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Hrayr Shahinian et al v. Cedars-Sinai Medical Center et al

April 27, 2011


(Los Angeles County Super. Ct. No. BS124002) APPEAL from a judgment of the Superior Court for the County of Los Angeles. Kevin C. Brazile, Judge.

The opinion of the court was delivered by: Grimes, J.




The trial court granted a petition by Hrayr Shahinian (plaintiff or Shahinian), a physician then on the medical staff at defendant Cedars-Sinai Medical Center, to confirm an arbitration award in his favor. The arbitrator awarded plaintiff $508,124 in economic damages, $1,603,650 in emotional distress damages, and $2,580,000 in punitive damages. The award also was deemed a voluntary withdrawal by plaintiff of medical staff membership and privileges at Cedars-Sinai.

Defendant appeals, claiming the award violated public policy and therefore exceeded the arbitrator's powers. Defendant asserts that, because the arbitrator found that defendant summarily suspended and substantially restricted plaintiff's clinical privileges without affording him a fair hearing, public policy required the arbitrator to order defendant to conduct a peer review hearing, rather than award damages against defendant. The arbitrator also exceeded her powers, defendant claims, by applying a "strictly mechanical" doubling formula to determine the amount of emotional distress damages, and by awarding punitive damages in an amount that "exceeded both contractual and public policy limits."

We find no merit in defendant's contentions and affirm the judgment.


The facts adduced during the extensive hearings in this case are fully set out in the arbitrator's 128-page final award. We draw the facts necessary to an understanding of the issues on appeal from that award.

Plaintiff came to Cedars-Sinai in 1996, after being heavily recruited by Dr. Achilles Demetriou, then defendant's chairman, to relocate his Skull Base Institute from New York to Los Angeles, where defendant would establish a division of skull base surgery to be directed by plaintiff. Plaintiff trained for years to become a skull base surgeon, and Demetriou described plaintiff as "one of the best surgeons technically he [had] ever met." Plaintiff is board-certified in surgery, but not in neurosurgery. The recruitment of plaintiff and the establishment of the skull base division met with tremendous resistance from neurosurgeons and others, who perceived plaintiff as a threat. Some considered plaintiff insufficiently qualified to be on defendant's medical staff.

The controversy continued throughout plaintiff's tenure. According to Dr. Demetriou, plaintiff "alienated everyone in the management structure." In August 2002, Shahinian's counsel raised issues with defendant's CEO concerning lack of support and resources for the skull base division, characterizing these issues as threatening to compromise patient care. But when told not to perform any surgery unless there was no compromise to patient care, plaintiff said there was no immediate threat. In September 2002, defendant notified Shahinian his professional services relationship with defendant (his services as a faculty physician and as director of the skull base institute) would be terminated in September 2003.

In December 2002, plaintiff reiterated his concern that diminishing resources supplied to the institute had impaired the ability to perform procedures "with the utmost safety to the patient," and protested the "lack of or the malfunctioning of instruments." While plaintiff was provided with an appropriate number of sets of instruments when he came to Cedars-Sinai in 1996, with increased numbers of procedures and the passage of time, an insufficient "redundancy" of instruments developed.

Plaintiff repeatedly questioned the adequacy of cleaning and sterilization processes at Cedars-Sinai, and had reasonable basis to do so. Plaintiff's instruments, which were extremely delicate, were routinely flash-sterilized after the first surgery of the day, a process that is "not advisable as a matter of convenience or due to insufficient redundancy of instruments."

In April 2003, prompted by plaintiff's concerns, members of defendant's staff investigated the status of plaintiff's specialized surgical instruments and found they had not been properly maintained or cleaned, and "bioburden" was found on some instruments.*fn1 It was defendant's responsibility to clean and maintain the instruments. Defendant's review of plaintiff's instruments indicated they had been "overused"; the arbitrator found this overuse and the absence of sufficient redundancy continued through December 2005.

After the termination of his faculty relationship with defendant and the disputes over the insufficiency of instruments and inadequate cleaning and sterilizing procedures, plaintiff drafted a civil complaint in October 2003. He alleged claims for tortious discharge in violation of public policy and other "representative" claims on behalf of the general public. This complaint was resolved in a settlement agreement in June 2005, under which the current dispute was submitted to arbitration.

In the settlement, the parties agreed, among other things, that certain named individuals would not disparage plaintiff, and that, "while Shahinian's medical staff privileges are governed exclusively by the Medical Staff Bylaws (including without limitation the Medical Staff Constitution and Rules and Regulations) and Departmental procedures [Cedars-Sinai] agrees that any issues regarding Shahinian's current medical staff privileges will be handled in a non-discriminatory manner on the same terms and conditions as other medical staff members." Defendant agreed not to "retaliate or discriminate against Dr. Shahinian in any unlawful manner with respect to his continued status as a medical staff member, including matters concerning his medical staff privileges . . . ."

The parties also agreed that the medical instruments listed on Exhibit A to the settlement would be made available by defendant to plaintiff during his scheduled surgeries "on the same terms and conditions as other medical staff members," and, except for instruments designated as "custom," defendant would maintain, repair and replace the instruments. As for "custom" instruments, defendant had no obligation to maintain, repair or replace them. Shahinian agreed that, "prior to performing a surgery at [Cedars-Sinai], he [would] inspect all medical instruments he intends to utilize in such surgery, including without limitation, non-standard and/or 'custom' instruments, to ensure that they are appropriate to assure patient safety," and that "if any instrument's use is in Dr. Shahinian's judgment inappropriate to assure patient safety, he will cease using such instrument." Defendant paid plaintiff $200,000 and plaintiff released all claims.

After the June 2005 settlement, disputes between the parties continued unabated.

Shahinian manifested "either an apparent lack of understanding as to or, more likely, a refusal to acknowledge, what 'custom' meant in Exhibit A to the [settlement agreement], how instruments became so designated, and the ramifications of such designation. Shahinian testified that his attorneys told him to sign the agreement and 'they would work it out.' " After the settlement, plaintiff did not purchase any "custom" instruments for use at Cedars-Sinai, and neither did defendant.

In November 2005, plaintiff indicated to defendant that replacements were needed for the Stryker Leibinger bipolar forceps (SLBF), and defendant responded that the SLBF was a "custom" instrument. Later in November, plaintiff raised issues with the functioning of the EndoScrub, also listed as a "custom" instrument (though it was also used by other surgeons).*fn2 Shahinian claimed defendant was not honoring its obligations under Exhibit A, "that every day trays are deficient and '[Shahinian's] struggling in the [operating room],' 'patients were suffering,' 'liability was increasing,' and [Shahinian] mentioned the [redacted] incident involving lack of proper backup." Plaintiff told defendant that if he were involved in a lawsuit against the facility, he would "tell the truth about the instruments" and how unsafe it was "due to him not having what he needs to do his procedures."

Thereafter, defendant, through Dr. William Brien, the interim chairman of its department of surgery, sent plaintiff a series of three letters which ...

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