Opinion
21-CV-62056-ALTMAN/STRAUSS
01-19-2024
ROSEMARY DALY, D.O., Plaintiff, v. MARKEL SERVICE INCORPORATED, Defendant.
REPORT AND RECOMMENDATION
Jared M. Strauss United States Magistrate Judge
THIS MATTER came before the Court upon Defendant, Markel Service Incorporated's (“MSI”), Motion to Dismiss Plaintiff's Second Amended Complaint with Prejudice (“Motion”) [DE 88]. This case has been referred to me, pursuant to 28 U.S.C. § 636(b)(1) and the Magistrate Judge Rules of the Local Rules of the Southern District of Florida, to take all action as required by law on the Motion [DE 115]. I have reviewed the Motion, the Response [DE 104] and Reply [DE 111] thereto, and all other pertinent portions of the record. For the reasons discussed herein, I respectfully RECOMMEND that the Motion be GRANTED-IN-PART and DENIED-IN-PART.
For purposes of considering the Motion, the Court accepts the factual allegations in the Second Amended Complaint as true and views them in the light most favorable to Plaintiff. See Cambridge Christian Sch., Inc. v. Fla. High Sch. Athletic Ass'n, 942 F.3d 1215, 1229 (11th Cir. 2019).
Plaintiff, Rosemary Daly, D.O. (“Daly”), is an anesthesiologist serving as an independent contractor at several South Florida medical clinics. See [DE 59] ¶¶ 5-7. At all relevant times, Evanston Insurance Company (“Evanston”) and Landmark America Insurance (“Landmark”) provided insurance coverage to Daly. Id. at ¶ 8. MSI Insurance Company wholly owns Evanston and MSI, and MSI manages the claims and all parts of the claims process for Evanston. See id. at ¶ 9.
Evanston provided insurance for Daly while working out of a clinic located in Weston, and Landmark provided insurance for Daly while working at a clinic located in Coral Gables.
On May 30, 2018, a patient at one of the clinics underwent a form of regenerative therapy. Id. at ¶ 12. Unfortunately, upon the patient's completion of therapy, the patient suffered serious injuries requiring extensive hospitalization and rehabilitation. Id. at ¶¶ 13-14. In November 2018, the patient named Daly - along with two other physicians, a physician assistant, and clinics - in a Notice of Intent to Initiate Litigation for Medical Negligence and Personal Injury (the “Notice”) pursuant to sections 766.106(2), 768.208(6)(a), Florida Statutes. Id. at ¶ 15. MSI and Landmark appointed counsel for the healthcare providers. Id. at ¶ 23. In preparation of the Notice, the Weston and Coral Gables clinics entered into a Common Interest and Confidentiality Agreement in September 2018. Id. at ¶ 24. At some unspecified time after receiving the Notice, by coincidence, Daly ran into MSI's hired counsel while at the Weston clinic and informed him that she was not present or supervising on the day the patient suffered their injuries. Id. at ¶ 27.
Daly alleged that she did not believe she was ever served with the Notice but believes she received it from either a former colleague or from insurance coverage counsel.
Two months after sending the Notice, the patient, through counsel, sent a demand letter to insurer-hired counsel for all listed or interested parties. Id. at ¶ 19; [DE 38-1]. The demand letter detailed the amount of money the patient requested to resolve the matter along with an unfiled complaint (“the draft complaint”). [DE 59] at ¶ 19; [DE 38-1]. The draft complaint attached to the demand letter did not name Daly as a defendant nor mention her in its allegations. [DE 38-1]. Nor did it contain any allegations pertaining to a physician that no longer worked at either clinic at the time of the incident but who was nevertheless named in the Notice. See id.; [DE 59] at ¶ 21. The draft complaint did, however, contain some factual allegations against one medical provider and an immediate supervisor who were named in the Notice (though it did not name them as defendants). See [DE 38-1]; [DE 59] at ¶ 21. The demand letter specifically stated that it was the patient's “intent, should the [c]omplaint be filed, to amend [the] Complaint at the conclusion of presuit to include those Defendants not currently named.” Id. at 2.
Daly attached several exhibits under seal to her Second Amended Complaint. This Court “can generally consider exhibits attached to a complaint in ruling on a motion to dismiss, and if the allegations of the complaint about a particular exhibit conflict with the contents of the exhibit itself, the exhibit controls.” Hoefling v. City of Miami, 811 F.3d 1271, 1277 (11th Cir. 2016).
