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SEARIVER MARITIME, INC. v. INDUSTRIAL MED. SERVS.

January 22, 1997

SEARIVER MARITIME, INC., a Delaware Corporation, Plaintiff,
v.
INDUSTRIAL MEDICAL SERVICES, INC., a California Corporation; JOEL RENBAUM, M.D., INC., a California Corporation, d/b/a, OCCUPATIONAL HEALTH NETWORK; and DAVID A. SMITH, M.D., Defendants.



The opinion of the court was delivered by: ARMSTRONG

 This matter was tried to the Court from September 12, 1996 through September 18, 1996, the Honorable Saundra Brown Armstrong presiding. Plaintiff SeaRiver Maritime, Inc. appeared through its counsel of record, Marco L. Quazzo, and Christine Banks of McCutchen, Doyle, Brown & Enersen. Defendants Industrial Medical Service, Joel Renbaum, d/b/a/ Occupational Health Network, and David A. Smith, M.D. appeared through their counsel of record, Charles E. Osthimer, and Jane Lennon of Wright, Robinson, Osthimer & Tatum.

 Pursuant to Federal Rule of Civil Procedure 52(a), the Court makes the following findings of fact and reaches the following conclusions of law:

 FINDINGS OF FACT

 1. Plaintiff SeaRiver Maritime, Inc. ("SeaRiver"), a successor to Exxon Shipping Company, is a Delaware Corporation. SeaRiver employs seamen and operates seagoing vessels as part of its maritime shipping business.

 2. Defendant Industrial Medical Services ("IMS") is a California corporation. IMS operates several industrial medical clinics which provide medical services to employers such as SeaRiver. In 1992, IMS operated two clinics in San Francisco, California.

 3. In 1992, IMS was owned by Joel Renbaum, M.D., Inc. Since that time, IMS has been merged with Joel Renbaum, M.D. Inc., d/b/a Occupational Health Network ("OHN"). Occupational Health Network is a successor in interest to IMS.

 4. Joel Renbaum, M.D. is a board-certified orthopaedic surgeon who owns and consults with the IMS/OHN clinics, but spends the majority of his time in his private practice as an orthopaedic surgeon.

 5. IMS/OHN sees a wide variety of patients from different industries and occupations, including merchant mariners.

 6. In 1992, the Valencia Street Clinic of IMS was staffed by a medical director, Dr. Alistair Smith, and various physicians and physicians' assistants. A physicians' assistant cannot write prescriptions or admit patients to a hospital, but is otherwise an extension of a physician. A physicians' assistant must be supervised by a physician holding a physicians' assistant supervisory license. The supervising physician need not be on site while a physicians' assistant is working, but must review and critique the assistant's documentation and treatment.

 7. For eight to ten years, SeaRiver regularly referred its employees in need of medical treatment to IMS in San Francisco.

 8. Defendant David A. Smith, M.D. ("Dr. Smith") was hired as a locum tenens physician by IMS. A locum tenens physician is one employed on a temporary basis, often to substitute for vacationing or otherwise absent permanent physicians.

 9. Dr. Smith graduated from medical school at the University of California at San Diego in 1989. He completed his internship in general surgery at the University of California at San Francisco ("UCSF") in June 1990 and received his medical license in February 1991.

 10. Dr. Smith entered a general surgery residency program at UCSF in July 1990. After completing two years of a seven to nine year residency, members of the UCSF Resident Coordination and Review Committee ("RCRC") dismissed Dr. Smith from the program. The members of the RCRC reached this decision after investigating several incidents which raised concerns regarding Dr. Smith's honesty, trustworthiness, communication and interpersonal skills, and ability to handle the stress of a general surgery practice. In dismissing him from its residency program, the UCSF Department of General Surgery concluded that Dr. Smith should practice medicine only under close supervision and not under arduous conditions such as working late hours or without sufficient sleep.

 11. In October 1992, IMS hired Dr. Smith through a physicians' registry service known at that time as Western Physicians Registry. It is standard practice in the industry for occupational medical clinics to use a physicians' registry to assist in hiring physicians.

 12. IMS had previously informed James Ellis of Western Physicians Registry that its locum tenens physicians should be licensed to practice medicine in California, should be familiar with and capable of performing in an occupational medical setting, and should have good interpersonal skills.

