Koppen v. Board of Medical Examiners

MR. JUSTICE McDONOUGH

delivered the Opinion of the Court.

Plaintiffs William and Kimberly Koppen (Koppens) and Alan and Susan Buck (Bucks) appeal from the order of the District Court of the Eleventh Judicial District, Flathead County, dismissing their complaint against defendants Board of Medical Examiners (Board) and State of Montana. We affirm.

The appellants present one issue on appeal:

“Does Section 2-9-112, M.C.A., which provides for judicial immunity, extend to executive agencies, such as the Montana Board of Medical Examiners, for negligent failure to perform their statutory duties?”

Plaintiffs Kimberly Koppen and Susan Buck both became pregnant during the summer of 1983 and contracted with Dr. David V. Kauffman for assistance with the delivery of their babies, expected during March of 1984. The baby born to the Koppens died after a short period of survival. The baby born to the Bucks died at the age of 8V2 months.

The Koppens and the Bucks filed suit against the Board and the State on February 18, 1987, alleging the Board was negligent in failing to limit or revoke Dr. Kaufman’s license to practice medicine, or otherwise prevent him from practicing obstetrics. According to the complaint, the Board had received complaints about Dr. Kaufman’s fitness to practice medicine but failed to respond to them. The complaint characterized this as a failure by the Board to discharge its duty under Section 37-3-202, MCA, to ensure that all physicians li*216censed in Montana maintain standards of conduct in the greatest public interest. The complaint alleged that because of the Board’s failure, Dr. Kauffman’s treatment was below the level of care and skill required of physicians in Montana, which caused avoidable complications in the two pregnancies and resulted in the deaths of both infants.

On April 1, 1987, the Board and the State filed a motion to dismiss based on the contention that the Board performs a quasi-judicial function, thereby entitling both defendants to absolute immunity from suit. The District Court granted the motion by its order of September 28, 1987, and thereafter entered judgment in favor of the Board and the State.

The rationale in the District Court’s Order began by quoting portions of Section 2-9-112, MCA:

“(1) The State and other governmental units are immune from suit for acts or omissions of the judiciary.

“(2) ...

“(3) The Judiciary includes those courts established in accordance with Article VII of the Constitution of the State of Montana.”

The court pointed out that the term “includes” in subparagraph 3 of the statute is not a “limiting term.” According to the court, if the legislature had wanted to limit the immunity, it could have drafted the provision to mean specifically only those courts established under Article VII. Because the word used was “includes,” the court determined that the legislature’s grant of immunity extended to administrative agencies exercising “quasi-judicial” authority.

The court cited Butz v. Economou, 438 U.S. 478, 98 S.Ct. 2894, 57 L.Ed.2d (1978), as stating the correct rationale for quasi-judicial immunity. In Butz, the U.S. Supreme Court began its analysis of quasi-judicial immunity by stating the rationale for judicial immunity:

“ [Controversies sufficiently intense to erupt in litigation are not easily capped by a judicial decree. The loser in one forum will frequently seek another, charging the participants in the first with unconstitutional animus, [citation omitted.] Absolute immunity is thus necessary to assure that judges, advocates, and witnesses can perform their respective functions without harassment or intimidation.”

Butz, 98 S.Ct. at 2913. The court then examined the nature of administrative proceedings and the controversies involved, and concluded:

*217“We think that adjudication within a federal administrative agency shares enough of the characteristics of the judicial process that those who participate in such adjudication should also be immune from suits for damages.”

Butz, 98 S.Ct. at 2914. In this case, the District Court applied the rule in Butz to the Board, a state administrative agency, and concluded that the Board’s adjudicatory function would warrant quasi-judicial immunity, which the court found to be afforded by Section 2-9-112, MCA.

The appellants argue that the District Court’s reading of Section 2-9-112, MCA, is too liberal. Appellants’ brief outlines general rules of statutory construction stating that any statute in derogation of rights otherwise guaranteed by a constitution must be strictly construed. The right involved in this case, according to appellants, is the right to sue state government entities in tort, which they assert is conferred by Article II, Section 18 of the Montana Constitution:

“The state, counties, cities, towns, and all other local governmental entities, shall have no immunity from suit for injury to a person or property, except as may be specifically provided by law by a % vote of each house of the legislature.”

Appellants argue that the grant of judicial immunity in Section 2-9-112, MCA, is in derogation of this right, and must therefore be construed strictly. The brief notes that the Board is an executive agency created pursuant to Article VI of the constitution rather than Article VII, which in appellants’ view places the Board outside the scope of the judicial immunity found in Section 2-9-112, MCA. The conclusion drawn from this by appellants is that they have the right to sue the Board and the State for negligence, and the District Court was in error when it dismissed their suit.

The decision of the District Court was rendered on a motion to dismiss. The judge sat without a jury, no testimony was taken and the facts are relatively uncontested. In cases such as this, our scope of review is much broader, and we are free to make our own examination of the entire case and make a determination in accordance with our findings. Shimsky v. Valley Credit Union (1984), 208 Mont. 186, 189-90, 676 P.2d 1308, 1310. However, we will affirm the result reached by the District Court if it is correct, even if the reasons given for that result are incorrect. Shimsky, 676 P.2d at 1310.