Following receipt of the demand letter, coverage counsel for Landmark sent Daly a letter advising her to attend mediation. [DE 59] at ¶ 22. Daly complied and attended mediation. Id. at ¶ 34. Despite being a named insured under the Evanston policy, Daly never met with defense counsel at any time before or after the issuance of the Notice except for her chance encounter at the Weston clinic and the mediation. Id. at ¶¶ 25, 27. There was, however, regular communications between MSI and the defense counsel it hired. Id. at ¶ 26.
The patient's claim was eventually settled, and Daly executed the settlement agreement and was given a release. Id. at ¶¶ 36-37. Although Daly did not have to personally contribute any money to the settlement, Evanston contributed a sum of money on her behalf as part of the settlement. [DE 38-3].
Following Daly's release from the patient's claim, on April 21, 2020, MSI reported Daly to the National Practitioners Data Bank (“NPDB”). The report stated, in a section titled “Description of the Allegations and Injuries or Illnesses Upon Which the Action or Claim Was Based”:
AS A RESULT OF THE INSUREDS' NEGLIGENCE, PATIENT SUFFERED FAT EMBOLISM SYNDROME, CYTOKINE RELEASE SYNDROME, A GLOBAL HYPOXIC ISCHEMIC INJURY, AND ASSOCIATED BRAIN DAMAGE. THE PATIENT UNDERWENT MONTHS OF HOSPITALIZATION AND REHABILITATION REQUIRING EXTENSIVE CARE FOR HER PERMANENT AND SEVERE SYMPTOMS.[DE 38-2]. The report listed “improper performance” as the “Specific Allegation.” Id. The report was forwarded to Florida's Division of Medical Quality Assurance Bureau of Operations, Sheridan Healthcorp, and Memorial Healthcare System. Id. The information MSI reported to the NPDB was then forwarded to the Florida Office of Insurance Regulation. [DE 59] at ¶ 45. As a result of MSI's report, two professional liability insurers have rejected Daly for coverage.
Upon discovering the report's existence, Daly submitted a counterstatement asserting her complete lack of involvement in the care and treatment of the injured patient, either as a direct provider or supervisor of those who were providers. Id. at ¶ 48. On September 6, 2020, she initiated a dispute resolution process through the NPDB, challenging the accuracy of statements indicating that she had been one of the injured patient's treating physicians, that she was negligent, and that she caused the patient to suffer permanent injury. Id. at ¶¶ 51-52. In March 2021, the NPDB suggested MSI correct some of its factual statements in the report but nothing as to the “Specific Allegation” of “Improper Performance” or the mention of “insureds' negligence.” Id. at ¶53; [DE 38-3]. Thereafter, on March 24, 2021, MSI filed a corrected report which included Daly's explanation that she was not involved with any of the patient's treatment and amended one sentence in the “Description of the Procedure Performed” section. See [DE 38-3]. The rest of the report - which still included the “Specific Allegation” of “Improper Performance” and the statement that the patient's injuries occurred “as a result of the insureds' negligence” in the “Description of the Allegations and Injuries or Illnesses Upon Which the Action or Claim Was Based” section - remained unchanged. Id.
The “Description of the Procedure Performed” section of the report indicates that, “The Patient underwent stem cell therapy to her left knee on at least two occasions.” [DE 38-2] at 2. In the original, April 2020 report, that section states that, “During the first occasion the insured harvested the stems (sic) cells from the claimant's adipose (fat) tissue, using a kit and then administered some of them via injection into her left knee on 9/7/2016 in Westin (sic), FL.” Id. (emphasis added). The amended, March 2021 report changed this sentence to read, “During the first occasion, the stem cells were harvested from the claimant's adipose (fat) tissue . . . .” [DE 38-3] at 2 (emphasis added). Thus, it appears that the change from the original report to the amended report was to change the assertion that “the insured” had harvested stem cells from the patient in 2016 to a passive-voice statement that the stem cells “were harvested” (without attributing who did the harvesting). None of the remaining statements in that section attributed any specific role or actions to “the insured” (or Daly by name) during the patient's May 2018 treatment, and no changes were made to those statements (other than stating that additional cells were “administered” to the patient, rather than “harvested and administered.” Compare [DE 38-2] with [DE 38-3].
Daly initially filed a complaint against MSI in Florida state court. MSI, however, then timely removed the matter to this Court. [DE 1]. After filing two previous complaints, the Second Amended Complaint (“SAC”) is the operative complaint before this Court. See [DE 59]. In this complaint, Daly brings forth five causes of action. First, Daly seeks a declaratory judgment that MSI “did not act in accordance with the NPDB Guidelines when it submitted its written report on April 21, 2020 and thereafter, its corrected report on March 24, 2021.” Id. at ¶ 65. Second, Daly seeks a declaratory judgment that “MSI should have attempted an allocation of liability based on the absence of any allegations of wrongdoing in the only document that contained a specific monetary demand and the information contained in its files that there were no claims against” Daly. Id. at ¶ 72. Third, Daly alleges defamation per se based on MSI's April 21, 2020 report. Id. at ¶¶ 73-82. Fourth, Daly alleges defamation per se based on MSI's March 24, 2021 report. Id. at ¶¶ 84-92. Finally, Daly alleges a breach of fiduciary duty against MSI. Id. at ¶¶ 95-102. In response, MSI moves to dismiss the SAC. [DE 88].
