Veronica Lindsey Caudill-Engle, D.O. v. Quantum Healthcare Associates, Psc.

• Court: Court of Appeals of Kentucky
• Decided: November 1, 2024
• Docket: 2023-CA-1047
• Status: Unpublished

Opinion

RENDERED: NOVEMBER 1, 2024; 10:00 A.M. NOT TO BE PUBLISHED

Commonwealth of Kentucky Court of Appeals NO. 2023-CA-1047-MR

VERONICA LINDSEY CAUDILL- ENGLE, D.O. APPELLANT

APPEAL FROM BREATHITT CIRCUIT COURT v. HONORABLE LISA HAYDEN WHISMAN, JUDGE ACTION NO. 23-CI-00016

QUANTUM HEALTHCARE ASSOCIATES, PSC APPELLEE

OPINION REVERSING AND REMANDING

** ** ** ** **

BEFORE: ECKERLE, GOODWINE, AND MCNEILL, JUDGES.

ECKERLE, JUDGE: Appellant, Veronica Lindsey Caudill-Engle, D.O. (“Dr.

Caudill”), seeks review of an order of the Breathitt Circuit Court dismissing her

wrongful termination claim against her employer, Appellee, Quantum HealthCare

Associates, PSC (“Quantum”). We conclude that the Trial Court improperly

considered matters outside of the pleadings to support Quantum’s motion to

dismiss. We further conclude that there were disputed issues of fact regarding whether there is a well-defined, public policy that would establish an exception to

the terminable-at-will doctrine. Consequently, the Trial Court erred by dismissing

Dr. Caudill’s complaint against Quantum. Hence, we reverse and remand to allow

the parties to engage in discovery and for additional proceedings.

Quantum provides staffing for various hospitals and medical facilities,

including Hazard Appalachian Regional Hospital (the “Hospital”) and Kentucky

River Medical Center (the “Medical Center”). Starting in October 2017, Quantum

employed Dr. Caudill to provide medical services at facilities with which it had

contracts. Quantum initially assigned Dr. Caudill to work at the Hospital, and

beginning in February 2021, it authorized Dr. Caudill to see patients at the Medical

Center as well. On or after August 2021, Quantum assigned Dr. Caudill to work as

a hospitalist exclusively at the Medical Center.

From October 2021 through February 2022, Jackson Hospital

Corporation (the “Corporation”), the operator of the Medical Center, authorized

physicians to treat COVID-19 patients with the antiviral medication Remdesivir,

Vitamin D, Zinc, and steroids. The Corporation did not approve the antiparasitic

drug Ivermectin as a treatment option for patients with COVID-19, but it did not

forbid it. On February 3, 2022, Dr. Caudill prescribed Ivermectin for two COVID-

19 patients at the Medical Center. Quantum terminated Dr. Caudill’s employment

the following day, on February 4, 2022.

-2- On January 30, 2023, Dr. Caudill filed a complaint asserting various

claims against Quantum, the Corporation, and Appalachian Regional Healthcare,

Inc. (“Appalachian Healthcare”). Specifically, regarding Quantum, Dr. Caudill’s

complaint pleaded claims for wrongful termination and tortious interference with a

doctor-patient relationship. Regarding the Corporation and Appalachian

Healthcare, Dr. Caudill pleaded claims for tortious interference with her business

relationship with Quantum and violation of her rights to administrative due

process.

Quantum moved to dismiss for failure to state claims against it.

Following briefing, the Trial Court granted the motion, concluding that Dr. Caudill

failed to show that Quantum’s termination of her employment violated any well-

established public policy. Thereafter, Dr. Caudill filed a motion to alter, amend, or

vacate pursuant to Kentucky Rule of Civil Procedure (“CR”) 59.05.

In addition to challenging the dismissal of her wrongful termination

claim against Quantum, Dr. Caudill requested that the Trial Court remove the

“final and appealable” language from the Order. Dr. Caudill noted that she had

asserted multiple claims against Quantum, the Corporation, and Appalachian

Healthcare, and that the Order dismissing only one of those claims did not dispose

of all of the relevant claims. On August 11, 2023, the Trial Court entered a

calendar order denying Dr. Caudill’s motion. It also stated at the August 11

-3- hearing that it was dismissing all claims against Quantum. This appeal followed.

