Cornfeld v. State Board of Physicians (Ct. of Special Appeals)

Filed May 2, 2007--Opinion by Judge Sally Adkins.

The State Board of Physicians ("Board") found Cornfeld (1) violated the standard of care in his treatment of a surgical patient by leaving her under anesthesia and unattended in the operating room, and (2) engaged in unprofessional conduct in the practice of medicine by misrepresenting to both a hospital peer review investigator and the Board that improper settings on the surgical instrument he used were not made to his specifications. The Board suspended Cornfeld's license to practice medicine until he satisfied certain conditions and imposed a three year probationary period thereafter. The Circuit Court for Baltimore City affirmed the Board's order. Cornfeld appeals, raising five issues for review:

1. Did the Board err in concluding that Dr. Cornfeld engaged in unprofessional conduct "in the practice of medicine" by making misrepresentations during hospital peer review and Board investigations?
2. Did the Board violate section 14-401(i) of the Medical Practice Act by failing to complete its investigation within 18 months, or to explain its delay, requiring dismissal of the complaint against Cornfeld?
3. Is the Board's conclusion that Dr. Cornfeld violated the standard of care by leaving an anesthetized patient unattended in the operating room supported by substantial evidence?
4. Is the sanction imposed by the Board "so disproportionate as to constitute arbitrary and capricious agency action?
5. Did the administrative law judge abuse her discretion by excluding certain evidence offered by Dr. Cornfeld?

The Court held that Dr. Cornfeld's false statements to hospital peer reviewers and Board investigators constituted "professional misconduct in the practice of medicine." Finding substantial evidence to support the Board's decision, no abuse of discretion, and no error of law, the judgment was affirmed.

The Medical Practice Act ("Act") identifies 40 specific bases for disciplinary action, two of which explicitly pertain to conduct committed "in the practice of medicine." Section 14-404(a)(3) permits the board to disclipline a licensee who is guilty of immoral or unprofessional conduct in the practice of medicine. Section 14-404(a)(11) authorizes discipline of a physician who "wilfully makes or files a false report or record in the practice of medicine." In addition, Section 14-404(a)(22) allows disciplinary action against a licensee who "fails to meet appropriate standards as determined by appropriate peer review for the delivery of quality medical and surgical care performed in a hospital."

Prior to a gynecological procedure in October 1999, Cornfeld instructed the overseeing nurse ("Dickey") to change the settings of the surgical machine ("Bovie") to his preferred settings indicated on a card he had on file. During the procedure, he burned the patient twice and repaired the lacerations with two large Vicryl stitches. Proper notifications of the incident by Dickey ultimately led to another surgeon's ("Vincent") review and correction of Cornfeld's stitching. Upon Dickey's notification to Cornfeld that another surgeon would be conducting such review and that the patient was to remain unconscious until the review, Cornfeld replied "Do what you need to do," and then left the operating room. No other surgeon was in the operating room at that time, and it was at least two to three minutes before the reviewing surgeon arrived. MGH suspended Cornfeld's hospital privileges shortly thereafter.

In a subsequent statement through his attorney in February 2000 to the investigating Board and a peer review investigation in July 2000, Cornfeld made statements in direct opposition to the stated preference of the card he had on file and alleged Dickey was negligent. The Board filed charges against Cornfeld in November 2003, alleging both violations of the standard of care and unprofessional conduct in the practice of medicine. After an evidentiary hearing, an administrative law judge ("ALJ") initially found Cornfeld breached the standards of care applicable to the charges. However, after hearing and exceptions, the Board concluded that "the clear and convincing evidence demonstrates only that Dr. Cornfeld left an anesthetized patient unattended in the operating room and thus violated Section 14-404(a)(22)."

The Board's separate charge of unprofessional conduct was based on Cornfeld's statements regarding his instructions for the Bovie machine settings. The ALJ concluded that the misrepresentations Cornfeld made about the settings were made during the hospital peer review and Board investigation and, therefore, did not fall within the "practice of medicine." The Board sustained the State's exception to that conclusion and, in support, cited its own precedents that making a false application or submitting a false testimony for a Board proceeding are "clearly within the practice of medicine."

The Board sanctioned Cornfeld by revoking his license until he satisfied certain enumerated conditions and, once the suspension was lifted, continued Cornfeld on probation for three years, during which his practice would be subject to "Board review and peer review" at the Board's discretion.

