(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for
the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please
note that, in the interests of brevity, portions of any opinion may not have been summarized).
Argued November 30, 1998 -- Decided June 7, 1999
GARIBALDI, J., writing for a unanimous Court.
The main issue in this case, as in Lowe v. Zarghami, ___ N.J. ___ (1999), also decided today, is
whether a clinical professor employed by the University of Medicine and Dentistry (“UMDNJ”) who
practices medicine in a private hospital affiliated with UMDNJ is a public employee entitled to notice under
the Tort Claims Act, N.J.S.A. 59:1-1 to -14.4 (“TCA”) when an injured person seeks to file a claim against
the doctor.
In this case, the hospital with which UMDNJ had an affiliation agreement similar to that in Lowe
was Robert Wood Johnson University Hospital (“RWJUH”), a private hospital that served as a teaching
hospital for UMDNJ. UMDNJ's doctors who practice at RWJUH become members of RWJUH's medical
staff in accordance with that hospital's rules and regulations. UMDNJ is entitled to twenty-five percent
representation on the governing board of RWJUH and controls the committee that oversees, among other
things, medical staff membership and performance. At the time of the alleged medical malpractice in this
case, Dr.Andrew Boyarsky, one of the defendants, was Chief of Surgery at RWJUH and Chairman of the
medical school's Department of Surgery.
The person who sued Dr. Boyarsky, another UMDNJ clinical professor, and two UMDNJ medical
residents was Thomas Eagan, who was referred by his primary care physician in a health maintenance
organization (HMO) to Dr. Boyarsky and Dr. Mackenzie for treatment for a possible goiter. Dr. Boyarsky
saw the patient at the HMO facility on numerous occasions and Dr. Mackenzie saw him at a RWJUH
outpatient center. Eagan did not know that the doctors were anything other than private physicians to whom
his HMO doctor had referred him.
Following surgery performed on Eagan by the defendants on October 25, 1994, at RWJUH, it was
determined that both of Eagan's recurrent laryngeal nerves had been severed during surgery and that as a
result he suffered from bilateral vocal cord paralysis. Eagan retained an attorney to represent him in 1995,
but changed attorneys in August 1996. The second attorney filed a medical malpractice complaint against the
four doctors who had participated in the surgery and when the doctors answered the complaint, they asserted
they were public employees entitled to a notice of claim under the TCA. Eagan then filed an amended
complaint against his first attorney alleging legal malpractice.
The trial court granted the doctors' motion to dismiss the complaint for failure to provide notice,
and then reinstated the complaint against Drs. Boyarsky and Mackenzie after the Appellate Division held in
Lowe that UMDNJ clinical staff were independent contractors for whom no notice of claim was required.
The court let stand the dismissal as to the two residents based on another case holding UMDNJ residents to
be public employees. The doctors filed an unsuccessful motion for leave to appeal to the Appellate Division.
The Supreme Court granted leave to appeal.
HELD: UMDNJ faculty members practicing in affiliated hospitals are public employees to whom the notice
provisions of the Tort Claims Act apply. Under the unique facts in this case, the one-year time bar for filing
a notice of late claim is tolled to permit plaintiff to file his claim.
1. The medical treatment at issue took place while Drs. Boyarsky and Mackenzie were attempting to fulfill
the goals of the faculty practice plan. Like the doctor in Lowe, they were wholly economically dependent on
UMDNJ. Applying the relative nature of the work test to the employment of these clinical professors, the
Court concludes that because of the economic dependence and the significance of the doctors' work to
UMDNJ's business, the doctors are public employees. ( pp.9-11)
2. Eagan had even fewer reasons than Lowe to suspect his doctors were UMDNJ professors or public
employees. He did not learn they were public employees until seventeen months after his claim accrued and
no doubt believed his late notice of claim would be barred by statute. He promptly filed a malpractice claim
against his first attorney. Eagan had consulted that attorney within six months after the accrual of the
medical malpractice claim. Like Lowe and the plaintiffs in earlier cases who were unable to learn the true
identity of public property owners, he pursued his claim diligently and was thwarted in his action because the
employment status of his doctors was obscured. In the unique circumstances of this case , the Court finds
that the Legislature intended the one-year time bar of N.J.S.A. 59:8-9 to be tolled and permits Eagan to file
a notice of late claim. Neither the doctors nor UMDNJ will be prejudiced. ( pp.11-16)
3. Together with the decisions in this case and in Lowe, the Court's requirement that in the future UMDNJ
direct its clinical professors to inform patients orally and in writing that they are UMDNJ employees should
make patients aware that their UMDNJ doctors are public employees entitled to notice under the TCA. ( pp.
