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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Waldroup v Lindman (08/10/2001) sp-5448

Waldroup v Lindman (08/10/2001) sp-5448

     Notice:  This opinion is subject to correction before publication in
the Pacific Reporter.  Readers are requested to bring errors to the attention of
the Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska 99501, phone
(907) 264-0608, fax (907) 264-0878.



             THE SUPREME COURT OF THE STATE OF ALASKA
                                 


E. E. WALDROUP, D.C. d/b/a    )
CHIROPRACTIC HEALTH CLINIC    )    Supreme Court No. S-9409
and HEALTHBEAT OF ALASKA,     )
                              )    Superior Court No.
             Appellants,      )    3AN-97-9446 CI
                              )
     v.                       )    O P I N I O N
                              )
MELISSA A. LINDMAN, and       )    [No. 5448 - August 10, 2001]
ALLSTATE INSURANCE COMPANY,   )
                              )
             Appellees.       )
______________________________)



          Appeal from the Superior Court of the State of
Alaska, Third Judicial District, Anchorage,
                        John Reese, Judge.


          Appearances:  Richard G. Haggart and David W.
          Murrills, Law Offices of Richard G. Haggart,
Anchorage, for Appellants.  Barry J. Kell and Audrey H. Faulkner,
Wilkerson & Associates, Anchorage, for Appellees.  


          Before: Fabe, Chief Justice, Matthews,
          Eastaugh, Bryner, and Carpeneti, Justices.  


          EASTAUGH, Justice.


I.   INTRODUCTION
          The insurer of a chiropractor's patient denied payment
for treatment the insurer considered unreasonable and unnecessary. 
It offered to defend the patient if the chiropractor sued her for
payment.  The chiropractor sued the insurer, alleging interference
with contractual relations.  Was it error to grant summary judgment
to the insurer on that claim?  Because the insurer had a direct
financial interest in the contractual relationship between its
insured and the chiropractor, and because there was insufficient
evidence to raise a genuine issue of material fact to support a
claim that an improper purpose motivated the insurer, we hold that
any interference by the insurer was privileged as a matter of law. 
We therefore affirm the grant of summary judgment.
II.  FACTS AND PROCEEDINGS
          On February 15, 1995 a vehicle rear-ended an automobile
in which Melissa Lindman was a passenger.  Lindman was insured
under an Allstate Insurance Company automobile insurance policy
which provided for payments for "all reasonable expenses incurred
for necessary treatment actually rendered within one year of [an]
accident because of [a] bodily injury." 
          Lindman went the next day to the Chiropractic Health
Clinic, the clinic of E.E. Waldroup, Doctor of Chiropractic.
Lindman complained of back and neck pain and headaches. 
          Before Dr. Waldroup examined her, Lindman completed and
signed a patient intake form, which provided:
          I understand and agree that health and
accident insurance policies are an arrangement between an insurance
carrier and myself.  Furthermore, I understand that the
Chiropractic Health Clinic will prepare any necessary reports and
forms to assist me in making collection from the insurance company
and that any amount authorized to be paid directly to the
Chiropractic Health Clinic will be credited to my account on
receipt.  However, I clearly understand and agree that all services
rendered me are charged directly to me and that I am personally
responsible for payment.  I also understand that, if I suspend or
terminate my care and treatment, any fees for professional services
rendered me will be immediately due and payable. 
 
Lindman also signed a personal injury office policy form containing
similar language. 
          Dr. Waldroup administered chiropractic care to Lindman at
the clinic between February and May 1995. [Fn. 1]  In June
Dr. Waldroup referred Lindman to HealthBeat of Alaska, a physical
rehabilitation clinic owned by Dr. Waldroup.  Lindman again
completed and signed a patient intake form and a personal injury
office policy form.  She also signed a doctor's lien form, which
provided:
          I fully understand that I am directly and
fully responsible to said doctor for all physical rehabilitation
bills submitted by him for service rendered me, and that this
agreement is made solely for said doctor's additional protection
and in consideration of his awaiting payment.  And I further
understand that such payment is not contingent on any settlement,
claim judgment or verdict by which I may eventually recover said
fee. 

