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Larry v. Powerski

United States District Court, E.D. Michigan, Southern Division

December 7, 2015

YOLANDA LARRY, Plaintiff,
v.
THERESA POWERSKI, Defendant

          For Yolanda Larry, Plaintiff: Glen N. Lenhoff, Law Office of Glen N. Lenhoff, Flint, MI; Michael E. Freifeld, Glen N. Lenhoff, Flint, MI.

         For Theresa Powerski, Defendant: Michael W. Edmunds, Edmunds Law, Grand Blanc, MI; Sean M. Siebigteroth, Williams Firm, Grand Blanc, MI.

         OPINION AND ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT

         Honorable DAVID M. LAWSON, United States District Judge.

         Plaintiff Yolanda Larry was fired from her job as a patient representative at Flint, Michigan's Hurley Medical Center. The hospital said it terminated Larry for improperly accessing patient medical records in violation of its policy under the Health Insurance Portability and Accountability Act of 1996, Pub. L. 104-191, 110 Stat. 1936,, (HIPAA). The plaintiff says those accusations were trumped up by her immediate supervisor, Theresa Powerski, who was retaliating against her as a result of the bad blood between them, which resulted from, among other things, Larry contacting the Michigan Department of Civil Rights and lodging a complaint that Powerski (and therefore Hurley) was discriminating against her on account of her race.

         In the first round of litigation, Larry sued Hurley Medical Center in state court, alleging claims of (1) wrongful discharge absent good cause, in breach of her employment contract; (2) violation of the Michigan Whistleblower Protection Act; and (3) retaliatory discharge, contrary to Michigan's Elliott-Larsen Civil Rights Act. She took her case to trial and a jury awarded her damages, including back and front pay, of more than $180,000. The present case is round two. Larry now brings claims against Powerski individually based on the same facts but advancing variant legal theories: (1) tortious interference with contractual relations (count I); (2) injurious falsehood (count II); (3) denial of procedural due process via 42 U.S.C. § 1983 (count III); and (4) First Amendment retaliation (count IV). Defendant Powerski has moved for summary judgment, arguing, among other things, that the state court judgment precludes the present lawsuit. The plaintiff has filed her own motion for partial summary judgment, contending that the undisputed facts entitle her to a judgment as a matter of law on her procedural due process claim.

         Although the legal theories in the state and federal lawsuits are not identical, the plaintiff's claims of tortious interference, injurious falsehood, and denial of procedural due process all are barred by the doctrine of claim preclusion, because they are premised upon the same essential facts and events underlying the plaintiff's state court wrongful termination lawsuit, and defendant Powerski, the plaintiff's supervisor, was in privity with her employer, the state court defendant hospital against whom the judgment was returned. The prior judgment does not bar the plaintiff's First Amendment retaliation claim, however, because that claim is based on a set of facts that is distinct from the state court judgment's factual foundation. Moreover, the discovery record in this case establishes fact questions requiring a trial for resolution of that claim. For these reasons, the defendant's motion for summary judgment will be granted as to counts I through III of the complaint, which will be dismissed, and denied as to count IV. The plaintiff's motion for partial summary judgment will be denied.

         I.

         Plaintiff Yolanda Larry began working for the Hurley Medical Center hospital on August 2, 1993 as a clerical assistant. She worked for the hospital in various clerical and administrative positions for more than 19 years. For much of that time she was a benefits assistant in the hospital's Human Resources department. On May 9, 2011, Larry transitioned to a position as an Assistant Patient Representative. The hospital's Patient Representative department handles all complaints by patients about any issues they may have with the care received while at the hospital.

         Defendant Theresa Powerski was the plaintiff's supervisor at the time of the termination. Powerski admitted in her answer to the complaint that (1) Hurley Medical Center is a public corporation, (2) the defendant was employed by Hurley Medical Center during the time period relevant to the complaint, and (3) the plaintiff's employment contract gave her a protected property interest cognizable under the Due Process Clause because she only could be terminated for good cause.