16-17)
The judgment of the Law Division is REVERSED and the case is remanded for further proceedings
consistent with this opinion.
CHIEF JUSTICE PORITZ and JUSTICES POLLOCK, O'HERN, STEIN and COLEMAN join in
JUSTICE GARIBALDI's opinion. JUSTICE HANDLER did not participate.
SUPREME COURT OF NEW JERSEY
A-
193 September Term 1997
THOMAS A. EAGAN and BERNADETTE T.
EAGAN, husband and wife,
Plaintiffs-Respondents,
v.
ANDREW H. BOYARSKY, M.D. and JAMES
MACKENZIE, M.D.,
Defendants-Appellants,
and
LISA BENTON, M.D., JOSEPH HEETHER,
M.D. and JOHN DOE, ESQUIRE I-III (a
fictitious name designating legal
counsel),
Defendants,
and
BERNARD A. CAMPBELL, JR., ESQUIRE
and DESTRIBATS, CAMPBELL, DESANTIS
& MAGEE,
Defendants-Respondents.
Argued November 30, 1998 -- Decided June 7,1999
On appeal from the Superior Court, Law
Division, Middlesex County.
Louis A. Ruprecht argued the cause for
appellants (Ruprecht, Hart & Weeks,
attorneys, Mr. Ruprecht, Adele C. Baker and
David F. Soltero,, on the brief).
Robert J. Pollan argued the cause for
respondents Thomas A. Eagan and Bernadette T.
Eagan (Haymond & Lundy, attorneys).
I. Blakeley Johnston, III, argued the cause
for respondents Bernard A. Campbell, Jr., and
Destribats, Campbell, DeStantis & Magee
Johnstone, Skok, Loughlin & Lane, attorneys,
John Bensulock, on the brief).
The opinion of the Court was delivered by
GARIBALDI, J.
The basic issue in this case, as in Lowe v. Zarghami, ____
N.J. ____ (1999), also decided today, is whether a clinical
professor employed by the University of Medicine and Dentistry of
New Jersey ("UMDNJ"), who practices medicine in a UMDNJ
affiliated private hospital, is a public employee entitled to
notice under the Tort Claims Act, N.J.S.A. 59:1-1 to 14.4
("TCA"). We again conclude that UMDNJ faculty physicians
practicing in affiliated private hospitals are public employees
for the purposes of the Tort Claims Act.
Thomas Eagan was a member of HIP-Somerset, a health maintenance organization. In August, 1994, he visited his primary care physician from HIP complaining of a sore throat and fever. The doctor discovered a possible goiter. After some diagnostic testing, Eagan's physician referred him to Dr. Andrew H. Boyarsky and Dr. James Mackenzie. After examinations by both doctors in September, Eagan agreed to undergo a thyroidectomy and a mediastinoscopy. The surgeries were performed on October 25, 1994 at Robert Wood Johnson University Hospital. The doctors were assisted by two medical residents, Dr. Lisa Benton and Dr. Joseph Heether.
After the surgeries, Eagan was able to speak only in a whisper. He also complained of a sore throat. Dr. Boyarskyarski's report on the surgery documents an intraoperative injury in which Eagan's right recurrent laryngeal nerve “may have been severed.” Eagan saw Dr. Boyarsky for two postoperative office visits. Both visits were conducted at the HIP treatment facility. During both visits, Eagan complained of hoarseness. Eagan was examined by two specialists and a neurologist in late November and early December 1994. All three doctors diagnosed Eagan as suffering from bilateral vocal cord paralysis. The doctors concluded that both recurrent laryngeal nerves were severed during Eagan's surgeries.
