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The Verdict Is In

Shocking Reversal In Orange County

Tony Francis, MD, Orthopaedic Surgery, 05:26PM May 21, 2013

There is a shocking reversal of fortune for the Orange County California doctor whose tale of woe was reported on The Verdict Is In on 2/17/13.  At that time, the post concerned an infectious disease doctor who had been falsely accused of carrying an illegal gun on hospital property, was strip searched and arrested.  The doctor had been perceived to have been critical of management.  What flowed was a frame-up of the doctor by hospital management, along with a planted gun. After a lengthy court battle, Dr. Fitzgibbons, the infectious disease doc, had been awarded $5.7 million in damages by an Orange County jury.  A comment was posted by blog reader Hana who updated the situation.  A judge has overturned Dr. Fitzgibbons' award, and ruled the doctor must pay the hospital corporations's legal fees.  One wonders whether this ruling will stand on appeal.  Needless to say, winning a verdict of $5.7 million from a jury in Orange County is quite an accomplishment unto itself.  All this simply points out how difficult it is for doctors to win much in a court battle.  As one lawyer once mused, "Doctor, did you go to medical school to learn how to treat sick people, or to get into a long legal battle with people who could barely get through business school?"  Of course, Dr. Fitzgibbons didn't seem to have much choice in the matter.  Neither do many other doctors who run afoul of hospital management, or the corrosive peer review process. One must ponder what the cumulative effect of this kind of thing will have on the people who choose to go into medicine, seeking it as a career choice.    

To read the original post on The Verdict Is In 

http://boards.medscape.com/forums/?128@@.2a385b18!comment=1


Thanks to Hana for this post

Added By: HanaManagliano, Other, 06:07AM May 18, 2013
 
I'm on vacation right now so couldn't log in with my regular ID, but a colleague just emailed me a link to this blog post, along with a link to the Orange County Register's latest (5/3) update on the story: "Judge tosses $5.7 million verdict in planted-gun case" at

http://www.ocregister.com/waptest/articles/ihhi-506766-fitzgibbons-mogel.html

So, verdict out, evidently (or evidentially). I'm sure you understand what a big deal it is for the judge to have overruled the jury's verdict in this case, and to have ordered Dr. Fitzgibbons to pay IHHI's costs, so I figured you'd be interested in this turn of events.
 
Added By: Tony Francis, MD, Orthopaedic Surgery, 09:14AM May 18, 2013

Hana- Thanks so much for sending this update. It is a sorry turn of events for Dr. Fitzgibbons and all doctors everywhere.

Here is the article provided by Hana:

Orange County Register

Judge tosses $5.7 million verdict in planted-gun case

05/03/2013

SANTA ANA – The trial judge has thrown out a $5.7 million jury verdict in favor of a doctor who was arrested in 2006 in a planted-gun case.

Orange County Superior Court Judge Gregory H. Lewis on Tuesday ruled for the defendant, hospital chain Integrated Healthcare Holdings Inc. He ordered the doctor, Michael W. Fitzgibbons, to pay IHHI's court costs.

Lewis said IHHI could not be held liable for actions of its former chief executive officer, Bruce Mogel, saying the alleged wrongdoing stemmed from "a personal grudge."

"I view this as one of the most appalling affronts to justice that I have ever seen," said Fitzgibbons' attorney, Charles T. "Ted" Mathews. "I think Judge Lewis should resign from the bench."

Mathews said he would immediately file an appeal to the Fourth District Court of Appeal – the third time Fitzgibbons will have taken IHHI there – "and I fully expect a reversal."

IHHI attorney David Robinson said, "I'm quite relieved, and obviously it's a very significant result and will ensure that the money goes to patient care and not a greedy doctor and lawyer."

Robinson said Lewis saw that "there was a lot of smoke (in Fitzgibbons' case), but there was no admissible evidence. ... There was no actual proof that IHHI was liable."

Fitzgibbons, an infectious disease specialist, is the former chief of staff at IHHI's flagship hospital, Western Medical Center – Santa Ana.

When IHHI bought Tenet Healthcare's four Orange County hospitals in early 2005, Fitzgibbons quickly emerged as a leading dissident on the medical staff.  The chain sued him for defamation – a suit that was thrown out by the appellate court in June 2006.

