[Cite as Premier Med. Mgt., Inc. v. Bur. of Workers' Comp., 2013-Ohio-5935.]




                                                        Court of Claims of Ohio
                                                                                       The Ohio Judicial Center
                                                                               65 South Front Street, Third Floor
                                                                                          Columbus, OH 43215
                                                                                614.387.9800 or 1.800.824.8263
                                                                                           www.cco.state.oh.us



PREMIER MEDICAL MANAGEMENT, INC., et al.

       Plaintiffs

       v.

BUREAU OF WORKERS’ COMPENSATION

       Defendant

Case No. 2012-07358

Judge Patrick M. McGrath

ENTRY GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT

        {¶ 1} On March 22, 2013, defendant filed a motion for summary judgment
pursuant to Civ.R. 56(B).           On April 19, 2013, with leave of court, plaintiffs filed a
response. On May 17, 2013, with leave of court, defendant filed a reply. Defendant’s
motion is now before the court for a non-oral hearing pursuant to L.C.C.R. 4(D).
        {¶ 2} Civ.R. 56(C) states, in part, as follows:
        {¶ 3} “Summary judgment shall be rendered forthwith if the pleadings,
depositions, answers to interrogatories, written admissions, affidavits, transcripts of
evidence, and written stipulations of fact, if any, timely filed in the action, show that
there is no genuine issue as to any material fact and that the moving party is entitled to
judgment as a matter of law. No evidence or stipulation may be considered except as
stated in this rule. A summary judgment shall not be rendered unless it appears from
the evidence or stipulation, and only from the evidence or stipulation, that reasonable
minds can come to but one conclusion and that conclusion is adverse to the party
against whom the motion for summary judgment is made, that party being entitled to
have the evidence or stipulation construed most strongly in the party’s favor.” See also
Case No. 2012-07358                             -2-                                        ENTRY

Gilbert v. Summit Cty., 104 Ohio St.3d 660, 2004-Ohio-7108, citing Temple v. Wean
United, Inc., 50 Ohio St.2d 317 (1977).
       {¶ 4} According to the complaint, Premier Medical Management (Premier), owned
by Donna Murrell and William Rabatin (collectively referred to as plaintiffs), provided file
reviews and conducted medical examinations of claimants to the Ohio Bureau of
Workers’ Compensation (BWC). Plaintiffs allege that on or about October 7, 2010,
agents from BWC hand-delivered a letter to plaintiffs stating that Premier had a breach
in its security and that BWC would no longer schedule file reviews or medical
examinations with Premier.         Plaintiffs state that on or about October 7, 2010, an
additional letter containing similar allegations was sent to medical professionals for
whom Premier was the authorized administrative agent. Plaintiffs allege that on that
same date, BWC agents took possession of their physical documents and medical files.
Plaintiffs allege that BWC, however, continued to schedule independent medical
examinations or file reviews and that several confiscated files were returned to plaintiffs
to complete the files as they normally would.             According to plaintiffs, Premier has
effectively ceased generating revenue as a result of the actions of BWC. Plaintiffs claim
tortious interference with business relationships.1
       {¶ 5} “The basic principle of a ‘tortious interference’ action is that one, who
without privilege, induces or purposely causes a third party to discontinue a business
relationship with another is liable to the other for the harm caused thereby.” Walter v.
ADT Sec. Sys., 10th Dist. No. 06AP-115, 2007-Ohio-3324, ¶ 33, quoting Wolf v.
McCullough-Hyde Mem. Hosp., 67 Ohio App.3d 349, 355 (12th Dist.1990).                           “The
elements of tortious interference with a business relationship are (1) a business
relationship; (2) the tortfeasor’s knowledge thereof; (3) an intentional interference