MSI's request for dismissal of Daly's first and second cause of action (both seeking declaratory judgment) is effectively unopposed. At the conclusion of a hearing on the Motion, Daly's counsel indicated that she would withdraw the declaratory judgment counts, although she wanted to confirm with her client. Daly subsequently filed a “supplement” in the form of a letter stating, “Plaintiff consents to the dismissal of [the Declaratory Judgment Counts] without prejudice.” [DE 119]. Daly's dismissal notice cannot operate to dismiss these counts on its own because it only purported to dismiss two claims and not the entire action. See Rosell v. VMSB, LLC, 67 F.4th 1141, 1143-44 (11th Cir. 2023); In re Esteva, 60 F.4th 664, 675-78 (11th Cir. 2023). However, the Court may order dismissal of these counts given that the Motion seeks their dismissal and Daly no longer opposes that relief (at least to the extent that dismissal is without prejudice). Because Daly does oppose MSI's request for dismissal of the declaratory judgment counts - and has instead indicated she does not wish to prosecute those counts, at least at this time - I recommend that the first and second causes of action be dismissed. In addition to withdrawing her declaratory judgment claims, Daly's “supplement” [DE 119] also requests the Court to review the version of her SAC attached to her Motion for Leave to Serve and File an Amended Complaint [DE 73]. However, the Court denied Daly's Motion for Leave in its entirety. [DE 78]. Therefore, regardless of the explanation in Daly's “supplement,” the SAC (as filed at [DE 59]) is clearly the operative complaint.
LEGAL STANDARD
At the pleading stage, a complaint must contain “a short and plain statement of the claim showing the [plaintiff] is entitled to relief.” Fed.R.Civ.P. 8(a). Although Rule 8(a) does not require “detailed factual allegations,” it does require “more than labels and conclusions”; a “formulaic recitation of the cause of action will not do.” Bell Atl. Corp v. Twombly, 550 U.S. 544, 555 (2007). To survive a motion to dismiss, “factual allegations must be enough to raise a right to relief above the speculative level” and must be sufficient “to state a claim for relief that is plausible on its face.” Id. at 555, 570. “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “The mere possibility the defendant acted unlawfully is insufficient to survive a motion to dismiss.” Sinaltrainal v. Coca-Cola Co., 578 F.3d 1252, 1261 (11th Cir. 2009) (citing Iqbal, 556 U.S. at 679)).
In considering a Rule 12(b)(6) motion to dismiss, the court's review is generally “limited to the four corners of the complaint.” Wilchombe v. TeeVee Toons, Inc., 555 F.3d 949, 959 (11th Cir. 2009) (quoting St. George v. Pinellas County, 285 F.3d 1334, 1337 (11th Cir. 2002)). Courts must accept the factual allegations in the complaint as true and view them in the light most favorable to the plaintiff. Cambridge Christian Sch., 942 F.3d at 1229; Tims v. LGE Cmty. Credit Union, 935 F.3d 1228, 1236 (11th Cir. 2019). But “[c]onclusory allegations, unwarranted deductions of facts or legal conclusions masquerading as facts will not prevent dismissal.” Jackson v. Bellsouth Telecomms., 372 F.3d 1250, 1262-63 (11th Cir. 2004) (citation omitted); see also Iqbal, 556 U.S. at 678 (“[T]he tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.”).
In light of Daly's consent to dismissal of her first and second cause of action (as noted above), MSI's arguments regarding Daly's declaratory judgment counts are now moot, and the Court will not address them.
As a threshold matter, the Court must determine which exhibits it may consider in ruling on the Motion. Daly attached several documents to her SAC. “A copy of a written instrument that is an exhibit to a pleading is a part of the pleading for all purposes.” Fed.R.Civ.P. 10(c); see also F.T.C. v. AbbVie Prod. LLC, 713 F.3d 54, 63 (11th Cir. 2013) (“At the motion-to-dismiss stage, we consider the facts derived from a complaint's exhibits as part of the plaintiff's basic factual averments.”). Here, Daly attached the patient's demand letter, which included the patient's draft complaint, to her SAC as well as the original and updated reports to the NPDB. See [DE 38-1, 38-2, 38-3]. Because Daly attached these documents to the SAC, this Court may consider the facts derived from these exhibits. See AbbVie Prod. LLC, 713 F.3d at 63; Hoefling, 811 F.3d at 1277.
