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Comprehensive Neurosurgical, P.C. v. The Valley Hospital

Superior Court of New Jersey, Law Division, Bergen

November 15, 2018

COMPREHENSIVE NEUROSURGICAL, P.C. c/b/a/ NORTH JERSEY BRAIN AND SPINE CENTER, PATRICK A. ROTH, MD, ROY D. VINGAN, MD, GEORGE J. KAPTAIN, MD, DANIEL E. WALZMAN, MD, HOOMAN AZMI, MD, HARSHPAL SINGH, MD, KANGMIN DANIEL LEE, MD, REZA J. KARIMI, MD, BRUCE C. ZABLOW, MD, UGO PAOLUCCI, MD, MOHAMMED FARAZ KAHN, MD, Plaintiffs,
v.
THE VALLEY HOSPITAL, THE BOARD OF TRUSTEES OF THE VALLEY HOSPITAL, VALLEY HOSPITAL PRESIDENT AUDREY MEYERS, NEUROSURGICAL ASSOCIATES OF NEW JERSEY, P.C., and ANTHONY D'AMBROSIO, MD, Defendants.

          Argued: October 26, 2018

          Joseph B. Fiorenzo, Esq. and Stephen M. Klein, Esq. appearing on behalf of the Plaintiff Comprehensive Neurosurgical, P.C. (from Sills Cummis & Gross P.C.).

          R. Scott Thompson, Esq. and Joseph A. Fischetti, Esq. appearing on behalf of Defendants The Valley Hospital, The Board of Trustees of the Valley Hospital, and Audrey Meyers (from Lowenstein Sandler LLP).

          Lauren M. Levine, Esq. and Michael J. Keane Jr., Esq. on behalf of Defendant Neurological Associates of New Jersey (from Garfunkel Wild P.C.).

          OPINION

          HONORABLE ROBERT C. WILSON, J.S.C.

         FACTUAL BACKGROUND

         THIS MATTER arises from a hospital's replacement of a surgical group by signing an exclusive agreement with another, competitor surgical group. Plaintiff North Jersey Brain and Spine Center ("NJBSC") is a neurosurgical group that held privileges at The Valley Hospital ("Valley") in Ridgewood, NJ. NJBSC's responsibilities included, among other things, covering the Emergency Department ("ED") call, and performing services using specialized surgical equipment, specifically, a Gamma Knife and a biplane angiography suite.

         While the relationship between NJBSC and Valley was amicable for years, concerns arose regarding NJBSC's practices at Valley. Specifically, Valley was concerned that NJBSC may be unnecessarily transferring certain patients admitted into Valley's ED to HackensackUMC ("HUMC") for follow-up surgical procedures. The NJBSC physicians also held privileges at HUMC. Valley also received reports from other physicians and staff members at the hospital of NJBSC's practices in the operating room that were concerning to the operating room ("OR") staff.

         Around the same time, Valley was interested in creating a "Neurological Center of Excellency" ("Center") at the hospital. Valley would accomplish this by entering into an exclusivity agreement with a neurosurgical group. Valley hired an outside consulting firm to create a report on a detailed study of the cost, quality, and volume of neurosurgical services provided over several years by the two largest surgical groups at Valley - NJBSC and Neurological Associates of New Jersey ("NANJ"). A white paper was created as a result of this study, and circulated among the members of the Board of Trustees ("Board") and Valley's president, Audrey Meyers ("Meyers"), to aid in the creation of the Center.

         Pursuant to the results of the study, Valley entered into an exclusivity agreement with NANJ to further its goal of creating the Center (the "Exclusivity Agreement"). Once the Exclusivity Agreement was executed, NJBSC was notified that it was no longer permitted to use the biplane angiography suite or the Gamma Knife to treat patients or perform surgical procedures. NJBSC was also told that it would no longer be responsible for ED calls.

         NJBSC filed this action against Valley, the Board, Meyers, and NANJ. NJBSC alleges, among other things, a breach of contract claim against Valley, the Board, and Meyers (collectively, "Valley Defendants"). They argue that preventing NJBSC from using the biplane suite, the Gamma Knife, and no longer allowing them to participate in ED calls is a termination of privileges. Valley's by-laws state that physicians are entitled to a hearing before their privileges are revoked by the hospital. NJBSC's physicians were required to sign the by-laws before working at Valley, and NJBSC argues that signing the by-laws created a contract between Valley, the Board, Meyers, and NJBSC. Therefore, in failing to provide them with a hearing, the Valley Defendants were in breach of contract.

         The Valley Defendants argue that precluding NJBSC from using the biplane suite and Gamma Knife, as well as being assigned ED call, do not amount to a revocation of privileges. Since these are not privileges, there was no violation of the procedure laid out in the by-laws.