         During her tenure as a patient representative, the plaintiff received four performance evaluations with scores equating to " Very Good" on the hospital's employee performance rating scale. The January 3, 2012 performance evaluation resulted in an " Outstanding" performance rating.

         Despite the high marks she awarded the plaintiff, Powerski also inserted a number of " counseling memos" into the plaintiff's personnel file. That upset the plaintiff, and the memos later were removed from her personnel file after the plaintiff, Powerski, and the head of the patient representative department, Michael Burnett, met and agreed that the plaintiff needed some " reeducation" about certain aspects of her job duties. After the meeting, Burnett requested the removal of the counseling memos, because Burnett sensed that the plaintiff believed she had been unfairly targeted by Powerski, and Burnett thought that a " fresh start" would be the best approach to improving the situation. Burnett perceived " tension" between Powerski and the plaintiff, as a result of the two " not communicating well with each other" and not " understand[ing] each others' motivations." Nevertheless, Powerski testified that, before August 24, 2012, the plaintiff's job " was not in jeopardy."

         The hospital's policy governing the patient representative program states that, when a representative first receives a complaint, she immediately should attempt to understand and address the problem by (1) diffusing tension and listening to the patient's concerns; (2) explaining any applicable policies and procedures to the patient; (3) coordinating with nurses or doctors involved in the patient's care to better understand the problem and possible solutions; (4) mediating any disagreements or misunderstandings between the patient or family and caregivers; and (5) obtaining direction as needed from doctors or risk management personnel. If the complaint cannot be resolved informally, " at the point of origin," then the patient representative proceeds to file an internal grievance on the patient's behalf. For recording and tracking such grievances, the hospital uses an electronic database system called MIDAS.

         In March 2012, the hospital began using an electronic system called EPIC to store and control access to all patient medical records. Patient representatives had " read only" access to medical records stored in EPIC, which they were allowed to view in the course of their duties for the purpose of investigating patient complaints.

         On May 21, 2012, the plaintiff had a meeting with defendant Powerski and Burnett. At that meeting, Burnett told the plaintiff that Powerski had reported to him that the plaintiff had been having inappropriate discussions with coworkers about salaries paid to managers at the hospital. The plaintiff denied that she had any such conversations, and she told Burnett that she believed Powerski was discriminating against her because of her race (African-American). Also in May 2012, the plaintiff told William Smith (presumably another employee of the hospital in an unspecified position) that Powerski had told the plaintiff that she was hired " to handle the African American population." Later, the plaintiff also told Vanessa Nelson (apparently another hospital employee), that whenever a black patient came to the patient representative office, Powerski would " find reasons not to assist them." On August 24, 2012, when she was leaving work at the end of the day, the plaintiff informed Powerski that she was going to " contact[] the Michigan Department of Civil Rights regarding the racial discrimination perpetrated on Plaintiff and patients, as well as the harassment and retaliation Plaintiff experienced in the workplace."

         Earlier on August 24, 2012, Powerski had delivered a memo to the plaintiff stating that she was being investigated for accessing patient records without authorization, contrary to the hospital's HIPPA policy, and that the consequences could include termination. Powerski's report of the investigation states that she became aware of possible improper record accesses by the plaintiff when she received an email from Belle Bell, the hospital's privacy officer, involving six patients. Along with her department head, Theresa Bourque, Powerski reviewed the information in the EPIC and MIDAS systems and determined that for only two out of six of the patients in question, there was a record of a patient complaint in MIDAS. Powerski arranged a meeting to discuss the other four record accesses with the plaintiff, along with an earlier access to the medical records of the plaintiff's cousin on July 20, 2012. Powerski reported that the plaintiff stated she had handwritten notes relating to three out of the four patients in question, but she wrote that, as of August 30, 2012, the plaintiff had not provided those notes to her.

