Breach of Contract Cases

Lois J. Ayash vs. Dana-Farber Cancer Institute & others. Suffolk. October 6, 2004. February 9, 2005. Present: Marshall, C.J., Greaney, Ireland, Spina, Sosman, & Cordy, JJ. Privacy. Doctor, Employment. Hospital, Peer review, Appointment to staff. Contract, Implied covenant of good faith and fair dealing, Physician, Employment, Interference with contractual relations. Employment, Retaliation. Charity. Corporation, Charitable corporation, Non-profit corporation. Damages, Employment contract, Libel. Libel and Slander. Contempt. A doctor seeking damages against a hospital (her former employer), among others, in connection with a series of events that occurred in the aftermath of the discovery that two patients at the hospital had been administered an overdose of a highly toxic chemotherapy drug, which resulted in the death of one of the patients, was not entitled to relief under G. L. c. 214, § IB, on the ground that her right to privacy had been invaded by the hospital’s public disclosure that peer review action was proceeding against the plaintiff or by the hospital’s actions in providing to a newspaper reporter confidential peer review documents that suggested some responsibility on the plaintiff’s part for the overdoses, where the disclosures were limited to the plaintiff’s professional involvement in a matter that already was the focus of a high degree of public scrutiny and interest and were not, in any event, of an exceedingly personal or intimate nature [382-385]; further, even assuming that the hospital breached its implied covenant of good faith and fair dealing by failing to follow the procedure described in its bylaws before restricting the plaintiff’s clinical privileges following the overdoses, the plaintiff failed to demonstrate that she suffered compensable loss as a result of the breach [385-388]; however, where a reasonable jury could conclude that the hospital’s decision not to renew the plaintiff’s appointment was motivated by retaliatory animus fueled by the plaintiff’s filing of a lawsuit against the hospital alleging gender discrimination, judgment in favor of the plaintiff on her claim of retaliation in violation of G. L. c. 151B, § 4 (4), was warranted [388-389]. This court concluded, based on the legislative history and plain language of the statutes in question, that the charitable cap on damages under G. L. c. 231, § 85K, limiting the tort liability of a charitable entity to $20,000, was not applicable to limit damages awarded pursuant to a successful claim of unlawful retaliation in the employment context under G. L. c. 151B, § 4 (4). [389-392] In an action where undifferentiated lump sum damages were awarded against a hospital for invasion of privacy, breach of the implied covenant of good faith and fair dealing, and retaliation, but where the verdicts on the first two claims were vacated on appeal, this court remanded the issue of damages for a new trial. [392-393] In an action brought by a doctor seeking damages against a hospital’s physician-in-chief (defendant), among others, claiming that the defendant intentionally interfered with the contractual relationship between the plaintiff and the hospital by wrongfully inducing the hospital not to extend the plaintiff’s employment in the aftermath of the discovery that two patients at the hospital had been administered an overdose of a highly toxic chemotherapy drug, which resulted in the death of one of the patients, the judge erred in denying the defendant’s motion for judgment notwithstanding the verdict, where the verdict against the defendant was tainted by the improper admission in evidence of confidential peer review documents protected under G. L. c. Ill, § 204 (a), and where, in the absence of such evidence, the defendant’s challenged conduct could not be said to be improper in motive or means. [393-399] A Superior Court judge did not abuse his discretion in finding that the ongoing refusal of certain defendants (a newspaper and a newspaper reporter) to comply with a discovery order directing them to disclose certain confidential sources to the plaintiff warranted, as a sanction pursuant to Mass. R. Civ. R 37 (b) (2), that judgments of liability enter in favor of the plaintiff on all of her remaining claims against the defendants, where the defendants’ refusal to comply resulted in the plaintiff’s inability to proceed against other defendants on certain claims, and where the judge left open to the defendants the option to remove the default by complying with the discovery order [399-404]; further, the jury’s award of damages on those default judgments was not clearly excessive in relation to what the plaintiff’s evidence had demonstrated damages to be [404-407]. Civil action commenced in the Superior Court Department on February 1, 1996. After certain discovery matters were heard by Peter M. Lauriat, J., the case was tried before Catherine A. White, J. The Supreme Judicial Court granted an application for direct appellate review. Kenneth W. Salinger (Steven L. Schreckinger with him) for Dana-Farber Cancer Institute & another. Joan A. Lukey (Gabrielle R. Wolohojian with her) for the