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Neade v. Portes

October 26, 2000

THERESE NEADE, AS INDEPENDENT ADM'R OF THE ESTATE OF ANTHONY ROBERT NEADE, DECEASED, APPELLEE, V. STEVEN
PORTES ET AL., APPELLANTS.



The opinion of the court was delivered by: Justice McMORROW

Docket No. 87445-Agenda 30-May 2000.

Plaintiff filed a three-count complaint in the circuit court of Lake County, two counts of which were directed against defendants Steven Portes and Primary Care Family Center. In count I, plaintiff alleged that defendants were liable for medical negligence, and in count II, plaintiff charged defendants with a breach of fiduciary duty. The principle issue in this appeal is whether, in a complaint alleging medical negligence, a patient has a cause of action for breach of fiduciary duty against a physician for that physician's failure to disclose incentives that exist under the physician's arrangement with the patient's health maintenance organization (HMO). We hold that a patient may not bring a breach of fiduciary duty claim against a physician under these circumstances.

BACKGROUND

According to the allegations in plaintiff Therese Neade's complaint, plaintiff's husband, Anthony Neade, had a family history of heart disease, suffered from hypertension and a high cholesterol count, smoked heavily and was overweight. In 1990, at age 37, Mr. Neade began to exhibit symptoms of coronary artery blockage. Specifically, Mr. Neade experienced chest pain extending into his arm and shortness of breath. Mr. Neade's primary care physician, Steven Portes, M.D., hospitalized Mr. Neade from August 10 through August 13, 1990. During this hospitalization, Mr. Neade received several tests, including a thallium stress test and an electrocardiogram (EKG). Dr. Thomas Engel (not a party to this appeal) found the results of the tests to be normal and diagnosed Mr. Neade with hiatal hernia and/or esophagitis. Mr. Neade was thereafter discharged.

After his hospitalization, Mr. Neade visited Dr. Portes on August 17, August 28 and September 24, 1990, at the Primary Care Family Center (Primary Care), complaining of continued chest pain radiating to his neck and arm. Relying on the results of the thallium stress test and EKG taken during Mr. Neade's hospitalization, Dr. Portes informed Mr. Neade that his chest pain was not cardiac related. In October 1990, Mr. Neade returned to Dr. Portes, this time complaining of stabbing chest pain. At the request of Dr. Portes, his associate, Dr. Huang, examined Mr. Neade. Dr. Huang recommended that Mr. Neade undergo an angiogram-a test that is more specific for diagnosing coronary artery disease than a thallium stress test. Dr. Huang was employed on a part-time basis at Primary Care and had no hospital privileges. Dr. Portes, as Mr. Neade's primary care physician, was responsible for ordering any necessary hospitalization or additional tests. Despite Dr. Huang's recommendation, Dr. Portes did not authorize an angiogram for Mr. Neade.

Mr. Neade again returned to Primary Care in June 1991, complaining of chest pain. Dr. Portes asked Dr. Schlager, another part-time physician at Primary Care, to examine Mr. Neade. After this examination, Dr. Schlager also recommended that Mr. Neade undergo an angiogram, but Dr. Portes, relying on the thallium stress test, did not authorize the angiogram and advised Dr. Schlager that Mr. Neade's chest pain was not cardiac related. Subsequently, on September 16, 1991, Mr. Neade suffered a massive myocardial infarction caused by coronary artery blockage. Nine days later, Mr. Neade died.

Plaintiff's complaint alleges that Dr. Portes was the president of Primary Care and, as such, negotiated contracts with various organizations on behalf of himself and the clinic. Chicago HMO, of which Mr. Neade was a member, was one of the organizations with which Dr. Portes had contracted for the provision of services. According to plaintiff's complaint, Dr. Portes personally negotiated with Chicago HMO in 1990 and 1991 and agreed that Dr. Portes and his group would receive from Chicago HMO, inter alia, $75,000 annually. The $75,000 was to be used by Dr. Portes and his group to cover costs for patient referrals and outside medical tests prescribed for Chicago HMO members. This fund was termed the "Medical Incentive Fund."

Pursuant to the contract between Dr. Portes, Primary Care and Chicago HMO, any portion of the Medical Incentive Fund that was not used for referrals or outside tests would be divided at the end of each year between Primary Care's full time physicians and Chicago HMO, with the physicians receiving 60% of the remaining money and Chicago HMO receiving 40%. If the Medical Incentive Fund was exhausted prior to the end of the year, Dr. Portes and his group would be required to fund any additional consultant fees and outside tests. Plaintiff and Mr. Neade were not informed of this arrangement between Dr. Portes, Primary Care and Chicago HMO.

