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Warner v. Lexington Medical Center

United States District Court, D. South Carolina, Columbia Division

June 12, 2018

Jana Warner, Plaintiff,
Lexington Medical Center; Evelyn Settle, Defendants.


          Joseph F. Anderson, Jr.United States District Judge

         The Plaintiff, Jana Warner, filed this employment action pursuant to the Americans with Disabilities Act (ADA), 42 U.S.C. §§ 12101, et seq.; the Family and Medical Leave Act (FMLA), 29 U.S.C. §§ 2601, et seq.; and asserting state law violations, including defamation, fraud, and constructive fraud, against her former employer, Lexington Medical Center (LMC), and her former supervisor, Evelyn Settle (Settle). (ECF No. 34). In accordance with 28 U.S.C. § 636(b)(1)(B) and Local Civil Rule 73.02(B)(2)(g) (D.S.C.), the case was referred to a Magistrate Judge for Review.


         Plaintiff filed her Amended Complaint in state court on June 16, 2017. (ECF No. 1-1). On July 21, 2017, LMC filed its Notice of Removal. (ECF No. 1). Plaintiff filed her Second Amended Complaint on November 9, 2017. (ECF No. 34). On November 21, 2017, LMC filed a partial motion to dismiss, asserting that Plaintiff's cause of action against LMC for constructive fraud should be dismissed. (ECF No. 36). Plaintiff responded to the Defendant's Motion on December 5, 2017 (ECF No. 42), and Defendant replied to Plaintiff's Response on December 12, 2017 (ECF No. 43). On February 22, 2018, the Magistrate issued a Report and Recommendation (Report). (ECF No. 48).


         The Magistrate Judge assigned to this action[1] prepared a thorough Report and Recommendation, recommending that Defendant's Partial Motion to Dismiss should be granted. (ECF No. 48). The Report sets forth, in detail, the relevant facts and standards of law on this matter, and this Court incorporates those facts and standards without a recitation.

         A district court is only required to conduct a de novo review of the specific portions of the Magistrate Judge's Report to which an objection is made. See 28 U.S.C. § 636(b); Fed.R.Civ.P. 72(b); Martin v. Duffy, 858 F.3d 239, 245 (4th Cir. 2017). In the absence of specific objections to portions of the Magistrate's Report, this Court is not required to give an explanation for adopting the recommendation. See Camby v. Davis, 718 F.2d 198, 199 (4th Cir. 1983). Thus, the Court must only review those portions of the Report to which Plaintiff has made a specific written objection. Diamond v. Colonial Life & Acc. Ins. Co., 416 F.3d 310, 316 (4th Cir. 2005).

         III. ANALYSIS

         The Magistrate found that Plaintiff's claim against LMC for constructive fraud should be dismissed because “the Complaint fails to set forth facts plausibly alleging the existence of the requisite fiduciary relationship to support a claim of constructive fraud.” (ECF No. 48 p. 4).

[T]o recover upon the grounds of actual fraud based on representation, the following elements must be shown: (1) a representation; (2) falsity; (3) its materiality; (4) knowledge of the falsity or a reckless disregard of its truth or falsity; (5) intent that the representation be acted upon; (6) the hearer's ignorance of its falsity; (7) the hearer's reliance upon the truth; (8) the hearer's right to rely thereon; and (9) the hearer's consequent and proximate injury.

Moorhead v. First Piedmont Bank and Tr. Co., 273 S.C. 356, 359, 256 S.E.2d 414, 416 (1979) (citing O'Shields v. S. Fountain Mobile Homes, 262 S.C. 276, 282, 204 S.E.2d 50, 52 (1974)). “Where the complaint omits allegations on any element of fraud, the trial court should grant the defendant's motion to dismiss the claim.” Ardis v. Cox, 314 S.C. 512, 515, 431 S.E.2d 267, 269 (Ct. App. 1993) (emphasis added) (citing Inman v. Ken Hyatt Chrysler Plymouth, Inc., 294 S.C. 240, 242, 363 S.E.2d 691, 692 (1988)).

         To establish constructive fraud, a plaintiff must establish all of the above nine elements of fraud except for the element of intent. Id. at 516, 431 S.E.2d at 269. Thus, “[n]either actual dishonesty of purpose nor intent to deceive is an essential element of constructive fraud.” Id. at 516, 431 S.E.2d at 269-70. “However, in a constructive fraud case where there is no confidential or fiduciary relationship, and an arm's length transaction between mature, educated people is involved, there is no right to rely.” Id. at 516, 431 S.E.2d at 270 (citing Poco-Grande Invs. v. C. & S Family Credit, Inc., 301 S.C. 322, 325, 391 S.E.2d 735, 735 (Ct. App. 1990)).

         Under South Carolina law, “[a] fiduciary relationship is founded on the trust and confidence reposed by one person in the integrity and fidelity of another.” Moore v. Moore, 360 S.C. 241, 250, 599 S.E.2d 467, 472 (Ct. App. 2004) (citing Ellis v. Davidson, 358 S.C. 509, 519, 595 S.E.2d 817, 822 (Ct. App. 2004); Regions Bank v. Schmauch, 354 S.C. 648, 670, 582 S.E.2d 432, 444 (Ct. App. 2003); Redwend Ltd. P'ship v. Edwards, 354 S.C. 459, 476, 581 S.E.2d 496, 505 (Ct. App. 2003)). Such a relationship exists “when one imposes a special confidence in another, so that the latter, in equity and good conscience, is bound to act in good faith and with due regard to the interest of the one imposing the confidence.” Id. (citing Hendricks v. Clemson Univ., 353 S.C. 449, 458, 578 S.E.2d 711, 715 (2003); O'Shea v. Lesser, 308 S.C. 10, 15, 416 S.E.2d 629, 631 (1992); *251 SSI Med. Servs., Inc. v. Cox, 301 S.C. 493, 500, 392 S.E.2d 789, 794 (1990); Regions Bank, 354 S.C. at 670, 582 S.E.2d at 444; Steele v. Victory Sav. Bank, 295 S.C. 290, 293, 368 S.E.2d 91, 93 (Ct. App. 1988)). Moreover, to constitute a fiduciary relationship, the relationship must be something more than “casual.” Id. at 251, 599 S.E.2d at 472.

         The Plaintiff objects to the Magistrate's finding that there is no fiduciary relationship between the Plaintiff and her employer, LMC, alleging that Plaintiff's situation was “unique” and that “state law creates a fiduciary duty” where nurses are involved. (ECF No. 49 p. 3). Specifically, Plaintiff claims that the South Carolina Nursing Code of Ethics creates the requisite fiduciary duty. (ECF No. 49 p. 4). Plaintiff, however, provides no case law to support its assertion that the Nursing Code of Ethics creates a fiduciary duty between LMC and the Plaintiff. Moreover, although South Carolina courts have not addressed the specific issue of whether a nurse and her employer have a fiduciary relationship, at least one other court has addressed the issue, and it determined that no such fiduciary relationship exists. See State ...

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