plaintiff. Jonathan M. Albano (George Freeman, of New York, & Martin F. Murphy with him) for Globe Newspaper Company, Inc., & another. The following submitted briefs for amici curiae: Carl Valvo for Professional Liability Foundation, Ltd., & others. Steven S. Locke for Massachusetts Commission Against Discrimination. Robert S. Mantell, Jonathan J. Margolis, & James E. Fitzgerald for Massachusetts Employment Lawyers Association. Laura R. Handman & Jeffrey L. Fisher, of the District of Columbia, for ABC, Inc., & others. David M. Livingston, Globe Newspaper Company, Inc., and Richard A. Knox (the latter two collectively referred to as the Globe defendants). Greaney, J. The plaintiff, Dr. Lois J. Ayash, commenced this action in the Superior Court against the defendants, the DanaFarber Cancer Institute (Dana-Farber or the hospital); Dr. David M. Livingston; Globe Newspaper Company, Inc., publisher of the Boston Globe (Globe); and Globe reporter Richard A. Knox, seeking damages in connection with a series of events that occurred in the aftermath of the discovery that two patients enrolled in an experimental breast cancer treatment study at Dana-Farber had mistakenly been administered a four-fold overdose of a highly toxic chemotherapy drug. One of the patients, Globe health columnist Betsy A. Lehman, died as a result of the overdose. In her complaint, the plaintiff accused the Globe and Knox (together, Globe defendants) of publishing a series of scathing and inaccurate articles about the overdoses and an alleged coverup by Dana-Farber that erroneously attributed culpability to the plaintiff, thereby destroying her reputation and her well-being. The plaintiff’s complaint also accused Dana-Farber and Livingston (who was physician-in-chief at Dana-Farber at the time of the overdoses and their discovery) of inappropriately focusing public attention on her, by issuing press releases containing confidential peer review information and by secretly providing to Knox other confidential peer review information. This was done, the plaintiff alleges, in order to deflect attention from widespread deficiencies in the hospital that led to the overdoses and in order to protect other physicians at the hospital. The plaintiff’s amended complaint, as far as now relevant, states claims against (1) Dana-Farber for invasion of privacy, breach of the implied covenant of good faith and fair dealing, and unlawful retaliation in violation of G. L. c. 151B, § 4 (4); (2) Livingston for intentional interference with contractual relations; (3) the Globe defendants for libel and defamation; and (4) Knox for intentional interference with contractual relations and for intentional or negligent infliction of emotional distress. During the discovery stage of the litigation, the plaintiff sought the identities of sources consulted by Knox before writing articles, subsequently published in the Globe, that formed, at least in part, the basis of the plaintiff’s lawsuit. After the Globe defendants’ steadfast refusal to provide information that would lead to the identities of Knox’s confidential sources, despite a court order to disclose their identities, a judgment of civil contempt was entered in the Superior Court against the Globe defendants. The Appeals Court vacated the order to disclose and the contempt order, concluding that the defendants had made “some showing” that disclosure of Knox’s confidential sources presented a danger to the free flow of information that was more than theoretical or speculative. See Ayash v. Dana-Farber Cancer Inst., 46 Mass. App. Ct. 384 (1999). On remand, the judge allowed the plaintiff’s renewed motion to compel the Globe defendants to disclose the identities of their confidential sources. When the Globe defendants continued to refuse, the judge ultimately entered, as a sanction pursuant to Mass. R. Civ. P. 37 (b) (2), as amended, 390 Mass. 1208 (1984), pretrial default judgments of liability in favor of the plaintiff on her claims against the Globe defendants. After five weeks of trial (presided over by a different judge than the judge who had dealt with discovery), a jury in the Superior Court found Dana-Farber liable for (1) violation of the plaintiff’s statutory right to privacy under G. L. c. 214, § 1B; (2) breach of the covenant of good faith and fair dealing implied in its employment contract with the plaintiff; and (3) unlawful retaliation in violation of G. L. c. 151B, § 4. The jury also returned a verdict in favor of the plaintiff on her claim that Livingston intentionally had interfered with her employment relationship with Dana-Farber. The jury awarded damages against Dana-Farber in the amount of $180,000 for lost compensation and injury to business reputation, $1,080,000 for emotional distress, and $5,000 in punitive damages; the jury also awarded damages against Livingston in the amount of $120,000 for lost compensation and injury to business reputation, and $720,000 for emotional distress. For the plaintiff’s defaulted claims against the Globe defendants, the jury awarded her the sum of $1,680,000 against the Globe (reflecting $240,000 in economic damages and $1,440,000 in emotional distress