Belnap v. Iasis Healthcare Corp. (Summary)

INJUNCTION, EXHAUSTION OF REMEDIES, MEDICAL STAFF HEARING

Belnap v. Iasis Healthcare Corp., No. 2:14-cv-00086-DN (D. Utah Jan. 28, 2015)

The U.S. District Court for the District of Utah granted in part and denied in part a health care system’s motion to compel arbitration in a suit alleging that the health care system attempted to eliminate a physician from the market.

The health care system signed an agreement with the physician to develop an abdominal treatment center. In the agreement was an arbitration clause that dictated that the parties were to resolve disputes through mediation or arbitration.

A short time later, the physician was alleged to have sexually harassed a female employee, and the health care system suspended his clinical privileges. He then requested a fair hearing, where it was determined that the action of the Medical Executive Committee was unwarranted and the physician’s suspension was vacated. The health care system never actually established the abdominal treatment center.

The physician sued based on seven causes of action. The court granted the health care system’s motion to compel arbitration for the physician’s claim that the health care system imposed a restraint on trade by attempting to eliminate him from the market. The physician alleged that the health care system conspired to restrain trade by failing to establish the abdominal treatment center. The court found that this claim fell under the scope of the physician’s contract and should therefore be held to the arbitration requirement in the agreement.

However, the physician’s other claims, including violation of bylaws, breach of the implied covenant of good faith and fair dealing, false representation, and intentional infliction of emotional distress, were all held to be outside the scope of the agreement. Therefore, these claims could not be barred by the arbitration clause.

The physician then requested a preliminary injunction to stop the health care system’s conduct toward him and to delay another fair hearing that was scheduled to challenge the Medical Executive Committee’s adverse recommendation for reappointment. (Belnap v. Iasis Healthcare Corp., No. 2:14-cv-00086 (D. Utah Feb. 4, 2015).) The physician requested that this fair hearing be postponed “until such time as the case can be fully and fairly litigated.” The court denied this request, finding that the physician’s injunction relied on facts that were not present in his original complaint. Additionally, the physician failed to exhaust all administrative remedies available before resorting to legal action.