Hainer v. American Medical International, Inc.

492 S.E.2d 103, 328 S.C. 128, 13 I.E.R. Cas. (BNA) 691, 1997 S.C. LEXIS 190

• Court: Supreme Court of South Carolina
• Decided: October 14, 1997
• Docket: 24702
• Status: Published

Opinions

WALLER, Justice:

We granted certiorari to review the Court of Appeals’ opinion in Hainer v. American Med. Intemat’l, Inc., 320 S.C. 316, 465 S.E.2d 112 (Ct.App.1995). We affirm as modified.

FACTS

Petitioner, Anne T. Hainer (Hainer), was a registered nurse at East Cooper Community Hospital (Hospital). She was disciplined by the State Nursing Board for “patient abandonment” when, without notifying appropriate personnel, she resigned her position on July 16,1989.

Hainer subsequently instituted this action for abuse of process and intentional infliction of emotional distress (outrage) against Hospital,¹ claiming it wrongfully reported her to the State Nursing Board. The jury returned a verdict of $75,000.00 actual and $225,000.00 punitive damages for Hainer. The Court of Appeals reversed, finding Hospital entitled to a directed verdict on both causes of action. We granted certiorari and instructed the parties to brief the following questions:

1. May a truthful communication be malicious under S.C.Code Ann. § 40-33-936 (1986)?

2. If so, was there any evidence of malice?

3. Was there evidence of abuse of process to withstand a directed verdict motion?

4. Was there evidence of intentional infliction of emotional distress sufficient to withstand a directed verdict motion?

1. MALICE UNDER § 40-33-936

In addressing the abuse of process claim, the Court of Appeals focused on the statutory privilege contained in S.C.Code Ann. § 40-33-936 (1986), which provides that a communication to the Nursing Board is privileged “except upon proof that such communication was made with malice.” Essentially, the Court of Appeals held that, as the Board found Hainer guilty of misconduct, Hospital had just cause to report her, and therefore the report could not have been maliciously made.² Accordingly, it held Hospital was properly granted a directed verdict on this claim.

S.C.Code Ann. § 40-33-936 (1986) provides, in part:

Every communication, whether oral or written, made by ... any person, ... to the Board ... shall be privileged: and no action or proceeding, ... shall he against any such person, ... on whose behalf such communication shall have been made ..., except upon proof that such communication was made with malice.

It is uncontested the report to the Board was true³ and that Hospital has a duty to report “misconduct.”⁴ Accordingly, the issue is whether, under such circumstances, a report may ever be deemed malicious.

We find no authority for the proposition that truth negates malice as a matter of law. On the contrary, truth is clearly not dispositive of the element of malice in a number of causes of action. See e.g. Upchurch v. New York Times, 314 S.C. 531, 431 S.E.2d 558 (1993) (truth not a defense to intentional infliction of emotional distress); Huggins v. Winn-Dixie, Greenville, Inc., 249 S.C. 206, 153 S.E.2d 693 (1967) (unlike malicious prosecution claim, plaintiff need not prove prior action unfounded to sustain abuse of process claim), see also Hubbard and Felix, The South Carolina Law of Torts, 342 (1990) (hereinafter Hubbard & Felix) (abuse of process claims founded on perversion of process, rather than illegality); Snakenberg v. The Hartford Cas. Ins. Co., 299 S.C. 164, 383 S.E.2d 2 (Ct.App.1989) (tort of wrongful publicizing of private affairs); Rycroft v. Gaddy, 281 S.C. 119, 314 S.E.2d 39 (Ct.App.1984) (invasion of privacy).⁵ Accordingly, we find the fact that the report was true does not negate malice as a matter of law.

Further, we are unpersuaded by Hospital’s claim that, because it had a statutory duty to report misconduct, malice is precluded. Where the terms of the statute are clear, the court must apply those terms according to their literal meaning. Adkins v. Varn, 312 S.C. 188, 439 S.E.2d 822 (1993). This Court cannot construe a statute without regard to its plain and ordinary meaning, and may not resort to subtle or forced construction in an attempt to limit or expand a statute’s scope. Berkebile v. Outen, 311 S.C. 50, 426 S.E.2d 760 (1993). See also Estate of Guide v. Spooner, 318 S.C. 335, 457 S.E.2d 623 (Ct.App.1995) (if Legislature had intended certain result in statute, it would have said so).