damages) and $420,000 against Knox (reflecting $60,000 in economic damages and $360,000 in emotional distress damages). The judge heard motions filed by Dana-Farber and Livingston for the entry of judgment notwithstanding the verdicts; a motion filed by Dana-Farber requesting that the charitable cap, G. L. c. 231, § 85K, be applied to the judgment against it; a motion filed by the Globe defendants challenging the default judgments; and motions for a new trial (or, alternatively, for remittitur) based on excessive damages submitted by all of the defendants. The judge upheld the verdicts against Dana-Farber and Livingston, but agreed that the charitable cap applied to the damages awarded against Dana-Farber. The judge declined to revisit the default judgment (which, as noted, had been entered by another judge). Finally, the judge concluded that damages awarded by the jury, although high, were not excessive and denied all of the defendants’ motions for remittitur. An amended judgment was entered allowing the plaintiff to recover the sum of $20,000 (plus costs and interest) from Dana-Farber. The case is before us on cross appeals. The plaintiff appeals the judge’s application of the charitable cap. Dana-Farber appeals the denial of its motion for judgment notwithstanding the verdicts on the retaliation, privacy and implied contract claims. Livingston appeals the denial of his motion for judgment notwithstanding the verdict on the intentional interference claim. The Globe defendants appeal the imposition of the sanction of default judgment against them. All of the defendants appeal the denial of their motions for remittitur, or for a new trial, on the issue of excessive damages. We granted the parties’ applications for direct appellate review. For reasons that follow, we vacate the judgments against Dana-Farber for invasion of privacy and for breach of the implied covenant of good faith and fair dealing, and against Livingston for interference with employment relations, and direct the entry of judgments for Dana-Farber and Livingston on those claims. We affirm the verdict against Dana-Farber for the G. L. c. 151B unlawful retaliation claim and conclude that the charitable cap set forth in G. L. c. 231, § 85K, does not apply to damage awards for unlawful retaliation under G. L. c. 151B. We affirm the default judgments, and the corresponding damage awards, against the Globe defendants. Vacating the judgments against Dana-Farber for invasion of privacy and breach of the implied covenant creates a defect in the damages awarded against Dana-Farber that necessitates a retrial on damages. Accordingly, we remand the case to the Superior court for a new trial on the damages to be awarded against Dana-Farber. 1. We begin with an overview of the facts in the light most favorable to the plaintiff. See Situation Mgt. Sys., Inc. v. Malouf, Inc., 430 Mass. 875, 876 (2000); Cambridgeport Sav. Bank v. Boersner, 413 Mass. 432, 438 (1992). Additional facts will be discussed as they relate to the parties’ claims of error. a. The overdoses and the immediate aftermath of their discovery. In November, 1994, a research fellow at Dana-Farber, Dr. James Foran, accidentally ordered four-fold overdoses of cyclophosphamide, a powerful chemotherapy drug with well known heart toxicity, for two patients in an experimental protocol for breast cancer patients (protocol 94-060) administered under the auspices of Dana-Farber’s Solid Tumor Autologous Marrow Program (STAMP). The plaintiff was protocol chair and principal investigator for protocol 94-060. The overdoses were separately administered to two patients, Betsy Lehman and Maureen Bateman, over the course of four days beginning on November 14 and November 16, respectively. The attending physician on duty at the time the orders were written, and the overdose administered to Lehman, was Dr. Gary N. Schwartz. The attending physician on duty at the time the overdose was administered to Bateman was Dr. Anthony Elias, the director of STAMP. Both patients suffered almost immediate adverse reactions to the cyclophosphamide treatment. Bateman survived the overdose but experienced severe cardiac damage. Lehman died on December 3 as a result of the overdose. An autopsy failed to uncover the cause of her death. The plaintiff began a rotation as the attending physician for Lehman and Bateman on December 1. On the morning after Lehman’s death, the plaintiff inquired of another STAMP team physician, Dr. Richardson, whether the correct chemotherapy dose had been administered to Lehman. Richardson responded in the affirmative. As protocol chair and co-director of the STAMP team, the plaintiff informed the director of protocol administration at Dana-Farber of Lehman’s death and provided him with pharmacological data about the blood levels of cyclophosphamide and its metabolite in Lehman and in other patients participating in protocol 94-060. To the plaintiff, and to other STAMP team physicians, the data appeared inconclusive. At a meeting approximately two weeks later, the plaintiff, based on her earlier conversation with Richardson, informed a group of STAMP team physicians and members of