1998 -NMCA- 17, Eckhardt v. Charter Hosp. of Albuquerque, Inc.

• Decision Date: 12 November 1997
• Docket Number: No. 17116,17116
• Parties: , 1998 -NMCA- 17 Kathleen ECKHARDT, Plaintiff-Appellant/Cross-Appellee, v. CHARTER HOSPITAL OF ALBUQUERQUE, INC., A New Mexico Corporation, Defendant-Appellee/Cross-Appellant, William Kent McGregor, Defendant, And Courtney Cook, Defendant-Appellee.
• Court: Court of Appeals of New Mexico

Page 722

953 P.2d 722

124 N.M. 549, 1998 -NMCA- 17

Kathleen ECKHARDT, Plaintiff-Appellant/Cross-Appellee, v. CHARTER HOSPITAL OF ALBUQUERQUE, INC., A New Mexico Corporation, Defendant-Appellee/Cross-Appellant William Kent McGregor, Defendant And Courtney Cook, Defendant-Appellee.

No. 17116.

Court of Appeals of New Mexico.

Nov. 12, 1997.

[124 N.M. 552] Susan Weckesser, Santa Fe, Daniel W. Shapiro, Shapiro & Bettinger, P.C., Albuquerque, for Appellant.

Earl Norris, Hinkle, Cox, Eaton, Coffield & Hensley, L.L.P., Albuquerque, for Appellees.

OPINION

ARMIJO, Judge.

¶1 This appeal and cross appeal arise out of a civil action filed by Kathleen Eckhardt (Plaintiff) against Charter Hospital of Albuquerque (Charter), William Kent McGregor (McGregor), and Courtney Cook (Cook) for damages sustained as a result of a sexual assault on Plaintiff by McGregor on July 16, 1987, in Santa Fe, New Mexico. Plaintiff alleged that she was assaulted while she was receiving counseling from McGregor, a certified social worker, at the offices of the Charter Counseling Center of Santa Fe (CCC). Cook was the director of the CCC, a facility owned by Charter. The trial court entered a default judgment against McGregor, and he is not a party to this appeal.

¶2 The case was tried before a jury which awarded Plaintiff the sum of $132,000 against Charter on her claim of negligent selection and supervision of McGregor; the sum of $70,000 against Charter on her claim of fraudulent misrepresentation; and the sum of $80,000 against Charter on her claim of negligent misrepresentation.

¶3 Plaintiff appeals from the trial court's order granting a directed verdict on her claims for punitive damages, wrongful disclosure, and violation of the Unfair Practices Act. Plaintiff also challenges the trial court's disclosure to the jury of a $1 million default judgment award entered against McGregor. Charter cross-appeals from the trial court's order denying its motion for a directed verdict and the trial court's entry of judgment for separate damage awards for fraudulent misrepresentation and negligent misrepresentation based upon the same conduct. Charter also challenges the trial court's failure to decide Defendant's amended motion for summary judgment and rule on the legal question of whether Charter owed a duty to Plaintiff as a Charter patient.

¶4 For the reasons discussed below, we affirm the judgment with respect to Plaintiff's claims against Charter for negligent misrepresentation and negligent selection and supervision of McGregor. We affirm the trial court's rulings with respect to summary judgment motions filed by the parties as they related to the claims set forth in the Second Amended Complaint. We affirm the trial court's rulings with respect to the directed verdicts on the claims for punitive damages and violation of the Unfair Practices Act. We reverse the judgment on Plaintiff's claim of fraudulent misrepresentation, and reverse the trial court's decision to grant a directed verdict dismissing Plaintiff's claim against Cook for wrongful disclosure. We determine that the trial court erred in disclosing to the jury the nature and amount of the default judgment entered against McGregor.

I. BACKGROUND

¶5 The procedural posture of this case is complex. The initial complaint was filed on March 15, 1990. Plaintiff sought compensatory and punitive damages from McGregor for wanton and willful misconduct, battery, and intentional infliction of emotional distress. She sought compensatory and punitive damages from Charter under various theories, not all of which are relevant to this appeal. Plaintiff alleged that Cook divulged confidential information to a third party (Plaintiff's husband) and that she suffered damages as a result.

¶6 During the pendency of the present case, Charter filed a separate declaratory judgment action to determine if Charter had a duty to defend McGregor; the two actions were consolidated. The present (tort) action was stayed pending disposition of the declaratory judgment action which was tried on August 12, 1991. A judgment was filed on December 17, 1991, which determined that McGregor was an independent contractor. No appeal of that judgment followed.