         Powerski concluded in the " findings of investigation" section of her report that the plaintiff had not explained adequately why she accessed the medical records of her cousin, because the plaintiff told Powerski she received a complaint about her cousin's medical care after 3:00 p.m., but the EPIC report showed that the plaintiff had accessed the records shortly after noon, and again around 2:30 p.m. Powerski further concluded that there was no corroboration in any other medical records for one of the alleged complaints of excessive wait time and a " rude nurse" that the plaintiff said she investigated. Powerski concluded by writing: " I am substantiating that a violation of HIPPA policy and work rule #33 of [the] Hurley Medical Center Employee Conduct Rules occurred."

         The plaintiff insists that she never accessed any patient medical records for an improper purpose. She testified that, on July 20, 2012, she accessed the records of her cousin because she received a phone call around 11:30 a.m. from the cousin's brother asking Larry to " check up on" her cousin, " because of how [the hospital] treated her last time." The plaintiff testified that she did not tell Powerski that her cousin's case was made known to her after 3:00 p.m., and that the statement in Powerski's report to that effect was false. As to the records of the other four patients that Powerski asked her about, the plaintiff contends that she had accessed their records during her informal investigations of their complaints, and she had handwritten notes on several of them.

         Hospital Privacy Officer Bell testified that she never provided Powerski with any statement that she had " substantiated a HIPPA violation" by the plaintiff. Instead, she merely informed Powerski that the EPIC audit report indicated that a possible violation may have occurred, but Powerski would have to investigate and reach her own conclusion, after reviewing the audit report and talking to the employee and patient involved. Bell also testified that she had concerns about the accuracy of the audit trails produced by the EPIC system, and she had run reports on her own activity in the system that turned out to be inaccurate.

         Bell also testified that she had reviewed the EPIC audit report of accesses to several patient records that Powerski had confronted the plaintiff with at the August 24, 2012 meeting. Bell said that after reviewing the audit report, she had questions about whether it was accurate, and she had never substantiated any violation based on that report. Bell also testified that she examined a " Census Audit" that allegedly was produced by the plaintiff from the EPIC system. She asked several other people familiar with the EPIC system whether the plaintiff could have produced such a report with the level of access she was allowed in the system, and after some attempts to produce such a report with the plaintiff's credentials, it was determined that it could not be done. Bell could not substantiate any HIPPA violation that had occurred based on the " Census Audit" report.

         Former hospital Human Resource Director Rebecca Jackson testified that it was the policy and practice of the hospital to have all suspected HIPPA policy violations substantiated by the hospital's privacy officer before terminating an employee, that she personally knew of several occasions when Ms. Bell had substantiated such violations before other employees were terminated, and that " if the Privacy Officer -- Belle Bell -- felt uncomfortable with the facts or circumstances surrounding the potential HIPPA violation or could not substantiate the HIPPA violation, Hurley Medical Center's Human Resource Department would not recommend the discharge of the employee."

         On August 30, 2012, the plaintiff was given a notice that she was suspended pending termination, which was signed by Powerski and then head of the patient representative department, Theresa Bourque. The notice stated that the plaintiff was suspended for violating " Work Rule #33," based on an investigation that concluded she had accessed patient records without authorization, in violation of the hospital's HIPPA policy. On September 21, 2012, hospital Human Resources Administrator David N. Szczepanski sent a notice to the plaintiff stating that her " suspension pending permission to terminate" was converted to a termination.

         The hospital's employee grievance process allowed the plaintiff to pursue a grievance regarding the decisions to suspend and terminate her by: (1) discussing her objections with her immediate supervisor (in this case, Powerski); (2) discussing and reviewing the decisions with the head of her department; (3) further discussing and reviewing the decisions with the Vice President of Human Resources; and (4) finally, filing an appeal to the Civil Service Commission. The defendant concedes that the fourth step was not available in August or September 2012, because the City of Flint Civil Service Commission had been disbanded by the City's Emergency Manager in December 2011. However, the hospital points to a memorandum of understanding ...


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