Virginia Supreme Court says vicarious liability claim should not have been dismissed in Carilion Clinic suit

By Charmaine Little | Nov 16, 2018

RICHMOND, Va. (Legal Newsline) – The Supreme Court of Virginia has only partially agreed with a woman who accused a health care group of revealing her confidential medical information to other parties.

Justice D. Arthur Kelsey authored the Nov. 1 opinion.

While the Supreme Court concurred with plaintiff Lindsey Parker that the Circuit Court of the City of Roanoke shouldn’t have dismissed her lawsuit concerning its vicarious liability claim, the court also agreed with defendants Carilion Clinic, Carilion Healthcare and two of its employees (Christy Davis and Lindsey Young) that the lower court was valid when it tossed out the direct liability claims.

Parker alleged Carilion was vicariously liable for Young and Davis’ breach of their responsibilities not to disclose her information. She also alleged Carilion was directly liable because it didn’t secure her medical information from unauthorized access and disclosure.

The case came to the Supreme Court after the Circuit Court sustained Carilion’s demurrer objections and Parker appealed. Carilion challenged whether Parker’s appeal was timely, which the Supreme Court determined it was before it ruled on the case.

As for the tort claims against Davis and Young for their alleged breach of the health care provider duty of non-disclosure, the Supreme Court determined it couldn’t be addressed in the appeal. Instead, Rule 5:17(c)(1)(iii) says it has to be taken up in the trial court. 

When it came to the vicarious liability claim, the Supreme Court said this shouldn’t have been dismissed. 

"Carilion acknowledges that the presumption applies but contends that the express allegations in Parker’s complaint rebut the presumption,” the ruling states.

Even though the Supreme Court agreed that a "plaintiff can plead herself out of court by affirmatively alleging facts that rebut the presumption implied in law,” the same doesn’t apply in the demurrer point of a case. Here, the self-refutation has to be very clear, and not debatable. 

Considering this, Carilion’s arguments don’t have enough standing to overcome any presumption and determine, only on pleadings, that the defendant can be vicariously responsible, the court says.

Still, the Supreme Court agreed with the Carilion when it came to Parker’s direct liability claims. The Supreme Court first said Parker’s claims don’t provide a clear boundary between vicarious and direct liability. It also said Parker doesn’t allege that Davis and Young performed their actions under the authority of the Carilion. A corporate defendant can only be held responsible if it actually authorized, directed, or ratified the conduct in question.

Concerning Parker’s claims under the Health Insurance Portability and Accountability Act (HIPAA), the Supreme Court determined there’s no Virginia law that backs her claim. 

“None of our precedents have ever imposed a tort duty on a health care provider to manage its confidential information systems so as to deter employees from willfully gaining unauthorized access to confidential medical information,” the Supreme Court said. 

Justices William Mims and Cleo Powell dissented in the opinion. While they agreed with the ruling that the Circuit Court shouldn’t have sustained Carilion’s demurrer to Parker, they said the accusations in her complaint were valid enough to prove "Davis and Young acted within their scope of employment," and that Carilion hasn’t challenged that presumption. The disagreement came when it was time to determine how and if the employees were within the scope of their employment.

Parker alleged that Davis, a Carilion employee, accessed her confidential medical information and contacted Young, who also worked for Carilion at a different facility, and disclosed the information.

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