Comprehensive Neurosurgical v. Valley Hosp.

312 A.3d 243

257 N.J. 33

COMPREHENSIVE NEUROSURGICAL, P.C., d/b/a North Jersey Brain and Spine Center, Patrick A. Roth, MD, Roy D. Vingan, MD, George J. Kaptain, MD, Daniel E. Walzman, MD, Hooman Azmi, MD, Harshpal Singh, MD, Kangmin Daniel Lee, MD, Reza J. Karimi, MD, Bruce C. Zablow, MD, Ugo Paolucci, MD, and Mohammed Faraz Khan, MD, Plaintiffs-Respondents,

v.The VALLEY HOSPITAL, The Board of Trustees of the Valley Hospital, and Valley Hospital President Audrey Meyers, Defendants-Appellants,andNeurosurgical Associates of New Jersey, P.C., and Anthony D’Ambrosio, MD, Defendants.

A-52 September Term 2022

087469

Supreme Court of New Jersey.

Argued November 29, 2023

Decided April 16, 2024

On certification to the Superior Court, Appellate Division.

Christopher S. Porrino argued the cause for appellants (Lowenstein Sandler, and Wollmuth Maher & Deutsch, attorneys; Christopher S. Porrino, of counsel and on the briefs, and Robert G. Nuse, Roseland, and R. Scott Thompson, on the briefs).

Peter G. Verniero argued the cause for respondents (Sills Cummis & Gross, attorneys; Peter G. Verniero, Joseph B. Fiorenzo, and Stephen M. Klein, of counsel and on the briefs, and James M. Hirschhorn and Michael S. Carucci, Newark, on the briefs).

Ross A. Lewin argued the cause for amicus curiae New Jersey Hospital Association (Faegre Drinker Biddle & Reath, attorneys; Ross A. Lewin, Princeton, of counsel and on the brief).

Ross A. Lewin submitted a brief on behalf of amicus curiae American Hospital Association (Faegre Drinker Biddle & Reath, attorneys; Ross A. Lewin, Princeton, of counsel and on the brief).

Daniel B. Frier submitted a brief on behalf of amici curiae The Medical Society of New Jersey and the American Medical Association (Frier Levitt, attorneys; Daniel B. Frier, Pine Brook, Todd Mizeski, Nicole M. DeWitt, Theresa M. DiGuglielmo, and Conor R. McCabe, on the brief).

JUSTICE FASCIALE delivered the opinion of the Court.

₄₆In this appeal, The Valley Hospital (Valley) challenges a jury verdict in favor of a group of eleven neurosurgeons and their practice group, Comprehensive Neurosurgical, P.C., d/b/a/ North Jersey Brain & Spine Center (collectively, plaintiffs). A jury awarded plaintiffs $24,300,000 in damages based on their claim that Valley did not deal with them fairly or act in good faith when it granted another group of neurosurgeons exclusive privileges in areas for which plaintiffs had held privileges.

Valley first argues that the trial judge should have granted summary judgment in its favor because courts traditionally defer to hospitals’ administrative healthcare policy decisions that "genuinely₄₇ serve[] a legitimate public-health objective," Berman v. Valley Hospital, 103 N.J. 100, 107, 510 A.2d 673 (1986), "including the selection of [its] medical staff," Desai v. St. Barnabas Medical Center, 103 N.J. 79, 90, 510 A.2d 662 (1986). Valley argues in the alternative that substantial cumulative errors tainting the jury verdict require a new trial. According to Valley, the jury was improperly permitted -- through an unclear verdict sheet and instructions -- to find that Valley had breached an implied covenant of good faith and fair dealing. Valley also contends that the jury verdict was tainted by the erroneous admission into evidence of privileged emails and by misleading remarks that plaintiffs’ attorney made in summation when he emphasized Valley’s lack of evidence on an issue despite knowing that such evidence existed.

Although we find that plaintiffs’ good faith and fair dealing claim properly survived summary judgment, we agree that the jury was not correctly charged or asked to rule on that claim. The trial judge failed to instruct the jury that the only underlying contract to which the implied covenant could attach to had to be one beyond the rights afforded by Valley’s Medical Staff Bylaws (the Bylaws). Adding to the significant uncertainty created by the jury charge and verdict sheet are the improper admission into evidence of the privileged emails and the improper remarks by plaintiffs’ attorney.

Despite the deference with which we consider jury verdicts, we find that those errors, cumulatively, had the capacity to lead the jury to reach a verdict it would not have otherwise reached and deprived Valley of a fair trial. Accordingly, we reverse the appellate court’s judgment, vacate that part of the verdict on plaintiffs’ implied covenant of good faith and fair dealing claim, and remand for further proceedings consistent with this opinion.

I.