Nothing in § 40-33-936 evinces a Legislative intent to exempt truthful communications from a finding of malice. If the fact of the duty negated malice, the Legislature would have granted an absolute privilege since there is a duty to report all perceived misconduct, and the statute makes no distinction for the reporting of truthful versus untruthful information. We therefore find that the filing of a truthful report pursuant to § 40-33-936 does not negate malice as a matter of law.⁶

Further, we find that, in order to defeat the privilege afforded reports made pursuant to § 40-33-936, a plaintiff must demonstrate the defendant made the communication with common law actual malice.⁷

Privileged communications are either absolute or qualified. When a communication is absolutely privileged, no action lies for its publication, no matter what the circumstances under which it is published, i.e., an action will not he even if the report is made with malice. Richardson v. McGill, 273 S.C. 142, 255 S.E.2d 341 (1979); Wright v. Sparrow, 298 S.C. 469, 381 S.E.2d 503 (Ct.App.1989); Crowell v. Herring, 301 S.C. 424, 392 S.E.2d 464 (Ct.App.1990). When qualified however, the plaintiff may recover if he shows the communication was actuated by malice. Id. One publishing under a qualified privilege is liable upon proof of actual malice. Constant v. Spartanburg Steel Products, 316 S.C. 86, 447 S.E.2d 194 (1994). Actual malice can mean the defendant acted recklessly or wantonly, or with conscious disregard of the plaintiffs rights. Constant v. Spartanburg Steel Products, supra. Common law actual malice has also been defined as meaning “the defendant was actuated by ill will in what he did, with the design to causelessly and wantonly injure the plaintiff; or that the statements were published with such recklessness as to show a conscious indifference towards plaintiffs rights.” Jones v. Garner, 250 S.C. 479, 488, 158 S.E.2d 909 (1968); see also Hubbard and Felix at p. 398.

Here, § 40-33-936 creates a qualified privilege. Accordingly, where a plaintiff demonstrates the defendant acted with common law actual malice, the privilege of section 40-33-936 does not apply.⁸

2. EVIDENCE OF MALICE

At trial and before the Court of Appeals, Hospital claimed a truthful communication made pursuant to a statutory duty could never be deemed malicious. Hospital conceded at oral argument before this Court, however, that if we found a truthful report could be malicious, then the matter of the sufficiency of the evidence of malice was for the jury. Accordingly, we need not conduct an exhaustive review of the evidence to determine its sufficiency.

Malice may be proved by direct or circumstantial evidence. Smith v. Smith, 194 S.C. 247, 9 S.E.2d 584 (1940). Proof that statements were published in an improper and unjustified manner is sufficient evidence to submit the issue of actual malice to a jury. Mains v. K Mart, 297 S.C. 142, 375 S.E.2d 311 (Ct.App.1988).

Although circumstantial, there was some evidence from which the jury could infer malice. Accordingly, the issue was for the jury.⁹

3. DIRECTED VERDICT — ABUSE OF PROCESS

As there was some evidence from which the jury could have inferred malice, we must determine whether Hainer met her burden of proving the remaining elements of abuse of process. We find that she did not and, accordingly, affirm in result the Court of Appeals’ holding that a directed verdict was properly granted on the abuse of process claim.

The essential elements of abuse of process are an ulterior purpose and a willful act in the use of the process not proper in the conduct of the proceeding. Huggins v. Winn-Dixie Greenville, Inc., 249 S.C. 206, 153 S.E.2d 693 (1967). Some definite act or threat not authorized by the process or aimed at an object not legitimate in the use of the process is required. There is no liability where the defendant has done nothing more than carry out the process to its authorized conclusion, even though with bad intentions. Id.; Rycroft v. Gaddy, 281 S.C. 119, 314 S.E.2d 39 (Ct.App.1984); Hubbard & Felix, supra at 382-383. The improper purpose usually takes the form of coercion to obtain a collateral advantage, not properly involved in the proceeding itself. Id. Abuse of process requires both an ulterior purpose and a willful act not proper in the regular course of the proceeding. See Sierra v. Skelton, 307 S.C. 217, 414 S.E.2d 169 (Ct.App.1992).¹⁰

Here, Hainer’s evidence is simply insufficient to meet the elements of abuse of process. The evidence, viewed in the light most favorable to Hainer, is that several days after her resignation on July 16, 1989, she had a meeting with Hospital employees at which Hainer was advised she would “have to [be] reported] to the State Board of Nursing for patient abandonment.” Notably, Hainer did not testify that she was “threatened” with a complaint to the Board if she did not report to work; she testified only that she was told that she would have to be reported. Hainer testified that she heard absolutely nothing more from Hospital until sometime in February, 1990, when she was contacted by the State Nursing Board concerning the complaint which had been filed against her by the Hospital.¹¹ There is absolutely no evidence in the record that, in between these dates, Hospital in any way threatened, coerced, harassed, or otherwise contacted Hainer.

Hainer essentially bases her abuse of process claim on the fact that, at trial, Hospital vacillated as to the date it learned “patient abandonment” was a reportable offense.¹² The argument follows that, since it did not even know if “patient abandonment” was a reportable offense, it must have been using it as a threat against her and other nurses to “keep them in line.” The problem with this argument is twofold. First, it is undisputed that, at least as to Hainer, she was told in July, 1989 that Hospital would have to report her to the Board. Second, it is uncontradicted that Hospital had absolutely no contact with Hainer between the date of that meeting and the lodging of the complaint with the Nursing Board. The fact that other nurses may have been threatened with “patient abandonment” charges, or that another nurse filed suit against Hospital in November is simply insufficient to demonstrate that Hospital abused the process against Hainer. Although Hainer’s evidence may be susceptible of an inference of an ulterior purpose, i.e., that Hospital filed the report either to discredit Hainer, or to chill other nurses from testifying in the Enright suit, Hainer has simply failed to demonstrate in what manner Hospital committed a “willful act not proper in the regular conduct of the proceeding.” Huggins v. WinnDixie Greenville, Inc., supra. Cf. Kollodge v. State of Alaska, 757 P.2d 1024 (Alaska 1988); Tomash v. John Deere Industrial Equipment, 399 N.W.2d 387 (Iowa 1987).