B. Defendants' Employment with UMDNJ
Drs. Boyarsky and Mackenzie are clinical professors who are employed by UMDNJ, a public entity entitled to the protection of TCA. Each received a letter of appointment from UMDNJ. Those letters of appointment do not specify the terms and conditions of employment, but do incorporate the terms and conditions of the negotiated agreement between a union bargaining unit and UMDNJ. All full-time faculty members have a recognized bargaining agent in the American Association of University Professors, which negotiates on their behalf for benefits, holidays, merit pay procedures, grievances under the collective bargaining agreement and termination for cause procedures.
Defendants performed plaintiff's surgery at Robert Wood Johnson University Hospital ("RWJUH"). RWJUM had an affiliation agreement with UMDNJ similar to the one described in Lowe, supra, ___ N.J. at ___ (slip op. at 4-5). Although a private hospital, RWJUM is a teaching hospital for UMDNJ. Pursuant to the agreement, defendants became members of RWJUH's medical staff in accordance with that hospital's rules and regulations. The bylaws of the hospital and the medical staff as well as the policies set forth by RWJUH's Board of Directors govern the hospital's operation. UMDNJ is entitled to twenty-five percent representation on the governing board of RWJUH.
UMDNJ also controls RWJUH's Professional Affairs Committee that oversees "medical staff membership and privileges, quality assurance, medical staff by-laws and regulations, and the performance of medical staff in fulfilling its obligations to RWJUH." The Chief Administrative Officer of the hospital is an employee of the medical school. The respective Chiefs of Clinical Services at the hospital are chairs of the parallel departments at UMDNJ-Robert Wood Johnson Medical School (RWJMS). At the time of this suit, Dr. Boyarsky was the Chief of Surgery at RWJUH and was also the Chairman of the Department of Surgery at the medical school.
Plaintiff was referred to defendants by his primary care physician from HIP. An affiliation agreement between UMDNJ-RWJMS and the Central New Jersey Medical Group allows HIP Health Plan of New Jersey to refer patients to UMDNJ-RWJMS doctors. Under an "Independent Contractor Agreement," UMDNJ-RWJMS agreed to provide services to HIP. Section 7.1 of the Agreement provides that UMDNJ-RWJMS physicians and other employees "shall . . . be covered for professional and general liability by the UMDNJ Professional and General Liability Program of Self Insurance," and that "[s]aid coverage is governed by the terms and provisions of the State of New Jersey Tort Claims Act, N.J.S.A. 59:1-1 et seq." Defendants do not carry malpractice insurance; they rely on UMDNJ's self-insurance.
Defendants' sole employment is with UMDNJ. Defendants receive their salary from UMDNJ, and all of the usual employer deductions and withholdings are taken from their pay. UMDNJ-RWJMS faculty are governed by a Medical Service and Research Plan, amended June 10, 1991. Under that plan, each member is required to "sign a contract governing the collection and distribution of income derived from professional services." The contract authorizes UMDNJ to bill and collect all fees from patient services and then redistribute the income from the Clinical Practice Account.
Under the overall salary structure at UMDNJ, UMDNJ retains ultimate control over the compensation received by its clinical professors. UMDNJ physicians are not allowed to issue their own bills; they must allow the University to bill patients. The physicians' salaries include state-funded compensation for teaching, plus a certain percentage derived from services to patients. However, the pay received by physicians is distributed from the patient billing fund only after a number of deductions that support UMDNJ programs, a discretionary fund, and benefits such as malpractice insurance. Although plaintiff emphasizes that participants in the faculty practice plan may set their own fees, all salaries of UMDNJ practicing physicians are subject to a salary cap. All physicians must also negotiate with the heads of their departments in order to receive a raise in salary, an increase in the percentage of the patient billing fund, or both. Despite some flexibility in salaries, UMDNJ maintains control over compensation.
Both UMDNJ and RWJUH furnish faculty physicians with equipment and resources for the delivery of medical services. The medical school provides offices and staff to its physicians through the faculty practice program, although some of these costs are offset by funds received through patient billing.
Dr. Boyarsky saw plaintiff at plaintiff's HIP primary care treatment center on numerous occasions both before and after the surgery. Dr. Mackenzie saw plaintiff at a RWJUH outpatient center. The University Medical Group, a faculty practice program established by UMDNJ-RWJMS to which both Dr. Boyarsky and Dr. Mackenzie belonged, issued bills for Eagan's surgery and other services. Plaintiff's medical insurance carrier, HIP, paid his bills. Plaintiff states in an affidavit, "At no time while I was under the care and treatment of Drs. Boyarsky and Mackenzie did I know that they were public employees or that they were anything other than private physicians to whom I was referred by my treating physicians from HIP."
