Brandi Billeaudeau v. Opelousas General Hospital Authority

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

17-893

BRANDI BILLEAUDEAU, ET AL.
VERSUS

OPELOUSAS GENERAL HOSPITAL AUTHORITY, ET AL.

ee ee oe oe ok Ok

APPEAL FROM THE
TWENTY-SEVENTH JUDICIAL DISTRICT COURT
PARISH OF ST. LANDRY, NO. 11-C-5112 C/W 13-C-0097
HONORABLE D. JASON MECHE, DISTRICT JUDGE

36 eR ER eK RE

VAN H. KYZAR
JUDGE

Bok qk kk do

Court composed of Phyllis M. Keaty, John E. Conery, and Van H. Kyzar, Judges.

AFFIRMED.

Kara Hadican Samuels

Tiffany A. Morales

Kara Hadican Samuels & Associates, LLC

4004 Canal Street

New Orleans, LA 70119

(504) 558-9478

COUNSEL FOR PLAINTIFFS/APPELLANTS:
Veronica Billeaudeau, individually and as curatrix of Brandi
Billeaudeau
Joseph Billeaudeau

Jennifer L. Thornton

Christian S. Chaney

Stanley, Reuter, Ross, Thornton & Alford, LLC

909 Poydras, Suite 2500

New Orleans, LA 70112

(504) 523-1580

COUNSEL FOR PLAINTIFFS/APPELLANTS:
Veronica Billeaudeau, individually and as curatrix of Brandi
Billeaudeau
Joseph Billeaudeau

J. Gregory Vidrine

Mahtook & LaFleur

P. O. Box 617

Ville Platte, LA 70586

(337) 363-6211

COUNSEL FOR DEFENDANT/APPELLANT:
Opelousas General Hospital Authority

Joseph L. McReynolds

J. Jerry Glas

Karen P. Holland

Deutsch, Kerrigan, L.L.P.

755 Magazine Street

New Orleans, LA 70130

(504) 581-5141

COUNSEL FOR DEFENDANT/APPELLEE:
Opelousas General Hospital Authority

Nicholas Gachassin, III

Gary J. Delahoussaye

Brandon M. Rhodes

Gachassin Law Firm

P. O. Box 80369

Lafayette, LA 70598-0369

(337) 235-4576

COUNSEL FOR DEFENDANT/APPELLEE:
Opelousas General Hospital Authority

George P. Hebbler, Jr.

Frances Irene McGinnis

Hebbler & Giordano, LLC

3501 N. Causeway Boulevard, Suite 400

Metairie, LA 70002

(504) 833-8007

COUNSEL FOR DEFENDANT/APPELLEE:
Nautilus Insurance Company

George D. Fagan
Anton L. Hasenkampf
Leake & Anderson LLP
1100 Poydras Street, Suite 1700
New Orleans, LA 70163
(504) 585-7500
COUNSEL FOR DEFENDANT/APPELLEE:
National Union Fire Insurance Company of Pittsburgh, PA

William H. Parker, IIi

Jacob E. Favaron

Allen & Gooch

2000 Kaliste Saloom Road, Suite 400

Lafayette, LA 70508

(337) 291-1000

COUNSEL FOR DEFENDANT/APPELLEE:
Louisiana Patients’ Compensation Fund (Opelousas General Hospital)
Louisiana Patients’ Compensation Fund (Dr. K. Skirlis-Zavala)

Alexander T. Reinboth

Louisiana Department of Justice, Civil

P. O. Box 94005

Baton Rouge, LA 70804

(225) 326-6000

COUNSEL FOR DEFENDANT/APPELLEE:
State of Louisiana

KYZAR, Judge.

The plaintiffs, Veronica Billeaudeau, individually and as curatrix of Brandi
Billeaudeau, and Joseph Billeaudeau, along with the defendant, Opelousas General
Hospital Authority, appeal from the trial court’s grant of a partial motion for
summary judgment, dismissing Nautilus Insurance Company as a party to the
Billeaudeau’s negligent credentialing claim against Opelousas General Hospital.
For the reasons assigned, we affirm.

