Doctor Fired From Staff Wins $2M Against Hospital – He Claimed Retribution For Criticism On TV

MO Lawyers Media Staff//May 12, 2003

A St. Louis County obstetrician who claimed St. Luke’s Hospital tried to destroy his practice after it terminated him from staff won over $2 million in his tortious interference case against the hospital.

Dr. David L. Gearhart said that St. Luke’s and his former partner refused to give his new phone number to patients who called in, withheld insurance proceeds owed to him and sent his patients to collections — all in retribution for Gearhart’s critical comments on a television news program about hospital management policies.

The defendants denied any wrongdoing and argued that Gearhart failed to prove he suffered any damages.

Jerome Dobson, Gearhart’s attorney, acknowledged that the doctor “had virtually no economic loss” and based his claim for damages on emotional distress. “We asked for $250,000 and they gave us $195,000.”

A verdict report on the May 2 verdict in Gearhart v. Unity Health System, et al., appears in this issue.

VERDICT REPORT

Employment

Gearhart and Dr. Alfred J. Bosche were partners in a successful obstetric and gynecological practice, Ballas Ob-Gyn, Inc. In 1997 the doctors agreed to sell the practice to St. Luke’s Hospital. Under the terms of the deal, the doctors received five-year employment contracts with the hospital, which at the time was part of Unity Health System.

In May 1998 the management of St. Luke’s decided to make changes affecting the nursing staff, specifically the OB-GYN surgical nurses. Gearhart criticized these changes on the local news, saying that it would negatively affect patient care. Four days later, he was notified that he had breached his contract with St. Luke’s and was fired 30 days later.

Gearhart said problems occurred almost immediately after he left. Despite an agreement on what hospital staff would tell Gearhart’s patients, staff told callers that they did not have Gearhart’s new phone number or know where he was. Gearhart accused his former partner, Bosche, of instructing staff to not give out Gearhart’s information, but to instead ask if they would like to make an appointment with one of the other doctors.

In February 1999, 456 of Gearhart’s patients received a letter from a collection agency. Gearhart said that most of the patients had never even received a bill from St. Luke’s before being sent to collections. He said that St. Luke’s had singled out his patients, and had not sent other patients to collections.

Around the same time, Gearhart’s office manager began to notice that he was not receiving payments from insurance companies. When she followed up with the insurance companies, she was told that the checks had been sent to St. Luke’s. St. Luke’s denied that it was withholding any payments from Gearhart.

The stress of the situation took its toll on Gearhart and he began to see a psychiatrist and take anti-anxiety medication. He started having chest pains that he claimed were caused by his anxiety. His internist testified that the anxiety accelerated Gearhart’s heart disease and required him to have open-heart surgery.

Gearhart’s suit originally contained a breach of contract claim as well as a wrongful termination and tortious interference with business expectation claim. The first two counts were dismissed on summary judgment. The case proceeded to trial on the tort claim. The trial was bifurcated, with the compensatory damages heard separately from the punitive damages. The jury returned a verdict in Gearhart’s favor, awarding him $195,500 for emotional distress. In addition, the jury gave $1.8 million in punitive damages — $930,000 from St. Luke’s, $775,000 from Unity Health and $132,000 from Bosche.

“After the judge dismissed the claims, he wouldn’t let us speak about patient care,” Dobson said. “We could talk about being fired but not why. We were not able to talk about what Gearhart opposed. The phrase they came up with was ‘a change in staffing procedures, that Dr. Gearhart felt very strongly about.'”

Dobson said they first had to decide if they could and should appeal the summary judgment on the contract and wrongful termination claims. “We felt the law would require us to proceed with the tort claim. So we took our one shot at the tort, and can still appeal the other decision later. We decided to leave issues related to the termination for another day.” The dismissal also affected what testimony they were able to use in establishing the tort claim.

“There are two elements to the issue of economic loss,” he said. “We couldn’t quantify how much the tortious conduct cost Gearhart economically — how much was due to their conduct and how much was because he set up a new practice, so he would lose some patients anyway.

