed by approval or modification of that plan. . . . A follow up visit at approximately three months would be appropriate. Enclosed is a prescription for that purpose. [(Emphasis added).]
That reference to an "area of fullness" that Dr. Wolf identified during the January 20, 1998, examination of Basil's right lower rib cage is the focal point of the Estate's malpractice claim. It claims that Dr. Wolf negligently failed to investigate and diagnose, or to refer for investigation and diagnosis, the "fullness" that more than a year later was identified to be an ultimately fatal spindle cell sarcoma.
When deposed about that January 20 examination, Dr. Wolf was asked whether there were any other diagnoses he had considered at the time. He indicated the possibility of a hernia or "[a] possible tumor," but did not specify any particular type of tumor that he had considered as a potential diagnosis. He explained that he did not believe there was a need to examine the swelling further at the time because of its intermittent nature.
During the January 20, 1998, exam, Dr. Wolf suggested to Basil that he discuss with the insurer finding his own physician to evaluate and treat him because Wolf thought it was "foolish" for Basil, who lived in Pennsylvania, to travel forty-five minutes to receive treatment in the Phillipsburg area. Dr. Wolf envisioned that Basil would "establish himself with [a treating physician,]" and work with a physical therapist to alleviate his discomfort, and that the physical therapist would consult with Dr. Wolf regarding specific treatment for which authorization would be requested. Dr. Wolf also believed that the three-month follow-up visit, to which he referred in his January 20 letter, would occur with "a treating physician of [Basil's] own arrangement."
Ms. Hudson telephoned Dr. Wolf about the examination two days later. Dr. Wolf informed her that he had recommended physical therapy but that he also had told Basil that seeing his chiropractor, Dr. Coryell, would not hurt his condition. Hudson and Dr. Wolf spoke again on January 27. Hudson asked that he submit a report and that he provide a prescription authorizing Basil's physical therapy. The same day, Hudson scheduled Basil for a physical therapy session to occur on January 29, 1998.
Dr. Wolf sent the prescription to the insurer, but did not forward a copy to Basil.
On February 3, 1998, Hudson entered a note in Basil's claim file memorializing that she had, that day, sent a "letter to Dr. Wolf authorizing any necessary takeover treatment." Her entry explains that "Dr. Wolf requested same due to his giving of [prescription] and [because his independent medical exam authorization] only instruct[ed him] to evaluate and comment." Hudson's February 3 letter to Wolf was a standard form letter used to authorize a physician to give or prescribe treatment. The letter therefore confusingly stated that the "claimant has been referred to your office for treatment for injuries sustained as a result of a work related injury"; requested medical reports on claimant's progress and expected course of treatment; and noted that "prior authorization for any special services," including diagnostic tests "must be obtained [from insurer] . . . . and arranged with another . . . network provider." Dr. Wolf never responded to the February 3, 1998, letter.
On February 13, 1998, Hudson noted that Basil never started [physical therapy], on date of appointment 1/29/98 provider stated they never [received prescription] from [Dr. Wolf] therefore they refused to treat. [Basil] has an appointment now for Monday 2/16/98 but he doesn't want to go before he has an MRI*fn2 or x[-]ray to rule out a tear in the muscle. He feels a lump in his rib area and he wants it looked at before [h]e tears, pulls or disrupts something.
Hudson also requested that the claim be reviewed by a supervisor. Basil's claim was reassigned to Claim Representative Crecco, and the insurer's records do not reveal any additional action on Basil's file between February 23 and May 6, 1998.
In the interim, Basil retained Ronald Bronstein, Esq., who wrote to Hudson on April 7, 1998, urging that the insurer "permit active medical treatment" of Basil. On May 6, 1998, Crecco informed Bronstein that Basil had not attended the physical therapy session that had been prescribed by Dr. Wolf and scheduled by Hudson. Bronstein asked for a reevaluation and a new physical therapy prescription for Basil. Accordingly, Crecco scheduled a "reevaluation" or "follow-up independent medical exam" with Dr. Wolf for May 26, 1998.