MSI also attached several exhibits to its Motion. Specifically, in addition to exhibits that Daly also attached to her SAC, MSI attached to the Motion the Notice, settlement agreement, and a decision from the United States Department of Health and Human Services regarding Daly's dispute of MSI's reporting to the NPDB. See [DE 90, 92, 94]. Exhibits to a motion to dismiss may also be considered as part of a complaint if they are central to the complaint and their authenticity is not disputed. See Crowder v. Delta Air Lines, Inc., 963 F.3d 1197, 1202 (11th Cir. 2020); Crawford's Auto Ctr., Inc. v. State Farm Mut. Auto. Ins. Co., 945 F.3d 1150, 1162 (11th Cir. 2019); Brooks v. Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364, 1368-69 (11th Cir. 1997). Daly does not dispute the authenticity of the exhibits. Therefore, the Court must determine if MSI's additional attachments to its Motion are “central” to the SAC. See Crowder, 963 F.3d at 1202; Crawford's Auto Ctr., Inc., 945 F.3d at 1162.
As with the exhibits filed with Daly's SAC, MSI also filed these exhibits under seal.
“A document, by definition, is central to a complaint when it is ‘a necessary part of [a plaintiff's] effort to make out a claim.'” Kalpakchian v. Bank of Am. Corp., 832 Fed.Appx. 579, 583 (11th Cir. 2020) (quoting Day v. Taylor, 400 F.3d 1272, 1276 (11th Cir. 2005)) (alteration in original). Other factors to consider when determining whether a document is central to a party's claims are “whether the claims depend on the documents; whether the contents of the documents are alleged in the complaint; . . . and whether the documents are referred to throughout the complaint.” Leader Glob. Sols., LLC v. Tradeco Infraestructura, S.A. DE C.V., 155 F.Supp.3d 1310, 1315-16 (S.D. Fla. 2016) (citations omitted).
Regarding the Notice, in her Response Daly argues that consideration of the Notice at this stage would be improper. [DE 104] at 6. Specifically, she argues that, while she references the Notice in her SAC, those references were “for background only” and that the content of the Notice neither “go[es] to the heart of the dispute” nor is “necessary for determination of the claims.” Id. At the hearing on the Motion, however, Daly represented that she does not oppose the Court reading the Notice for background information. Therefore, the Court will consider the Notice for purposes of this Motion.
Regardless, as discussed below, even considering the content of the Notice, I find that the Motion should be denied as to SAC's defamation counts.
By contrast, Daly maintains her opposition to the Court considering MSI's other attachments - the settlement agreement and Health and Human Services decision - at this stage of the proceeding. Although Daly's SAC makes reference to the settlement agreement and Health and Human Services decision, and does not challenge their authenticity, she does not allege their contents nor rely on their contents to make her claim. Nor are the contents of these documents necessary to her claims. Therefore, these exhibits are not central to her claim, and this Court may not derive facts from these attachments. See Fin. Sec. Assur., Inc. v. Stephens, Inc., 500 F.3d 1276, 1284 (11th Cir. 2007).
A. Defamation Per Se Based on MSI's Reports to the NPDB
Daly's third and fourth causes of action, alleging defamation per se claims, based on MSI's reports filed in the NPDB on April 21, 2020, and on March 24, 2021, respectively, should not be dismissed. Under Florida law, defamation consists of five elements “(1) publication; (2) falsity; (3) the statement was made . . . negligently on a matter concerning a private person; (4) actual damages; and (5) the statement must be defamatory.” Turner v. Wells, 879 F.3d 1254, 1262 (11th Cir. 2018); see also Jews For Jesus, Inc. v. Rapp, 997 So.2d 1098, 1106 (Fla. 2008). A publication rises to the level of defamation per se when it, considered alone, contains “(1) charges that a person has committed an infamous crime, or (2) has contracted an infectious disease, or (3) they carry statements tending to subject a person to hatred, distrust, ridicule, contempt or disgrace, or (4) to injure a person in his trade or profession.” Adams v. News-J. Corp., 84 So.2d 549, 551 (Fla. 1955). “Per se defamatory statements are ‘so obviously defamatory' and ‘damaging to reputation' that they ‘give[ ] rise to an absolute presumption both of malice and damage.'” Alan v. Wells Fargo Bank, N.A., 604 Fed.Appx. 863, 865 (11th Cir. 2015) (quoting Wolfson v. Kirk, 273 So.2d 774, 776 (Fla. 4th DCA 1973)) (alteration in original). When evaluating a per se defamation claim, courts must only consider the four corners of the publication and interpret the language as the common mind would normally understand it. Paulson v. Cosm. Dermatology, Inc., No. CV 17-20094-CIV, 2017 WL 2484197, at *3 (S.D. Fla. June 8, 2017).