Days later, he was arrested after anonymous callers claimed they had seen a man in Fitzgibbons' car waving a gun in traffic. Police found a gun and a pair of black gloves in his car in the employee parking lot.

Fitzgibbons denied the gun was his. DNA evidence excluded him. He was never prosecuted.

At trial, Mathews linked the planted gun to former IHHI chief Mogel. Mogel, according to testimony by former IHHI president Larry Anderson, had vowed to "humble" Fitzgibbons after the appellate court victory. He then ordered Anderson to pay $10,000 to a man named Mikey Delgado for a no-work job.

Anderson speculated this was a payoff to Delgado, whom Mogel told him had corrupt contacts with the Santa Ana Police Department, to arrange for the planted gun.

That alleged act – the diversion of IHHI funds by Anderson and Mogel to Delgado, presumably for the purpose of planting the gun – was the key to Fitzgibbons' case against IHHI.

Lewis dismissed it out of hand. An employer is liable for its officers' actions only if those acts are reasonably related to the job or reasonably foreseeable, Lewis wrote. An employer can't be held liable for the actions of its officers if they are "startling and unusual," he wrote, citing the words of a 1994 case involving a Glendale fire marshal who had set fires.

"Mogel was not operating a nightclub or a criminal enterprise," Lewis wrote. "Mogel's alleged effort to 'humble' (Fitzgibbons) had nothing to do with the business of IHHI. It was a personal grudge. The hiring of a thug was a 'startling and unusual ... occurrence.' "

Mogel, who left the company in late 2008, was not a defendant in the case.

http://www.ocregister.com/waptest/articles/ihhi-506766-fitzgibbons-mogel.html

From Orange County Weekly 5/03/13

Judge Overturns Doctor's Multi-Million-Dollar Whistleblower Award

A few months ago, it appeared that all the years Dr. Michael Fitzgibbons spent struggling to clear his name had paid off--to the tune of $5.7 million.That's the amount an Orange County jury awarded him on Feb. 13, after finding that Integrated Healthcare Holdings, Inc, (IHHI) the company that owns the hospital where Fitzgibbons works, Western Medical Center, had retaliated against him for questioning the company's business practices and patient care standards--even planting a gun in his car in an effort to discredit him.

But IHHI appealed the verdict and yesterday a new judge issued a stunning ruling in the case.

On May 1, Orange County Superior Court Judge Gregory H. Lewis tossed out the jury's verdict in favor of Fitzgibbons and ordered that not only should IHHI not have to pay the doctor $5.7 million, but that he should pay the company's legal bills. In his ruling, Lewis states that "the jury's verdict was not supported by substantial evidence concerning vicarious liability or ratification."

Specifically, Lewis ruled, Fitzgibbons did present plenty of evidence that IHHI's former chief executive officer, Bruce Mogel, had laundered company cash to hire a "thug" who likely planted a gun in the doctor's car to have him arrested in a bizarre road rage incident that both sides in the recent trial acknowledge never happened. However, the judge argued, the doctor failed to convincingly show that IHHI had "ratified" this conduct, which arose not from Mogel's job function, but rather a "personal grudge."

Despite the fact the jury heard evidence that Fitzgibbons was handcuffed and taken to the police station after being falsely arrested for possession of a gun that was planted in his car, and how he later found drugs planted in the same vehicle, Lewis found that the doctor failed to quantify psychological damages that warrant such a large cash award.

"The award for only emotional distress is completely out of line with similar injuries in other cases," he wrote. "Plaintiff failed to introduce any evidence of medical expenses or loss of income . . . Plaintiff was not hospitalized or medically treated. He did not take any medication . . . While Plaintiff sustained embarrassment, the emotional distress was not of a substantial quality or duration. At worst, some other doctors poked fun at him."