          Dr. Waldroup treated Lindman at HealthBeat of Alaska
until December 1995.  On December 8, 1995 Allstate, acting as
Lindman's insurer, informed Dr. Waldroup in writing that it would
deny payment for any treatment Dr. Waldroup rendered at HealthBeat
of Alaska after June 30, 1995, unless Dr. Waldroup submitted
"additional objective documentation" supporting the treatment as
"reasonable, necessary and accident related."  Allstate also wrote
Lindman on the same date.  This letter advised Lindman of its
decision to deny payment for the treatment and assured her that "if
Allstate denies payment of these bills as not being reasonable and
necessary treatment we will defend you if Chiropractic Health
Clinic and/or HealthBeat of Alaska pursues you for payment." 
          In May 1996 Dr. Waldroup demanded payment from Lindman. 
Lindman refused to pay. 
          In November 1997 Dr. Waldroup sued Lindman and Allstate
in superior court.  By amended complaint, Dr. Waldroup and
HealthBeat of Alaska (collectively "Waldroup") alleged breach of
contract and breach of the covenant of good faith and fair dealing
against Lindman; they alleged interference with contractual
relations and intentional/malicious conduct against Allstate.  
          In October 1998 Allstate and Lindman moved to amend their
answer to assert the affirmative defenses of breach of contract and
breach of fiduciary obligations.  Dr. Waldroup opposed that motion
and cross-moved to strike the affirmative defense of unclean hands. 
The superior court granted the defendants' motion to amend their
answer.  The superior court's order did not address Dr. Waldroup's
cross-motion. 
          In May 1999 Dr. Waldroup asked the superior court to
appoint an expert advisory panel under AS 09.55.536 and Alaska
Civil Rule 72.1 to evaluate defendants' affirmative defenses.  The
superior court denied this request. 
          Allstate had previously moved for summary judgment on
Dr. Waldroup's claim for interference with contractual relations. 
The superior court granted Allstate's motion in August 1999 and
entered a Civil Rule 54(b) final judgment for Allstate. [Fn. 2]
          In October 1999 the parties agreed to submit
Dr. Waldroup's claims for breach of contract and breach of the
covenant of good faith and fair dealing to arbitration, with the
superior court retaining jurisdiction as to any legal issues
arising from the arbitration.
          Dr. Waldroup appeals the superior court's orders (1)
granting summary judgment on Dr. Waldroup's claim for interference
with contractual relations; (2) granting Allstate and Lindman leave
to amend their answer; and (3) denying Dr. Waldroup's request to
appoint an expert advisory panel.
III. DISCUSSION
     A.   Standard of Review
          We review a grant of summary judgment de novo and affirm
if the evidence in the record fails to disclose a genuine issue of
material fact, and the moving party is entitled to judgment as a
matter of law. [Fn. 3]  We view the facts in the light most
favorable to the non-moving party. [Fn. 4]  We apply our
independent judgment to any questions of law, adopting the rule of
law that is most persuasive in light of precedent, reason, and
policy. [Fn. 5]
     B.   It Was Not Error to Grant Summary Judgment on
          Dr. Waldroup's Claim for Interference with Contractual
Relations.