We derive the factual overview that follows from the evidence and testimony presented at trial. Mindful that a substantial retrial will follow our decision, we endeavor to attribute differing accounts₄₈ to the parties that made them, and also emphasize that no factual findings may be inferred from the overview presented here.

Plaintiffs -- initially a group of two neurosurgeons -- joined the Valley Hospital Medical Staff Organization (Medical Staff) in 2003.¹ Upon arrival, plaintiffs received "core privileges" allowing them to perform common neurosurgery procedures, and "admitting privileges" permitting them to admit their already-established patients into Valley. Valley also gave plaintiffs the right to "cover" the Emergency Room (ER) by treating "unassigned" ER patients who arrive to the ER on an emergency basis and are not any other neurosurgeon’s established patient. Plaintiffs’ practice at Valley primarily derived from treating those "unassigned" ER patients.

Over the following years, plaintiffs expanded their practice from two to up to twelve neurosurgeons. Additional neurosurgeons and practice groups also obtained privileges and joined the Medical Staff. For example, Dr, Anthony D’Ambrosio of the Columbia Neurosurgical Network-NJ (the Columbia Group) joined the Medical Staff in July 2007.²

With plaintiffs’ help, Valley’s programs and facilities grew during that time as well. Plaintiffs helped establish Valley’s "Spine Center," contributed to the creation of Valley’s "Neuro-oncology program," and introduced specialized neurosurgical equipment, such as the "Biplane" angiography system and the "Gamma Knife" radiosurgery procedure, which allowed the neurosurgeons to perform minimally invasive surgeries rather than "opening" patients’ ₄₉skulls. Valley granted "specialized privileges" to the physicians in plaintiffs’ practice group who focused their craft on treating stroke and aneurysm patients. The "specialized privileges" authorized them to use the "Biplane" and "Gamma Knife" equipment they helped implement.³

By 2008, Valley had opened its "Neuroscience Center of Excellence," which included a "Comprehensive Stroke Center." According to testimony by a Valley executive, Valley sought to enhance its programs further by creating a "Neuroscience Strategic Planning Committee" tasked with "implementing alignment strategies" between Valley and the neurosurgeons on the Medical Staff. One such "alignment strategy" included a possible co-management agreement.⁴ The Valley executive testified that the Columbia Group was "pretty excited" about the possibility of a co-management structure while plaintiffs’ group "was skeptical."

Meanwhile, six miles down the road from Valley, Hackensack University Medical Center took over a hospital that had previously closed and began the process of reopening it as "Hackensack University Medical Center at Pascack Valley" (Hackensack). Valley launched several attempts to prevent that reopening, including a lawsuit where it relied principally on N.J.S.A. 26:2H-8 to argue there was no "need" to open a new medical facility in the area. Valley ultimately lost that suit on appeal, and Hackensack opened around June 2013. Hackensack thereafter granted plaintiffs privileges to treat patients at Hackensack. In a meeting with plaintiffs, Valley’s President and CEO, Audrey Meyers, expressed that she disliked how plaintiffs simultaneously held privileges and leadership positions at both Valley and Hackensack.

₅₀According to Valley, its satisfaction with plaintiffs’ performance deteriorated over time, exacerbated by concerns over plaintiffs’ relationship with Hackensack. In 2014, Valley’s Vice President of Planning and Government Relations, Gail Callandrillo, along with Valley’s data analysis team and one independent consultant, evaluated Valley’s neurosurgical services. Specifically, they compared "data relating to volume, quality, utilization and complication rates" between patients cared for by the Columbia Group and plaintiffs. That analysis served as the basis for a study au thored by Callandrillo and outside counsel, which the parties have called the "White Paper."

Valley’s White Paper stated that plaintiffs had lower inpatient and outpatient volumes, performed fewer neurosurgery procedures at Valley, maintained a higher leakage rate,⁵ and overall rendered a lower quality of patient care than did the Columbia Group. The White Paper also suggested that plaintiffs had engaged in so-called "patient transfers," which involved "accruing patients from [Valley’s] Emergency Department consult and subsequently performing [] procedures at another facility, presumably [Hackensack] given their strong connection to that organization." After ultimately concluding that the Columbia Group outperformed plaintiffs, the White Paper recommended that Valley enter into an exclusive agreement with the Columbia Group (the Exclusive Agreement).

Meyers and the Staff Development Committee of the Valley Board of Trastees then presented the White Paper to the entire Valley Board of Trustees, recommending that Valley enter into the Exclusive Agreement. The Board agreed, and in December 2015, Valley and the Columbia Group signed the Exclusive Agreement providing the Columbia Group with the exclusive right over ₅₁Valley’s "unassigned" ER patients, as well as exclusive access to the "Gamma Knife" and "Biplane" equipment.

Thereafter, Meyers notified plaintiffs about the Exclusive...