C. Procedural History
Eagan contacted an attorney, Bernard A. Campbell, Esq, on April 10, 1995. Eagan signed a contingent fee agreement and hired Campbell's firm to represent him. On August 2, 1996, Eagan requested that Campbell transfer his file to new counsel. Current counsel received Eagan's file on August 7.
Eagan, with the assistance of new counsel, filed a malpractice action against Drs. Boyarsky, Mackenzie, Benton, and Heether on September 18, 1996. The doctors answered the complaint, alleging that they were public employees entitled to notice of a claim under the Tort Claims Act. Eagan filed an amended complaint alleging legal malpractice against his former counsel.
The doctors filed a motion to dismiss for failure to provide notice. The trial court granted that motion on October 24, 1997. Three days later, the Appellate Division issued its opinion in Lowe v. Zarghami, 305 N.J. Super. 90 (1997). Eagan moved for reconsideration based on the Lowe court's conclusion that UMDNJ faculty practicing in private hospitals were independent contractors. The trial court reinstated the complaints against Dr. Boyarsky and Dr. Mackenzie, but not against the two medical residents.See footnote 1 The doctors then moved for reconsideration based on the consolidated appeals decided in Allen v. Krause, 306 N.J. Super. 448 (App. Div. 1997). The court denied that motion, but stayed all discovery for 30 days, so the doctors could file an interlocutory appeal.
The doctors moved for leave to appeal. The Appellate Division denied that motion. The doctors then moved for leave to appeal to this Court, which we granted.
In Lowe, we discussed the two tests courts use to distinguish employees from independent contractors -- the control test and the relative nature of the work test. Id. at 9-13.
We found that the relative nature of the work test supplements the control test in limited circumstances. Id. at 13. If the working relationship involves professional services where an employer cannot exercise control over the methods used to provide those services, the relative nature of the work test may provide a more accurate assessment of the working relationship. Dunellen v. F. Montecalvo Contracting, 273 N.J. Super. 23, 28 (App. Div. 1994). Also, if a working relationship was created by social legislation under which public policy concerns dictate a more liberal standard, then a court may apply the relative nature of the work test rather than the control test. Lowe, supra, ___ N.J. at ___ (slip op. at 13).
"[A]s is the case with all professional employees, the governing body did not control the details" of how defendant physicians administered treatment. Id. at 13 (quoting Dunellen, supra, 273 N.J. Super. at 28). UMDNJ retained the right to terminate Drs. Boyarsky and Mackenzie and neither physician is employed outside of the University. All billing occurred through the University and the only salaries received by defendants were their UMDNJ paychecks, which were subject to numerous deductions as well as a salary cap. Defendants were totally economically dependent on UMDNJ and their work constituted an integral part of UMDNJ's business.
Furthermore, defendants' work related directly to the operation of UMDNJ. The faculty practice program has four main goals: to attract patients who will be treated by faculty and observed by students; to use the income from patient services to supplement faculty salaries; to establish UMDNJ faculties as a patient referral service; and to allow clinical teachers to retain and improve their medical skills. Attorney General Formal Opinion 23-1976. Defendants, as UMDNJ clinical professors, were required to participate in a faculty practice program and to treat patients while allowing students to observe and learn. As in Lowe, at least two medical residents were present during plaintiff's two surgeries. Defendants' treatment of plaintiff occurred while defendants were attempting to fulfill the goals of the faculty practice plan.
Because defendants were totally economically dependent on UMDNJ and because their work constituted an integral part of UMDNJ's business, both aspects of the relative nature of the work test are satisfied. We, therefore, conclude that defendants are public employees of UMDNJ.
The trial court initially found that the defendants were public employees. It, therefore, granted their motion to dismiss for failure of plaintiff to provide notice under the TCA. When Lowe, supra, 305 N.J. Super. 90, decided that the clinical professors were independent contractors, the trial court reinstated the complaints against defendants. Because the trial court considered the issue of notice and the parties argued and briefed that issue, we now consider whether under the unique facts of this case, plaintiff may file a late notice of claim.
