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PATRICK C. KERSHISNIK (ISB No. 4607) JOHN S. GROVER (ISB No. 8504) KERSHISNIK LAW, PLLC Attorneys at Law U.S. Bank Plaza 101 South Capitol Boulevard, Suite 701 Boise, Idaho 83702 P.O. Box 2050 Boise, Idaho 83701-2050 Telephone: (208) 472-2383 Facsimile: (888) 849-4957 kershisniklaw@gmail.com john.kershisniklaw@gmail.com Attorneys for Plaintiff

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF IDAHO JAMES MURTAGH, MD Plaintiff, v. SW IDAHO ACUTE CARE HOSPITAL MEDICAL CENTER, BENNY COSTELLO, CHIEF EXECUTIVE OFFICER FOR SOUTHWEST IDAHO ADVANCED CARE HOSPITAL, and EARNEST HEALTH Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. 1:12-cv-45 COMPLAINT AND DEMAND FOR JURY TRIAL

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COMPLAINT 1. This is a Complaint seeking damages and injunctive relief as a result of the

intentional and reckless actions by the Defendants to damage the reputation and livelihood of the Plaintiff, Dr. James Murtagh. JURISDICTION, VENUE AND DISCLOSURE 2. The Court has jurisdiction over the issues raised herein based upon diversity of

citizenship and because the Complaint raises a federal question. The amount in question exceeds $75,000.00. 3. Venue is proper with this Court because the actions complained of herein took

place in the County of Ada, Idaho and is conferred by 29 U.S.C. 216 and 28 U.S.C. 1391. 4. Venue is proper in the Southern Division of the United States District Court for

the District of Idaho pursuant to D.Id.L.Civ.R. 31. 5. Pursuant to Federal Rule of Civil Procedure 26(a)(1) and District of Idaho Local

Rule 26.1, all employment records in possession of Defendants must be produced to Dr. James Murtagh as part of Defendants initial disclosures. PARTIES 6. Plaintiff Dr. James Murtagh is a physician licensed in Idaho and other

jurisdictions. Dr. Murtagh is a resident of the State of Ohio. COMPLAINT AND DEMAND FOR JURY TRIAL - 2

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7.

Defendant Southwest Idaho Acute Chronic Hospital (SIACH) is a medical facility

located in Boise, Idaho. 8. Defendant Earnests Health System owns and operates community-based acute

rehabilitation and long-term acute care facilities in Arizona, Colorado, Idaho, Montana, New Mexico, South Carolina, Texas, Utah and Wyoming. Ernest functions as the parent company for member organizations, which includes SIACH. 9. Defendant Benny Costello is the Chief Executive Officer of Defendant Southwest

Idaho Acute Chronic Hospital. SUMMARY OF ALLEGED FACTS 10. Dr. Murtagh was under contract with COMPHEALTH Staffing Solutions

(COMPHEALTH), a physician recruiting and placement service at all times relevant to this complaint. Under the contract, COMPHEALTH would find either temporary or permanent positions for Dr. Mutragh, and CompHealth would then bill hosptials (such as SIACH) for Dr. Murtaghs services as an independent contractor. CompHealth then paid Dr. Murtagh an amount agreed to by both the Hospital and CompHealth. 11. Dr. Murtagh was hired through COMPHEALTH for position as a physician at

SIACH. SIACH first showed interest in Dr. Murtagh in November 2009, and Comphealth presented Dr. Murtagh on Nov. 23, 2009 to SIACH. Dr. Murtagh was

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interviewed by Mr. Costello on December 9, and SIACH sent Dr. Murtagh an application by overnight delivery on Dec. 23. SIACH sent an acceptance letter and a letter detailing terms of employment and a tentative schedule to Dr. Murtagh that week. Dr. Murtaghs initial term at SIACH was scheduled to begin in January, 2010 and conclude in July 2010. 12. Dr. Murtagh received repeated calls from Rachael Fletcher, Senior Staffing

