Knapp v. Palos Community Hospital

531 N.E.2d 989, 176 Ill. App. 3d 1012, 126 Ill. Dec. 362, 1988 Ill. App. LEXIS 1666
CourtAppellate Court of Illinois
DecidedNovember 30, 1988
Docket84—3004, 85—0218, 85—0917 cons.
StatusPublished
Cited by37 cases

This text of 531 N.E.2d 989 (Knapp v. Palos Community Hospital) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Knapp v. Palos Community Hospital, 531 N.E.2d 989, 176 Ill. App. 3d 1012, 126 Ill. Dec. 362, 1988 Ill. App. LEXIS 1666 (Ill. Ct. App. 1988).

Opinion

JUSTICE FREEMAN

delivered the opinion of the court:

This litigation arises from the termination by defendant, Palos Community Hospital (Palos), of the medical staff privileges of the plaintiffs, William B. Knapp, M.D., Francisco Lopez, M.D., and Hugh Savage, M.D. This is the second appeal arising from this litigation. A different panel of this division of the Appellate Court, First District, previously held that the trial court had abused its discretion in granting plaintiffs a preliminary injunction prohibiting Palos from denying them reappointment to its medical staff because plaintiffs had not shown a likelihood of success on the merits. (Knapp v. Palos Community Hospital (1984), 125 Ill. App. 3d 244, 465 N.E.2d 554.) By the time the mandate of this court was returned to the circuit court, after leave to appeal to the supreme court had been denied, this cause had proceeded to a jury trial on the second amended complaint. At the conclusion of the trial, the jury returned a verdict for Dr. Knapp against Palos and certain individual defendants and awarded him $400,000 in damages.

The facts underlying this litigation have been amply set forth and discussed in our prior opinion (hereinafter Knapp I) and will be repeated here only insofar as necessary. Plaintiffs are cardiologists engaged in a group practice. All three were employed by William B. Knapp and Associates, Inc. As members of Palos’ medical staff, plaintiffs had the privilege of admitting patients, receiving treatment referrals from other physicians for patients already admitted, ordering tests and conducting surgery. All medical staff members are subject to an annual peer-review process, governed by the medical staff bylaws, to determine their fitness for staff reappointment. The annual redetermination of staff privileges and the increase or curtailment thereof at other times is based on the direct observation of care provided by the applicant through: (1) a review of the records of patients treated by him at Palos or other hospitals; (2) a review of the medical staff’s evaluations of the applicant’s participation in the delivery of medical care; and (3) other pertinent information concerning clinical performance obtained from reliable sources.

The bylaws provide the following procedures in the annual reapplication process. The first step in that process is a review of all pertinent information on an applicant for reappointment by the privilege evaluation committee of the department in which the applicant holds privileges and a recommendation by that body to the department chairman. Next, the members of the department either approve or disapprove the recommendation by majority vote and the chairman submits both recommendations to the medical executive committee. If that committee’s findings are favorable to the applicant, they are forwarded to Palos’ board of directors; if its findings are adverse to him, the applicant is entitled to notice and a hearing before an ad hoc hearing panel which reports its decision and findings back to the medical executive committee. That committee forwards, its findings to the board of directors. If the board’s decision is adverse to the applicant, he is entitled to a hearing before an appellate review committee, which may refer the matter back to an appropriate body for further investigation and review or recommend affirmance, modification or reversal of the adverse decision to the board of directors for the ultimate disposition of the application.

Plaintiffs’ original complaint alleged that their medical staff privileges to write orders for ventilation therapy had been wrongfully curtailed. The trial court granted plaintiffs a temporary restraining order prohibiting defendants from denying them reappointment to the medical staff. Plaintiffs then amended the complaint to allege that Palos had violated its bylaws in denying them reappointment. Thereafter, the trial court dissolved the temporary restraining order and entered a preliminary injunction reinstating plaintiffs to the medical staff. Defendants appealed the preliminary injunction and this court reversed the order of the trial court. This court held that, as Palos had not violated its bylaws in denying plaintiffs reappointment, its actions were not subject to judicial review and that, therefore, the trial court’s order was an abuse of discretion since plaintiffs had not established a likelihood of success on the merits.

After defendants had appealed the preliminary injunction, plaintiffs filed a seven-count, second amended complaint on which this cause proceeded to trial. All seven counts are predicated on defendants’ alleged violation of the medical staff bylaws in denying plaintiffs reappointment to Palos’ medical staff. Counts I and II allege wilful, wanton and malicious breaches of contract; count III alleges wilful, wanton and malicious interference with plaintiffs’ rights to practice medicine; count IV alleges wilful, wanton and malicious injury to plaintiffs by the individual defendants’ inducement of Palos to withhold staff privileges; count V alleges the individual defendants’ wilful, wanton and malicious interference with plaintiffs’ business relationship with Palos; count IV alleges certain individual defendants’ unfair competition with plaintiffs; count VII alleges the individual defendants’ intentional, wilful, wanton and malicious infliction of severe emotional distress upon plaintiffs. Plaintiffs prayed for, inter alia, preliminary and permanent injunctive relief requiring defendants to grant plaintiffs full medical staff privileges and compensatory and punitive damages of at least $500,000. At the close of all the evidence, the trial court directed verdicts on all counts against plaintiffs Lopez and Savage and on all counts but I and II in favor of all but Palos and several individual defendants and against plaintiff Knapp. The jury returned a verdict for Knapp on counts I and II and awarded damages of $400,000.

This opinion consolidates three separate appeals taken by the parties from: (1) the verdicts directed by the trial court against plaintiffs Lopez and Savage and its denial to all plaintiffs of a permanent injunction requiring Palos to grant plaintiffs staff privileges (appeal No. 84 — 3004); (2) the judgment for plaintiff Knapp entered on the jury verdict in his favor (appeal No. 85 — 0917); and (3) the award under section 11 — 110 of the Code of Civil Procedure (Ill. Rev. Stat. 1981, ch. 110, par. 11 — 110) to defendants for damages resulting from the wrongful issuance of the preliminary injunction vacated in Knapp I (appeal No. 85 — 0218).

Opinion

Notwithstanding the voluminous and multifarious arguments of the parties, we believe that the one issue dispositive of appeals Nos. 84 — 3004 and 85 — 0917 is whether the trial court erred in entertaining the causes of action pleaded seeking equitable and legal relief against the defendant private hospital and the hospital’s physicians, officers and directors. We believe that the trial court did err in entertaining plaintiffs’ claims and requests for relief. In so doing, it violated the rule of limited judicial review of hospital medical staffing decisions established in Jain v. Northwest Community Hospital (1978), 67 Ill. App. 3d 420, 385 N.E.2d 108, and reaffirmed by relevant statutory law.

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Bluebook (online)
531 N.E.2d 989, 176 Ill. App. 3d 1012, 126 Ill. Dec. 362, 1988 Ill. App. LEXIS 1666, Counsel Stack Legal Research, https://law.counselstack.com/opinion/knapp-v-palos-community-hospital-illappct-1988.