Diamond Post
 Professional Negligence Newsletter
In defending medical malpractice cases accompanied with allegations of fraud and breach of contract, GWB successfully petitioned the Supreme Court of South Carolina to grant certiorari to review a circuit court order permitting the plaintiffs to contact and interview nonparty patients treated at the defendant's facilities. In a per curiam opinion, filed September 21, 2009, the Supreme Court vacated the order, holding that the circuit court committed an abuse of discretion in determining the interviews with the nonparty patients were necessary. See Hollman v. Woolfson, Op. No. 26725, 2009 WL 2997895 (S.C. Sept. 21, 2009).
The Court recognized that the nonparty patients, whose confidential medical records were disclosed pursuant court order and subject to a Protective Order, have a valid and legitimate expectation that their medical information will remain confidential. The Court held that this expectation outweighed the plaintiff's intent to use the personal information to buttress their claims by showing a propensity by the defendants to commit malpractice. Because of these important privacy rights, the plaintiffs were required to show that the sought-after interviews with nonparty patients were relevant and necessary to the case, which the plaintiffs failed to do.
In particular, the Court held that evidence relating to treatment of the nonparty patients is irrelevant to the plaintiffs' negligence claims. Such evidence cannot be used to show that a defendant in a medical malpractice action breached the standard of care with a particular patient. Likewise, the Court noted there was no evidence that any of the nonparty patients were victims of fraud and held that the treatment received by those patients is irrelevant to the plaintiffs' fraud claims. Finally, despite noting that the information sought could be relevant to an Unfair Trade Practice Act (UTPA) cause of action, the Court held that the evidence is not necessary to establish that cause of action. The plaintiffs failed to demonstrate with specificity what information they sought or how the lack of interviews with the nonparty patients would impair the presentation of their case to the extent that an unjust result is a real threat. Moreover, there was no evidence that there were no other reasonable alternatives available to the plaintiffs to discover the information sought from the nonparty patients. Therefore, the Court held that the circuit court committed an abuse of discretion in determining the interviews with the nonparty patients were necessary.
Additionally, there have been several significant decisions by
South Carolina courts in the area of professional liability recently
which may be helpful in connection with your work in South Carolina.
Turner v. Milliman, 671 S.E.2d 636 (S.C. Ct. App. 2009)
This case involved claims for fraud in the inducement and negligent misrepresentation by the plaintiffs, individuals seeking health insurance, against their insurance agent. Based upon certain alleged representations made by the agent to the plaintiffs, they applied for and purchased group health insurance. The alleged representations inducing the purchase of this policy by the insurance agent were that premium increases by the company writing this policy which would be reasonable and less expensive than others. After purchasing this insurance, the premiums increased significantly over the course of time. The plaintiffs alleged that because of these increases, they were not able to maintain coverage under this policy. 671 S.E.2d at 638-39.
The South Carolina Court of Appeals affirmed summary judgment for the insurance agent, holding that even if he made the representations alleged, they could not form the basis of claims for fraud in the inducement and negligent misrepresentation. The alleged statements regarding future premium increases could not be construed as more than the agent's opinion as to future events. Id. at 642-43. The court found that, "[b]ecause mere unfulfilled promises or statements as to future events are not actionable, and because no evidence was presented to show [the agent] made those statements only to induce [the plaintiffs] into procuring the policy, the trial court properly granted [the agent's] summary judgment motions on this ground." Id. at 643. Thus, claims for fraudulent inducement and negligent misrepresentation cannot be based upon an insurance agent's opinions as to future events.
