By Jeffrey S. Lichtman, Richard A. Menchini and Fiona Ley, New York Law Journal - August 24, 2015
During the past twelve months, the New York Court of Appeals has handed down three decisions in which the underlying action was a medical malpractice claim, yet the issues to be decided on appeal had little to do with the malpractice itself. They instead dealt with: the standard for legal malpractice cases where a ruling in the underlying medical malpractice case was not appealed; long-arm jurisdiction based mainly on internet advertising of services by out-of-state medical practitioner defendants; and whether a catheter left inside a patient and not discovered for over twenty years qualifies as a “fixation device” or a “foreign object,” a distinction relevant to the applicable statute of limitations. These three decisions have created clear and broadly applicable interpretations of both statutory rules and common law principles in tort cases.
Counsel who assess whether to accept a case for legal malpractice must consider the complexities of proving a “case within a case” as well as proving that legal malpractice was a proximate cause of damages. These complexities are compounded when new counsel is faced with an adverse ruling that might be appealed and, perhaps, reversed. Should new counsel be compelled in all instances to pursue such an appeal as a prerequisite for preserving a legal malpractice action?
In Grace v. Law,1 the Court addressed an issue of first impression, holding that a legal malpractice action is only barred due to a client’s failure to appeal in the underlying action where the client was likely to have succeeded on appeal. Prior to this decision, an attorney prosecuting a legal malpractice action based on an adverse ruling in the underlying action had to determine whether to pursue a potentially futile appeal to preserve the position that the alleged malpractice would not have been cured even on appeal. The Court established the “likely-to-succeed” standard as the measure of whether an appeal need be pursued in the setting discussed below.
Plaintiff John W. Grace (“Grace”) first received treatment in October 2002 for an eye condition at the U.S. Department of Veterans Affairs (“VA”) outpatient clinic in Rochester. Grace’s July 2003 ophthalmology appointment was canceled by Dr. Boghani and was not rescheduled for approximately one year. When Grace did eventually see a different VA ophthalmologist in August 2004, he was diagnosed with a form of glaucoma which ultimately caused blindness in his right eye, and was informed that his blindness might have been prevented had the condition been detected earlier.
Grace first engaged Counsel One, and then substituted Counsel Two to represent him. In January 2008, Grace brought an action in the federal court against the VA for malpractice in failing to diagnose the eye condition and failing to follow-up after canceling the July 2003 appointment. After filing suit, Counsel Two learned that Dr. Boghani, the physician who canceled Grace’s appointment, was not employed by the VA but rather was employed by the University of Rochester (“University”). Because University was an existing client of Counsel Two’s firm, Counsel Two withdrew from representing Grace, and Counsel One re-assumed representation.
After Grace and the VA added claims against Dr. Boghani, the federal court granted the physician’s motion for summary judgment, finding the claims against her were time-barred. That court also held that, because Dr. Boghani was an independent contractor and not an employee of the VA, the VA could not be held liable for her conduct, and granted the VA’s motion for summary judgment to that extent. Grace’s claim for malpractice against the VA for failing to reschedule his appointment, however, survived.2 Grace did not appeal. At that point, Counsel One advised Grace he was unlikely to succeed on the remaining claim against the VA and Grace instructed Counsel One to discontinue the underlying action.
