Chinwuba v. Larsen
| Decision Date | 31 January 2002 |
| Docket Number | No. 2298,2298 |
| Citation | 790 A.2d 83,142 Md. App. 327 |
| Parties | Christian E. CHINWUBA v. Steven B. LARSEN, et al. |
| Court | Court of Special Appeals of Maryland |
Sunanda K. Holmes, Chevy Chase, for appellant.
Randolph S. Sergent, Asst. Atty. Gen. (J. Joseph Curran, Jr., Atty. Gen. and Dorothy Wilson on the brief), Baltimore, for appellees.
Argued before DEBORAH S. EYLER, ADKINS and THEODORE G. BLOOM (Retired, Specially Assigned), JJ. ADKINS, Judge.
Does serving notice of a tort claim against a State agency on the Attorney General, instead of on the Treasurer, substantially comply with the notice requirements of the Maryland Tort Claims Act? Does a public official act within the scope of his public duties when he makes statements and disclosures to the press in violation of a statute that specifically prohibits such publications? Does the Commissioner of the Maryland Insurance Administration, as the head of an independent State agency, have an absolute privilege to make defamatory public statements about persons under agency investigation? In this appeal, we answer "no" to each of these novel questions.
This is another appellate chapter arising from the misfortunes of PrimeHealth Corporation ("PrimeHealth"), a defunct Maryland health maintenance organization ("HMO"). Christian Chinwuba, M.D., appellant, was the primary owner of PrimeHealth, until the State placed the insolvent HMO into receivership. In this case, Chinwuba complains about certain statements and actions of the Maryland Insurance Administration (the "MIA") and its commissioner, Steven B. Larsen (the "Commissioner"), appellees, during the investigation leading up to that receivership.
In the Circuit Court for Prince George's County, Chinwuba filed a four count complaint against the MIA and Larsen, alleging defamation, false light invasion of privacy ("false light"), abuse of process, and violation of due process under Articles 24 and 26 of the Maryland Declaration of Rights. The MIA and Larsen successfully moved to transfer the case to the Circuit Court for Baltimore City, and then moved to dismiss the complaint, or, in the alternative, for summary judgment. That court held that Chinwuba's [c]laims should properly be dismissed for ... (1) failure to comply with the Maryland Tort Claims Act, (2) the Commissioner falls within the [s]tatutory and [c]ommon [l]aw [i]mmunity, (3) the Commissioner falls within absolute privilege and some statements fall within the [j]udicial [p]roceedings [p]rivilege and, (4) failure to state a claim for [a]buse of [p]rocess, and (5) [Chinwuba] received [d]ue [p]rocess and failed to allege harm to any cognizable interest.
On appeal, Chinwuba challenges all of these adverse decisions, arguing:
I. The Circuit Court for Prince George's County erred in transferring the case to Baltimore City.
II. The Circuit Court for Baltimore City erred in dismissing all four counts of his complaint, because
A. he substantially complied with the notice requirements of the Maryland Tort Claims Act ("MTCA"), by serving his complaint on the Attorney General;
B. Larsen did not have governmental immunity to make statutorily prohibited statements and disclosures about the substance of the MIA's charges against PrimeHealth and Chinwuba, during the midst of the MIA's investigation and examination of PrimeHealth;
C. Larsen did not have an absolute privilege, as the head of a State agency, to make statements that damaged Chinwuba's reputation, and he lost any conditional privilege to do so by making statements in violation of the nondisclosure statute he was charged with enforcing;
D. the absolute privilege for statements made in judicial proceedings cannot shield Larsen from liability for his statements to the press;
E. Chinwuba adequately alleged an abuse of process; and
F. there were factual disputes over whether Chinwuba received due process.
Chinwuba's appeal raises three new questions (discussed infra in parts A, B, and C of section II), regarding the circumstances in which the Commissioner of the MIA may be held liable for making allegedly tortious publications to the press during an MIA investigation.
Although we find no error in the transfer, we agree with Chinwuba that his complaint should not have been dismissed in its entirety. In particular, we conclude that, if Larsen made public statements that defamed Chinwuba or placed him in a false light, and if he did so in violation of a statute that required him to refrain from making such statements, then Larsen stepped outside any immunity or privilege protections that his public office afforded him. Given the allegations in Chinwuba's complaint and the newspaper articles attached to it, we hold that Chinwuba stated cognizable claims for defamation and false light. We shall affirm the judgments in favor of the MIA and in favor of Larsen on the abuse of process and due process counts, but vacate the judgments entered in Larsen's favor on the defamation and false light counts.
