ZURICH AMERICAN INSURANCE COMPANY v. ZIAD ABBUD, M.D.

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-2255-11T2

ZURICH AMERICAN INSURANCE

COMPANY, as SUBROGEE of

DANIEL BILL,

Plaintiff-Appellant,

v.

ZIAD ABBUD, M.D., VINISHKUMAR

PATEL, M.D., BEVERLY J. DEMCHUK,

M.D., CHRISTINE DESANTIS, AMERICAN

HEART CENTER, P.A., DIONISIO CRUZ,

M.D., IRA M. STRAUSS, M.D.,

MUHAMMED S. HUQ, M.D., AVAIS

MASUD, M.D., CONDE CHAT, HUQ, CRUZ,

STRAUSS & MASUD, M.D., P.A.,

Defendants-Respondents.

_________________________________________

August 22, 2013

Argued January 8, 2013 - Decided

Before Judges Alvarez, Waugh and St. John.

On appeal from Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-6036-08.

Richard P. Krueger argued the cause for appellant (Krueger & Krueger and The Blanco Law Firm, LLC, attorneys; Mr. Krueger and Pablo N. Blanco, of counsel and on the brief).

Michael G. Halpin argued the cause for respondent Vinishkumar Patel, M.D. (Grossman & Heavey, P.C., attorneys, Mr. Halpin, on the brief).

Russell J. Malta argued the cause for respondents American Heart Center, P.A. and Beverly Demchuk, M.D. (McGreevy & Malta, attorneys; Mr. Malta, on the brief).

Annmarie G. Flores argued the cause for respondents Dionisio Cruz, M.D. and Ira M. Strauss, M.D. (Gage Fiore, LLC, attorneys; Alec Frick, on the brief).

Gregory J. Giordano argued the cause for respondent Avais Masud, M.D. (Lenox, Socey, Formidoni, Giordano, Cooley, Lang & Casey, LLC, attorneys; Michael A. Pattanite, Jr., on the brief).

Jill R. O'Keeffe argued the cause for respondents Muhammed S. Huq, M.D. and Conde, Chat, Huq, Cruz Strauss & Masud, M.D., P.A. (Orlovsky, Moody, Schaaff, Conlon & Gabrysiak, attorneys; Ms. O'Keeffe, on the brief).

PER CURIAM

Plaintiff Zurich American Insurance Company, a worker's compensation insurer, as a subrogee of Daniel Bill, appeals from the grant of defendants' summary judgment motion which dismissed plaintiff's medical malpractice complaint because it was filed beyond the applicable statute of limitations. Plaintiff contends that the "discovery rule," should apply to toll the limitations period. Lopez v. Swyer, 62 N.J. 267, 272 (1973). Alternatively, plaintiff argues that it properly employed the fictitious party rule, R. 4:26-4, and its second and third amended complaints naming certain defendants for the first time related back to the timely-filed original complaint, thus avoiding application of the limitations period. We have considered these arguments in light of the record and applicable legal standards. We affirm.

I.

We consider the facts in a light most favorable to plaintiff. Bill was injured in a fall in February 2005, and while in the hospital was diagnosed with renal disease and other medical issues.

On February 23, 2007, plaintiff filed a complaint against John Boyd Construction & Equipment Company, Inc. (Boyd), John Does 1-10, ABC Businesses 1-10, and XYZ Corporations 1-10, seeking damages related to the fall Bill suffered. On March 12, 2008, plaintiff voluntarily dismissed the complaint without prejudice, with the stipulation that the complaint could be re-filed out of time, and that defendants agreed to waive statute of limitations and laches defenses.

