author:
PIETRAGALLO, Member,
     O’CONNOR, Member,

text:
    Office of Disciplinary Counsel v. Coleman

      Disciplinary Board Docket no. 98 D.B. 2003.
    January 24, 2005
   To the Honorable Chief Justice and Justices of the Supreme Court of Pennsylvania:

PIETRAGALLO, Member,

Pursuant to Rule 208(d)(2)(iii) of the Pennsylvania Rules of Disciplinary Enforcement, the Disciplinary Board of the Supreme Court of Pennsylvania herewith submits its findings and recommendations to your honorable court with respect to the above-captioned petition for discipline.

I. HISTORY OF PROCEEDINGS

On July 24, 2003, Office of Disciplinary Counsel filed a petition for discipline against respondent, Thomas Joseph Coleman III. The petition charged respondent with violations of the Rules of Professional Conduct and Rules of Disciplinary Enforcement arising out of the unauthorized practice of law while on inactive status. Respondent filed an answer to petition on September 4, 2003.

A disciplinary hearing was held on December 17,2003, before Hearing Committee 2.10 comprised of Chair Steven Howard Berkowitz, Esquire, and Members Anna M. Durbin, Esquire and Karen J. Schular, Esquire. Respondent was represented by James C. Schwartzman, Esquire.

Following the submission of briefs by the parties, the Hearing Committee filed a report on September 2,2004, finding that respondent violated the rules as charged in the petition for discipline and recommending that respondent be suspended for one year and one day.

Respondent filed a brief on exceptions on October 12, 2004. Petitioner filed a brief opposing exceptions on October 28, 2004.

This matter was adjudicated by the board at the meeting of November 17, 2004.

II. FINDINGS OF FACT

The board makes the following findings of fact:

(1) Petitioner, whose principal office is situated at Suite 1400,200 North Third Street, Harrisburg, Pennsylvania 17101, is invested, pursuant to Rule 207 of the Pennsylvania Rules of Disciplinary Enforcement, with the power and duty to investigate all matters involving alleged misconduct of an attorney admitted to practice law in the Commonwealth of Pennsylvania and to prosecute all disciplinary proceedings brought in accordance with the various provisions of the aforesaid rules.

(2) Respondent, Thomas Joseph Coleman III, was bom in 1963 and was admitted to practice law in Pennsylvania in 1990. Respondent is also admitted to the bar of the State of New Jersey and maintains his office at 325 New Albany Road, Moorestown, NJ 08057. Respondent is subject to the jurisdiction of the Disciplinary Board of the Supreme Court of Pennsylvania.

(3) Respondent has no prior history of discipline.

(4) By order dated November 22, 1993, the Supreme Court of Pennsylvania transferred respondent to inactive status pursuant to Pa.R.D.E. 219, effective 30 days from the date of the order.

(5) By cover letter dated November 30, 1993, Elaine M. Bixler, secretary of the Disciplinary Board, mailed to respondent at his registration address the following:

(a) A copy of the order of the Supreme Court dated November 22, 1993;

(b) Standard Guidance of the Disciplinary Board to lawyers who have been transferred to inactive status;

(c) Rules 217 and 219 of the Pa.RJD.E;

(d) Subchapter E, Formerly Admitted Attorneys, of the Disciplinary Board Rules;

(e) Form D.B.-23, Nonlitigation notice of disbarment, suspension or transfer to inactive status;

(f) Form D.B.-24, Litigation notice of disbarment, suspension or transfer to inactive status; and

(g) Form D.B.-25, Statement of compliance.

(6) Ms. Bixler’s November 30, 1993 letter was sent by certified mail, return receipt requested.

(7) Ms. Bixler’s letter was signed for by respondent’s agent at his New Jersey law firm on or about December 2, 1993.

(8) Respondent has no present recollection of having received a letter from Ms. Bixler, but has no reason to think such documents were not received, and does not doubt the veracity of the allegations.

(9) By order dated June 17, 1994, the Supreme Court of Pennsylvania transferred respondent to inactive status, pursuant to Rule 111(b), Pa.R.C.L.E., effective 30 days after the date of the order.

(10) By cover letter dated June 22, 1994, Ms. Bixler mailed to respondent at his registered address the following:

(a) A copy of the certified Supreme Court order dated June 17, 1994.

(b) A letter prepared by the Continuing Legal Education Board which provided information regarding compliance with the rules;

(c) Pa.R.D.E. 217 and sections 91.91 to 91.99 of the Disciplinary Board Rules.

(d) Forms D.B.-23 and D.B.-24; and

(e) Form D.B.-25.

(11) Ms. Bixler’s June 22,1994 letter was sent by certified mail, return receipt requested.

(12) The letter was received by respondent’s agent at his New Jersey law firm.

(13) Respondent has no present recollection of having received a letter from Ms. Bixler dated June 22,1994, but has no reason to think that such a document was not received and does not doubt the veracity of the allegations.

(14) Prior to August 1995, the Administrative Office of Pennsylvania Courts (Lawyer Assessment) sent respondent an Attorney’s Annual Fee form 1995-1996.

(15) On August 18, 1995, respondent or respondent’s agent at his law firm signed or caused to be signed respondent’s 1995-1996 form.

(16) OnAugust 18,1995, respondent or his agent sent or caused to be sent to Lawyer Assessment the Attorney Fee form and check for $325.

(17) By letter dated August 22,1995, addressed to respondent at his registered address, Suzanne E. Sipes, Attorney Registrar, advised that the CLE Board had not certified that respondent had complied with his CLE requirements, his registration form was being processed as inactive, and his firm would be reimbursed the fee of $325.

(18) Respondent was employed as an associate in the law firm of Montgomery, McCracken, Walker & Rhoads (MMW&R) at the Cherry Hill, New Jersey office from October 9, 1995 to September 14, 2001.

(19) MMW&R handled attorney licensing on a firm-wide basis, coordinated by Human Resources. Human Resources received the fee forms and then provided them to the individual attorney for signature and dating. The attorney was responsible to review the information on the form for accuracy. The Legal Recruitment manager then reviewed the signed form for completeness and mailed in one check and all individual forms to Lawyer Assessment.

(20) On May 21, 1996, Lawyer Assessment sent a 1996-1997 Attorney Annual Fee form to respondent at MMW&R.

(21) Respondent’s 1996-1997 form listed him as being on inactive status since December 1993.

(22) On May 31,1996, respondent or his agent marked off the box on the form that indicated respondent desired active status, enclosed payment of $325, and listed respondent’s office address as 123 South Broad Street, Philadelphia PA 19109.

(23) Respondent signed the 1996-1997 form.

(24) Respondent or his agent sent the fee form and check to Lawyer Assessment.

(25) By letter dated July 31, 1996, addressed to MMW&R, 123 South Broad Street, Philadelphia, PA 19109, Suzanne Sipes acknowledged receipt of respondent’s fee form and the $325 check, advised respondent that the Continuing Legal Education Board had not certified that respondent had complied with the CLE Rules, advised respondent that his registration form would be processed as inactive and that his law firm would receive a refund of $325.

(26) At some time in 1997, Lawyer Assessment sent a 1997-1998 Attorney Annual Fee form addressed to respondent at MMW&R in Cherry Hill, New Jersey.

(27) Respondent or his agent forwarded the signed 1997-1998 fee form to Lawyer Assessment and indicated that respondent desired to voluntarily assume inactive status and discontinue the practice of law in Pennsylvania.

(28) On February 16, 1999, respondent filed with the Disciplinary Board a motion for waiver of Disciplinary Board Rule section 89.279(a) in conjunction with petition for reinstatement to active status; a petition for reinstatement from inactive status, and a special reinstatement questionnaire.

