#23679-a-JKM
2006 SD 44
IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA
* * * *
JIM SCHWAIGER, M.D., Plaintiff and Appellant,
v.
AVERA QUEEN OF PEACE HEALTH
SERVICES, Defendant and Appellee.
* * * *
APPEAL FROM THE CIRCUIT COURT OF
THE FIRST JUDICIAL CIRCUIT
DAVISON COUNTY, SOUTH DAKOTA
* * * *
HONORABLE ROBERT A. AMUNDSON
Justice (Retired), sitting as a circuit court judge
* * * *
ROBERT A. CHRISTENSON of
Christenson Law Office, PC
Sioux Falls, South Dakota
JONATHAN K. VAN PATTEN Attorneys for plaintiff
Vermillion, South Dakota and appellant.
MICHAEL F. TOBIN
MICHAEL S. McKNIGHT of
Boyce, Greenfield, Pashby & Welk, LLP Attorneys for defendant
Sioux Falls, South Dakota and appellee.
* * * *
ARGUED ON MARCH 22, 2006
OPINION FILED 05/03/06
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MEIERHENRY, Justice.
[¶1.] Dr. Jim Schwaiger (Schwaiger) brought this suit against Avera Queen
of Peace Hospital (Avera) for negligence, defamation, breach of contract, and
misrepresentation. The trial court granted summary judgment on all of
Schwaiger’s claims. He appeals the judgment on the defamation and breach of
contract claims. We affirm.
FACTS
[¶2.] On April 27, 1998, Jim Schwaiger began a one-year employment
contract with Mitchell Radiological Associates, P.C., (MRA) in Mitchell, South
Dakota. While employed at MRA, Schwaiger had medical staff privileges at Avera,
the hospital in Mitchell, and performed radiological services there pursuant to a
contract between MRA and Avera. Allegations of inappropriate behavior by
Schwaiger arose during the summer and fall of 1998. According to those
allegations, Schwaiger made inappropriate comments to both staff and patients at
Avera while performing radiological services.
[¶3.] Information concerning the allegations against Schwaiger was
transmitted in a December 28, 1998 e-mail from Rod Kernes (Kernes), the director
of Avera’s radiology department, to K.C. DeBoer (DeBoer), Avera’s Vice President of
Professional Services. DeBoer then restated those allegations in a letter to
Schwaiger’s employer, MRA, on December 29, 1998. The letter was addressed to
Dr. Carey Buhler (Buhler), a partner at MRA; Buhler also acted as the medical
director of Avera’s radiology department. DeBoer wrote:
I have now discussed with you on two occasions concerns being
brought forward by employees related to the behavior of Jim
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Schwaiger, M.D., an employee of [MRA]. I regret the need to
involve you in this situation, but since Dr. Schwaiger is an
employee of your company, I feel it would be most appropriate
for you to address these issues with him consistent with your
contractual obligation as the President of [MRA].
The letter then detailed eight examples of alleged inappropriate behavior by
Schwaiger.1 Three of the reported incidents involved Avera patients. Of all the
allegations, the seventh was the most serious allegation in the letter. It involved
Schwaiger’s behavior toward and comments concerning a male patient being
prepped for an angiogram. The letter described the alleged incident as follows:
In August or September, a young male patient was being
prepped for an angiogram. Dr. Schwaiger entered the control
room area. He proceeded to inquire about the patient’s physical
attributes. He made comments about the patient being “a
young, good looking, blonde boy.” He entered the exam room
and palpated the patient’s femoral artery. Dr. Schwaiger was
not the physician involved in the case.
A note at the top of DeBoer’s letter indicated that it was “FOR DR. BUHLER’S
EYES ONLY,” however, the bottom of the letter shows copies were sent to three
administrators at Avera.
1. In its memorandum decision, the trial court stated that DeBoer’s letter
“described nine specific incidents of behaviors and/or comments that staff had
reported as making them uncomfortable.” Citing the letter as appended to
Schwaiger’s brief, Avera, in its brief, also stated that the letter detailed “nine
separate instances of conduct.” At oral argument, however, Schwaiger’s
attorney stated that he “counted eight” allegations in the letter. Upon an
examination of the letter, we agree that it contained eight allegations: the
“screwdriver” incident, the “new technology” incident, several “miss you”
incidents which were addressed as one allegation, the “elevator eyes”
incident, the “fat butt” incident, the “thyroids like breasts” incident, the
“blonde boy” incident, and the “impotence” incident.