Although Daly alleges two counts of defamation per se (one based on each report), MSI's Motion analyzes these claims together applying the same arguments to both. After reviewing both reports, the changes from the April 21, 2020 report to the March 24, 2021 report do not affect the analysis. Indeed, even MSI does not argue that the changes make a material difference as to these counts. MSI's updated March 24, 2021 report replaced its earlier April 21, 2020 report. See U.S. Dep't of Health & Hum. Servs. NPDB, https://www.npdb.hrsa.gov/guidebook/ESubmittingReportsQA4.jsp (last visited Nov. 15, 2023) (explaining that “[a] Correction Report negates and replaces the current version of a report”). In MSI's corrected report, Daly's name, the amount paid on her behalf for the settlement, and the patient's allegations remained present. [DE 38-3]. The major change between the two reports was that the report now included a “Subject Statement” where Daly provided her set of facts surrounding the incident. See [DE 38-3] at 3. Additionally, there was a slight change to the “Description of the Procedure Performed” section where instead of stating “the insured harvested the stems (sic) cells,” that sentence now states “the stem cells were harvested” without saying who did the harvesting. Compare [DE 38-2], with [DE 38-3].
The federal Health Care Quality Improvement Act of 1986 (“HCQIA”) mandates that entities, including insurance companies, who make a payment under “a policy of insurance, selfinsurance, or otherwise in settlement (or partial settlement) of, or in satisfaction of a judgment in, a medical malpractice action or claim shall report . . . information respecting the payment and circumstances thereof.” 42 U.S.C. § 11131(a). The entity shall include in the report:
(1) the name of any physician or licensed health care practitioner for whose benefit the payment is made, (2) the amount of the payment, (3) the name (if known) of any hospital with which the physician or practitioner is affiliated or associated, (4) a description of the acts or omissions and injuries or illnesses upon which the action or claim was based, and (5) such other information as the Secretary determines is required for appropriate interpretation of information reported under this section.42 U.S.C. § 11131(b). Entities that fail to report this information are subject to a civil monetary penalty. 42 U.S.C. § 11131(c). However, no person or entity, “shall be held liable in any civil action with respect to any report made” pursuant to the reporting of information subchapter within the HCQIA “without knowledge of the falsity of the information contained in the report.” 42 U.S.C. § 11137(c).
Here, Daly alleges that statements in MSI's report to the NPDB that she was negligent and engaged in “improper performance” resulting in the patient's injuries were false. [DE 59] at ¶ 74. MSI makes four arguments for dismissal: (1) the statements in the report are not false because they merely recite the “allegations” of the injured patient; (2) MSI's reports are protected by the HCQIA's statutory privilege; (3) Daly's allegations do not satisfy the requirements of defamation per se; (4) MSI's reports are protected by a qualified privilege. However, at this stage, MSI's arguments fail.
MSI's first argument is that its statements regarding Daly's “negligence” and “improper performance” causing the patient's injuries were not “false” but merely recitations of the patient's allegations, specifically those made in the Notice sent in November 2018. As MSI argues, the HCQIA directs reporting insurers to provide “a description of the acts or omissions and injuries or illnesses upon which the action or claim was based” and the references to “negligence” and “improper performance” in the reports were in sections titled “Specific Allegation” and “Description of the Allegations and Injuries or Illnesses Upon Which the Action or Claim Was Based.” 42 U.S.C. § 11131(b) (emphasis added); [DE 38-2] at 4. Therefore, MSI argues that its statements were not false - regardless of whether the patient's allegations of negligence had any merit - because it was merely stating what those allegations were.
Daly responds that even statements that there were allegations of negligence and improper performance against her were false. As Daly alleges, two months after receiving the Notice (which named Daly), MSI received the patient's monetary demand with an attached draft complaint that made no mention of Daly or her alleged negligence despite describing the negligence of two other medical providers. [DE 59] at ¶ 75. As a result, Daly contends, this demand letter with the accompanying draft complaint superseded the Notice and indicated that Daly was no longer the subject of the patient's contemplated lawsuit. Id. at ¶¶19-21. In other words, regardless of what was said in the November 2018 Notice, by the time MSI made its report to the NPDB, MSI knew that the injured patient was not alleging claims against Daly.