       1
         On January 2, 2013, the court dismissed plaintiffs’ claims regarding defamation, abuse of
process, intentional infliction of emotional distress and alleged violations of the Ohio Constitution.
Case No. 2012-07358                        -3-                                    ENTRY

causing a breach or termination of the relationship; and (4) damages resulting
therefrom.” Id. (Citations omitted.)
       {¶ 6} “The doctrine of qualified privilege is applicable to tortious interference
cases, and acts performed within a business relationship are considered subject to a
qualified privilege.”   Id., quoting Chandler & Assoc., Inc. v. America’s Healthcare
Alliance, Inc., 125 Ohio App.3d 572, 583 (8th Dist.1997). “To overcome a qualified
privilege, a party must show the wrongdoer acted with actual malice, which denotes an
unjustified or improper interference with the business relationship.” Id.
       {¶ 7} “[I]n determining whether an actor has acted improperly in intentionally
interfering with a contract or prospective contract of another, consideration should be
given to the following factors: (a) the nature of the actor’s conduct, (b) the actor’s
motive, (c) the interests of the other with which the actor’s conduct interferes, (d) the
interests sought to be advanced by the actor, (e) the social interests in protecting the
freedom of action of the actor and the contractual interests of the other, (f) the proximity
or remoteness of the actor’s conduct to the interference, and (g) the relations between
the parties.” Fred Siegel Co., L.P.A., v. Arter & Hadden, 85 Ohio St.3d 171, 178-179
(1998), citing 4 Restatement of the Law 2d, Torts, Section 767 (1979).            See also
Havensure L.L.C., v. Prudential Ins. Co. of Am., 595 F.3d 312 (6th Cir.2010). It is
plaintiffs’ burden to show that defendant’s conduct was not privileged.        Havensure,
supra, at 316.
       {¶ 8} Defendant argues that it had a qualified privilege to notify the medical
professionals for whom Premier was the authorized agent that plaintiffs had failed to
properly maintain or destroy confidential medical records.       In support of its motion,
defendant presented the affidavits of Tammie Mihaly, Manager of Provider Relations for
the BWC, Special Agent Jeffery Adams, and Special Agent Sheila Debrock-Matzinger.
       {¶ 9} Mihaly avers that BWC entered into a contract with Disability Evaluators’
Panel (DEP) physicians for the evaluation of injured workers. Affidavit, ¶ 3. According
to Mihaly, the contract allows DEP physicians to designate an administrative agent,
Case No. 2012-07358                         -4-                                   ENTRY

whose duties include scheduling examinations, writing reports, and managing billing.
Affidavit, ¶ 4. The contract incorporates the DEP Evaluators Handbook, which provides
the acceptable methods for destroying confidential medical records. Affidavit, ¶ 7-8.
The contract further provides that DEP physicians are responsible for the actions of its
administrative agent. Id.    BWC Special Investigations Division notified the Medical
Services Division that plaintiffs were “failing to properly maintain or destroy confidential
medical records and creating a security/sensitive data breach[.]” Affidavit, ¶ 9. As a
result of the security breach, BWC suspended DEP physicians that designated plaintiffs
as their administrative agent. Affidavit, ¶ 10.
       {¶ 10} Adams avers that special agents investigate health care providers for a
variety of fraudulent conduct and that such investigations include “trash runs” at both
business and residential locations in an effort to obtain related information. Affidavit, ¶
2. Adams collected plaintiffs’ trash on September 8, 14, 28, October 5, and 12, 2010.
Affidavit, ¶ 4. Adams states that in plaintiffs’ trash, he discovered numerous documents
including psychological reports, diagnoses, records of patients’ medications, social
security numbers, and other private medical information, all of which should not have
been in the trash. Id. Adams even discovered a memorandum from BWC providing
specific instructions relative to shredding of sensitive material. Id.
       {¶ 11} Debrock-Matzinger assigned special agents to perform trash runs as part
of an investigation of Premier. Debrock-Matzinger, ¶ 2-3. After learning that the special
agents had found claimants’ personal medical information in plaintiffs’ trash, Debrock-
Matzinger contacted plaintiffs to ask for all BWC-related records. Debrock-Matzinger, ¶
4-5.   After reviewing the records, BWC discovered that some cases were partially
completed and returned those cases to Premier to complete the work that it had already
begun. Debrock-Matzinger, ¶ 8.
Case No. 2012-07358                          -5-                                    ENTRY