In Lowe, we held that the facts presented constituted extraordinary circumstances that required the court to grant Lowe's motion to file a late notice of a claim. Id. at 23-31. We relied primarily on the legal doubt surrounding the employment status of UMDNJ faculty, Lowe's diligence in pursuing her claim, and her lack of awareness of her doctor's employment. Id. at 31-32.
Eagan had even fewer reasons than Lowe to suspect that his doctors were UMDNJ professors or public employees. Defendants only were known to plaintiff through his HMO. He met with the doctors at his HMO's treatment facility. He was referred to Dr. Boyarsky and Mackenzie by his HMO primary care physician. The record indicates that Eagan had no information about the employment status of defendants.
However, unlike Lowe, Eagan did not file a notice of a late claim nor did he file a complaint within one year of the accrual of his claim. However, within six months of his operation, plaintiff had contacted his original attorney, who apparently took no action, and within the normal two-year period for medical malpractice cases had filed medical malpractice complaints against defendants. Eagan did not receive information indicating that Dr. Boyarsky and Dr. Mackenzie were public employees until 17 months after the claim accrued. As a result, he undoubtedly believed that a late notice would be barred by the one-year time barrier of N.J.S.A. 59:8-9. Eagan nonetheless acted promptly to protect his rights, amending his complaint to include a malpractice claim against his initial counsel.
In Lowe, we relied on three cases to support the position that extraordinary circumstances could exist for the filing of a late notice of claim where the public entity, intentionally or unintentionally, obscured the identity of the appropriate responsible entity to be sued. Lowe, supra, ___ N.J. at ___ (slip op. at 28-29).
In Feinberg v. State, D.E.P., 137 N.J. 126 (1994), plaintiff sought more specific information about the ownership of the Delaware and Raritan Canal but was thwarted by the original defendants who failed to disclose the identity of the responsible public entity for two years beyond the accrual of the claim. Id. at 135.
In Zwirn v. County of Hudson,
137 N.J. Super. 99 (Law Div. 1975), plaintiff's counsel was
misled unintentionally by county police
officers about the ownership of the road
where plaintiff's accident occurred. Id. at
101. Finding that the belief of plaintiff's
counsel was reasonable, though mistaken,
because county police officers had advised
him it was a county road and because the
death involved an accident that was
exhaustively investigated by the county
police and county prosecutor, the court found
that plaintiff had sufficient reasons to file
a late notice of claim with the State. Id.
at 104-05.
In Dambro v. Union Cty. Park Comm.,
130 N.J.
Super. 450 (Law Div. 1974), the plaintiff's
counsel sent a letter to the borough tax
assessor describing the accident and
requesting that he be informed about the
owner of the property where plaintiff's
accident occurred. Id. at 453. The tax
assessor wrote back indicating that the
property was owned by the County Park
Commission. Ibid. It was only after
plaintiff was served with the Commission's
third-party complaint that he learned that
Watchung owned the premises either in whole
or in part. Ibid. Watchung moved to
dismiss, but the court held that plaintiff
had substantially complied with N.J.S.A.
59:8-4 and 59:8-7 and that the borough was
estopped from relying on the notice provision
because the tax assessor had made a good
faith mistake that misled the plaintiff's
counsel concerning the borough's ownership.
Id. at 457.
In two of those cases, the court allowed the filing of a late notice of claim beyond one year of the accrual of the claims of the plaintiffs. In Feinberg, supra, 137 N.J. Super. at 135, we allowed the filing of a late notice of claim two years beyond the accrual of the plaintiff's claim. Although plaintiff did not file a formal notice of late claim within the one year of the accrual of his claim, we also allowed the late filing of a notice of claim in Dambro, supra, 131 N.J. Super. at 459.
