March 17 2015
DA 13-0687 Case Number: DA 13-0687
IN THE SUPREME COURT OF THE STATE OF MONTANA 2015 MT 86N
DAVID G. VAINIO,
Plaintiff and Appellant,
v.
STATE OF MONTANA,
Defendant and Appellee.
APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. BDV 02-405 Honorable Jeffrey M. Sherlock, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
Kevin E. Vainio, Attorney at Law, Butte, Montana
For Appellee:
Timothy C. Fox, Montana Attorney General; Andres N. Haladay, Assistant Attorney General; Helena, Montana
Submitted on Briefs: February 4, 2015 Decided: March 17, 2015
Filed:
__________________________________________ Clerk Justice Beth Baker delivered the Opinion of the Court.
¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating
Rules, this case is decided by memorandum opinion and shall not be cited and does not
serve as precedent. Its case title, cause number, and disposition shall be included in this
Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana
Reports.
¶2 This case arises from the prosecution and acquittal of David G. Vainio on criminal
charges of false billing to state agencies. Vainio was a licensed practicing optometrist in
Montana who contracted with the Montana Department of Corrections (DOC) to provide
optometric services at Montana State Prison (MSP) between 1993 and 1997. Under
MSP’s scheduling policy, DOC staff determined whether an inmate was eligible for an
eye exam and scheduled an appointment every two years. If warranted, additional exams
and glasses were provided for inmates with vision deficits.
¶3 Under his contract with DOC, Vainio was responsible for billing according to
State and Federal Medicaid billing rules, which distinguished between “new” and
“established” patients. A patient was “new” if he had not been seen by an optometrist for
at least twenty-four months, if ever; all other patients were “established.” Optometrists
received greater compensation for “new” patient examinations than for “established”
patient examinations. Vainio admitted that, without checking, he assumed every patient
was a “new” patient for billing purposes.
2 ¶4 In 1997, an auditor at the Montana Department of Justice (DOJ) Medicaid Fraud
Control Unit became suspicious that Vainio was overcharging Medicaid for his patients.
Dave Schettine, an investigator with the DOJ Division of Criminal Investigation, was
assigned to investigate allegations of fraud by Vainio. Based on his investigation and a
consulting optometrist’s review of medical records, Schettine concluded that Vainio had
overcharged MSP for eye exams. Schettine provided his investigatory file to Kathy
Seeley and Barbara Harris, prosecutors with the DOJ Medicaid Fraud Control Unit.
Seeley and Harris concluded that the facts in the investigatory file established probable
cause to believe Vainio had submitted false claims to DOC under § 45-7-210, MCA. On
March 17, 1999, Seeley, the lead prosecutor on the case, prepared and submitted a
Motion and Supporting Affidavit for Leave to File an Information against Vainio to the
District Court.
¶5 On March 18, 1999, Seeley charged Vainio with two felony counts of making
false claims to public agencies under § 45-7-210, MCA. The first count accused Vainio
of overcharging Medicaid by submitting approximately 475 bills for “new” patients that
were actually for “established” patients. The second count accused Vainio of submitting
bills for “comprehensive” eye exams that were not actually performed. On June 24,
1999, a jury acquitted Vainio of both charges.
¶6 On June 24, 2002, Vainio filed a complaint asserting eight causes of action:
violation of his civil rights under 42 U.S.C. § 1983, false light invasion of privacy, libel,
malicious prosecution, interference with prospective economic advantage, negligence in
3 screening, emotional distress, and negligence in investigation. On November 21, 2002,
the District Court granted the State’s M. R. Civ. P. 12(b)(6) motion to dismiss Vainio’s
claims for 42 U.S.C. § 1983 violations, false light invasion of privacy, and libel. Eleven
years later, on September 12, 2013, the court granted the State’s motion for summary
judgment on Vainio’s remaining claims. Vainio appeals.
¶7 We review de novo a district court’s ruling on a motion to dismiss for failure to
state a claim under M. R. Civ. P. 12(b)(6). White v. State, 2013 MT 187, ¶ 15, 371
Mont. 1, 305 P.3d 795. “A district court should not dismiss a complaint for failure to
state a claim ‘unless it appears beyond doubt that the plaintiff can prove no set of facts in
support of his claim that would entitle him to relief.’” White, ¶ 15 (quoting McKinnon v.
W. Sugar Coop. Corp., 2010 MT 24, ¶ 12, 355 Mont. 120, 225 P.3d 1221). We also
review a district court’s grant of summary judgment de novo. Bailey v. State Farm Mut.
