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Dickerson v. Gynecological Associates Inc.

October 21, 1996


Appeal from Superior Court of King County. Docket No: 90-2-14759-2. Date filed: 12/24/92. Judge signing: Hon. Dale Ramerman.

Petition for Review Denied September 3, 1997,

Authored by Ronald E. Cox. Concurring: Faye C. Kennedy

The opinion of the court was delivered by: Cox

COX, J. - This is a wrongful discharge case in which the parties assert a number of claims and counterclaims. Dr. Ronald Margolis appeals from an adverse jury verdict. Lynn Dickerson cross-appeals. We affirm in part and reverse in part.

Dickerson was a receptionist and medical assistant for Dr. Margolis.

He worked under the corporate name of Gynecological Associates ("GA"). A large part of his practice involved performing abortions.

During her first year at GA, Dickerson received calls from patients indicating that GA was billing insurance companies for more than the patients were actually charged. When she confronted Dr. Margolis, he told her that the money was being returned, but instructed her that billing was to continue in the same manner.

In the spring of 1987, Dickerson became responsible for GA's billing and grew more suspicious about Dr. Margolis' billing practices. Among other things, she discovered that Dr. Margolis billed for procedures that were not performed and charged for more elaborate and expensive tests than were actually performed.

In the fall of 1988, Dickerson questioned Dr. Margolis about billings for hysteroscopy procedures that she did not believe were performed. But he instructed her to bill the insurance company so he could see how much it would pay for the procedure. He was adamant that she not discuss it with him further. Dr. Margolis fired Dickerson shortly thereafter. She was a few months pregnant at this time.

Dickerson then contacted the Attorney General's office and reported Dr. Margolis' fraudulent practices. She specifically identified a number of billing schemes that he used to defraud Medicaid and King County Medical. Michael Gregoire, an investigator in the Medicaid Fraud Control Unit ("MFCU") of the Attorney General's office, handled the complaint and began an investigation. In an attempt to assist in the investigation, Dickerson provided Gregoire with documentation of patient records and the billings. Dickerson obtained this information with the help of Catherine Danko and Anita Stevenson, both of whom were still employed at GA.

The investigation generally corroborated Dickerson's story. Thereafter, the MFCU obtained a warrant from a King County Superior Court Judge to search Dr. Margolis' office. The MFCU investigators executed the warrant in January 1990 and seized several patient files and records.

Dickerson, Danko, and Stevenson were all aware of the search warrant and the date it was to be executed. Danko was present when it was executed.

Donald Penrose, an investigator from the Department of Health, was also present and accompanied Gregoire. During the warrant execution, Penrose spoke briefly with Danko and observed evidence of unsanitary practices at GA.

Dickerson, Danko, and Stevenson then filed complaints with the Board of Osteopathic Medicine and Surgery (BOMS), alleging that Dr. Margolis engaged in unsanitary practices. Thereafter, the BOMS filed disciplinary charges against Dr. Margolis, alleging that he used outdated medications, reused disposable medical instruments without adequate sterilization, and charted tests that were not performed. The BOMS also entered an order summarily restricting Dr. Margolis' medical license.

The BOMS proceeding ultimately concluded with the BOMS' acceptance of an "assurance of discontinuance" by Dr. Margolis. Dr. Margolis agreed, among other things, not to reuse disposable medical instruments and to implement protocols for rotating medicines. As a result, the BOMS terminated all disciplinary proceedings and permitted Dr. Margolis to resume his medical practice.

The MFCU ultimately concluded its criminal investigation. Its attorneys began to prepare to file felony charges against Dr. Margolis.

Dr. Margolis then agreed that he would plead guilty to medical care false statement, a class C felony. He also agreed that his corporation would plead guilty to first degree theft, a class B felony, and pay restitution in the amount of $111,221. Dr. Margolis pleaded guilty before the superior court and was sentenced to 45 days in jail, based on the State's agreed recommendation.

In July 1990, Dickerson commenced an action against GA and Dr. Margolis for wrongful discharge. She alleged Dr. Margolis discharged her for questioning his fraudulent billing practices and because she was pregnant. Dickerson also claimed that Dr. Margolis engaged in a pattern of racketeering in violation of the Racketeer Influenced and Corrupt Organizations Act *fn1 ("RICO") and that these activities resulted in her termination.

Dr. Margolis counterclaimed against Dickerson and commenced a third party action against others. The trial court dismissed Dr. Margolis' counterclaim and third party claims on summary judgment.

Dickerson's wrongful discharge and RICO claims proceeded to jury trial. The jury returned a verdict in favor of Dr. Margolis on the wrongful discharge claim. The jury also found that Dr. Margolis had violated RICO but that Dickerson did not suffer any damages as a result of the violation.

Dickerson moved for a new trial and, in the alternative, JNOV on the RICO claim. The trial court denied the motion for a new trial. But it granted the motion for JNOV and entered judgment for Dickerson on the RICO claim in the amount of one dollar in nominal damages. The court also awarded Dickerson $100 in attorney fees for prevailing on the RICO claim.