Appellees moved to dismiss Chinwuba's complaint, and, in the alternative, for summary judgment. In reviewing the dismissal of a complaint, we credit the allegations of the complaint, and draw all reasonable inferences in favor of the plaintiff. See Shah v. HealthPlus, Inc., 116 Md.App. 327, 332, 696 A.2d 473,
cert. denied, 347 Md. 682, 702 A.2d 291 (1997). Consequently, this opinion features Chinwuba's version of events, even though a fact-finder ultimately may not accept that version as true. In particular, we are required to assume for purposes of this appeal that the statements about which Chinwuba complains were both false and harmful to his reputation.1
Dr. Chinwuba, a radiologist, had an ownership share in PrimeHealth, through ownership of PrimeHealth's sole shareholder,2 and was the sole owner of Diagnostic Health Imaging Systems, Inc. ("DHIS"). In November 1995, PrimeHealth applied to the MIA for a certificate of authority to operate as an HMO in Maryland. In support of the application, Chinwuba submitted an affidavit describing a transfer of certain medical equipment by DHIS to PrimeHealth. The purpose of the transfer was to ensure that PrimeHealth had a minimum surplus of $1.5 million in assets, as required by the MIA's solvency standards for health maintenance organizations. In its initial audit, the MIA raised concerns that PrimeHealth did not meet this requirement. With the "acquisition" of the medical equipment from DHIS, PrimeHealth had sufficient assets to satisfy the standard. In December 1996, however, "DHIS became totally operationally defunct."
Based on the effect of this transfer on DHIS, the MIA became concerned that DHIS creditors might be able to challenge it as a fraudulent conveyance. On August 28, 1996, the MIA asked Chinwuba to provide a notarized statement disclosing "[a]ny and all liabilities or debts of DHIS, and any and all liens or encumbrances on the assets of DHIS immediately preceding the gift of assets to PrimeHealth." Chinwuba was asked to attest that neither he nor DHIS was aware of any creditors "that could have the gift of DHIS' accounts receivable and equipment set aside or annulled to satisfy their claim or levy" or "that would force DHIS to file for bankruptcy in the foreseeable future."
Chinwuba responded to the MIA's request on September 6, 1996. He provided a notarized certification disclosing debts secured by the equipment and DHIS's general debts and liabilities, including accounts payable, taxes, and deferred revenue. That same day, an MIA examiner contacted Chinwuba by facsimile letter to request that he specifically attest that "DHIS does not have any other liabilities or debts or any liens or encumbrances on the assets of DHIS immediately preceding the gift of assets to PrimeHealth with exception [of] those stated in this confirmation."
Immediately upon receipt of this request, Chinwuba revised his certification to include verbatim the language requested by the MIA examiner. He submitted this revised and notarized certification to the MIA on the same day.
Later that day, Chinwuba became concerned about whether the revised certification was completely accurate. In an effort to correct the revised certification, he created a third certification. This unnotarized certification differed from the second certification by a single word. Chinwuba added the word "contributed" to his previous statement that "DHIS does not have any other liabilities or debts or any liens or encumbrances on the assets of DHIS...." The third certification qualified that assertion by stating that "DHIS does not have any other liabilities or debts or any liens or encumbrances on the `contributed' assets of DHIS[.]" In November 1996, relying on Chinwuba's statements in all three certifications, the MIA granted PrimeHealth a certificate of authority to operate as an HMO.
By early 1998, the MIA claimed that it had discovered millions of dollars in judgments against DHIS, that these judgments had been in existence when DHIS transferred the medical equipment to PrimeHealth, and that none of these judgments had been disclosed in any of Chinwuba's certifications. In a March 11, 1998 letter, Commissioner Larsen informed PrimeHealth that the MIA had "grave concerns covering a number of critical areas relating to PrimeHealth's ongoing ability to maintain licensure," and outlined those concerns. The opening paragraph of the letter acknowledged that the MIA already had begun a "review" of the gift of medical equipment that Chinwuba certified had been made by DHIS to PrimeHealth.
As you know, the [MIA] has been conducting a review of PrimeHealth's status as a licensee in light of recent disclosures that have come to light relating to the company's ownership and to the status of certain assets that were gifted to PrimeHealth in order to satisfy statutory...
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