(29) By letter dated March 5,1999, addressed to Elaine M. Bixler and copied to respondent, Office of Disciplinary Counsel set forth its position of opposition to respondent’s motion for waiver.

(30) By order of March 15, 1999, the Disciplinary Board denied respondent’s motion for waiver and required respondent to complete the current schedule of continuing legal education courses necessary for reinstatement.

(31) By cover letter of March 15, 1999, Ms. Bixler transmitted the board order to respondent.

(32) To date, respondent has not been reinstated to active status in Pennsylvania.

(33) To date, respondent has failed to file with the Disciplinary Board a verified statement in conformance with Pa.R.D.E. 217(e).

(34) Respondent is not in compliance with his CLE credits.

(35) From January 2002 through on or about October 18,2002, respondent signed numerous pleadings in mortgage foreclosure actions and allowed them to be filed in various Courts of Common Pleas in Pennsylvania by the law office of Michael J. Milstead.

(36) The following counts are a sampling of respondent’s signed pleadings that were submitted to Pennsylvania Courts of Common Pleas in Schuylkill County during the year 2002. An additional list of cases is found in exhibit P-28.

(37) With regard to all pleadings specified, respondent never notified or caused to be notified in any manner, (1) the client involved in the litigation; (2) the attorney for the adverse party; (3) the court of his transfer to inactive status and of his inability to act as an attorney.

Count I

(38) On January 7, 2002, respondent signed a complaint in the mortgage foreclosure on behalf of the plaintiff in the matter of First Union National Bank of Delaware, f/k/a First Union Home Equity Bank v. Clara N. Lymaster. He allowed the law office of Michael J. Milstead to file the complaint in the Schuylkill County Court of Common Pleas.

(39) On February 8, 2002, respondent signed and allowed the law office of Michael J. Milstead to file a praecipe to dismiss complaint without prejudice.

(40) Respondent identified himself as the attorney for the plaintiff.

Count II

(41) On February 13,2002, respondent signed a complaint in a mortgage foreclosure on behalf of plaintiff in the matter of Bank of New York v. Lawrence Neff, and allowed the law office of Michael J. Milstead to file that complaint in the Schuylkill County Court of Common Pleas.

(42) On June 17,2002, respondent signed and allowed the Milstead law office to file a praecipe to dismiss complaint without prejudice.

(43) Respondent identified himself as the attorney for the plaintiff.

Count III

(44) On February 14,2002, respondent signed a complaint in a mortgage foreclosure on behalf of the plaintiff in the matter of Home Equity Servicing Corporation, f/k/a TMS Mortgage Inc., d/b/a The Money Store v. Joshua and Susan Guthrie, and allowed the Milstead law office to file that complaint in the Schuylkill County Court of Common Pleas.

(45) On July 12,2002, respondent signed and allowed the Milstead law office to file a praecipe to enter default judgment.

(46) On August 30, 2002, respondent signed and allowed the Milstead law office to file a praecipe for writ of execution.

(47) On September 20, 2002, respondent signed and allowed the Milstead law office to file a withdrawal of appearance.

(48) Respondent identified himself as attorney for the plaintiff.

Count IV

(49)On March 19, 2002, respondent signed a mortgage foreclosure action on behalf of the plaintiff in the matter of First Union National Bank of Delaware, f/k/a First Union Home Equity Bank N.A. v. Estate of Clara Lymaster, and allowed the Milstead law office to file the action in the Court of Common Pleas of Schuylkill County.

(50) On September 20, 2002, respondent signed and allowed the Milstead law office to file a withdrawal of appearance.

(51) Respondent identified himself as attorney for the plaintiff.

Count V

(52) On February 14,2002, respondent signed amortgage foreclosure action on behalf of the plaintiff in the matter of Bank of New York, as Trustee Under the Pooling and Servicing Agreement Dated as of November 30, 1996, Series 1996-D v. Brad G. Murray, and allowed the Milstead law office to file the action in the Schuylkill County Court of Common Pleas.

(53) On June 20,2002, respondent signed and allowed the Milstead law office to file a praecipe to reinstate complaint in mortgage foreclosure.

(54) On August 27, 2002, respondent signed and allowed the Milstead law office to file a praecipe for writ of execution.

(55) Respondent identified himself as attorney for the plaintiff.

Count VI

(56)On April 29,2002, respondent signed a complaint in mortgage foreclosure on behalf of the plaintiff in First Union National Bank of Delaware v. Albert and Jacqueline Ragazinsky, and allowed the Milstead law office to file it in the Schuylkill County Court of Common Pleas.

(57) On August 15, 2002, respondent signed and allowed the Milstead law office to file a praecipe to reinstate complaint in mortgage foreclosure.

(58) Respondent identified himself as attorney for the plaintiff.

Count VII

(59) On May 14,2002, respondent signed a complaint in confession of judgment on behalf of the plaintiff in the matter of Amresco Commercial Finance Inc. v. Jerry and Phyllis Munger, and allowed the Milstead law office to file the complaint in the Court of Common Pleas of Schuylkill County.

(60) On July 8,2002, Joseph H. Jones Jr., attorney for defendant, filed defendant’s petition to strike or open judgment in the Munger confession of judgment matter.

(61) On July 29,2002, respondent signed and allowed the Milstead law office to file a withdrawal of appearance.

(62) Respondent identified himself as attorney for the plaintiff.

Count VIII

(63) On May 17,2002, respondent signed a complaint in mortgage foreclosure on behalf of the plaintiff in the matter of Amresco Commercial Finance Inc. v. Jerry and Phyllis Munger and Swatara Management Group LLC, and allowed the Milstead law office to file that complaint in the Schuylkill County Court of Common Pleas.

(64) On June 18, 2002, Joseph H. Jones Jr., counsel for the defendants, filed preliminary objections.

(65) The preliminary objections contained a motion to strike the complaint on the basis that the respondent was not licensed to practice law in Pennsylvania.

(66) On July 5, 2002, respondent signed and allowed the Milstead law office to file a praecipe to dismiss complaint without prejudice.

(67) Respondent held himself out as attorney for the plaintiff.

Count IX

(68) On June 17,2002, respondent signed a mortgage foreclosure action on behalf of the plaintiff in the matter of First Union National Bank v. John and Victoria Koszyk, and allowed the Milstead law office to file that action in the Court of Common Pleas of Schuylkill County.

(69) On September 20, 2002, respondent signed and allowed the Milstead law office to file a withdrawal of appearance.

(70) Respondent identified himself as attorney for the plaintiff.

Count X

(71)On July 2, 2002, respondent signed a mortgage foreclosure action on behalf of the plaintiff in the matter of J.P. Morgan Chase Bank v. John Valentine and the United States of America, and allowed the Milstead law office to file that action in the Court of Common Pleas of Schuylkill County.

(72) On August 8, 2002, respondent signed and allowed the Milstead law office to file a praecipe to reinstate complaint in mortgage foreclosure.

(73) On September 20, 2002, respondent signed and allowed the Milstead law office to file a withdrawal of appearance.

(74) Respondent identified himself as attorney for the plaintiff.

Other Findings of Fact

(75) Michael J. Milstead is a licensed New Jersey attorney with a practice that concentrates on performing foreclosure and bankruptcy services for mortgage brokers and investors.

(76) Mr. Milstead is not licensed to practice in Pennsylvania.

(77) In November 2001, Mr. Milstead became a tenant at 325 New Albany Road, Moorestown, New Jersey, where respondent was one of his landlords.

