Discovery, Ethics: Court Imposes Sanctions for Defense at Odds with Facts Known to Hospital

​A Michigan court of appeals upheld a trial court's imposition of a $53,958.69 sanction against a hospital and its legal counsel for its conduct at trial—pursuing a defense that was directly contrary to facts known to the hospital in an incident report that had not been disclosed to the plaintiff. The court did not impose a sanction for not producing the incident report. The hospital challenged the sanction on appeal. The appellate court upheld the sanction but concluded that because the hospital's legal counsel had access to the incident report for only a limited time, the attorney's culpability was less than the hospital's. The court offered the hospital an opportunity to take responsibility for the entire award, lest the court further intervene to clarify who should bear the sanction.

The lawsuit was brought by a patient who had sustained a quarter-size forearm burn during thyroid surgery. She subsequently was informed by a representative of the hospital that an electrocautery device caused the wound. Dissatisfied with the explanation and the burn's aftereffects, the patient sued the hospital and the surgeon. During a "lengthy and contentious" course of pretrial discovery, operating room (OR) staff testified that their habit and practice was always to return the device to its protective holster when it was not in active use. The hospital contended that no one recalled the event and only an accidental dislodgement of the device from its holster could explain how the burn occurred. The hospital pursued an "accidental occurrence" defense in its opening statement to the jury, despite...