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Parker v. Carilion Clinic

Supreme Court of Virginia

November 1, 2018


          FROM THE CIRCUIT COURT OF THE CITY OF ROANOKE J. Christopher Clemens, Judge



         Lindsey Parker sued Carilion Clinic, Carilion Healthcare Corporation (collectively, "Carilion"), and two Carilion employees, Christy Davis and Lindsey Young, claiming that they had disclosed her confidential medical information to others. Parker served process on Carilion but did not serve Davis or Young. The circuit court granted Carilion's demurrers and dismissed all of Parker's claims against it, which included both vicarious and direct liability claims. Parker challenges that holding on appeal. We agree with Parker that the circuit court should not have dismissed her vicarious liability claim on demurrer, but we agree with Carilion that the circuit court correctly dismissed the direct liability claims.

         I. Background

         In her complaint, Parker claimed that she had been diagnosed with a medical condition at Rocky Mount Obstetrics & Gynecology.[1] J.A. at 2. Almost seven months later, she visited her primary care physician at Rocky Mount Family Practice for treatment unrelated to her previous diagnosis. Carilion owned and operated both healthcare facilities. While awaiting treatment at Rocky Mount Family Practice, Parker spoke with an acquaintance, Trevor Flora, in the waiting room. Davis, a Carilion employee working at Rocky Mount Family Practice, saw Parker conversing with Flora, with whom she also was acquainted.

         Davis accessed Parker's confidential medical information and discovered Parker's previous diagnosis. Davis then contacted her friend Young, who was a Carilion employee working at a third facility and who also knew Flora. Davis told Young that Parker was at Rocky Mount Family Practice conversing with Flora and disclosed Parker's previous diagnosis to Young. Young then accessed Parker's confidential medical information and confirmed Davis's disclosure. Young thereafter disclosed Parker's previous diagnosis to Flora, who revealed the disclosure to Parker.

         Parker's complaint alleged that Davis, Young, and Carilion had disclosed her confidential medical information in breach of the tort duty that we recognized in Fairfax Hospital v. Curtis, 254 Va. 437, 442 (1997). She based her unauthorized-disclosure claim against Carilion on two theories: (i) Carilion was vicariously liable under respondeat superior principles for the breach by Davis and Young of their duties not to disclose and (ii) Carilion was directly liable because it failed to secure her confidential medical information from unauthorized access and disclosure, as evidenced by Davis and Young's acts.

         Parker also asserted a negligence per se claim against Carilion. She based this claim on the theory that the federal Health Insurance Portability and Accountability Act of 1996, Pub. L. No. 104-191, 110 Stat. 1936 (codified as amended in scattered sections of 26, 29, and 42 U.S.C.) ("HIPAA"), imposed statutory requirements that Carilion violated by failing to secure, and thus protect from unauthorized disclosure, her confidential medical information. Parker argued that Code § 8.01-221 converted these statutory violations into a negligence per se claim under Virginia law.

         In its answer, Carilion admitted that Davis and Young were its employees at the time that they accessed and disclosed Parker's confidential medical information. In its demurrer to the unauthorized-disclosure count, however, Carilion argued with respect to Davis and Young that they acted outside the scope of their employment, precluding Parker's respondeat superior claim as a matter of law. Carilion also contested the legal viability of Parker's direct liability claims, in which she had asserted a breach of the non-disclosure duty recognized in Fairfax Hospital and negligence per se based upon HIPAA violations.

         On October 25, 2016, the circuit court entered an order sustaining Carilion's demurrers but granting Parker 21 days within which to amend her complaint. The order provided that if she did not do so, "the case is dismissed with prejudice." J.A. at 80. Parker did not amend her complaint but instead filed a notice of appeal on December 2, 2016.

         II. Rule 1:1 & the Notice of Appeal

         As a threshold matter, Carilion asserts that Parker failed to file her notice of appeal within 30 days from the entry of the final order as required by Rule 5:9(a). Under Rule 1:1, Carilion reasons, the final order was entered on the date that it was signed, notwithstanding the fact that the order provided Parker 21 additional days within which to file an amended complaint. Although we held in Norris v. Mitchell that an order sustaining a demurrer and dismissing the case unless the plaintiff files an amended complaint within a specified period of time does not become final until the time for amendment lapses, see 255 Va. 235, 239-40 (1998), Carilion argues that Rule 1:1's definition of when such an order is entered controls for the purpose of the 30-day deadline that Rule 5:9(a) imposes. We disagree.

