Goddard v. Protective Life Corp.

• Citation: 82 F.Supp.2d 545
• Decision Date: 10 February 2000
• Docket Number: No. Civ.A. 2:99CV735.,Civ.A. 2:99CV735.
• Court: U.S. District Court — Eastern District of Virginia
• Parties: Johnnie GODDARD, and Sarah Goddard, Plaintiffs, v. PROTECTIVE LIFE CORPORATION, Dr. William Feist, Medical Director, and LabOne, Inc., Defendants.

82 F.Supp.2d 545

Johnnie GODDARD, and Sarah Goddard, Plaintiffs, v. PROTECTIVE LIFE CORPORATION, Dr. William Feist, Medical Director, and LabOne, Inc., Defendants.

No. Civ.A. 2:99CV735.

United States District Court, E.D. Virginia, Norfolk Division.

February 10, 2000.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Lanis L. Karnes, Karnes Legal Services, P.C., Virginia Beach, VA, for plaintiffs.

John Y. Pearson, Jr., Daniel T. Campbell, Willcox & Savage, P.C., Norfolk, VA, for defendants Protective Life Corp. & Dr. William F. Feist.

Albert H. Poole, Huff, Poole & Mahoney, P.C., Virginia Beach, VA, Joseph C. Benage, Morrison & Hecker, L.L.P., Kansas City, MO, for defendant LabOne, Inc.

OPINION AND FINAL ORDER

REBECCA BEACH SMITH, District Judge.

The present matter is before the court on motion for summary judgment by defendants LabOne, Protective Life Corporation, and Dr. William Feist. For the reasons set forth below, the court GRANTS summary judgment as to all defendants.

I. Factual and Procedural History

Plaintiffs, Johnnie and Sarah Goddard, filed a suit in state court, which was removed to this court, pursuant to 28 U.S.C. § 1441, on the basis of diversity jurisdiction. The suit claims damages stemming from an indeterminate Human Immunodeficiency Virus ("HIV") test performed by LabOne on a sample of Mr. Goddard's blood in December, 1997, on behalf of Protective Life Corporation ("Protective"). LabOne, an independent laboratory, performed the HIV test pursuant to a contract with Protective to analyze the medical status of insurance applicants for purposes of determining insurability as part of the underwriting process.

In December, 1997, Mr. Goddard consulted his insurance agent, seeking to increase an existing life insurance policy with Protective. The agent wrote the policy, but ordered that blood and urine samples be taken and analyzed, in accordance with standard procedure, prior to issuing coverage. In connection with, and prior to, this testing, the Goddards signed several forms, including a "Notice and Consent Form for AIDS Virus (HIV) Testing," which authorized the release of test results to, among others, the proposed insured, a licensed physician designated by the proposed insured, and an insurance medical information exchange using nonspecific codes designed to ensure confidentiality. The plaintiffs also signed an "Authorization to Obtain and Disclose Information," which authorized Protective to draw and test the blood and urine samples, to obtain and use any medical information relating to insurability, and to release this information to the Medical Information Bureau ("MIB") using non-specific codes.¹

On December 8, 1997, paramedics from American Para Professional Systems Para Medical Services ("APPS"), an independent contractor,² arrived at the Goddard home and withdrew the samples for testing. These samples were then delivered to, and tested by, LabOne. LabOne performed three dried blood Ezyme-Linked Immunosorbent Assay ("ELISA") tests and one Western Blot Banding Pattern test ("Western Blot test") on the samples. The Western Blot test indicated reactivity in the P24 band and no others. In accordance with Center for Disease Control ("CDC") interpretation criteria, the results were interpreted as indeterminate for HIV.

LabOne reported the indeterminate result to William Feist, M.D., Medical Director of Protective Life Corporation. Dr. Feist notified the Goddards, by certified letter, that the tests had shown some abnormal findings, which might require further clinical evaluation through their personal physician, and that Protective would be unable to insure Mr. Goddard at that time. Protective then reported to the MIB a non-specific code to alert other insurance companies that Mr. Goddard may have a blood disorder of some type.

Concerned by the reference to abnormal findings in the certified letter, Mrs. Goddard contacted Dr. Feist on January 12, 1998, to inquire as to the specific results referred to in the letter. Dr. Feist explained that he could not discuss any results over the telephone; however, at his suggestion, Mr. and Mrs. Goddard scheduled an appointment with their personal physician, Kenneth W. Putland, M.D., that same day. Dr. Putland spoke with Dr. Feist via telephone and had the indeterminate results faxed from Protective to his office.

