Franciscan Health prevails in challenge to summary judgment after patient files improperly accessed

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The Court of Appeals of Indiana has affirmed a Marion Superior Court’s decision to grant summary judgment to Franciscan Health – Indianapolis in a dispute involving the plaintiffs’ medical records.

Judge Elizabeth Tavitas wrote the opinion in Marjorie K. Fox, Stephanie Heggemeier, James Kahrhoff, and Nancy Owens v. Franciscan Alliance Inc. d/b/a/Franciscan Health – Indianapolis, 22A-CT-2114. Chief Judge Robert Altice and Judge Elaine Brown concurred.

The dispute traces back to June 2018, when a man named Tad Brewer received harassing emails from his ex-wife, Laura Vardaman. At the time, Vardaman worked for Franciscan as a scheduling assistant and had access to patient records as part of her job.

After receiving the harassing emails, Brewer suspected Vardaman had accessed the records of his then-girlfriend, Stephanie Heggemeier. Brewer reported his suspicions to Franciscan as well as to some of his friends and family members.

Franciscan discovered that Vardaman had improperly accessed Heggemeier’s medical records four times between 2016 and 2017. Franciscan also found that Vardaman had improperly accessed the records of Brewer’s mother, Marjorie Fox; Brewer’s sister, Nancy Owens; and Heggemeier’s ex-husband, James Kahrhoff.

Franciscan then terminated Vardaman’s employment.

Fox, Heggemeier, Kahrhoff and Owens filed suit against Franciscan in October 2018. The plaintiffs also filed a complaint before the Indiana Department of Insurance that month.

The plaintiffs’ complaint included claims of negligence, invasion of privacy via intrusion, invasion of privacy via public disclosure of private facts and intentional infliction of emotional distress.

Franciscan filed a motion for summary judgment in November 2020, but the trial court stayed those proceedings pending a decision in an Indiana Supreme Court case, Community Health Network, Inc. v. McKenzie, 185 N.E.3d 368 (Ind. 2022). That case also involved a dispute involving a hospital system employee who had improperly accessed patient records, prompting those patients to sue.

In Community Health, the Supreme Court ruled that Community was entitled to summary judgment on the plaintiffs’ negligence claims.

Based on that ruling, the Marion County trial court granted Franciscan’s motion for summary judgment.

Fox and the other Franciscan plaintiffs appealed that decision, arguing the court had erred in granting summary judgment.

But the Court of Appeals disagreed, saying that the trial court had acted properly.

On the count of invasion of privacy via public disclosure of private facts, for instance, the Court of Appeals agreed with the trial court’s ruling that Vardaman’s conduct failed to meet the legal standard of public disclosure.

“The designated evidence fails to demonstrate that Vardaman communicated the information in a way that either reached or was sure to reach the public in general or a large enough number of persons such that the matter was sure to become public knowledge,” Tavitas wrote.

The plaintiffs also argued the trial court abused its discretion during the discovery process, allowing “‘one of the most egregious patterns of discovery obstructionism ever witnessed by’ Plaintiffs’ counsel.”

The COA disagreed, writing that the plaintiffs “have failed to demonstrate any prejudice related to the trial court’s rulings during the discovery process.”

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