Consultant at CompHealth on behalf of her client SIACH in early January, 2010. Ms. Fletcher stated that SIACH faced an emergency situation due to a family crisis of the one physicians they had on staff in pulmonology, the same specialty as Dr. Murtagh. SIACH pleaded with Dr. Murtagh to leave his current position in Georgia and come to Idaho immediately. Dr. Murtagh agreed and arrived in Idaho on January 27, 2010, and began working at SIACH the following day January 28, 2010. 13. Although the position arranged through COMPHEALTH was temporary, from the

earliest discussions between Dr. Murtagh and SIACH corporate officials made a clear offer that Mr. Murtagh could work at SIACH as long as he wanted to, and he was promised as many twelve hour shifts (at a base rate of $150.00 per hour plus additional overtime pay) as he was willing to work. SIACH officials also expressed a great interest in Dr. Murtagh staying on in a permanent position.

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14.

Dr. Murtagh received positive feedback from staff and managers at SIACH within

the first few days after beginning work. He was frequently asked to work overtime and willingly agreed to put in additional hours. At no time during his tenure was Dr. Murtagh informed that his performance concerning matters involving patient care was in any manner deficient. Mr. Costello asked Dr. Murtagh for his advice on how to grow SIACHs business. 15. On Jan 29, 2010, Dr. Murtagh was informed by SIACH officials, including Mr.

Costello, that his work at SIACH was superb, and just what SIACH needed. 16. About 8: 29 AM, Feb 1, 2010, Siach officials sent Dr. Murtagh emails

congratulating him on his work, and on his recent passing of the ABIM boards. At approximately the same time CompHealth officials sent a similar congratulations to Dr. Murtagh. Dr. Murtagh then attended morning rounds with the staff, and was invited to a meeting of officers of SIACH to discuss potential business clients in the Boise area for SIACH. 17. On Tuesday, Feb 2, 2010, at approximately 11:00 am, while he was working at

SIACH, Dr. Murtagh received a call from his COMPHEALTH liaison Rachael Fletcher, informing him that SIACH was alleging Dr. Murtagh committed malpractice during an intubation of a patient January 30, 2010 and that he should leave the SIACH facility immediately. Fletcher was clearly alarmed. COMPLAINT AND DEMAND FOR JURY TRIAL - 5

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18.

After receiving that phone call Dr. Murtagh went to the office of Mr. Benny

Costello, the Chief Executive Officer of SIACH to inquire what was happening. Other than stating he was sorry it didnt work out, Mr. Costello offered no information or explanation for Dr. Murtaghs summary suspension from duties, and termination from SIACH. Mr. Costello did admit that he was in charge, and was responsible for Dr. Murtaghs termination. 19. CompHealth, in several additional phone calls, confirmed that SIACH was

making extremely negative statements against Dr. Murtaghs professional skills, and CompHealth urged Dr. Murtagh not to go near SIACH, and to leave Idaho immediately. Dr. Murtagh repeatedly stated he wished to remain in Idaho to clear this matter up, and determine what he was supposedly did that would warrant termination, and to address the accusations through the required peer review system for handling such allegations against doctors. 20. On Wednesday, February 3, 2010, Morris L. Jensby Vice President, Risk

Management, Comphealth Healthcare Services confirmed in writing that SIACH had made allegations against Dr. Murtagh, and that Comphealth was looking into the clinical concerns raised by Southwest Idaho Advanced Care Hospital and will coordinate with Rachel Fletcher regarding any appropriate response on behalf of CompHealth to the termination of services. COMPLAINT AND DEMAND FOR JURY TRIAL - 6

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21.

Wednesday, February 3, 2010 3:40, Dr. Murtagh communicated with Mr.

