IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
April 23, 2008 Session
JESSE RAYMOND PROCTOR, ET AL. v. CHATTANOOGA
ORTHOPAEDIC GROUP, P.C., ET AL.
Appeal from the Circuit Court for Hamilton County
No. 06C520 Jacqueline E. Schulten, Judge
No. E2007-02469-COA-R3-CV - FILED JUNE 10, 2008
Jesse Raymond Proctor and Janie Kay Proctor (“Plaintiffs”), husband and wife, sued Chattanooga
Orthopaedic Group, P.C. and Center for Sports Medicine & Orthopaedics, LLC (“Defendants”)
alleging violations of the Tennessee Consumer Protection Act of 1977, Tenn. Code Ann. § 47-18-
101 et seq., concerning certain business practices of Defendants related to surgery performed on Mr.
Proctor. Defendants filed a motion to dismiss. After a hearing, the Trial Court entered an order
finding and holding, inter alia, that the gravamen of Plaintiffs’ claim sounded in alleged deceptive
business practices under the Tennessee Consumer Protection Act of 1977; that the complaint was
dismissed for failure to state a claim upon which relief could be granted; that Defendants’ affirmative
defenses contending that Plaintiffs’ claims sound in medical malpractice should be denied; and that
Plaintiffs were barred from amending their pleadings to raise medical malpractice claims. Plaintiffs
appeal to this Court. We reverse and hold that the Tennessee Consumer Protection Act of 1977 can
apply to the entrepreneurial, commercial, or business aspects of a medical practice, and since
Plaintiffs’ complaint sounds in alleged deceptive business practices under the Tennessee Consumer
Protection Act of 1977, Plaintiffs have stated a claim upon which relief could be granted.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Reversed;
Case Remanded
D. MICHAEL SWINEY , J., delivered the opinion of the court, in which HERSCHEL P. FRANKS, P.J., and
CHARLES D. SUSANO , JR., J., joined.
Sam Jones, Chattanooga, Tennessee for the Appellants, Jesse Raymond Proctor, et ux., Janie Kay
Proctor.
Arthur P. Brock and Timothy J. Millirons, Chattanooga, Tennessee for the Appellees, Chattanooga
Orthopaedic Group, P.C. and Center for Sports Medicine & Orthopaedics, LLC.
OPINION
Background
In 1998, Jesse Raymond Proctor established a doctor/patient relationship with Dr. N.
Earl McElheney who at that time was affiliated with Defendants. In the course of Mr. Proctor’s
treatment, Dr. McElheney performed, among other things, a right rotator cuff repair surgery and later
a left shoulder arthroscopic debridement. Some time later, Dr. McElheney and Mr. Proctor
discussed shoulder replacement surgery and Mr. Proctor agreed to have Dr. McElheney perform the
recommended procedure. The surgery was scheduled for August of 2005. However, Dr. McElheney
disassociated from Defendants prior to this surgery.
Dr. Alan Odom, who was associated with Defendants, performed shoulder surgery
on Mr. Proctor in August of 2005. Plaintiffs allege that Dr. Odom performed a hemi-arthroplasty
on Mr. Proctor, rather than a total shoulder arthroplasty as recommended by Dr. McElheney. The
operative report for Mr. Proctor’s surgery apparently states that a total shoulder arthroplasty was
performed on Mr. Proctor and Mr. Proctor’s insurance company apparently was billed for a total
shoulder arthroplasty rather than the less expensive hemi-arthroplasty actually performed.
Plaintiffs sued Defendants alleging that Defendants had deceived Mr. Proctor
regarding Dr. McElheney’s availability to perform the surgery in order for Defendants to keep his
business and the income from Mr. Proctor’s surgery, and further had deceived Mr. Proctor regarding
the extent of the surgery actually performed. Plaintiffs later were granted leave to amend their
complaint to allege, in part, that Defendants violated a statutory duty to keep records1 when the
operative report was prepared showing that Dr. Odom had performed a total shoulder arthroplasty
on Mr. Proctor when a hemi-arthroplasty was performed, and that this incorrect report was utilized
to submit a claim for insurance reimbursement. Defendants filed a motion to dismiss.
After a hearing, the Trial Court entered an order on October 2, 2007, finding and
holding, inter alia, that the gravamen of Plaintiffs’ claim sounded in alleged deceptive business
practices under the Tennessee Consumer Protection Act of 1977; that the complaint was dismissed
for failure to state a claim upon which relief could be granted; that Defendants’ affirmative defenses
contending that Plaintiffs’ claims sound in medical malpractice should be denied; and that Plaintiffs
were barred from amending their pleadings to raise medical malpractice claims. Plaintiffs appeal
to this Court.
