INDIANAPOLIS (Legal Newsline) - An Indiana appeals court ordered a hospital to pay a doctor more than $4.75 million over claims she was defamed by a nurse who accused her of being drunk but delayed the report until it was too late for the physician to disprove it with a blood alcohol test.
The appeals court rejected arguments by St. Vincent Carmel Hospital and the Indiana Hospital Association that the nurse’s report was protected by the privilege for reporting suspected misconduct, saying there was enough evidence for the jury to decide the nurse was acting out of hostility. The appeals court also reversed the trial judge’s reduction of damages and ordered prejudgment interest running from January 2020.
Dr. Rebecca Denman was at dinner with a friend in December 2017 when she received what she described as a “snarky” text from a colleague who was miffed she had been asked to evaluate one of Dr. Denman’s patients in the hospital. The obstetrician left the restaurant and went to see her patient, a woman in the late stages of pregnancy. On the way to the patient’s room, she got into a confrontation with a nurse named Hannah Thornton in front of several witnesses.
After Dr. Denman left the labor and delivery unit, Thornton told a colleague there was “an overwhelming smell of alcohol” on the doctor’s breath, although no one else present testified they had smelled anything. A day later, Thornton sent an email to the director of nursing, accusing Dr. Denman of “unprofessional behavior” and smelling of alcohol. In the email, Thornton said she didn’t report the incident immediately because another nurse present didn’t smell alcohol and she wasn’t sure what to do.
The nursing director immediately called the hospital’s chief medical officer, who conferred with other physicians including one who said she had approached Dr. Denman about her drinking in 2015. A few days later the chief medical officer called Dr. Aaron Shoemaker, chief medical officer for the St. Vincent Medical Group, which owns the hospital. Dr. Shoemaker was one of four members of the medical group’s Peer Review Executive Committee, which reviews such allegations and can suspend a doctor’s hospital privileges.
Dr. Denman met with Dr. Shoemaker where, she later testified, she was led to believe her case had been sent to the PREC. In fact, Dr. Shoemaker conducted his own review and concluded that the hospital had received “a credible, reasonable complaint of a possible impaired physician.”
On Dec. 21, 2017, Dr. Denman was told she needed to take a paid leave of absence and couldn’t return to work until she went to a Physician Assistance Program for an assessment. The doctor did so and in January 2018 she was diagnosed as having severe alcohol use disorder. Dr. Denman disagreed with the diagnosis and treatment plan but returned to work in March 2018 under condition she agree to a five-year alcohol monitoring program including multiple breathalyzer tests a day, random urine screens and therapy.
On July 5, 2018, Dr. Denman sued Thornton and the hospital for defamation, tortious interference with her employment contract, fraud and other claims. The doctor said the alcohol accusations stained her record and interfered with her plan practice medicine in retirement in South Carolina.
The case went to trial in January 2020, where Thornton denied she waited to send the email so Dr. Denman couldn’t have a blood-alcohol test. Dr. Denman’s colleagues testified they had never seen her consume alcohol at work or on call, and her dinner companion the night of the confrontation testified they didn’t consume alcohol and he didn’t smell it on her breath.
The jury ordered the hospital and SVMG to pay $4.75 million on multiple claims including defamation and fraud. The hospital moved for a retrial on several grounds including that the jury awarded multiple awards for the same harm and the evidence was insufficient for any finding of liability.The trial court found some of the claims were duplicative and reduced damages to $3.5 million, plus 8% prejudgment interest.
Both sides appealed, and in an Aug. 18 decision, the Indiana Court of Appeals ruled that Dr. Denman should collect the full $4.75 million verdict plus hundreds of thousands of dollars in prejudgment interest.
The judge was correct to reject defense calls to dismiss the case or reverse the jury verdict, the appeals court ruled. Evidence at trial included testimony from Dr. Denman’s colleagues that she had never shown up at work drunk and her dinner companion on the night of the confrontation with the nurse, who testified neither of them had been drinking.
“There was no evidence that Dr. Denman consumed alcohol on either Dec. 11 or 12,” the court said, providing enough evidence for the jury to question Thornton’s claims to the contrary.
There also was evidence Thornton’s email was defamatory, the court said.
“The jury was free to weigh Thornton’s stated reasons for waiting to make her report until morning, when it was too late for Dr. Denman to be tested,” the appeals court ruled.
Finally, the court reversed the trial court’s decision to strike some of the jury awards, saying Indiana law allows juries to split their total award across multiple claims.
“We conclude that the jury clearly intended to award a total amount of $2.25 million on the three fraud-based claims and to reduce it would be contrary to jury intent,” the court said.