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Russellville Holdings, LLC v. Peters

Court of Appeals of Arkansas, Division II

October 25, 2017

RUSSELLVILLE HOLDINGS, LLC, D/B/A SAINT MARY'S REGIONAL MEDICAL CENTER D/B/A TURNING POINT BEHAVIORAL HEALTH APPELLANT
v.
JAMES ROBERTSON PETERS, AS PERSONAL REPRESENTATIVE OF THE ESTATE OF JOHN D. PETERS, JR., DECEASED, AND ON BEHALF OF THE ESTATE AND ITS STATUTORY BENEFICIARIES; JOHN D. PETERS III; JAMES ROBERTSON PETERS, INDIVIDUALLY; AND KATHLEEN STINGLEY APPELLEES

         APPEAL FROM THE POPE COUNTY CIRCUIT COURT [NO. 58CV-15-160] HONORABLE DENNIS CHARLES SUTTERFIELD, JUDGE

          Munson, Rowlett, Moore and Boone, P.A., by: Beverly A. Rowlett, Timothy L. Boone, and Mary Carole Young, for appellant.

          Streett Law Firm, P.A., by: Alex G. Streett, James A. Streett, and Robert M. Veach; and Brian G. Brooks, Attorney at Law, PLLC, by: Brian G. Brooks, for appellees.

          MIKE MURPHY, Judge.

         This medical-malpractice case stems from the death of John D. Peters, Jr. ("Mr. Peters"), who was admitted to appellant Turning Point Behavioral Health ("Turning Point"), a unit located at Saint Mary's Regional Medical Center ("St. Mary's"), and upon his release, hanged himself ten days later. Appellee James Robertson Peters, as personal representative of the estate, initiated suit. We affirm.

         I. Facts and Procedural History

         Mr. Peters was admitted to Turning Point following the death of his wife of 37 years and two resulting suicide attempts. Mr. Peters had long suffered from bipolar disorder with periods of severe anxiety. His second suicide attempt occurred on December 10, 2013, and resulted in an emergency-room visit to St. Mary's. The inquiry and assessment form that was filled out in the emergency room recognized that Mr. Peters's son, John D. Peters III ("Jay"), was Mr. Peters's legal guardian. Notably, both Mr. Peters and Jay signed the consent for voluntary admission on December 10, 2013. On December 13, 2013, a social worker from Turning Point filed a petition to involuntarily admit a person with mental illness, which the Pope County Circuit Court granted on December 16, 2013. Nothing in the petition acknowledged that Mr. Peters had a legal guardian.

         On December 26, 2013, Mr. Peters was discharged from Turning Point on his own recognizance. The discharge summary revealed that Mr. Peters denied further suicidal ideations; he had engaged in no self-destructive behavior since admission and seemed ready for discharge; he was future oriented and had interacted very positively with staff and peers; and it was felt that he had reached maximal benefit of hospitalization.[1] On January 6, 2014, Mr. Peters hanged himself.

         Four days after the death of Mr. Peters, appellees' (Mr. Peters's estate and heirs) attorney sent a seven-page letter to appellant with the heading "Important Notice Regarding Document and Data Preservation." This broad letter gave appellant notice that the heirs and estate of Mr. Peters had retained legal counsel to investigate a potential claim, and appellant was notified "not to destroy, conceal or alter any paper or electronic files . . . ." At that time, medical records of discharged patients were kept in two places: (1) copies of the paper portion of the records were scanned to Laserfiche by a third-party vendor and then shredded and (2) the electronic portion of the medical records was maintained on a computer program known as MediTech.

         After receipt of the letter, Tim Copeland, chief quality officer of Russellville Holdings, LLC (another name for appellant) told the director of the health-information-management department, Paula Page, to sequester the paper portion of Mr. Peters's records. Subsequently, Turning Point retained legal counsel. Turning Point responded to the letter on February 7, 2014, requesting a meet-and-confer conference to discuss the breadth and scope of the document-preservation letter. Turning Point sent a follow-up request on February 14, 2014, because counsel had not responded. A few days later, the attorneys conducted a telephone conference, and appellees' attorney sent a follow-up one-page letter narrowing down the preservation request.

         Around the same time, but before the telephone conference occurred, Annette Smith replaced Paula Page as health-information-management director. In an affidavit, Smith explained that she had not been provided a copy of the letter that the hospital received regarding document and data preservation. She said at some point between late January but before February 10, 2014, she discovered, in a drawer of a desk previously used by Paula Page, Mr. Peters's paper medical records. She explained, as in the ordinary course of business, that she took the complete paper portion to EDCO Health Information Solutions, the third-party vendor that scans medical records into Laserfiche, to be scanned. Smith received the paper medical records back once they had been scanned. At some point between February 10, 2014, and February 9, 2015, the paper portion of the records was shredded in the usual and ordinary course of business; she explained that this was not done maliciously or to destroy evidence. From her point of view, "a superior copy of the paper records existed on Laserfiche at the time the paper portion was shredded."

         Appellees eventually filed suit on May 6, 2015. Prior to, and during the course of, litigation, four different sets of the medical records were produced, for various reasons that were set out in the affidavit by Smith. In February 2015, after the contents of the medical records had changed four times, counsel for appellees made a demand for a physical inspection of Mr. Peters's original medical chart. Of particular importance, appellees sought to document the actual content of the original physical chart as it was on the day of Mr. Peters's discharge and whether the original chart contained guardianship orders that appellees claimed they had provided to Turning Point, but Turning Point claimed the contrary. It was then that the hospital and the appellees discovered that the original paper medical chart had likely been destroyed by Saint Mary's.