The standards governing judicial review of the Board's decision are limited to determining whether there was substantial evidence in the record as a whole to support the agency's findings and conclusions, and to determining whether the decision was premised upon an erroneous conclusion of law. In applying the substantial evidence test, a reviewing court decides whether a reasoning mind reasonably could have reached the factual conclusion the agency reached; should defer to the agency's fact-finding and drawing of inferences if they are supported by the record; must review the agency's decision in the light most favorable to it; the agency's decision is prima facie correct and presumed valid; and it is the agency's province to resolve conflicting evidence and to draw inferences from that evidence.

Unprofessional Conduct in the Practice of Medicine: The practice of medicine is statutorily defined as

1. to engage, with or without compensation, in medical (i) diagnosis, (ii) healing, (iii) treatment, or (iv) surgery;

2. "practice medicine" includes doing, undertaking, professing to do, and attempting any of the following: diagnosing, healing, treating, preventing, prescribing for, or removing any phsyical, mental or emotional ailment or supposed ailment of an individual:

• by physical, mental, emotional or other process that is exercised or invoked by the practitioner, the patient, or both, or
• by appliance, test, drug, operation, or treatment.

Cornfeld contends that his misconduct did not occur in the practice of medicine because it took place in the context of judicial proceedings and was unrelated to the manner in which he treated a patient such that it was directly tied to the effective delivery of patient care. The Court reasoned that this case involved misconduct that occurred during proceedings that arguably adjudicated the medical propriety of Cornfeld's care. However, the Court did not agree that the definition of the pratice of medicine was so narrowly defined so as to exclude professional misconduct during hospital peer reviews and Board disciplinary proceedings. The issue of whether a treating physician's dishonesty in a peer review or state discplinary proceeding falls within the "practice of medicine" is one of first impression, and the Court was persuaded that Cornfeld made the false statements in order to influence decisions concerning the quality of his medical care to a patient and his fitness to practice medicine at MGH specifically, and in Maryland generally. Further, Cornfeld's false statements concerned his instructions for settings on a surgical instrument he used to operate, a matter that required his medical judgment in a specific surgical procedure. These misrepresentations were made to persons responsible for evaluating Cornfeld's medical care to patients. Held: Such misrepresentations were directly tied to medical treatment and surgery within the statutory definition of "practice medicine."

Delay in Board Investigation: The relevant section, 14-404(j)(2), states "If the Board is unable to complete the disposition of a complaint within 1 year, the Board shall include in the record of that complaint a detailed explanation of the reason for the delay."

Although the investigation was opened in January 2000, charges were not issued for more than three years. Cornfeld contends that, despite repeatedly raising the issue of untimeliness of the investigation, the Board failed to comply with either the statutory time frame or the statutory requirement that any extension beyond one year will be explained in detail on the record and posits the proper remedy is dismissal of the charges for failure to comply with the statute. The Court found that the legislature's failure to include a penalty for failure to act within a prescribed time indicates the provision is directory rather than mandatory. In accordance with HO § 14-405(g), "hearing of charges may not be . . . challegend by any procedural defects alleged to have occurred prior to the filing of charges" including complaints that the Board failed to comply with Section 14-404(j).

Violation of Standard of Care: The Court held the cited evidence provided a substantial factual basis for the Board's finding that Cornfeld violated the applicable standard of care in leaving an anesthetized patient.

Sanctions: The Board has statutory authority to "place any license on probation or suspend . . . a license" for violations of the Act. The Court could not find that suspension and long term probation for the breach of the standard of care in this case was so extreme and egregious as to warrant judicial intervention.

Evidentiary Rulings: The Administrative Procedure Act protects a party's right to call witnesses, offer evidence (including rebuttal evidence), cross-examine any witness, and present summation and argument. An ALJ may exclude evidence that is incompetent, irrelevant, immaterial or unduly repetitious, Cornfeld contends the ALJ went too far when she denied him his right to pursue any theories of the case. After reviewing the relevant portions of the record in support of Cornfeld's complaints, the Court did not find that Cornfeld was denied his rights to defend himself.

The full opinion is available in PDF.

Yourik v. Mallonee (Ct. of Special Appeals)

Decision Filed May 1, 2007--Opinion by Judge Sally D. Adkins.

