Montana Interventional & Diagnostic Radiology Specialists, PLLC v. St. Peter’s Hospital

Montana Interventional & Diagnostic Radiology Specialists, PLLC v. St. Peter’s Hospital, 2015 MT 258 (Sept. 1, 2015) (Cotter, J.) (5-0, rev’d)

Issue: Whether the district court erred in granting the hospital’s motion for judgment on the pleadings based on the primary complaint being barred by the statute of limitations.

Short Answer: Yes.

Reversed and remanded

Facts: MIDRS and St. Peter’s worked together for many years, with MIDRS physicians providing radiological services through the hospital. Before 2006, St. Peter’s had an “open” radiology department, meaning the hospital medical staff granted privileges to qualified non-employee radiologists to interpret images taken at the hospital.

In 2005, MIDRS announced its intent to open a separate imagining facility in Helena, which would compete with St. Peter’s. In February 2006, the parties entered into a 3-year contract under which MIDRS would provide exclusive services to the hospital and refrain fro opening a new facility while the contract was in effect. In October 2008, MIDRS submitted a proposal to extend the expiring contract. St. Peter’s did not submit the proposal to its medical staff, instead choosing to enter into exclusive contracts with other providers during 2009-2010.

After the MIDRS contract expired, the hospital revoked the MIDRS doctors’ credentials due to their alleged failure to abide by the Mammography Quality Standards Act guidelines. MIDRS radiologists were not allowed to practice at the hospital after February 2009.

MIDRS doctors applied again for staff privileges in 2011, as the exclusive contract between the hospital and another radiology group was expiring, but were told the hospital had closed it radiology department and be staffed only by hospital personnel.

MIDRS filed a complaint against the hospital in August 2012, seeking declaratory and injunctive relief, and damages for unreasonable restraint of trade in violation of the UTPA, and intentional interference with prospective advantage. On Aug. 6, 2012, MIDRS opened the Helena Imaging Center, a stand-alone facility offering a full range of radiological services.

The hospital answered, asserting affirmative defenses and counterclaiming for breach of contract. MIDRS answered the counterclaim, and counterclaimed for breach of contract, breach of the implied covenant of good faith, and seeking declaratory judgment.

St. Peter’s moved for judgment on the pleadings on June 20, 2013, arguing MIDRS failed to file its claim under the UTPA within the two-year statute of limitations, and its claim for intentional interference within the three-year statute of limitations. It contended all elements of MIDRS’s claims accrued in February 2009 when the exclusive contract between St. Peter’s and MIDRS expired. MIDRS responded that its claims were premised on the July 2011 closure of the radiology department.

Procedural Posture & Holding: Following a hearing, the district court determined MIDRS’s claims accrued in February 2009 and dismissed MIDRS’s complaint. Because the counterclaims were not dismissed, MIDRS moved for certification under Rule 54(b), which the district court granted. MIDRS appeals, and the Supreme Court reverses.

Reasoning: Judgment on the pleadings is appropriate only where all allegations of material fact are admitted or not controverted in the pleadings, and only questions of law remain to be decided by the court. Under the appropriate standard of review, the court was required to assume that MIDRS’s well-pleaded factual allegations were true and the hospital’s contravening assertions were false.

The district court determined that MIDRS alleged the cause of its harm was the denial of staff privileges in 2009, and that the complaint was therefore untimely. MIDRS contends the district court contradicted this in its order on certification, acknowledging there that “[t]he primary complaint alleged facts arising out of the Hospital’s closing of the radiology department in July 2011.” ¶ 15. MIDRS maintains that the elements of its claims did not and could not accrue until 2011 when the hospital closed its radiology department. It was at this point, MIDRS argues, that the hospital began exercising monopoly power, creating the horizontal restraint on trade that forms the basis of MIDRS’s antitrust and UTPA allegations.

Based on the standard of review, which takes MIDRS’s well-pled factual allegations as true, the Court concludes the date oMIDRS’s claims accrued cannot be determined from the pleadings alone, and that further development of the record is necessary.