Grace then retained new counsel and sued Counsel One and Counsel Two for legal malpractice in failing to timely sue Dr. Boghani. Both moved for summary judgment. Counsel Two claimed Grace was estopped from bringing the legal malpractice lawsuit as he chose not to appeal the dismissal of his medical malpractice action. Counsel One argued that Grace voluntarily discontinued his lawsuit, thereby forfeiting his right to pursue the legal malpractice action. The Supreme Court, Erie County denied both motions.3 The Appellate Division, Fourth Department granted the defendants’ motion for leave to appeal and affirmed the denial of the defendants’ summary judgment motions, holding that “defendants failed to establish that plaintiff was likely to succeed on an appeal . . . and, therefore, that their alleged negligence was not a proximate cause of his damages.”4
The appeal presented an issue of first impression for the Court of Appeals. Defendants Counsel One and Counsel Two urged the Court to adopt a standard whereby a plaintiff forfeits the right to bring a legal malpractice claim when he fails to pursue an appeal in the underlying action. After considering earlier decisions of lower courts and those of some sister states, the Court adopted a “likely to succeed” standard. Courts applying this standard analyze the likelihood that the client would have prevailed on appeal before deciding whether to allow the legal malpractice action. This standard effectively requires a client to press an appeal if that appeal might be deemed a likely success. “However, if the client is not likely to succeed, he or she may bring a legal malpractice action without first pursuing an appeal of the underlying action.”5
In approving this standard, the Court sought to adopt what it viewed as the most efficient and fair approach for all parties. The Court observed that the standard would allow “the appellate courts to correct any trial court error and allow attorneys to avoid unnecessary malpractice lawsuits by being given the opportunity to rectify their clients’ unfavorable result.”6 The Court was not dissuaded by the argument that, in applying the “likely to succeed” standard, courts would have to determine the potential outcome of an appeal that was never in fact pursued, as “courts engage in this type of analysis when deciding legal malpractice actions generally.”7
The Court, applying this standard, held that Counsel One and Counsel Two failed to meet their burden of establishing that Grace would have been successful had he appealed the federal court summary judgment ruling. As neither defendant demonstrated via record evidence that Dr. Boghani was a VA employee, defendants failed to meet their burden, thus requiring the Court of Appeals to affirm the Fourth Department’s ruling.
Now that the Court of Appeals has firmly established “likely to succeed” as the standard for whether an appeal must be prosecuted, counsel representing legal malpractice plaintiffs must still painstakingly assess, on a case-by-case basis, whether a court will conclude that the malpractice embodied in another court’s ruling likely would have been cured by an appeal. We can expect the scope of that standard to be the subject of litigation and consternation for the practitioners in this field. Counsel should be guided, however, by the Court’s decision in Grace and remain mindful that the trial court will appraise the record for evidence demonstrating whether the plaintiff would have been successful on the underlying appeal, had it been pursued.
In a decision that has ever-growing significance for retailers and service providers who advertise online to potential consumers and clients, and especially for those in a medical setting, the Court of Appeals clarified the limited reach of long-arm jurisdiction in Paterno v. Laser Spine Institute.8 In Paterno, the Court dismissed a suit filed in New York against a Florida surgical practice by a New York plaintiff who learned of the medical facility through online advertising and communicated via phone and email with defendants while plaintiff was in New York.
In May 2008, plaintiff Frank Paterno (“Paterno”), suffering from severe back pain, clicked on an online advertisement for the Laster Spine Institute (“LSI”), a specialist spinal surgery facility based in Tampa, Florida. After watching an online promotional video, he telephoned LSI to inquire about medical services which might relieve his back pain. Paterno then communicated with LSI via phone calls, email and mail, and traveled to Florida to undergo surgery to be performed by LSI physicians. In preparation for surgery, Paterno and LSI exchanged multiple emails addressing registration, payment, medical insurance, and accommodation options in Tampa. Paterno’s New York-based physician and an LSI physician discussed the scheduled surgery via conference call. LSI received and reviewed Paterno’s MRI films and blood work, which had been obtained in New York by Paterno and sent to Florida.
After surgery on June 9, 2008, Paterno complained of severe back pain. LSI staff advised him that this was due to the procedure and could last two weeks. A second surgery was performed two days later, and Paterno again experienced severe back pain post-surgery. Paterno returned home to New York the day after the second surgery and, for the next two weeks, contacted the LSI physicians daily to discuss his condition and complain of pain. The LSI physicians in Florida arranged for prescriptions for pain medications to be available at Paterno’s local New York pharmacy.
A month passed and Paterno, continuing to experience severe pain, consulted with New York-based physicians about the outcome of his surgery and pain levels. An MRI revealed the same disc herniations which existed prior to his two surgeries in Florida. Paterno’s New York-based physician and LSI discussed Paterno’s condition via conference call. Paterno returned to Florida for a third surgery by LSI, the arrangements again made via email and telephone. Following the third surgery, Paterno again experienced severe pain. He returned home to New York a few days later.