DISCUSSION OF THE RECORD

The Billeaudeaus initially filed a claim under the Louisiana Medical
Malpractice Act (MMA), La.R.S. 40:1231.1, et seq., and later brought suit alleging
medical malpractice and general negligence against Opelousas General Hospital
(OGH), among other defendants, for serious injuries allegedly sustained by their
daughter, Brandi, while she was being treated in the emergency department at
OGH. Also named as a defendant was Nautilus Insurance Company (Nautilus),
the general liability insurer of OGH. The facts of this matter were set forth in
detail by this court in Billeaudeau v. Opelousas General Hospital Authority, 15-
1034 (La.App. 3 Cir. 4/6/16), 189 So.3d 561, writ granted, 16-846 (La. 6/28/16),
192 So.3d 781, wherein we held that the Billeaudeaus’ negligent credentialing
claim sounded in general negligence, as opposed to a claim for medical
malpractice, which would have to be pursued under the MMA. The supreme court
reviewed the case and affirmed. Billeaudeau v. Opelousas Gen. Hosp. Auth., 16-
846 (La. 10/19/16), 218 So.3d 513.

Thereafter, Nautilus filed a motion for partial summary judgment, claiming
that its policy of general liability insurance issued to OGH did not provide
coverage for losses sustained as a result of negligent credentialing, as claimed by

the Billeaudeaus. Following a hearing on the motion, the trial court granted

Nautilus’ motion, dismissing it from the suit. The written judgment, which was
rendered on July 26, 2017, certified that the judgment was a partial final judgment.
It is from this judgment that both the Billeaudeaus and OGH appeal.

On appeal, the Billeaudeaus set forth one assignment of error, as follows:

The trial court ignored unrebutted evidence submitted by the

Plaintiffs demonstrating that OGH’s negligence in the improper

credentialing of Dr. Zavala was not limited to the conduct of its

formal credentialing committee in evaluating her application for

privileges, but included acts, omissions, and multiple careless

oversights by hospital employees and staff that do not constitute

“healthcare professional services” as defined by Nautilus in the GL

policy.
OGH also raises one assignment of error on appeal, arguing that “(t]he District
Court erred in granting Nautilus Insurance Company’s Motion for Partial
Summary Judgment on its General Liability Policy.”

OPINION

Louisiana Code of Civil Procedure Article 966(A)(2) provides that summary
judgment procedure is favored and that it “is designed to secure the just, speedy,
and inexpensive determination of every action, except those disallowed by Article
969.” It further provides that summary judgment “shall be granted if the motion,
memorandum, and supporting documents show that there is no genuine issue as to
material fact and that the mover is entitled to judgment as a matter of law.”
La.Code Civ.P. art. 966(A)(3). Although the burden of proof rests with the mover,
if the mover will not bear the burden of proof at trial then he need only point out to
the trial court “the absence of factual support for one or more elements essential to
the adverse party’s claim, action, or defense.” La.Code Civ.P. art. 966(D)(1).
Once this occurs, the burden shifts to “the adverse party to produce factual support

sufficient to establish the existence of a genuine issue of material fact or that the

mover is not entitled to judgment as a matter of law.” Jd.

