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Johnson v. Preferred Prof'l Ins. Co.

Superior Court of Delaware, New Castle

February 17, 2014

TIRESE JOHNSON, et. al., Plaintiffs,
v.
PREFERRED PROFESSIONAL INSURANCE COMPANY, et. al., Defendants

Submitted November 1, 2013

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Upon Consideration of Defendants' Motion to Dismiss.

Francis J. Murphy, Esquire, Murphy & Landon, Wilmington, Delaware for Plaintiffs.

William J. Cattie, III, Esquire, Rawle & Henderson, LLC, Wilmington, Delaware for Defendant Preferred Professional Insurance Company.

John A. Elzufon, Esquire, Elzufon Austin Tarlov & Mondell, P.A., Wilmington, Delaware for Defendant Michelle Montague.

Colm F. Connolly, Esquire, Morgan Lewis & Bockius, LLP, Wilmington Delaware for Defendants Mason E. Turner, Jr. and Prickett, Jones & Elliott, P.A.

OPINION

Robert B. Young, J.

Page 999

ORDER

SUMMARY

This addresses the several Motions to Dismiss filed by the various Defendants.

At this early stage of the proceedings, where a Court views all of the pled circumstances extant in a light most favorable to the responding party (here, the Plaintiffs), sufficient factual dispute exists, relative to the claims under the general aegis of fraud (which is to say: Counts I, II, III, IV, V, VI, VII, IX, X, XI, XII and XIII), independent of those allegations considered and determined by prior rulings of both the Superior and Supreme Courts, to overcome those Motions to Dismiss. Hence, they are DENIED. As to Count XIV, the Motions to Dismiss are GRANTED.

All Motions to Stay Discovery are now moot. Discovery, to the extent that it has been delayed, should proceed forthwith.

FACTS

Plaintiffs are Tirese Johnson, a minor child, and his Guardian Ad Litem (" Johnson or Plaintiffs" ). The allegations in the First Amended Complaint arise in relation to two prior lawsuits previously adjudicated by this Court. The first prior suit was a medical negligence action filed in 2007 by Johnson's mother, Letoni Wilson (" Wilson" ) on his behalf, against Michelle Montague (" Montague" ) and Dr. Phyllis James (" Dr. James" ). The Medical Negligence Action alleged that Montague, a physician's assistant employed by Dr. James, negligently failed to treat and diagnose Johnson for jaundice. As a result, Johnson developed Kernicterus, resulting eventually in permanent brain damage. The second prior suit was a bad faith action brought by Dr. James against her insurer, Preferred Professional Insurance Company (" PPIC" ).

The Medical Negligence Action:

On July 21, 2006, then four-day old Tirese Johnson was brought by his parents to New Castle Family Care, an unincorporated medical practice operated by Dr.

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James. He was examined by Montague. who noted that Johnson was jaundiced, a medical condition characterized by the yellowing of the skin. Jaundice occurs when the body is not properly breaking down bilirubin. When high levels of bilirubin are present, the condition is called Kernicterus. If left untreated, Kernicterus can lead to brain damage. Shortly after her examination of Johnson, Montague created a medical record/office note in her own handwriting which she signed. In that note, Montague recorded the observation that Johnson was positive for " yellow tint face/abdomen."

On Sunday July 23, 2006 at 11:30 a.m. Johnson's mother called Montague to report an increased yellow tint to both eyes and his skin. Montague advised Wilson that she could take her son to the Medical Aide Unit near Christiana Hospital, or could bring him in to New Castle Family Care the next morning. Later that day, Johnson was taken to Christiana Hospital where he was seen by an emergency room physician at 2:42 p.m. He was diagnosed later that day with Kernicterus. Johnson suffered permanent brain and neurological damage as a result of the high bilirubin level and his jaundiced condition.

In 2007, Wilson filed a medical negligence action on behalf of Johnson against Montague and Dr. James. The complaint in that case alleged that the medical care provided by Defendants violated the standard of care, resulting in Johnson's physical injuries and mental anguish.[1] Though Wilson was the only listed Plaintiff in the original case, for the purpose of continuity all references to the party bringing suit on behalf of Johnson will be referred to as Plaintiffs.

The Trial Court granted summary judgment in the Medical Negligence Action in favor of Defendant Michelle Montague on March 10, 2010. The ground for that decision was that Johnson had failed to satisfy the requirement of 18 Del. Code § 6853(e) that he provide an admissible expert opinion that Montague had violated the standard of care applicable to a physician's assistant. That judgment was appealed.

The Bad Faith Action:

In March 2010, the Medical Negligence Action against Dr. James went to trial. A verdict was rendered for the Plaintiff in the amount of $6,250,000.00. Because the verdict against Dr. James was in excess of the limits of her insurance coverage with PPIC, Dr. James brought an action in Superior Court for bad faith breach of her insurance policy (against PPIC), and for legal negligence against the law firm that represented her in the Medical Negligence Action. During discovery in the Bad Faith Action, Wilson and her Attorney, Kenneth M. Roseman, Esquire (" Roseman" ) learned for the first time about alterations that had occurred to the patient chart of Johnson in the aftermath of his hospitalization.