(78) In November 2001, Mr. Milstead had several conversations with respondent about the nature of Mr. Milstead’s practice, at which time:

(a) Mr. Milstead informed respondent that he was using another Pennsylvania attorney to review and sign pleadings and documents in Pennsylvania for his foreclosure practice;

(b) Respondent informed Mr. Milstead that he was a member of the Pennsylvania Bar;

(c) The parties discussed the possibility of respondent replacing the other attorney in signing Mr. Milstead’s Pennsylvania pleadings;

(d) Mr. Milstead asked respondent, and respondent agreed to sign pleadings and other litigation-related documents as attorney for the plaintiff in Pennsylvania;

(e) Mr. Milstead and respondent agreed that Mr. Milstead would pay respondent a nominal fee of $15 to $25 for each pleading respondent signed.

(79) At no time prior to June 2002 did respondent advise Mr. Milstead that he was on inactive status.

(80) Checks in the amount of $2,466.25 and $4,899.50 represented payments made by Mr. Milstead to respondent.

(81) Based upon respondent’s representation to Mr. Milstead, he believed respondent was a licensed Pennsylvania attorney, and utilized letterhead that indicated “Of Counsel, Thomas Joseph Coleman III, Esquire, Licensed Pennsylvania Attorney.” Mr. Milstead placed this caption on his letterhead.

(82) Mr. Milstead took no affirmative action to verify respondent’s status as a licensed Pennsylvania lawyer.

(83) Near the end of June 2002, Mr. Milstead learned by receiving certain responsive pleadings in the Munger matter (Count VIII above) that there was a problem with respondent’s Pennsylvania license.

(84) Mr. Milstead confronted respondent about his license. Respondent advised Mr. Milstead that his license in Pennsylvania was compromised due to a deficiency in his CLE credits.

(85) Respondent represented to Mr. Milstead that it was respondent’s understanding, based on a conversation with someone from the Pennsylvania Bar or Board of Law Examiners, that he could still sign the Pennsylvania pleadings.

(86) Although respondent was on notice no later than June 2002 that there was a problem with his continued signing of Pennsylvania pleadings, respondent continued to sign such pleadings and did not withdraw his appearance in the Pennsylvania cases where he was attorney of record until September 2002.

(87) Despite being on notice that there was a problem with his ability to sign pleadings, respondent continued his practice of signing pleadings as set forth below:

(a) On July 12, 2002, respondent signed and allowed the Milstead law office to file a praecipe to enter default judgment in the Guthrie matter;

(b) On August 30, 2002, respondent signed and allowed the Milstead law office to file a praecipe for writ of execution in the Guthrie matter;

(c) On June 20,2002, respondent signed and allowed to be filed a praecipe to reinstate complaint in the mortgage foreclosure in the Murray matter;

(d) On August 14, 2002, respondent signed and allowed to be filed a praecipe to enter default judgment in the Murray matter;

(e) On August 27,2002, respondent signed and allowed to be filed a writ of execution in the Murray matter;

(f) On July 16, 2002, respondent signed and allowed to be filed a praecipe to reinstate complaint in the Ragazinsky matter;

(g) On August 15, 2002, respondent signed and allowed to be filed a praecipe to reinstate complaint in the mortgage foreclosure in the Ragazinsky matter;

(h) On August 22, 2002, respondent signed and allowed to be filed a praecipe to reinstate complaint in the Ragazinsky matter;

(i) On or about August 8,2002, respondent signed and allowed to be filed a praecipe to reinstate complaint in the mortgage foreclosure in the Valentine matter.

(88) Respondent testified that he did not withdraw his appearance in the Pennsylvania cases after he received the pleadings in the Munger matter because he was busy and Mr. Milstead was out of the office.

(89) In September 2002, respondent brought to Mr. Milstead’s attention the allegations of misconduct from Office of Disciplinary Counsel, and it was mutually agreed that respondent’s signing of Pennsylvania pleadings should stop.

(90) Mr. Milstead had his staff prepare substitutions for every active matter in the approximately 300 Pennsylvania matters filed, for which respondent was counsel of record, and respondent’s involvement with Mr. Milstead’s office ceased.

(91) Respondent signed the pleadings under the belief that he was allowed to do so even though he was on inactive status. He thought that it was permissible as long as he did not take a more active role in the representation.

(92) Respondent understands now that his beliefs were incorrect.

(93) Five character witnesses testified on behalf of respondent. These witnesses all know respondent in a personal or professional capacity. Respondent has a very good reputation in his community as a truthful, honest and law-abiding person.

III. CONCLUSIONS OF LAW

By his conduct as set forth above, respondent violated the following Rules of Professional Conduct and Rules of Disciplinary Enforcement:

(1) R.P.C. 1.16(a)(1) — A lawyer shall not represent a client, or where the representation has commenced, shall withdraw from the representation of a client if the representation will result in a violation of the Rules of Professional Conduct or other law;

(2) R.P. C. 5.5 (b) — A lawyer shall not practice law in a jurisdiction where to do so would be in violation of regulations of the profession in that jurisdiction;

(3) R.P.C. 7.1(a) — A lawyer shall not make a false or misleading communication about the lawyer or the lawyer’s services;

(4) R.P.C. 7.5(a) — A lawyer shall not use a firm name, letterhead or other professional designation that violates R.P.C. 7.1;

(5) R.P.C. 7.5(b) — A law firm with offices in more than one jurisdiction may use the same name in each jurisdiction, but identification of lawyers in an office of the firm shall indicate the jurisdictional limitations on those not licensed to practice in the jurisdiction where the office is located;

(6) R.P.C. 8.4(c) — It is professional misconduct for a lawyer to engage in conduct involving dishonesty, fraud, deceit or misrepresentation;

(7) R.P.C. 8.4(d) — It is professional misconduct for a lawyer to engage in conduct that is prejudicial to the administration of justice;

(8) Pa.R.D.E. 217(d) — A formerly admitted attorney transferred to inactive status shall not accept any new retainer or engage as attorney for another in any new case or legal matter of any nature;

(9) Pa.R.D.E. 217(j) — A formerly admitted attorney is precluded from engaging in law-related activities and representing himself or herself as a lawyer.

IV. DISCUSSION

This matter is before the Disciplinary Board on a petition for discipline charging respondent with the unauthorized practice of law while on inactive status. Specifically, respondent signed hundreds of pleadings as an attorney of record in Pennsylvania when he was not licensed to do so. The parties entered into a stipulation of facts. Petitioner presented the testimony of one witness. Respondent testified and presented the testimony of five character witnesses. Respondent does not contest that he committed the acts as alleged by petitioner. Based on the clear and convincing evidence presented at the hearing, there is no doubt that respondent violated the Rules of Professional Conduct and Rules of Disciplinary Enforcement.

Respondent attempted to mitigate his actions by presenting several character witnesses. These witnesses all testified that respondent is a truthful, honest and law-abiding person. Respondent also presented the fact that he has no prior disciplinary record. Upon consideration of these factors in light of respondent’s misconduct, the board believes that they do not outweigh the aggravating factors present in this matter.

Respondent was not able to recollect many important aspects of his professional licensure proceedings in Pennsylvania, such as the Supreme Court order transferring him to inactive status, and letters from the Disciplinary Board in regard to his responsibilities as an inactive attorney. He had no recollection of receiving annual attorney fee forms from 1996 to 1998 nor did he remember filing a petition for reinstatement from inactive status in 1999.

Respondent believed he could sign Pennsylvania pleadings as an inactive attorney, yet never affirmatively verified this belief by calling the Disciplinary Board or otherwise checking.