Costellos administrative assistant Nancy Shark via e-mail requesting an opportunity to meet with him to resolve any issue so that he could return to work. 22. Nancy Shark did not respond to Dr. Murtaghs request for a meeting. Verbally,

SIACH officials stated to Dr. Mutagh, I suggest, if you have additional questions, that you contact CompHealth. 23. On or about Wednesday, February 3, 2010, Rachael Fletcher phoned Dr. Murtagh

and stated that SIACH told her that they would not meet with Dr. Murtagh. This was confirmed by email on Wednesday, 3 Feb 2010, when Ms. Fletcher wrote As for meeting with them--this will not happen. Fletcher again claimed that both CompHealth and SIACH wanted Dr. Murtagh to leave the state. 24. On or about the same day, Dr. Murtagh: (a) requested by email and by phone to

multiple SIACH officials to be informed of the reason(s) for his suspension; (b) requested to receive information regarding the reason(s) for his suspension in writing; and (c) requested to meet with SIACHs Chief Medical Officer, Mr. Costello. All of these requests were denied and Dr. Murtagh was required to leave the SIACHs grounds. 25. SIACH officials advised Dr. Murtagh that Mr. Costello would meet him face-to-

face the following day. On February 4, 2010, Mr. Costello declined to meet with Dr. Murtagh. Instead Dr. Murtagh met with Cynthia Newsom, a Vice President for SIACH. COMPLAINT AND DEMAND FOR JURY TRIAL - 7

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She averred that SIACH did not have any reason to terminate Dr. Murtagh, but that COMPHEALTH was behind the decision. Because this was in stark contrast to what COMPHEALTH had told him, Dr. Murtagh asked Ms. Newsom for a letter stating that there was no patient care issue from SIACHs view. Over the next several months Dr. Murtagh repeatedly contacted Ms. Nissin to obtain the letter, but never received a response. 26. Dr. Murtagh also requested a complete copy of SIACHs bylaws, which were

provided. 27. Due to the unusual nature of SIACH, ERNEST HEALTHs and Mr. Costellos

actions, Dr. Murtagh sent an e-mail to the ERNEST HEALTH Board of Directors and its Quality Control Officer, and patient care advocate. All declined to give Dr. Murtagh written notice regarding the basis for his summary suspension or any due process. Due process for doctors is an important component of patient care. 28. Dr. Murtagh then called the corporate office of Ernest Health Systems and

informed the officer in charge of risk management that ERNEST HEALTH was violating the Joint Commission and Centers for Medicaid and Medicare services (CMS) and other requirements. 29. Despite his best efforts with ERNEST HEALTH, Mr. Costello, and

COMPHEALTH, Dr. Murtagh was unable to obtain accurate information regarding the COMPLAINT AND DEMAND FOR JURY TRIAL - 8

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reason(s) for his suspension or an opportunity to confront any of the alleged bases for the action being taken against him. 30. The abrupt and arbitrary nature of the actions taken against him were shocking to

Dr. Murtagh. 31. As a consequence of the Defendants actions, Dr. Murtagh was forced to leave

Idaho and look for other work. 32. Over the next several months Dr. Murtagh communicated with COMPHEALTH

regarding the reason for his termination for SIACH. COMPHEALTH assured him that they would conduct a review of the alleged incident. COMPEALTH did confirm that SIACH had made extremely damaging complaint about him related to patient care, but claims it was never provided with details. 33. On or around April 7, 2010, Dr. Murtagh was informed by phone and by email

from CompHealth risk management Quint McCombs that he was cleared of any and all charges of deficient patient care. 34. Upon his removal from SIACH, Dr. Murtagh contacted several area hospitals

seeking employment. He received an offer of full time employment from the Boise VA Medical Center, Dr. Robert Albanese at an annual salary of $270,000. The VA hospital initiated the process to have Dr. Murtaghs credentials approved to work at the VA hospital. COMPLAINT AND DEMAND FOR JURY TRIAL - 9

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35.

Subsequent to his departure from ERNEST HEALTH, Dr. Murtagh learned that

SIACHs allegations were sent to other prospective employers and/or medical staffing agencies that Dr. Murtagh had been dismissed from ERNEST HEALTH for unsatisfactory performance. This statement is false. 36. On Tue, 30 Mar 2010 Dr. Murtagh was informed by Robert Albanese that the ID

VA could not credential him. Dr. Albanese suggested that the VA might hire him temporarily, but then stopped answering Dr. Murtaghs attempts to contact. On September 14, 2010, the Boise VA formally wrote to Dr. Murtagh and turned him down for the position, even though the position was still being advertised on the internet as open. 37. Also in the aftermath of his removal from SIACH, Dr. Murtagh contacted St.

