PHYSICIAN SPECIALISTS IN ANESTHESIA v. Wildmon

• Decision Date: 28 June 1999
• Docket Number: No. A99A0707., No. A99A0706
• Parties: PHYSICIAN SPECIALISTS IN ANESTHESIA, P.C. v. WILDMON et al. Wildmon v. Physician Specialists in Anesthesia, P.C.
• Court: Georgia Court of Appeals

521 S.E.2d 358

238 Ga. App. 730

PHYSICIAN SPECIALISTS IN ANESTHESIA, P.C. v. WILDMON et al.

Wildmon v. Physician Specialists in Anesthesia, P.C.

Nos. A99A0706, A99A0707.

Court of Appeals of Georgia.

June 28, 1999.

Decker & Hallman, Richard P. Decker, F. Edwin Hallman, Jr., Atlanta, for appellant.

Parker, Hudson, Rainer & Dobbs, John H. Parker, Jr., Leo E. Reichert, David L. Fenstermacher, Atlanta, for appellees.

BARNES, Judge.

This appeal and cross-appeal arise out of a lawsuit filed by Physician Specialists in Anesthesia, P.C. ("Physician Specialists") against its former employees Robert Wildmon and Shannyn Duddles. In its complaint, Physician Specialists alleges Wildmon and Duddles breached their duty of employee loyalty (Count 1) and their fiduciary duty (Count 2) by providing confidential information to a competing group of doctors while still employed by Physician Specialists. Wildmon and Duddles subsequently moved for summary judgment. The trial court granted complete summary judgment to Duddles and partial summary judgment to Wildmon. In Case No. A99A0706, Physician Specialists appeals the portion of the trial court's order granting summary judgment. In Case No. A99A0707, Wildmon appeals the partial denial of his motion for summary judgment. For reasons that follow, we affirm the trial court's grant of summary judgment and reverse its denial of complete summary judgment to Wildmon.

To prevail at summary judgment under OCGA § 9-11-56, the moving party must demonstrate that there is no genuine issue of material fact and that the undisputed facts, viewed in the light most favorable to the nonmoving party, warrant judgment as a matter of law. OCGA § 9-11-56(c). A defendant may do this by showing the court that the documents, affidavits, depositions and other evidence in the record reveal that there is no evidence sufficient to create a jury issue on at least one essential element of plaintiff's case.

(Emphasis in original.) Lau's Corp. v. Haskins, 261 Ga. 491, 405 S.E.2d 474 (1991). On appeal from a grant of summary judgment, this Court conducts a de novo review of the record, construing the evidence and all inferences therefrom in favor of the nonmoving party. Maddox v. Southern Engineering, 231 Ga.App. 802, 803, 500 S.E.2d 591 (1998); Lane v. Spragg, 224 Ga.App. 606, 481 S.E.2d 592 (1997).

Construed in this light, the record shows that Physician Specialists is a professional corporation with physician shareholders who specialize in the fields of anesthesia, critical care, and pain management. Physician Specialists in Pain Management, Inc. ("Pain Management") is a separate legal corporation formed by these physician shareholders and three non-shareholders "for various reasons, including separation of [Physician Specialists'] pain practice in furtherance of ... accounting considerations and for the collection of facility fees." At all relevant times, the physician shareholders of Physician Specialists were also shareholders of Pain Management, controlling the operations and management of Pain Management.

Duddles worked for Pain Management as its Assistant Practice Administrator from June 1, 1994, until she resigned on November 15, 1995, effective December 1, 1995. Although she was paid by Physician Specialists, Duddles worked exclusively for Pain Management pursuant to a "Contract Labor Agreement" between Physician Specialists and Pain Management. This Agreement required Pain Management to reimburse Physician Specialists for the cost of her salary and fringe benefits.

Duddles' responsibilities as Assistant Practice Administrator included managing the day-to-day operations of Pain Management, supervising front office personnel, and acting as a liaison between the nurses and the front office personnel. According to Physician Specialists' president, Duddles "also negotiated on behalf of [Physician Specialists] and [Pain Management] with managed care organizations." However, it is undisputed that Duddles did not have the authority to (1) enter into contracts on behalf of either Physician Specialists or Pain Management; (2) hire or fire personnel of either entity; or (3) sign checks or make payments on behalf of either entity.