Over the next three months, Paterno continued to experience back pain and headaches, and asserted he communicated daily with LSI staff via telephone, text message and email. An LSI physician in Florida ordered an MRI in New York and spoke with Paterno’s New York-based physician. LSI determined there was a spinal dura leak causing an accumulation of spinal fluid and offered to fly Paterno back to Florida for a fourth surgical procedure at LSI’s expense. After consulting with his New York-based physicians, Paterno declined LSI’s offer and had the surgery performed in New York by a New York-based physician not affiliated with LSI.
The surgeries performed by LSI in Florida became the subject of Paterno’s medical malpractice lawsuit filed in New York against LSI and several LSI physicians individually. The defendants moved to dismiss for lack of personal jurisdiction pursuant to CPLR 3211(a)(8), and the Supreme Court, Westchester County granted the motion.9 In a split decision, the Appellate Division, Second Department affirmed, rejecting Paterno’s arguments that LSI had transacted business in New York per CPLR 302(a)(1), or that the injury occurred in New York per CPLR 302(a)(3).10 The two dissenting justices concluded that LSI’s New York contacts demonstrated the “purposeful creation of a continuing relationship”11 sufficient to establish jurisdiction over the defendants under CPLR 302(a)(1).
The Court of Appeals’ opinion considered at length Paterno’s argument that LSI’s purposeful activity, through online solicitation and communication with Paterno and his New York-based medical providers, both pre and post-surgery, was sufficient to confer long-arm jurisdiction under CPLR 302(a)(1)—the “transacting business” prong of New York’s long-arm statute. The Court explained that whether a non-domiciliary can be held to have transacted business within the meaning of 302(a)(1) is a fact-based determination, requiring a finding of “purposeful” activity. The Court noted that this activity could be by “technological methods” and requires that “‘on his [or her] own initiative . . . [the non-domiciliary] project[s] himself [or herself]’ into this state to engage in a ‘sustained and substantial transaction of business'”12 including seeking out and initiating contact with New York, soliciting business in New York, and establishing a continuing relationship.13
In considering whether to find long-arm jurisdiction under CPLR 302(a)(1), the Court examined the origins, nature, and extent of the transactions between Paterno and LSI. Paterno conceded that he was the party to make the first contact after viewing the online advertisement, and that LSI’s website had not provided him opportunity to register or make payment online. He argued, however, that personal jurisdiction ought to be conferred due to the nature and volume of contacts between the parties. The Court held that those arguably numerous contacts should be assessed by their quality, not quantity.
The Court characterized LSI’s website as “passive” because it merely imparted information without permitting a business transaction on the site, which the Court assessed as “generally insufficient to establish personal jurisdiction”14 Further, the Court considered LSI’s communication with Paterno as “responsive in nature”15 and noted that LSI “served the convenience”16 of Paterno. Paterno also attempted to rely on the myriad post-surgery contacts between LSI and New York but the Court declined to weigh these as justifying the exercise of long-arm jurisdiction, as the bases for the underlying malpractice action were the initial surgeries in Florida.
In addition to declining to confer long-arm jurisdiction under CPLR 302(a)(1), the Court succinctly denied Paterno’s argument that defendants committed a tortious act outside of New York which caused injury to him within New York, as a possible basis to confer personal jurisdiction under CPLR 302(a)(3). The Court observed that “the situs of the injury in medical malpractice cases is the location of the original event which caused the injury, and not where a party experiences the consequences of such injury.”17
In limiting the reach of long-arm jurisdiction in this medical malpractice case, the Court considered both past decisions and the modern reality of access to medical care. Cognizant of the ease of travel across state lines for medical care and the proliferation of internet advertising, the Court expressly declined to interpret CPLR 302(a)(1) in a way which would provide potentially boundless application. Although the ruling in Paterno will be particularly pertinent to practitioners in the medical malpractice arena, the Court’s perspectives provide useful guidance to counsel presented with other scenarios involving internet-related cases and out-of-state parties.