Luke's Boise Medical Center and Saint Alphonsus Regional Medical Center. Dr. James Souza from St. Lukes was enthusiastic about hiring Dr. Murtagh, and initiated the credentialing process in anticipation of hiring Dr. Murtagh as soon as possible. Dr. James Souza was especially interested in Dr. Mutrtagh because of the relative scarcity of pulmanologists, especially in the State of Idaho. 38. A few months later, on the eve of his credentials being approved, Dr. James

Souza withdrew the offer from St. Lukes to hire Dr. Murtagh. When Dr. Murtagh asked why Dr. James Souza stated that the hospital no longer needed a pulmanologist. Dr. COMPLAINT AND DEMAND FOR JURY TRIAL - 10

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Murtaghs application fee, which he paid at the beginning of the credentialing process, was refunded. 39. As a direct and proximate result of Mr. Costellos communications, Dr. Murtagh

has been denied positions at several other hospitals. 40. Additionally, COMPHEALTH prematurely broke off its contractual relationship

with Dr. Murtagh, and since April 2010, has refused to work with him, and has failed to respond to his communications. COUNT I: BREACH OF CONTRACT (Defendant SIACH , ERNEST HEALTH, Costello) 41. 42. Paragraphs 1 40 are repeated as though restated here. Defendants ERNEST HEALTH/SIACH, and Costello, breached their contract

with COMPHEALTH and Dr. Murtagh when they summarily ended Dr. Murtaghs employment at SIACH without cause, and in direct violation of SIACHs own by-laws governing allegations of deficient patient care against Doctors. 43. As a direct and proximate result of ERNESTS/SIACHs breach of its binding

contract, Dr. Murtagh has suffered economic losses including but not limited to lost income, relocation expenses, lost employment opportunities at other hospitals, and employment search expenses.

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COUNT II: DEFAMATION AND FALSE LIGHT (Defendants ERNEST HEALTH, SIACH, Costello) 44. 45. Paragraphs 1 43 are repeated as though restated here. Defendants ERNEST HEALTH/SIACH and Costello have communicated or

authorized the communication to others, that Dr. Murtagh was dismissed or otherwise left their employ because his performance as a doctor was unsatisfactory. 46. The Defendants knew or had reason to know that statements to others indicating

or inferring that Dr. Murtagh had performed unsatisfactorily as a doctor while in their

employ would cast Dr. Murtagh in a false light, negatively impact his employment prospects and damage his reputation and career. 47. Defendants knew or should have known that the statements made asserting that

Dr. Murtaghs performance as a doctor at ERNEST HEALTH/SIACH was unsatisfactory were entirely false, or at least misleading. 48. Following Dr. Murtaghs complaints, Defendants Costello, and/or ERNEST

HEALTH/SIACH engaged in a campaign to damage Dr. Murtaghs reputation and cause economic losses by falsely asserting to subsequent prospective employers that Dr. Murtagh was terminated because his performance as a doctor at SIACH was unsatisfactory.

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49.

As a direct and proximate result of the Defendants actions, Dr. Murtagh has been

denied positions in other medical facilities, lost economic opportunities, and suffered damage to his reputation. COUNT III: TORTIOUS INTERFERENCE WITH PROSPECTIVE ECONOMIC ADVANTAGE (Defendants Costello, ERNEST HEALTH, and SIACH) 50. 51. Paragraphs 1 48 are repeated as though restated here. Dr, Murtagh had a valid expectation that his contract with Comphealth would

continue for at least its entire term and that he would earn substantial income under that contract. Dr. Murtagh also had a valid expectation that after the initial term of the placement at SIACH, that he would be placed by Comphealth in another position at another healthcare provider. 52. Defendants Costello, ERNEST HEALTH/SIACH knew, based on their own

knowledge of the services Comphealth provided, and as a healthcare services provider which regularly hires medical professionals in the open market, that statements indicating that Dr. Murtagh had made errors in patient care, or worse, committed malpractice, would have a negative impact on Dr. Murtaghs ability to be placed by COMPHEALTH, or hired by any other hospital or healthcare facility, and to earn a living practicing medicine.