Wildmon was employed by Physician Specialists from May 1993 until December 31, 1995. He was hired as a billing clerk and promoted to the position of Assistant Practice Administrator in the fall of 1993. When Physician Specialists terminated its Practice Administrator in September 1995, Wildmon acted as its Practice Administrator until he resigned on November 6, 1995, effective December 31, 1995.

Wildmon's responsibilities as Assistant Practice Administrator involved human resource and personnel issues, including physician expense accounts and health disbursement accounts. He also provided general assistance to the Practice Administrator. It is undisputed that during Wildmon's employment as Assistant Practice Administrator, he did not have the authority to (1) sign contracts on behalf of Physician Specialists, or (2) hire or fire employees of Physician Specialists.

The parties disagree about Wildmon's responsibilities and authority after he became the acting Practice Administrator in September 1995. Wildmon asserts he never had express authority to enter into contracts on behalf of Physician Specialists. In an OCGA § 9-11-30(b)(6) deposition, a corporate representative of Physician Specialists testified that Wildmon had authority to enter into contracts on its behalf after he became the acting Practice Administrator. There is no evidence in the record that Wildmon actually entered into contracts on Physician Specialists' behalf.

1. Physician Specialists contends the trial court erred by concluding Wildmon owed no fiduciary duty while he was employed as Assistant Practice Administrator and that Duddles owed no fiduciary duty whatsoever.

In Atlanta Market Center Mgmt. Co. v. McLane, 269 Ga. 604, 606(1), 503 S.E.2d 278 (1998), the Supreme Court held that fiduciary duties are owed by those in confidential relationships as defined by OCGA § 23-2-58. This Code section provides:

Any relationship shall be deemed confidential, whether arising from nature, created by law, or resulting from contracts, where one party is so situated as to exercise a controlling influence over the will, conduct, and interest of another or where, from a similar relationship of mutual confidence, the law requires the utmost good faith, such as the relationship between partners, principal and agent, etc.

OCGA § 23-2-58.

Physician Specialists asserts a question of fact remains as to whether Wildmon and Duddles were its agents and therefore owed a fiduciary duty to it, their principal. It also asserts a confidential relationship existed between itself and the defendants because they could exercise control over its will or conduct.

(a) OCGA § 10-6-1 explains that "[t]he relation of principal and agent arises wherever one person, expressly or by implication, authorizes another to act for him or subsequently ratifies the acts of another in his behalf." Although an employee may at times act on behalf of his employer, an employer-employee relationship does not typically create a principal-agent relationship. See Cochran v. Murrah, 235 Ga. 304, 307, 219 S.E.2d 421 (1975); Atlanta Market, supra, 269 Ga. at 607, 503 S.E.2d 278. The distinguishing characteristic of an agent is that "[h]e is vested with authority, real or ostensible, to create obligations on behalf of his principal, bringing third parties into contractual relations with him." Southeastern Fidelity Ins. Co. v. Heard, 123 Ga.App. 635, 639(3)(b), 182 S.E.2d 153 (1971). See also Atlanta Market, supra, 269 Ga. at 606, 503 S.E.2d 278. Thus, in Atlanta Market, the Supreme Court held that the trial court properly granted summary judgment to a defendant on the plaintiff's breach of fiduciary duty claims because there was no evidence that the parties could create obligations on each other's behalf. Id. at 606-607, 503 S.E.2d 278.

In this case, there is no evidence in the record showing that Duddles could create obligations on behalf of Physician Specialists or bring third parties into contractual relations with it. Likewise, no evidence in the record shows Wildmon could do the same when he was employed as its Assistant Practice Administrator.

Physician Specialists asserts the following statement in the affidavit of Physician Specialists' president, Dr. Sween, nonetheless creates an issue of fact on the agency issue:

[Duddles] and Wildmon were employed by [Physician Specialists] in high-level, well-paid positions as Assistant Practice Administrators with total and unrestricted access to virtually all corporate records and files of [Physician Specialists] and were agents of [Physician Specialists].

(Emphasis supplied.) Relying upon Commercial Union Ins. v. Taylor, 169 Ga.App. 177, 180(3), 312 S.E.2d 177 (1983), Physician Specialists argues that Dr. Sween's declaration that Duddles and Wildmon "were agents" is a statement of fact that creates a genuine issue as to whether they were its agents. We disagree.

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