In Smitko v. Gulf South Shrimp, Inc., 11-2566, pp. 7-8 (La. 7/2/12), 94 So.3d
750, 755, the supreme court set forth the governing law relative to summary
judgment and our appellate standard of review thereof, as follows:

Appellate review of the granting of a motion for summary judgment is
de novo, using the identical criteria that govern the trial court’s
consideration of whether summary judgment is appropriate. Bonin v.
Westport Ins. Corp., 05-0886, p. 4 (La.5/17/06), 930 So.2d 906, 910;
Schroeder v. Bd. of Supervisors of La. State Univ., 591 So.2d 342, 345
(La.1991). A motion for summary judgment is properly granted only
if the pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if any, show there is
no genuine issue of material fact, and the mover is entitled to
judgment as a matter of law. La. C.C.P. art. 966; Duncan v. USAA
Ins. Co., 06-0363, p. 4 (La.1 1/29/06), 950 So.2d 544, 546-547. A fact
is material if it potentially insures or precludes recovery, affects a
litigant’s ultimate success, or determines the outcome of the legal
dispute. Hines v. Garrett, 04-0806, p. 1 (La.6/25/04), 876 So.2d 764,
765 (per curiam)(citing Smith v. Our Lady of the Lake Hosp., Inc., 93-
2512, p. 27 (La.7/5/94), 639 So.2d 730, 751). A genuine issue of
material fact is one as to which reasonable persons could disagree; if
reasonable persons could reach only one conclusion, there is no need
for trial on that issue and summary judgment is appropriate. Hines,
876 So.2d at 765-66.

Summary judgment is a particularly appropriate procedure when considering
and determining certain insurance coverage issues. Sensebe v. Canal Indem. Co.,
10-703 (La. 1/28/11), 58 So.3d 441. This court reiterated the principles of
insurance contract interpretation in Burns v. Couvillion, 10-763, pp. 8-9 (La.App. 3
Cir. 12/8/10), 53 So.3d 540, 546 (alteration in original), stating:

“An insurance policy is an agreement between the parties and
should be interpreted by using ordinary contract principles.” Orazio
v. Henderson, 01-28, p. 2 (La.App. 3 Cir. 7/11/01), 790 So.2d 754,
755 (quoting Ledbetter v. Concord Gen. Corp., 95-809, p. 3
(La.1/6/96), 665 So.2d 1166, 1169, amended on other grounds, 95-
809 (La.4/18/96), 671 So.2d 915). Additionally, “[t]he contract has
the effect of law for the parties. La.Civ.Code art. 1983.” /d. When
the language in an insurance contract is clear and explicit, no further
interpretation may be made in search of the party’s intent. Hill v.
Shelter Mut. Ins. Co., 05-1783, 05-1818 (La.7/10/06), 935 So.2d 691.
A court should not strain to find ambiguity where none exists. Hebert
v. Webre, 08-60 (La.5/21/08), 982 So.2d 770.

The principles of insurance interpretation pertaining to exclusions was set
out by the supreme court in Ledbetter v. Concord General Corp., 95-809, p. 4 (La.
1/6/96), 665 So.2d 1166, 1169, amended, 95-809 (La. 4/18/96), 671 So.2d 915:

Exclusionary provisions in insurance contracts are strictly
construed against the insurer, and any ambiguity is construed in favor

of the insured. Garcia v. St. Bernard Parish School Board, 576 So.2d

975, 976 (La.1991). However, the rule of strict construction does not

“authorize a perversion of language, or the exercise of inventive

powers for the purpose of creating an ambiguity where none exists.”

Muse v. Metropolitan Life Ins. Co., 193 La. 605, 192 So. 72, 75

(1939). Insurance companies have the right to limit coverage in any

manner they desire, so long as the limitations do not conflict with

statutory provisions or public policy. Reynolds v. Select Properties,

Ltd., 93-1480 (La. 4/11/94); 634 So.2d 1180, 1183.

“Any exclusion from coverage in an insurance policy must be clear and
unmistakable.” Duncan v. U.S.A.A. Ins. Co., 06-363, pp. 4-5 (La. 11/29/06), 950
So.2d 544, 547. The burden of proof that a loss falls within a policy exclusion lies
with the insurer. Rodgers v. State Farm Mut. Auto. Ins., 15-868 (La. 6/30/15) 168
So.3d 375.