         NJBSC also alleges tortious interference claims against Valley, the Board, Meyers, and NANJ. The tortious interference claims are rooted in arguments that the aforementioned defendants took part in activities that sought to prevent NJBSC from entering into an exclusivity agreement with Valley and further the Exclusivity Agreement to oust NJBSC. NANJ argues that the activities they undertook amounted to nothing more than fair, lawful competition, as nothing in the record rises to the level of tortious interference under New Jersey law.

         NJBSC moves for partial summary judgment in its favor as to: (1) breach of contract against the Valley Defendants; and (2) breach of contract against the Valley Defendants for failure to provide a hearing before termination of privileges. The Valley Defendants and NANJ also move for summary judgment in their favor, dismissing the complaint in its entirety. For the reasons below, and because there exist several questions of material fact, the motions for summary judgment are DENIED in part, with the exception that summary judgment is GRANTED with respect to the issues of: (1) liability of the Board and Meyers; and (2) the tortious interference claims.

         SUMMARY JUDGMENT STANDARD

         The New Jersey procedural rules state that a court shall grant summary judgment "if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law." R. § 4:46-2(c).

         In Brill v. Guardian Life Insurance Co., 142 N.J. 520 (1995), the Supreme Court set forth a standard for courts to apply when determining whether a genuine issue of material fact exists that requires a case to proceed to trial. Justice Coleman, writing for the Court, explained that a motion for summary judgment under R. § 4:46-2 requires essentially the same analysis as in the case of a directed verdict based on R. § 4:37-2(b) or R. § 4:40-1, or a judgment notwithstanding the verdict under R. § 4:40-2. Id. at 535-536. If, after analyzing the evidence in the light most favorable to the non-moving party, the motion court determines that "there exists a single unavoidable resolution of the alleged dispute of fact, that issue should be considered insufficient to constitute a 'genuine' issue of material fact for purposes of R. § 4:46-2." Id. at 540.

         RULE OF LAW AND DECISION

         I. The Valley Defendants' Motion to Dismiss Breach of Contract Claims as to the Board and Meyers is Granted

         It is clear that NJBSC has no viable claims against the Board or against Meyers. There is no evidence in the record to support a claim against the Board. Similarly, NJBSC's claims against Meyers are invalid as a matter of law.

         NJBSC alleges contractual claims against the Valley Defendants. However, the record only supports a finding that NJBSC purportedly entered into a contractual relationship with Valley alone in signing the by-laws, not with the Board or with Meyers individually. New Jersey law construes by-laws as a contract between a hospital and members of its staff. Joseph v. Passaic Hospital Asso., 26 N.J. 557, 569 (1958); Raymond v. Cregar, 72 N.J.Super. 73, 85-86 (App. Div. 1962).

         Considering the foregoing, the act of NJBSC signing Valley's by-laws does not create a contract between NJBSC and the Board. It also does not create a contract between NJBSC and Meyers. At best, it creates a contract between NJBSC and Valley only. Therefore, the breach of contract claims against the Board and Meyers must be dismissed.

         II. The Valley Defendants' Motion to Dismiss NJBSC's Claim of an Invalid Exercise of Discretionary Healthcare Powers as to the Board and Meyers is Granted

         NJBSC also alleges claims against the Board and Meyers for an invalid exercise of discretionary health care powers. The jurisprudence in this area of the law speaks to the procedural protections afforded to a physician against a hospital with respect to hospital decisions. Hurwitz v. AHS Hosp. Corp., 438 N.J.Super. 269, 296-70 (App. Div. 2014) ("[F]ederal immunity is applicable so long as the hospital and its participants acted in a fair and reasonable manner and with a reasonable belief that the actions taken were in furtherance of quality of health care and warranted by the facts.")

         The Supreme Court of New Jersey determined that judicial intervention in hospital decisions should be exercised on a limited basis, and that reliance should be placed on internal hospital remedies. Guerrero v. Burlington County Mem. Hospital, 70 N.J. 344 (1976). The Court based its reasoning on the need to balance the procedural rights of physicians with the managerial expertise of the hospital administration. Id. at 90-91. Furthermore, "[s]o long as hospital decisions concerning medical staff are reasonable, are consistent with the public interest, and further the health care mission of the hospital, the courts will not interfere." Zoneraich v. Overlook Hosp., 212 N.J. Super. 83, 90 (App. Div. 1986) (citing Desai v. Barnabas Medical Center, 103 N.J. 79) (1986)).

         In light of the foregoing, there is nothing in the record to support the notion that either the Board or Meyers made their decisions regarding the Exclusivity Agreement in an unreasonable manner. In fact, they relied on an extensive report compiled by an outside company to assist them in selecting NANJ as its exclusive ...


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