         Rule 5:9(a) provides in relevant part that

[n]o appeal shall be allowed unless, within 30 days after the entry of final judgment or other appealable order or decree, or within any specified extension thereof granted by this Court pursuant to Rule 5:5(a), counsel for the appellant files with the clerk of the trial court a notice of appeal and at the same time mails or delivers a copy of such notice to all opposing counsel.

         This requirement is "mandatory, not merely directory." School Bd. v. Caudill Rowlett Scott, Inc., 237 Va. 550, 556 (1989). In Norris, we considered whether the circuit court had authority under Rule 1:1 to grant a nonsuit. See 255 Va. at 239. The circuit court entered an order on June 20 sustaining a demurrer and dismissing the case unless the plaintiffs filed an amended motion for judgment by July 8. See id. at 238. On July 15, the plaintiffs filed a motion for nonsuit, which the court granted, but they never filed an amended motion for judgment as the June 20 order had required. See id. Because July 15 was later than 21 days after June 20 but sooner than 21 days after July 8, we directly answered the question whether Rule 1:1's 21-day period began to run on June 20 (when the order was entered) or on July 8 (when the entered order became final).

         We ruled that the circuit court retained jurisdiction until 21 days after July 8 because an order merely sustaining a demurrer is not final, but an order dismissing a case is final. See Norris, 255 Va. at 239 (citing Bibber v. McCreary, 194 Va. 394, 395 (1952)); Commercial Bank of Lynchburg v. Rucker, 24 S.E. 388, 388 (1896). Furthermore, a trial court may enter an order dismissing a case if an amended complaint is not filed before a specified deadline. See Norris, 255 Va. at 239 (citing London-Va. Mining Co. v. Moore, 98 Va. 256, 257 (1900)). In such cases, there is no dismissal if the plaintiff files the amended complaint before the deadline, and the order thus never becomes final. Dismissal - and finality - occur only when the deadline expires without the filing of an amended complaint. See generally Kent Sinclair & Leigh B. Middleditch, Jr., Virginia Civil Procedure § 9.6, at 740 (6th ed. 2014) ("A court order sustaining or overruling a demurrer does not, of itself, result in a final judgment; there must also be either a failure by the plaintiff to amend within the time allowed by the court or a direct dismissal of the case by the court.").

         Although not analyzed in Norris, the commencement of the 30-day period for filing a notice of appeal requires "the entry of [a] final judgment or other appealable order or decree," Rule 5:9(a) (emphasis added), and Norris, Bibber, London-Virginia Mining Co., and Commercial Bank of Lynchburg all decisively hold that an order merely sustaining a demurrer without dismissing the case is not final. Consequently, the 30-day period provided by Rule 5:9(a) does not begin to run in the absence of a final order, and in the case before us, no final order existed until the deadline for filing an amended complaint had expired. Absent a statutory provision stating otherwise, an order must be both entered and final before the 30-day period for filing a notice of appeal commences. Thus, Parker's notice of appeal was timely.

         III. The Demurrers

         When reviewing an order granting a demurrer, we accept as true all factual allegations expressly pleaded in the complaint and interpret those allegations in the light most favorable to the claimant. See Coutlakis v. CSX Transp., Inc., 293 Va. 212, 215 (2017).[2] "Two important limitations on this principle, however, deserve emphasis." Coward v. Wellmont Health Sys., 295 Va. 351, 358 (2018).

First, while we also accept as true unstated inferences to the extent that they are reasonable, we give them no weight to the extent that they are unreasonable. The difference between the two turns on whether "the inferences are strained, forced, or contrary to reason," and thus properly disregarded as "arbitrary inferences." Second, we must distinguish allegations of historical fact from conclusions of law. We assume the former to be true arguendo, but we assume nothing about the correctness of the latter because "we do not accept the veracity of conclusions of law camouflaged as factual allegations or inferences." "Instead, we review all conclusions of law de novo." Id. at 358-59 (emphases in original) (footnote and citations omitted).