Dr. Putland stated during his deposition that he did not recall the specifics of the conversation with Dr. Feist. (Putland Dep. at 9, 25). Dr. Putland did state, however, that he knew how to interpret the results, that he was fully aware that the results were indeterminate rather than positive, and that he told the Goddards there was no particular cause for alarm. (Putland Dep. at 9-10; 25-26). The Goddards dispute this testimony and contend that Dr. Putland, in fact, told them that Dr. Feist had indicated during this telephone conversation that the tests performed on behalf of Protective showed that Mr. Goddard was HIV positive. (Sara Goddard Dep. at 18-20; Johnnie Goddard Dep. at 27-30).

A repeat test was performed by Dr. Putland during the office visit on January 12, 1998, and a negative result was returned just two days later. Two subsequent tests were also performed. One test was performed by Osborne Laboratories on March 25, 1998, at the direction of a second personal physician consulted by Mr. Goddard. The final test was performed by Sentara Laboratory Services on behalf of Interstate Insurance Company on May 4, 1990, as part of an insurance underwriting decision.³ Both of these subsequent tests were also negative.

After receiving these negative results, the Goddards contacted their insurance agent seeking to have Protective reconsider coverage. Protective was unwilling to reconsider until Mr. Goddard was retested six months from the initial indeterminate result.⁴

The Goddards also contacted the MIB by letter dated May 27, 1998, seeking to have the non-specific code removed from Mr. Goddard's file. Upon receiving a written request from the Goddards, the MIB notified Protective on July 9, 1998, that the Goddards were disputing the accuracy of the non-specific code that Dr. Feist had reported in January, 1998. Protective then contacted the Goddards for written verification of the subsequent negative results. Immediately after receiving these results, on July 23, 1998, Dr. Feist wrote the MIB confirming that Mr. Goddard's indeterminate status had been subsequently determined to be negative. The MIB, consequently, removed the non-specific code from Mr. Goddard's file.

Mr. and Mrs. Goddard then filed the current action. Plaintiffs seek recovery from LabOne, Protective, and Dr. Feist for negligence,⁵ breach of an implied warranty to use reasonable skill and care in the performance of a service contract, and intentional infliction of emotional distress. Plaintiffs also seek recovery from Protective and Dr. Feist for defamation arising from the publication of the non-specific code with the MIB.

Alleging that the defendants' actions caused plaintiffs to endure the mistaken belief that Mr. Goddard was HIV positive, plaintiffs seek compensatory damages from each defendant, jointly and severally, for emotional damages, the added expense of living separate and apart consequent to marital strife caused by this mistaken belief, and medical expenses incurred to alleviate the stress-induced symptoms suffered by plaintiffs as a result of this mistaken belief. Plaintiffs also seek punitive damages in the amount of $500,000. All three defendants have moved for summary judgment on all counts of the complaint.

II. Standard of Review

Under Federal Rule of Civil Procedure 56, summary judgment is improper unless, viewing the record as a whole and in the light most favorable to the nonmoving party, there is no genuine issue as to any material fact, and the moving party is entitled to judgment as a matter of law. See Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-50, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Terry's Floor Fashions, Inc. v. Burlington Indus., 763 F.2d 604, 610 (4th Cir.1985). A party resisting summary judgment may not rest on the mere pleadings alone, but instead must show that specific material facts exist that give rise to a genuine triable issue. See Fed. R.Civ.P. 56(e); Celotex, 477 U.S. at 322-24, 106 S.Ct. 2548; In re McNallen, 62 F.3d 619, 623 (4th Cir.1995). A mere "scintilla of evidence" is not sufficient to withstand a motion for summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Rather, the evidence must be such that a jury could reasonably find for the nonmoving party. See id.

III. Analysis

A. Negligence

Count I of plaintiffs' complaint asserts four separate theories of negligence against the defendants in the present action: (1) Dr. Feist and Protective were negligent in refusing to retest and reconsider Mr. Goddard upon learning of the subsequent negative results and receiving the plaintiffs' request for retesting; (2) Dr. Feist and Protective negligently stated in the certified letter denying coverage that Mr. Goddard's tests showed some "abnormal" findings; (3) Dr. Feist and Protective negligently communicated to plaintiffs' personal physician, Dr. Putland, that Mr. Goddard was HIV positive; and (4) APPS and LabOne negligently collected and tested the samples, and all defendants are liable for this negligence, either directly or as agents for the negligent parties.

In order to establish a cause of action for negligence, plaintiffs must establish (1) the existence of a legal duty; (2) breach of that duty; (3) proximate causation; and (4) compensable damages. See Fox v. Custis, 236 Va. 69, 73, 372 S.E.2d 373 (1988). Upon consideration of the record, the court finds that plaintiffs have failed to come forward with the facts legally necessary to satisfy these...