          The superior court dismissed Dr. Waldroup's interference-
with-contractual-relations claim on summary judgment, finding as a
matter of law that any interference by Allstate was privileged.  On
appeal, Dr. Waldroup argues that it was error to grant summary
judgment because he claims: (1) Allstate did not have a "direct
financial interest" in the contractual relationship between Dr.
Waldroup and Lindman; (2) genuine issues of material fact regarding
Allstate's motivation precluded summary judgment; (3) Allstate's
interference "pervade[d] the entire physician-patient relationship
and not merely that part of it relating to Allstate's interest in
the automobile accident"; and (4) public policy dictates against
granting insurance companies a privilege to interfere with the
physician-patient relationship. 
          The tort of intentional interference with contractual
relations requires proof that "'(1) a contract existed, (2) the
defendant knew of the contract and intended to induce a breach, (3)
the contract was breached, (4) defendant's wrongful conduct
engendered the breach, (5) the breach caused the plaintiff's
damages, and (6) the defendant's conduct was not privileged or
justified.'" [Fn. 6]  Allstate conceded for purposes of its summary
judgment motion that there was sufficient evidence of the first
five elements to preclude dismissal of Dr. Waldroup's claim on
summary judgment.  Allstate's motion and Dr. Waldroup's response
focused on the sixth element of the tort -- whether Allstate's
conduct was privileged or justified. 
          In Ran Corp. v. Hudesman, we held that "where an actor
has a direct financial interest, he [or she] is privileged to
interfere with a contract for economic reasons, but not where he
[or she] is motivated by spite, malice, or some other improper
objective." [Fn. 7]  We added that "'where there is a direct
financial interest in a contract, the essential question in
determining if interference is justified is whether the person's
conduct is motivated by a desire to protect his economic interest,
or whether it is motivated by spite, malice, or some other improper
objective.'" [Fn. 8]
          1.   Allstate had a direct financial interest in the
contractual relationship between Dr. Waldroup and Lindman.
          The superior court found as a matter of law that
"Allstate [had] a direct financial interest in the contract between
Dr. Waldroup and Ms. Lindman, as to medical care related to the
subject automobile accident."  Dr. Waldroup argues on appeal that
Allstate did not have a "direct financial interest" in the
contractual relationship between himself and Lindman, because
Allstate's interference did not expose it to both potential gain
and loss. 
          In Bendix Corp. v. Adams, we considered whether a parent
corporation was privileged to interfere with a contractual
relationship of its subsidiary. [Fn. 9]  We held that "where a
direct interest in a contract is involved, there is reason to be
more liberal in granting the privilege to interfere with an
existing contract." [Fn. 10]  We explained:
          There appears to be a significant distinction
. . . between the interests of a person in his [or her]
competitor's contracts and those contracts in which he [or she] has
some direct financial interest.  One who interferes with a
competitor's contracts ordinarily has little to lose and much to
gain by successfully causing a breach of contract.  Encouraging
contractual stability may require imposing legal liability to stop
such behavior when it steps beyond limits acceptable to society. 
But in a case where a person has some direct financial stake in a
contract, it appears logical that a person's own economic self-
interest would discourage causing a breach of contract because
there would be some personal loss.  For example, it seems that a
stockholder in a closely held corporation would not ordinarily want
to interfere in the corporation's contracts because the corporation
would become liable for breach of contract, jeopardizing the value
of the stockholder's own investment.[ [Fn. 11]]