Within this framework, we turn to a review of the liability insurance policy
in question and the pertinent provisions of the policy issued by Nautilus to OGH.
The policy in question is labeled as a “Healthcare General Liability Insurance
Policy.” Nautilus’s claim that its policy did not provide coverage for the
Billeaudeaus’ negligent credentialing claim arose from policy exclusion “w.,”
which stated that OGH’s policy did not apply to

Healthcare Professional Services

“Bodily Injury’ or “property damage” that result from the

performance of or failure to perform “healthcare professional

services”.

The policy further defines “Healthcare professional services,” as pertaining to

negligent credentialing, as:

d. The work of your formal accreditation, standards review
or equivalent professional board or committee done for any insured
while:

(1.) Evaluating the professional qualifications or clinical
performance of any provider of health care professional services; or

(2.) Promoting and maintain the quality of health care
professional services being provided.

e. The execution, or failure to execute, a decision or
directive of your formal accreditation, standards review or equivalent
professional board or committee.

The Billeaudeaus’ Appeal

The language of OGH’s policy clearly excludes from coverage any actions
of its formal accreditation, credentialing, and standards review board or committee
for negligently credentialing a physician for privileges at the hospital. However,
the Billeaudeaus argue that other hospital employees, not actual members of
OGH’s Credentials Committee, were negligent in gathering or failing to gather
pertinent information for consideration by the board or committee concerning Dr.
Zavala, Particularly, the Billeaudeaus assert that various individuals, who were
OGH employees and not members of its Credentials Committee, were negligent in
the information gathering, background, and discovery process; thus, the policy
provides coverage for their negligence leading to the improper or negligent
credentialing by the committee.

Specifically, the Billeaudeaus asserted in their brief in opposition to
Nautilus’ motion that the following material facts are in dispute and preclude
summary judgment.

a. Nicole Savoy committed negligent acts and omissions in her

role as medical staff coordinator during the preliminary

credentialing process with respect to Dr. Zavala that contributed

to the hospital’s negligent credentialing of Dr. Zavala and the
Plaintiffs’ damages.

b. Nicole Savoy is an individual employee of OGH, and her work
on Dr. Zavala’s application and credentialing file was not
“work of [OGH’s] formal accreditation, standards review or
equivalent professional board or committee.”

c. Kim Richards committed negligent acts and omissions in her
role as a “credentialing specialist” at OGH during the
preliminary credentialing process with respect to Dr. Zavala,
which acts and omissions contributed to the hospital’s negligent
credentialing of Dr. Zavala and the Plaintiffs’ damages.

d. Kim Richards was an individual employee of OGH, and her
work on Dr. Zavala’s application and credentialing file was not
“work of [OGH’s] formal accreditation, standards review or
equivalent professional board or committee.”

e. Dr. Ronald Padgett was negligent in signing off on Dr. Zavala’s
application without indicating whether Dr. Zavala was qualified
to obtain privileges, which act contributed to and was a cause of
the hospital’s negligent credentialing of Dr. Zavala and the
Plaintiffs’ damages.

f. Dr. Padgett’s negligence cannot be considered “work of
[OGH?’s] formal accreditation, standards review or equivalent
professional board or committee.”

The “Medical Staff By-Laws” of OGH set forth the organizational and

procedural process for the granting of medical staff privileges for the hospital.

They provided, in part:

ARTICLE VII-PART D:

Section 2. Clinical Committee Chairperson Procedure:

(a) The Office of Medical Staff Services shall transmit the
complete application and all supporting materials to the
appropriate clinical committee chairperson who shall provide
the Credentials Committee with a written report concerning the
applicant’s qualifications for the requested clinical privileges.
As part of the process of making this report, the clinical
committee chairperson may meet with the applicant to discuss
any aspect of the application, qualifications and requested
clinical privileges.

