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Hermanson v. Multi-Care Health System, Inc.

Court of Appeals of Washington, Division 2

August 27, 2019

DOUG HERMANSON, an individual, Respondent/Cross Appellant,
v.
MULTI-CARE HEALTH SYSTEM, INC., a Washington Corporation d/b/a TACOMA GENERAL HOSPITAL, JANE and JOHN DOES 1-10 and their marital communities comprised thereof, Appellant/Cross Respondent.

          Worswick, J.

         This case presents two questions of controlling law. First, does the corporate attorney-client privilege apply to a nonparty physician who is an agent, but not an employee, of a hospital? And second, does the corporate attorney-client privilege apply to nonphysician employees of a hospital who are parties to the lawsuit? We answer the first question in the negative, and the second question in the affirmative.

         During the course of a discovery dispute, the superior court issued an order that (1) prohibited MultiCare Health System Inc.'s counsel from having ex parte, privileged communications with a physician who is an admitted agent of MultiCare but not an employee; (2) prohibited MultiCare's counsel from having ex parte, privileged communications with a social worker employed by MultiCare; (3) allowed ex parte, privileged communications with nurses employed by MultiCare; and (4) required MultiCare to seek leave of court prior to having ex parte communications with any other "MultiCare healthcare providers."

         We affirm the superior court's order to the extent that it (1) prohibited ex parte privileged communications with the physician, and (2) allowed ex parte privileged communications with the nurses. We reverse the superior court's order to the extent that it (3) prohibited ex parte privileged communications with the social worker, and (4) required MultiCare to seek leave of court prior to having ex parte communications with any other MultiCare healthcare providers.

         FACTS

         A. The Incident

         Doug Hermanson, while speeding in his pickup truck, sideswiped a parked vehicle, crossed the center line, and collided head on with a power pole. Hermanson's head penetrated the windshield. He was transported to Tacoma General Hospital, where he was treated by a trauma team for his injuries. Relevant here, Hermanson received treatment from:

(1) Dr. David Patterson, a Trauma Trust employee, and admitted agent of MultiCare;
(2) Nurse Pauleen Wheeler, a MultiCare employee;
(3) Nurse Carla Defibaugh, a MultiCare employee; and
(4) Clinical social worker, Lori Van Slyke, a MultiCare employee.

         Hermanson was given a blood alcohol screen. He had a "high [blood alcohol level] on admission," but he denied consuming alcohol. Clerk's Papers (CP) at 88. The blood alcohol screen indicated a blood alcohol level of 330 mg/dL.

         Law enforcement went to Tacoma General as part of the accident investigation. At some point, a healthcare provider allegedly disclosed Hermanson's blood alcohol level to law enforcement. At the hospital, Hermanson was issued a citation for first degree negligent driving. Hermanson was later charged with first degree negligent driving, and hit and run of an unattended vehicle.

         B. MultiCare and Trauma Trust Background

         MultiCare, a nonprofit corporation, operates Tacoma General. MultiCare, CHI Franciscan Health Systems, Madigan Army Medical Center, and Pierce County Medical Society formed Trauma Trust, a nonprofit corporation, to provide trauma services. Trauma Trust was created to address the lack of adult trauma services being offered in the area and to share the risk and resources of providing those services.

         Trauma Trust employs physicians and other professionals to deliver trauma services. Trauma Trust employee physicians have privileges at each participating hospital, including Tacoma General. As it pertains to services provided at MultiCare facilities, Trauma Trust's employees are agents of MultiCare, and MultiCare is responsible for any care they deliver within the scope of their duties providing trauma services.

         Trauma Trust is closely affiliated with MultiCare. The administrative offices for Trauma Trust are located within Tacoma General, and MultiCare provides billing and technical support to Trauma Trust. Dr. Patterson has an office at Tacoma General.

         C. Procedural Background

         Based on the disclosure of Hermanson's blood alcohol level, Hermanson sued MultiCare, and Jane and John Does 1-10, identified as individuals employed by MultiCare, for negligence, defamation, false imprisonment, and violation of physician-patient privilege under RCW 5.60.060(4).[1] Hermanson did not allege personal injuries or other medical malpractice. Hermanson's complaint did not name either Trauma Trust or Dr. Patterson.[2]

         A single law firm was retained to represent MultiCare, Dr. Patterson, and Trauma Trust in connection with Hermanson's lawsuit. Although Trauma Trust was not named in the lawsuit, Trauma Trust retained counsel because Hermanson's "demand letter clearly implicated the Emergency Department at Tacoma General Hospital and trauma services." CP at 543. Additionally, MultiCare recognized that Dr. Patterson was an agent of MultiCare in providing care to Hermanson. Trauma Trust, Dr. Patterson, and MultiCare signed a letter confirming joint representation.

         1. Protective Order

         During the initial stages of the lawsuit, MultiCare's counsel notified Hermanson that it represented MultiCare and its employee-social worker and employee-nurses, Trauma Trust, and Dr. Patterson. Hermanson objected to MultiCare's counsel representing the social worker, nurses, Trauma Trust, and Dr. Patterson.