¶7 Based on the declaratory judgment, Charter moved for summary judgment on all counts against it in the tort action. Plaintiff was granted leave to amend her complaint. The trial court ultimately granted summary judgment in favor of the Defendants on certain issues, and Plaintiff appealed to the Supreme Court. On August 8, 1994, the Supreme Court affirmed the district court's dismissal of Plaintiff's claims that McGregor was an employee and apparent employee of Charter and reversed the district court's dismissal of Plaintiff's negligent selection and supervision claim.

¶8 On October 26, 1994, the trial court granted Plaintiff's motion to file a Second Amended Complaint, in which Plaintiff stated the claims which relate to the present appeal. Counts I, II and III related to McGregor and are not germane to this appeal because, during a pretrial proceeding, the trial court entered a default judgment against McGregor as to liability due to his failure to appear at the proceedings. Determination of the amount of damages to be assessed against him was left to a later time.

¶9 The remaining claims, all relating to Charter and Cook, can be summarized as follows. Count IV alleged that Charter was negligent in its employment and supervision of McGregor and in its failure to terminate him. Count V alleged that Charter violated the Unfair Practices Act by engaging in false advertising in its promotional materials with regard to the quality of its services and its affiliation with McGregor. Count VI alleged that Charter made fraudulent or, alternatively, negligent misrepresentations in its advertising and in other statements indicating that McGregor was its employee. Count VII alleged that Charter and Cook breached their duty of confidentiality by intentionally and negligently disclosing confidential information to Plaintiff's husband. The information related to her history of spousal abuse.

¶10 Plaintiff moved for summary judgment as to Count IV on April 6, 1995, and Charter filed an amended motion for summary judgment on all outstanding claims. The trial court heard the motions for summary judgment on June 5, 1995, and denied both motions. Voir dire began on June 20, 1995, with the trial commencing on July 25, 1995.

¶11 During the trial, Plaintiff requested that the trial court assess damages against McGregor. The trial court entered an award of $500,000 in compensatory damages and $500,000 in punitive damages against McGregor. The trial court disclosed both the nature and the amount of this award to the jury, over Plaintiff's objection.

¶12 At the close of Plaintiff's case, Charter moved for a directed verdict on the remaining counts in Plaintiff's Second Amended Complaint. This motion was granted in part and denied in part with respect to Count IV (negligent selection and supervision) and Count VI (fraudulent or negligent misrepresentation). The trial court also granted Charter's motion with respect to Count V (Unfair Practices Act) and Count VII (wrongful disclosure).

¶13 Plaintiff's request for jury instructions on punitive damages was refused. The trial court instructed the jury on Plaintiff's claims for negligent selection and supervision, and both fraudulent and negligent misrepresentation. The instructions did not indicate that the misrepresentation claims were pled in the alternative. The jury returned a verdict awarding Plaintiff damages on each of these claims. These appeals followed.

II. DISCUSSION

¶14 For the sake of clarity, our discussion departs from the order in which the issues arose in the trial court or were briefed by the parties on appeal. Instead, we address the parties' claims on appeal in the following order: (A) Plaintiff's wrongful disclosure claim against Cook; (B) the trial court's disclosure of the default judgment against McGregor; (C) Plaintiff's negligence claims against Charter; (D) Plaintiff's claim against Charter for fraudulent misrepresentation; (E) Plaintiff's claims against Charter for punitive damages; and (F) Plaintiff's claim against Charter for violation of the Unfair Practices Act.

A. Wrongful Disclosure of Confidential Communication

¶15 In her capacity as director of the CCC, Cook disclosed to Plaintiff's husband (Mr. Eckhardt) that she knew (from talking to Plaintiff, McGregor, or both) that Mr. Eckhardt was an "abusive alcoholic" whose spousal abuse was related to his drinking. On appeal, Cook contends that this information was not privileged or confidential, and therefore its disclosure to Mr. Eckhardt was not wrongful. The trial court granted Defendant's motion for directed verdict on this issue, reasoning that Cook did not intend to harm Plaintiff by disclosing this information, and that the evidence was insufficient to establish that the disclosure was a proximate cause of Plaintiff's damages.

¶16 We determine that: (1) the information which Plaintiff shared with Cook or McGregor concerning Mr. Eckhardt's alcohol problem and spousal abuse was confidential; (2) Plaintiff was not required to prove that Cook's disclosure of this information was intended to harm her; and (3) the evidence was sufficient to establish a jury question as to whether the disclosure was a proximate cause of Plaintiff's damages. We reverse the trial court's ruling and remand for a jury trial on Plaintiff's wrongful disclosure claim. See Sunwest Bank v. Garrett, 113 N.M. 112, 115, 823 P.2d 912, 915 (1992) ("A directed verdict is appropriate only when there are no true issues of fact to be presented to a jury.").

¶17 We first address whether Plaintiff's wrongful disclosure claim is precluded by the trial court's finding that Cook did not intend to harm Plaintiff by making the disclosure to Mr. Eckhardt. We note that under some...