Title: Charles Johnson v. Rogers Memorial Hospital, Inc.

State: wisconsin

Issuer: Wisconsin Supreme Court

Document:

2001 WI 68 
 
SUPREME COURT OF WISCONSIN 
 
 
Case No.: 
98-0445 
 
 
Complete Title 
of Case: 
 
Charles Johnson and Karen Johnson,  
 
Plaintiffs-Appellants-Petitioners, 
 
v. 
Rogers Memorial Hospital, Inc., Heartland 
Counseling Services,  
 
Defendants-Respondents, 
South Street Clinic,  
 
Defendant, 
Kay Phillips, Ph.D., Jeff Hollowell and Tim 
Reisenauer,  
 
Defendants-Respondents, 
ABC Insurance Company, DEF Insurance Company, 
GHI Insurance Company, JKL Insurance Company, 
MNO Insurance Company, and PQR Insurance 
Company,  
 
Defendants, 
Wisconsin Patients Compensation Fund,  
 
Defendant-Respondent.  
 
 
REVIEW OF A DECISION OF THE COURT OF APPEALS 
2000 WI App 166 
Reported at:  238 Wis. 2d 227, 616 N.W.2d 903 
(Published) 
 
 
Opinion Filed: 
June 19, 2001 
Submitted on Briefs: 
      
Oral Argument: 
April 6, 2001 
 
 
Source of APPEAL 
 
COURT: 
Circuit 
 
COUNTY: 
Dane 
 
JUDGE: 
Daniel R. Moeser 
 
 
JUSTICES: 
 
Concurred: 
      
 
Dissented: 
      
 
Not Participating:       
 
 
 
2 
 
ATTORNEYS: 
For plaintiffs-appellants-petitioners there were 
briefs by William Smoler and Smoler Law Office, LLC, Madison, and 
Gregory P. Seibold and Murphy & Desmond, S.C., Madison, and oral 
argument by William Smoler and Gregory P. Seibold. 
 
 
For defendant-respondent, Rogers Memorial 
Hospital, Inc., there was a brief by Lori Gendelman, Jeffrey J.P. 
Conta and Otjen, Van Ert, Lieb & Weir, S.C., Milwaukee, and oral 
argument by Lori Gendelman. 
 
 
For defendant-respondent, Kay Phillips, Ph.D., 
there was a brief by David E. McFarlane and Bell, Gierhart & 
Moore, S.C., Madison, and oral argument by David E. McFarlane. 
 
 
For defendants-respondents, Jeff Hollowell and 
Tim Reisenauer, there was a brief by Bradway A. Liddle, Jr., 
Mario D. Mendoza and Boardman, Suhr, Curry & Field, LLP, Madison, 
and oral argument by Mario D. Mendoza. 
 
2001 WI 68 
 
NOTICE 
This opinion is subject to further editing and 
modification.  The final version will appear 
in the bound volume of the official reports. 
 
 
No.  98-0445 
 
STATE OF WISCONSIN                    :  
  IN SUPREME COURT 
 
 
Charles Johnson and Karen Johnson, 
 
 
Plaintiffs-Appellants-Petitioners, 
 
 
v. 
 
Rogers Memorial Hospital, Inc., Heartland 
Counseling Services,  
 
 
Defendants-Respondents, 
 
South Street Clinic,  
 
 
Defendant, 
 
Kay Phillips, Ph.D., Jeff Hollowell and 
Tim Reisenauer, 
 
Defendants-Respondents, 
 
ABC Insurance Company, DEF Insurance 
Company, GHI Insurance Company, JKL 
Insurance Company, MNO Insurance Company 
and PQR Insurance Company, 
 
Defendants, 
 
Wisconsin Patients Compensation Fund, 
 
 
Defendant-Respondent. 
 
