Knight v. Reliant Hospice Inc et al

Filing 161

OPINION AND ORDER RULING ON REPORT AND RECOMMENDATIONS for 138 Report and Recommendations; granting in part and denying in part 107 Motion for Sanctions filed by Alisha Knight; denying 98 Motion for Entry of Default file d by Alisha Knight; granting 102 Motion to Set Aside Default filed by Tammy McDonald; denying 118 Motion to Strike filed by Alisha Knight; denying 94 Motion for Summary Judgment filed by Reliant Medical Products Inc. Signed by Honorable Cameron McGowan Currie on 12/8/2011. (cbru, )

IN UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
COLUMBIA DIVISION
UNITED STATES OF AMERICA,
ex rel. Alisha Knight,

)
)
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Plaintiff,
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vs.
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RELIANT HOSPICE, INC.;
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RELIANT MEDICAL PRODUCTS, INC.; )
TAMMY MCDONALD; AND
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DAVID MCDONALD,
)
)
Defendants,
)
____________________________________)

Civil Action No. 3:08-3724-CMC-JRM

OPINION AND ORDER ADOPTING
REPORT AND RECOMMENDATION

This matter is before the court for review of a Report and Recommendation which addressed
multiple pending motions. For the reasons set forth below, the reasoning and recommendations of
the Report are adopted in full.1
BACKGROUND
In accordance with 28 U.S.C. § 636(b) and Local Civil Rule 73.02 (B)(2)(e), DSC, this
matter was referred to United States Magistrate Joseph R. McCrorey for pre-trial proceedings and
a Report and Recommendation (“Report”). On November 8, 2011, the Magistrate Judge issued a
Report with recommendations as to the disposition of multiple motions. Dkt. No. 138.
The Magistrate Judge advised the parties of the procedures and requirements for filing
objections to the Report and the serious consequences if they failed to do so. Only Defendant

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The court does, however, correct one scrivener’s error in the Report which suggests that this
action was initiated on April 11, 2011. Dkt. No. 138 at 1. The action was, instead, initiated on
November 7, 2008. April 11, 2011, is the date on which Plaintiff filed an amended complaint adding
Tammy McDonald, David McDonald, and Reliant Medical Products, Inc. (“Reliant Medical”), as
Defendants.

Reliant Medical filed an objection. That objection challenges the recommendation that Reliant
Medical’s motion for summary judgment be denied. No party has filed any response to this
objection and the deadline for doing so has expired. The Report is, therefore, ripe for review by the
court.
STANDARD
The Magistrate Judge makes only a recommendation to this court. The recommendation has
no presumptive weight, and the responsibility to make a final determination remains with the court.
See Mathews v. Weber, 423 U.S. 261 (1976). The court is charged with making a de novo
determination of any portion of the Report of the Magistrate Judge to which a specific objection is
made. The court may accept, reject, or modify, in whole or in part, the recommendation made by
the Magistrate Judge or recommit the matter to the Magistrate Judge with instructions. See 28
U.S.C. § 636(b). The court reviews the Report only for clear error in the absence of an objection.
See Diamond v. Colonial Life & Accident Ins. Co., 416 F.3d 310, 315 (4th Cir. 2005) (stating that
“in the absence of a timely filed objection, a district court need not conduct a de novo review, but
instead must only satisfy itself that there is no clear error on the face of the record in order to accept
the recommendation.”) (citation omitted).
I.

Recommendations without Objection
No objections have been filed with respect to the following motions and the Report’s related

recommendations:
(1) Plaintiff’s motion for entry of default as to Defendant Tammy McDonald (Dkt. No. 98),
which the Report recommends be denied;

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(2) Tammy McDonald’s corresponding motion to set aside default (Dkt. No. 102), which
the Report recommends be granted;
(3) Plaintiff’s motion for sanctions against Defendants Reliant Hospice, Inc. (“Reliant
Hospice”), and Tammy McDonald (Dkt. No. 107), which the Report recommends be denied
to the extent it seeks entry of default as a sanction or imposition of any sanctions against
Reliant Hospice, but be granted, in part, by imposing the lesser sanctions of requiring
Tammy McDonald to reimburse Knight for certain fees and expenses (discussed infra); and
(4) Plaintiff’s motion to strike Tammy McDonald’s Fed. R. Civ. P. 26(a)(3) disclosures
(Dkt. No. 118) which the Report recommends be denied.
The court has reviewed the relevant portions of the Report for clear error. Finding none,
the court adopts the Report’s recommendations and the underlying rationale as to each of these
motions with the added detail included below.
As to the motion for sanctions (Dkt. No. 107), the court grants relief limited to requiring
Tammy McDonald to pay Knight’s reasonable costs (1) of reconvening the Fed. R. Civ. P. 30(b)(6)
deposition of Defendant Reliant Hospice (including expenses paid to the court reporter and
attorneys’ fees arising from Knight’s counsel’s attendance at the failed deposition), and (2) directly
related to the mediation which Tammy McDonald failed to attend (including fees paid to the
mediator and attorneys’ fees arising from Knight’s counsel’s attendance at the failed mediation).
Knight may seek these amounts by motion filed at any time following entry of this order and prior
to the expiration of fourteen days following the completion of trial or other resolution of this action.
As Tammy McDonald is now proceeding without counsel, there is no duty of prior consultation.

