Opinion ID: 2334690
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Heading Rank: 7

Heading: Inducement to Breach an Implied Contract of Confidentiality

Text: As to the plaintiff's allegations of inducement to breach an implied contract of confidentiality, her complaint alleges that such a contract was created when she agreed to pay money in return for medical treatment. She further alleges that this implied contract arose from the specific understanding and actions of the parties that her medical information would remain confidential. Accordingly, we must examine the complaint's allegations to determine whether facts have been sufficiently plead to support the various elements of this tort. a. The Existence of an Implied Contract of Confidentiality A contract implied in fact is one that arise[s] under circumstances which show mutual intent or assent to contract. Angus v. City of Jackson, 968 S.W.2d 804, 808 (Tenn.Ct.App.1997). Such a contract or agreement may result as a legal inference from the facts and circumstances of the case, Paschall's, Inc. v. Dozier, 219 Tenn. 45, 53, 407 S.W.2d 150, 154 (1966), but to be enforceable, the implied contract must nevertheless be supported by mutual assent, consideration, and lawful purpose. See Johnson v. Central Nat'l Ins. Co., 210 Tenn. 24, 34-35, 356 S.W.2d 277, 281 (1962) (recognizing that an implied contract must result from a meeting of the minds of the parties in mutual assent to the terms, [and] must be based upon a sufficient consideration, free from fraud or undue influence, not against public policy and sufficiently definite to be enforced); Lay v. Fairfield Dev., 929 S.W.2d 352, 356 (Tenn.Ct.App.1996) (same). Although we have yet to decide a case where an implied contract of confidentiality arose between a physician and a patient, we have recognized that such a possibility exists when a patient compensates a physician in return for medical treatment. See Quarles v. Sutherland, 215 Tenn. 651, 657, 389 S.W.2d 249, 252 (1965). Since our decision in Quarles , however, the General Assembly has enacted several statutes that expressly require a physician and others to keep a patient's medical records and identifying information confidential. See Tenn.Code Ann. §§ 63-2-101(b)(1) (1997); XX-XX-XXXX (2001); XX-XX-XXXX (2001). Through the enactment of these statutes, patients and physicians now clearly expect that the physician will keep the patient's information confidential, and this expectation arises at the time that the patient seeks treatment. As one of the leading cases recognizing implied covenants of confidentiality in this context has acknowledged, Any time a doctor undertakes the treatment of a patient, and the consensual relationship of physician and patient is established, two jural obligations (of significance here) are simultaneously assumed by the doctor. Doctor and patient enter into a simple contract, the patient hoping that he will be cured and the doctor optimistically assuming that he will be compensated. As an implied condition of that contract, this Court is of the opinion that the doctor warrants that any confidential information gained through the relationship will not be released without the patient's permission.... Consequently, when a doctor breaches his duty of secrecy, he is in violation of part of his obligations under the contract. Hammonds v. Aetna Cas. & Sur. Co., 7 Ohio Misc. 25, 243 F.Supp. 793, 801 (1965). As such, we now expressly hold that an implied covenant of confidentiality can arise from the original contract of treatment for payment, and we find that the plaintiff's complaint here has adequately alleged the existence of an implied covenant of confidentiality. b. Breach of Implied Covenant of Confidentiality Based Upon the Physician's Response to Subpoenas Having found the existence of an implied covenant of confidentiality, we must next examine whether the complaint has alleged a breach of this implied covenant. Initially, it is clear that whatever the terms of this implied covenant of confidentiality may be, a physician cannot withhold such information in the face of a subpoena or other request cloaked with the authority of the court. Undoubtedly, any such contract would be contrary to public policy as expressed in the rules governing pre-trial discovery and in the relevant medical confidentiality statutes. [10] Nevertheless, the plaintiff would have us declare that a physician does have a duty to keep a patient's information confidential in the face of a technically defective subpoena. We agree that the subpoenas issued by the Richardson Firm without the plaintiff's agreement did not strictly comply with the requirements of Rule of Civil Procedure 45.07. However, we do not agree that a physician is under a duty to discover technical defects in a subpoena, or to submit a subpoena for legal review and evaluation, before releasing a patient's medical records. Instead, the law can only require a physician responding to such request to act in good faith and with a subjective belief as to the validity of that request. Consequently, unless a plaintiff can show that a physician acted in bad faith or with actual knowledge of the subpoena's invalidity, no breach of an implied covenant of confidentiality can occur in this context. [11] Using this standard as our guide, we find that the plaintiff has not alleged sufficient facts showing that her physician actually breached his implied covenant of confidentiality by releasing records pursuant to a technically defective subpoena. For example, we find no allegation that the physician acted in bad faith in sending the plaintiff's medical records to the Richardson Firm or that he was actually aware that the subpoenas did not meet the technical requirements of the law. Without these averments, therefore, we must hold that the plaintiff has not stated a claim that the Richardson Firm, in requesting medical records through subpoena, induced her physician to breach his implied covenant of confidentiality. c. Breach of Implied Covenant of Confidentiality Based upon the Physician's Private Conversations with Opposing Counsel A much different case is presented, however, with respect to whether the physician breached his implied covenant of confidentiality by informally speaking to members of the Richardson Firm about the plaintiff's medical information. While the understanding of the parties giving rise to the implied covenant of confidentiality permits a physician to disclose information pursuant to subpoena or court order, this understanding does not include permission to divulge this information informally without the patient's consent. [12] Therefore, absent circumstances