Puetz v. Spectrum Health Hosps.

Citation919 N.W.2d 439,324 Mich.App. 51
Decision Date24 April 2018
Docket NumberNo. 335329,335329
Parties Catherine PUETZ, MD, Plaintiff-Appellant, v. SPECTRUM HEALTH HOSPITALS and Kevin Splaine, Defendant-Appellees.
CourtCourt of Appeal of Michigan (US)

Burgess Sharp & Golden, PLLC (by Heidi T. Sharp and Joseph A. Golden ) and Heikens Law Firm (by Steven Heikens) for plaintiff.

Dykema Gossett, PLLC (by Steven S. Muhich and Mark J. Magyar ) for defendants.

Before: Markey, P.J., and M.J. Kelly and Cameron, JJ.

M. J. Kelly, J.

Plaintiff, Catherine Puetz, M.D., appeals by right the trial court order dismissing her complaint under MCR 2.116(C)(7) (statute of limitations) and MCR 2.116(C)(10) (no genuine issue of material fact). For the reasons stated in this opinion, we affirm in part and reverse in part.

I. BASIC FACTS

In 1999, Puetz took a job with Emergency Care Specialists (ECS), a physicians' group representing about 150 physicians and about 70 physician's assistants. ECS exclusively staffs its physicians at hospitals run by defendant, Spectrum Health Hospitals (Spectrum). Through her relationship with ECS, Puetz had admission privileges in emergency services and observation medicine at Spectrum. In addition, Spectrum appointed Puetz to serve as the associate medical director of observation medicine, the associate medical director for emergency and cardiovascular medicine, and the clinical advisor for pediatrics. In connection with her role at Spectrum, Puetz developed certain observation protocols, which she admitted were created for Spectrum's use and placed on Spectrum's intranet.

Because the observation program at Spectrum was considered a success, individuals and organizations outside of Spectrum and ECS were interested in it. As a result, in the summer of 2013, ECS and Puetz decided to prepare a pamphlet on observation medicine in an effort to start consulting on the subject. When Spectrum learned about the pamphlet, it instructed ECS that it had to work with Spectrum on any consulting or observation work. Further, a meeting was held on the pamphlet/consulting work in July 2013. At the meeting, Spectrum claimed ownership of the observation materials. A follow-up meeting was scheduled, but the meeting did not occur before Puetz was, essentially, prohibited from working at Spectrum in any capacity because of her comments on a Facebook page.

The record reflects that on August 5, 2013, a Spectrum nurse posted on a public Facebook page a photograph of the backside of an overweight woman and the caption: "Don't judge me. I like what I like." In response to the post, 12 Spectrum employees and 3 ECS employees commented on the photograph on Facebook. Relevant to this appeal, Puetz was the sixth person to comment, and she stated, "OMG is that [patient's initials]? You are soo naughty."

A Spectrum staff member saw the post on Facebook, was uncomfortable with the dialogue, and reported it to Spectrum. Defendant Kevin Splaine, Spectrum's president, testified that the decision was made to discipline those involved. Initially, Spectrum decided to remove Puetz from her administrative roles at the hospital. However, Splaine testified that as the investigation into the incident continued, he decided that additional discipline was warranted. According to Splaine, "anyone with whom we could prove was part of this dialogue knew that this was a patient, if they were an employee of Spectrum Health, they would be terminated. If they were contracting with Spectrum Health, the contract would be terminated. And if they were privileged at Spectrum Health, we would not allow them to practice at Spectrum Health Hospitals." The other individuals involved received a written reprimand. By August 19, 2013, Puetz was informed that she was being removed from both her "administrative leadership position and clinical" because of the Facebook incident.

On August 21, 2013, after making that decision, Splaine spoke at an ECS meeting. Ostensibly, Splaine spoke at the meeting because there was "a lot of angst and concern" about the decision to remove Puetz, and ECS wanted to hear Spectrum's side of it. Splaine apparently did not refer to Puetz by name at the meeting; however, he allegedly told everyone at the meeting that Puetz's comments on Facebook violated HIPAA.1 In addition, Splaine sent ECS a letter demanding that Puetz and another employee of ECS not be scheduled at any hospital owned by Spectrum. In the letter, Splaine referred to the conduct of Puetz and the other employee as reprehensible, unprofessional, and disturbing.