This Court subsequently dismissed the Corporation and Appalachian Healthcare,

as the claims against those parties remain pending in the Trial Court.

As an initial matter, Dr. Caudill clearly pleaded claims against

Quantum for wrongful termination and tortious interference with a doctor-patient

relationship. However, Quantum’s motion to dismiss only addressed the first

claim. Likewise, the Trial Court’s written orders only dismiss the wrongful

termination claim. However, at a hearing, the Trial Court, apparently orally and

sua sponte, dismissed the tortious interference claims. The record contains no

basis for this dispositive decision. The Trial Court speaks only through its “written

orders entered upon the official record.” Kindred Nursing Centers Ltd. P’ship v.

Sloan, 329 S.W.3d 347, 349 (Ky. App. 2010). Thus, any dispositive rulings by the

Trial Court cannot be considered by this Court on appeal unless specifically

incorporated into a written and properly entered order. Id.

This Court conducts a de novo review of the Trial Court’s dismissal

under CR 12.02(f) for failure to state a claim. Carruthers v. Edwards, 395 S.W.3d

488, 491 (Ky. App. 2012). “Since a motion to dismiss for failure to state a claim

upon which relief may be granted is a pure question of law, a reviewing court owes

no deference to a trial court’s determination; instead, an appellate court reviews the

issue de novo.” Fox v. Grayson, 317 S.W.3d 1, 7 (Ky. 2010) (citing Morgan v.

-4- Bird, 289 S.W.3d 222, 226 (Ky. App. 2009)). The pleadings are to be “liberally

construed in a light most favorable to the plaintiff[,]” and all allegations in the

complaint are to be taken as true. Mims v. Western-Southern Agency, Inc., 226

S.W.3d 833, 835 (Ky. App. 2007) (citing Gall v. Scroggy, 725 S.W.2d 867, 869

(Ky. App. 1987)).

Dr. Caudill first argues that the Trial Court should have treated

Quantum’s motion to dismiss as a motion for summary judgment, and that there

were genuine issues of material fact that precluded relief. It is well-established

that reliance on matters outside of the pleadings effectively converts a motion to

dismiss into a motion for summary judgment. See McCray v. City of Lake

Louisvilla, 332 S.W.2d 837, 840 (Ky. 1960). In support of its motion to dismiss,

Quantum submitted a joint press release from the American Medical Association

(“AMA”), American Pharmacists Association, and the American Society of Health

System Pharmacists. In that release, these organizations stated their collective

opposition to the use of Ivermectin to prevent or treat COVID-19 outside of a

clinical trial. Quantum also referenced advisories from the Centers for Disease

Control and the Food and Drug Administration indicating that Ivermectin is not

authorized or approved for the prevention or treatment of COVID-19.

Thus, Quantum clearly introduced matters outside of the pleadings to

attempt to rebut Dr. Caudill’s claim that she had a protected right to prescribe any

-5- medication according to her best judgment. Thus, the Trial Court should have

treated the motion as one for summary judgment. Even disregarding the AMA

evidence, we conclude that there were other genuine issues of material fact that

precluded a judgment as a matter of law. While the above-stated background facts

are undisputed, at this early stage of the litigation, most of the facts underlying the

dispute are unknown as either absent entirely or undeveloped. And the

unrequested, unbriefed, oral dismissal of the tortious interference claims is wholly

unsupported.

Dr. Caudill stated that in her opinion as a physician, the two patients

would not medically tolerate Remdesivir, and thus she prescribed Ivermectin.

Quantum, the Hospital, the Medical Center, and the Corporation have not

explicitly commented upon whether Dr. Caudill’s medical opinion in that regard is

genuinely held, sound, or permitted. However, none of those organizations

prohibited doctors from administering Ivermectin to patients. Instead, they failed

to condone it. The meaning of that distinction has not been clarified.

None of the organizations have averred that they practice medicine;

however, none have conceded that they do not practice medicine. No one has

provided evidence that any organization is or is not permitted to forbid doctors

from prescribing certain medicines that they believe are medically appropriate.