Our final case addresses questions arising out of the application of the discovery rule of CPLR 214(a): what is a fixation device and what is a foreign object? In Walton v. Strong Memorial Hospital,18 plaintiff Adam Walton (“Walton”) brought a medical malpractice action, alleging defendants failed to remove a piece of vinyl catheter which broke off inside him after heart surgery. The fragment was discovered some twenty-two years later. The facts and circumstances of Walton’s treatment required the Court of Appeals to clarify the difference between a fixation device and a foreign object.
In 1986, the then-three year-old Walton underwent heart surgery at Strong Memorial Hospital (“Hospital”) in Rochester, New York to rectify a congenital heart condition. During surgery, a catheter was placed within Walton’s heart to monitor atrial pressure. Three days after surgery, Hospital staff removed catheters, wires and tubes. The medical record noted that the catheter line possibly broke off with a portion remaining in Walton. In late 2008, Walton, by then 25 years old, suffered a transient ischemic attack, his second that year. Procedures and testing revealed something in his left atrium. Surgery was performed and the broken piece of catheter left inside Walton in 1986 was discovered.
In November 2009, within a year of the discovery of the catheter fragment, Walton filed his lawsuit against Hospital and individual physicians, claiming that, while treating him in 1986, they negligently left a foreign body in his heart which was not reasonably discoverable until 2008 and which caused serious and permanent injuries. Walton sought to rely upon the foreign object exception codified in CPLR 214(a), which provides that, although a medical malpractice lawsuit must normally be brought within two years and six months of “the act, omission or failure complained of . . . where the action is based upon the discovery of a foreign object in the body of the patient, the action may be commenced within one year of the date of such discovery.” The statute specifically excludes a fixation device from the defined term ‘foreign object’.
The defendants asserted the statute of limitations as an affirmative defense and then moved to dismiss the action as time-barred. They argued that, pursuant to CPLR 208, the action should have been commenced in 1986, within 10 years of their alleged failure to remove the entire catheter. Defendants further argued that the foreign object exception for medical malpractice actions in CPLR 214(a) did not apply because the catheter was a fixation device, not a foreign object, as “[it] was intentionally placed inside the plaintiff during the operation and served a continuing medical purpose beyond the procedure itself.”19 In opposition, Walton argued that the catheter was simply a conduit to convey information from inside the body to an external machine, that it served no treatment function, and that it could not be called a “fixation device” in the medical sense because it did not secure body tissue or provide any structural support to the body.
The Supreme Court, Erie County, granted defendants’ motion and dismissed the case.20 Based on the Court of Appeals’ decision in LaBarbera v. New York Eye & Ear Infirmary,21 the trial court concluded that, because the catheter initially was deliberately left in Walton’s body with a continuing medical purpose, it could not be considered a foreign object.22 The Appellate Division, Fourth Department affirmed,23 for slightly different reasons, interpreting LaBarbera and Rockefeller v. Moront24 to require a finding that the catheter was a fixation device, thereby denying Walton the benefit of the CPLR 214(a) exception.
In its unanimous reversal of the Appellate Division decision, the Court of Appeals analyzed the events and decisions leading to the adoption of CPLR 214(a) in 1975, and the Court’s subsequent application of it. Based on this review of precedent and policy, the Court determined that the catheter that had been left in Walton was a foreign object.
The Court’s decision in Flanagan v. Mount Eden Gen. Hosp.,25 pre-dated enactment of CPLR 214(a). In that case, the patient sued the practitioners who had left surgical clamps in her body during surgery eight years before they were discovered. The Court of Appeals, which often defers to the legislature in such matters, instead fashioned its own statute of limitation exception that started the running of the statute of limitations only after the malpractice involving the placement of a foreign body could reasonably have been discovered. The legislature soon adopted CPLR 214(a), which narrowed the discovery rule enunciated in Flanagan to apply only to ‘foreign objects,’ expressly excluding chemical compounds, fixation devices and prosthetic devices from its ambit.
