Newborn v. Christiana Psychiatric Services, P.A. ( 2017 )

SUPER|OR COURT
oF THE
STATE OF DELAWARE
VlleN L. MEDINlLLA LEoNARD L. WlLLlAMs JusTlcE CENTER
JuDGE 500 NoRTH KlNG STREET, sulTE 10400
WlLMlNGToN, DE 19801-3733
TELEPHONE (302) 255-0626
January 25, 2017
Tiffany M. Shrenk, Esq. Victor F. Battaglia, Esq.
MacElree Harvey, Ltd. Biggs and Battaglia
5721 Kennett Pike 921 N. Orange Street
Centreville, DE 19807 P.O. BoX 1489
Attorneyfor Plaz'ntijj‘" Wilmington, DE 19899
Attorneyfor Defendant CPS
Bradley J. Goewert, Esq.
Thomas J. Marcoz, Jr., Esq.
Marshall Dennehey Warner
Coleman & Goggin
1007 N. Orange Street, Suite 600
Wilmington, DE 19899
Attorneys for Defendant Estate
Re: Newborn v. Christiana Psychiatric Services, P.A., et al.
Case No.: N16C-05-04 7 VLM
Dear Counsel:
This is the Court’s ruling on Defendant Christiana Psychiatric Services, P.A.
(“CPS”)’s Motion to Dismiss in the above-captioned case. For the reasons stated
below, CPS’s Motion to Dismiss is DENIED.
Factual and Procedural Background
This is a Wrongful death and medical malpractice action against a deceased
psychiatrist, Dr. Jorge A. Pereira-Ogan (“Dr. Ogan”), and his former practice
group, CPS, alleging, inter alia, that Dr. Ogan negligently prescribed Plaintiff’s
decedent, Lindsay Ballas, a sample medication of Brintellix that caused her to
commit suicide in August 2014. CPS moves to dismiss the Complaint for failure
to state a claim upon Which relief may be granted. Defendant Estate of Dr. Ogan
takes no position on the Motion.
The Complaint states three claims of relief. Count I asserts a negligence
claim against Dr. Ogan. Count II asserts a negligence per se claim against Dr.
Ogan. Count III, the subject of the present Motion, is a claim of negligence against
CPS.
Count III, While titled simply “negligence,” alleges two distinct claims: one
of direct liability against CPS (i.e., a failure to supervise and monitor Dr. Ogan),
and another of vicarious liability (i.e., Dr. Ogan acted as an employee and/or agent
of CPS and committed negligence Within the scope of this relationship).
Count III of the Complaint states that: “At all times relevant hereto, Dr.
Ogan Was an employee and/or agent of [CPS].”l Dr. Ogan allegedly used a
prescription pad When Writing prescriptions to Ms. Ballas that bore CPS’s name
and address.2 The samples of the Brintellix provided to Ms. Ballas before her
death Were CPS Samples.3 CPS allegedly failed to “adequately instruct Dr. Ogan
as to his statutory duties,” and “failed to monitor the distribution of potentially
dangerous medications to Dr. Ogan.”4 CPS “lid. art 43.
3 see la at 11 44.
4 1a at ‘M 45, 47.
51d. ama
CPS’s Motion was filed on October 24, 2016. Plaintiff filed a brief in
opposition to the Motion on December 9, 2016. CPS filed a reply brief on
December 21, 2016. Oral arguments were heard on January 9, 2017. The Motion
is now ripe for decision.
Standard of Review
Defendant moves for dismissal under Superior Court Rule 12(b)(6). A
motion to dismiss generally considers only that which is found in the complaint6
In this case, in support of its Motion to Dismiss, CPS asks the Court to consider
three sets of documents outside the Complaint: (1) two 1099s CPS issued to the
IRS in 1999 and 2002 classifying Dr. Ogan as an independent contractor; (2) a
copy of a 1996 phonebook that lists Dr. Ogan’s address as his Trolley Square
office; and (3) a 1996 Delaware business license for Dr. Ogan’s practice at the
same address.