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53.

Following Dr. Murtaghs complaints, Defendant Costello with the explicit or

implied support of ERNEST HEALTH and SIACH engaged in a campaign to damage Dr. Murtaghs reputation and cause economic losses by falsely asserting to subsequent prospective employers that Dr. Murtagh was terminated because his performance as a doctor at ERNEST HEALTH was unsatisfactory. 54. As a direct and proximate result of the Defendants false statements and

communications regarding Dr. Murtaghs performance he has lost economic opportunities, suffered damage to his reputation, and sustained other damages and losses. COUNT IV: WRONGFUL TERMINATION (Defendants ERNEST HEALTH, SIACH, Costello) 55. 56. Paragraphs 1 54 are repeated as though restated here. Dr. Murtagh was credentialed by ERNEST HEALTH and met its professional and

human resources standards or requirements prior to beginning work, and was therefore entitled to these protections in light of allegations of deficient patient care by his employers. 57. Dr. Murtagh was terminated by the Defendants without notice or any opportunity

to know or contest the allegations allegedly made against him. This conduct by the Defendants violated the hospitals bylaws and likely violated other applicable standards

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such as accreditation and related standards established by the Joint Commission. The Joint Commission describes itself as an independent, not-for-profit organization, that accredits and certifies more than 19,000 health care organizations and programs in the United States. As a condition of accreditation, healthcare providers are required to provide the opportunity to be informed of any allegations of deficient patient care, an opportunity to respond to the allegations, and a review by an independent panel of qualified medical professionals to determine whether the allegations have merit. 58. Dr. Murtagh made complaints to ERNEST HEALTH officials and SIACH about

his abrupt and unexplained termination indicating that such action violated bylaws, policy, and other standards. Further, Dr. Murtagh requested an investigation of the circumstances of his termination and advised that such arbitrary actions against doctors negatively impacts patient care. 59. Defendants ERNEST HEALTH/SIACH, and Costello violated its bylaws and

related standards, which are required under federal regulations and designed to prevent abuse and improper disciplining of medical professionals and ensure proper patient care. These requirements constitute a clear public policy that healthcare providers must not abuse their authority to coerce or otherwise dictate the medical decisions and practice of the physicians they employ.

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60.

As a direct and proximate cause of Defendants actions, Dr. Murtagh was unjustly

terminated from his position at ERNEST HEALTH and was subsequently injured by the false and defamatory statements made by Defendant Costello and condoned by ERNEST HEALTH/SIACH. These actions resulted in damage to Dr. Murtaghs reputation and standing in the medical community and caused Dr. Murtagh to suffer economic and noneconomic damages. RELIEF REQUESTED 61. 62. Paragraphs 1 60 are repeated as though restated here. The actions taken by the Defendants have damaged Plaintiffs reputation, caused

him to lose economic opportunities, damaged his standing in the medical community, placed him under undue stress, caused unnecessary hardship, breached contractual and other duties owed to him, and were actions perpetrated after contemplation and in several instances with malice and intent to cause harm. 63. Consequently, Plaintiff requests damages for economic and reputational injuries,

pain and suffering, attorneys fees, costs of litigation, and seeks punitive damages. Further, Plaintiff requests that the Court order the Defendants to retract and amend all prior negative statements and cease and desist all actions that would damage or in any manner injure the Plaintiff or infringe upon his ability to fully engage in his professional pursuits. COMPLAINT AND DEMAND FOR JURY TRIAL - 16

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64.

In addition, Plaintiff seeks such other and further relief, including statutory,

general and special relief, at law and in equity, as the Court and/or the Jury deems just and proper. DEMAND FOR JURY TRIAL A trial by Jury on all matters triable in this case is demanded. DATED this 2nd day of February, 2012. KERSHISNIK LAW, PLLC By: /s/ Patrick C. Kershisnik, of the firm Attorneys for Plaintiff

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