The only arguable “act” cited by Hainer is the fact that Hospital delayed filing its complaint with the Board for several months. However, S.C.Code Ann. § 40-33-970 sets forth no time frame in which to report misconduct and, accordingly, there is nothing improper in the fact that Hospital delayed filing its complaint. As noted by the Court of Appeals in Skelton, there must be an overt act, and an improper purpose alone is insufficient. 307 S.C. at 222, 414 S.E.2d at 172. See also Huggins, supra; W. Page Keeton, Prosser and Keeton on The Law of Torts 898 (5th Ed.1984). At best, the evidence here demonstrates that Hospital carried out the process to its authorized conclusion, even if it had bad intentions in so doing. This is simply insufficient to create liability under this cause of action. Rycroft v. Gaddy, supra; Scott v. McCain, 275 S.C. 599, 274 S.E.2d 299 (1981). Accordingly, the Court of Appeals’ holding on this issue is affirmed in result.

4. DIRECTED VERDICT — OUTRAGE

The only remaining issue is whether Hospital was entitled to a directed verdict on Earner’s claim of outrage. We concur with the Court of Appeals’ opinion that Hospital’s actions here do not rise to the level of outrage. Cf. People v. Yarbrough, 156 Ill.App.3d 643, 109 Ill.Dec. 86, 509 N.E.2d 747 (1987) (even if report of misconduct against nurse was filed in bad faith and with malice, it was not enough to be characterized as extreme and outrageous). Accordingly, we affirm the Court of Appeals’ opinion on this issue.

AFFIRMED IN RESULT.

FINNEY, C.J., and MOORE and BURNETT, JJ., concur. TOAL, J., dissents in separate opinion.

1 . The hospital and its employees are referred to herein collectively as Hospital.

2 . In light of this finding, the logical extension would have been for the Court of Appeals to hold that the statutory privilege of § 40-33-936 preempted both the abuse of process and the outrage claims.

3 . The circuit court ruled, and the Court of Appeals held, Hainer was collaterally estopped to relitigate the issue of her misconduct.

4 . S.C.Code Ann. § 40-33-970 requires employers of nurses to report any instances of misconduct.

5 . Moreover, it is patent that truthful information may be divulged in a malicious maimer as, for example, disclosure of the fact that a person has a venereal disease, is an adulterer, a racist, etc.

6 . The fact that a report is both truthful and pursuant to a statutory duty may, however, be relevant to the jury's determination of whether the defendant in fact acted with malice.

7 .We note that, in using the term "actual malice," we do not refer to what is commonly known as "constitutional actual malice.” There is a distinction between the two. See Hubbard and Felix, The South Carolina Law of Torts, p. 398. "Constitutional actual malice” refers to the defendant’s knowledge of the publication’s falsity or reckless disregard of its truth or falsity. Id.; Sanders v. Prince, 304 S.C. 236, 403 S.E.2d 640 (1991). The present case involves common law actual malice.

8 . We remind trial judges that in cases in which the issue of punitive damages is submitted to the jury, there must be clear and convincing evidence of actual malice to warrant such an award. See Wilhoit v. WCSC, Inc., 293 S.C. 34, 358 S.E.2d 397 (Ct.App.1987); S.C.Code Ann. § 15-33-135 (Supp.1996).

9 . The Court of Appeals’ opinion is modified to the extent it held there was no evidence of malice.

10 . There is authority for the proposition that the focus of an abuse of process claim is on the improper use of the process after it has been issued. Scott v. McCain, 275 S.C. 599, 274 S.E.2d 299 (1981); Hubbard & Felix, supra at p. 384. But see Sierra v. Skelton, supra. Under this view, there was clearly no willful act subsequent to issuance of the process in this case. However, we need not decide whether a claim for abuse of process will lie in cases where the willful act occurs prior to the institution of proceedings since, here, there is simply no willful act in the use of the proceedings.

11 . In the interim between July and February, other nurses were allegedly "threatened” by Hospital with charges of "patient abandonment.” One of those nurses, Sandra Enright, was told by Nurse Woltman that if she did not report during Hurricane Hugo, she would be reported to the Nursing Board. Enright filed suit against Hospital in November, 1989; her suit was subsequently settled.

12 . According to Hospital's director of nursing, the reason for the delay in filing a complaint was that she did not learn until February 8, 1990 (in a phone conversation with B.J. Church of the Nursing Board) that "patient abandonment” was a reportable offense required by the Nurse Practice Act, S.C.Code Ann. § 40-33-935 (Supp.1995) to be reported to the State Board. It is undisputed that although "patient abandonment” became a reportable offense in June, 1989, the regulations to that effect were not in print in July, 1989. 26 S.C.Code Regs. 91-19(c)(3)(n) (Supp.1995).