       {¶ 12} Plaintiffs argue that no data breach occurred, or if one did occur, that such
a breach was through no fault of plaintiffs. As such, plaintiffs maintain that defendant’s
actions were inappropriate.
       {¶ 13} In support of their position, plaintiffs provided the affidavit of Donna
Murrell, who avers as follows:
       {¶ 14} “4) In 2004, Premier began operating as an agent for various medical
professionals who were associated with the DEP program through BWC;
       {¶ 15} “5)   From the time it began operating through October 2010, Premier
enjoyed success, strong growth, and a good reputation;
       {¶ 16} “6) During this period of time, Premier appropriately interacted with BWC
personnel and medical professionals to accomplish file reviews and medical
examinations, complied with all laws and administrative directives, and experienced no
violations or breaches regarding the maintenance of confidential medical records;
       {¶ 17} “7) On or about October 7, 2010, agents from BWC entered my home,
without subpoenas or warrants, and hand-delivered a letter stating generally that
Premier had a breach in its security and that BWC would no longer schedule
independent medical examinations or file reviews with any DEP physician for whom
Premier, Plaintiffs (individually or jointly), or any entity owned or controlled by Plaintiffs
(individually or jointly) is the authorized administrative agent;
       {¶ 18} “8) While at my home on or about October 7, 2010, agents from BWC,
without subpoenas or warrants, took possession of nearly all physical documents and
medical files in our possession, but left all computer hard drives and other hardware that
was described in the letter;
       {¶ 19} “9) Approximately 3 weeks later, BWC representatives received the final 2
boxes of physical files that had been left at our home on October 7, 2010;
       {¶ 20} “10) Despite being told BWC would no longer do business with us, we
continued to receive files from BWC to schedule independent medical examinations or
file reviews;
Case No. 2012-07358                          -6-                                ENTRY

       {¶ 21} “11) Several of the confiscated files were eventually returned by BWC
employee Special Agent Sheila Debrock-Matzinger for the purpose of having me
personally complete the files as I normally would have done, despite BWC apparently
stripping myself and Premier of the proper credentials to do so; and
       {¶ 22} “12) I was not notified of the nature of the alleged breach of security for
approximately 3 weeks, when I was finally informed generally that a document was
found in our residential trash.”
       {¶ 23} Upon review, the only reasonable conclusion to be drawn is that defendant
had a qualified privilege to contact the DEP physicians, for whom Premier was the
authorized administrative agent, and that such a privilege allowed defendant to inform
such physicians of plaintiffs’ security breach.     There is no dispute that defendant
contracted with the DEP physicians and that a part of that contract specifies acceptable
methods for destroying confidential medical records. Additionally, there is no dispute
that defendant holds DEP physicians responsible for the acts of their designated
administrative agent.    Furthermore, plaintiffs have not presented the court with any
evidence that defendant’s conduct, motive, or interests in contacting the DEP
physicians were somehow improper and thus not privileged. Moreover, plaintiffs do not
dispute defendant’s assertion that confidential medical records were found in plaintiffs’
residential trash.
       {¶ 24} Accordingly, the court concludes that there are no genuine issues of
material fact and that defendant is entitled to judgment as a matter of law. Therefore,
defendant’s motion of summary judgment is GRANTED and judgment is rendered in
favor of defendant. All previously scheduled events are VACATED. Court costs are
assessed against plaintiffs.       The clerk shall serve upon all parties notice of this
judgment and its date of entry upon the journal.
Case No. 2012-07358                     -7-                          ENTRY

                                       _____________________________________
                                       PATRICK M. MCGRATH
                                       Judge

cc:


Kristin S. Boggs                         Michael J. Ash
Velda K. Hofacker                        52 Public Square
Assistant Attorneys General              Medina, Ohio 44256
150 East Gay Street, 18th Floor
Columbus, Ohio 43215-3130

003
Filed August 2, 2013
Sent to S.C. Reporter April 30, 2014