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[¶4.] Shortly after receiving DeBoer’s letter, Buhler and his partner at
MRA, Dr. Kundel, met privately with Schwaiger to discuss some of the incidents
described in the letter. The “blonde boy” incident, however, was not discussed at
the meeting. After the meeting, Kundel privately informed Schwaiger about the
“blonde boy” allegation. Schwaiger then confronted Buhler and vigorously denied
the allegation. A few days later, Buhler wrote a follow-up letter to Schwaiger
detailing their meeting; Buhler wrote a similar letter to DeBoer. Thereafter, Avera
received no further reports concerning questionable conduct by Schwaiger, and
Avera took no disciplinary or personnel action against Schwaiger. Schwaiger
continued to work at MRA and Avera until the completion of his contract.
[¶5.] Schwaiger brought this suit against Avera and originally asserted
claims of negligence, defamation, and tortious interference. He then amended his
complaint so as to eliminate the claim of tortious interference and added claims of
breach of contract and misrepresentation. Avera moved for summary judgment,
and the trial court ruled in Avera’s favor on all of Schwaiger’s claims.
[¶6.] Schwaiger appeals the adverse ruling on his claims of defamation and
breach of contract. Schwaiger claims that DeBoer’s letter—specifically, the details
of the alleged “blonde boy” incident—constitutes a defamatory communication.
Schwaiger admits that the letter is a communication between interested parties,
but he argues that the qualified privilege applicable to such communications does
not apply because the allegation was malicious. Schwaiger also alleges that Avera
breached its contract with Schwaiger by failing to follow procedure established by
the medical staff bylaws when investigating the alleged “blonde boy” incident.
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According to Schwaiger, the trial court erred in granting summary judgment for
Avera, and he asks us to consider the following issues:
ISSUES
1. Whether the trial court erred in concluding that there was no
genuine issue of material fact regarding the existence of malice,
which would negate the qualified privilege defense to
defamation for communications between interested persons.
2. Whether the trial court erred in concluding that there was no
genuine issue of material fact as to whether Avera breached the
medical staff bylaws.
STANDARD OF REVIEW
[¶7.] Our review of a trial court’s decision on summary judgment is well
established:
Summary judgment is authorized if the pleadings, depositions,
answers to interrogatories, and admissions on file, together with
the affidavits, if any, show that there is no genuine issue as to
any material fact, and that the moving party is entitled to
judgment as a matter of law. We will affirm only when there
are no genuine issues of material fact and the legal questions
have been correctly decided. All reasonable inferences drawn
from the facts must be viewed in favor of the non-moving party.
The burden is on the moving party to clearly show an absence of
any genuine issue of material fact and an entitlement to
judgment as a matter of law. Summary judgment will be
affirmed if there exists any basis which would support the trial
court’s ruling.
Cleveland v. BDL Enters., Inc., 2003 SD 54, ¶11, 663 NW2d 212, 216-17 (citations
and quotation marks omitted) (emphasis in original). The non-moving party,
however, cannot merely rest on its pleadings; it must point to specific facts which
establish a genuine, material issue for trial. Wulf v. Senst, 2003 SD 105, ¶18, 669
NW2d 135, 141-42. Mere allegations are not sufficient to avoid summary judgment.
Id. ¶18, 669 NW2d at 142.
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DECISION
Defamation
[¶8.] We first review Schwaiger’s contention that genuine issues of material
fact precluded summary judgment on his defamation claim. In South Dakota,
defamation is defined by statute. SDCL 20-11-2. Defamation includes both libel2
and slander.3 SDCL 20-11-2. By definition, both libel and slander are
“unprivileged” communications. SDCL 20-11-3; SDCL 20-11-4. Therefore, a
defamation action may not survive if the alleged defamatory communication was
2. Libel is defined as
[A] false and unprivileged publication by writing, printing,
picture, effigy, or other fixed representation to the eye which
exposes a person to hatred, contempt, ridicule, or obloquy, or
which causes him to be shunned or avoided, or which has a
tendency to injure him in his occupation.