Respondent was aware that he was on inactive status and aware that he needed to complete CLE credits. He also became aware in June 2002 that there were problems with his signatures on Pennsylvania pleadings. This was specifically brought to his attention in the Munger matter by the opposing attorney, who filed preliminary objections and a motion to strike on the basis that respondent was not licensed in Pennsylvania. In spite of this knowledge, respondent still took no action to determine for himself the strictures on his activities as an inactive attorney. He continued to sign documents for Attorney Milstead after June 2002 until September 2002.

There is no question that respondent engaged in serious misconduct by signing hundreds of pleadings in knowing violation of a Supreme Court order prohibiting him from the practice of law. This warrants a suspension of one year and one day.

The purpose of the disciplinary system is to protect the public from unfit attorneys and to maintain the integrity of the legal system. Office of Disciplinary Counsel v. Costigan, 526 Pa. 16, 584 A.2d 296 (1990). In determining final discipline, precedent is considered due to the need for consistency in the results reached so that similar misconduct is not punished in radically different ways. Office of Disciplinary Counsel v. Lucarini, 504 Pa. 271, 472 A.2d 186 (1983). There are numerous disciplinary cases concerning attorneys who continue to practice law after being transferred to inactive status for failing to fulfill their CLE credits or pay their annual fee. Generally, these attorneys are suspended from the practice of law. The principal rationale for this discipline is that fulfilling continuing legal education requirements, filing the annual fee form and paying the annual fee are not mere ministerial acts. Rather, an attorney has an affirmative duty to know the status of his professional license and to comply with professional requirements. In re Anonymous No. 123 D.B. 96, 41 D.&C.4th 290 (1998). Moreover, if there are aggravating factors or additional charges of misconduct, the Supreme Court has suspended attorneys for more than one year. A sampling of recent cases supports the imposition in the instant matter of a suspension of one year and one day.

In Office of Disciplinary Counsel v. Harris, 150 D.B. 2002, 930 disciplinary docket no. 3 (Pa. July 15, 2004), Mr. Harris received notice that he was transferred to inactive status for failing to complete his CLE requirements. In defiance of the Supreme Court order, Mr. Harris continued to practice and handle the legal matters of one client. He also kept the indicia of his licensure by maintaining a large office sign advertising himself as a lawyer. Mr. Harris had received two informal admonitions in the past. He was suspended for one year and one day.

The Supreme Court imposed a suspension of one year and one day on an attorney who continued to practice after he was transferred to inactive status for failing to complete his CLE requirements. Office of Disciplinary Counsel v. Enright, no. 136 D.B. 2002, 890 disciplinary docket no. 3 (Pa. March 14, 2004). Mr. Enright knowingly continued to provide services to his client and filed a petition for appeal in a license suspension case. Mr. Enright failed to appear for his disciplinary hearing.

Even when an attorney claims he never received notice of his transfer to inactive status, the court has imposed a suspension of one year and one day. Office of Disciplinary Counsel v. Forman, no. 70 D.B. 2001, 799 disciplinary docket no. 3 (Pa. Jan. 31, 2003). Mr. Forman practiced law for 12 years while on inactive status. Although he attempted to excuse himself by claiming he never received notification, the record demonstrated that Mr. Forman never provided his new address to the board as mandated by the Rules of Disciplinary Enforcement.

In Office of Disciplinary Counsel v. Holder, no. 131 D.B. 1999, 660 disciplinary docket no. 3 (Pa. March 23, 2001), Mr. Holder was aware that he was inactive due to CLE deficiencies, but continued to enter his appearance and attend court hearings on behalf of five clients during a three-month time period. The Supreme Court suspended Mr. Holder for one year and one day.

In sum, the Supreme Court does not tolerate lawyers who take a lax approach to the administrative rules governing the practice of law. Respondent’s argument that no client or member of the public was harmed appears immaterial in light of the court’s determinations in past discipline cases. Even in situations where lawyers lack disciplinary records and have otherwise good reputations, the court has found their misconduct contemptuous and has suspended these lawyers for one year and one day, thus obligating the lawyers to petition for reinstatement in the future.

Application of this strong line of precedent leads to the conclusion that respondent should be suspended for one year and one day.

V. RECOMMENDATION

The Disciplinary Board of the Supreme Court of Pennsylvania recommends that the respondent, Thomas Joseph Coleman, be suspended from the practice of law for a period of one year and one day.

It is further recommended that the expenses incurred in the investigation and prosecution of this matter are to be paid by the respondent.

Board Members Sheerer, O’Connor and Suh dissented and would recommend a two-year suspension.

Board Member Nordenberg did not participate in the November 17, 2004 adjudication.

DISSENT TO THE MAJORITY REPORT & RECOMMENDATION OF THE DISCIPLINARY BOARD OF THE SUPREME COURT OF PENNSYLVANIA

O’CONNOR, Member,

January 25, 2005

The undersigned respectfully files the following dissent from the recommendation of the majority recommendation in the above matter:

No objection is taken to the findings of fact or conclusion of law. This dissent is to the recommendation of only a year and one day suspension.

DISCUSSION

As the court is aware, violations of Pa.R.D.E. 217 are unfortunately brought on a regular basis before the Disciplinary Board. The recommendation that is almost always seen appears to be for a suspension of one year and a day no matter if the violation is for one occurrence or, as in this case, over 250. It also appears to make little difference if the violations occur over a short period of time or over an extended period of time, and that is why this dissent is made.

In this matter, Mr. Coleman was inactive for about nine years. He was notified in 1993, 1994, 1995 and 1996 that he was on inactive status. Apparently, in 1997 Mr. Coleman requested he be allowed to resume active status, and in 1999 he requested a waiver from the rules and petitioned for reinstatement. Despite all of the knowledge of his status, Mr. Coleman continued to represent himself as a licensed attorney and to sign legal documents.

While the complaint cites only 10 matters, many more are referenced and, interestingly enough, even after Mr. Coleman knew in 2002 there was a question as to his ability to practice, he continued to sign legal documents.

The Hearing Committee and the board found nine violations of the Rules of Professional Conduct and Disciplinary Enforcement. In addition, the Hearing Committee found Mr. Coleman was less than candid about receiving compensation and what the fees were given to him for.

At some time a suspension of more than one year and a day needs to be recommended, and the undersigned respectfully represents this is an appropriate case.

Considering the length of time involved, the number of violations, the acknowledgement that he knew he was on inactive status and his lack of candor with the Hearing Committee, it is respectfully recommended the suspension be for two years.

Board Members Sheerer and Suh join in this dissent.

ORDER

And now, April 19, 2005, upon consideration of the report and recommendations of the Disciplinary Board and dissent to the majority report and recommendations of the Disciplinary Board dated January 24, 2005, it is hereby ordered that Thomas Joseph Coleman III, be and he is suspended from the bar of this Commonwealth for a period of two years, and he shall comply with all the provisions of Rule 217, Pa.R.D.E.

It is further ordered that respondent shall pay costs to the Disciplinary Board pursuant to Rule 208(g), Pa.R.D.E.


source: Caselaw Access Project

author: MINORA, J.,

license: Public Domain

text:
    Rarrick v. Silbert

      C.P. of Lackawanna County,
    no. 02 Civ 4951.

      Malcolm L. MacGregor and Patricia Ann Lafferty, for plaintiffs.

      Mark I Perry, Frank J. Brier and Salvatore Savatteri, for defendants.
    December 16, 2005
   MINORA, J.,

This is a medical negligence action that arises out of psychiatric care and treatment by defendants, Dr. Richard Silbert and Behavioral Healthcare Center P.C. to the plaintiff’s husband/ father, Gerald Rarrick Jr. Plaintiffs Debbie Rarrick (patient’s wife), Jonothan and Ben Rarrick (patient’s children) filed the complaint in this matter on December 23, 2003. On January 9, 2004 the defendants, Dr. Richard Silbert and Behavioral Center P.C. (BHC), filed the preliminary objections to the complaint that have previously been decided by the court. Plaintiffs filed a response to the preliminary objections on February 18,2004. The preliminary objections requested a demurrer on Counts IV, V and VI of plaintiffs’ complaint. The court granted the preliminary objections by opinion and order dated March 10, 2004, and recorded March 11, 2004.

