Collins v. Clinic

• Decision Date: 25 September 2020
• Docket Number: A18A0296
• Citation: 849 S.E.2d 213,356 Ga.App. 776
• Parties: COLLINS et al. v. ATHENS ORTHOPEDIC CLINIC.
• Court: Georgia Court of Appeals

356 Ga.App. 776

849 S.E.2d 213

COLLINS et al.

v.ATHENS ORTHOPEDIC CLINIC.

A18A0296

Court of Appeals of Georgia.

September 25, 2020

David Andrew Bain, Mark S. Goldman, Douglas J. Bench, for Appellant.

John Durand Dalbey, Atlanta, for Appellee.

Markle, Judge.

Several former and current patients filed a putative class action against the Athens Orthopedic Clinic ("the Clinic"), asserting claims for negligence, breach of implied contract, unjust enrichment, attorney fees, injunctive relief under Georgia's Uniform Deceptive Trade Practices Act (UDTPA),¹ and declaratory judgment stemming from a data breach of their personal information. The trial court dismissed all claims, and we affirmed. Collins v. Athens Orthopedic Clinic , 347 Ga. App. 13, 14-22 (2), 815 S.E.2d 639 (2018). Our Supreme Court granted certiorari and reversed, holding that the allegations in the complaint sufficiently stated a claim for negligence that was not merely speculative, and thus, it was error to dismiss the negligence claim. Collins v. Athens Orthopedic Clinic , 307 Ga. 555, 563-564 (3), 837 S.E.2d 310 (2019). The Court then directed this Court to reconsider the remaining claims in light of this ruling. Id. at 557 (1), n.1, 566 (4), 837 S.E.2d 310.

On remand, we adopt the Supreme Court's decision as our own, reverse the dismissal of the negligence count, and remand it for further proceedings. With regard to the remaining counts, for the reasons that follow, we conclude that the trial court erred in dismissing the counts for breach of implied contract and attorney fees, and we reverse the dismissal of those counts and remand for further proceedings. We affirm the trial court's dismissal of the counts for unjust enrichment, declaratory relief, and those raised under the UDTPA.²

We review the grant of a motion to dismiss de novo, construing the factual allegations of the complaint in the light most favorable to the plaintiff. Radio Perry, Inc. v. Cox Communications, Inc. , 323 Ga. App. 604, 605 (1), 746 S.E.2d 670 (2013). The complaint should be dismissed only if its allegations demonstrate with certainty that the claimant "would not be entitled to relief under any state of provable facts asserted in support thereof; and ... the movant establishes that the claimant could not possibly introduce evidence within the framework of the complaint sufficient to warrant a grant of the relief sought." (Citation omitted.) Id. ; see also Babalola v. HSBC Bank, USA, N.A. , 324 Ga. App. 750, 752 (2), 751 S.E.2d 545 (2013).

The facts are set forth in our prior opinion, but are summarized here: In June 2016, an anonymous hacker known as the "Dark Overlord" stole the personally identifiable information, including social security numbers, birthdates, addresses, and health insurance information, of approximately 200,000 current and former Clinic patients. The hacker demanded ransom, but the Clinic refused to pay, and the hacker sold the information on the "dark web." The Clinic alerted its patients of the breach in August 2016. Collins , 347 Ga. App. at 13, 815 S.E.2d 639.

Thereafter, Christine Collins, Paulette Moreland, and Kathryn Strickland (collectively, "the plaintiffs") filed a putative class action. In their complaint, they alleged that the Clinic failed to offer and pay for any credit monitoring or identity theft protection following the data breach despite the "imminent threat" that the stolen information will be used to their detriment now that "criminals are ... able to assume [the patients’] identity and fraudulently obtain credit cards, issue fraudulent checks, file tax refund returns, liquidate bank accounts, and open new accounts, all in [the patients’] names."³ Based on these allegations, the plaintiffs asserted claims for negligence, breach of implied contract, unjust enrichment, and violations of the Georgia UDTPA. They requested a declaratory judgment and injunctive relief in the form of monitoring, theft protection, and other prospective corrective measures.

We now consider whether the other claims as alleged above are sufficient to survive a motion to dismiss.

1. Breach of implied contract.

In our prior opinion, we concluded that this claim failed because the plaintiffs had yet to suffer injury and thus incurred no damages. 347 Ga. App. at 19 (2) (b), 815 S.E.2d 639. The Clinic concedes that this claim must be remanded. See Collins , 307 Ga. at 563 (3), 837 S.E.2d 310 ; see also In re Arby's Restaurant Group Inc. Litigation , 2018 WL 2128441, at *16 (III) (C) (N. D. Ga. 2018) (citing cases from other circuits allowing implied contract claims to survive motion to dismiss and agreeing that "[t]hese decisions are grounded in the recognition that when a customer uses a credit card in a commercial transaction, she intends to provide that data to the merchant only ... and certainly does not intend ... the merchant to allow unauthorized third parties to access that data." (citation and punctuation omitted)); Irwin v. RBS Worldpay, Inc. , 2010 WL 11570892, at *6-7 (III) (C) (3) (N. D. Ga. 2010) (plaintiff sufficiently stated claim for breach of implied contract claim based on allegations that he would not have provided his personal financial information without defendant's implied agreement to protect it). We accept the Clinic's concession, and therefore reverse the dismissal of this claim, and remand it for further proceedings.