SDCL 20-11-3.
3. Slander is defined as
[A] false and unprivileged publication, other than libel, which:
(1) Charges any person with crime, or with having been
indicted, convicted, or punished for crime;
(2) Imputes to him the present existence of an
infectious, contagious, or loathsome disease;
(3) Tends directly to injure him in respect to his office,
profession, trade, or business, either by imputing to
him general disqualification in those respects which
the office or other occupation peculiarly requires, or
by imputing something with reference to his office,
profession, trade, or business that has a natural
tendency to lessen its profit;
(4) Imputes to him impotence or want of chastity; or
(5) By natural consequence, causes actual damage.
SDCL 20-11-4.
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privileged. Peterson v. City of Mitchell, 499 NW2d 911, 915 (SD 1993). The
existence of privilege is a question of law. Sparagon v. Native Am. Publishers, Inc.,
1996 SD 3, ¶26, 542 NW2d 125, 132.
[¶9.] What constitutes a privileged communication is set forth by statute.
SDCL 20-11-5. If a communication is made “without malice, to a person interested
therein, by one who is also interested, or by one who stands in such relation to the
person interested as to afford a reasonable ground for supposing the motive for the
communication innocent, or who is requested by the person interested to give the
information,” it is privileged. SDCL 20-11-5 (emphasis added). Consequently,
communications between interested parties are protected unless those
communications are made with malice.
[¶10.] In this case, Schwaiger bases his defamation claim on DeBoer’s letter
to Buhler concerning Schwaiger’s conduct. Schwaiger admits that the letter is a
communication between interested parties, but he contends that the qualified
privilege applicable to such communications does not apply because of the existence
of malice. However, malice cannot be inferred from the defamatory communication
alone. SDCL 20-11-5. Rather, Schwaiger must present evidence that the
communication was made with “reckless disregard of the truth or actual malice.”
Kieser v. Se. Props., 1997 SD 87, ¶15, 566 NW2d 833, 837-38. The test for whether
DeBoer’s communication is reckless depends on whether he had “serious doubts”
about its truthfulness at the time he sent the letter. Id. ¶15, 566 NW2d at 838. As
we have stated,
The real test of whether a defendant’s conduct is reckless so as
to constitute actual malice is whether he in fact entertained
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serious doubts as to the truth of his publications. Reckless
conduct is not measured by whether a reasonably prudent man
would have published, or would have investigated before
publishing.
Petersen v. Dacy, 1996 SD 72, ¶8, 550 NW2d 91, 93 (citations and quotation marks
omitted); see also Kieser, 1997 SD 87, ¶21, 566 NW2d at 839 (“Kiesers have offered
no proof that Southeast Properties did not believe, at the time it communicated the
allegations, that Kiesers stole the listed property.”); Petersen, 1996 SD 72, ¶14, 550
NW2d at 94 (“Petersen has offered no proof that Cerny did not believe, at the time
she made the communication to the four Mr. G’s employees, that Petersen stole the
tickets.”) “Because malice cannot be presumed, the party bearing the burden of
proof must establish that there was a reckless disregard for the truth on the part of
the accused,” and “a specific showing of malice is required for purposes of raising a
genuine issue of material fact.” Tibke v. McDougall, 479 NW2d 898, 905-06 (SD
1992).
[¶11.] In his complaint, Schwaiger alleged that DeBoer’s letter was
defamatory because Avera “knew or should have known that there was no factual
basis for any inappropriate behavior by [Schwaiger] towards any patients of
[Avera].” The trial court determined, however, that Schwaiger failed to “present
evidence that [Avera] actually had serious doubts about the truth of the statements”
in DeBoer’s letter. The court noted that while Schwaiger questioned the source of
the information in the letter, Avera “filed an affidavit from the employee who made
the allegations” concerning the “blonde boy” incident. The court also noted that in
any event, “a failure to investigate is not malice.”