Fitzgibbons says he plans to appeal the ruling.

http://blogs.ocweekly.com/navelgazing/2013/05/judge_overturns_doctors_multi-.php

From previous The Verdict Is In post

People Don't Know How Powerful I Am (Feb 17, 2013)

I ran upon this case on MoreLaw last night.  There weren't a lot of details, so I had to do some digging to find the back story on an astonishing case.  Dr. Fitzgibbons had run afoul of a hospital CEO.  It was a typical power struggle. The kind we are used to seeing.  Troubled IHHI was a holding company which bought several Southern California Hospitals from Tenet.  In the process the new CEO came into possession of an e-mail from Dr. Fitzgibbons, an infectious disease doc and staff member.  The message in the e-mail was perceived to be highly critical of the new management.  In what has to go down as one of the worst examples of Bad California Lawyering 101, the CEO filed a suit against the doctor seeking damages for (1) defamation; (2) intentional interference with a contractual relationship; (3) negligent interference with a contractual relationship; (4) breach of contract; (5) breach of the duty of good faith and fair dealing; and (6) violation of Business and Professions Code section 17200 et seq. The complaint alleged Fitzgibbons’ e-mail message was forwarded to Blue Cross/Wellpoint, Inc., (Blue Cross) with whom IHHI had been negotiating for higher insurance payments, and the e-mail message provoked concern on the part of Blue Cross, stalling negotiations. IHHI alleged this delay has cost it over $500,000.

What the lawyers for the hospital seemed to forget was California's tough anti-SLAPP laws.  SLAPP, (Strategic Lawsuit Against Public Participation) is a tactic which tries to stifle criticism of issues in public discussion by filing an expensive lawsuit against the complainers.  California has some of the most stringent laws in the country sanctioning this kind of thing.  Clearly a comment by a doctor in an e-mail  concerning a hospital going broke is a matter for public discussion.  So in 2006, Dr. Fitzgibbons won his case under the anti-SLAPP provision, and got legal fees as well.  But the CEO wasn't done.  As the facts showed at trial, he hired a hit man to place a gun in Dr. Fitzgibbons car, then had him strip searched and arrested on hospital property, and charged with a weapons violation.  As testimony later demonstrated, the CEO was purported to have said, "People don't know how powerful I am."  The defense tried to discredit it by the usual methods.  It came down to an argument over what the date of the statement might have been. That kind of thing doesn't bode well for the defense.  A statement like that is what trial lawyers call "the money shot," or "gold in the bank,"  or "the rainmaker." In a recent trial I was in, a federal judge admonished a trial lawyer that all tort cases, no matter how many thousands of pages there may be, boil down to two or three pages which make or break the case.  And how correct that proved to be here.  Dr. Fitzgibbons won $5.2 million, and another $500 thousand for punitive damages.

All this points out how difficult it is to sue a hospital and win, if you are a doctor.  The facts here were egregious.  The lawyer had asked for more than $50 million.  Of course, we might say that Orange County is a pretty square place.  One wonders what the verdict might have been in Downtown LA.

I also wonder how much the doctor will collect.  The CEO in question left in 2009.  There were a lot of other lawsuits which have been filed and settled.   The hospital claims to be broke.

Anti-SLAPP (2006) -INTEGRATED HEALTHCARE HOLDINGS, INC., Vs MICHAEL FITZGIBBONS

California Anti-SLAPP Project

The order denying Fitzgibbons‘s special motion to strike is reversed, and the trial court is directed to enter a new order granting the motion in its entirety. Fitzgibbons is entitled to his costs on appeal.

Factual and Procedural Background

In 2004, Tenet Healthcare Corporation sought to divest itself of a number of California hospitals it owned, including four in Orange County. Among those seeking to purchase the Orange County hospitals was IHHI, a holding company formed for this purpose. As its president concedes, IHHI is a “heavily debt lleveraged” company “trying to develop sufficient cash flow to survive in a difficult healthcare market.” Because of concerns about IHHI’s financial ability to operate the four hospitals, the County of Orange and the California Senate conducted public hearings on the proposed acquisitions.

Among the hospitals IHHI sought to purchase was Western Medical Center-Santa Ana (WMC), a 282-bed acute care facility and one of only three trauma centers in Orange County. WMC’s medical staff opposed IHHI’s acquisition of WMC, due to concerns about both IHHI’s financial stability and its principal, Dr. Kali P. Chaudhuri, who had been involved in the failure of a previous healthcare company. One of the medical staff opposing IHHI’s purchase was Fitzgibbons, a member of the medical staff’s medical executive committee and WMC’s former chief of staff.