Auto. Ins. Co., 2013 MT 119, ¶ 18, 370 Mont. 73, 300 P.3d 1149. Summary judgment is
appropriate when there is no genuine issue of material fact and the moving party is
entitled to judgment as a matter of law. M. R. Civ. P. 56(c)(3); Smith v. Burlington N. &
Santa Fe Ry. Co., 2008 MT 225, ¶ 10, 344 Mont. 278, 187 P.3d 639.
Dismissal of Vainio’s constitutional claims.
¶8 The District Court determined that Vainio’s 42 U.S.C. § 1983 claims fall under the
state law tort of malicious prosecution. In the Ninth Circuit, malicious prosecution “is
not cognizable under 42 U.S.C. § 1983 if process is available within the state judicial
system to provide a remedy.” Usher v. Los Angeles, 828 F.2d 556, 561 (9th Cir. 1987)
4 (citing Bretz v. Kelman, 773 F.2d 1026, 1031 (9th Cir. 1985) (en banc); Cline v. Brusett,
661 F.2d 108, 112 (9th Cir. 1981)). As an exception, malicious prosecution is actionable
under 42 U.S.C. § 1983 if it is “intended to subject a person to a denial of constitutional
rights.” Usher, 828 F.2d at 561 (quoting Bretz, 773 F.2d at 1031) (internal quotation
marks omitted).
¶9 Vainio’s complaint alleged that the State violated his Fourth, Fifth, and Fourteenth
Amendment rights by searching and seizing MSP inmate eye exam records without
probable cause, conspiring to maliciously accuse him of criminal conduct, filing
exaggerated felony charges without probable cause, submitting incomplete patient
records to expert witnesses, and charging him for violating improperly adopted Medicaid
rules. Except for Vainio’s allegations that the investigator submitted incomplete
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March 17 2015
DA 13-0687 Case Number: DA 13-0687
IN THE SUPREME COURT OF THE STATE OF MONTANA 2015 MT 86N
DAVID G. VAINIO,
Plaintiff and Appellant,
v.
STATE OF MONTANA,
Defendant and Appellee.
APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. BDV 02-405 Honorable Jeffrey M. Sherlock, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
Kevin E. Vainio, Attorney at Law, Butte, Montana
For Appellee:
Timothy C. Fox, Montana Attorney General; Andres N. Haladay, Assistant Attorney General; Helena, Montana
Submitted on Briefs: February 4, 2015 Decided: March 17, 2015
Filed:
__________________________________________ Clerk Justice Beth Baker delivered the Opinion of the Court.
¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating
Rules, this case is decided by memorandum opinion and shall not be cited and does not
serve as precedent. Its case title, cause number, and disposition shall be included in this
Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana
Reports.
¶2 This case arises from the prosecution and acquittal of David G. Vainio on criminal
charges of false billing to state agencies. Vainio was a licensed practicing optometrist in
Montana who contracted with the Montana Department of Corrections (DOC) to provide
optometric services at Montana State Prison (MSP) between 1993 and 1997. Under
MSP’s scheduling policy, DOC staff determined whether an inmate was eligible for an
eye exam and scheduled an appointment every two years. If warranted, additional exams
and glasses were provided for inmates with vision deficits.
¶3 Under his contract with DOC, Vainio was responsible for billing according to
State and Federal Medicaid billing rules, which distinguished between “new” and
“established” patients. A patient was “new” if he had not been seen by an optometrist for
at least twenty-four months, if ever; all other patients were “established.” Optometrists
received greater compensation for “new” patient examinations than for “established”
patient examinations. Vainio admitted that, without checking, he assumed every patient
was a “new” patient for billing purposes.
2 ¶4 In 1997, an auditor at the Montana Department of Justice (DOJ) Medicaid Fraud
Control Unit became suspicious that Vainio was overcharging Medicaid for his patients.
Dave Schettine, an investigator with the DOJ Division of Criminal Investigation, was
assigned to investigate allegations of fraud by Vainio. Based on his investigation and a
consulting optometrist’s review of medical records, Schettine concluded that Vainio had
overcharged MSP for eye exams. Schettine provided his investigatory file to Kathy
Seeley and Barbara Harris, prosecutors with the DOJ Medicaid Fraud Control Unit.