To support this contention, Daly emphasizes that, of the four medical providers mentioned in the Notice, the patient's draft complaint contained detailed factual allegations regarding negligent acts of two of them (even though they were not named as defendants), while there were no factual allegations against Daly and another doctor. Id. at ¶¶ 20-21; [DE 38-1]. She further emphasizes that the other doctor who (like Daly) was not mentioned in the draft complaint's factual allegations was no longer working at either clinic at the time of the incident. [DE 59] at ¶ 21. Thus, Daly infers, the patient intentionally omitted the other doctor from the draft complaint and was no longer pursuing litigation against that doctor (given that doctor's obvious non-involvement in the patient's care). Daly seems to further infer that the patient similarly intentionally omitted Daly from the draft complaint for the same reason.
In the SAC, Daly further alleges that the insurance defense counsel retained by MSI spoke with the patient's counsel about which healthcare providers not named in the draft complaint would be named if a lawsuit was filed. Id. at ¶ 32. In that discussion, which insurance defense counsel relayed to MSI, the patient's counsel did not include Daly among the healthcare providers he or she identified. Id. Moreover, Daly alleges that she informed MSI's hired counsel that she “was not there that day” and “was not supervising.” Id. at ¶ 27. And, she alleges, insurance defense counsel never met with her but met repeatedly with the healthcare providers named in the draft complaint's factual allegations. Id. at ¶¶ 25, 27, 29.
Taking all of Daly's allegations as true, and construing all reasonable inferences in Daly's favor, as the Court must at this stage, these allegations are sufficient to infer that, before it filed its report in the NPDB, MSI knew the injured patient was not pursuing claims of negligence against Daly. Based on the allegations discussed above, MSI (through insurance defense counsel) had reason to know that the patient had dropped her allegations against Daly, based on insurance defense counsel's discussion with the patient's counsel and the fact that the draft complaint did not mention Daly (and similarly did not mention another doctor named in the notice who was conclusively not involved in the patient's care). Moreover, Daly had given insurance defense counsel reason to believe that she was not involved in the patient's care, and insurance defense counsel's actions were consistent with an understanding that Daly was not involved in the case (considering that insurance defense counsel did not meet with Daly). Therefore, Daly has plausibly alleged that MSI's statements in the reports to NPDB were false (and that MSI knew they were false), even if MSI's statements were merely conveying “allegations” against Daly.
MSI's Motion emphasizes that the patient's demand letter that accompanied the draft complaint indicated, “[i]t is our intent, should the Complaint be filed, to amend this Complaint at the conclusion of presuit to include those Defendants not currently named.” [DE 88] at 5; [DE 38-1] at 2. Thus, MSI argues, the demand letter evinced an intention to pursue claims against Daly, who was one of the healthcare providers named in the Notice (which initiated a “presuit” process), even though she was not named in the draft complaint. MSI makes a potentially reasonable inference from the language in the demand letter. However, it is not the only reasonable inference, especially in light of Daly's other allegations, given that the letter does not specifically identify the “Defendants not named.” And, again, at this stage, the Court must “draw all reasonable inferences in favor of the nonmovant.” Newton v. Duke Energy Florida, LLC, 895 F.3d 1270, 1275 (11th Cir. 2018).
By the same token, MSI cannot compel dismissal based on HCQIA's statutory immunity. As stated above, the statutory immunity applies to statements made “without knowledge of the falsity of the information contained in the report.” 42 U.S.C. § 11137(c). However, given Daly's allegations, the Court cannot at this stage conclude that MSI's statements were “without knowledge of falsity.”
MSI's third argument regarding the elements of defamation per se also fails at this stage. MSI argues that the alleged defamatory statements do not charge Daly with having committed an infamous crime, do not subject her to “hatred, distrust, ridicule, contempt, or disgrace,” and do not injure her in her trade or profession. [DE 88] at 15-16. However, Daly adequately alleges MSI's statements within the April 21, 2020 report to the NPDB injured her in her profession. The statements indicated that “the insured harvested the stems (sic) cells from the claimant's adipose (fat) tissue,” that the specific allegation against the insured was “improper performance,” and “[a]s a result of the insureds' negligence” the patient suffered extensive injuries. [DE 38-2] at 4.These are statements that, considered as the “common mind would naturally understand” them, Richard v. Gray, 62 So.2d 597, 598 (Fla. 1953), would plausibly injure Daly in her profession as a doctor, see Leavitt v. Cole, 291 F.Supp.2d 1338, 1345-46 (M.D. Fla. 2003) (finding allegations that a doctor's work was “not good” and “rushed” sufficiently gave notice of slander per se). Moreover, Daly specifically alleges that, as a result of MSI's report, two professional liability insurers rejected Daly from coverage. See [DE 59] at ¶ 47. These allegations plausibly allege that MSI's statements have (and will) harm her in her profession.