Ardis v. Sessions, 2009 WL 2366150 (S.C. Sup. Ct. Aug. 3, 2009)
In this chiropractic malpractice action, the South Carolina Supreme Court rejected use of a "good faith" jury instruction, holding that in professional negligence actions, it is improper to require the plaintiff to establish bad faith on the part of a professional. At trial, the jury was charged, in pertinent part that, "a physician is not ordinarily liable for making an incorrect diagnosis where it is made in good faith and there is reasonable doubt as to the nature of the physical conditions involved..." 2009 WL 2366150 at *1. The court held that a "good faith" jury charge in a professional malpractice case is improper due to the implication that "an error in judgment is actionable only if made in bad faith." Id. It also held that such an instruction requires a plaintiff to prove a departure from the standard of care, and that the departure was committed in bad faith. Thus, a "'good faith' instruction impermissibly adds a subjective component contrary to our objective professional negligence law." Id. Further, the supreme court explicitly stated that this holding was not limited to physicians or chiropractors, but applied to all professionals. Id. Therefore, South Carolina does not impose a subjective standard for the determination of whether any professional has committed malpractice.
Fournil v. Turbeville Insurance Agency, Inc. 2009 WL 512261 (D.S.C. 2009)
In this review of the federal magistrate's report and recommendation in an action between an insurance agent and the agency where she was formerly employed, the United States District Court held that an insurance agent's non-compete clause was invalid because it was not related to any legitimate interest of the insurance agency which formerly employed her. The provision at issue prohibited the former agent from "directly or indirectly...solicit, attempt to obtain or accept any insurance business of any nature from any customer or account on the books of [agency]..." 2009 WL 512261 at *4. Acknowledging that post-employment use of information compiled for the agency which was not available to the general public to her advantage and the agency's detriment is "siphoning [the employer's] goodwill" which is impermissible, the court held that the particular covenant at issue extended to situations where goodwill-siphoning did not exist. Id. at *5. The court interpreted this provision to be an absolute bar to soliciting or accepting business from "any insurance business of any nature from any customer or account on the agency's books..." Id. However, the court held that soliciting business from former clients of the agency or from current clients provided that the agent did not trade on the agency's goodwill are not unfair or improper acts. Id. Thus, the non-compete provision extended to areas where the insurance agency had no legitimate interest in preventing competition. Id.
Specific to the healthcare industry, the South Carolina Supreme Court has issued two decisions in favor of healthcare providers:
Dema v Tenet Physician Serv., 678 S.E.2d 430 (S.C. 2009)
The South Carolina Supreme Court held that the Certification of Need and Health Facility Licensure Act, S.C. Code Ann. Section 44-7-110 et seq. does not create a private right of action. In this case, former patients sued the hospital based upon their receipt of unauthorized therapeutic cardiac catheterizations in violation of this act. Examining the purpose of this act, the court held that the South Carolina Legislature intended to "advance the quality of healthcare provided in [South Carolina] for all people receiving the care, not for a particular individual." Id. at 433. The court also interpreted the act to provide for enforcement through sanctions provided - monetary fines and license denial, revocation and suspension - rather than civil liability. Id. at 434. Thus, the supreme court concluded that the South Carolina Legislature did not intended to create a private right of action by implication since there was no basis to conclude that it was enacted for the special benefit of a private party.
Kerr v. Richland Memorial Hospital, 678 S.E.2d 809 (S.C. 2009)
In this decision, the supreme court concluded that South Carolina's six-year statute of repose in S.C. Code Ann. Section 15-3-545(A) is an absolute outer limit applicable to any medical malpractice action, including those brought against governmental entities under the South Carolina Tort Claims Act. Reading this statute of repose and the Tort Claims Act together, the court held that to interpret it otherwise would "contravene the unambiguous intent of the Legislature and expand liability for a governmental hospital beyond a private hospital's potential liability." 678 S.E.2d at 811. Additionally, it would have the effect of disregarding the statute of limitations set forth in the Tort Claims Act. Id. The court futher affirmed its prior decision rejecting the continuous treatment rule and noted that this limit applies, "regardless of whether [the medical malpractice claim] has or should have been discovered." Id. at 810 (quoting Harrison v. Bevilacqua, 580 S.E.2d 109, 113 (S.C. 2003)). |