          Citing Bendix, Dr. Waldroup contends that to find that a
defendant has a "direct financial interest" in the contractual
relationship of a plaintiff alleging interference with contractual
relations, the defendant must be exposed to both potential gain and
loss as a result of its interference.  Because "Allstate could gain
by interfering in the Lindman-Waldroup contract [but] could not
lose anything Allstate was not already obligated to provide to
Lindman," Dr. Waldroup argues that Allstate did not have a "direct
financial interest" in the contractual relationship between Lindman
and Dr. Waldroup.  We disagree.
          We do not read Bendix to hold that a finding of a "direct
financial interest" in a contractual relationship requires that an
interfering defendant must be exposed to both potential gain and
loss as a result of its interference. [Fn. 12]  Rather, exposure to
both gain and loss is a factor that courts consider in determining
whether a defendant has a "direct financial interest" in a
contractual relationship. [Fn. 13]  As we noted in Bendix, "[o]ne
who interferes with a competitor's contracts ordinarily has little
to lose and much to gain by successfully causing a breach of
contract.  Encouraging contractual stability may require imposing
legal liability to stop such behavior when it steps beyond limits
acceptable to society." [Fn. 14]  "[T]he essential question in
determining if interference is justified is whether the
[defendant's] conduct is motivated by a desire to protect [its]
economic interest, or whether it is motivated by spite, malice, or
some other improper objective." [Fn. 15]  Thus, in cases in which
a defendant's interference exposes it to potential gain but not
loss, the interference may nevertheless be privileged if it does
not step beyond limits acceptable to society -- i.e., if it is not
motivated by spite, malice, or some other improper objective. [Fn.
16]  
          For example, we held in Ran that a landlord had a direct
financial interest in a lessee's proposed assignment of a lease
because: (1) "[a]n effective lease assignment makes the assignee
the tenant of the owner; the assignee becomes the lessee and has a
direct contractual relationship with the owner"; [Fn. 17] (2)
"[t]he tenant also has an obligation to pay rent directly to the
owner, and the use, or abuse, of the property by the assignee may
affect its value to the owner"; [Fn. 18] (3) "the owner may know of
another potential assignee who will pay more rent than the
prospective assignee"; [Fn. 19] and (4) "the owner may wish to
terminate the lease based on knowledge of a more profitable use for
the property." [Fn. 20]  We did not discuss whether the landlord's
interference also exposed him to potential loss. [Fn. 21]  Because
there was "no evidence of spite, malice or other improper
objective," [Fn. 22] we concluded that the landlord was privileged
to interfere with his tenant's lease assignment contract. [Fn. 23]
          In any event, Allstate's alleged interference with the
contractual relationship between Lindman and Dr. Waldroup subjected
it to both potential gain and loss.  Dr. Waldroup concedes that
Allstate could potentially gain by interfering with the contract
between Lindman and Dr. Waldroup: "Allstate's interference in the
contract between Dr. Waldroup and Lindman . . . could result in
Allstate paying less than it would otherwise be required to pay
under its insurance contract with Lindman."  Lindman's auto
insurance policy with Allstate obligated "Allstate [to] pay to or
on behalf of a person insured all reasonable expenses incurred for
necessary treatment actually rendered within one year of [an]
accident because of [a] bodily injury."  By interfering, Allstate
could potentially gain because Dr. Waldroup might decide not to
pursue legal action given the dollar amount in question and the
cost of litigation, or might settle for less than the full amount
Lindman owed.
          Allstate's alleged interference also exposed it to
potential loss.  Allstate's letter promised to defend Lindman in
any action filed by the clinic or HealthBeat of Alaska, even though
its insurance policy did not clearly require it to do so.  Thus, by
interfering with the contractual relationship, Allstate was
prospectively exposed to the cost of defending Lindman if Dr.
Waldroup sued her for payment. 
          Dr. Waldroup also cites Speer v. Cimosz, in which the
Court of Appeals of New Mexico upheld a jury verdict against a
workers' compensation insurer for interference with contractual
relations. [Fn. 24]  In Speer, a workers' compensation insurer had
denied payment to a chiropractor for treatment it considered
unreasonable and had assured its insureds that "'in the event suit
is filed against you, the company will provide a complete defense
of any action . . . .'" [Fn. 25]  On appeal, the insurer argued
that the trial court had erred by denying its motion for a directed
verdict. [Fn. 26]  But the court of appeals held that "the evidence
[at trial] sustained the claim of interference and the jury was not
erroneously instructed thereon." [Fn. 27]  Dr. Waldroup argues that
Speer necessarily implies that an insurer is not privileged to
interfere with its insured's contractual relationship with a
healthcare provider.
          But Speer is distinguishable.  The court there defined
"privilege" as "a good faith assertion or threat by the one
interfering to protect a legally-protected interest of his [or her]
own which he [or she] believes might otherwise be impaired or
destroyed by performance of the contract." [Fn. 28]  The court then
held that the insurer's argument that it would have lost the
"right" to pay its insureds' medical bills if it did not inject
itself into the contracts between its insureds and the chiropractor
was "'full of sound and fury, signifying nothing.'" [Fn. 29]  The
court's definition of privilege did not turn on whether the
defendant had a "direct financial interest" in the plaintiff's
contractual relationship. [Fn. 30]  Dr. Waldroup's reliance on
Speer is therefore misplaced.
          The terms of Allstate's insurance policy with Lindman and
evidence of Lindman's February 1995 automobile accident made out a
prima facie case for summary judgment on the issue of Allstate's
"direct financial interest" in the contractual relationship between
Dr. Waldroup and Lindman.  Because Dr. Waldroup did not raise a
genuine fact dispute regarding Allstate's "direct financial
interest," we affirm the grant of summary judgment on this issue.
          2.   No genuine issues of material fact regarding
Allstate's motivation precluded summary judgment.