         As a result, appellees filed a motion to compel their access to Mr. Peters's original chart or, in the alternative, to force Saint Mary's to admit on the record that they had intentionally destroyed the original chart. In response, appellant stated that it could not permit inspection of the original chart because it had been destroyed. Appellees filed a motion to strike appellant's answer, arguing that their ability to obtain a full and fair trial had been irretrievably compromised as a result of the evidentiary destruction of the medical records. After a hearing on the motion, the circuit court found that, after careful consideration, the original medical file in question was so important to the case that its preservation was essential to a just adjudication. In its order, the court recognized that striking an answer is very serious, but it found appellant's conduct to be most egregious. Appellant filed a motion to reconsider, but the circuit court denied appellant's motion after a hearing. Appellant timely appealed, and we have jurisdiction per Ark. R. App. P. - Civ. 2(a)(4), which states that an appeal may be taken from an order that strikes an answer. In Arnold Fireworks Display, Inc. v. Schmidt, 307 Ark. 316, 319, 820 S.W.2d 444, 445 (1991), the supreme court explained that the general purpose of Ark. R. App. P. -Civ. 2(a)(1) (an appeal may be taken from a final judgment or decree) is to prevent piecemeal appeals while portions of the litigation remain unresolved but that, quite differently, Ark. R. App. P. -Civ. 2(a)(4) allows a piecemeal approach.

         On appeal, appellant argues three points: (1) the court erred as a matter of law in finding that spoliation of evidence occurred; (2) the court erred as a matter of law in finding that appellees' letters, sent long before any suit was filed, unilaterally imposed a duty to preserve the paper copy of the paper portion of the record; and (3) the court erred in imposing the extraordinary sanction of striking the answer.

         II. Spoliation of Evidence

         On appeal from a circuit court's determination of a purely legal issue, we must decide only if its interpretation of the law was correct, as we give no deference to the circuit court's conclusion on a question of law. Kraft v. Limestone Partners, LLC, 2017 Ark.App. 315, at 5, 522 S.W.3d 150, 153. When a case is tried by a circuit court sitting without a jury, the inquiry on appeal is whether the circuit court's fact-findings are clearly erroneous, or clearly against the preponderance of the evidence. Rial v. Boykin, 95 Ark.App. 404, 408, 237 S.W.3d 489, 492 (2006). Recognition must be given to the circuit court's superior opportunity to determine credibility of witnesses and the weight to be given to their testimony. Id.

         Our supreme court has defined "spoliation" as "the intentional destruction of evidence and when it is established, [the] fact finder may draw [an] inference that [the] evidence destroyed was unfavorable to [the] party responsible for its spoliation." Goff v. Harold Ives Trucking Co., 342 Ark. 143, 146, 27 S.W.3d 387, 388 (2000). However, we must begin our analysis by acknowledging that Arkansas case law on spoliation is sparse. For example, this court has not previously addressed whether spoliation of medical documents occurs when the documents are scanned and converted to another format. The spoliation cases in Arkansas involve tangible evidence, such as a halogen lamp and a water-pipe clamp and bolt. See Bunn Builders, Inc. v. Womack, 2011 Ark. 231; see also Rodgers v. CWR Constr., Inc., 343 Ark. 126, 33 S.W.3d 506 (2000).

         Our supreme court held that a circuit court is not required to make a specific finding of bad faith on the part of the spoliator. Bunn Builders, supra. Unlike the case at hand, the plaintiffs in Bunn Builders sought to implement jury instructions on spoliation rather than striking the answer. Bunn Builders, 2011 Ark. 231, at 2. Regardless, it serves as guidance in our analysis on whether spoliation actually occurred. In Bunn Builders, the circuit court found that the parties had a duty and an agreement to preserve the evidence in the case but that the motive behind the destruction of evidence was unclear and granted that the jury be instructed on spoliation. Id. The appellants appealed, arguing that the circuit court erred in instructing the jury on spoliation because there was no initial finding by the court that the destruction was done in bad faith. Id. The supreme court explained that Arkansas courts have never specifically held that a circuit court must find intentional destruction indicating a desire to suppress the truth before a spoliation instruction can be given. Id. at 10. Therefore, the supreme court concluded that a finding of bad faith on behalf of the spoliator is not necessary. Id. at 11.

         The court in Bunn Builders relied on Rodgers for guidance. Rodgers was injured in a construction-site accident when a section of water pipe that was suspended from the ceiling fell and struck him as he was pulling feeder wires out of an electrical panel in the basement of the Pulaski County Courthouse. Rodgers, supra. The parties stipulated that the appellee, the contractor, had lost the clamp and bolt that held the water pipe to the ceiling before the accident occurred, and the appellants requested a spoliation instruction. Rodgers, 343 Ark. at 129, 33 S.W.3d at 508. The circuit court rejected a non-AMI jury instruction propounded by the appellants, noting that the clamp and bolt were available at the time the appellants' lawsuit was initiated and that the appellants had presented no proof that the contractor willfully lost or intentionally destroyed the evidence. Id.

         On appeal in Rodgers, the appellants argued that the record reflected that the contractor had been in physical possession and control of the pipe, clamp, and bolt involved in the accident. Rodgers, 343 Ark. at 130, 33 S.W.3d at 510-11. The supreme court affirmed the circuit court's decision to reject appellants' spoliation instructions because (1) the circuit court specifically found that the evidence had not been intentionally lost or destroyed; (2) the circuit court had permitted counsel to argue the same points even though the instructions were not submitted to the jury; and (3) the evidence was available shortly after the accident, but no meaningful discovery was commenced until five years following the accident. Id. The supreme court held that "[i]n absence of any intentional misconduct, we cannot say that the circuit court abused its discretion by failing to give the jury an instruction on ...


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