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[¶12.] On appeal, Schwaiger focuses on the statement concerning the “blonde
boy” incident because it is “the most outrageous and the most damaging.” For
evidence of malice, Schwaiger asserts that “one need not look any further than Rod
Kernes.” Schwaiger argues that DeBoer’s letter was instigated by Kernes, with
whom Schwaiger had a strained relationship. According to Schwaiger, Kernes
composed the e-mail in retaliation after Schwaiger reported to Kernes’ superiors
that Kernes had a drug problem. Schwaiger claims that Kernes’ animosity toward
him prompted Kernes’ e-mail to DeBoer which, in turn, prompted DeBoer to repeat
the allegations in the letter to MRA. Schwaiger asserts that his history with
Kernes supports the inference that the statement regarding the “blonde boy”
incident was made with malice. Schwaiger also contends the time lapse between
the actual occurrence of the “blonde boy” incident in May 1998 and Kernes’ e-mail
months later also supported an inference of malice. In response, Avera argues that
Schwaiger inappropriately relies on the allegation of a strained relationship
between Kernes and Schwaiger for the first time on appeal and had presented no
evidence to the trial court making it a genuine issue of material fact.
[¶13.] The record does not contain an affidavit or a deposition of Kernes,4 and
the trial court’s decision never mentions Kernes or his relationship with Schwaiger.
The only evidence that Kernes may have had a malicious motive in transmitting the
4. Interestingly, Schwaiger recognized the importance of Kernes’ testimony not
only in his affidavit, infra n5, but also during DeBoer’s deposition when the
following exchange occurred:
Q (by Schwaiger’s attorney): Did you feel in your capacity in your job
that you had a duty to find out who made these allegations?
(continued . . .)
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allegations about Schwaiger in his e-mail to DeBoer came from Schwaiger’s
affidavit.5 Schwaiger cannot point to any other evidence of animosity. He only
______________________
(. . . continued)
A: Rod and I would have discussed it, but I don’t recall the details
of those discussions at this time.
Q: So we probably should talk to Mr. Kernes about that? I mean
you don’t know—you can recall if Mr. Kernes mentioned any
names to you, is that correct?
A: At this point, no.
DeBoer’s deposition took place on December 20, 2003, but Kernes was not
deposed before the summary judgment hearing in September 2004.
5. Specifically, Schwaiger refers to three paragraphs in his affidavit in
opposition to Avera’s motion for summary judgment. In whole, those
paragraphs provide:
71. Rod Kernes had substantial reason to dislike or fear me,
and be predisposed to act against me, since I had conveyed
[a nurse]’s allegation of I.V. drug abuse by Rod Kernes,
inside the hospital, to Dr. Buhler. During the year I spent
in the hospital, Rod Kernes was accused on multiple
occasions of I.V. drug abuse, inside the hospital, by reliable
witnesses. I have also been informed that, prior to my
arrival, Rod Kernes was accused of another case of I.V.
drug abuse, inside the hospital, by yet another reliable
witness. Also, in a separate instance, Rod Kernes
reportedly consumed huge amounts of Demerol (an opiate)
as well as other opiates, over a two week period (I have
written documentation of this allegation). While his office
was being cleaned after Rod Kernes’ termination from the
hospital, yet another reliable witness noted a tourniquet
hidden (taped) underneath Rod Kernes’ desk in his office.
Rod Kernes had every reason to be concerned about my
disapproval of his drug abuse inside the hospital, and this
quite probably gave him a source of malice in his actions
against me. I ask that a jury be allowed to decide whether
his damaging and false statements against me are a
product of that malice, or whether they are, as [Avera]
(continued . . .)
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surmises that Kernes had reason “to fear or dislike” him. He speculates that “Rod
Kernes had every reason to be concerned about my disapproval of his drug abuse
inside the hospital, and this quite probably gave him a source of malice in his
actions against me.” He further speculates in his affidavit that “Kernes also may
have disliked and borne malice toward me because of my disapproval of his
interference in patient care issues.” Speculation and innuendo, however, are not
enough to raise a genuine issue of material fact. As Schwaiger points out as part of
his affidavit:
______________________
(. . . continued)
would have us believe, part of his effort to protect my
reputation through “collegial intervention.”