In that opinion and order, the court did a comprehensive review of the law on point and allowed plaintiffs leave to amend their complaint joining the same defendants under “theories other than corporate negligence if they so desire.” Plaintiffs now seek reconsideration of our March 11, 2004 opinion and order.

I. FACTUAL HISTORY

On September 18,2000, the plaintiff, Debbie Rarrick, along with minor-plaintiffs, Jonothan and Ben Rarrick, were making preparations to move out of the family home the following day due to the rapid decline in marital and familial harmony resulting from Mr. Rarrick Jr.’s deteriorated mental state.

With Mr. Rarrick referencing “guns” and “killing” and specifically threatening Mrs. Rarrick, and having concern about the emotional impact of the family’s move on Mr. Rarrick Jr., plaintiff, Debbie Rarrick, phoned defendant Dr. Silbert on multiple occasions to alert him to her grave concerns regarding her husband’s behavior and the upcoming stressful event. Mr. Rarrick Jr.’s father called Dr. Silbert to additionally and separately voice his concerns over his son’s behavior.

On September 19,2000, while Debbie Rarrick and her mother awaited the moving van, Mr. Rarrick Jr. entered the kitchen brandishing a shotgun. After firing a shot into the wall and threatening Debbie Rarrick, Mr. Rarrick Jr. tried to force the women into the living room area. While relocating from the kitchen to the living room area, the plaintiff’s mother fled and narrowly escaped to try and get help from the authorities. Debbie Rarrick attempted to call 911 several times, but Mr. Rarrick Jr., brandishing a shotgun, prevented her from doing so. Debbie Rarrick attempted to escape by running out of the house through the back door. Fearing for her life and screaming for help as she ran across the front lawn, Mr. Rarrick Jr. chased her, grabbed her and forced her back into the home at gunpoint.

Shortly thereafter, Mr. Rarrick Jr.’s father, Mr. Gerald Rarrick Sr., entered the house and was taken hostage along with Debbie Rarrick. After lengthy negotiations with the police, the ordeal ended with Mr. Rarrick Jr. leaving the home in police custody.

Plaintiffs complaint alleges defendant Dr. Silbert was negligent in that he knew or should have known of the clear and present danger Mr. Rarrick Jr., his patient, represented to plaintiffs and that Dr. Silbert failed to take any action to defuse the explosive situation. Dr. Silbert responds by attacking Counts IV, V and VI of plaintiffs’ complaint in his preliminary objections.

II. LEGAL ANALYSIS

Count IV of the complaint continues to assert a cause of action against Behavioral Healthcare Center P.C. on behalf of plaintiff Debbie Rarrick. Count V asserts a cause of action against Behavioral Healthcare Center P.C. on behalf of plaintiffs Jonothan Rarrick, as a minor, and Debbie Rarrick his parent. Count VI continues to assert a cause of action against Dr. Silbert and trading as Behavioral Healthcare Center P.C. on behalf of Ben Rarrick, as a minor, and Debbie Rarrick as his parent. All three counts identically state the following on behalf of the various plaintiffs:

“The gross, careless and negligent conduct of defendant Behavioral Healthcare Center P.C. consisted of:
“(a) employing defendant doctor and its employees with knowledge of their lack of sufficient qualifications, capabilities or experience and/or failing to investigate or ascertain the extent of the same;
“(b) recommending, referring and holding out defendant Dr. Silbert to Mr. Rarrick Jr. and plaintiffs as being a competent, knowledgeable and experienced psychiatrist, capable of handling Mr. Rarrick Jr.’s psychiatric problems;
“(c) failing to require and direct through policies and procedures, the prompt and continuing review of the patient’s condition;
“(d) failing to properly train and supervise its employees, including defendant Silbert, while they rendered psychiatric care to plaintiff;
“(e) failing to supervise the quality of care rendered by defendant Dr. Silbert and/or its employees, servants, and/or agents;
“(f) failing to contract competent psychiatrists to provide psychiatric services;
“(g) failing to promulgate sufficient rules, regulations, procedures and policies to ensure that mental health procedures promulgated by the State of Pennsylvania are followed;
“(h) failing to ensure that prescribed rules, regulations, policies and accepted psychiatric standards and procedures were complied with in the care and treatment of Mr. Rarrick Jr.;
“(i) failing to select and train only competent psychiatrists and employing incompetent psychiatrists such as defendant Silbert;
“(j) failing to select and retain only competent employees, servants and/or agents and employing incompetent employees, servants and/or agents;
“(k) failing to oversee the actions of the defendant psychiatrist as to patient care;
“(1) failing to take corrective action to remedy the defects of procedures which created the harms visited upon plaintiff when defendant Behavioral Center P.C. knew or should have known of the problems set forth in the preceding and subsequent paragraphs and incorporated herein by reference;
“(m) failing to have a sufficient number of trained and qualified employees at all times capable of recognizing plaintiff’s emotional problems and of bringing the same to the attention of other practitioners so that adequate consultation could have been secured and such conditions addressed so as to avoid harm to others;
“(n) failing to use reasonable care in determining the qualifications of the defendant doctor rendering psychiatric services to Mr. Rarrick Jr. and reviewing the treatment rendered by the defendant doctor;
“(o) failing to use reasonable care in selecting, reviewing and/or supervising members of its medical staff; and,
“(p) failing to establish and follow emergent procedures for the timely evaluation and treatment of patients like Mr. Rarrick Jr.”

The defendant contends these counts contain causes of action sounding in corporate negligence against Behavioral Healthcare Center RC. that are not legally supported by Pennsylvania law, and as such their preliminary objections, in the form of a demurrer, should be granted. Plaintiffs argue that subparagraphs (a) through (p), stated above, set forth plaintiffs’ allegations of negligence against defendant BHC. These allegations, plaintiffs contend, in and of themselves, read in a light most favorable to plaintiffs, based on the entire complaint, set forth causes of actions which form a basis for recovery, and for these reasons defendant’s request for demurrer should be denied.

A. Standard of Review

Preliminary objections, the end result of which would be dismissal of a cause of action, should be sustained only in cases that are free and clear from doubt. Bourke v. Kazaras, 746 A.2d 642, 643 (Pa. Super. 2000). To be clear and free from doubt, it must appear with certainty that the law will not permit recovery by the plaintiff upon the facts averred. Gallo v. Nationwide Insurance Company, 791 A.2d 1193, 1195 (Pa. Super. 2002). If there is any doubt as to whether preliminary objections should be granted, it must be resolved in favor of overruling the objection. Allegheny Sportsmen’s League v. Ridge, 790 A.2d 350, 354 (Pa. Commw. 2002).

B. The Doctrine of Corporate Negligence

The defendant argues that plaintiffs’ complaint fails to state a claim for corporate negligence under Pennsylvania law because a claim for corporate negligence is available only against a hospital or HMO and is not available against a private physicians’ practice group, clinic or private physician. Our Supreme Court established a hospital’s liability for corporate negligence in Thompson v. Nason Hospital, 527 Pa. 330, 591 A.2d 703 (1991). The Thompson court defined the doctrine as follows: corporate negligence is a doctrine under which the hospital is liable if it fails to uphold the proper standard of care owed the patient, which is to ensure the patient’s safety and well-being at the hospital. This theory of liability creates a nondelegable duty which the hospital owes directly to a patient. Therefore, an injured party does not have to rely on and establish the negligence of a third party.