Seeley and Harris concluded that the facts in the investigatory file established probable
cause to believe Vainio had submitted false claims to DOC under § 45-7-210, MCA. On
March 17, 1999, Seeley, the lead prosecutor on the case, prepared and submitted a
Motion and Supporting Affidavit for Leave to File an Information against Vainio to the
District Court.
¶5 On March 18, 1999, Seeley charged Vainio with two felony counts of making
false claims to public agencies under § 45-7-210, MCA. The first count accused Vainio
of overcharging Medicaid by submitting approximately 475 bills for “new” patients that
were actually for “established” patients. The second count accused Vainio of submitting
bills for “comprehensive” eye exams that were not actually performed. On June 24,
1999, a jury acquitted Vainio of both charges.
¶6 On June 24, 2002, Vainio filed a complaint asserting eight causes of action:
violation of his civil rights under 42 U.S.C. § 1983, false light invasion of privacy, libel,
malicious prosecution, interference with prospective economic advantage, negligence in
3 screening, emotional distress, and negligence in investigation. On November 21, 2002,
the District Court granted the State’s M. R. Civ. P. 12(b)(6) motion to dismiss Vainio’s
claims for 42 U.S.C. § 1983 violations, false light invasion of privacy, and libel. Eleven
years later, on September 12, 2013, the court granted the State’s motion for summary
judgment on Vainio’s remaining claims. Vainio appeals.
¶7 We review de novo a district court’s ruling on a motion to dismiss for failure to
state a claim under M. R. Civ. P. 12(b)(6). White v. State, 2013 MT 187, ¶ 15, 371
Mont. 1, 305 P.3d 795. “A district court should not dismiss a complaint for failure to
state a claim ‘unless it appears beyond doubt that the plaintiff can prove no set of facts in
support of his claim that would entitle him to relief.’” White, ¶ 15 (quoting McKinnon v.
W. Sugar Coop. Corp., 2010 MT 24, ¶ 12, 355 Mont. 120, 225 P.3d 1221). We also
review a district court’s grant of summary judgment de novo. Bailey v. State Farm Mut.
Auto. Ins. Co., 2013 MT 119, ¶ 18, 370 Mont. 73, 300 P.3d 1149. Summary judgment is
appropriate when there is no genuine issue of material fact and the moving party is
entitled to judgment as a matter of law. M. R. Civ. P. 56(c)(3); Smith v. Burlington N. &
Santa Fe Ry. Co., 2008 MT 225, ¶ 10, 344 Mont. 278, 187 P.3d 639.
Dismissal of Vainio’s constitutional claims.
¶8 The District Court determined that Vainio’s 42 U.S.C. § 1983 claims fall under the
state law tort of malicious prosecution. In the Ninth Circuit, malicious prosecution “is
not cognizable under 42 U.S.C. § 1983 if process is available within the state judicial
system to provide a remedy.” Usher v. Los Angeles, 828 F.2d 556, 561 (9th Cir. 1987)
4 (citing Bretz v. Kelman, 773 F.2d 1026, 1031 (9th Cir. 1985) (en banc); Cline v. Brusett,
661 F.2d 108, 112 (9th Cir. 1981)). As an exception, malicious prosecution is actionable
under 42 U.S.C. § 1983 if it is “intended to subject a person to a denial of constitutional
rights.” Usher, 828 F.2d at 561 (quoting Bretz, 773 F.2d at 1031) (internal quotation
marks omitted).
¶9 Vainio’s complaint alleged that the State violated his Fourth, Fifth, and Fourteenth
Amendment rights by searching and seizing MSP inmate eye exam records without
probable cause, conspiring to maliciously accuse him of criminal conduct, filing
exaggerated felony charges without probable cause, submitting incomplete patient
records to expert witnesses, and charging him for violating improperly adopted Medicaid
rules. Except for Vainio’s allegations that the investigator submitted incomplete
information to the medical expert and that the prosecutors charged him under an
improperly adopted rule, these claims all are subsumed within Vainio’s claim for
malicious prosecution.
¶10 Despite Vainio’s allegation that the investigator submitted incomplete information
to the medical expert, in the twelve years between the District Court’s dismissal of
Vainio’s constitutional claims and Vainio’s appeal, he has not identified any information
missing from the investigator’s report that could have made any difference in the
prosecutor’s decision to charge him.