72. In addition to my disapproval of I.V. drug abuse, Rod
Kernes also may have disliked and borne malice toward me
because of my disapproval of his interference in patient
care issues. As I stated in my deposition, Rod Kernes
attempted to impair the department’s delivery of quality
care to patients on multiple occasions, and I opposed his
efforts. I leave it to a jury to decide as a question of fact,
after hearing his testimony, whether he had malice toward
me. I ask that a jury be allowed to decide whether his
damaging and false statements against me are a product of
that malice, or whether they are, as [Avera] would have us
believe, part of his effort to protect my reputation through
“collegial intervention.”
73. Rod Kernes’ malice toward me is evident in his practice of
investigating my sex life and sexual preference, inside the
hospital, during working hours, long after I left the
hospital. I wrote of this practice to Ron Jacobsen in my
letter AQOP 0089 on June 23, 2000, in which I was asking
about damage to my reputation. A few weeks later, Rod
Kernes was terminated. We need to learn more from Rod
Kernes in his deposition about whether this was part of
“collegial intervention,” or whether it might be, as I believe,
an indication of his zealous malice continuing perhaps to
this very day.
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We need to learn more from Rod Kernes in his deposition about
whether this was part of “collegial intervention,” or whether it
might be, as I believe, an indication of his zealous malice
continuing perhaps to this very day.
Consequently, Schwaiger’s affidavit concerning Kernes’ motives in sending the e-
mail does not set forth sufficient evidence to defeat the summary judgment motion.
[¶14.] Even if we were to find the affidavit was sufficient to raise a genuine
issue of material fact concerning Kernes’ motive, it is not Kernes’ e-mail which
forms the basis of Schwaiger’s claim of defamation. Rather, Schwaiger challenges
DeBoer’s letter, which incorporated Kernes’ e-mail. We might assume that Kernes’
e-mail was written maliciously, but even so, Schwaiger failed to provide compelling
authority for the proposition that his malice can be imputed to DeBoer.6 We have
continually noted that “[a]s a threshold . . . [an appellant] must cite relevant
authority before this Court will consider granting relief.” State v. Corey, 2001 SD
53, ¶19, 624 NW2d 841, 845. Therefore, we determine only whether, when viewed
in a light most favorable to Schwaiger, there is any evidence in the record to suggest
that DeBoer entertained serious doubts as to the truth of his statement regarding
the “blonde boy” incident when he wrote the letter to Schwaiger’s employer.
6. Citing two law review articles, Schwaiger argues that “support for the
proposition that a publication with malice doesn’t lose its malicious character
when repeated may be found in the compelled or self defamation cases where
an applicant for employment is forced to repeat the defamatory reason that
he or she left the last job.” He provides no further explanation for that
statement. Further, the cited articles concern compelled self-publication, a
doctrine this Court has not yet addressed, and they do not address whether
malice can be imputed to one who publishes statements made by another.
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[¶15.] In his deposition, DeBoer testified that the “blonde boy” incident was
brought to his attention by Kernes. DeBoer did not specifically recall who made the
allegation, and when asked if Kernes provided that information, DeBoer replied,
“As I stated, probably in our conversation we discussed that, but at this time I don’t
recall the details.” When asked whether the statement in his letter concerning the
incident was “an accurate statement from what Mr. Kernes brought to [DeBoer],”
DeBoer replied, “I believe that’s true.”
[¶16.] In his deposition, Rod Jacobsen (Jacobsen), then president of Avera,
also testified regarding the source of the allegations concerning Schwaiger from
DeBoer. When asked how he first learned of the allegations, Jacobsen stated, “My
recollection is that [DeBoer] talked with me and said that employees have raised
some issues, have had some complaints. He may have given me a couple of
examples of the complaints that employees had given to, I believe, Rod Kernes. If
I’m not mistaken, Rod Kernes talked to [DeBoer]. [DeBoer] told me about it.”