Yourik is the son of Mallonee. In 1964, shortly after Yourik married, Mallonee and her now deceased husband selected a house for the newlyweds. Mallonee made the downpayment and paid all settlement fees and recording costs; the balance of the purchase price was obtained by mortgaging the property. The deed to the property was titled in the name of Yourik and his wife Leonora, as tenants by the entireties.

Within a year, however, the Youriks had not only separated, but also had become delinquent in their mortgage, resulting in foreclosure proceedings being initiated. With Yourik’s blessing, Mallonee and her husband “took over” the house and its mortgage. They paid the arrearage and continued making mortgage payments until that debt was paid in full. Meanwhile, Yourik moved to Baltimore City, never again living in the house, paying anything toward it, or receiving any income from it. At most, Yourik returned to the house for occasional holiday visits with the Mallonees.

Thus, beginning in late 1965 and continuing until trial in 2006, Mallonee either lived in the house or rented it out to others. She made all rental decisions without informing Yourik and kept all rental income. She and her husband paid all the taxes and utilities, and made all expenditures for upkeep, improvements, and repairs. Mr. Mallonee died two years before trial; Ms. Mallonee now lives in the property by herself.

After a bench trial, the Circuit Court for Baltimore County held that Mallonee had established all the elements of adverse possession, including the requirement that the possession be "hostile," even though she has always acknowledged that Yourik has held a recorded deed to the property since 1964. Yourik appealed, raising a single issue for review:

May a person acquire title to property by adverse possession if she acknowledges that when she first took possession, and at all times thereafter, she has had actual knowledge that the legal title is in the name of her son?

The Court held that a person who acknowledges legal title in a family member who abandoned the disputed property to foreclosure may occupy the property "hostilely" for purposes of acquiring that title by adverse possession. The Court noted that:

Mallonee did not occupy [the property] in the belief that her son owned it, or under the terms of a contract that required her to earn her interest over time. . . . . [A]ny agreement by which Yourik would "sign over" the deed did not signify that Mallonee considered her possession to be permissive, because Yourik had relinquished his ownership rights in the face of foreclosure. Instead, Mallonee made all mortgage payments, tax payments, repairs, and occupancy decisions on her own behalf, while keeping all rental income for the property for herself.

The Court therefore affirmed the lower court's determination that title had passed to Mallonee under the doctrine of adverse possession.

A copy of the opinion is available in PDF.

Swoboda v. Wilder (Ct. of Special Appeals)

Filed April 4, 2007--Opinion by Judge Sally Adkins.

In an appeal from the approval of a Rodgers Forge building permit, the Court held that determining the front, side, and rear orientation of a townhouse end unit situated at the corner of intersecting streets requires consideration of all physical characteristics of the property, not merely street address and foundation walls, and that in an appropriate case an end unit may front on a different street than the interior units in the same townhouse group.

(synopsis to follow)

The opinion is available in PDF.

Brown v. Smith (Ct. of Special Appeals)

Filed: March 29, 2007--Opinion by Judge Sally Adkins

In a case arising from disputed use of a right-of-way, the Court of Special Appeals examined the nature of a nominal damages award, and whether there is a maximum limitation on the dollar amount that can be considered nominal damages.

Appellants, the Browns, were determined by the lower court to have been trespassing on property owned by the Smiths, by traveling over a farm lane to access a public road from the Browns’ property. The Browns appealed both the decision that they had no right to use the farm lane and an award of $8,350 in “nominal damages.”

The Court first determined that there was a final appealable judgment, even though no judgment had been entered on a third party complaint against a neighbor of both parties. Next the Court agreed that the common grantor of the original deeds in 1875 had not intended to create mutually reciprocal rights of way appurtenant to the Smith and Brown properties. The Court also held that the trial court did not err in admitting expert testimony or in denying injunctive relief. On the issue of damages, however, the Court concluded that an $8,350 damage award on the trespass count was too high to be a “nominal damages” award. Because the Court could not determine from the record whether there may or may not be justification for compensatory damages, it remanded for reconsideration of that issue.

The opinion is available in PDF.

Bank of America v. Gibbons (Ct. of Special Appeals)

Filed March 13, 2007. Opinion by Judge Sally Adkins.

