Physician may face a negligent misrepresentation claim for steering a patient away from a procedure by falsely stating it won’t be covered by insurance.
Alice Borman sought treatment for a droopy eyelid and eyebrow from Dr. Tara Brown. Dr. Brown allegedly told Borman that her condition could be treated with either a “brow lift” that would not be covered by her insurance or a blepharoplasty (removal of excess eyelid skin) that would be covered by her insurance. Borman had a blepharoplasty, but continued to have physical difficulties. Borman consulted another doctor, who told her that Dr. Brown had performed the wrong treatment and that a brow lift should have been performed instead. And the brow lift procedure was allegedly covered by insurance. Borman sued Dr. Brown for professional negligence, lack of informed consent, fraud and deceit, and battery, alleging that she falsely represented that a brow lift would not be covered by insurance, thereby steering her away from that procedure. The trial court granted defendants’ motion for summary adjudication of the fraud and deceit cause of action, reasoning that Borman would be unable to establish reliance, and the jury returned a defense verdict on the remaining claims. Borman appealed.
The Court of Appeal reversed the summary adjudication. The court began by clarifying the nature of Borman’s claim. The court distinguished fraud (requiring intent to deceive) from negligent misrepresentation (requiring only intent to induce reliance). The court held that Borman’s complaint had adequately alleged negligent misrepresentation, but Dr. Brown’s motion had addressed only fraud, not negligent misrepresentation. The court rejected Dr. Brown’s argument that Borman could not prove an intent to induce reliance because Dr. Brown had no financial incentive to perform a blepharoplasty rather than a brow lift. The court reasoned that Borman could show intent to induce reliance regardless of any financial motive. Indeed, a reasonable jury could find Dr. Borman intended Borman to rely on the insurance coverage statement based on the physician consultation context in which the misrepresentation was made. In addition, Borman presented evidence that she informed Dr. Brown that she could undergo a procedure only if it was covered by insurance, which was sufficient to create a triable issue that Dr. Brown intended to induce Borman’s reliance on her insurance coverage misrepresentation. Accordingly, the Court of Appeal reversed and remanded for further proceedings regarding Borman’s negligent misrepresentation claim.
The bulletin describing this appellate decision was originally prepared for the California Society for Healthcare Attorneys (CSHA) by H. Thomas Watson and Peder K. Batalden, Horvitz & Levy LLP, and is republished with permission.