Later decisions construed the new statute. For example, in Rodriguez v. Manhattan Medical Group, P.C.,26 a physician was sued for failing to locate an IUD inserted into plaintiff’s uterus years beforehand by a different physician, prior to his inserting a second IUD. The Court in Rodriguez distinguished the policies that justified adoption of a foreign object exception finding in Flanagan, reasoning that the first IUD did not transform into a foreign object simply due to the placement of a second IUD. The Court in Rodriguez concluded that the case was more suited to being considered of the misdiagnosis category. In Rockefeller, where a misplaced suture during surgery later prevented a couple from conceiving, the Court held that the error in placement of the suture did not turn the suture into a foreign object. Instead, such a claim was predicated on negligent medical treatment. Quoting from Flanagan, the Court reiterated that “only in circumstances where a foreign object is negligently ‘left’ in the patient’s body without any intended continuing treatment purpose will the discovery rule be available to delay the running of the Statute of Limitations.”27
The Court turned last to its holding in LaBarbera, which involved a plaintiff who suffered complications following a nasal reconstruction, only to discover later that his surgeon had failed to remove a stent he had deliberately inserted for post-surgical healing (the stent was intended to remain in situ for only ten days after surgery). There, the Court restricted the foreign object exception to the narrow confines described in Flanagan, finding the stent undeniably a fixation device with a continuing treatment purpose.
The Court harmonized the various cases to articulate the following general principles to be applied when considering the foreign object exception: (1) tangible items used to facilitate surgery are foreign objects if left behind in a patient’s body; (2) a fixation device does not transform into a foreign object if not timely removed; (3) a fixation device does not become a foreign object if inserted in the wrong place; (4) a fixation device not removed in a timely fashion is akin to misdiagnosis and a fixation device improperly placed is akin to negligent medical treatment, and; (5) the legislative intent of CPLR 214(a) was to maintain the narrow Flanagan rationale in a rare fact pattern.28
Reflecting on this body of precedent, the Court in Walton rejected defendants’ view of the state of the law as to what constitutes a fixation device. In response to their contention that “any device that is intentionally left in a patient’s body for the purposes of continuous treatment is a ‘fixation device’”29 the Court observed that “every fixation device is intentionally placed for a continuing (even if temporary) treatment purpose, but it does not follow that everything that is intentionally placed for a continuing treatment purpose is a fixation device.”30 The Court determined that Walton’s catheter was indeed a foreign object, because, much like a clamp, a scalpel, or a sponge, it was introduced solely to facilitate surgery and performed no securing or supporting role during or after surgery. In distinguishing Walton from LaBarbera, the Court noted that Walton’s catheter remained in his body for a few days after surgery, but not for “post-surgery healing purposes,” as was the case with the nasal stent in LaBarbera.
The Walton decision has come at an interesting time in New York, given that there is currently a bill awaiting Senate vote, commonly known as Lavern’s Law, which proposes to amend CPLR 214(a). If passed, the bill would extend the statute of limitation in medical malpractice actions to two and a half years from the date the patient first learns of, or should have reasonably known of, the malpractice. The bill, if passed, would bring New York into line with forty-four other states across the United States already applying a “date of discovery” rule. Should this bill pass, the “fixation device” and “foreign object” distinction made in Walton could become obsolete. In the meantime, and in light of the legislative uncertainties, Walton provides a useful roadmap into the Court’s view of the patchwork of precedent on this nuanced issue.
1 24 N.Y.3d 203, 21 N.E.3d 995, 997 N.Y.S.2d 334 (2014).
2 Grace v. U.S., 754 F. Supp. 2d 585, 602 (W.D.N.Y. 2010).
3 Grace v. Law, 2012 WL 11921336 (Sup. Ct. Erie Cnty. Oct. 3, 2012).
4 Grace v. Law, 108 A.D.3d 1173, 1176, 969 N.Y.S.2d 661, 664 (4th Dep’t 2013).
5 Grace, 24 N.Y.3d at 210.
7 Grace, 24 N.Y.3d at 211.
8 24 N.Y.3d 370, 23 N.E.3d 988, 998 N.Y.S.2d 720 (2014).