The hospital’s duties have been classified into four general areas: (1) a duty to use reasonable care in the maintenance of safe and adequate facilities and equipment, Thompson, supra at 339, 591 A.2d at 707, citing Chandler General Hospital Inc. v. Purvis, 123 Ga. App. 344, 181 S.E.2d 77 (1971); (2) a duty to select and retain only competent physicians, id., citing Johnson v. Misericordia Community Hospital, 99 Wis.2d 708, 301 N.W.2d 156 (1981); (3) a duty to oversee all persons who practice medicine within its walls as to patient care, id., citing Darling v. Charleston Community Memorial Hospital, 33 Ill.2d 326, 211 N.E.2d 253 (1956); and (4) a duty to formulate, adopt and enforce adequate rules and policies to ensure quality of care for the patients, id., citing Wood v. Samaritan Institution, 26 Cal.2d 847, 161 P.2d 556 (Cal. App. 1945).

The Thompson court provided the following rationale for imposing these duties on hospitals:

“Hospitals in the past enjoyed absolute immunity from tort liability. See McDonald v. Massachusetts General Hospital, 120 Mass. 432, 21 Am.Rep. 529 (1876). The basis of that immunity was the perception that hospitals functioned as charitable organizations. See Forrest v. Red Cross Hospital, 265 S.W.2d 80 (Ky. 1954). However, hospitals have evolved into highly sophisticated corporations operating primarily on a fee-for-service basis. The corporate hospital of today has assumed the role of a comprehensive health care center with responsibility for arranging and coordinating the total health care of its patients. As a result of this metamorphosis, hospital immunity was eliminated.” 527 Pa. at 337-38, 591 A.2d at 706. (emphasis added)

Plaintiffs would urge upon this court that their allegations in Counts IV, V and VI do not sound in corporate negligence and therefore defendant Dr. Silbert’s preliminary objections should be denied. A cursory examination of the plaintiffs’ allegations in the three Counts IV, V and VI against defendant’s Behavioral Healthcare P.C. reveals a contrary view to plaintiffs’ is correct.

Thompson, supra, at 339, 591 A.2d at 707, sets forth four well established duties which sound in a duty to use reasonable care in: (1) “the maintenance of safe and adequate facilities and equipment,” (2) “a duty to select and retain only competent physicians,” (3) “a duty to oversee all persons who practice medicine within its walls as to patient care,” and (4) “a duty to formulate, adopt and enforce adequate rules and policies to ensure quality of care for the patients.”

Comparing these corporate negligence duties to plaintiffs’ identical allegations of negligence repeated at Counts IV, V and VI we see that subparagraphs (a) and (b) fall under Thompson duty number (2). Subparagraph (c) falls under Thompson duty number (4). Subparagraph (d) arguably falls under Thompson duty number (3). Sub-paragraph (e) arguably falls within Thompson duty number (3). A further review by subparagraph continues to yield similar results. Counts IV, V and VI are substantially permeated with the language of corporate negligence found in Thompson, and yet not allowed to be applied in the context of the physician’s office setting herein.

In short, the Thompson court imposed such duties on hospitals because today’s hospital functions as a highly sophisticated corporation assuming the role of a comprehensive health care center with the responsibility of arranging and coordinating the total health care of its patients. An office of a physician has not yet been held to this same corporate negligence standard by our appellate courts.

C. Expansion of the Corporate Negligence Doctrine to Entities Other Than Hospitals

Initially, hospitals were the only medical providers subject to liability under the doctrine of corporate negligence. Our Superior Court in Shannon v. McNulty, 718 A.2d 828, 835 (Pa. Super. 1998) then extended such liability to health maintenance organizations (HMOs). Reasoning that an HMO performs the same or similar function as a hospital, the Superior Court stated:

“We recognize the central role played by HMOs in the total health care of its subscribers. A great deal of today’s healthcare is channeled through HMOs Specifically, while these providers do not practice medicine they do involve themselves daily in decisions affecting their subscriber’s medical care. These decisions may, among others, limit the length of hospital stays, restrict the use of specialists, prohibit or limit post hospital care, restrict access to therapy, or prevent rendering of emergency room care.” (emphasis added)

Thus, the Superior Court extended the doctrine of corporate liability to HMOs because of the HMOs’ central role in making critical decisions in a patient’s healthcare, such as length of hospital stay, use of specialists, access to therapy and rendering of emergency room care.

Beyond HMOs, as defendant points out and plaintiff acknowledges, Pennsylvania trial courts have dismissed claims of corporate liability against professional corporations. The U.S. District Court for the Eastern District declined to apply the doctrine to an optometrist’s office. Milan v. American Vision Center, 34 F. Supp.2d 279, 282 (E.D. Pa. 1998). A three-judge panel of the Dauphin County Common Pleas Court agreed that the doctrine does not apply to physician practices in a case in which the plaintiff alleged the negligent medical treatment resulted in an above the knee amputation. Dowhouer v. Judson, 45 D.&C.4th 172 (Dauphin Cty. 2000).

Locally, recent court decisions have declined to extend corporate liability beyond HMOs. In Brewer v. Geisinger Clinic Inc., 45 D.&C.4th 215 (Lacka. Cty. 2000), Judge Cottone granted the defendant’s preliminaiy objections, reasoning that although appellate courts have extended corporate liability claims to hospitals and HMOs, they have not yet determined whether corporate liability should extend to clinics. In his opinion, Judge Cottone cited Dibble v. Penn State Geisinger Clinic Inc., 42 D.&C.4th 225 (Lacka. Cty. 1999).

In Dibble, the clinic argued in their preliminary objections that a claim for corporate negligence is strictly limited to hospitals and does not extend to individuals or group medical practices such as the clinic. This court agreed and granted the clinic’s preliminary objections, reasoning that “the clinic, like a hospital and an HMO, is a critical component of the comprehensive health care delivery system to the patient. . . . Despite this role, a clinic cannot be considered a comprehensive health care center such as a hospital, nor can it be construed to play a central role in the ‘total health care of its subscribers.’ ” Dibble, supra at 233, citing Shannon, supra. Thus, in declining to extend corporate liability to clinics, the doctrine of corporate liability has yet to be extended beyond hospitals and HMOs.

Just as in Dibble, this court is faced with the same restraints imposed by the appellate courts in Shannon and Thompson. The Shannon and Thompson courts imposed corporate liability on hospitals and HMOs because of their central role in making critical decisions in a patient’s healthcare as well as their role as a comprehensive health care center with the responsibility of arranging and coordinating the total health care of its patients.

Here, plaintiff seeks to extend corporate liability to Behavioral Healthcare Center P.C. However, there are neither facts nor any allegations in the pleadings to suggest that BHC’s role in a patient’s healthcare can be described as central, total or comprehensive. To the contrary, the complaint states that BHC’s role was limited to providing psychiatric health care and services to Mr. Rarrick Jr.

While psychiatric services play an important role in the healthcare of a patient, they certainly cannot be described as central, total or comprehensive; rather, they are but one branch of medicine dealing with mental, emotional or behavioral disorders. Unlike the comprehensive role in a patient’s healthcare provided by a hospital, or the central role a HMO plays in critical decisions in the healthcare of their patients, psychiatric services serve only one branch of medicine that applies only in limited and appropriate circumstances. In essence, psychiatry has neither the role of the comprehensive health care center nor the central role in making critical decisions in a patient’s total healthcare. Psychiatry clearly has a role in making decisions but not a central role.