The medical staff dropped its opposition to the purchase when they entered into a written agreement with IHHI, effective January 1, 2005. Under the three-year contract, WMC’s medical staff received significant financial oversight of WMC’s operations, and Dr. Chaudhuri agreed to limit his interest in IHHI to a minority share. The agreement also assured WMC that IHHI had “a lender commitment for a working capital line of credit loan in the approximate aggregate amount of $50 Million, to be available to the Hospital no later than ten (10) days following the closing of the purchasing parties’ acquisition of the Hospitals.”

Under the heading, “Consideration,” the agreement provided: “The Parties further agree that this Agreement will be submitted to [the Department of Health Services] as part of the Hospital’s license application process. In consideration for the binding and enforceable commitments of IHHI, and in reliance upon these commitments, the Medical Staff of Western Medical Center-Santa Ana will express public support for the acquisition and operation of IHHI of, and issuance of hospital licenses to IHHI for, the Hospitals, in accordance with the commitments made herein, including being represented at any public hearings on this proposed acquisition and delivering to DHS (Mark Helmar) a letter supporting IHHI’s acquisition and licensure of the Hospitals.”

*2 IHHI’s acquisition and licensing of the hospitals was completed in March 2005. On May 9, 2005, the lender on IHHI’s $50-million acquisition loan, and a $30 million non-revolving working capital line of credit, served IHHI with a notice of default. The default was disclosed in IHHI’s filing with the Securities Exchange Commission (SEC), and reported in an article in the May 17, 2005, Orange County Register, which cited an analyst’s warning that IHHI needed to “find another investment partner ‘really quickly’ or the whole thing could be headed for bankruptcy court.”

Two days after the article appeared, Fitzgibbons sent an e-mail message to medical executive committee members and other individuals Fitzgibbons believed might offer financial assistance to the hospital, expressing concern IHHI could be headed for bankruptcy. The e-mail stated: “By the way, the hospital
appears to be underwater and I don’t think IHHI can get an investor to pony up the $20 million, for the 60-70 million shares of stock which they are selling. Admissions are down 20%. They got a reduction of costs by dumping Tenet by 13%, and increased insurance payment of 7% (but that is neutralized by the factoring). Then their nursing salaries went up 8%-so they’re in the red. No way to get out. That is ominous. What would the buyer get buying IHHI stock? Control of IHHI, but not the land? Sounds like its going BK. Get ready. Now, if the doctors had been in the deal … interest rates would have been better say 9%? ?, would have had our capital say $10 million, and admissions would have been even. Result happiness. Sad. It might work if they came to us on hands and knees and gave us the stock in exchange for our telling the world we support them, and get a refinance at a better rate? ? ? Who would lend? Ligon’s the CFO’s family supposedly has money. The loan default is classic ‘chaudhuri.’ I guess Mr. Mogel won’t be pooring [sic ] expensive brandy on the table today. Mike Fitzgibbons.”

On June 23, 2005, IHHI filed a complaint against Fitzgibbons based on his May 19 e-mail message, seeking damages for (1) defamation; (2) intentional interference with a contractual relationship; (3) negligent interference with a contractual relationship; (4) breach of contract; (5) breach of the duty of good faith and fair dealing; and (6) violation of Business and Professions Code section 17200 et seq. The complaint alleges Fitzgibbons’s e-mail message was forwarded to Blue Cross/Wellpoint, Inc., (Blue Cross) with whom IHHI had been negotiating for higher insurance payments, and the e-mail message provoked concern on the part of Blue Cross, stalling negotiations. IHHI alleges this delay has cost it over $500,000.

Fitzgibbons filed a special motion to strike under the anti-SLAPP statute, which the trial court denied. Fitzgibbons now appeals. (Fitzgibbons won his appeal.)

http://hospitals.wordpress.com/2006/06/14/integrated-healthcare-holdings-michael-fitzgibbons/

http://boards.medscape.com/forums/?128@@.2a385b18!comment=1

About This Blog

We will discuss current legal issues related to the practice of medicine.

Disclosure: Tony Francis, MD, JD, has disclosed no relevant financial relationships.

  • Tony Francis

    Graduated with MD degree in 1977, performed residency in Orthopedic Surgery,  Graduated with a JD and LLD in 1987. Graduated with Master of Science in Quantum Mechanics and Computational Chemistry in 1999.

    Director of  "Legal Medicine Research" and writes advisory reports for US Federal Judges. 

     

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