When asked if he recalled what DeBoer stated, Jacobsen replied, “No, not
necessarily in specific, just that he referenced the fact that complaints have been
made by employees to Rod Kernes concerning Dr. Schwaiger.” Jacobsen did not
know who made the allegation concerning the “blonde boy” incident.
[¶17.] The record also includes the deposition and affidavit of Stacy Koch
(Koch), as well as the deposition of Mandy Robinson (Robinson), the two radiological
technicians who observed the “blonde boy” incident. Both technicians stated that on
May 7, 1998, they were preparing for an angiogram on a young man when
Schwaiger made comments about the patient’s physical appearance. According to
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both Koch and Robinson, the patient was not a patient of Schwaiger. Koch observed
Schwaiger palpate the patient’s femoral artery. In her deposition and her affidavit,
Koch stated that she reported the incident to Kernes.
[¶18.] Suffice it to say, DeBoer was not the most cooperative witness during
his deposition. He was often evasive—“I don’t understand your point”—and his
memory was anything but clear where Schwaiger was concerned—“We’re five years
later. I don’t recall those kind of details.” Therefore, if the record provided no
factual basis for the “blonde boy” allegation, we might question whether DeBoer
published that allegation with reckless disregard for the truth. Even viewed in a
light most favorable to Schwaiger, however, the only inference supported by the
evidence is that Koch and Robinson observed conduct by Schwaiger which made
them feel uncomfortable, Koch reported that conduct to Kernes, Kernes informed
DeBoer of the conduct, DeBoer discussed his concerns with Jacobsen, and DeBoer
passed his knowledge on to Buhler. We do not measure DeBoer’s conduct “by
whether a reasonably prudent man would have published, or would have
investigated before publishing.” Petersen, 1996 SD 72, ¶8, 550 NW2d at 93
(citations and quotation marks omitted). Therefore, because there is no evidence in
the record that DeBoer in fact entertained serious doubts as to the truth of his
publications, there is no genuine issue of material fact concerning malice. Thus, the
trial court correctly entered summary judgment in favor of Avera on Schwaiger’s
claim of defamation.
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Breach of Contract
[¶19.] Next we review Schwaiger’s argument that a genuine issue of material
fact precluded summary judgment on his breach of contract claim. As we have
recognized, a hospital’s bylaws constitute a binding contract between the hospital
and its medical staff. Mahan v. Avera St. Luke’s, 2001 SD 9, ¶15, 621 NW2d 150,
154. When the construction of hospital bylaws is at issue, “we apply the normal
principles for construction and interpretation of a contract.” Id. (citation omitted).
The construction of a contract is a question of law which we review de novo. Id.
(citation omitted).
[¶20.] Schwaiger asks us to consider two sections in Article III of Avera’s
medical staff bylaws. The first section is Section VII, titled “Corrective Review
Action.” Section VII states an investigation may be initiated whenever a physician
“engages in, makes, or exhibits acts, statements, demeanor, or professional conduct
. . . detrimental to patient safety or delivery of patient care, disruptive to the
hospital operation or an impairment of the community confidence in the hospital.”7
7. Section VII provides:
Corrective Review Action – Whenever a physician, dentist, or allied
health professional with clinical privileges engages in, makes, or
exhibits acts, statements, demeanor, or professional conduct (either
within or outside of the hospital) detrimental to patient safety or
delivery of quality patient care or disruptive to the hospital operations
or an impairment of the community’s confidence in the hospital, a
review action against the individual may be initiated by the Chief
Executive Officer, the Governing Board, the Executive Committee, or
any officer of the Medical Staff. If an adverse recommendation is made
the affected individual may utilize the fair hearing plan in Article III,
Section VIII.
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The second section is Section X, entitled “Impaired Staff Membership,” which
provides the procedure that “shall be used in assisting Medical Staff member
experiencing impairment of professional performance or disruption of hospital
activity due to mental/emotional disturbances, sexual misconduct, physical
disabilities and chemical impairment or dependencies.”8
8. Section X provides:
Impaired Staff Membership – The following shall be used in assisting
Medical Staff members experiencing impairment of professional
performance or disruption of hospital activity due to mental/emotional
disturbances, sexual misconduct, physical disabilities and chemical
impairment or dependencies.