Dr. Margolis appeals and Dickerson cross-appeals. Halprin, the attorney representing Dr. Margolis at trial, appealed an order revoking his pro hac vice status. That appeal was dismissed by order of this court and will not be addressed in this opinion.


Conspiracy Claims

Dr. Margolis contends that the trial court erred by granting summary judgments dismissing his counterclaim and third party claims for damages under 42 U.S.C. sec. 1983. We disagree.

Gregoire first urges us to decline to review this claimed error because Dr. Margolis did not properly assign error as required by RAP 10.3(a)(3). *fn2 This rule provides a basis for refusing to consider the merits of a case only "when an appellant fails to raise an issue in the assignments of error . . . and fails to present any argument on the issue or provide any legal citation." *fn3 As Gregoire notes, Dr. Margolis' assignment of error to the summary judgment ruling is somewhat broad, as is his argument on the issue. But Gregoire's arguments address the arguments made in Dr. Margolis' brief. Dr. Margolis also provides citation to legal authority, although minimal, in support of the arguments. We therefore exercise our discretion and reach the merits of the argument. *fn4 When reviewing a summary judgment, we engage in the same inquiry as the trial court. *fn5 We apply the standard of CR 56(c) after considering the facts and inferences therefrom most favorably toward the nonmoving party. We review questions of law de novo. *fn6 A trial court properly grants summary judgment under CR 56(c) if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.

An affidavit does not raise a genuine issue of fact unless its sets forth facts evidentiary in nature, that is, information as to what took place--an act, an incident, a reality--as distinguished from supposition or opinion. *fn7 Ultimate facts, Conclusions of facts, or conclusory statements of fact are insufficient to raise an issue of fact. *fn8 To recover damages under 42 U.S.C. sec. 1983, a plaintiff must prove that the defendant deprived him or her of a constitutional right while acting "'under color of law.'" *fn9 "'Private persons, jointly engaged with state officials in the prohibited action, are acting "under color" of law for purposes of the statute. . . .'" *fn10 To prove a conspiracy between the state and private parties under sec. 1983, a plaintiff must show "'an agreement or "meeting of the minds" to violate constitutional rights.'" *fn11 Dr. Margolis alleged that Dickerson, Danko, Stevenson, and Gregoire violated his Fourth and Fourteenth Amendment rights by conspiring to file false civil and criminal charges against him. Specifically, he alleged that they unlawfully obtained his patient files and participated in obtaining a search warrant based on false allegations. He further alleged that they conspired to plant evidence of unsterile practices at the time the warrant was executed and used this evidence as the basis for the BOMS disciplinary charges and the subsequent order restricting his license.

In ruling on the motion to dismiss the sec. 1983 claims, the trial court made several findings in support of its order. First, the trial court found: "If the admissible evidence presented in the affidavits . . . were all of the evidence presented to the jury, the court would have to dismiss the conspiracy claim. Accordingly, it must be dismissed now."

The court further found that Gregoire was entitled to limited immunity. The court found that there was insufficient evidence that Gregoire "had any hand in" copying or sending the charts and concluded:

"No clearly established right of Dr. Margolis was violated by this copying; the unlawfulness of what Gregoire did is not apparent." The court also found that there was probable cause for the issuance of the search warrant and that the search was therefore proper. The court further concluded that there was insufficient evidence for a jury to find that Gregoire knew or should have known that the allegedly false information in the warrant was false. Additionally, the court found that there was no evidence that Gregoire initiated or had any control over the BOMS proceedings. Thus, the court concluded, Gregoire "did not act to deprive Dr. Margolis of anything in connection with those proceedings."

The court's final order dismissed the sec. 1983 claims against Dickerson and all third party defendants. The court also granted summary judgment in favor of Dickerson, Danko, and Stevenson based on the defense of qualified immunity pursuant to RCW 4.24.510.

Dr. Margolis challenges the court's order on several grounds. First, he argues that the court erred by discrediting circumstantial evidence. Second, he argues that the facts before the court established his conspiracy claim. Third, he argues that the trial court erred by finding that Gregoire, Dickerson, Danko, and Stevenson were entitled to qualified immunity. Finally, he argues that because dismissal was improper, the court's award of attorney fees should be reversed. We reject all of these assertions.


Circumstantial Evidence

Dr. Margolis first argues that the trial court erred by discrediting circumstantial evidence. Dr. Margolis is correct that circumstantial evidence is as probative as direct evidence and that conspiracy can rarely be proved by direct evidence. *fn12 But he mischaracterizes the trial court's findings. While the court did find that Dr. Margolis presented no direct evidence of a conspiracy, the court also found that the circumstantial evidence did not support his claim.

Specifically, the court stated: "Defendants have produced no direct evidence that there was a conspiracy. Rather, defendants rely on circumstantial evidence, arguing that the jury could disbelieve the denials and find based on the circumstantial evidence that a conspiracy exists." As to Gregoire's role in the unlawful copying, the court found: "All of the direct ...

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