“I was uncomfortable asking a jury for lost income. We didn’t want to appeal [the summary judgment decision] with an award of some of the lost income. So we focused on the emotional distress. We’ll use an economist expert if we ever get to trial on the breach of contract.”

Jane Wyman, a Carthage attorney who represented a doctor in a similar case, said, “These [cases] were real rare until the hospitals started buying out lucrative practices. These doctors have no idea what it means to be an employee. Hospitals are going to have to get better at dealing with doctors whose practices they buy out. They are not your average employee. A nurse can’t finance a lawsuit, but a specialist can, especially if they made their money before they sold out to the hospital.”

She said the key to success is to get the jury to identify with the doctor. “Nobody likes big conglomerates. Nobody likes doctors, but they all think ‘my doctor is good.’ You’ve got to make them think of that guy as their doctor. Remember, everybody is getting squeezed that’s sitting on that jury, by medical expenses, in one way or another.”

David And Goliath

Gerald Richardson, attorney for St. Luke’s Hospital, said, “We believe we have good grounds for post-trial motions, including a judgment not withstanding the verdict.” He declined to comment further.

Springfield defense attorney James Bandy, whose practice includes health care law, said, “This case is fairly typical of these kinds of lawsuits. There are usually underlying problems between the doctor and the hospital before the case. The doctor usually tries to divert the focus away from the behavior that caused the problem, tries to portray himself as protector of the patients against the hospital.

“The David and Goliath scenario is fairly common,” Bandy said. “It’s difficult to keep the jury focused on the facts, when they have diverted attention to collateral issues. It plays into the theme of huge corporate entity more concerned with the bottom line than with patient care.

“It’s sometimes hard to put a face on a corporation. The hospital is primarily made up of nurses, support staff and technicians, people you know and like. In the scheme of things, doctors spend very little time actually at the hospital.

“We see this type of lawsuit more frequently now than we did 15 to 20 years ago, but if you look at Missouri caselaw, there is a history of this type of lawsuit that goes back at least 30 to 40 years,” he said. “Medicine has become more of a business, less of a profession. It’s the same complaint as with attorneys,” Bandy said.

This type of case can be resolved without litigation, Bandy said, but it “requires that both parties be reasonable, that they listen to the other side and make compromises. The attorneys play a large role” in whether the case becomes a full-blown legal battle.

Questions or comments may be directed to [email protected].

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VERDICT REPORT

[NOTE: The following information was provided by the counsel for the winning party and represents the attorney’s characterization of the case.]

$2.03 Million Verdict

A St. Louis County obstetrician who claimed St. Luke’s Hospital tried to destroy his practice after firing him from its staff sued the hospital for tortious interference with his business.

Dr. David L. Gearhart and Dr. Alfred J. Bosche sold their practice to St. Luke’s in 1997. Under the terms of the agreement, Dr. Gearhart and Dr. Bosche joined the staff of the hospital, which was owned by Unity Health System. The practice had about 5,000 patients when it joined St. Luke’s.

In 1998 Dr. Gearhart criticized decisions made by hospital management on the local television news. By the end of the week, he received a letter informing him he had breached his contract. He was fired 30 days later.

Dr. Gearhart said the hospital staff, including Dr. Bosche, then began to intentionally interfere with his patient relationships. He claimed that the staff told his patients who called in that they did not have a phone number for Dr. Gearhart and did not know where he had gone — even though Dr. Gearhart reached an agreement with hospital management before his termination about what his patients would be told.

Six months after Dr. Gearhart was fired, 456 of his patients received collection notices. Most of his patients said they had never received a bill from St. Luke’s before being sent to collections.

Dr. Gearhart also said that the hospital intentionally withheld money it received from insurance companies that should have been forwarded to his office.

He filed suit against St. Luke’s, Unity Health Systems and Dr. Bosche for breach of contract and tortious interference with employment. The breach of contract claim was dismissed on summary judgment, and the case proceeded to trial on the tortious interference claim alone.