 
REVIEW of a decision of the Court of Appeals.  Reversed and 
cause remanded. 
FILED 
 
JUN 19, 2001 
 
Cornelia G. Clark 
Clerk of Supreme Court 
Madison, WI 
 
 
 
 
 
No. 
98-0445 
 
 
2 
 
¶1 
WILLIAM A. BABLITCH, J.   Charles and Karen Johnson 
(Johnsons) seek review of two determinations by the court of 
appeals relating to their claims for personal injuries resulting 
from the alleged negligent treatment of their adult daughter, 
Charlotte, by various therapists and a hospital.  The court 
first determined that the Johnsons' claims of negligence and 
negligent 
infliction 
of 
emotional 
distress 
against 
three 
therapists for implanting false memories of sexual and physical 
abuse in their child must be dismissed based on public policy 
concerns 
of 
confidentiality 
in 
the 
therapist-patient 
relationship.  Second, the court concluded that the Johnsons' 
breach of contract claim against the hospital must also be 
dismissed based on the same public policy concerns.  The 
Johnsons contend that these determinations were based on an 
insufficient factual record.  We agree.  Further development of 
the factual record is necessary before a decision can be made on 
these issues.  We also review and reject the hospital's 
arguments that the Johnsons lack standing to sue the hospital 
and that their claim against the hospital is barred by the 
statute of limitations.  Accordingly, we reverse the court of 
appeals' decision and remand for further proceedings. 
I 
¶2 
On May 29, 1996, the Johnsons filed a complaint 
against the defendants, alleging the following facts.  Beginning 
in 
the 
late 
summer 
or 
fall 
of 
1991, 
Charlotte 
began 
psychotherapy treatment with defendant Kay Phillips (Phillips) 
No. 
98-0445 
 
 
3 
and 
defendant 
Heartland 
Counseling 
Services. 
 
Shortly 
thereafter, Phillips referred Charlotte to defendant Rogers 
Memorial Hospital (RMH) for treatment in specialty programs that 
focused on eating disorders, addictive disorders, and sexual and 
physical abuse issues.  Charlotte was admitted to RMH as an 
inpatient in early November 1991.  The Johnsons entered into a 
financial agreement with RMH in which they agreed to pay for 
this inpatient care. 
¶3 
At RMH, Charlotte received treatment from defendants 
Jeff Hollowell (Hollowell) and Tim Reisenauer (Reisenauer).  
During this treatment, Charlotte developed the belief that her 
parents had sexually and physically abused her as a young child. 
 Charlotte remained as an inpatient at RMH until November 29, 
1991, but continued to receive treatment from Hollowell and 
Reisenauer after that time as an outpatient.  She confronted her 
father about this abuse on November 22, 1991, and confronted her 
mother on October 28, 1993.  Both confrontations occurred during 
meetings where Charlotte's therapists were present, although it 
is unclear who was present, including which therapists. 
¶4 
The 
Johnsons 
denied 
that 
such 
abuse 
occurred.  
Nevertheless, Charlotte terminated her relationship with her 
parents.  The Johnsons were unsuccessful in reestablishing any 
relationship with her.  Charlotte continues to believe that her 
parents abused her.  
¶5 
In their complaint, the Johnsons alleged three primary 
causes of action.  First, they alleged negligence against 
Phillips, Hollowell, and Reisenauer (therapists) for their 
No. 
98-0445 
 
 
4 
treatment of Charlotte.  They claimed that the treatment 
provided by the therapists resulted in Charlotte's false beliefs 
that she had been abused and that their continued treatment of 
Charlotte reinforced these false beliefs.  The Johnsons also 
contended that the therapists failed or refused to counsel 
Charlotte to determine the validity of these memories despite 
being informed by the Johnsons that these beliefs were false.  
Under this cause of action, they sought the following damages:  
past and future mental and emotional pain and suffering, past 
and future loss of enjoyment of life, loss of the relationship 
of Charlotte, and loss of funds paid for the negligent 
treatment. 
¶6 
A second cause of action alleged negligent infliction 
of emotional distress against the therapists.  Within this 
claim, the Johnsons asserted that the therapists' negligent 
treatment 
of 
Charlotte, 
which 
included 
the 
confrontation 
meetings, caused them to suffer severe emotional damages.  
¶7 
A third cause of action alleged a breach of contract 
against RMH for failing to provide appropriate treatment to 
Charlotte pursuant to its financial agreement with the Johnsons. 
 The Johnsons sought the following damages under this cause of 
action:  emotional pain and suffering, past and future loss of 
enjoyment of life, loss of the relationship with Charlotte, and 
loss of payments made for inpatient care. 
¶8 
The complaint also alleged that RMH was liable for the 
conduct of Hollowell and Reisenauer under an ostensible agency 
theory.  The Johnsons also sought recovery from various unnamed 
No. 
98-0445 
 
