819 S.E.2d 809 (Va. 2018), 170132, Parker v. Carilion Clinic

• Docket Nº: Record 170132
• Citation: 819 S.E.2d 809
• Opinion Judge: D. ARTHUR KELSEY, JUSTICE.
• Party Name: Lindsey PARKER v. CARILION CLINIC, et al.
• Attorney: James B. Feinman, Lynchburg (Feinman & Associates, on briefs), for appellant. Charles L. Downs, Jr. (Paul C. Kuhnel; Joseph M. Rainsbury; LeClairRyan, on briefs), Roanoke, for appellees.
• Judge Panel: JUSTICE MIMS, with whom JUSTICE POWELL joins, concurring.
• Case Date: November 01, 2018
• Court: Supreme Court of Virginia

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819 S.E.2d 809 (Va. 2018)

Lindsey PARKER

v.

CARILION CLINIC, et al.

Record No. 170132

Supreme Court of Virginia

November 1, 2018

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

James B. Feinman, Lynchburg (Feinman & Associates, on briefs), for appellant.

Charles L. Downs, Jr. (Paul C. Kuhnel; Joseph M. Rainsbury; LeClairRyan, on briefs), Roanoke, for appellees.

PRESENT: All the Justices

OPINION

D. ARTHUR KELSEY, JUSTICE.

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, 492 S.E.2d 642 (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 duty not to disclose and (ii) Carilion was directly liable because it had 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

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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 had 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, 495 S.E.2d 809 (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, 379 S.E.2d 319 (1989). In Norris, we considered whether the circuit court had authority under Rule 1:1 to grant a nonsuit. See 255 Va. at 239, 495 S.E.2d 809. 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, 495 S.E.2d 809. 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, 495 S.E.2d 809 (citing Bibber v. McCreary, 194 Va. 394, 395, 73 S.E.2d 382 (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, 495 S.E.2d 809 (citing London-Va. Mining Co. v. Moore, 98 Va. 256, 257, 35 S.E. 722 (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,

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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, 796 S.E.2d 556 (2017).² "Two important limitations on this principle, however, deserve emphasis." Coward v. Wellmont Health Sys., 295 Va. 351, 358, 812 S.E.2d 766 (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."...