          Dr. Waldroup next argues that even if Allstate had a
"direct financial interest" in the contractual relationship between
Dr. Waldroup and Lindman, it was nevertheless error to dismiss the
interference-with-contractual-relations claim on summary judgment,
because the question whether Allstate's interference was improperly
motivated is one for the trier of fact.  Dr. Waldroup cites Geolar,
Inc. v. Gilbert/Commonwealth Inc., where we held that the question
whether a defendant's interference with a plaintiff's contractual
relationship is motivated by an improper objective is normally one
for the trier of fact. [Fn. 31]
          We note initially that Dr. Waldroup did not preserve the
issue of improper motive in the superior court.  Dr. Waldroup's
opposition to Allstate's summary judgment motion did not address
that issue.  Nor did Dr. Waldroup file a statement of genuine
issues of material fact regarding Allstate's motivation, as
permitted by Alaska Civil Rule 56(c). [Fn. 32]  But in any event,
we find Dr. Waldroup's argument unpersuasive.     
          Dr. Waldroup argues that the record before the superior
court when it granted summary judgment contained sufficient
evidence of Allstate's improper motivation to preclude summary
judgment.  Dr. Waldroup first asserts that the record contained
evidence that "Allstate cut off payment as of June 30, 1995, but
did not bother telling either Lindman or Dr. Waldroup that they
were doing so until after the treatment regime had been completed." 
This assertion is inaccurate.  Dr. Waldroup's deposition testimony
establishes that during the physical rehabilitation phase of
Lindman's treatment, he was aware, based on communications with an
Allstate agent, that Allstate was going to deny payment for
portions of Lindman's treatment.  
          Dr. Waldroup next asserts that the record included
evidence that "Allstate told Lindman not to pay Dr. Waldroup and
offered to pay for a defense" even though it had no contractual
obligation to do so.  It is true that Allstate offered to pay for
Lindman's legal defense.  But Dr. Waldroup cites no evidence that
would support a finding that Allstate advised Lindman not to pay
Dr. Waldroup.  And Allstate's offer to pay for Lindman's legal
defense, standing alone, is insufficient to give rise to an
inference of improper purpose.  That offer arguably tends to
establish the element of Allstate's wrongful conduct in inducing a
contract breach by Lindman, but it sheds no light on Allstate's
motivation for its conduct.  Therefore, evidence of Allstate's
offer to pay for Lindman's legal defense did not raise a genuine
factual dispute material to the improper motivation issue.
          Finally, Dr. Waldroup argues that summary judgment was
precluded by evidence that "it was not until after this lawsuit was
filed[] that Allstate hired an expert to try to find fault with
Dr. Waldroup's treatment."  First, this assertion is inaccurate. 
A letter dated October 10, 1995, prepared by a chiropractor at
ADP/National Biosystems, Inc., establishes that Allstate consulted
an expert regarding Dr. Waldroup's treatment of Lindman about ten
months before Dr. Waldroup filed suit.  Moreover, Dr. Waldroup does
not explain how any delay in consulting with an expert would tend
to prove an improper motive.
          Did Allstate present sufficient evidence to make out a
prima facie showing of entitlement to summary judgment on the issue
of improper motive? [Fn. 33]  Although Allstate did not support its
summary judgment motion with an affidavit addressing the issue, the
record contained enough circumstantial evidence of good faith to
satisfy Allstate's initial burden.  First, evidence of Allstate's
direct financial interest in the contractual relationship between
Lindman and Dr. Waldroup [Fn. 34] is circumstantial evidence of
good faith, because business firms generally act in accordance with
their financial interest.  Furthermore, Dr. Waldroup testified in
a deposition that he "actually . . . had a pretty good working
relationship with Allstate."  Finally, Allstate's December 1995
letter to Lindman was narrowly tailored to the exact nature of its
dispute with Dr. Waldroup and did not reflect any improper
motivation.  That letter merely advised Lindman of Allstate's
decision to deny payment for the treatment it claimed was
unnecessary and unreasonable, and assured Lindman that "if Allstate
denies payment of these bills as not being reasonable and necessary
treatment we will defend you if Chiropractic Health Clinic and/or
HealthBeat of Alaska pursues you for payment."  Because Allstate
made out a prima facie case for summary judgment on the issue of
improper motive, and because Dr. Waldroup countered with no
contrary evidence on that issue, we affirm the grant of summary of
judgment on this issue.
          3.   Dr. Waldroup did not present evidence of treatment
for reasons independent of Lindman's automobile accident.