Upon conducting that May 1998 re-examination, Dr. Wolf wrote to the insurer that
[t]his patient has chosen to and wishes to continue with treatment in proximity to his home geographic area and; therefore, has been advised that this examination does not establish nor imply a patient-physician relationship.*fn3
Apparently, there was a delay in the receipt and implementing of a prescription-treatment plan for physical therapy as outlined in the 1-20-98 report and in a preliminary discussion with the therapist chosen by the patient the question of necessity for x-rays and or MRI of the right costo-chondral inferior area was raised. The uncertainty apparently resulted in no actual course of physical therapy and very little else happening well into February 1998. Pain in this anatomic area continued, the area "jumped" when touched and Mr. Basil returned to the chiropractor for a series of treatments. He was also finding that if he sneezed he had to hold his right lower rib cage to prevent pain. [T]here was one episode of such severity that he contorted himself to the right and triggered an episode of left sided "sciatica" so painful that he slept on the floor. The chiropractor after 8 to 10 visits during which he manipulated or "cracked the back" an [sic] 85% improvement. Various areas "feel black and blue" with the right inferior costal area, the mid dorsal area just below the scapula are tender and an area just to the right of the navel is also tender and sensitive "like sunburn". In general the discomforts are located between this area of the navel and the dorsal area of the back as described. Further the right lower rib area feels "like a golf ball" rolling and tingling. Sitting...[is] extremely bothersome.
. . . "There is at least an annoying pain level at all times in the areas described.
. . . [The] problems . . . appear to have increased in severity . . . .
. . . The right inferior costal margin and intercostal muscle areas overlying the lowermost three to four ribs are somewhat more tender and the area of fullness in the area between the lower rib cage and sternum persists along with some muscle tenderness along the lateral margin of the latissimus dorsi and just below the right scapula. There is a paresthesia in the area to the right of the umbilicus. . . .
There are no x-rays, special studies nor reports of same.
The diagnoses remain: probable hematoma resulting from stretching and tearing mechanism of injury involving abdominal muscle, (such as rectus abdominus) and fascial attachments to the right inferior costal cage- healing with normal fibrous tissue or scar. Due to some changes in the findings, as described, it is necessary to rule out an intercostal neuralgia on the right or even central nervous system pathology though the latter is not likely. . . . .
. . . At this point further study ought to be completed for confirmation or modification of diagnosis. Mr. Basil wishes to pursue any such plan as close to home as possible. A simple chest and rib x-ray series would be the logical first step and if necessary an MRI. If there is concurrence with the diagnosis of a neuralgia then a trial of steroid sonophoresis in the area of complaint and administered by a physical therapist or depository steroid infiltration might be considered.
By his statement that "very little else [was] happening," Dr. Wolf explained that he meant that
[Basil] didn't go to any of the things that I suggested. He didn't seek either a physician in the area, at least as to the history that he gave me, nor did he, through the physician or directly himself, seek a therapist for a consultation.
Dr. Wolf's notes from that exam memorialized that Basil could not sit up from lying on his back without help --- which Dr. Wolf believed was significant -- and that the "patient needs studies, x-rays, possible MRI to follow." In his deposition, Dr. Wolf recalled that although he did not formally recommend x-rays in his report on the January 20, 1998, exam, he did discuss x-rays with Mr. Basil. Dr. Wolf said that he explained to Basil that if "[Basil] chose a physician, an MD, as compared to a chiropractor, that in all likelihood x-rays would be ordered and possibly other studies." Dr. Wolf did not feel that it was necessary for him to advise the insurer that x-rays, specifically, were recommended because Dr. Wolf "thought [Basil] was going to discuss that with [the insurer]" or that, once Basil chose a treating physician, "that physician would make that judgment."
The insurer received Dr. Wolf's report on June 1, 1998, and took no further action until September 11, 1998. Bronstein, Basil's lawyer, had written during August to ask the insurer to authorize further treatment or the diagnostic tests discussed in Dr. Wolf's report. On September 11, 1998, Crecco sent Dr. Wolf's report to Bronstein and advised him that the insurer "will allow treatment [consisting of 'a simple chest and rib x[-]ray, which is a good starting point'] recommended by our doctor ...