(b) Within thirty (30) days after receipt of all necessary
documentation, the clinical committee chairperson, or the
individual within the committee to whom the chairperson has
assigned this responsibility, shall evaluate the applicant’s
education, training, experience and conduct and make inquiries

6

with respect to the same to the applicant’s past or current
department/service chief(s), residency training director, and
others who may have knowledge about the applicant’s
education, training, experience, and ability to work with others.

(c) The clinical committee chairperson shall be available to the
Credentials Committee to answer any questions that may be
raised with respect to that chairperson’s report and findings.

In brief and before the trial court, the Billeaudeaus acknowledged that Ms.
Savoy was an “ex officio member” of the credentialing committee of OGH. An
“ex officio” member is one who is a member “by virtue or because of an office; by
virtue of the authority implied by office.” BLACK’s LAW DICTIONARY (10th ed.
2014). Ms. Savoy participated in the committee meetings and the work of the
committee. Further, Ms. Richards was specifically employed as a “credentialing
specialist” for OGH. Her work in that capacity, at least in part, was for the purpose
of providing information to and on behalf of the credentialing committee. Finally,
Dr. Padgett served for and on behalf of the credentialing committee. He was the
“Clinical Committee Chairperson” tasked with taking the application and
supporting documentation from the hospital’s “Office of Medical Staff Services,”
which included Ms. Savoy and Ms. Richards, and preparing a report for the
Credentials Committee’s consideration.

In granting the motion for partial summary judgment in favor of Nautilus,
the trial court stated in its written reasons that judgment was proper in favor of
Nautilus for the reasons it set forth in its motion and memorandum in support
thereof. In its supporting memorandum, Nautilis argued that the general liability
policy it issued to OGH “does not apply to ‘bodily injury’ that results from the
performance of or failure to perform ‘healthcare professional services,’” which it

defined, in part, as “the work of OGHA’s forma! accreditation, standards review or

equivalent professional board or committee while evaluating the professional

qualifications or clinical performance of any provider of health care professional
services.” Thus, Nautilus urged that the claim for negligent credentialing, which 1s
now outside the scope of the MMA, was clearly excluded under the plain language
of its policy.

After reviewing the evidence, we find no error in the trial court’s judgment
in favor of Nautilus. The exclusion and definitions in Nautilus’ policy are clear
and unambiguous. The Billeaudeaus concede that it was the Credentials
Committee’s obligation to independently verify the applicant’s experience and
threshold qualifications, and it was the obligation and duty of the appropriate
clinical committee chairperson, Dr. Padgett in this case, after receipt of the
completed application and all supporting materials from the Office of Medical
Staff Services, to provide the Credentials Committee with a written report
conceming the applicant’s qualifications. The Medical Staff By-Laws further
provided that the Credentials Committee should review and consider the report
prepared by the clinical committee chairperson, Dr. Padgett, and then make a
recommendation, which was then forwarded to the Executive Committee.

While employees of OGH, such as Ms. Savoy and Ms. Richards, may gather
the materials, it is clearly the responsibility of the Credentials Committee and the
Executive Committee to review the application, reports, and all materials and to
make a recommendation to the Board as to whether to grant privileges to the
applicant. As noted by Ms. Savoy in her deposition, her job was only to gather
information, not to verify it. While the Billeaudeaus point to the word “formal” in
the definition of “Healthcare professional services” to attempt to create an
ambiguity in the policy, the word “formal” cannot be read in isolation. Plainly
read, the policy excludes from coverage the work of a formal accreditation,

standards review or equivalent professional boards or committees while evaluating

8

the credentials of a physician who seeks to provide healthcare professional services
at the hospital. Were such privileges granted via another method, 1.e., through
individual decision makers, such an exclusion may not be applicable.

Accordingly, we find that the “work of’ the Credentials Committee cannot
be viewed in a vacuum. It encompasses all the work that went into the process,
and if indeed there was misinformation or a lack of information that went into the
effort, that falls on the back of the committee process itself and the decision to
credential the physician. Thus, we conclude that the “work of’ the Credentials
Committee included the work of those tasked with processing the applications for
privileges at the hospital. Without this, there would have been no credentialing
process in this particular case.