 13. Western Physicians Registry interviewed Dr. Smith, received his resume and reference from two physicians, and determined that he met the criteria set forth by IMS. Although the Western Physicians Registry contacted the references provided by Dr. Smith, it did not contact anyone from UCSF to inquire into the reason Dr. Smith had left the residency program.

 14. Western Physicians Registry referred Dr. Smith to IMS and provided IMS with verification of Dr. Smith's medical license, his curriculum vitae, and his references.

 15. IMS hired Dr. Smith as a locum tenens physician to work at its Valencia Street Clinic for seven to nine days. In doing so, IMS relied entirely on the screening performed by Western Physicians Registry. IMS hired Dr. Smith without interviewing him, without checking his references, without requesting any information from UCSF, and without reviewing any written information regarding Dr. Smith's credentials or qualifications. Dr. Smith did have a telephone conversation with Joel Renbaum before beginning work at IMS, during which time Renbaum stated that he was available if Dr. Smith needed assistance. Dr. Smith received a brief orientation as to the layout and workings of the Valencia Street Clinic, but did not receive any clinical or medical training.

 16. Records introduced at trial, as well as testimony from Dr. Smith, Dr. Lane, and RCRC member Linda Riley establish that: (1) Dr. William Schecter, a reference provided by Dr. Smith to Western Physician's Registry and IMS, was aware of the circumstances surrounding Dr. Smith's departure from the UCSF residency program; (2) UCSF maintained a file on Dr. Smith which contained information regarding Dr. Smith's departure from the residency program, and also indicated the circumstances under which Dr. Smith could safely practice medicine; (3) Dr. Smith's curriculum vitae contained false information regarding publications he claimed to have authored and the nature of his clinical and work experience.

 17. IMS did not supervise Dr. Smith's treatment of patients during the time he worked at the Valencia Street Clinic. IMS also did not review Dr. Smith's medical charts during this time.

 18. Dr. Smith was working double shifts as a locum tenens physician during the week that he treated Richards at IMS. For example, Dr. Smith worked from 6:00 p.m. to 7:00 a.m. at Manteca Hospital on October 25, 1992, drove 90 minutes by car to San Francisco on the morning of October 26, 1992, and worked that day at the IMS Valencia Street Clinic from 8:30 a.m. to 4:30 p.m.

 19. Christopher Richards, plaintiff in the underlying action, is a forty-six year old, African-American male. He began work as a seaman at age eighteen. In September 1992, Richards was employed as a seaman by SeaRiver. He worked aboard the "Exxon Philadelphia" from July through September, 1992.

 20. According to the findings of fact made by Judge Hugh Gibson in the Texas action, on September 14, 1992, Richards began experiencing pain and a sharp tightening in his right forearm during a shift aboard the Exxon Philadelphia. Richards reported these symptoms to Captain David Leonard Grove, and was thereafter placed on restricted work duty.

 21. Between September 14, 1992 and September 17, 1992, Richards was assigned to perform "light duties." During this period, he performed housekeeping duties such as sweeping, mopping, and cleaning bathrooms; performed bridge and anchor watch; and participated in tank cleaning.

 22. On September 17, Richards was examined by Dr. Richard A. Ferse at the Swedish Medical Center/Ballard in Seattle, Washington. Dr. Ferse indicated in a written report that Richards was fit for duty and that he was to consult with his family physician in Miami, Florida if the pain in his elbow did not resolve within one week. Richards thereafter spent his regularly scheduled days off in Miami, relaxing and resting his elbow.

 23. On October 25, Richards reported to work aboard the "Exxon Benecia." When Richards reported for duty, he informed Captain George Borawski that he was injured.

 24. On October 26, 1992, SeaRiver sent Richards to IMS for evaluation and treatment of his right arm. Richards was examined on this date by Dr. Smith.

 25. When Dr. Smith treated Richards, he had limited experience treating seamen and limited familiarity with the tasks performed by able-bodied seamen. Dr. Smith also had limited experience treating lateral epicondylitis and administering corticosteroids. Dr. Smith received limited training in orthopedics during his internship and abbreviated residency.