We observed in Lowe,
The notice provisions of the Tort Claims Act were not intended as "a trap for the unwary." Murray v. Brown, 259 N.J. Super. 360, 365 (Law Div. 1991). "Generally, we examine 'more carefully cases in which permission to file a late claim has been denied than those in which it has been granted, to the end that wherever possible cases may be heard on their merits, and any doubts which may exist should be resolved in favor of the application.'" Feinberg [v. State D.E.P., 137 N.J. 126, 135 (1994)](quoting S.E.W. Fried Co. v. New Jersey Turnpike Auth., 73 N.J. 107, 122 (1977); Randazzo v. Township of Washington, 286 N.J. Super. 215 (App. Div. 1995). Not any one particular factor constitutes "sufficient reasons" but courts consider a combination of factors. Lamb v. Global Landfill Reclaiming, 111 N.J. 134, 149 (1988). Likewise, not one scenario will constitute "extraordinary circumstances." Each case depends on its own circumstances. (citations omitted.)
Plaintiff sought prompt medical treatment. He contacted an
attorney within six months of the accrual of his claim. There is
no evidence supporting the conclusion that plaintiff knew
defendants were UMDNJ employees. Indeed, plaintiff had no reason
to suspect that his doctors were even associated with a public
entity. He followed the procedures necessary to claim medical
malpractice against a physician in ordinary circumstances. Like
the plaintiffs in Feinberg v. State D.E.P.,
137 N.J. 126 (1994);
Zwirn v. County of Hudson,
137 N.J. Super. 99 (Law Div. 1975);
and Dambo v. Union City Park Comm.,
130 N.J. Super. 450 (Law Div.
1974), he diligently pursued his claim. Like those plaintiffs he
was thwarted in his action because the employment status of his
doctors was obscured. We do not think that the Legislature
contemplated that the one-year ban would be used to bar a
plaintiff-patient from pursuing his medical malpractice claim
against a physician whom he had no reason to believe was a public
employee. In such unique circumstances, we find that the
Legislature intended the one-year ban provided under N.J.S.A.
59:8-9 to be tolled. Accordingly, plaintiff should be entitled
to file a notice of late claim.
Moreover, a late notice of claim would not prejudice either
the doctors or UMDNJ. Because the doctors are required to keep
medical records in the ordinary course of treating patients,
investigation of plaintiff's claim is not hindered by the delay
in filing notice. Furthermore, the doctors must have been aware
of the possibility of a malpractice suit, given plaintiff's
repeated treatments and Dr. Boyarsky's report in which he
documented that plaintiff's right recurrent laryngeal nerve "may
have been severed."
As we stated in Lowe, supra, ___ N.J. at ___ (slip op. at
33), to make patients aware of their physician's employment
status and to avoid this problem in the future, UMDNJ must
require clinical professors employed by them to advise their
patients, both orally and in writing, that they are employees of
UMDNJ. Such notice should be given to a patient as soon as
practicable. It also would be helpful if clinical professors
wore badges identifying themselves as UMDNJ employees. Those
steps, if taken together with this holding that clinical
professors are UMDNJ employees, should make patients aware that
their physicians are public employees entitled to notice under
the TCA.
The judgment of the Law Division is reversed, and the case
is remanded for further proceedings in accordance with this
opinion.
CHIEF JUSTICE PORITZ and JUSTICES POLLOCK, O'HERN, STEIN, and COLEMAN join in JUSTICE GARIBALDI's opinion. JUSTICE HANDLER did not participate.
NO. A-193 SEPTEMBER TERM 1997
ON APPEAL FROM Appellate Division, Superior Court
ON CERTIFICATION TO
THOMAS A. EAGAN and BERNADETTE T.
EAGAN, husband and wife,
Plaintiffs-Respondents,
v.
ANDREW H. BOYARSKY, M.D. and JAMES
MACKENZIE, M.D.,
Defendants-Appellants,
and
LISA BENTON, M.D., JOSEPH HEETHER,
M.D. and JOHN DOE, ESQUIRE I-III (a
fictitious name designating legal
counsel),
Defendants,
and
BERNARD A. CAMPBELL, JR., ESQUIRE
and DESTRIBATS, CAMPBELL, DESANTIS
& MAGEE,
Defendants-Respondents.
DECIDED June 7, 1999
Chief Justice Poritz PRESIDING
OPINION BY Justice Garibaldi
CONCURRING OPINION BY
CONCURRING/DISSENTING OPINION BY
Footnote: 1 Relying on Wajner v. Newark Beth Israel Medical Center, 298 N.J. Super. 116 (App. Div. 1999) which held that UMDNJ residents are public employees, the court did not reinstate the complaints against the two residents.