 
5 
insurance companies for coverage provided to the defendants and 
from the Wisconsin Patients Compensation Fund for coverage 
provided to RMH.   
¶9 
The defendants answered and denied the allegations.  A 
series of motions to dismiss followed.  In her motion, Phillips 
argued that the complaint failed to state a claim upon which 
relief could be granted and that the applicable statute of 
limitations 
barred 
the 
claim. 
 
Hollowell 
and 
Reisenauer 
presented similar arguments in a separate motion.  In its 
motion, RMH alleged a failure to state a claim, a failure to 
comply with the statute of limitations, and a lack of standing 
to sue under Wis. Stat. Ch. 655 (1997-98).1  RMH's motion also 
sought summary judgment in the alternative.2 
¶10 The Dane County Circuit Court, the Honorable Daniel R. 
Moeser, dismissed the complaint.3  The court concluded that the 
claims against the therapists failed to state claims upon which 
relief could be granted and that the claims against RMH required 
dismissal because the Johnsons did not have standing to sue RMH. 
                     
1 All subsequent references to the Wisconsin Statutes are to 
the 1997-98 version unless otherwise indicated. 
2 Although not filing a separate motion to dismiss, 
Wisconsin Patients Compensation Fund joined the arguments of the 
movants.  South Street Clinic was dismissed prior to the circuit 
court's decision on these motions. 
3 RMH contends that, because it moved for summary judgment, 
we may review this case under summary judgment standards.  
However, because the circuit court decided this case as a motion 
to dismiss based solely on the pleadings, we address the 
defendants' motions in a similar manner.  
No. 
98-0445 
 
 
6 
 The court also noted that the Johnsons' claims against RMH were 
barred by the statute of limitations.  
¶11 The Johnsons appealed.  While their appeal was 
pending, we decided Sawyer v. Midelfort, 227 Wis. 2d 124, 595 
N.W.2d 423 (1999).  Sawyer directly addressed an issue central 
to the Johnsons' case, that is, whether the parents of an adult 
child can maintain a third-party professional negligence claim 
against a therapist when the therapist's treatment resulted in 
the implanting of alleged false memories of abuse in the child. 
 Id. at 129, 136.  Applying public policy concerns from Schuster 
v. Altenberg, 144 Wis. 2d 223, 424 N.W.2d 159 (1988), as well as 
collateral burdens to a therapist-patient relationship that are 
presented by such claims, we concluded that the Sawyers' claim 
was not prohibited by such policy concerns.  Sawyer, 227 Wis. 2d 
at 142-151.   
¶12 After our decision in Sawyer, the court of appeals 
affirmed the circuit court's decision to dismiss the Johnsons' 
complaint.  See Johnson v. Rogers Mem'l Hosp., 2000 WI App 166, 
¶20, 238 Wis. 2d 227, 616 N.W.2d 903.  In its decision, the 
court noted that the Johnsons' claims presented a significant 
collateral burden on confidentiality within the therapist-
patient relationship that was not present in Sawyer, and this 
burden precluded the Johnsons from continuing their claims.  Id. 
at ¶¶17-18.  In particular, unlike Sawyer, where the plaintiff 
parents, as administrators of their deceased child's estate, had 
custody of the child's medical records, neither the Johnsons nor 
the therapists had any such access.  Id. at ¶¶11, 17.  
No. 
98-0445 
 