Where extrinsic evidence is considered, the Court usually converts the
motion to a motion for summary judgment7 If the Court does convert the motion,
the Court should advise the parties and give a reasonable opportunity to present
pertinent material according to Rule 56.8 However, it does not follow that the
“floodgates to discovery” are open simply because an extrinsic document is
presented on a motion to dismiss.
There are two exceptions to the general rule regarding extrinsic evidence on
a motion to dismiss.lo First, “where an extrinsic document is integral to a
plaintiffs claim and is incorporated into the complaint by reference,” the Court
may consider this in the motion.ll Second, “where the document is not being
6 See In re Gen. Motors (Hughes) S’holder Litig., 897 A.2d 162, 168 (Del. 2006) (citations
omitted).
7 See id. (citing Malpiea’e v. Townson, 780 A.2d 1075, 1090 (Del. 2001)).
8 See ia'. at 168-69 (citations omitted).
9 Malpiede, 780 A.2d at 1091.
10 See Furman v. Del. Dep’t of Transp., 30 A.3d 771, 774 (Del. 2011) (Vanclerbilt Income &
Growth Assocs. v. Arvia'a/JMB Managers, 691 A.2d 609, 613 (Del. 1996)).
ll]d
relied upon to prove the truth of its contents,” then the Court may likewise consider
. , . , '? .
this document on a motion to dismiss."“ Nevertheless, “The trlal court may also
take judicial notice of matters that are not subject to reasonable dispute.”13
Here, the IRS documents contain a classification of Dr. Ogan’s relationship
with CPS made solely by CPS. They are presented to prove the truth of the matter
asserted: that Dr. Ogan was an independent contractor. As such, they do not fit
into either of the two above exceptions. Further, there is no per se rule to
determine agency (see infra), and the parties’ understanding of the nature of the
putative agency relationship is only one sub-factor of many non-exclusive
factors.14 Because the IRS documents are open to reasonable disagreement, they
are not susceptible to judicial notice. Therefore, the Court will not consider them
on the Motion to Dismiss.'5
The Court declines to convert the Motion to one for summary judgment
based on the presentation of the extrinsic documents. Discovery has only just
begun in this case and it would be premature to convert the Motion to a summary
judgment motion. Thus, the Motion will remain one to dismiss the Complaint for
failure to state a claim upon which relief may be granted.
Under Rule 12(b)(6), all well-pleaded allegations in the complaint must be
accepted as true.16 Even vague allegations are considered well-pleaded if they give
12 1a
13 In re Gen. Motors, 897 A.2d at 169 (citing D.R.E. 201(b)). Pursuant to D.R.E. 201(b), a
judicially-noticed fact must pertain to a subject not open to reasonable disagreement that is either
generally known to the Court’s territorial jurisdiction, or “capable of accurate and ready
determination by resort to sources whose accuracy cannot reasonably be questioned.” D.R.E.
201(b).
14 See REsTATi-:MENT (SECoND) oF AGENCY § 220 (1958).
15 The other two sets of documents may be subject to judicial notice. While not open to
reasonable disagreement and capable of ready determination to sources whose accuracy
cannot_and has not_been challenged, the Court declines to take these documents into
consideration in the present Motion.
16 see spence v. Funk, 396 A.2d 967, 968 (Del. 1978). See also Di-:L. suPER. CT. Civ. R.
iz(b)(6).
the opposing party notice of a claim.17 The Court must draw all reasonable
inferences in favor of the non- moving party; 8 however, it will not “accept
conclusory allegations unsupported by specific facts,” nor will it “draw
unreasonable inferences in favor of the non-moving party.”19 Dismissal of a
complaint under Rule 12(b)(6) must be denied if the non-moving party could
recover under “any reasonably conceivable set of circumstances susceptible of
proof under the complaint.”20
Discussion
Plaintiffs Vicarious Liability Claim
CPS argues that dismissal is appropriate because discovery into Dr. Ogan’s
relationship with CPS would not reveal that Dr. Ogan was anything more than an
independent contractor.
