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Garcia v. Coffman6/17/1997
FLORES, Judge.
Defendants Ted Coffman (Coffman), Allied Physicians, P.C. (Allied), and Musculoskeletal Evaluation Diagnostic Services appeal from judgments awarding Plaintiff damages upon claims for fraudulent misrepresentation, breach of fiduciary duty, and attorney's fees and costs. Defendants raise the following issues on appeal: (I) the complaint failed to state a cause of action for piercing the corporate veil and the evidence was insufficient to support that claim; (II) it was error to award Plaintiff nominal and punitive damages for breach of fiduciary duty; (III) the absence of actual damages constituted a failure to prove fraud and the jury's award of punitive damages for fraud was error; (IV) the jury's failure to award punitive damages against Allied precluded such an award against Coffman; (V) the punitive damages awards were excessive; and (VI) the award of attorney's fees was error.
We reverse the jury's award of nominal damages and punitive damages for fraudulent misrepresentation. We affirm the trial court's award of nominal damages and punitive damages for breach of fiduciary duty and its award of attorney's fees.
FACTS
Plaintiff's claims were tried both to a jury and to the bench. The claim for breach of fiduciary duty was tried to the court. Because Defendants have not challenged the sufficiency of the evidence to support the district court's findings, we rely on those findings to provide the factual background for the legal issues raised by the appeal.
Plaintiff was involved in an automobile accident on February 25, 1991. Eight days later, Plaintiff sought chiropractic care from Allied, a corporation wholly owned by Coffman. Coffman never met or spoke with Plaintiff nor provided any direct diagnosis or treatment to him. However, Coffman, individually and through Allied and its employees, designed and implemented a treatment program for personal injury patients such as Plaintiff for the purpose of generating income for Coffman to the detriment of the patients.
Coffman made it a practice to hire inexperienced chiropractors and required them to follow his prescribed treatment and diagnostic protocol. He also required other employees to report any deviations from his protocol. Pursuant to Coffman's protocol, unnecessary computerized muscle testing was performed on automobile accident patients by incompetent personnel, and x-rays were taken regardless of whether the treating physician Judged the procedures to be appropriate. In Plaintiff's case an excessive number of x-rays were taken, the x-rays were marked up by an unqualified staff member, and the x-ray results were not used in treatment.
Dr. Berlin, an employee of Allied and Plaintiff's treating chiropractor, had no discretion to alter the treatment and diagnostic regimen established by Coffman or the communications that Coffman required be made to Allied's patients. The length and frequency of visits and treatment modalities Dr. Berlin prescribed for Plaintiff had no relationship to Plaintiff's individual needs, and the modalities were administered by unqualified personnel on a rote basis. Dr. Berlin ordered blood tests, urinalysis, computer muscle testing, and follow-up x-rays for Plaintiff that were not necessary. Dr. Berlin referred Plaintiff to Dr. Weber for a second opinion without deciding whether such a referral was necessary. Dr. Weber, to whom Dr. Berlin made 50 to 100 referrals in one year, never once opined that a patient should not return to Allied for continued treatment. Dr. Berlin did not alter treatment of Plaintiff in response to Dr. Weber's opinion regarding Plaintiff, even though the opinion in part did not confirm the correctn
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