Over a six year period, the husband of appellee Gibbons (Mrs. Gibbons), pocketed proceeds from unauthorized sales of securities owned by several customers of his employer, appellant Bank of America Corporation (the Bank). The value of these misappropriated stocks allegedly exceeded $1.5 million. Mr. Gibbons deposited the proceeds in a solely-owned account. From there, he moved some of the funds into a jointly-owned account and a still smaller portion into another jointly-held account from which Mrs. Gibbons wrote checks, primarily for household and family purposes.

The Bank sought to recover the funds deposited in this final account from Mrs. Gibbons on a conversion and unjust enrichment theory. Mrs. Gibbons, who had no knowledge of her husband's theft, sought and obtained summary judgment, convincing the motion court that the Bank had no evidence to support any of the three elements of unjust enrichment.

"Under Maryland law, '[a] claim of unjust enrichment is established when: (1) the plaintiff confers a benefit upon the defendant; (2) the defendant knows or appreciates the benefit; and (3) the defendant's acceptance or retention of the benefit under the circumstances is such that it would be inequitable to allow the defendant to retain the benefit without the paying of value in return.' Benson v. State, 389 Md. 615, 651-52 (2005)."

On appeal, the court held that neither an implied-in-fact contract, nor direct dealings between the parties, nor the direct transfer of funds from plaintiff to defendant was required to meet the first element. Furthermore, it is not necessary to show that the recipient knew the funds were stolen to meet the second element. All that is required is that the recipient gave no consideration for the funds. Similarly, the lack of knowledge that the funds were stolen is not automatically fatal to proof of the third element. Instead, the motion court should have considered whether Mrs. Gibbons would have suffered any loss had she been ordered to make restitution, whether her husband had used the money without benefiting the family, or whether other equitable circumstances should come into play. Thus, under the reasoning of the court, it is legally possible that the Bank could recover funds from the completely innocent spouse of a thief.

The opinion is available in PDF.

Harby v. Wachovia Bank (Court of Special Appeals)

Filed January 26, 2007. Opinion by Judge Sally D. Adkins.

Issue: Are "no acceptance" and “no consideration” viable defenses to enforcement of an arbitration clause contained in a bank's depositary agreement?

Held: No. A depositor who signs a signature card or other agreement adopting the terms of a separate agreement containing an arbitration clause is bound by that arbitration clause. Judgment of the circuit court affirmed.

Facts: The court-appointed guardian of the property of a minor opened a bank account and deposited funds for the benefit of the minor. To open the account, the guardian signed a document that referred to and incorporated the terms of a depositary agreement containing a mandatory arbitration clause. The guardian did not sign the depositary agreement separately. The guardian then allegedly defalcated portions of the fund. The guardian was replaced by a substitute guardian who sued the first guardian and the bank in circuit court.

The bank moved to enforce the mandatory arbitration clause and asked that the litigation be stayed or dismissed. The plaintiff opposed the motion, raising as grounds 1) no acceptance of the clause, and 2) no consideration given for the clause. The circuit court enforced the arbitration agreement and stayed the litigation. The plaintiff appealed.

On appeal, the Court of Special Appeals identified and discussed a line of precedent establishing the principle that a depositor who accepts the terms of a separate deposit agreement by executing a signature card or other agreement is bound by the terms of the deposit agreement, even if the deposit agreement is not separately executed. The Court held that the guardian was bound by the terms of the second agreement, and that the substitute guardian was bound by the acts of her predecessor. The Court rejected the argument that, to be enforceable, the arbitration clause must be specifically referenced in the agreement signed by the depositor.

The plaintiff argued, alternatively, that the arbitration agreement was unenforceable for lack of consideration, because it remained subject to unilateral modification by the bank under the terms of the depositary agreement. The plaintiff argued that the bank's unilateral right to change the terms meant it could "opt out" of arbitration at its discretion. This rendered the mutual promise of arbitration "illusory," and thus inadequate as consideration for a binding agreement. The Court held that the bank's agreement to provide 30-days notice of any change to the agreement meant that the bank was bound to the terms for at least 30 days. The Court held that this was sufficient consideration to support a binding agreement to arbitrate.

Accordingly, the Court affirmed the decision of the Circuit Court.

A copy of the opinion is available in PDF.

Pope v. Barbre (Ct. of Special Appeals)

Decided January 25, 2007--Opinion by Judge Sally D. Adkins.