¶11 Vainio’s allegation that he was charged under an improperly adopted law is based
on this Court’s determination in a related case that the reimbursement rates for “new” and
5 “established” patients were not validly adopted in compliance with the Montana
Administrative Procedure Act. State v. Vainio, 2001 MT 220, ¶¶ 49-50, 306 Mont. 439,
35 P.3d 948. The District Court concluded that Montana’s improper adoption of
Medicaid billing requirements is irrelevant because the charges against Vainio were
based on his contractual agreement to use the fee schedules for his billing. Additionally,
to state a claim under 42 U.S.C. § 1983, Vainio must demonstrate a deprivation “of
rights, privileges, or immunities secured by the Constitution or laws of the United
States.” Parratt v. Taylor, 451 U.S. 527, 535, 101 S. Ct. 1908, 1913 (1981), overruled on
other grounds by Daniels v. Williams, 474 U.S. 327, 330-31, 106 S. Ct. 662, 664 (1986).
A plaintiff’s alleged right to have a state law strictly obeyed is not a federal right
protected by 42 U.S.C. § 1983 or by the United States Constitution. McKinney v.
George, 556 F. Supp. 645, 651 (N.D. Ill. 1983), aff’d, 726 F.2d 1183 (7th Cir. 1984);
Zimmerman v. Hoard, 5 F. Supp. 2d 633, 637 (N.D. Ind. 1998). Vainio has not
demonstrated that the contract’s reliance on reimbursement rates that were not adopted in
compliance with state law violates his federal rights.
¶12 Further, a state prosecuting attorney acting within the scope of her duties “in
initiating and pursuing a criminal prosecution” cannot be sued under 42 U.S.C. § 1983.
Kalina v. Fletcher, 522 U.S. 118, 124, 118 S. Ct. 502, 506 (1997) (quoting Imbler v.
Pachtman, 424 U.S. 409, 410, 96 S. Ct. 984, 985 (1976)) (internal quotation marks
omitted). This absolute prosecutorial immunity extends to the State of Montana. State ex
rel. Dep’t of Justice v. Dist. Court, 172 Mont. 88, 92-93, 560 P.2d 1328, 1330 (1976). In
6 Kalina, a prosecutor did not have absolute immunity when she acted outside the scope of
her duties by “personally vouch[ing] for the truth of the facts set forth” in a certification
for determination of probable cause. Kalina, 522 U.S. at 121, 131, 118 S. Ct. at 505, 510.
Vainio argues that this exception applies. We disagree. Seeley did not personally vouch
for the truth of facts set forth in the investigatory file, but merely stated her belief that
there was probable cause to prosecute Vainio based on information presented to her. She
was thus entitled to absolute prosecutorial immunity in filing and maintaining criminal
charges against Vainio. The court did not err in dismissing Vainio’s constitutional
claims.
Dismissal of Vainio’s false light invasion of privacy and libel claims.
¶13 Vainio’s libel and false light invasion of privacy claims are based on the State’s
press release announcing his prosecution. Vainio’s libel claim is barred by the two-year
statute of limitations under § 27-2-204(3), MCA (2001). Although we agree with Vainio
that his false light invasion of privacy claim was timely filed under § 27-2-204(1), MCA
(providing a three year statute of limitations for general tort claims) and § 2-9-301(2),
MCA (tolling the statute of limitations for 120 days upon the Department of
Administration’s receipt of a claim), the District Court’s dismissal nonetheless was
proper. A publication must be false for a plaintiff to succeed on an action for false light
invasion of privacy. Bd. of Dentistry v. Kandarian, 268 Mont. 408, 413, 886 P.2d 954,
957 (1994); Restatement (Second) of Torts § 652E, cmt. a. The press release truthfully
described Vainio’s charges, which are a matter of public record. See § 44-5-103(13),
7 MCA. The court thus properly dismissed Vainio’s false light invasion of privacy and
libel claims.
Grant of summary judgment on Vainio’s malicious prosecution claim.
¶14 To prevail on a claim for malicious prosecution, a plaintiff must produce prima
facie evidence that “there was a lack of probable cause for the defendant’s acts.” White,
¶ 31. Probable cause for prosecution means “reasonable grounds for suspicion, supported
by circumstances reasonably strong in themselves to warrant a reasonably prudent and
cautious [person] to believe that the accused is guilty of the offense charged.” White,
¶ 36 (quoting Plouffe v. Mont. Dep’t of Pub. Health & Human Servs., 2002 MT 64, ¶ 18,
309 Mont. 184, 45 P.3d 10) (internal quotation marks omitted) (alteration in original).
“A judicial determination of probable cause to hold a party answerable to criminal
charges is considered prima facie or presumptive evidence of the existence of probable
cause” that may be overcome only if the plaintiff shows “by a preponderance of the
evidence that there was no probable cause for filing the original criminal action.” White,
¶ 37 (quoting Watkins v. Spring Creek Colony, 188 Mont. 467, 469-71, 614 P.2d 508,
510-11 (1980)) (internal quotation marks omitted).