Count I of plaintiff's amended complaint alleges that Dr. Portes' reliance on the thallium stress test and EKG and his failure to authorize an angiogram constituted medical negligence which proximately resulted in Mr. Neade's death. In count I, plaintiff alleged facts regarding the Medical Incentive Fund. Count II of plaintiff's amended complaint alleges that Dr. Portes had a fiduciary duty to act in good faith and in the best interest of Mr. Neade, and that he breached that duty by refusing to authorize further testing, by refusing to refer Mr. Neade to a specialist and by refusing to disclose to the Neades Dr. Portes' financial relationship (including the Medical Incentive Fund) with Chicago HMO. Count II further alleges that Dr. Portes breached his fiduciary duty by entering into a contract with Chicago HMO that put his financial well-being in direct conflict with Mr. Neade's physical well-being.

The trial court agreed with defendants' argument that financial motive was not relevant to whether Dr. Portes violated the applicable standard of care in treating Mr. Neade. The trial court therefore struck the allegations relating to the Medical Incentive Fund from count I. With respect to count II, the trial court found that there existed no cause of action against a physician for breach of fiduciary duty and granted defendants' motion to dismiss. Plaintiff thereafter filed a motion to reconsider, to which she attached her own affidavit and portions of the deposition of plaintiff's expert, Dr. Jay Schapira. Plaintiff's affidavit stated that, if she had known of the Medical Incentive Fund, she would have sought a second opinion from a physician outside of Dr. Portes' group concerning the necessity of an angiogram. In his deposition, Dr. Schapira stated that both the applicable standard of care and ethical considerations obligate a doctor to disclose his financial interest in withholding care. According to Dr. Schapira, a patient can then make an informed decision concerning the quality of care he is receiving and his doctor's motivations in treating him. Defendants filed a motion to strike the affidavit and deposition excerpts from plaintiff's motion to reconsider. The trial court denied defendants' motion to strike and also denied plaintiff's motion to reconsider.

On appeal, plaintiff argued that allegations concerning the Medical Incentive Fund are relevant to count I of plaintiff's complaint, in which plaintiff alleged medical negligence, to show that Dr. Portes deviated from the standard of care. The appellate court determined that allegations relating to financial motive are not appropriate in a medical negligence claim, and affirmed the trial court's holding on this issue. However, the appellate court held that evidence relating to the Medical Incentive Fund may be relevant at trial to attack Dr. Portes' credibility if he testifies. The appellate court reversed the trial court's dismissal of count II and held that plaintiff stated a cause of action for breach of fiduciary duty against Dr. Portes for Dr. Portes' failure to disclose the Medical Incentive Fund. 303 Ill. App. 3d 799.

On appeal to this court, defendants argue for reversal of the appellate court's finding that: (1) a cause of action for breach of fiduciary duty exists for Dr. Portes' failure to disclose the Medical Incentive Fund; and (2) evidence of the Medical Incentive Fund is relevant in plaintiff's medical negligence action if Dr. Portes testifies at trial. We allowed the Illinois Trial Lawyers Association to file an amicus curiae brief in support of plaintiff and the Illinois State Medical Society and American Medical Association to file an amicus curiae brief in support of defendant.

ANALYSIS

A motion to dismiss under section 2-615 of the Code of Civil Procedure (735 ILCS 5/2-615 (West 1998)) is properly granted where the plaintiff fails to state a cause of action upon which relief can be granted. Abbasi v. Paraskevoulakos, 187 Ill. 2d 386, 391 (1999). We review a section 2-615 motion to dismiss de novo. Abbasi, 187 Ill. 2d at 391, citing Vernon v. Schuster, 179 Ill. 2d 338, 344 (1997).

I. Breach of Fiduciary Duty

The primary issue in this appeal is whether plaintiff can state a cause of action for breach of fiduciary duty against Dr. Portes for Dr. Portes' failure to disclose his interest in the Medical Incentive Fund. A fiduciary relationship imposes a general duty on the fiduciary to refrain from "seeking a selfish benefit during the relationship." Kurtz v. Solomon, 275 Ill. App. 3d 643, 651 (1995), citing Collins v. Nugent, 110 Ill. App. 3d 1026, 1036 (1982). Illinois courts have recognized a fiduciary relationship between a physician and his patient (Witherell v. Weimer, 118 Ill. 2d 321, 331 (1987); Petrillo v. Syntex ...


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