          Dr. Waldroup argued in the superior court, and maintains
on appeal, that to the extent Lindman's need for treatment was
independent of Lindman's automobile accident, Allstate did not have
a "direct financial interest" in the physician-patient
relationship.  The superior court's order granting Allstate's
motion for summary judgment noted that Dr. Waldroup had failed to
present evidence raising a genuine issue of material fact about
whether "the medical care involved in the collection suit [was]
from some other cause." 
          Dr. Waldroup argues on appeal that evidence of Lindman's
preexisting back and neck injuries raised a genuine factual dispute
regarding the scope of Allstate's "direct financial interest" in
the contractual relationship between Lindman and Dr. Waldroup.  Dr.
Waldroup therefore concludes that it was error to grant summary
judgment.  We disagree.
          Although the record before the superior court contained
evidence of Lindman's preexisting injuries, it contained no
evidence that Lindman's treatment in 1995 was related to her
preexisting injuries.  Indeed, even Dr. Waldroup's affidavit did
not aver that Lindman's treatment in 1995 was related to her
preexisting injuries.  We therefore hold that there was no genuine
fact dispute regarding the scope of Allstate's "direct financial
interest" precluding the summary judgment.
          4.   Public policy considerations do not dictate against
granting insurers a privilege to interfere with the physician-
patient relationship.

          Dr. Waldroup also argues that public policy
considerations dictate against granting insurance companies a
privilege to interfere with the physician-patient relationship:
          If Allstate's actions herein are upheld as
permissible as a matter of law, an open invitation is extended to
medical insurers generally to utilize their economic power to
influence and control the physician/[p]atient relationship for
monetary, rather than medical reasons - all to the potential
detriment of the health of their fiduciaries, the insureds. 

          Allstate responds:

          The typical health care consumer lacks any
real degree of sophistication with respect to medical treatment,
billing, and insurance; patients generally obtain the treatment
their physicians prescribe, and rely on their insurers to pay for
that treatment.  Where, as here, a dispute arises as to the
reasonableness of medical treatment, the insurer plays an important
role in assuring the medical care providers do not seek to take
advantage of patients.

          Because we are not convinced that Dr. Waldroup's public
policy argument, unsupported by evidence, is more plausible than
Allstate's, we choose not to rely upon the parties' irreconcilable
public policy arguments in deciding this case.
     C.   It Was Not Error to Grant Allstate and Lindman's Motion
to Amend Their Answer.

          In October 1998 Allstate and Lindman moved to amend their
answer to assert the affirmative defenses of breach of contract and
breach of fiduciary obligations.  Dr. Waldroup opposed the motion
and cross-moved to strike the affirmative defense of unclean hands. 
Dr. Waldroup argued that all three affirmative defenses were
"simply disguised counterclaims for malpractice, and should have
been asserted in that manner."  The superior court granted Allstate
and Lindman's motion to amend their answer.  The superior court's
order did not address Dr. Waldroup's cross-motion.  It was
therefore denied by implication.  Dr. Waldroup appeals this ruling.
          Dr. Waldroup's argument is not properly before us.   The
superior court's order granting Allstate and Lindman leave to amend
their answer, the order from which Dr. Waldroup appeals, permitted
Allstate and Lindman to plead affirmative defenses to Dr.
Waldroup's contract claims.  But the superior court has not entered
final judgment as to those claims.  Rather, the parties agreed to
submit the contract claims to arbitration, with the superior court
retaining jurisdiction as to legal issues arising from the
arbitration.  Because Alaska Appellate Rule 202(a) requires that
appeals to the supreme court be taken from a final judgment entered
by the superior court, [Fn. 35] we lack jurisdiction to consider
this issue.  But because the parties have fully briefed this issue,
we choose to treat it as if it were raised by a petition for review
and review its merits to avoid a possible future appeal on this
issue. [Fn. 36]
          Dr. Waldroup contends that the superior court erroneously
allowed Allstate and Lindman to assert the affirmative defenses of
breach of contract, breach of fiduciary obligation, and unclean
hands, because, he argues, they are no longer recognized under
Alaska common law in cases between a physician and a patient, and
must be pleaded as a medical malpractice counterclaim.  We
disagree.  
          Dr. Waldroup cites M.A. v. United States for the
proposition that a cause of action for breach of fiduciary
obligations is no longer recognized in Alaska in cases between a
physician and a patient and must be asserted as a medical
malpractice claim under AS 09.55.540(a). [Fn. 37]  Dr. Waldroup
misreads the holding of M.A.  That case held that a physician's
negligent failure to diagnose a pregnancy gave rise to a valid
cause of action for medical malpractice under AS 09.55.540(a). [Fn.
38]  That holding was based in part on the fiduciary responsibility
of physicians toward their patients. [Fn. 39]  But M.A. did not
hold that a cause of action for breach of fiduciary obligations is
no longer available in Alaska in cases filed by patients against
physicians. [Fn. 40]          Dr. Waldroup also cites cases holding
that if an attorney has made the client no express promise, the
client's malpractice action sounds in tort and the two-year statute
of limitation applies. [Fn. 41]  Dr. Waldroup argues that these
cases stand for the proposition that Alaska no longer recognizes "a
breach of contract claim between doctor and patient with respect to
treatment rendered."  Not only does Dr. Waldroup misread the
holding of these cases, but these cases were overruled in Lee
Houston & Associates, Ltd. v. Racine, which held that the two-year
limitation period for personal injury actions does not apply to
actions arising out of professional service relationships which
primarily involve economic injury. [Fn. 42]
          Finally, Dr. Waldroup cites no authority to persuade us
that the affirmative defense of unclean hands is not recognized
under Alaska law in a contract action between a physician and a
patient.  We therefore affirm the order granting Allstate and
Lindman leave to amend their answer.
     D.   It Was Not Error to Deny Dr. Waldroup's Request for
Appointment of an Expert Advisory Panel.