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The Trial Court’s order allowing the amendment to the complaint states that the complaint is amended to
including the following language: “8. An agent, employee, and/or servant of the Defendants, currently suspected to be
Dr. Alan Odom, knew or should have known he was: A. violating TCA 68-3-303 (Hospital’s duty to keep records)
when he dictated his operative report… .” This language was taken verbatim from Plaintiffs’ motion to amend the
complaint. Tennessee Code Annotated § 68-3-303 addresses only the preparation and filing of a birth certificate for a
birth that occurs outside an institution. Tenn. Code Ann. § 68-3-303 (2006). While we note the error, the incorrect
citing of this statute has no bearing on the issue involved in this appeal.
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Discussion
Although not stated exactly as such, Plaintiffs raise one issue on appeal: whether the
Trial Court erred in holding that the business aspects of Defendants’ medical practice are not subject
to the provisions of the Tennessee Consumer Protection Act of 1977, Tenn. Code Ann. § 47-18-101
et seq., and dismissing Plaintiffs’ complaint.
Our standard of review as to the granting of a motion to dismiss is set out in Stein v.
Davidson Hotel Co., in which our Supreme Court explained:
A Rule 12.02(6), Tenn.R.Civ.P., motion to dismiss for failure
to state a claim upon which relief can be granted tests only the legal
sufficiency of the complaint, not the strength of a plaintiff's proof.
Such a motion admits the truth of all relevant and material averments
contained in the complaint, but asserts that such facts do not
constitute a cause of action. In considering a motion to dismiss,
courts should construe the complaint liberally in favor of the plaintiff,
taking all allegations of fact as true, and deny the motion unless it
appears that the plaintiff can prove no set of facts in support of her
claim that would entitle her to relief. Cook v. Spinnaker's of
Rivergate, Inc., 878 S.W.2d 934, 938 (Tenn. 1994). In considering
this appeal from the trial court's grant of the defendant's motion to
dismiss, we take all allegations of fact in the plaintiff's complaint as
true, and review the lower courts' legal conclusions de novo with no
presumption of correctness. Tenn.R.App.P. 13(d); Owens v.
Truckstops of America, 915 S.W.2d 420, 424 (Tenn. 1996); Cook,
supra.
Stein v. Davidson Hotel Co., 945 S.W.2d 714, 716 (Tenn. 1997).
Defendants argue on appeal that the Tennessee Consumer Protection Act of 1977
does not apply to the provision of medical services. Defendants cite Constant v. Wyeth, a decision
of the United States District Court for the Middle District of Tennessee, for this proposition.
Constant v. Wyeth, 352 F. Supp. 2d 847 (M.D. Tenn. 2003). The Constant Court found that the
plaintiff had alleged a claim for medical malpractice and then alleged simply that the doctor had
violated the Tennessee Consumer Protection Act of 1977 “with no other ‘fleshing out’ of this
allegation.” Id. at 853. The Constant Court then stated that it agreed “with the reasoning of [other
state courts] that medical malpractice claims may not be recast as consumer protection act claims.”
Id. at 854. The Constant Court also stated:
That is not to say physicians are immune entirely from claims under the TCPA.
Rather, they are only immune when the plaintiff’s allegations concern the actual
provision of medical services. As one state court has explained:
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We agree that “[i]t would be a dangerous form of elitism,
indeed, to dole out exemptions to our [consumer protection] laws
merely on the basis of the educational level needed to practice a given
profession, or for that matter, the impact which the profession has on
society’s health and welfare.” Short, supra at 58, 691 P.2d 163,
citing United States v. Nat’l Society of Professional Engineers, 389
F.Supp. 1193, 1198 (D.D.C., 1974), vacated and remanded 422 U.S.
1031, 95 S.Ct. 2646, 45 L.Ed.2d 686 (1975) (for reconsideration in
light of Goldfarb, supra). Also, because the MCPA [Michigan
Consumer Protection Act] broadly defines “trade or commerce,” in
part, as the “conduct of a business,” and the practice of medicine
clearly has a business aspect, a blanket exemption for the learned
professions would be improper. However, we are also of the opinion
that it would be improper to view the practice of medicine as
interchangeable with other commercial endeavors and apply to it
concepts that originated in other areas. Goldfarb, supra. Therefore,
a blanket inclusion in the MCPA for physicians would also be
improper. Consequently, we align ourselves with the line of cases set
forth in this opinion and bold (sic) that only allegations of unfair,
unconscionable, or deceptive methods, acts, or practices in the
conduct of the entrepreneurial, commercial, or business aspect of a
physician’s practice may be brought under the MCPA.
Nelson v. Ho, 222 Mich. App. 74, 564 N.W.2d 482, 486 (1997).
Id. at 853-54 n.10.