Plaintiff then filed a second complaint on March 25, 2008, alleging medical malpractice against defendants Ziad Abbud, M.D., Dionisio Cruz, M.D., Indira Bollampally, M.D., and Ira M. Strauss, M.D., as well as fictitious defendants. An amended complaint was filed on October 3, 2008, adding Virendra Patel, M.D., as a defendant. A second amended complaint was filed on March 3, 2009, to add American Heart Center, P.A. as a defendant, and to replace Vinendra Patel with Vinishkumar Patel. A third amended complaint was filed on March 5, 2010, to add Christine Desantis, Conde Chat, Muhammed S. Huq, M.D., Avais Masud, M.D., Beverly J. Demchuk, M.D., and Huq, Cruz, Strauss, & Masud M.D., P.A. as defendants.

The claims against Bollampally were dismissed with prejudice pursuant to a January 23, 2009 order.1 The claims against Boyd were settled and dismissed with prejudice on May 16, 2009. Abbud was granted summary judgment without opposition on June 25, 2011. Chat and Desantis were never served, and these claims were administratively dismissed. None of these defendants are parties to the appeal.

We review the facts that gave rise to plaintiff's action. On February 23, 2005, Bill, then 78 years old, fell while working as a security guard at Erickson Communities Seabrook Village. Bill was taken to Jersey Shore Medical Center (JSMC), where he was diagnosed with several rib fractures. Bill was also diagnosed with pneumothorax (air in the outer lining of a lung) and underlying kidney disease. He was hospitalized four times between February and May 2005 as a result. Plaintiff's expert, Dr. Steven D. Weisbord, alleges that Bill sustained acute kidney injury while in the hospital, caused by the use of a drug known as natrecor.

Plaintiff, the worker's compensation insurer of Bill's employer, paid benefits and medical expenses related to the fall and subsequent hospitalization. An email received on March 1, 2005, by Joseph Ays, a field manager for plaintiff's administrator, Broadspire Services, Inc. (Broadspire), alerted plaintiff that Bill was "still on the Natrecor drip." On March 28, 2005, Ays sent an email to Paul Todoroff, stating "I would like to pursue Subro[gation] in this case." This email was acknowledged and replied to on April 8, 2005, noting that if Bill had not pursued a claim within one year, the insurer could notify Bill that it was taking over his right to do so. Broadspire made a determination of non-certification on June 14, 2005, based on a thorough review of Bill's file by Dr. Wendy Weinstein, an internal medicine doctor, who found that "[t]here was a lack of objective, quantifiable findings by physical examination or diagnostic testing to support the intensity of service provided by inpatient hospitalization as causally related to the work related injury on 2/25/05." On June 22, 2005, Ays wrote to JSMC requesting Bill's medical records. These records were sent, with an "Original Review Receipt Date" of August 19, 2005.

All of the current defendants to this suit are identified in these records. Dr. Patel's name is featured prominently in the hospital charts, including ordering medications, ordering a lung scan, and as the reading cardiologist for an echocardiographic study. Dr. Huq likewise entered and ordered several items in the charts, including renal function panels and a kidney flow and function scan. The remaining defendants ordered at least one entry apiece.

At plaintiff's request, Bill was examined by Dr. Peter Blumenthal, a certified independent medical examiner, on July 14, 2005. Dr. Blumenthal rated the rib injury at 12.5% permanent partial disability, noted underlying absolute arrhythmia/atrial fibrillation, underlying atherosclerosis, and that Bill was suffering from carotid stenosis, causing confusion and hallucinations "in no way related to the incident in question." On July 21, 2005, Dr. Blumenthal filed a second report, predicting maximum medical improvement by the end of August, and noting again that any disability related to carotid stenosis was related to underlying disease and not the fall. On December 15, 2005, Dr. Blumenthal filed a third report after reviewing additional hospital records, comparing the fall to "the straw that broke the camel's back" and saying that the

incident in question set off an avalanche of other events that can only be explained by the high burden of this man's underlying atherosclerosis at an advanced biological age. Despite that, Mr. Bill has made an excellent recovery of his renal functions as well as his cardiac function .