          Waldroup claims that the superior court erred by denying
his request under AS 09.55.536 [Fn. 43] and Alaska Civil Rule 72.1
[Fn. 44] to appoint an expert advisory panel to evaluate the
defendants' affirmative defenses.  Because Dr. Waldroup's request
arises out of his contract claims, and because there is no final
judgment as to those claims, we lack jurisdiction to consider this
issue on direct appeal. [Fn. 45] 
          In any event, Dr. Waldroup's arguments lack merit.  He
argues that the affirmative defenses of breach of contract, breach
of fiduciary obligations, and unclean hands are "simply disguised
counterclaims for malpractice" which trigger the provisions in AS
09.55.536 and Rule 72.1 for appointing an expert advisory panel.
But Rule 72.1(a) provides that "[e]ither party in a health care
malpractice action subject to AS 09.55.536 may request that the
court appoint an expert advisory panel to evaluate the claim."
(Emphasis added.)  Alaska Statute 09.55.536 applies only to "an
action for damages due to personal injury or death based upon the
provision of professional services by a health care provider
. . . ." [Fn. 46]  Even if Allstate and Lindman's affirmative
defenses are characterized as counterclaims for medical
malpractice, they do not allege death or personal injury based on
Dr. Waldroup's services.  Alaska Statute 09.55.536 and Rule 72.1
therefore do not apply.  The superior court properly denied
Dr. Waldroup's request to appoint an expert advisory panel.
IV.  CONCLUSION
          For these reasons, we AFFIRM the superior court's
judgment in all respects.



                            FOOTNOTES


Footnote 1:

     Lindman received no treatments between February 20, 1995, and
April 24, 1995, because she was in Mississippi for Air National
Guard training.


Footnote 2:

     Although Allstate did not move for summary judgment on Dr.
Waldroup's claim for intentional/malicious conduct, Dr. Waldroup's
brief concedes that the superior court's grant of summary judgment
on the interference-with-contractual-relations claim also
effectively precluded a claim for intentional/malicious conduct,
because the court's conclusion that Allstate's conduct was
privileged as a matter of law precluded a finding that the same
conduct was intentionally or maliciously tortious.


Footnote 3:

     See  Mathis v. Sauser, 942 P.2d 1117, 1120 (Alaska 1997).


Footnote 4:

     See id.


Footnote 5:

     See id.