9 Paterno v. Laser Spine Inst., 2011 WL 11003906 (Sup. Ct. Westchester Cnty. Mar. 25, 2011), aff’d, 112 A.D.3d 34 (2d Dep’t 2013), aff’d, 24 N.Y.3d 370 (2014).
10 Paterno v. Laser Spine Inst., 112 A.D.3d 34 (2d Dep’t 2013), aff’d 24 N.Y.3d 370 (2014).
11 Id. at 695 (quoting Grimaldi v. Guinn, 72 A.D.3d 37, 44, 895 N.Y.S.2d 156).
12 Paterno, 24 N.Y.3d at 376-77 (quoting Fischbarg v. Doucet, 9 N.Y.3d 375, 382, quoting Parke-Bernet Galleries v. Franklyn, 26 N.Y.2d 13, 18).
13 Paterno, 24 N.Y.3d at 377 (quoting Fischbarg, 9 N.Y.3d at 381).
14 Paterno, 24 N.Y.3d at 377 (citing Grimaldi, 72 A.D.3d at 37; see Benifits By Design Corp. v. Contractor Mgmt. Servs., LLC, 75 A.D.3d 826, 829 (3d Dep’t 2010); Am. Homecare Fed’n, Inc. v. Paragon Scientific Corp., 27 F. Supp. 2d 109, 114 (D. Conn. 1998); Edberg v. Neogen Corp., 17 F. Supp. 2d 104, 114 (D. Conn. 1998); Boris v. Bock Water Heaters, Inc., 3 Misc. 3d 835, 840 (Sup. Ct. Suffolk Cnty. 2004); see also Morilla v. Laser Spine Inst., LLC, 2010 WL 3258312 at *5 (Aug. 16, 2010)).
15 Paterno, 24 N.Y.3d at 378.
17 Id. at 381 (citing Hermann v. Sharon Hosp., 135 A.D.2d 682, 683, 522 N.Y.S.2d 581, citing McGowan v. Smith, 52 N.Y.2d 268, 273–274, 437 N.Y.S.2d 643, 419 N.E.2d 321 (1981), and Kramer v. Hotel Los Monteros S. A., 57 A.D.2d 756, 394 N.Y.S.2d 415 (1st Dep’t 1977)).
18 Walton v. Strong Mem’l Hosp., — N.Y.3d —-, 2015 WL 3593821, 2015 N.Y. Slip Op. 04786 (June 10, 2015).
20 Walton v. Strong Mem’l Hosp., 37 Misc. 3d 539, 950 N.Y.S.2d 556 (Sup. Ct. Erie Cnty. 2012), aff’d, 114 A.D.3d 1289 (4th Dep’t 2014), rev’d, — N.Y.3d —-, 2015 WL 3593821, 2015 N.Y. Slip Op. 04786 (June 10, 2015).
21 LaBarbera v. N.Y. Eye & Ear Infirmary, 91 N.Y.2d 207, 691 N.E.2d 617, 668 N.Y.S.2d 546 (1998).
22 Walton, 37 Misc. 3d at 539.
23 Walton v. Strong Mem’l Hosp., 114 A.D.3d 1289, 980 N.Y.S.2d 691 (4th Dep’t 2014), rev’d, — N.Y.3d —-, 2015 WL 3593821, 2015 N.Y. Slip Op. 04786 (June 10, 2015).
24 Rockefeller v. Moront, 81 N.Y.2d 560, 618 N.E.2d 119, 601 N.Y.S.2d 86 (1993).
25 Flanagan v. Mount Eden Gen. Hosp., 24 N.Y.2d 427 (1969).
26 Rodriguez v. Manhattan Med. Grp., P.C., 77 N.Y.2d 217 (1990).
27 Id. at 566.
28 Walton v. Strong Mem’l Hosp., — N.Y.3d —-, 2015 WL 3593821, 2015 N.Y. Slip Op. 04786 (June 10, 2015).
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