 
7 
Charlotte, the court noted, had neither waived her rights to the 
confidentiality to her medical records nor relinquished any 
privilege to the privacy of her communications with her 
therapists.  Id. at ¶11.  
¶13 Because the court of appeals believed that these 
medical records and confidential communications were necessary 
to the fair resolution of the Johnsons' claims, it precluded the 
Johnsons from pursuing their claims "in order to further the 
public 
policy 
of 
protecting 
the 
confidentiality 
of 
the 
therapist-patient relationship."  Id. at ¶18.  The court also 
dismissed the Johnsons' claims against RMH, concluding that the 
breach of contract claim was nothing more than a malpractice 
claim that was similarly precluded because it too relied on 
Charlotte's confidential communications and health care records. 
 Id. at ¶19.   
II 
¶14 Our review is limited to the following three issues: 
(1) whether the Johnsons' claims against the therapists must be 
dismissed in light of the potential burden of such claims on 
confidentiality 
in 
the 
therapist-patient 
relationship; 
(2) 
whether the Johnsons have standing to sue RMH in light of Wis. 
Stat. Ch. 655 and may sustain this claim despite any public 
policy concerns; and (3) whether the Johnsons' claim against RMH 
is barred by the statute of limitations.   
¶15 We first review whether the Johnsons' negligence and 
negligent infliction of emotional distress claims against the 
therapists state claims upon which relief may be granted.  The 
No. 
98-0445 
 
 
8 
question of whether a complaint states a claim is one of law.  
Koestler v. Pollard, 162 Wis. 2d 797, 802, 471 N.W.2d 7 (1991). 
 We apply a de novo standard when reviewing such decisions.  
Elections Bd. v. WMC, 227 Wis. 2d 650, 660, 597 N.W.2d 721 
(1999).  We proceed in the following manner in determining 
whether dismissal is warranted:   
 
We review the complaint in the same manner as the 
circuit court and the court of appeals, benefitting 
from their analyses and opinions.  Pleadings are to be 
liberally construed, and a claim will be dismissed 
only if "it is quite clear that under no conditions 
can the plaintiff recover."  The complaint must be 
viewed most favorably to the plaintiff.  Accepting the 
allegations 
as 
true, 
we 
must 
decide 
whether 
a 
plaintiff has stated a claim upon which relief may be 
granted.  
Bowen v. Lumbermens Mut. Cas. Co., 183 Wis. 2d 627, 635-36, 517 
N.W.2d 432 (1994) (citation omitted).   
¶16 The court of appeals determined that dismissal was 
required based on public policy considerations.  Application of 
such considerations "is a function solely of the court."  Id. at 
654.  As a result, the court may make its public policy 
determination based solely on the pleadings without proceeding 
to trial.  Id. at 654-55.  However, if the issues are complex or 
the facts not fully presented, it may be desirable for the court 
to allow further discovery or even a full trial before making 
its determination.  See id. at 655.  In this case, the facts of 
record do not fully present the question of public policy.  As a 
result, we conclude that the court of appeals should not have 
decided this issue based on the present record. 
No. 
98-0445 
 
 
9 
¶17 In Sawyer, we permitted the plaintiffs to move forward 
on a claim of professional negligence against two therapists to 
recover for direct injuries resulting from treatment of their 
adult child that lead to false memories of abuse.  Sawyer, 227 
Wis. 2d at 137-51.  We also permitted the plaintiffs to continue 
with a claim of negligent infliction of emotional distress 
against one therapist.  Id. at 154-58.  The defendants argue 
that Sawyer does not control this case because, in this case, 
the claim affects a collateral burden on the therapist-patient 
relationship, which was addressed but did not apply in Sawyer.  
See id. at 150.  The burden involved the importance of 
confidentiality in the therapist-patient relationship and the 
concerns that such claims would jeopardize confidentiality 
within this relationship and that confidentiality would prevent 
therapists from being able to adequately defend themselves from 
such actions.  Id.  The defendants only focus on these concerns 
as distinguishing characteristics between this case and Sawyer. 
The parties have provided detailed analyses on these concerns.  
¶18 Indeed, these concerns are significant and may prevent 
a claim from moving forward in some instances.  Based on the 
current record, however, we are unable to determine whether the 
Johnsons' claims will place a burden on such confidentiality.  
The facts of record do not reveal whether Charlotte has waived 
her rights concerning confidentiality of her health care records 
or her privilege to confidential communications with her 
therapists.  See Wis. Stat. §§ 146.82, 905.04.  Further, we are 
unable to determine whether any privilege applies based on the 
No. 
98-0445 
 