Whether the Corporation’s or the AMA’s disapproval of prescribing Ivermectin for

-6- COVID-19 translated into an automatic – and permitted – disallowance of the

practice is likewise murky. The reasons for the lack of approval are unknown.

Were they based on insufficient information about the drug and its effects of

persons, or rather profit or something else? Was it a universal impugning of the

drug for every patient, or just those who could not tolerate it, or merely those who

had first tried other drugs unsuccessfully?

The sparse record before us does not show that any of the

organizations prevented the drug from being administered to the patients. Yet, Dr.

Caudill contends that she was terminated because she sought to administer this

drug. The record also does not clearly establish that the Corporation immediately

revoked Dr. Caudill’s staff privileges at the Medical Center. However, Dr.

Caudill’s complaint alleges that the Corporation’s actions “constituted an actual

revocation and/or a de facto revocation” of her staff privileges at the Medical

Center. Thus, it is unclear whether Quantum terminated Dr. Caudill’s employment

before the Corporation revoked her staff privileges at the Medical Center. In

addition, neither the record nor the pleadings show that the Corporation had

published guidelines regarding acceptable treatments for COVID-19 at the time of

the dispute.

The undeveloped factual record renders insufficient support for the

proper determination of the legal central question: has Dr. Caudill stated an

-7- actionable, legislative public policy that would support her wrongful termination

claim against Quantum? Under Kentucky law, an employer may ordinarily

“discharge his at-will employee for good cause, for no cause, or for a cause that

some might view as morally indefensible.” Firestone Textile Co. Div., Firestone

Tire and Rubber Co. v. Meadows, 666 S.W.2d 730, 731 (Ky. 1983). “An

exception to this rule exists when the termination violates public policy as

expressed by the employee’s exercise of a constitutional or statutory right, which

may give rise to an action for wrongful termination.” Greissman v. Rawlings and

Associates, PLLC, 571 S.W.3d 561, 563 (Ky. 2019). In Marshall v. Montaplast of

North America, Inc., 575 S.W.3d 650 (Ky. 2019), the Kentucky Supreme Court

recently summarized the scope of the public policy exception, stating as follows:

Only three circumstances exist in which a discharge will be actionable as contrary to public policy: (1) when there are “explicit legislative statements prohibiting the discharge,” (2) when “the alleged reason for the discharge . . . was the employee’s failure or refusal to violate a law in the course of employment,” or (3) when “the reason for the discharge was the employee’s exercise of a right conferred by well-established legislative enactment.” Hill v. Kentucky Lottery Corp., 327 S.W.3d 412, 422 (Ky. 2010) (quoting [Grzyb v. Evans, 700 S.W.2d 399, 402 (Ky. 1985)]). Further, the public policy involved must have an employment-related nexus. Grzyb, 700 S.W.2d at 402.

Id. at 652.

-8- Dr. Caudill does not point to any explicit legislative enactment

prohibiting her discharge. Furthermore, she does not allege that the discharge was

the result of her failure or refusal to violate a law. Rather, Dr. Caudill contends

that she was terminated for the exercise of her independent medical judgment as

protected by well-established public policy and legislative enactment. In support

of this argument, she notes that Kentucky Revised Statutes (“KRS”) 311.597(4)

defines “dishonorable, unethical, or unprofessional conduct of a character likely to

deceive, defraud, or harm the public or any member thereof” to include:

Conduct which is calculated or has the effect of bringing the medical profession into disrepute, including but not limited to any departure from, or failure to conform to the standards of acceptable and prevailing medical practice within the Commonwealth of Kentucky, and any departure from, or failure to conform to the principles of medical ethics of the American Medical Association or the code of ethics of the American Osteopathic Association. For the purposes of this subsection, actual injury to a patient need not be established.

Dr. Caudill further refers to Principle VII of the AMA Code of Ethics,

which provides that “[a] physician shall, while caring for a patient, regard

responsibility to the patient as paramount.” She also points to Section 11 of the

American Osteopathic Association’s Code of Ethics, which provides that “[i]n any

dispute between or among physicians regarding the diagnosis and treatment of a

patient, the attending physician has the responsibility for final decisions, consistent

with any applicable hospital rules or regulations.”