The District Court was correct in concluding that the Board is entitled to quasi-judicial immunity from suit. However, we do not need to read Section 2-9-112, MCA, as providing for quasi-judicial *218immunity. The Board’s quasi-judicial immunity is derived from the common law, which we hold to be controlling here.

Article II, Section 18 of the Montana Constitution abolished sovereign immunity in Montana. The Bill of Rights Committee of the 1972 Constitutional Convention stated in its Comments accompanying the proposed text of Section 18 that its purpose was to abolish “the archaic doctrine of sovereign immunity.” 2 Mt. Leg. Council, Montana Constitutional Convention, 1971-72, 637. In reporting Section 18 to the full convention for approval, Delegate Murray of the Bill of Rights Committee stated, “We feel that the doctrine of sovereign immunity, which we are attempting to do away with by this particular provision, really means that the king can do whatever he wants but he doesn’t have to pay for it; and we’d like to do away with that doctrine.” 5 Mt. Leg. Council, Montana Constitutional Convention, 1971-72, 1760. This Court duly recognized the demise of sovereign immunity when the question first came before us in Noll v. City of Bozeman (1975), 166 Mont. 504, 534 P.2d 880.

However, sovereign immunity is not at issue here. We are instead dealing with the doctrine of quasi-judicial immunity. As we have previously held, there were and are immunities separate and distinct from sovereign immunity, unaffected by the language of Article II, Section 18. As a particularly relevant example, in State ex rel. Dept. of Justice v. District Court (1977), 172 Mont. 88, 560 P.2d 1328, and more recently in Ronek v. Gallatin County (Mont. 1987), [227 Mont. 514,] 740 P.2d 1115, 44 St.Rep. 1275, this Court held that Article II, Section 18 did not abolish the common-law doctrine of prosecutorial immunity.

As with prosecutorial immunity, quasi-judicial immunity is not a subject of Montana statutory law. Section 1-1-108, MCA, provides where the law Is not declared by statute, the common law shall be the rule of a decision. The common law rule of quasi-judicial immunity was reviewed by the U.S. Supreme Court in the Butz decision, which in turn was cited by the District Court. The opinion in Butz squarely addressed the issue raised by appellants that executive officials or agencies are not judicial bodies and should not be immunized as such. Expanding on its statement quoted above that administrative adjudications have enough in common with judicial process to warrant immunity, the U.S. Supreme Court said,

“Judges have absolute immunity not because of their particular location within the Government but because of the special nature of their responsibilities. This point is underlined by the fact that pros*219ecutors — themselves members of the Executive Branch — are also absolutely immune.

“We also believe that agency officials performing certain functions analogous to those of a prosecutor should be able to claim absolute immunity with respect to such acts. The decision to initiate administrative proceedings against an individual or corporation is very much like the prosecutor’s decision to initiate or move forward with a criminal prosecution.

“The discretion which executive officials exercise with respect to the initiation of administrative proceedings might be distorted if their immunity from damages arising from that decision was less than complete.”

Butz, 98 S.Ct. at 2913, 2915. The Butz court thus characterized quasi-judicial immunity as the logical descendant of prosecutorial immunity, which this Court recognized in Dept. of Justice and Ronek. Both are founded upon the nature of the functions carried out by agencies or officials. See Ronek, 740 P.2d at 1116.

The discretion vested in the Board to weigh the information relative to Dr. Kauffman rendered it a quasi-judicial body. This is also evident from the statutes dictating the procedures to be followed. The Board cannot revoke or suspend a license to practice medicine without giving notice and opportunity for hearing, a hearing at which the doctor concerned may be represented by counsel and offer evidence. Section 37-3-323, MCA. Such a hearing is governed by the Montana Administrative Procedure Act, and the decision reached is subject to judicial review. Sections 2-4-702 and 2-4-631, MCA. The task performed by the Board thus comes within the statutory definition of “quasi-judicial function” found at Section 2-15-102(10), MCA.

The action or inaction by the Board under attack in this case is its decision not to strip Dr. Kauffman of his license when faced with complaints concerning his professional conduct. The Board’s decision whether to initiate administrative proceedings against a doctor is analogous to a prosecutor’s decision whether to initiate court proceedings against an alleged criminal. We concur with the reasoning in Butz that the Board’s discretion might be distorted if it is not immune from suit for damages arising from such a decision. We hold, therefore, that in the exercise of its quasi-judicial authority, the Board is entitled to the absolute immunity afforded executive *220officials under the rule in the Butz decision. We also hold that the quasi-judicial immunity afforded the Board must encompass the State. The Board’s discretion would be equally subject to distortion by considerations of possible litigation against the State arising from its actions. See Ronek, 740 P.2d at 1116-17; Dept. of Justice, 560 P.2d at 1330.

The opinions in Ronek, Dept. of Justice and Butz stand for the proposition that entities called upon to function judicially should be immunized in order to facilitate the proper execution of their duties. However, the basis for these decisions, as discussed above, is the common law. We affirm the decision of the District Court.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES HARRISON, WEBER and GULBRANDSON concur.