Given these findings and the binding precedent established by Shannon and Thompson, we have previously held in our earlier opinion that the clinic’s preliminary objections to Counts IV, V and VI dealing with corporate liability are granted, and dismissed these counts. Plaintiff now seeks reconsideration of that ruling.

III. PLAINTIFFS’ RECONSIDERATION

Plaintiffs now cite yet another local decision in the case of Oven v. Pascucci, 46 D.&C.4th 506 (Lacka. Cty. 2000). In that case, similar defense preliminary objections were denied by the court and the plaintiff was allowed to proceed on the theories of corporate negligence against Northeast Eye Institute as well as the defendant doctors who were determined to be vicariously liable as well. The Oven court cites a number of federal and county cases for the proposition that there is no logical reason to stop this doctrine of corporate negligence at hospitals and HMOs. There lies the pivotal issue. Quite candidly, a search of the cases reveals trial court-level precedent both for and against the expansion of the doctrine of corporate negligence.

These plaintiffs now urge upon the court a case-by-case review of corporate negligence allegations against healthcare institutions other than hospitals and HMOs, using a functional duty analysis. In essence, they urge that if a complaint properly pleads some form of one, some or all of the four Nason Hospital duties, then and in that event, discovery should be allowed to proceed past the preliminary objection stage and the validity of the corporate negligence allegations ought to be tested via summary judgment motions upon the completion of their discovery. Defendant believes objections without discovery are the proper test for what they argue is an invalid expansion of the Thompson doctrine of corporate negligence.

The court, upon review of the two watershed cases, is forced to inquire as to whether the “comprehensive health center” language in Thompson, supra at 338, 591 A.2d at 706, is dicta or a mandatory gate-keeping hurdle that must be overcome as a condition precedent before doing a functional duty analysis. The same concern can be addressed relative to the Shannon case supra. Does the court’s language recognizing that an HMO plays a “central role” in the “total health care of its subscribers” represent dicta, or should the language operate as a mandatory gate-keeping hurdle that must be overcome as a condition precedent to doing a functional duty analysis?

In analyzing these issues, we must first attempt to discern whether the Thompson and Shannon language cited above is the reason the court found a hospital, as a comprehensive healthcare provider, and an HMO, as having a central role in the healthcare of its subscribers, should be subjected to corporate negligence exposure. In essence, the inquiry needs to determine whether the language in these two opinions is dicta or represents the rationale for the courts’ holding. Upon review of the two watershed cases noted above, the court is forced to inquire as to whether this “comprehensive health center” language in Thompson at 338, 591 A.2d at 706 is dicta or a mandatory gate keeping hurdle that must be overcome as a condition precedent before proceeding to the point of doing a functional duty analysis.

The same concern can be addressed relative to the Shannon case supra. Does the Superior Court’s language recognizing that an HMO plays a “central role” in the “total healthcare of its subscribers” represent dicta, or should that language also act as a mandatory gate-keeping hurdle that must be overcome as a condition precedent before proceeding to the point of doing a functional duty analysis?

According to Webster’s Third New International Dictionary, unabridged, on page 627, dicta or dictum is defined as, “(2) an opinion expressed by a judge on a point not necessarily arising or involved in a case in question or necessary for determining the rights of the party involved.”

That same dictionary on page 1885 defines the word “rationale” as, “(1) an explanation or exposition of controlling principles ... (2) the underlying reason: a rational basis: justification: ground.”

Since we last visited this issue, a number of other trial court opinions have been issued, but none provides this court with the clear guidance of appellate case law normally required and desired.

Accordingly, we will revisit Thompson v. Nason Hospital, supra and Shannon v. McNulty, supra, again with a precise and discerning eye.

In the watershed case of Thompson v. Nason Hospital, 527 Pa. 330, 591 A.2d 703 (1991), our Supreme Court clearly established duties that a hospital owes its patients. This court is guided by both the wording in the opinion itself as well as the insightful analysis of Milan v. American Vision Center, 34 F. Supp.2d 279 (E.D. 1998). In Milan, the Eastern District Court noted that Thompson adopted a theory of hospital liability only. In Milan, page 280, the court notes, “Thompson sets a standard of care for hospitals, not necessarily all healthcare organizations.” Later, this opinion discussed Justice Flaherty’s dissent and concludes, “the court itself focused solely on hospitals.”

The Milan court rationale for its conclusion is the plain meaning of the wording in the Thompson opinion.

“The use of the language throughout Thompson similarly suggests that the Supreme Court believed itself to be crafting a rule of hospital liability, not healthcare organization liability generally. Thus, the first sentence of the decision defining the court’s jurisdiction notes that, ‘allocatur was granted to examine the novel issue of whether a theory or corporate liability with respect to hospitals should be recognized.’” Milan at page 280, citing Thompson at 332, 591 A.2d at 704. (emphasis added)

As the Milan court directs us, when we review the precise language of Thompson, it becomes clear that the Supreme Court consistently remained focused on hospitals only and not healthcare organizations generally. In addition to the focus noted above, the Supreme Court frames the issue from defendant’s petition for allowance of appeal as, “Did the Superior Court err in adopting a theory of corporate liability with respect to a hospital ... ?” Thompson at 336, 591 A.2d at 706. After a review of the history of hospital liability in the Commonwealth, the Supreme Court in Thompson at 339, 591 A.2d at 707, stated, “We now turn our attention to the theory of corporate liability with respect to the hospital . . . .” (emphasis added) The opinion continues when it notes, “a critical step towards recognition of this theory of hospital liability has already been taken ....” Id. at 340, 591 A.2d at 708. (emphasis added)

When the decision is formally announced within the Thompson opinion, the court stated, “Today we take a step beyond the hospital’s duty of care as delineated in Riddle in full recognition of the corporate hospital’s role in the total healthcare of its patients. In doing so, we adopt as a theory of hospital liability the doctrine of corporate negligence or corporate liability under which a hospital is liable. ...” Id. at 341, 591 A.2d at 708. (emphasis added)

Clearly then, the scope in Thompson is narrowly confined to hospitals and not other healthcare organizations generally.

Subsequent to Thompson, in the case of Shannon v. McNulty, 718 A.2d 828 (Pa. Super. 1998), the Superior Court reviewed the Thompson case and held that it was proper to apply the corporate negligence doctrine from Thompson to health maintenance organizations (HMOs) such as involved with Shannon. This was viewed by some as an expansion of the doctrine that was feared in the dissenting opinion of Justice Flaherty in the Thompson case. This court submits that the characterization of applying this corporate negligence doctrine to an HMO as an expansion may not be accurate.

When the Shannon case is viewed in terms of the actions or duties of the HMO, essentially our Superior Court found that HMOs should be held under the Thompson doctrine of corporate negligence because the HMO, in essence, was behaving like a hospital. This similarity of behavior was what the court used as its basis for holding HMOs responsible.

In Shannon, supra at 835, the Superior Court stated quite clearly that HMOs played a central role in the healthcare of its subscribers. This was compared to the corporate hospital’s role in the total healthcare of its patients in Thompson.

“In adopting the doctrine of corporate liability, the Thompson court recognized ‘the corporate hospital’s role in the total healthcare of its patients.’ Thompson, supra at 708. Likewise, we recognize the central role played by HMOs in the total healthcare of its subscribers. A great deal of today’s healthcare is channeled through HMOs with the subscribers being given little or no say-so in the stewardship of their care. Specifically, while these providers do not practice medicine, they do involve themselves daily in decisions affecting their subscribers ’ medical care. These decisions may, among others, limit the length of hospital stays, restrict the use of specialists, prohibit or limit post-hospital care, restrict access to therapy or prevent rendering of emergency room care... when decisions are made to limit a subscriber’s access to treatment, that decision must pass the test of medical reasonableness. To hold otherwise would be to deny the true effect of the provider’s actions, namely, dictating and directing the subscriber’s medical care.” (emphasis added)

Later in Shannon, supra at 836, the court stated, “We see no reason why the duties applicable to hospitals should not be equally applied to an HMO when that HMO is performing the same or similar functions as a hospital.” (emphasis added) Subsequently, the Superior Court in Shannon, supra at 836, reiterates this distinction by stating, “When a benefits provider, be it an insurer or managed care organization, interjects itself in the rendering of medical decisions affecting a subscriber’s care, it must do so in a medically reasonable manner.”