giving rise to a duty to warn identifiable third persons against foreseeable risks emanating from a patient's illness, see Bradshaw v. Daniel, 854 S.W.2d 865, 872 (Tenn.1993), we hold that a physician breaches his or her implied covenant of confidentiality by divulging medical information, without the patient's consent, through informal conversations with others. Accordingly, we find that the complaint in this case alleges sufficient facts showing that the physician breached his implied covenant of confidentiality by informally speaking to the Richardson Firm about the plaintiff's condition without her consent. [13] d. Damages Resulting from the Physician's Private Conversations with Opposing Counsel Having found sufficient allegations concerning the existence and breach of an implied contract of confidentiality, and presuming, but not deciding, that facts are pled showing the elements of knowledge, intent, and malice, we must examine whether the plaintiff has alleged facts showing that she has suffered damage from this breach. The plaintiff claims that as a result of these informal conversations between the Richardson Firm and her physician, she has suffered a strategic loss in the litigation. More specifically, she alleges that the Richardson Firm was free to explore Dr. Holcomb's thoughts with impunity until he revealed something favorable to them, which could then be inquired about in a deposition unencumbered with a lot of unfavorable testimony. No other allegations of injury arising out of these informal conversations are present. [14] No case in Tennessee has previously recognized that, as a matter of law, a party may claim injury based on a strategic loss in pre-trial litigation, and we decline to recognize such a possibility here. Quite simply, if the plaintiff was concerned that testimony unfavorable to the defendant was not adequately disclosed in the deposition of her physician, then her remedy was to prepare an examination of the physician herself, thereby ensuring a complete record for trial. Because the complaint alleges no legally cognizable injury resulting from these informal conversations with the plaintiff's physician, we must find that she has not stated a claim that the Richardson Firm, by initiating informal and private conversations with her physician, induced him to breach his implied covenant of confidentiality. C. INDUCEMENT TO BREACH A CONFIDENTIAL RELATIONSHIP The plaintiff next alleges that the Richardson Firm, by obtaining her medical information with defective subpoenas and through private conversations with her physician, induced him to breach his confidential relationship with her. Because confidential relationships in Tennessee can assume a variety of forms, a unifying principle connecting all such relationships is difficult to establish. Nevertheless, prior cases make it clear that a confidential relationship is not one merely exhibiting mutual trust and confidence. Rather, the relationship is more accurately described as one in which `confidence is placed by one in the other and the recipient of that confidence is the dominant personality, with ability, because of that confidence, to influence and exercise dominion and control over the weaker or dominated party.' Mitchell v. Smith, 779 S.W.2d 384, 389 (Tenn.Ct.App.1989) (quoting Iacometti v. Frassinelli, 494 S.W.2d 496, 499 (Tenn.Ct.App.1973)). This Court has long recognized that an abuse or breach of a confidential relationship to gain a benefit or advantage will give rise to an action for damages. See Leake v. Gray, Shillinglaw & Co., 189 Tenn. 574, 592, 226 S.W.2d 298, 305 (1949). As we stated in Turner v. Leathers, 191 Tenn. 292, 298, 232 S.W.2d 269, 271 (1950), Whenever two persons stand in such a relation that, while it continues, confidence is necessarily reposed by one, and the influence which naturally grows out of that confidence is possessed by the other, and this confidence is abused, or the influence is exerted to obtain an advantage at the expense of the confiding party, the person so availing himself of his position will not be permitted to retain the advantage, although the transaction could not have been impeached if no confidential relation had existed. (internal quotations omitted). To be clear, then, a plaintiff may recover damages from an abuse or breach of a confidential relationship only by showing that (1) the defendant was in a position to influence or control the plaintiff; (2) the defendant used the confidences given to him or her to obtain some benefit from, or advantage over, the plaintiff; and (3) the plaintiff, as the dominated party in the relationship, suffered some detriment at the hands of the defendant. See Mahunda v. Thomas, 55 Tenn.App. 470, 478, 402 S.W.2d 485, 489 (1965) (citing Peoples Bank v. Baxter, 41 Tenn.App. 710, 720-21, 298 S.W.2d 732, 737 (1956)); see also Kelly v. Allen, 558 S.W.2d 845, 848 (Tenn.1977) (stating that there must be a showing that there were present the elements of dominion and control by the stronger over the weaker). In reviewing the complaint in this case, we find that the plaintiff has not stated a claim for inducement to breach a confidential relationship. While the physician-patient relationship can constitute such a relationship, see Shadrick v. Coker, 963 S.W.2d 726, 735-36 (Tenn.1998); Turner, 191 Tenn. at 298, 232 S.W.2d at 271, the plaintiff has not alleged that her physician used the trust or confidences given to him either to obtain an advantage over her or to extract some benefit from her. Clearly, a physician's revealing of confidences is not tantamount to a tortious breach of a confidential relationship-at least as that tort has been previously recognized in this state-unless that physician also uses the confidences given to him or her to obtain some benefit from, or advantage over, the patient. [15] Because the complaint here does not allege that the Richardson Firm induced her physician to obtain any benefit or advantage for himself, we must therefore find that the complaint fails to state a claim for inducement to abuse or breach a confidential relationship. We affirm the judgment of the Court of Appeals on this issue. D. INVASION OF PRIVACY Finally, the plaintiff asserts that the Court of Appeals erred in dismissing her invasion of privacy claims. The complaint alleges that the Richardson Firm invaded her common law right of privacy by obtaining her medical information with defective subpoenas and that it invaded her right of privacy under the Patient's Privacy Protection Act, Tenn.Code Ann. §§ 68-11-1501 to 1505 (2001), by having informal conversations with her physician without her consent. We address each of these claims separately.