Fraud claims against hospital revived in surgery dispute

The 4th U.S. Circuit Court of Appeals held that a district court applied the wrong statute of limitations when it dismissed fraud and conspiracy claims arising from a hospital’s alleged misrepresentations about a surgeon’s employment status, vacating the dismissal and remanding for further proceedings.

The plaintiff underwent emergency gallbladder surgery at the defendant hospital in 2015. According to the complaint, hospital personnel and the surgeon represented that the surgeon was acting as an employee or agent of the hospital when recommending and performing the procedure. After experiencing complications and undergoing additional surgery elsewhere, the plaintiff pursued malpractice litigation and allegedly later discovered that the surgeon had been operating as an independent contractor under an agreement disclaiming hospital supervision over his surgical activities.

Based on that information, the plaintiff filed a separate action alleging fraudulent misrepresentation and conspiracy. The complaint asserted that the defendant falsely portrayed the surgeon as its employee or agent and concealed the true nature of its contractual relationship with him.

The district court dismissed the action as untimely under Maryland’s five-year statute of limitations governing medical malpractice claims. Because the plaintiff was aware of the alleged medical negligence by late 2015 and did not file the fraud action until 2023, the court concluded the claims were barred.

The 4th Circuit disagreed, concluding that the district court applied the wrong legal framework. The court explained that Maryland’s Health Care Malpractice Claims Act applies to claims arising from a healthcare provider’s alleged failure to exercise professional skill or judgment. The plaintiff’s complaint, however, did not challenge the quality of the medical treatment itself. Instead, it asserted fraud and conspiracy claims based on alleged misrepresentations concerning the surgeon’s employment and agency status.

Because those claims involved separate civil theories rather than allegations of deficient medical care, the court held they were governed by Maryland’s general three-year statute of limitations for civil actions rather than the specialized malpractice limitations period. The panel declined to determine whether the claims were timely under the correct statute, leaving issues concerning Maryland’s discovery rule and the plaintiff’s knowledge of the alleged wrongdoing for the district court to resolve on remand.

The 11 page opinion is Brunenkant v. Suburban Hospital Inc., Lawyers Weekly No. 001-180-26.