 
10
fact that the Johnsons attended meetings where this therapy 
method was revealed.  See § 905.04(1)(b).  In addition, the 
Johnsons have raised an issue of fact as to whether the 
privilege applies to the therapists in this case.  See 
§ 905.04(1)(e). 
¶19 Accordingly, we conclude that a determination on 
whether the Johnsons' claims should be dismissed is premature.  
As a result, the defendants' motions to dismiss on the claims 
against the therapists must be denied.4  This conclusion applies 
equally to the Johnsons' claims against RMH under their 
ostensible agency theory.   
¶20 The second issue presented is whether the Johnsons 
have standing to bring their breach of contract claim against 
RMH and may pursue this claim in view of public policy 
considerations.  RMH argues that the Johnsons lack standing 
because Wis. Stat. Ch. 655, Wisconsin's health care liability 
law, provides the exclusive remedy for such claims against 
health care providers and because the Johnsons do not fall 
within the list of individuals who may bring such a claim under 
the chapter.  We conclude, however, that the question is more 
                     
4 The court of appeals concluded, and the Johnsons concede, 
that, to the extent the Johnsons' claims allege injuries related 
to the loss of society and companionship of an adult child, the 
Johnsons may not recover for such injuries.  See Johnson v. 
Rogers Mem'l Hosp., 2000 WI App 166, ¶7 n. 3, 238 Wis. 2d 227, 
616 N.W.2d 903 (citing Estate of Wells v. Mount Sinai Med. Ctr., 
183 Wis. 2d 667, 677-78, 515 N.W.2d 705 (1994)).  We agree with 
the court of appeals that the Johnsons' claim for loss of 
relationship with Charlotte must be construed as such and must 
be barred. 
No. 
98-0445 
 
 
11
appropriately characterized as whether the Johnsons have stated 
a viable cause of action, rather than whether they have standing 
to sue.  As noted by the court of appeals, this action, although 
labeled as a contract claim, is actually an action for 
professional negligence because it is based on whether RMH 
provided appropriate treatment to Charlotte.  We specifically 
allowed such claims to move forward outside the realm of chapter 
655 
in 
Sawyer. 
 
See 
also 
Schuster, 
144 
Wis. 2d 
223.  
Accordingly, chapter 655 is not the exclusive remedy for such 
claims, like the Johnsons' claim, brought consistent with our 
holding in Sawyer.  The Johnsons may proceed with their claim.  
We note that, similar to the claims against the therapists, this 
claim also presents concerns surrounding the burden it may place 
on 
confidentiality 
in 
the 
therapist-patient 
relationship.  
However, again, based on the current insufficient state of the 
record, we decline to make a determination on whether this 
concern requires dismissal. 
¶21 The final question on review is whether the statute of 
limitations barred the Johnsons' claim against RMH because any 
negligent treatment provided by RMH occurred more than three 
years prior to the filing of the complaint in violation of Wis. 
Stat. § 893.55(1).  We conclude, however, that this issue also 
cannot be determined based on the factual record present at this 
time.  The complaint is unclear as to whether Charlotte's 
treatment with RMH extended beyond her inpatient treatment 
during November 1991.  As Judge Dykman noted in his dissent at 
the court of appeals in this case, a reasonable inference can be 
No. 
98-0445 
 
 
12
drawn from the complaint that RMH provided care as late as 
October 28, 1993.  See Johnson, 2000 WI App 166 at ¶24 (Dykman, 
P.J., dissenting).  The factual record must be developed on this 
issue before a determination on the statute of limitations can 
be made.  In turn, the defendants' motions to dismiss on the 
claim against RMH must also be denied. 
III 
¶22 In sum, in view of the current state of the record, we 
conclude that the Johnsons have presented claims upon which 
relief may be granted.  The record is insufficient for us to 
determine whether public policy considerations bar the Johnsons' 
claims.  Further, the factual record is insufficient for us to 
determine whether the statute of limitations bars the Johnsons' 
claim against RMH.  As a result, we reverse the court of 
appeals' decision, which upheld the circuit court's dismissal of 
the complaint. 
By the Court.—The court of appeals' decision is reversed, 
and the cause is remanded to the circuit court. 
 
No. 
98-0445 
 
 
1