We agree that medical malpractice claims may not be recast as Tennessee Consumer
Protection Act of 1977 claims. These two types of claims are wholly separate and distinct claims
governed by separate statutory schemes. Tenn. Code Ann. § 29-26-115 et seq.; Tenn. Code Ann.
§ 47-18-101 et seq. The Constant plaintiff pled a claim for medical malpractice and then attempted
to also allege that this very same claim constituted a violation of the consumer protection law.
Constant, 352 F. Supp. 2d at 853. This is distinguishable from the case now before us. Here, the
Trial Court found and held that the gravamen of Plaintiffs’ claim sounded in alleged deceptive
business practices under the Tennessee Consumer Protection Act of 1977, not in medical
malpractice. Simply put, Plaintiffs did not allege that Defendants had deviated from the acceptable
standard of professional practice in either the decision to perform the surgery that was performed or
in the manner in which the actual surgery was performed. Plaintiffs instead alleged that Defendants
had misled them in order to keep Mr. Proctor’s business, and that Defendants charged for a more
expensive procedure than the one actually performed. We agree with the Trial Court that Plaintiffs’
complaint attempts to state a claim for alleged deceptive business practices under the Tennessee
Consumer Protection Act of 1977, and not a claim for medical malpractice.
The Tennessee Consumer Protection Act of 1977 provides that it shall be liberally
construed to promote its purposes, which include:
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(1) To simplify, clarify, and modernize state law governing the protection of the
consuming public and to conform these laws with existing consumer protection
policies;
(2) To protect consumers and legitimate business enterprises from those who engage
in unfair or deceptive acts or practices in the conduct of any trade or commerce in
part or wholly within this state;
(3) To encourage and promote the development of fair consumer practices;
(4) To declare and to provide for civil legal means for maintaining ethical standards
of dealing between persons engaged in business and the consuming public to the end
that good faith dealings between buyers and sellers at all levels of commerce be had
in this state; and
(5) To promote statewide consumer education.
Tenn. Code Ann. § 47-18-102 (2001). To these ends, Tenn. Code Ann. § 47-18-115 provides:
47-18-115. Construction. – This part, being deemed remedial legislation necessary
for the protection of the consumers of the state of Tennessee and elsewhere, shall be
construed to effectuate the purposes and intent. It is the intent of the general
assembly that this part shall be interpreted and construed consistently with the
interpretations given by the federal trade commission and the federal courts pursuant
to § 5(A)(1) of the Federal Trade Commission Act (15 U.S.C. § 45(a)(1)).
Tenn. Code Ann. § 47-18-115 (2001).
In Goldfarb v. Virginia State Bar, the United States Supreme Court refused to find
a blanket exemption for the learned professions from the Sherman Act and held “that certain
anticompetitive conduct by lawyers is within the reach of the Sherman Act ….” Goldfarb v. Virginia
State Bar, 421 U.S. 773, 793, 95 S. Ct. 2004, 2016, 44 L. Ed.2d 572, 588 (1975). The Sixth Circuit
has instructed:
The Federal Trade Commission Act may be construed in pari materia with
the Sherman and Clayton Acts. “This construction allows for using cases decided
under any of the antitrust laws in dealing with cases brought by the Commission.”
Atlantic Refining Co. v. Federal Trade Commission, 344 F.2d 599, 606 (C.A. 6),
cert. denied, 382 U.S. 939, 86 S. Ct. 391, 15 L. Ed. 2d 350.
American Cyanamid Co. v. Federal Trade Comm’n, 363 F.2d 757, 770 (6th Cir. 1966). In addition,
the Federal Trade Commission has held that attorneys are subject to the Federal Trade Commission
Act. In re Wilson Chem. Co., 64 F.T.C. 168 (1964). Given the clear directions and intent of our
General Assembly as expressed in the statute along with the relevant Federal and Tennessee case
law, we hold that Defendants are not exempt because they are learned professionals from claims
relating to their business practices brought under the Tennessee Consumer Protection Act of 1977.
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Construing the complaint liberally in favor of Plaintiffs and taking all allegations of
fact as true, as we must, we hold that Plaintiffs have stated a claim against Defendants under the
Tennessee Consumer Protection Act of 1977 for alleged deceptive business practices upon which
relief could be granted. We, therefore, reverse the Trial Court’s October 2, 2007 order dismissing
Plaintiffs’ complaint.
Conclusion
The judgment of the Trial Court dismissing Plaintiffs’ complaint for failure to state
a claim upon which relief can be granted is reversed and this cause is remanded to the Trial Court
for further proceedings and for collection of the costs below. The costs on appeal are assessed
against the Appellees, Chattanooga Orthopaedic Group, P.C. and Center for Sports Medicine &
Orthopaedics, LLC.
___________________________________
D. MICHAEL SWINEY, JUDGE
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