As noted in, supra note 5, the March 2021 report amended this statement to “the stem cells were harvested” without saying it was by “the insured.” However, again, MSI makes no argument that this change made a material difference for analyzing the third and fourth causes of action.
Even though both reports used the plural “insureds,'” implying multiple individuals, Daly is the only named insured in the report. Therefore, reading the reports in their entirety, and considering them as a common mind would, at this stage, there is a reasonable inference that the report is stating Daly's negligence caused the patient's injuries.
Finally, MSI argues Daly's defamation per se claim fails because the report is subject to qualified privilege. The elements of qualified privilege are: “(1) good faith; (2) an interest in the subject by the speaker or a subject in which the speaker has a duty to speak; (3) a corresponding interest or duty in the listener or reader; (4) a proper occasion; and (5) publication in a proper manner.” Thomas v. Tampa Bay Downs, Inc., 761 So.2d 401, 404 (Fla. 2d DCA 2000). The court decides if the privilege applies if “the circumstances surrounding a defamatory communication are undisputed[] or are so clear under the evidence as to be unquestionable.” Nodar v. Galbreath, 462 So.2d 803, 810 (Fla. 1984). “[W]hen all the essential facts and circumstances are not conceded, the existence or nonexistence of the privilege should be determined by the jury from all the facts and circumstances of the case ....” Hartley & Parker v. Copeland, 51 So.2d 789, 790 (Fla. 1951) (quoting Abraham v. Baldwin, 42 So. 591, 592 (Fla. 1906)).
Contrary to MSI's statements within its Motion, there is a dispute between the parties regarding the essential facts and circumstances of this case. Daly contends that the patient did not make (or, at least, maintain) allegations of negligence and improper performance against Daly (and that MSI knew this) while MSI argues the opposite. These are disputes that bear on whether MSI can demonstrate both a duty to speak and good faith. Therefore, the Court may not decide, at this stage, whether the doctrine of qualified privilege shields MSI from Daly's suit.
Accordingly, when construing all reasonable inferences in Daly's favor, Daly has sufficiently alleged defamation per se claims based on MSI's reports filed in the NPDB, and the third and fourth causes of action should not be dismissed.
B. Breach of Fiduciary Duty
Daly's final alleged cause of action, breach of fiduciary duty, should be dismissed. Under Florida law, a plaintiff must prove three elements to establish a breach of fiduciary duty: “the existence of a fiduciary duty, a breach of that duty, and that the plaintiff's damages were proximately caused by the breach.” Med. & Chiropractic Clinic, Inc. v. Oppenheim, 981 F.3d 983, 989 (11th Cir. 2020).
“A cause of action for breach of a fiduciary duty is founded on a fiduciary relationship.” Taylor Woodrow Homes Fla., Inc. v. 4/46-A Corp., 850 So.2d 536, 540 (Fla. 5th DCA 2003). This relationship is based upon trust and confidence between the parties “where confidence is reposed by one party and a trust accepted by the other, or where confidence has been acquired and abused.” Doe v. Evans, 814 So.2d 370, 374 (Fla. 2002) (quoting Quinn v. Phipps, 113 So. 419, 421 (Fla. 1927)).
Daly's SAC fails to allege sufficient non-conclusory facts to establish MSI owed Daly a fiduciary duty. The only facts alleged regarding the relationship between Daly and MSI are: Evanston issued a policy covering Daly for her work performed out of the Weston clinic; MSI Insurance Company wholly owned Evanston; MSI Insurance Company also wholly owned MSI; and MSI manages the claims and all parts of the claims process for Evanston. [DE 59] at ¶¶ 8-10. Daly then conclusorily alleges that, “Once Dr. Daly was added to the Evanston Policy as an insured, the insured relationship became a fiduciary one; that is MSI, as the claims administrator for Evanston, became Dr. Daly's fiduciary.” Id. at ¶ 95.
Numerous opinions within this District and throughout the state courts in Florida routinely conclude that a fiduciary relationship could exist between insurer and insured, at least where the insurer handles the defense of claims against the insured. See Great Lakes Ins. SE v. Boat Rental Miami, Inc., No. 19-20623-CIV, 2020 WL 264674, at *8 (S.D. Fla. Jan. 17, 2020); Bos. Old Colony Ins. Co. v. Gutierrez, 386 So.2d 783, 785 (Fla. 1980); Liberty Mut. Fire Ins. Co. v. Kaufman, 885 So.2d 905, 908 (Fla. 3d DCA 2004); Doe v. Allstate Ins. Co., 653 So.2d 371, 374 (Fla. 1995).