2. Unjust enrichment.

[A] claim for unjust enrichment exists where a plaintiff asserts that the defendant induced or encouraged the plaintiff to provide something of value to the defendant; that the plaintiff provided a benefit to the defendant with the expectation that the defendant would be responsible for the cost thereof; and that the defendant knew of the benefit being bestowed upon it by the plaintiff and either affirmatively chose to accept the benefit or failed to reject it.

Campbell v. Ailion , 338 Ga. App. 382, 387 (2), 790 S.E.2d 68 (2016).

"Unjust enrichment is an equitable principle that may be applied when there is no valid written contract between the parties[.]"⁴ (Citation omitted.) Ga. Dept. of Community Health v. Data Inquiry , 313 Ga. App. 683, 687 (2), 722 S.E.2d 403 (2012). In other words, if there was no express or implied contract, the plaintiffs can bring a claim for unjust enrichment. See Watson v. Sierra Contracting Corp. , 226 Ga. App. 21, 28 (c), 485 S.E.2d 563 (1997) (physical precedent only). Importantly, however, the plaintiffs in this case "did not plead unjust enrichment as an alternate theory of recovery based on a failed contract." 347 Ga. App. at 22 (2) (e), 815 S.E.2d 639. Instead, they pled it as a separate tort seeking damages in the form of credit monitoring and a credit freeze in addition to restitution of payments made for security services.⁵ As such, the plaintiffs have alleged unjust enrichment as a separate and distinct cause of action and not as an alternate remedy for a failed contract.⁶ Therefore, this claim fails as a matter of law. See Cash v. LG Electronics, Inc. , 342 Ga. App. 735, 742 (2), 804 S.E.2d 713 (2017) ; Tolson Firm, LLC v. Sistrunk , 338 Ga. App. 25, 31 (4), 789 S.E.2d 265 (2016) ; Wachovia Ins. Svcs. v. Fallon , 299 Ga. App. 440, 449 (6), 682 S.E.2d 657 (2009) ; Tidikis v. Network for Med. Communications & Research, LLC , 274 Ga. App. 807, 810-811 (2), 619 S.E.2d 481 (2005). The Supreme Court's analysis does not dictate we reach a different result with respect to this claim, and the trial court properly dismissed it. See Shadix v. Carroll County , 274 Ga. 560, 562-563 (1), 554 S.E.2d 465 (2001) ; see also Schroeder v. Dekalb County , 350 Ga. App. 82, 82-83, 828 S.E.2d 108 (2019) ; Jordan v. Everson , 345 Ga. App. 509, 511, 813 S.E.2d 600 (2018).

3. UDTPA.

"A person likely to be damaged by a deceptive trade practice of another may be granted an injunction against it under the principles of equity and on terms that the court considers reasonable. Proof of monetary damage, loss of profits, or intent to deceive is not required." OCGA § 10-1-373 (a). The UDTPA offers only injunctive relief where the plaintiff has established a likelihood of future damage, but it does not address past harm. Catrett v. Landmark Dodge, Inc. , 253 Ga. App. 639, 644 (3), 560 S.E.2d 101 (2002) ; Moore-Davis Motors, Inc. v. Joyner , 252 Ga. App. 617, 619 (3), 556 S.E.2d 137 (2001). Thus, to state a claim and to establish standing under the UDTPA, the plaintiffs must allege that they are likely to be damaged in the future by an unfair trade practice.⁷ See OCGA § 10-1-373 (a) ; Friedlander v. HMS-Pep Products, Inc. , 226 Ga. App. 123, 124-125 (1) (a), 485 S.E.2d 240 (1997).

In their complaint, the plaintiffs alleged that the Clinic engaged "in the unconscionable, deceptive, or unfair acts or practices ... [by] breaching duties [the Clinic] owes ..., by failing to provide fair, reasonable, or adequate computer systems and data security practices"; that the Clinic did so knowing it was likely to mislead patients who were acting reasonably under the circumstances; that the Clinic knew or should have known that it kept its lack of adequate safeguards from its patients; and that they would not have obtained care at the Clinic had they known.

Pretermitting whether the plaintiffs have alleged an "unfair trade practice" under the statute, an injunction would serve no purpose at this point because, as alleged, their personal information was already sold and is available on the dark web. As such, the plaintiffs have failed to allege a future harm caused by the unfair practice, as required by the UDTPA, and the trial court properly dismissed this claim. See Catrett , 253 Ga. App. at 644 (3), 560 S.E.2d 101 ; see also Willingham v. Global Payments, Inc. , 2013 WL 440702, *16 (III) (C) (1) (N. D. Ga. 2013).

4. Declaratory judgment.

[A] declaratory judgment may not be granted in the absence of a justiciable controversy. The plaintiff must show facts or circumstances whereby it is in a position of uncertainty

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