PURPOSE:
To provide a 1) confidential way of investigating alleged
impairment or misconduct and, if appropriate, to achieve a
confidential, fair and impartial assessment of a physician or
professional’s impairment or misconduct and 2) to assist the
affected individual in initiating and continuing appropriate
treatment for his/her condition and 3) to provide the Executive
Committee with the information necessary to initiate corrective
action if appropriate.
POLICY:
The Executive Committee shall assess any and all instances of
purported impairment or disruption in a manner at once
confidential, humanitarian, and directed toward assisting the
affected individual while also assuring patient safety and the
smooth operation of the hospital.
The section then goes on to provide the investigative procedure applicable to
instances of “impaired staff membership.”
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[¶21.] The parties disagree on the application of these sections to the
allegations against Schwaiger.9 According to Schwaiger, Avera should have
followed Section X’s confidential investigation procedures, and its failure to do so
constitutes breach of contract. Specifically, Schwaiger focuses on the “blonde boy”
incident, which, according to Schwaiger, constitutes an allegation of sexual
misconduct under Section X. Avera, however, argues that Section X does not apply
because Schwaiger was not impaired and did not disrupt hospital activity.
According to Avera, Schwaiger’s conduct made employees feel uncomfortable, and
therefore it had discretion to engage in “collegial intervention,” rather than a formal
investigation process.
[¶22.] We begin by noting the title of Section X, “Impaired Staff
Membership.” The plain, ordinary meaning of “impaired” is “diminish[ed] in
strength, value, quantity, or quality.” American Heritage Dictionary 644 (2d
College Ed). Thus, the title of Section X implicates more than just offensive
conduct. Section X goes on to require “impairment of professional performance or
disruption of hospital activity.” The plain, ordinary meaning of “disrupt” is “[t]o
throw into confusion or disorder.” American Heritage Dictionary 408 (2d College
Ed). Additionally, Section X requires that the source of impairment be
“mental/emotional disturbances, sexual misconduct, physical disabilities and
chemical impairment or dependencies.” While “sexual misconduct” is not defined by
9. While it does not bear on the breach of contract issue, the fact that Avera
took no disciplinary action against Schwaiger is notable. Schwaiger’s
privileges were not restricted at any time, and therefore no review hearing
took place.
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the section, the surrounding terms—mental or emotional disturbances, physical
disabilities, chemical impairment—indicate the serious connotation given to the
terms. Therefore, Section X applies to serious impairments which diminish a
physician’s ability to provide care or cause confusion or disorder in hospital activity.
[¶23.] In this case, no evidence suggests that Schwaiger’s staff membership
was impaired in any way. The claims against Schwaiger alleged that he made
inappropriate statements—most of a sexual nature—to hospital employees and
patients. The “blonde boy” incident involved a similar comment to hospital
employees. It also alleged that Schwaiger “entered the exam room and palpated the
patient’s femoral artery” and that Schwaiger “was not the physician involved in the
case.” Therefore, it is not apparent that the allegations claimed that Schwaiger was
unable to fully perform his professional duties, or that Schwaiger’s conduct caused
confusion or disorder in hospital activity. Thus, we agree with the trial court that
Section X’s mandatory investigation requirement did not apply to the allegations
against Schwaiger. Thus, Avera did not breach its contract with Schwaiger by
failing to follow the procedure in Section X.
[¶24.] Even if the allegations against Schwaiger fell within Section VII, no
breach of contract occurred. The language of Section VII allows investigation, but
does not require it. Rather, Section VII granted Avera the discretion to apply its
investigation procedure. Thus, we cannot say that Avera breached its contract with
Schwaiger by utilizing “collegial intervention,” rather than formal discipline
procedures, to address the allegations regarding Schwaiger’s conduct.
[¶25.] Affirmed.
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[¶26.] GILBERTSON, Chief Justice, and KONENKAMP and ZINTER,
Justices, and STEELE, Circuit Judge, concur.
[¶27.] STEELE, Circuit Judge, sitting for SABERS, Justice, disqualified.
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