He opined that "the treatments at Jersey Shore University Medical Center and Riverview Medical Center up to April 21, were necessitated by the incident in question, and were adequate." On March 6, 2006, plaintiff received notice from Mrs. Bill's attorney that she did not intend to pursue any claims relating to the incident, due to the large worker's compensation lien and because Bill had since passed away. Plaintiff filed a complaint against Boyd, the contractor responsible for snow removal on the employer's property, on February 23, 2007. In pursuing this claim, plaintiff sought the opinion of Dr. Steven Weisbord, a nephrologist, asking him in a March 7, 2007 letter to "review the hospital records to determine whether all of Mr. Bill's injuries and treatment are related to the February 25, 2005 slip and fall." Dr. Weisbord informed plaintiff in a March 20, 2007 phone call that Bill's renal failure was "likely the result of the administration of a drug called Natrecor, used by some physicians for the treatment of congestive heart failure." In August, Dr. Weisbord reviewed the file again and opined that Bill's treating physicians were negligent. He issued a written report to this effect on February 10, 2008.

Summary judgment was granted to Demchuck on September 2, 2011. On December 2, 2011, Judge Joseph P. Quinn denied plaintiff's motion for reconsideration, and granted summary judgment to all remaining defendants. In his comprehensive written statement of reasons addressing the discovery rule, the judge determined:

The standard under the discovery rule is that the statute of limitations will begin to run when a reasonable person would be able to discern through due diligence that a potential claim exists. See [Baird v. Am. Med. Optics, 155 N.J. 54, 66 (1998).] Zurich did not exercise due diligence in this case. Zurich was on notice that some of the medical treatment performed at JSUMC was not causally related to Bill's rib fractures. In the review completed by Dr. Weinstein on June 14, 2005, she opined, "[t]here is a lack of objective, quantifiable findings . . . to support the intensity of service provided by inpatient hospitalization as casually related to the work related injury on 2/25/05." Furthermore in an email written by Ays on July 14, 2005, Ays sought a determination of which medical services performed for Bill were causally related to Bill's broken ribs. As Zurich was already investigating into the medical treatment provided, a reasonable person would have been on notice of a potential claim of medical malpractice. Furthermore, Zurich received Bill's medical records on August 19, 2005. These records coupled with the review by Dr. Weinstein and Ays'[] email, as a matter of law, give rise to the state of the statute of limitations. Under Matynska v. Fried, Zurich was required to act timely in bringing claims for medical malpractice once Zurich became in possession of the medical records and was reasonably on notice of potential medical malpractice claims. 175 N.J. 51 (2002). Zurich failed to act timely, and as such, the medical malpractice claim is barred.

Plaintiff contended that under Rule 4:9-3 defendants named in amended complaints filed after the March 15, 2008 complaint should be deemed to "relate back" to that date. The motion judge found that since the March 15 claims are barred by N.J.S.A. 2A:14-2, even if plaintiff could satisfy the "related back" test, it would be of no avail since those claims would be outside the time period. This appeal ensued.

II.

The statute of limitations sets forth the period of time within which a party must initiate a lawsuit. Szczuvelek v. Harborside Healthcare Woods Edge, 182 N.J. 275, 281 (2005). A medical malpractice action, or a lawsuit seeking damages for personal injury caused by the wrongful act of another, must be filed within two years of the date the alleged negligence or wrongful act. N.J.S.A. 2A:14-2; Szczuvelek, supra, 182 N.J. at 281.

"To avoid the harsh effects of a mechanical application of [the] statute of limitations," the Court has adopted the discovery rule, which provides that, in appropriate cases, "'a cause of action will be held not to accrue until the injured party discovers, or by an exercise of reasonable diligence and intelligence should have discovered that he may have a basis for an actionable claim.'" Szczuvelek, supra, 182 N.J. at 281 (quoting Lopez, supra, 62 N.J. at 272) (alteration in original). The discovery rule serves to suspend the statute of limitations "'when the plaintiff is unaware of his or her injuries or of the culpability of another.'" Dunn v. Borough of Mountainside, 301 N.J. Super. 262, 274 (App. Div. 1997) (citation omitted), certif. denied, 153 N.J. 402 (1998). The discovery rule is essentially a rule of equity. Lopez, supra, 62 N.J. at 273.