-9- Based on these provisions, Dr. Caudill argues that she had a legal and

ethical responsibility to exercise her professional judgment in a manner to best

serve the needs of her individual patients. She maintains that Quantum’s

termination of her employment interfered with the exercise of that judgment.

Consequently, Dr. Caudill contends that Quantum’s actions constitute a violation

of a clear public policy and serve as actionable grounds for her wrongful

termination action.

Dr. Caudill also takes the position that the public policy expressed in

the statute and these rules prohibit an employer from terminating a treating

physician based solely only on disagreements over patient care. Rather, she asserts

that she may only be terminated for disagreements over patient care after receiving

full due process in proceedings by either the Board of Medical Licensure or an

administrative process under the Medical Center’s bylaws.

We agree that the initial determination of the existence of an

actionable public policy is a question of law. Grzyb, supra, at 401. See also

Firestone, supra, at 731-32. An obligatory rule of professional conduct may

qualify as a public policy for purposes of a wrongful termination claim.

Greissman, 571 S.W.3d at 567. While neither the statute nor the professional rules

explicitly give the attending physician unfettered discretion regarding patient

treatment, they clearly afford the physician some discretion. Moreover, the rules

-10- are designed to allow a physician to exercise her best professional judgment in

making treatment decisions tailored to the needs of particular patients. Thus, the

rule is designed to serve the interests of the public at large and not the sole needs of

the profession. Id.

Under these circumstances, factual questions clearly remain as to

whether the statute and ethical principles imposing a general obligation upon

physicians to be responsible for patient care granted Dr. Caudill a right to prescribe

disapproved treatment that was not forbidden. And which organization can

disapprove of such treatment is unclear: Quantum, the Hospital, the Medical

Center, the Corporation, and/or the AMA. Further, whether such disapproval or

non-allowance translates into a prohibition against the prescription and by whom is

factually undeveloped as no factual evidence was permitted before dismissal.

Here, Dr. Caudill did not merely disagree with the recommendation, she declined

to follow it in two circumstances. And perhaps there were more instances, but

these facts are also unknown. Whether Quantum’s firing of Dr. Caudill violated

public policy by essentially forbidding her from using her medical training and

judgment to treat these two patients with Ivermectin necessarily involves some

fact-finding, and that is absent here. By this ruling, we do not suggest that a

physician’s discretion in making treatment decisions for patients is unlimited. But

factual issues remain as to whether Quantum’s or the Corporation’s disagreement

-11- with Dr. Caudill’s application of the treatment protocols constituted an improper

interference with her protected right to exercise her professional judgment with

regard to these two patients. And Quantum admits that the state licensure board

can discipline doctors who violate AMA “principles,” but no discipline was

apparently sought or received here for reasons yet unknown. There was no formal

medical review or finding here that Dr. Caudill’s conduct with regard to these two

patients was improper. And without any evidence, whether “principles” are

“guidelines” or actually requirements is also left to conjecture. Doctors are hired

to exercise their medical judgment. Thus, factual questions exist as to the reasons

that Dr. Caudill was fired for exercising it, especially under circumstances such as

this where the press release appeared to offer only a cautionary warning in general.

At this early juncture in this case, Quantum failed to establish that it

was entitled to judgment as a matter of law on this issue. And it offered no

evidence or argument about dismissing the tortious interference claim. At a

minimum, Dr. Caudill is entitled to additional discovery to address the merits of

her claim of a public policy exception to the at-will employment doctrine. Until

such time as the record is further developed, the dismissal (which operated as a

summary judgment by considering facts outside the record) was not proper.

Therefore, we conclude that the Trial Court erred by dismissing Dr. Caudill’s

claims against Quantum. And as noted above, Dr. Caudill’s other claims against

-12- the Corporation and Appalachian Healthcare remain pending before the Trial

Court.

Accordingly, we reverse the order of the Breathitt Circuit Court

dismissing Dr. Caudill’s claims against Quantum and remand for additional

discovery proceedings on the merits of those claims.

ALL CONCUR.

BRIEFS FOR APPELLANT: BRIEF FOR APPELLEE:

Anthony J. Bucher Ryan M. Martin Covington, Kentucky Cincinnati, Ohio

-13-