However, as Daly alleged in her SAC, MSI is not her insurer, but rather, a third-party claims administrator for her insurer. See [DE 59] at ¶¶ 10, 95, 98. She then premises her allegation that MSI owed her a fiduciary duty on the syllogism that, because her insurer owed her a fiduciary duty, and because MSI was the insurer's agent acting on its behalf, MSI (the agent) owed her a fiduciary duty as well. However, this syllogism is not necessarily sound.
Generally, “only the insurer owes the duty of good faith and fair dealing to its insured, and agents of the insurer, even agents whose acts may have been material to a breach of the duty, do not normally owe the insured a duty of good faith.” 44 C.J.S. Insurance § 313 (2023); see also Babul v. Golden Fuel, Inc., 990 So.2d 680, 683 (Fla. 2d DCA 2008) (“[A]n agent acting within the course and scope of its agency relationship with a disclosed principal is not liable for the debts or obligations of the principal arising from contracts which the agent may negotiate or execute on behalf of such disclosed principal.”) (quoting Sussman v. First Fin. Title Co. of Fla., 793 So.2d 1066, 1068 (Fla. 4th DCA 2001) (alteration in original)); 14 Jordan R. Plitt, Steven Plitt, Daniel Maldonado & Joshua D. Rogers, Couch on Insurance § 198:17 (3d ed. 2023) (“While an insurer's agent may be subject to the insurer's duty of good faith, the agent does not also incur personal liability to the insured.”). Notably, Daly's Response provides no authority supporting her supposition that an insurer's agent owes a fiduciary duty to an insured (or can be sued directly for a breach of that fiduciary duty) whenever the insurer itself owes a fiduciary duty.
Moreover, Daly's Response argues that
Although MSI identifies itself as a “third party administrator”, there is nothing in the record to support this statement. The precise relationship between Evanston and MSI is unknown and the only thing that has been alleged is that both are wholly owned by MSI Insurance Company. Complaint, ¶¶ 9-10. Nor is there any basis on this Motion to conclude that MSI was acting within the scope of its agency.[DE 104] at 20. Daly thus seems to be disputing whether MSI was indeed acting as Evanston's agent, even though it is hard to find any other way to interpret her allegation “that is MSI, as the claims administrator for Evanston, became Dr. Daly's fiduciary.” See [DE 59] at ¶ 95. However, this argument merely underscores the deficiency of Daly's allegations. If “the only thing that has been alleged” about the relationship between Evanston and MSI is that they are owned by the same parent company, it is entirely unclear then why Evanston's fiduciary duty ipso facto inures to MSI. Indeed, if Daly is not arguing that MSI owed a fiduciary duty by virtue of being Evanston's agent, then it is even less clear what the source of MSI's alleged fiduciary duty was. At any rate, Daly's allegations, even taken in the light most favorable to her, are insufficient to demonstrate that MSI owed such a duty for some other reason.
Because the allegations in Daly's SAC, even taken in the light most favorable to Daly, only indicate that MSI was acting as an agent to Evanston when it settled the patient's claim against Daly, she has failed to sufficiently allege facts that would establish MSI had a fiduciary relationship with her. Accordingly, Daly has not sufficiently alleged a cause of action for breach of fiduciary duty and the fifth cause of action should be dismissed with prejudice.
Dismissal with prejudice is appropriate in this scenario because Daly has already made two amendments to her complaint and is represented by counsel. See Eiber Radiology, Inc. v. Toshiba Am. Med. Sys., Inc., 673 Fed.Appx. 925, 931 (11th Cir. 2016) (“We have never required district courts to grant counseled plaintiffs more than one opportunity to amend a deficient complaint, nor have we concluded that dismissal with prejudice is inappropriate where a counseled plaintiff has failed to cure a deficient pleading after having been offered ample opportunity to do so.”).
CONCLUSION
For the reasons discussed above, I respectfully RECOMMEND that the Motion [DE 88] be GRANTED-IN-PART and DENIED-IN-PART as follows:
1. The first and second causes of action should be dismissed;
2. The fifth cause of action should be dismissed with prejudice;
3. The Motion should otherwise be denied.
The parties will have fourteen (14) days from the date of being served with a copy of this Report and Recommendation within which to file written objections, if any, with the Honorable Roy K. Altman, United States District Judge. Failure to timely file objections shall bar the parties from a de novo determination by the District Judge of an issue covered in the Report and shall bar the parties from attacking on appeal unobjected-to factual and legal conclusions contained in this Report except for plain error if necessary in the interests of justice. See 28 U.S.C. § 636(b)(1); Thomas v. Arn, 474 U.S. 140, 149 (1985); Henley v. Johnson, 885 F.2d 790, 794 (11th Cir. 1989); 11th Cir. R. 3-1.