Pope suffered paralyzing injuries when Mark Barbre, appellee and Queen Anne's County Deputy Sheriff, shot him in the neck following a traffic stop. The Circuit Court for Montgomery County granted summary judgment on Pope's claims against Barbre, and dismissed his claims against the State of Maryland and Queen Anne's County, because Pope mistakenly notified Queen Anne's County of his claim under the Maryland Tort Claims Act (MTCA), rather than notifying the State Treasurer or one of two specified designees. Pope challenges those rulings, arguing that he complied with the mandatory notice requirements of Md. Code (1984, 2004 Repl. Vol.), section 12-106(b) of the State Government Article (SG), and that such notice is not a prerequisite to his claim against Barbre individually.

Held:

1. The "substantial compliance" doctrine under the Maryland Tort Claims Act can be expanded to encompass such defective notice. Pope had provided notice of his claim to the Queen Anne's County Commissioner. However, the Court concluded that the Queen Anne's County Commissioner was not a "Treasurer’s designee" for purposes of accepting notice of tort claims under the MTCA. Furthermore, service on the County does not constitute substantial compliance with §12-106(b) of the MTCA.

2. Notice under the MTCA is not necessary to sue an individual State officer in his individual capacity for torts allegedly committed with malice or gross negligence, or outside the scope of employment. The Court found that:

When, as in this case, the claimant pursues tort remedies against an individual classified as State personnel, based on acts allegedly committed with malice or gross negligence, a requirement of notice to the State would not serve the investigation and settlement purposes underlying section 12-106(b). Nor would notice to individual State personnel serve such purposes. Thus, the State Treasurer does not require early notice of a claim against an individual officer alleging a malicious or grossly negligent tort.

A copy of the opinion is available in PDF.

Kreter v. HealthStar Communications, Inc. (Ct. of Special Appeals)

Decided January 2, 2007-Opinion by Judge Sally D. Adkins.

This case deals with the validity and enforceability of an indemnification agreement indemnifying an indemnitee against its own fraud. Under existing Maryland law, there is a presumption against enforcement of an agreement to indemnify a person against his own negligence unless the intent to do so is expressed in unequivocal terms (the "Presumption"). In this case, the Court, after examining the history and rationales for the Presumption, held that it was inapplicable to the indemnification agreement which is the subject of this decision.

The relevant facts are as follows: Kreter was an officer, director, and controlling stockholder of two closely-held corporations, and her husband was an officer, director, and minority stockholder of the corporations. Several months after Kreter and her husband separated, she fired him, and several months later she began negotiating the sale of all of the stock in the two corporations to HealthStar.

Kreter, her estranged husband, and several other minority stockholders ultimately approved the sale of the stock to HealthStar for $20,000,000, but unbeknownst to Kreter's husband and the other minority stockholders, Kreter had entered into a separate employment contract pursuant to which HealthStar agreed to pay Kreter an additional $1,000,000.

Foreseeing the possibility that Kreter's husband might sue, Kreter and HealthStar entered into an agreement pursuant to which Kreter agreed to indemnify HealthStar for any damages or costs, including defense costs, arising out of any such lawsuit.

Kreter's husband sued both Kreter and HealthStar for fraud, but his claim against Kreter was held to be barred under the doctrine of res judicata due to the judgment entered in their divorce. He ultimately prevailed in his claim against HealthStar, which then sought to recover its damages and attorney's fees from Kreter. When Kreter refused to honor her obligations under the indemnity agreement, HealthStar commenced an action seeking a declaratory judgment that the agreement was valid and enforceable.

The circuit court ruled that the agreement was valid and enforceable, and Kreter appealed.

In affirming the circuit court's decision, the Court of Special Appeals examined the history and rationale for the Presumption. One rationale for the Presumption is that it is designed to protect the "unwary and uninformed promissor." A second rationale is to avoid encouraging indemnitees to engage in negligent conduct.

The Court rejected the first rationale not only because Kreter was a sophisticated businessperson, but also because she was represented by counsel. The Court rejected the second rationale, because, unlike the typical exculpatory agreement which is designed to protect a party against its future wrongful conduct, the wrongful conduct had already occurred, therefore enforcement of the agreement would not tend to encourage wrongful conduct.

The full opinion is available in WordPerfect and PDF.