Further, the proposed reading of the language of the policy espoused by the
Billeaudeaus would require only an actual “formal” member of the Credentials
Committee, a member of the Executive Committee, or an actual member of the
Board of OGH to personally gather all information pertaining to its credentialing
decisions. Such a reading clearly leads to absurd consequences. The Billeaudeaus
do not, and cannot, contend that Ms. Savoy or Ms. Richards “evaluated the
professional qualifications or clinical performance” of Dr. Zavala. As for Dr.
Padgett, the Medical Staff By-Laws provide that the complete application and all
supporting materials shall be provided to the clinical committee chairperson, “who
shall provide the Credentials Committee with a written report concerning the
applicant’s qualifications for the requested clinical privileges.” The clinical
committee chairperson “shall evaluate the applicant’s education, training,
experience and conduct and make inquiries with respect to the same[.]” A
reasonable and unstrained reading of the Medical Staff By-Laws is that Dr.

Padgett, the Hospital Based Clinical Service Committee Chairman, was an integral

9

person performing the work of OGH’s standards review or equivalent professional
committees while evaluating the applicant’s professional qualifications or
credentials.

The Billeaudeaus place a strained view on the claim for “negligent
credentialing” to forge the argument that the policy of insurance issued by Nautilus
does not cover the acts of the OGH employees tasked with gathering information,
reporting on, and presenting that information to the Credentials Committee. The
only question presented by the claim for negligent credentialing is whether OGH,
through its credentialing process and decision, should have granted privileges to
Dr. Zavala in the first place. Accordingly, we find no merit in this assignment of
error.

OGH’s Appeal

In its appeal, OGH argues that the trial court’s grant of partial summary
judgment in favor of Nautilus violates public policy because it “would not only
deprive the insured of the coverage it believed was procured, but it would also
deprive the allegedly injured party of a means by which to recover on any
negligent acts or omissions.” However, we disagree.

As stated by Justice Dennis in Daigle v. Clemco Industries, 613 So.2d 619,
624 (La.1993):

The courts of this state are not authorized to review otherwise

valid contracts to determine whether they conform to judicial notions

of “morals, moral conduct and public order.” Schiffman [v. Serv.

Truck Lines, Inc.], 308 So.2d [824,] 827. Civil Code article 7

provides: “Persons may not by their juridical acts derogate from laws

enacted for the protection of the public interest. Any act in derogation

of such laws is an absolute nullity.” Civil Code article 1968 provides:

“The cause of an obligation is unlawful when the enforcement of the

obligation would produce a result prohibited by law or against public

policy.” Civil Code article 2030 provides, in pertinent part: “A

contract is absolutely null when it violates a rule of public order, as

when the object of a contract is illicit or immoral.” None of these
provisions grants judges the prerogative to disregard public policy

10

decisions underlying legislation or to reweigh balances of interests
and policy considerations already struck by the legislature.

We are not unmindful of the dilemma created by the change in the law that
occurred with the holding that “negligent credentialing” is no longer covered under
the MMA as a claim for “medical malpractice” or “medical negligence.”
However, that does not alter the analysis that controls our determination of whether
Nautilis’ insurance policy provides coverage for the claim “negligent
credentialing.” Because we find nothing in Nautilis’ policy exclusion, which
produces a result prohibited by law or against public policy, the trial court’s
judgment in favor of Nautilis is affirmed. Accordingly, we find no merit in this
assignment of error.

DISPOSITION

For the reasons subscribed, we affirm the decision of the trial court granting
the motion for partial summary judgment in favor of Nautilus Insurance Company.
Costs of this appeal are assessed equally to Veronica and Joseph Billeaudeau and
Opelousas General Hospital Authority.

AFFIRMED.

1]