TRAVERSE CITY — Munson Healthcare and its attorney in a malpractice case face $54,000 in sanctions after pursuing a defense they knew to be in "fundamental conflict" with undisclosed facts that explained a surgical patient's injury, state appellate judges ruled.
The Court of Appeals of Michigan decision last month is the latest wrinkle in a long-running legal battle that began when Jeanne Harrison awoke from surgery in 2007 to find a mysterious, quarter-sized burn on her arm.
Harrison's dissatisfaction with Munson's explanation for how a surgical device called a "Bovie" caused the wound eventually led to a malpractice case. In 2011, 13th Circuit Court Judge Philip Rodgers declared a mistrial after he believed an internal incident report contradicted Munson Healthcare and its East Lansing lawyer Thomas R. Hall's contention no one knew how the burn occurred.
Harrison settled with Munson for an undisclosed sum, but the hospital and Hall appealed Rodgers' sanctions. The appellate judges upheld Rodgers' ruling and found Munson and Hall violated state law and ethics rules by knowingly presenting a defense at odds with facts laid out in the internal report.
"Honestly, this is my 24th year on the bench and I've never seen anything like it before or since," Rodgers said of the case.
Paul Shirilla, Munson's vice president and general counsel, said hospital officials are "disappointed" with the ruling and plan to appeal to the Michigan Supreme Court. He disagreed that the internal "peer review" information showed the hospital offered an "inappropriate" defense.
"There's nothing in the peer review information that's inconsistent with the defense presented to the court," he said.
The appellate judges' opinion outlines how Munson and Hall argued before trial that no one in the operating room remembered the incident and asserted the Bovie device must have dislodged from a holster and accidentally burned Harrison.
But evidence arose in trial that Rodgers said showed a "shocking lack of candor" from Munson; an incident report penned 90 minutes after the surgery indicated the Bovie was placed in a fold on a drape during Harrison's surgery and a doctor unknowingly leaned against it, causing the burn.
The appellate judges echoed Rodgers' admonishments against Munson and Hall. The opinion states Hall, who couldn't be reached for comment, had an "ethical obligation" to withhold an accident defense once he read the incident report.
The judges also wrote Munson was more culpable than Hall and "obstructed Harrison's search for the truth" in three instances, including preparing a signed affidavit stating a surgical assistant never handled the Bovie, despite testimony to the contrary.
Shirilla said the incident report had no place in court under Michigan's protections for hospital peer review. He said internal evaluations of medical procedures and techniques are important ways for hospitals to ensure quality care.
"What this opinion does is discourages clinicians and staff from participating in peer review and quality assurance because they could face lawsuits and claims," Shirilla said.
The appellate judges rejected Munson's claim Michigan that law prohibited Rodgers from reviewing the incident report. The opinion states the law's protections indeed applied to parts of the report, but not hand-written operating room observations.
Peer review protections did not count as "licenses to subvert the discovery process, or as shields for the presentation of false or misleading evidence," the opinion states.
The appellate judges sent the case back to Rodgers' court for individualized sanctions against Munson and Hall.