         On appeal, Parker contends that the circuit court erred in granting the demurrers because she adequately pleaded four distinct causes of action:

• Tort claims against Davis and Young individually for breach of the "health care provider" duty of non-disclosure recognized in Fairfax Hospital. See Appellant's Suppl. Br. at 3-6.
• A respondeat superior claim against Carilion, as Davis and Young's employer, that alleged vicarious liability for the employees' torts. See Appellant's Br. at 16-19; Appellant's Suppl. Br. at 7-11.
• A direct claim against Carilion for breach of the "health care provider" duty of non-disclosure recognized in Fairfax Hospital. See Appellant's Br. at 16-19.
• A direct claim against Carilion alleging negligence per se based upon violations of federal HIPAA provisions. See id. at 20-22.

         We will address these arguments in the same sequence.

         A. Tort Claims Against Davis & Young Individually

         Parker pleaded tort claims against Davis and Young individually, asserting that they were "healthcare providers" and thus owed a duty under Fairfax Hospital not to disclose her confidential medical information without her authorization. See J.A. at 4-5. On appeal, Parker argues in her first assignment of error that the circuit court "erred in ruling there is no cause of action under Virginia law against an employee of a healthcare provider when the employee makes an extra-judicial disclosure of sensitive confidential personal health information without the authorization of the patient-plaintiff." Appellant's Suppl. Br. at 1 (altering capitalization).

         The circuit court, however, never addressed whether a viable cause of action existed against Davis and Young individually. Instead, the court held only that Carilion could not be liable under respondeat superior principles because, based on Parker's allegations, Davis and Young had acted outside the scope of their employment. Parker nonetheless contends that we should address the issue given its importance to the underlying issue of respondeat superior liability.[3]

         Though we appreciate Parker's concerns, [4] we cannot address them in the present appeal. Rule 5:17(c)(1)(iii) requires an assignment of error to "address the findings or rulings in the trial court or other tribunal from which an appeal is taken." See Wright v. Commonwealth, 292 Va. 386, 393-94 (2016), cert. denied, __U.S.__, 137 S.Ct. 1442 (2017). For these reasons, we dismiss this assignment of error and offer no opinion on the question whether Parker's complaint alleged facts that, if true, would prove that Davis and Young qualified as "healthcare providers," J.A. at 4, for purposes of personal liability under Fairfax Hospital.[5]

         B. Carilion's Vicarious Liability

         1. The Rebuttable Presumption

         Parker asserts that the circuit court erred by ruling as a matter of law that Carilion was not vicariously liable for Davis and Young's tortious acts. She contends that when Carilion "admitted . . . that Davis and Young were its employees," there arose a rebuttable presumption that Davis and Young were acting within the scope of their employment when they committed the alleged tort. See Appellant's Suppl. Reply Br. at 2; see also Majorana v. Crown Cent. Petroleum Corp., 260 Va. 521, 526 (2000).[6]

         Carilion acknowledges the rebuttable presumption but contends that the cases cited by Parker apply only when considering "the evidentiary burden at trial, not whether the plaintiffs' complaints alleged facts sufficient to state a vicarious liability claim." Appellees' Suppl. Br. at 17-18. And even if those cases apply at the pleading stage, Carilion adds, Parker's own pleadings, coupled with the factual interpretations that she advocates on appeal, show "that the defendant could not, as a matter of law, be held vicariously liable." Id. at 18; see also Oral Argument Audio at 18:04 to 18:11 (arguing that "there has to be more . . . than just asserting magic words of employer-employee relationship"); id. at 18:32 to 18:36 (arguing that Parker pleaded herself out of the presumption because of "the information that's not provided" in the complaint).

         To Carilion's first point, we disagree that the presumption applies only at trial and has no role at the pleading stage of the case. There has always been in law a symmetry between pleadings and proof. On essential matters, the latter can go no further than the former. See Ted Lansing Supply Co. v. Royal Aluminum & Constr. Corp., 221 Va. 1139, 1141 (1981) ("Pleadings are as essential as proof, the one being unavailing without the other." (citation omitted)); Martin P. Burks, Common Law and Statutory Pleading and Practice § 334, at 638 (T. Munford Boyd ed., 4th ed. 1952). A prima facie civil case - that is, the cluster of factual and legal assertions, which, if true, would authorize a judicial remedy - remains the same from the beginning of a judicial proceeding to its end. A demurrer, a motion for summary judgment, a motion to strike, and a motion to set aside a verdict all use the same definition of a prima facie case when the question presented is the legal sufficiency of the claim.