If there remained any doubt as to the actions giving rise to culpability needing to be similar to those of a hospital, the Shannon court initially stated at page 835, “[w]here the HMQ is providing health care services rather than merely providing money to pay for services, their conduct should be subject to scrutiny.” What the Superior Court is saying is only under those circumstances where a benefits provider chooses to provide services similar to a hospital should their actions be subject to the scrutiny, not where they are merely providing money for care.

In short, if a benefit provider elects to dictate and direct the total healthcare of its subscribers, it will be held to the Thompson doctrine of corporate negligence because, in essence, it is choosing to behave in a manner similar to that of a hospital. The plain reading of both Thompson and Shannon seems to dictate this result.

Returning to our earlier questions of the dispute between dicta and rationale, it now becomes apparent that the wording in Thompson, “the corporate hospital’s role in the total healthcare of its patients. ...” Thompson, supra at 341, 591 A.2d at 708, is mandatory gate-keeping language and not simply dicta. Likewise, the Shannon language recognizing “the central role played by HMOs in the total healthcare of its subscribers” is also rationale. This is because HMOs involve themselves daily in decisions affecting their subscribers’ medical care and perform the same or similar functions to a hospital. Shannon, supra at 835, 836. Therefore, it is also mandatory gate-keeping language.

In Milan v. American Vision Center, 34 F. Supp.2d 279 (E.D. 1998), the federal court did an analysis of the above tenets in the context of a vision center. This court concluded that the doctrine of corporate negligence should not be extended to optometrist offices. The rationale was that Thompson applied to hospitals, not healthcare organizations liability generally.

However, see the opinion of Judge Nealon in the case of Oven v. Pascucci, 46 D.&C.4th 506 (2000). In that opinion, Judge Nealon concluded that Oven’s allegations, if proved by the plaintiff, could satisfy a corporate negligence claim under Thompson. In Oven, the court was dealing with the Northeast Eye Institute (NEI), which practiced medicine and provided health care to its patients. NEI was not an insurer nor an HMO, nor a benefits provider; therefore, Shannon was not as appropriate a guidepost as was Thompson.

The court in Oven found that corporate negligence could apply as alleged by plaintiff but ultimately said the matter was academic because the corporation, NEI, “may nonetheless be vicariously liable” id. at 523, for the actions of its two doctors. This conclusion negated any potential dispute because an eye specialty group may not be viewed as providing for the total healthcare of its patients per Thompson.

Judge Nealon’s opinion in Oven does a scholarly job of framing the history of hospital corporate liability and the disputes among varying courts of common pleas regarding corporate negligence. We have attempted to discern a consistent rationale for those cases which have allowed corporate liability to entities other than hospitals. We have discussed at length Thompson and Shannon. If we ignore Shannon, since it applied to a benefits provider, and look to other cases, a trend does seem to emerge.

In the Dauphin County case of Irvin v. Fierer, 49 D.&C.4th 225 (Dauphin Cty. 2000), the court overruled an earlier case to the contrary, Dowhouer v. Judson, 45 D.&C.4th 172 (Dauphin Cty. 2000). That case found that corporate negligence doctrine did not apply to a physician’s practice group because “the facts in the instant case do not indicate the plaintiff was required to commit to a single health care provider for treatment. ...” Dowhouer, supra at 181. In September of 2000, a mere five months later, Dauphin County permitted the plaintiff to pursue a claim of corporate negligence against an incorporated medical practice. In the Irvin case, the rationale for this different view was, “the facts in this case are clearly distinguishable from the facts in Dowhouer". Irvin, supra at 230. Plaintiff Irvin argued that she was subjected to a number of tests at KFKA’s offices. She further argues that KFKA made a conscious decision to expand its role as not just an office that practiced internal medicine, but a facility that then provided to the plaintiff many surgical and invasive procedures, thus rendering KFKA accountable. The plaintiff was allowed to proceed because of the “significant control exercised by the corporation over Ms. Brown’s total health care needs as alleged in [the] complaint.” Irvin at 231. (emphasis added)

The Dauphin County court referred the federal case of Fox v. Horn, 2000 WL 49374 (January 21, 2000 E.D. Pa.). In that case, an inmate at Graterford Prison sued CPS, a contracted healthcare provider to the prison. The court therein allowed the corporate negligence suit to proceed because organizations like CPS are responsible for their “patients’ total healthcare choices. An inmate, Fox, had no meaningful choice in his health care choices, but to rely on what was provided to him at SCI-Graterford.” Since CPS did significantly control Fox’s total healthcare, he was permitted to continue with his corporate negligence count. Fox at p. 8. This was the federal court’s prediction of how our appellate courts would rule.

Plaintiffs would have us allow the case to proceed through discovery and then have the corporate negligence count be tested via summary judgment. While there may exist a pleading and fact pattern where such a course of conduct should be permitted, this case is not it. It is more appropriate to reject plaintiffs’ theory as a legal nullity at the preliminary objection stage per Thompson.

The discernible trend seems to be to look at Thompson and Shannon as hospital-based or hospital behavior-based claims which should allow for corporate negligence counts to be pursued. The rationale is because they have somehow allowed themselves to become involved in the total healthcare of their patients or subscribers.

In our case, we are dealing with a professional corporation and physician/psychiatrist who have a specialized focus in their practice of medicine. Their role addresses the mental health needs of their patients through counseling and medication. They have not expanded to perform other services and as such they cannot, in our view, be construed to be involved in the total healthcare of their patients. Accordingly, their count in corporate negligence must fail as we have earlier concluded as well.

However, when plaintiffs’ complaint is read as a whole, plaintiffs’ complaint could be read to assert theories of liability against BHC based on vicarious liability or agency. For this reason, plaintiffs will be permitted to amend Counts IV, V and VI of their complaint to sound in these theories other than corporate negligence if they so desire.

IV. CONCLUSION

In conclusion, we agree with defendant’s contentions that Counts IV, V and VI of plaintiffs’ complaint inappropriately attempt to apply the theory of corporate negligence doctrine to Behavioral Healthcare Center, a professional corporation provider of psychiatric services. For this reason, defendant’s preliminary objections are granted and Counts IV, V and VI of plaintiffs’ complaint are dismissed.

However, as previously stated, when plaintiffs’ complaint is read as a whole, the complaint could be read to assert theories of liability against BHC based on vicarious liability or agency theories. For this reason, plaintiffs will be permitted to amend Counts IV, V and VI of their complaint if they so desire. An amended complaint shall be filed within 20 days of this order or plaintiffs may proceed upon their remaining counts without amendment.

ORDER

And now to wit, December 16, 2005, upon due consideration to defendants Dr. Richard Silbert and Behavioral Healthcare Center’s preliminary objections to Counts IV, V and VI of plaintiffs’ complaint and the response of plaintiffs, it is hereby ordered and decreed that defendants’ preliminary objections to Counts IV, V and VI of plaintiffs’ complaint are granted. Plaintiffs are granted 20 days to amend Counts IV, V and VI to theories other than corporate negligence if they so desire.