¶15 Based on the order granting leave to file the information, and on its independent
review, the District Court determined that probable cause existed to charge Vainio. As
noted above, Vainio has not identified any information allegedly withheld from the
consulting optometrist that was material to the expert’s conclusions or could have
undermined the State’s decision to file charges. Vainio has not overcome the
8 presumption that probable cause existed for Seeley to file the charges. The court
properly granted summary judgment to the State on Vainio’s malicious prosecution
claim.
Grant of summary judgment on Vainio’s claim for interference with prospective economic advantage.
¶16 Intentional interference with prospective economic advantage must (1) be
intentional and willful; (2) be calculated to cause damage to the plaintiff’s business;
(3) be done with the unlawful purpose of causing damage or loss; and (4) result in actual
damages or loss. Maloney v. Home & Inv. Ctr., Inc., 2000 MT 34, ¶ 41, 298 Mont. 213,
994 P.2d 1124 (citations omitted). The absence of any one element is dispositive. See
Victory Ins. Co., Inc., v. Mont. State Fund, 2015 MT ____, ¶ 14, ___ Mont. ___, ___ P.3d
___. Because Vainio did not prove lack of probable cause, he necessarily fails to meet
the third element—unlawful purpose. Further, under § 27-2-204(1), MCA, this claim is
barred by the three-year statute of limitations because Vainio’s contract with the State
expired on October 31, 1997, and was not renewed. The District Court correctly rejected
Vainio’s continuing tort theory. The statute of limitations ran on this claim on
October 31, 2000, nearly two years before Vainio filed his complaint. The court properly
granted summary judgment to the State on Vainio’s claim for interference with
prospective economic advantage.
Grant of summary judgment on Vainio’s claim for negligence in screening.
¶17 Vainio argues that the court improperly granted summary judgment to the State on
his negligence in screening claim because he “played no part in the process of screening 9 for eligibility under the 2 year rule and scheduling for inmates.” The scheduling staff had
nothing to do with billing, which Vainio does not dispute was his responsibility and
which was the basis of the criminal charges against him. Vainio also has not established
that the State owed him a legal duty with regard to scheduling “new” and “established”
patients. See Debcon, Inc. v. City of Glasgow, 2001 MT 124, ¶ 29, 305 Mont. 391, 28
P.3d 478 (absent a legal duty, there is no negligence). The court thus properly granted
summary judgment to the State on Vainio’s negligence in screening claim.
Grant of summary judgment on Vainio’s claim for emotional distress.
¶18 A plaintiff claiming emotional distress must show that he suffered emotional
distress “so severe [that] no reasonable person could be expected to endure it.” White,
¶ 41 (quoting Feller v. First Interstate Bancsystem, Inc., 2013 MT 90, ¶ 34, 369 Mont.
444, 299 P.3d 338) (alteration in original). “[S]ummary judgment is appropriate for
disposing of an emotional distress claim that lacks sufficient evidentiary support.” White,
¶ 43 (citing Renville v. Fredrickson, 2004 MT 324, ¶¶ 4-7, 16, 324 Mont. 86, 101 P.3d
773). There is no evidence in the record that Vainio suffered severe emotional distress;
being forced to defend against criminal charges alone does not create a claim for severe
emotional distress. White, ¶ 44. The court thus properly granted summary judgment to
the State on Vainio’s emotional distress claim.
Grant of summary judgment on Vainio’s negligence in investigation claim.
¶19 This court has never recognized a separate cause of action for negligence in
investigation, and we decline to create a new cause of action here, particularly because
10 Vainio’s alleged damages under this count are indisputably the direct consequence of his
criminal prosecution, not the investigation.
¶20 We have determined to decide this case pursuant to Section I, Paragraph 3(d) of
our Internal Operating Rules, which provides for noncitable memorandum opinions.
Vainio has not met his burden to establish a genuine issue of material fact, and the legal
issues are controlled by settled law, which the District Court correctly interpreted. We
affirm.
/S/ BETH BAKER
We concur:
/S/ PATRICIA COTTER /S/ LAURIE McKINNON /S/ JAMES JEREMIAH SHEA /S/ JIM RICE