         Without discussion, we applied the rebuttable presumption at the demurrer stage in Plummer v. Center Psychiatrists, Ltd., 252 Va. 233, 235-36 (1996). We elaborated on the point in Majorana. In that case, a pleading asserting an employer's liability under the doctrine of respondeat superior alleged an employment relationship. The employer filed a motion for summary judgment that relied only on the allegations in the claimant's pleading "to support its argument that [the employee] was acting outside the scope of his employment." Majorana, 260 Va. at 525.

         We held that summary judgment was improper because the rebuttable presumption arising out of the complaint supplied the necessary permissible inference that the tortfeasor had acted within the scope of his employment. See id. at 527 (stating that "[t]he sole issue . . . was whether the trial court erred by holding, as a matter of law, that the [pleading] did not state the necessary elements of respondeat superior within its factual allegations"); see also Plummer, 252 Va. at 237. Plummer and Majorana confirm the proper timing of the scope-of-employment presumption. It begins with the complaint, not the presentation of evidence at trial.

         Addressing Carilion's second point, that Parker's complaint and its factual inferences themselves rebutted the presumption, the resolution of that issue depends on what the presumption actually presumes. Quite a lot, apparently, if we were to grant Parker's requested remedy: "Upon remand," Parker argues, the circuit court "should be instructed that when an employee is allowed access to medical information as part of their employment with a health care provider, and the employee wrongfully distributes or discloses such confidential information, they are acting within the scope of their employment as a matter of law." Appellant's Suppl. Br. at 8.

         From Parker's perspective, neither her complaint nor its factual inferences could possibly provide a basis for self-refutation because "[u]nder these facts there is respondeat superior liability of the master-employer as a matter of law." Id. at 9. In response, Carilion argues that Parker "has affirmatively alleged facts demonstrating that [Davis and Young] were not acting within the scope of their employment," and thus, the circuit court properly dismissed the complaint as a matter of law.[7] Appellees' Suppl. Br. at 19 (emphasis in original).

         We cannot fully agree with either Parker or Carilion.

         2. The Job-Related-Service Principle

         "[C]ommon-sense is opposed to making one man pay for another man's wrong." Oliver Wendell Holmes, Jr., Agency, 5 Harv. L. Rev. 1, 14 (1891). On the strength of this premise, we have insisted that "[a] master is not liable for every wrong which a servant may commit during the continuance of an employment." E.H. Abernathy v. Romaczyk, 202 Va. 328, 332 (1960) (citation omitted); see also McNeill v. Spindler, 191 Va. 685, 694 (1950) (same). Virginia has not recognized such an omnipotent form of vicarious liability. See, e.g., Appalachian Power Co. v. Robertson, 142 Va. 454, 466 (1925) (stating that "if the act be done while the servant is at liberty from service, and pursuing his own ends, exclusively, there can be no question of the freedom from liability, even if the injury could not have been committed without facilities afforded to the servant by his relations to the master" (citation omitted)). Instead, under the traditional "doctrine of respondeat superior, an employer is liable for the tortious act of his employee if the employee was performing his employer's business and acting within the scope of his employment." Kensington Assocs. v. West, 234 Va. 430, 432 (1987).

         Restating the doctrine in such low-resolution terms, however, has led to "difficulties" in its application, Giant of Md., Inc. v. Enger, 257 Va. 513, 516 (1999), and has proven to be conceptually "vexatious," Gina Chin & Assocs. v. First Union Bank, 260 Va. 533, 541 (2000), and "perplexing," Kidd v. De Witt, 128 Va. 438, 443 (1920). Less charitable observations suggest that the "highly indefinite" scope-of-employment phrase is

"devoid of meaning in itself" and is "obviously no more than a bare formula to cover the unordered and unauthorized acts of the servant for which it is found to be expedient to charge the master with liability, as well as to ...

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