Footnote 6:

     Ran Corp. v. Hudesman, 823 P.2d 646, 648 (Alaska 1991)
(quoting Knight v. American Guard & Alert, Inc., 714 P.2d 788, 793
(Alaska 1986)) (internal ellipses omitted).


Footnote 7:

     823 P.2d 646, 648 (Alaska 1991).


Footnote 8:

     Id. at 649 (quoting Bendix Corp. v. Adams, 610 P.2d 24, 31
(Alaska 1980)).


Footnote 9:

     610 P.2d 24, 25-32 (Alaska 1980).


Footnote 10:

     Id. at 30.


Footnote 11:

     Id. (emphasis added).


Footnote 12:

     See id. at 29-32.


Footnote 13:

     See id.


Footnote 14:

     Id. at 30 (emphasis added).


Footnote 15:

     Id. at 31.  We address Dr. Waldroup's arguments regarding
Allstate's allegedly improper motivation in Part III.B.2.


Footnote 16:

     See id.


Footnote 17:

     Ran Corp., 823 P.2d at 649.


Footnote 18:

     Id.


Footnote 19:

     Id.


Footnote 20:

     Id.


Footnote 21:

     See id. at 647-50. But see id. at 651 (Burke, J., dissenting)
("[The landlord] stood to lose nothing by forcing [its tenant] to
relinquish his right to assign his lease to the person of his
choice.").


Footnote 22:

     Id. at 650.


Footnote 23:

     See id.


Footnote 24:

     642 P.2d 205, 207 (N.M. App. 1982).


Footnote 25:

     Id. 


Footnote 26:

     See id.


Footnote 27:

     Id. at 210.


Footnote 28:

     Id. at 209 (citing Williams v. Ashcraft, 381 P.2d 55, 56 (N.M.
1963)).


Footnote 29:

     See id.


Footnote 30:

     See id.


Footnote 31:

     874 P.2d 937, 941 (Alaska 1994).   


Footnote 32:

  Alaska R. Civ. P. 56(c) ("The adverse party . . . may serve .
. . a concise 'statement of genuine issues' setting forth all
material facts as to which it is contended there exists a genuine
issue necessary to be litigated . . . .").


Footnote 33:

  See Cannone v. Noey, 867 P.2d 797, 801 n.4 (Alaska 1994) ("A
summary judgment movant bears the burden of demonstrating the
absence of any genuine issue of material fact and entitlement to
judgment as a matter of law.").


Footnote 34:

  See supra Part III.B.1.


Footnote 35:

  Alaska R. App. P. 202(a) ("An appeal may be taken to the
supreme court from a final judgment entered by the superior court
. . . .").


Footnote 36:

  See Alaska R. App. P. 402(b)(2) (providing that petition for
review will be granted where an "order or decision involves an
important question of law on which there is substantial ground for
difference of opinion, and an immediate review of the order or
decision may materially advance the ultimate termination of the
litigation"); City of North Pole v. Zabek, 934 P.2d 1292, 1296
(Alaska 1997) (holding that this court may treat appeal improperly
brought from non-final judgment as petition for review).


Footnote 37:

  951 P.2d 851 (Alaska 1998).


Footnote 38:

  See id. at 853-54.


Footnote 39:

  See id.


Footnote 40:

  See id.


Footnote 41:

  See, e.g., Jones v. Wadsworth, 791 P.2d 1013 (Alaska 1990);
Van Horn Lodge, Inc. v. White, 627 P.2d 641 (Alaska 1981),
overruled by Lee Houston & Assocs., Ltd. v. Racine, 806 P.2d 848
(Alaska 1991).


Footnote 42:

  806 P.2d 848, 854-55 (Alaska 1991).


Footnote 43:

  AS 09.55.536(a) provides: 

       In an action for damages due to personal
injury or death based upon the provision of professional services
by a health care provider, . . . the court shall appoint . . . a
three-person expert advisory panel unless the court decides that an
expert advisory opinion is not necessary for a decision in the
case.  

(Emphasis added.)


Footnote 44:

  Alaska Civil Rule 72.1(a) provides: "Either party in a health
care malpractice action subject to AS 09.55.536 may request that
the court appoint an expert advisory panel to evaluate the claim."


Footnote 45:

  See supra Part III.C.


Footnote 46:

  AS 09.55.536(a) (emphasis added).