Berry v. Saline Memorial Hospital

907 S.W.2d 736, 322 Ark. 182, 1995 Ark. LEXIS 616
CourtSupreme Court of Arkansas
DecidedOctober 23, 1995
Docket95-144
StatusPublished
Cited by33 cases

This text of 907 S.W.2d 736 (Berry v. Saline Memorial Hospital) is published on Counsel Stack Legal Research, covering Supreme Court of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Berry v. Saline Memorial Hospital, 907 S.W.2d 736, 322 Ark. 182, 1995 Ark. LEXIS 616 (Ark. 1995).

Opinion

Robert H. Dudley, Justice.

This is an appeal from an order disqualifying a law firm from participating in a case. We affirm the disqualification order. The facts viewed in the light most favorable to appellee are as follows. Clark Brewster, a member of the law firm of Boswell, Tucker & Brewster, was a member of the Board of Governors of the Saline Memorial Hospital from July 1, 1989, to June 30, 1992. During this period, Brewster, as a member of the board, was privy to confidential and privileged information about the hospital’s quality assurance activities and the peer reviews conducted by the medical staff. He additionally served as Chairman of the Joint Conference Committee, a committee composed of three members of the board and three members of the medical staff. This committee relayed concerns of the medical staff to the board about the quality assurance programs. This information was not known to the public and was disclosed to Brewster because of his fiduciary relationship to the hospital. He was not employed as the hospital’s attorney, but he was asked questions by board members because of his profession.

On July 25, 1992, or twenty-five days after the attorney’s term on the board ended, Toni Berry underwent emergency surgery at the Saline Memorial Hospital and, lamentably, died the next afternoon. Shortly after her death, her widower, Jackie Berry, employed Ted Boswell, senior partner in the firm of Boswell, Tucker & Brewster, to investigate a possible negligence action against the hospital. Ten months later the Boswell law firm filed a negligence action on behalf of Toni Berry’s estate against St. Paul Fire & Marine Insurance Company, the insurer of Saline Memorial Hospital, which is a county-owned hospital. See Ark. Code Ann. § 23-79-210 (Repl. 1992). The gravamen of the complaint was that the hospital and certain of its employees committed medical malpractice. See Saline Memorial Hosp. v. Berry, 321 Ark. 588, 906 S.W.2d 297 (1995).

On November 15, 1994, the Boswell firm requested numerous records from the hospital under the Arkansas Freedom of Information Act, Ark. Code Ann. §§ 25-19-101 to -107 (Repl. 1992 & Supp. 1995). The FOIA at times provides greater disclosure than do the discovery procedures afforded by the Arkansas Rules of Civil Procedure. Baxter County Newspapers v. Baxter Gen. Hosp. Staff, 273 Ark. 511, 622 S.W.2d 495 (1981). Among the many requested records were “records used by the nursing or hospital administration to determine patient acuity levels”; “records of the employee-to-patient ratio reports from 1991, 1992, and 1993”; and “records of the employee-per-occupied-bed reports for 1990, 1991, 1992, and 1993.” The hospital complied with most of the requests, but refused to release statements taken from witnesses as part of a quality assurance or peer review proceeding. In its response to the Boswell firm’s request, the hospital replied that the quality assurance and peer review records:

are specifically excluded from disclosure and are absolutely privileged communications pursuant to Arkansas statutes. These would be the only such records in the hospital’s possession. Those made and kept by St. Paul or this [law] firm [Friday, Eldredge & Clark] and are not public records.

The Estate of Toni Berry then filed this separate suit under the FOIA and, among other things, requested the circuit court to order the hospital to disclose all records denied “on any alleged quality assurance privilege. . . .”

The Hospital filed a motion seeking to disqualify the Boswell firm from representing the estate in this FOIA suit on the following basis:

The confidential information gathered by Clark Brewster while serving on the hospital’s Board and the decisions related to the operation of the hospital are directly at issue in the present lawsuit. The representation of the Plaintiff in an action directly adverse to the interests of the hospital is improper, presents an unavoidable conflict of interest and gives the appearance of impropriety that undermines the public’s perception of the legal profession and defeats the public policy principles against such actions.
[He] was in a fiduciary relationship with Saline Memorial Hospital and continues to owe a duty of loyalty which will be breached if allowed to represent interests adverse to those of the hospital.

The trial court ruled that the Boswell law firm was disqualified because:

[Clark Brewster’s] membership on the board of Governors of Saline Memorial Hospital, at the time Quality Assurance and Peer Review policies and procedures were approved and adopted by the board, is a matter related to the issues in the pending FOIA action. Mr. Brewster’s law firm represents interests directly adverse to the hospital which will necessarily involve issues related to the very policies and procedures which Mr. Brewster approved and implemented as a member of the Board.

The Boswell firm appeals from the ruling.

Appellant first contends the trial court erred in disqualifying the law firm because the firm was not in an attorney-client relationship with the hospital. We could summarily dispose of the argument by stating that the trial court did not rule that an attorney-client relationship existed. Even so, we answer in more detail. The trial court ruled that a conflict of interest existed between the attorney and the hospital, and that ruling was correct. Rule 1.7(b) of The Model Rules of Professional Conduct provides that a lawyer “shall not represent a client if the representation of that client may be materially limited by the lawyers’s responsibility to another client or to a third person,” unless the client or the third person consents. Model Rule 1.10 states that, while lawyers are associated in a firm, “none of them shall knowingly represent a client when any of them practicing alone would be prohibited from doing so by Rule 1.7.” The Comment to Rule 1.7 discusses several possible conflicting relationships such as the business interests of the lawyer and membership on a board of directors.

A member of a hospital’s board of directors holds a fiduciary relationship with the hospital. Warren v. Wheatley, 231 Ark. 707, 331 S.W.2d 843 (I960). One who is in such a relationship may not assume a position in which his personal interest might conflict with his fiduciary duty as a member of the board. Id. at 712-13, 331 S.W.2d at 847. When a lawyer is on the board of a hospital, the lawyer owes a fiduciary duty to the hospital, and the lawyer should not take any action that conflicts with that duty, such as filing a suit against the hospital. After the lawyer’s term on the board ends, the lawyer should not take any action to the detriment of the hospital when that action is based upon confidential information the attorney gained during the fiduciary relationship.

The holding in this case must be read in context of this case only.

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Bluebook (online)
907 S.W.2d 736, 322 Ark. 182, 1995 Ark. LEXIS 616, Counsel Stack Legal Research, https://law.counselstack.com/opinion/berry-v-saline-memorial-hospital-ark-1995.