Hermanson v. MultiCare Health System, Inc., 196 Wn.2d 587 (2020)

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June 1, 2020

Washington Supreme Court Clarifies the Scope of Corporate Attorney-Client Privilege of Independent Contractors

This case arose when Doug Hermanson struck a vehicle and crashed into a utility pole. Hermanson
was transported to Tacoma General Hospital (“TGH”), which is owned by MultiCare Health
(“MCH”). Hermanson was treated by several MCH employees, including two nurses and a social
worker. The physician who treated Hermanson, Dr. Patterson, was an independent contractor of
MCH pursuant to an agreement between MCH and Trauma Trust, his employer. Dr. Patterson had
his own office at TGH and was expected to abide by MCH’s policies and procedures.

During Hermanson’s treatment, a blood test showed a high blood alcohol level. As a result,
someone at TGH reported this information to the police, and the police charged Hermanson with
negligent driving and hit and run. Based on this disclosure, Hermanson sued MCH and multiple
unidentified parties. MCH retained counsel to jointly represent MCH, Dr. Patterson, and Trauma
Trust, reasoning that while Dr. Patterson and Trauma Trust were not identified parties,
Hermanson’s initial demand letter implicated both parties.

Hermanson objected to this joint representation and argued that MCH’s ex parte communications
with Dr. Patterson violated Hermanson’s physician-patient privilege. MCH subsequently filed a
motion for a protective order to have ex parte communications with Dr. Patterson. In the same
motion, MCH sought to protect its ex parte communications with the two nurses and the social
worker. In response, the trial court denied MCH’s motion as to Dr. Patterson and the social worker,
reasoning that Dr. Patterson was not a MCH employee and thus did not fall under the corporate
attorney-client privilege, and the social worker does not fall under any type of medical privilege.
However, the trial court held that the nurses qualified under the corporate attorney-client privilege
because they were MCH employees.

MCH then filed a motion for discretionary review with the Court of Appeals. The Court of Appeals
affirmed the trial court’s ruling as to Dr. Patterson and the two nurses but reversed the ruling as to
the social worker because the social worker was a MCH employee. Both parties filed petitions for
review, which were granted.

The Washington Supreme Court reversed both rulings and held that a nonparty physician who is an
independent contractor maintains a principal-agent relationship and is the “functional equivalent”
of an employee such that Youngs applies (i.e., hospital may have ex parte communications with
plaintiff’s nonparty treating physician, a hospital’s employee, if communications limited to facts
regarding negligent event). Furthermore, the Court explained that because nurse-patient and social
worker-client privilege have identical purpose to physician-patient privilege, a hospital may have
ex parte communications with non-physician employees, under Youngs limitations.

Discussion: Over thirty years ago, the Washington State Supreme Court held that to protect the
patient-physician relationship, defense counsel cannot have ex parte communications with a
personal injury plaintiff’s non-party treating physician. This case, Loudon v. Myhre, limited defense
counsel’s communications with non-party treating physicians to depositions or with the consent of
plaintiff’s counsel. Approximately twenty-five years later, in Youngs v. PeaceHealth, the Court
ruled that Loudon does not apply to non-party treating physicians employed by a defendant hospital
who have direct knowledge of the events leading to a claim. The holding in Hermanson ensures
Loudon rule is not fully eroded by recognizing a patent’s physician-patient privilege must be well
protected while acknowledging corporations must effectively ascertain facts of incidents involving
employees, and now, independent contractors who are the “functional equivalent” of an employee.

Briefing by Christopher A. Luhrs, an Associate Attorney at Holt Woods & Scisciani LLP.

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