         MultiCare sought a protective order "confirming the right of MultiCare's attorneys to have ex parte privileged communications" with its clients, including but not limited to Dr. Patterson, the nurses, and the social worker, who had direct knowledge of the alleged negligence at issue.[3]

         MultiCare argued that it was entitled to have communications with Dr. Patterson, the nurses, and the social worker based on corporate attorney-client privilege under Loudon v. Mhyre, [4] Upjohn Co. v. United States, [5] and Youngs v. PeaceHealth.[6] Specifically, it argued that its attorney-client privilege allowed ex parte privileged communications with MultiCare's agents who had firsthand knowledge of the alleged negligent event, namely Dr. Patterson, the social worker, and the nurses. MultiCare also argued that it was entitled to ex parte privileged communications with Dr. Patterson under the joint representation agreement.

         Hermanson[7] argued that counsel was prohibited from having ex parte privileged communication with Dr. Patterson under Loudon, and because he was not a MultiCare employee, Youngs did not apply. Hermanson further argued that counsel was prohibited from having ex parte privileged communication with the nurses under Youngs because they are not physicians. Further, Hermanson argued that because the nurses did not appear to have released Hermanson's healthcare information, they could not have firsthand knowledge of the alleged negligent event "unless MultiCare intends on certifying [they were] present when Dr. Patterson or [the social worker] disclosed plaintiffs health care information." CP at 66. Hermanson also argued that counsel was prohibited from having ex parte privileged communication with the social worker under Loudon and Wright v. Group Health[8]

         2. The Superior Court's Decision

         The superior court ruled that, under Youngs, ex parte privileged communication with Dr. Patterson was prohibited because he was not MultiCare's employee. With regard to the nurses, the court allowed ex parte privileged communication, noting:

[The] nurses who may have had contact with the injured individual in this case, even though they're not physicians, that would fall under the physician-patient purview that was before the Court with Youngs vs. PeaceHealth. These are employees of MultiCare Health System, it appears; and I think, in line with the reasoning given by the Court, they would fall under something that the Court did not have before it but very similar reasoning.

         Verbatim Report of Proceedings (VRP) (Aug. 11, 2017) at 25.

         And with regard to the social worker, the court prohibited ex parte privileged communications, saying:

I believe this individual is a social worker; and I don't believe [the social worker] falls under either the employee-physician or anything like a physician-patient analysis that the Court went through for the physicians, even though she is an employee of MultiCare; and, therefore, I don't believe Youngs vs. PeaceHealth, she falls under that privilege that can be afforded [the nurses]; and, therefore, that ex parte communication would be denied.

VRP (Aug. 11, 2017) at 25.

         The court entered an order granting in part and denying in part MultiCare's motion for protective order. The court's order also required MultiCare's counsel to seek leave of the court prior to ex parte communications with "other MultiCare healthcare providers." [9] CP at 136. MultiCare moved for reconsideration, which was denied.

         D. Discretionary Review

         The trial court certified for discretionary review the protective order and order denying MultiCare's motion for reconsideration. We granted MultiCare's motion for discretionary review under RAP 2.3(b)(4), [10] and considered Hermanson's response to the motion as a cross motion for discretionary review, which we also granted.

         ANALYSIS

         A. Legal Principles

         1. Standard of Review

         We review a superior court's discovery order for abuse of discretion. Richardson v. Gov't Emps. Ins. Co., 200 Wn.App. 705, 711, 403 P.3d 115 (2017), review denied, 190 Wn.2d 1008 (2018). A superior court abuses its discretion where the court's decision was manifestly unreasonable or made for untenable reasons. Richardson, 200 Wn.App. at 711. Further, a superior court abuses its discretion if its decision is based on the wrong legal standard, or on an improper understanding of the law. Richardson, 200 Wn.App. at 711. When a superior court's decision rests on a question of law, such as statutory interpretation or judicial decisions, we review the decision de novo. Fellows v. Moynihan, 175 Wn.2d 641, 649, 285 P.3d 864 (2012); Richardson, 200 Wn.App. at 711.

         2. Legal Background: Attorney-Client Privilege

         "The attorney-client privilege is the oldest of the privileges for confidential communications known to the common law." Upjohn Co. v. United States, 449 U.S. 383, 389, 101 S.Ct. 677, 682, 66 L.Ed.2d 584 (1981). The purpose of the privilege "is to encourage full and frank communication between attorneys and their clients," recognizing "that sound legal advice or advocacy serves public ends and that such advice or advocacy depends upon the lawyer's being fully informed by the client." Upjohn, 449 U.S. at 389.

         The attorney-client privilege is codified in Washington at RCW 5.60.060(2)(a), which provides: "An attorney or counselor shall not, without the consent of his or her client, be examined as to any communication made by the client to him or her, or his or her advice given thereon in the course of professional employment." To qualify for the privilege, communications must have been made in confidence and in the context of an ...


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