 26. Upon examining Richards, Dr. Smith noted that Richards "had a history of sharp lancing pain and reflex weakness in his right arm to extension and supination, very tender supernator [sic] origins in extensor aspect right arm."

 27. Based on this examination and Richards' representations, Dr. Smith diagnosed Richards' injury as lateral epicondylitis, commonly known as "tennis elbow." He prescribed an elbow brace, Motrin, and occupational therapy. Dr. Smith requested that Richards return to the IMS clinic on October 28, 1992. He estimated that Richards' disability would last four weeks, and indicated on an Individual Disability Report given to SeaRiver that Richards should not engage in heavy pushing or pulling with his right arm.

 28. Lateral epicondylitis results from tears of the tendon extensors as they connect to the epicondyle. The condition involves a process of microscopic death and degeneration of tissue, inflammation, absorption, and healing. In some cases, lateral epicondylitis may recur after a full course of treatment. However, most cases of lateral epicondylitis resolve without the need for surgery and without resulting in permanent physical damage.

 29. Any motion that requires forceful stabilization of the wrist, including forceful grips or twists of the arm, may exacerbate the condition of lateral epicondylitis.

 30. Richards attended physical therapy sessions at St. Luke's Hospital on September 27 and 28, 1992.

 31. Richards returned to IMS on October 28, 1992. He was again seen by Dr. Smith. After noting that Richards' condition had not significantly improved, Dr. Smith injected Richards' right elbow with a solution containing a corticosteroid known as Kenalog-40 ("K-40) and an anesthetic known as lidocaine.

 32. Dr. Smith then released Richards to modified work status, with a lifting limitation of zero to twenty-five pounds, a limited capacity for climbing and reaching, a restriction from pushing or pulling, and a restriction on "weighted twisting or extension of right wrist against tension."

 33. Based on the medical chart entry made by Dr. Smith on October 28, 1992, as well as on the testimony of SeaRiver's medical experts, Dr. Lane and Dr. Bunce, the Court finds that Dr. Smith injected Richards with 3 cc's (or 120 milligrams) of Kenalog-40 and 2 cc's (or 80 milligrams) of a one-percent solution of lidocaine. An IMS medical chart entry dated October 28, 1992 contains a notation by Dr. Smith which reads: "lateral epicondyle injected with 3 cc K-40 and 2 cc 1% lidocaine." According to Dr. Lane, this chart entry follows standard medical format and states that 3 cc's of Kenalog-40 was administered to Richards' right elbow.

 34. The Court finds that Dr. Smith's testimony that the chart entry indicates an injection of one cc of Kenalog-40 is not credible. The Court also finds that Dr. Smith's testimony that he specifically recalls administering the injection to Richards is not credible.

 35. The testimony of SeaRiver's medical experts and the medical literature introduced at trial establish that the recommended dosage of Kenalog-40 is between 2.5 and 10 milligrams for a small joint. The lateral epicondyle is considered to be a small joint. SeaRiver's medical experts and the medical literature introduced at trial establish that an injection of up to 40 milligrams, or one cc, is appropriate for larger joints such as the shoulder or hip, but not for smaller joints.

 36. On October 26, 1992, and again on October 28, 1992, Dr. Smith spoke with Tom Shearer, senior personnel manager specialist for SeaRiver, regarding whether SeaRiver could accommodate the work restrictions he had placed on Richards. Shearer informed Dr. Smith that an extra able bodied seaman was aboard the Exxon Benicia at that time and that the work restrictions placed on Richards could be accommodated.

 37. Upon returning to the Exxon Benicia, Captain Borawski and first mate John Poulos assigned Richards to "light duties." Richards updated the vessel's Ocean Fleet Safety Manual and performed housekeeping tasks. One of the tasks Captain Borawski assigned Richards was to "suegee" bookshelves. This task involved removing books from a shelf, wiping the shelf with a cloth, and replacing the books. Richards also operated a winch during a docking procedure. According to Captain Borawski, in performing these tasks, Richards may have exceeded the work limitations placed upon him.

 38. On November 11, 1992, Richards returned to IMS for a scheduled follow-up visit. On this date, he was treated by Fred Dugger, a ...


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