On March 14, 2014, Puetz filed a complaint in the United States District Court for the Western District of Michigan alleging defamation, false-light invasion of privacy, breach of contract, intellectual property ownership, and two counts of tortious interference with a business expectancy. Only Count IV, the intellectual-property-ownership claim, arguably fell within the federal court's original jurisdiction. After discovery closed, the federal district court sua sponte issued a show-cause order regarding subject-matter jurisdiction. Thereafter, the court determined that it lacked subject-matter jurisdiction over the intellectual-property claim and dismissed the entire complaint without prejudice.

Within 30 days of her federal complaint being dismissed, Puetz filed a claim in the Kent County Circuit Court. In response, Spectrum moved for summary disposition under MCR 2.116(C)(7) with regard to the defamation claim and for summary disposition under MCR 2.116(C)(10) for the remaining claims. Puetz also moved for partial summary disposition on the defamation claim, asserting that Splaine's comments were defamation per se, and she asked the court to rule as a matter of law that her comments on Facebook did not constitute a violation of HIPAA. After oral argument, the trial court entered a written opinion and order dismissing the defamation claim under MCR 2.116(C)(7) and dismissing the remaining claims under MCR 2.116(C)(10).

II. DISMISSAL UNDER MCR 2.116(C)(7)
A. STANDARD OF REVIEW

Puetz first argues that the trial court erred by dismissing her defamation claim under MCR 2.116(C)(7). Whether a trial court properly granted summary disposition on statute-of-limitations grounds is reviewed de novo. Barnard Mfg. Co., Inc. v. Gates Performance Engineering, Inc. , 285 Mich. App. 362, 369, 775 N.W.2d 618 (2009). "Summary disposition under MCR 2.116(C)(7) is appropriate when the undisputed facts establish that the plaintiff's claim is barred under the applicable statute of limitations." Kincaid v. Cardwell , 300 Mich. App. 513, 522, 834 N.W.2d 122 (2013). In addition, issues regarding the proper interpretation and application of statutes are reviewed de novo. Petersen v. Magna Corp. , 484 Mich. 300, 306, 773 N.W.2d 564 (2009) (opinion by KELLY , C.J.).

B. ANALYSIS

In Michigan, the period of limitations for a defamation claim is one year. MCL 600.5805(9). "A defamation claim accrues when ‘the wrong upon which the claim is based was done regardless of the time when damage results.’ " Mitan v. Campbell , 474 Mich. 21, 24, 706 N.W.2d 420 (2005), quoting MCL 600.5827. Here, the allegedly defamatory statements were made on August 21, 2013, and August 22, 2013. Puetz timely filed her complaint in federal court, but her federal complaint was dismissed for lack of subject-matter jurisdiction in June 2015. Puetz declined to appeal the dismissal from federal district court. Subsequently, on July 21, 2015, she filed suit in Michigan, again raising her defamation claim based on Splaine's August 21 and August 22, 2013 statements to ECS. Because her defamation claim was filed more than a year after her claim accrued, it is time-barred unless a tolling provision applies.2

In order to bring a state-law claim in federal court, a plaintiff must assert his or her claim under the supplemental jurisdiction statute, 28 USC 1367. Section 1367(a) provides:

Except as provided in subsections (b) and (c) or as expressly provided otherwise by Federal statute, in any civil action of which the district courts have original jurisdiction, the district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution. Such supplemental jurisdiction shall include claims that involve the joinder or intervention of additional parties. [Emphasis added.]

Therefore, before a federal court may exercise supplemental jurisdiction over a state-law claim, two requirements must be met. First, there must be a civil action over which the federal district court has original jurisdiction. Second, the state-law claim must be "so related" to the federal claim that it forms "part of the same case or controversy under Article III of the United States Constitution." Id. In this case, the federal district court concluded that Puetz's complaint failed to satisfy the first requirement, i.e., the federal district court lacked original jurisdiction over any of the claims raised in the complaint.3 Accordingly, because there was no claim over which the federal court had original jurisdiction, the court had no authority under § 1367(a) to exercise supplemental jurisdiction over Puetz's state-law claims.

The supplemental jurisdiction statute does not contain a provision expressly addressing what happens when a state-law claim is dismissed for lack of subject-matter jurisdiction under § 1367(a). Instead, "Subsection (b) places limits on supplemental jurisdiction when the district court's original jurisdiction is based only on diversity of citizenship jurisdiction...." Raygor v. Regents of Univ. of Minnesota , 534 U.S. 533, 540, 122 S.Ct. 999, 152 L.Ed.2d 27 (2002). "Subsection (c) allows district courts to decline to exercise supplemental jurisdiction in certain situations" that are not applicable under the facts in this...

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