Dana-Farber’s pharmacology department that the cyclophosphamide administered to Lehman had been the correct dosage. During a medical staff retreat, the plaintiff presented the pharmacological data and clinical scenario of all four patients who had undergone protocol 94-060 and stated her view that Lehman’s death most probably reflected a modulation of cyclophosphamide. Those present voiced no disagreement. It was not until on or about February 8, 1995, that a Dana-Farber data manager discovered the overdosing errors. The plaintiff reported the errors to Dana-Farber’s human protection committee on the following day. The hospital immediately notified both patients’ families of the tragic error and suspended all clinical work under protocol 94-060. Livingston, as the hospital’s physician-in-chief, began his own informal investigation into the incident by inquiring of other physicians, including Dr. Schwartz and Dr. Foran, as to their version of events. Livingston, however, did not seek the plaintiff’s view as to what had occurred. Dana-Farber established three committees to investigate the circumstances of the overdoses and the hospital’s subsequent failure to discover them. First, it convened an internal peer review committee, chaired by Dr. Steven E. Sallan (Sallan committee), to focus on how the overdoses occurred and to recommend steps to prevent a similar tragedy in the future. Dana-Farber also appointed an external peer review committee (Devita committee), headed by Dr. Vincent T. Devita, a national leader in oncology and former director of the National Cancer Institute, to review the Sallan committee report and, if necessary, independently investigate circumstances leading to the overdose. Finally, an internal Dana-Farber audit team was established to perform an in-depth investigation of protocol 94-060 itself. On March 22, 1995, Livingston issued two statements. First, in a statement to hospital staff, he described the overdose incidents and the steps that had been, or would be, taken by Dana-Farber in response. Second, in a statement to the news media, Livingston admitted that the overdoses resulted from “human error” and announced that Dana-Farber had “taken additional precautions to ensure that they do not happen again,” including the establishment of “two internal review committees and an external review committee” that had been “asked to examine all issues related to this situation.” Livingston stated that “once all the facts have been fully analyzed, and the causes of the errors identified,” Dana-Farber would “make available to the public the conclusions and recommendations of the committees.” The next day, two physicians and three pharmacists were placed on administrative duty and restricted from clinical practice. The plaintiff was not one of those whose clinical privileges were restricted. b. Reporting of the overdoses by the Globe. The discovery of the overdoses was of considerable public interest. Dana-Farber became the subject of intense media coverage, including that in the Globe. On March 23, 1995, the day after Livingston issued the hospital’s first press release on the overdoses, the Globe published a front page article, authored by Knox, entitled “Doctor’s orders killed cancer patient.” With respect to the overdose administered to Lehman, the article ascribed the erroneous order to a “physician working as a research fellow,” but noted that “[f]ive or six other doctors and nurses countersigned the mistaken order, including Dr. Lois J. Ayash, leader of the team.” The plaintiff was the only physician named in the article as having any connection to the overdose. Moreover, contrary to what was stated in the article, the plaintiff had not countersigned the overdose order, nor was she the “leader of the team.” Despite this error in reporting, no effort was made by Dana-Farber, or by Livingston, to correct the impression that the plaintiff shared responsibility for the overdose error. On March 24, 1995, the Globe published an editorial concerning the overdoses. The editorial characterized the overdose error as “so glaring that any first-year medical student should have spotted it.” The following day, the Globe published an article written by another Globe columnist, Bella English. The column did not mention the plaintiff by name, but described the overdoses as “an appalling series of errors that would make The Three Stooges look like brain surgeons” and stated tha

<bold>Arbitration and Mediation — arbitration — attorney fees</bold> <block_quote> The superior court did not err in a securities broker's defamation, wrongful termination, failure to pay severance benefits, tortious interference with contractual relations, and withholding of referral fees case by affirming an arbitration award granting attorney fees to petitioner even though respondent contends that the arbitration panel lacked the authority to award attorney fees, because: (1) both parties specifically requested attorney fees; and (2) the parties' uniform submission agreement incorporated the New York Stock Exchange (NYSE) Rules, and NYSE Rule 629 allowed a panel of arbitrators to award attorney fees.</block_quote>