When conducting a Lopez analysis, a court must consider: the nature of the alleged injury; the length of time that has elapsed since the wrongdoing; whether the delay was deliberate; whether the defendant has been prejudiced by the delay; and the information available to the claimant. Id. at 276. The Lopez discovery rule will not excuse every late filing of a complaint. If "the facts presented would alert a reasonable person exercising ordinary diligence that he or she was injured due to the fault of another[,]" the discovery rule will not excuse a late filing. Martinez v. Cooper Hosp., 163 N.J. 45, 52 (2000).

As the Supreme Court has explained:

To be sure, legal and medical certainty are not required for a claim to accrue. See Lapka v. Porter Hayden Co., 162 N.J. 545, 555-56 (2000). Thus, a plaintiff need not be informed by an attorney that a viable cause of action exists, Burd v. New Jersey Telephone Company, 76 N.J. 284, 291 (1978), nor does a plaintiff need to understand the legal significance of the facts. See Lynch [v. Rubacky, 85 N.J. 65, 73 (1981)]. Likewise, a plaintiff may not delay his filing until he obtains an expert to support his cause of action. Brizak v. Needle, 239 N.J. Super. 415, 429 (App. Div.), certif. denied, 122 N.J. 164 (1990). In cases in which fault is not self-evident at the time of injury, a plaintiff need only have "reasonable medical information" that connects an injury with fault to be considered to have the requisite knowledge for the claim to accrue. Vispisiano v. Ashland Chem. Co., 107 N.J. 416, 435 (1987). Temporal proximity of injury with exposure may be sufficient medical information; however, it is not dispositive. Compare Burd, supra, 76 N.J. at 292-93 with Vispisiano, supra, 107 N.J. at 436.

[Kendall v. Hoffman-LaRoche, Inc., 209 N.J. 173, 191-92 (2012).]

Applying these principles, we are satisfied that the motion judge correctly concluded that the Lopez discovery rule did not apply. The statute of limitations is tolled until the plaintiff knows of the injury, its cause and that it results from another's fault. Savage v. Old Bridge-Sayreville Med. Grp., 260 N.J. Super. 417, 421 (App. Div. 1992), aff'd, 134 N.J. 241 (1993). Awareness of fault requires only that the plaintiff is cognizant of "facts that would alert a reasonable person exercising ordinary diligence that a third party's conduct may have caused or contributed to the cause of the injury and that conduct itself might possibly have been unreasonable or lacking in due care." Savage, supra, 134 N.J. at 248.

As is evident from the record, Dr. Weinstein's June 14, 2005 report, Ays' July 14, 2005 email, and plaintiff's receipt of Bill's hospital records on August 19, 2005, gave plaintiff the "reasonable medical information" that connects Bill's injury with fault and therefore plaintiff had the requisite knowledge for the claim to accrue.

For these reasons, the discovery rule is inapplicable. It is clear that on August 19, 2005, the facts known to plaintiff were sufficient to start the statute of limitations running. Because plaintiff knew that Bill had been injured, and knew the identity of the responsible party, the trial judge correctly held that the discovery rule did not excuse violation of the two-year statute of limitations.

We reject plaintiff's contention that not until it received Dr. Weisbord's March 20, 2007 telephone call did it suspect or have reason to suspect that any of Bill's physicians were negligent. It is also evident that plaintiff did not exercise timely reasonable diligence in consulting Weisbord.

In light of our conclusion that plaintiff's claims are barred by the statute of limitations, we need not consider plaintiff's Rule 4:26-4 argument.

A

1 The order dismissing the claims is misdated January 23, 2008.