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Tammy McDonald is reminded that she must file any opposition to such a motion within fourteen
days of service of the same.2
As to the issue of default addressed in Knight’s motion for entry of default (Dkt. No. 102)
and Tammy McDonald’s corresponding motion for relief from default (Dkt. No. 107), the court
notes that there is still no document filed as an answer on behalf of Tammy McDonald. However,
in light of this Defendant’s pro se status and in the interest of moving this matter forward, the court
will deem filed the answer which Tammy McDonald delivered to Plaintiff’s counsel, and which
Tammy McDonald later filed as an attachment to her motion for relief from default. The Clerk of
Court is directed to make a separate docket entry of the relevant pages (Dkt. No. 102-1 pages 20-26),
designating them the answer of Tammy McDonald.3
II.

Recommendations as to Motion for Summary Judgment
Defendant Reliant Medical moved for summary judgment and now objects to the

recommendation that this motion be denied arguing, in part, that the allegations against it amount
to nothing more than a claim that it violated the Health Insurance Portability and Accountability Act
of 1996 (“HIPAA”), by sharing private patient information with Defendant Reliant Hospice. Reliant
Medical further argues that HIPAA does not provide a private cause of action to Knight for these
alleged violations of the privacy rights of third-parties (the patients). Based on these arguments,

2

Under the Federal Rules of Civil Procedure, three additional days are allowed for filing a
response when service is by mail. Thus, any response must be filed with the court within seventeen
days (14 + 3) of the date any such motion is mailed to Tammy McDonald. A document is “filed” on
the date it is actually received by the court.
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Although this filing will appear on the docket after entry of this order, the answer will be
deemed timely.
4

Reliant Medical concludes that Knight’s claim under the False Claims Act should be dismissed.
This court disagrees for the reasons set forth in the Report and as summarized below.
As noted in the Report, while Knight’s allegations involve actions which presumably violate
HIPAA, they are not so limited. Instead, she alleges that the sharing of private patient information
(the arguable HIPAA violation) facilitated a fraudulent scheme through which Reliant Hospice
provided hospice services to patients who may not have qualified for those services (and who were
not, in any event, properly obtained as patients). She further alleges that Reliant Medical received
a direct benefit from the addition of each such patient to Reliant Hospice’s rolls because Reliant
Medical received a per-day, per-patient fee for providing medical equipment to Reliant Hospice and
its patients. There is evidence to support each of these allegations which the court finds adequate
to raise genuine issues of material fact that preclude summary judgment on Knight’s claim under
the False Claims Act for reasons more fully addressed in the Report.
The court reaches the same conclusion as to Knight’s claim for civil conspiracy. Reliant
Medical argues that this claim must fail because Knight has not alleged special damages flowing
from the conspiracy. The court disagrees. The essence of Knight’s allegations is that Reliant
Hospice and Reliant Medical combined to achieve a result (or at least a level of results) which
neither could have achieved alone. Taking the evidence in the light most favorable to Knight,
Reliant Hospice obtained many of its patients as a result of the information improperly provided by
Reliant Medical. While the damages (false claims) which resulted from the addition of these
patients may be of the same type as Reliant Hospice might have achieved alone, the degree of
damages was made possible by the alleged combination. At this stage, this is enough to raise a
genuine issue of material fact for trial on the civil conspiracy claim. See generally Lee v.

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Chesterfield Gen. Hosp., 344 S.E.2d 379, 382 (S.C. Ct. App. 1986) (listing elements of a civil
conspiracy claim as (1) the combination of two or more persons; (2) for the purpose of injuring the
plaintiff; (3) which causes him special damage).
CONCLUSION
For the reasons set forth above, the court DENIES Reliant Medical’s motion for summary
judgment (Doc. 94), DENIES Knight’s motion for entry of default as to Defendant Tammy
McDonald (Doc. 98). GRANTS Defendant Tammy McDonald’s motion for relief from entry of
default (Doc. 102) and directs the Clerk to file documents previously filed as an attachment to a
motion as this Defendant’s answer; and DENIES Knight’s motion to strike Tammy McDonald’s
Rule 26(a)(3) disclosures and hold Tammy McDonald in default (Doc. 118). See supra at 4 (Answer
deemed filed). The court DENIES Knight’s motion for sanctions (Doc. 107) in part (to the extent
it seeks sanctions against Defendant Reliant Hospice and to the extent it seeks to hold Defendant
Tammy McDonald in default) but GRANTS the motion in party by imposing the lesser relief of
requiring Defendant Tammy McDonald pay Knight the reasonable costs of reconvening of her
30(b)(6) deposition and which resulted from Tammy McDonald’s failure to attend mediation. See
supra at 3-4.
IT IS SO ORDERED.

s/ Cameron McGowan Currie
CAMERON MCGOWAN CURRIE
UNITED STATES DISTRICT JUDGE
Columbia, South Carolina
December 8, 2011

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