Whether a principal-agent relationship exists is determined on a case-by-
case basis. 21 “The Delaware courts have ‘recognize[d] that no single rule could be
laid down to determine whethe1 a given lelationship is that of [a Seivant to a
master] as distinguished from an independent contractoi. ”``"” Instead that
detellnination is typically left to the factfinder 23 DelaWare courts look to the
Restatement (Second) of Agency § 220 (1958) to determine whether‘ ‘the actual
tortfeasor ls a servant or an independent contractor. ”24
17 See 111 re Gen. Motors, 897 A.2d at 168 (quoting Savor, Inc. v. FMR Corp., 812 A.2d 894,
896-97 (Del. 2002)).
'8 See id. (citing Malpiea'e v. Townson, 780 A.2d 1075, 1082 (Del. 2001)).
19 Price v. E.I. DuPont de Nemours & Co., 26 A.3d 162, 166 (Del. 2011) (citations omitted).
20 spence, 396 A.2d 31968 (citing mem v. Simz;eam Corp., 94 A.2d 385 (Del. 1952)).
21 See Murphy v. Bayhealth, lnc., 2005 WL 578823, at *3 (Del. Super. Feb. 4, 2005).
22 1a (quoting thie v. Gulfoil Corp., 406 A.2d 48, 51 (Del. 1979)).
22 See 1a (quoting Fisher v. rownsends, Inc., 695 A.2d 53, 59 (Del. 1997)).
24 see Fzsher, 695 A.2d ar 59 (quoting RESTATEMENT (sEcoND) or AGENCY § 220 (1958)).
CPS cites Smyre v. Amaral repeatedly as representative of Delaware’s
pleading standard.25 lt is not. Smyre is a federal case involving the federal
pleading standard of T womny and Iqbal: “plausibility.”26 The Delaware Supreme
Court has expressly rejected the federal pleading standard, instead opting for
Delaware’s long-standing “conceivability” standard for motions to dismiss.
Where the complaint states claims that are reasonably conceivable from the facts
alleged, the Court may not dismiss the complaint on a motion to dismiss23
The Court finds that a conclusive determination of an agency relationship in
this case is premature Taking the facts in light most favorable to Plaintiff, she has
alleged reasonably conceivable allegations that Dr. Ogan and CPS were in an
employer-employee relationship during at least a portion of the allegations
CPS’s second argument for dismissal of the vicarious liability claim deals
with scope of employment At oral argument and for purposes of this Motion only,
CPS conceded that even if it and Dr. Ogan stood in an employer-employee
relationship during the relevant period of time, Dr. Ogan’s alleged conduct fell
outside the scope of this employment relationship and obviates the imposition of
liability on CPS for his actions. The Court disagrees.
An employer may be vicariously liable for the torts of the employee where
the employee’s tortious conduct is within the scope of the employment
relationship29 Delaware courts look to the Restatement (Second) of Agency § 228
25 2013 WL 3306141 (D. Del. June 28, 2013) (granting motion to dismiss two vicarious liability
claims against contracted medical service company on basis that tortfeasor’s actions fell outside
scope of employment under Delaware law).
26 See Ashcroft v. Iqbal, 556 U.S. 662 (2009); BellAtl. Corp. v. Twombly, 550 U.S. 544 (2007).
22 see Cambzum Lid. vi atlantic capital Parmers 111 L.P., 36 A.3d 348, 2012 WL 172844, at *1-
2 (Del. Supr. Jan. 20, 2012) (TABLE); Central Mortg. Co. v. Morgan Stanley Mortg. Capilal
Hola'ings LLC, 27 A.3d 531, 536-37 (Del. 2011) (declining to adopt “plausibility” standard). See
also Winshall v. Viacom Im"l, lnc., 76 A.3d 808, 813 n.12 (citations omitted) (“The
Twoml)ly/Iqbal plausibility standard is more rigorous than Delaware’s counterpart pleading
standard Long standing Delaware case law holds that a complaint will survive a motion to
dismiss if it states a cognizable claim under any ‘reasonably conceivable’ set of circumstances
inferable from the alleged facts. These two standards are significantly different.”).