The Present Case:

In the present case, Plaintiffs allege that on the morning of July 24, 2006, the day after Johnson's admission to the hospital, Dr. James informed Montague of Johnson's hospitalization and condition. It was at this point that Plaintiffs claim the process of a cover- up began. Montague and Dr. James allegedly discussed the original office note. At some point after that conversation, Montague removed the original note from Johnson's patient chart. Then, at some point on or after July 24, 2006, Montague prepared a new office note (" Altered Montague Office Note" ) which she placed in Johnson's patient chart. The Altered note stated that the yellow tint was limited to the face and sternum of

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Johnson, rather than extending to the abdomen as the original note had stated.

Montague left New Castle Family Care in or around September 2006. When she left, Montague took either a copy or the original of her first office note, a copy of the altered note, and a copy of a note Dr. James had made (prior to alteration) for Johnson's chart.

PPIC retained attorneys to represent both Montague and Dr. James in the Medical Negligence Action brought by Johnson's family against them. Daniel McCarthy (" McCarthy" ) of Mintzer Sarowitz Zeris Ledva & Meyers, LLP was the attorney retained by PPIC to represent Dr. James. He was admitted pro hac vice by order of the Delaware Superior Court for this purpose. Mason E. Turner, Jr. (" Turner" ), employed at the time by Prickett, Jones & Elliott, P.A., (" PJE" ), was the attorney retained by PPIC to represent Montague.

On September 2, 2008, McCarthy and Turner took the deposition of Wilson. After her deposition, Turner told McCarthy about the alterations to Johnson's chart, providing him with copies of the original notes written by Dr. James and Montague. At this time, both attorneys were well aware of the fact that the notes had been altered by their clients after learning of Johnson's hospitalization and brain damage. Neither attorney informed the Plaintiffs or Plaintiffs' counsel of these alterations.

After learning of the alterations to the medical records of Johnson, McCarthy sent a letter, dated September 12, 2008, to Luanne C. Cornell (" Cornell" ), in-house attorney at PPIC. This letter reported the information about the altered patient chart, providing copies of the Montague Original Office Note, Montague Altered Office Note, Dr. James Original Office Note, and Dr. James Altered Office note. It also included a sentence asking Cornell to call to discuss these issues. On September 19, 2008, McCarthy sent Cornell another letter. This letter indicated that the two of them had already talked about the first letter, and that McCarthy wanted to speak about the issue again. Plaintiffs allege that Turner also reported and discussed these alterations with representatives of PPIC.

On December 9, 2010, Cornell was deposed in the Bad Faith Action brought by Dr. James against PPIC. In that deposition, Cornell testified that she mistakenly believed that the records (including both original office notes) had been produced to the Plaintiffs in the Medical Negligence Action. She based this conclusion on the assumption that McCarthy " responded honestly to the records request." However, it is now clear that Plaintiffs in the original Medical Negligence Action were not provided or made aware of the existence of these notes in the course of that litigation. It was not until discovery in the Bad Faith Action, that Plaintiffs' counsel became aware of their existence. Cornell's deposition, supported by other evidence, indicates that PPIC, McCarthy, and Turner knew these notes were relevant to the Medical Negligence Action and thought they would likely make it more difficult to defend.

Plaintiffs, now aware of the existence of the altered notes, look back on the prior litigation, and point to occasions when those notes should have been produced or disclosed. Furthermore, there are specific instances where both Dr. James and Montague perjured themselves when questioned about the exam, the patient chart and existence of any additional notes/records. The Complaint in the present case also describes how Turner and McCarthy, with full knowledge of the notes allowed their clients to perjure themselves in depositions.

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Both attorneys also failed to disclose the existence or produce the notes to the Plaintiffs, despite being aware of their relevance. These allegations are particularly true for Montague and Turner who were specifically aware of the existence of both sets of notes, as Montague had copies of all of them and had participated in their creation.

Montague has contended that the Montague Original Office Note was merely a draft prepared before she was able to review and finalize the information with Dr. James. She asserts further that the alterations resulted from a meeting with Dr. James in which it was suggested that she change the term " abdomen" to " sternum" to reflect more accurately her observations during the exam.

Motion to Vacate, Reargument, and Subsequent Appeal of Judgment Entered in Favor of Montague:

On or about September 30, 2010, PPIC responded to a request for production filed by Dr. James in the Bad Faith Action. The response contained the September 12, 2008 letter (discussed above) from McCarthy to Cornell, regarding the alterations to Johnson's medical records. As a result of this letter's being produced, the Plaintiffs from the Medical Negligence Action became aware of the existence of the additional notes for the first time. In response to this new information, Roseman filed a Motion to Vacate the Judgment Entered in Favor of the Defendant, Michelle Montague. That Motion alleges that, had Plaintiffs been aware of the alterations, they would not have been " forced to settle" on the expert witness they ...


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