28 See Cambmm Lid., 2012 WL 172844,31*1-2.
29 See Fisher, 695 A.2d at 58.
to determine whether an employee was acting within the scope of employment30
Where the employee’s conduct is motivated, at least in part, by a desire to benefit
himself or a third party, the tortious conduct may still fall within the scope of
employment if the employer’ s business “actuates the employee to any appreciable
extent.’ ”31 “The mere fact that the primary motive is to benefit himself or a third
person does not cause the act to be outside the scope of employment ” 32
CPS repeatedly characterizes the allegations against Dr. Ogan as Dr. Ogan
helping a “friend” in Ms. Ballas and not a “patient.” lt further argues that Dr.
Ogan’s conduct was that of a “sexual predator” or that he is alleged to have
committed acts of “sexual abuse” against Ms. Ballas. Therefore, CPS claims that
Dr. Ogan “was acting for his personal gratification, and to help a friend,” which
constitutes conduct falling outside the scope of the employment relationship
The Complaint does not allege sexual abuse. Taking the facts in a light most
favorable to Plaintiff, the allegations involve conduct squarely within the scope of
Dr. Ogan’s alleged employment: prescribing a patient medication for a medical
condition. CPS’s characterization of Ms. Ballas and Dr. Ogan’s relationship is an
issue of fact and not a necessary conclusion of law based on the allegations in the
Complaint Moreover, the final determination of 3whether a doctor-patient
relationship exists is typically one for a jury to decide.33 Therefore, it cannot be
said at this time that Dr. Ogan’ s actions were clearly outside the scope of
employment
The Court finds that Count III’s claim of vicariously liability is reasonably
conceivable and survives CPS’s Motion to Dismiss.
30 RESTATEMENT (sEcoND) or AGENCY § 228 (1958). see Wiison v. Joma, 1nc., 537 A.2d 187,
189 (Del. 1988) (quoting § 228).
3' Wilson, 537 A.2d at 189 (citing Best Steel Bla’gs., Inc. v. Hara'in, 553 S.W.2d 122, 128 (Tex.
Civ. App. 1977)) (discussing “dual purpose rule”).
22 1a (citing Hardin, 553 s.W.2d ar 128).
32 see Murphy v. Godwm, 303 A.2d 668, 673 (Del. super. 1973).
Plaintiffs Direct Liability Claim
The argument for dismissal of this claim puts the cart before the horse. CPS
assumes as true the nonexistence of a patient-physician relationship lt then
extrapolates from this conclusion, arguing that it cannot be held liable as a
professional corporation for failing to monitor or supervise Dr. Ogan’s informal
relationship with a “secret” friend.
The Professional Service Corporation Act (“Act”), 8 Del. C. §§ 601-619,
includes any “qualified related professional services,” which is limited to physician
practice groups.34 Section 608 specifically limits the Act’s impact on the doctor-
patient relationship. This section confirms that the Act does nothing to change the
medical provider’s professional relationship with his or her patient Section 608
further implies that it does not change existing jurisprudence on negligence where
such a claim is asserted against a physician employed by a professional
corporation/practice group.
CPS argues that it is legally prohibited from interfering into Dr. Ogan’s
practice. However, this argument proceeds_as stated above_from a premature
assumption that no agency relationship exists. Assuming there is such a
relationship for purposes of this Motion, nothing in the Act exculpates CPS from
respondeat superior liability, nor liability for its officers’ own negligent conduct
Plaintiff has stated a reasonably conceivable allegation of negligent
supervision and monitoring of Dr. Ogan. The facts present an allegation CPS acted
negligently by failing to supervise and monitor Dr. Ogan’s prescription of
dangerous medications There is nothing in the Act that prevents the imposition of
negligence on the part of the practice group where it has acted negligently in
failing to monitor or supervise its own employee. As such, the Motion is denied as
to Count lll’s direct liability claim.
Conclusion
The Court finds that Plaintiff states reasonably conceivable claims of direct
34 8 Del. C. § 603(2)-(3) (effeaive sept 3, 2015).
8
and vicarious liability against CPS in Count lll of her Complaint CPS’s Motion
is, therefore, DENIED.
IT IS SO ORDERED.
Sincerely, /-1"
, 'Vivian L. Medfiiilla
Judge
oc: Prothonotary