Court: Massachusetts Appeals Court; July 13, 2005; Massachusetts; State Appellate Court
A conflict arose between Florence Di-Johnson and Marilyn Litman, a medical professional, leading to Di-Johnson's criminal conviction for larceny, specifically for unlawfully taking billing and patient information stored on her laptop. Di-Johnson had been hired by Litman in January 2002 to manage billing for her home-based practice, working part-time while maintaining a full-time job elsewhere. Despite no formal written agreement, Di-Johnson was paid a flat monthly fee for her services, which included entering patient information and billing insurers using software called 'Therapist Helper.'
In mid-2002, issues with rejected insurance claims prompted Litman to investigate, revealing that Di-Johnson had failed to submit claims correctly. Tensions escalated during a dinner meeting intended to address these billing problems, where Di-Johnson quit after becoming upset. Following her resignation, Di-Johnson refused Litman's requests for the patient database, claiming she had nothing belonging to her. When Litman sought assistance to download the information, they found a carton of incomplete and inaccurate printouts at Di-Johnson's home.
Litman then hired Donna Ball to reconstruct the patient database, which involved contacting insurance companies to gather historical billing data, resulting in significant time and financial costs for Litman. The court agreed with Di-Johnson that her motion for a not-guilty finding should have been granted, leading to the reversal of her conviction.
On October 25, 2002, Litman reported to the police that Di-Johnson had left her job and taken all billing information belonging to Litman. During the investigation, Di-Johnson claimed the information was her property and did not need to be returned. Consequently, on December 12, 2002, she was charged with larceny over $250, a felony under Massachusetts law. In court, Di-Johnson argued she could not be prosecuted for larceny as she was an independent contractor, asserting that the database she created was her own property. The judge denied her motions for a not guilty verdict, found her guilty, sentenced her to one year of probation, imposed court fees, and mandated that she provide a computer disk with all patient information to Litman, followed by the deletion of the records from her computer after verification.
For a larceny conviction under Massachusetts law, the Commonwealth must demonstrate an unlawful taking of another's property with the intent to permanently deprive the owner. The property in question was the database of patient information on Di-Johnson's computer. While the larceny statute includes electronically stored data as property, the Commonwealth failed to prove beyond a reasonable doubt that the database belonged to Litman. The relationship between Litman and Di-Johnson and their rights concerning the database were unclear, leaving it speculative whether Di-Johnson was an employee or an independent contractor. If she was an independent contractor, the database would not be considered Litman's property, merely a tool for completing her work. This determination is supported by the case law, which emphasizes the need to establish ownership clearly for larceny convictions.
In Ipswich Mills, the court ruled that worksheets used by accountants to prepare a client’s tax returns were the property of the accountants, as they were independent contractors rather than agents of the client. The absence of a contractual agreement regarding ownership of the worksheets further supported this conclusion, despite the worksheets containing confidential client information. The court noted that the client's interest in the information did not confer ownership of the accountants' materials.
In the present case involving Di-Johnson, the ownership of a database she compiled for billing purposes depended on her employment status and the nature of her engagement with Litman. The Commonwealth's evidence failed to establish whether Di-Johnson was an employee or tasked with creating the database, warranting a not guilty finding. The dissent expressed concern over the use of criminal prosecution for what is typically a civil matter, suggesting that alternative remedies existed to protect Litman’s confidential patient data without resorting to criminal charges. The judge's sentence mirrored potential civil relief available in such disputes.
The judgment on the complaint is reversed, and the finding is set aside, resulting in a judgment for the defendant, Di-Johnson. Litman provided a portion of the funds for Di-Johnson to purchase a computer, but Di-Johnson did not charge Litman for services during the initial months. It is undisputed that the computer belonged to Di-Johnson and that Litman made no claim to it. The Commonwealth failed to demonstrate where Di-Johnson performed her work, although she testified that it was primarily done at her home. Di-Johnson was the purchaser and license holder of the 'Therapist Helper' software on her computer. The term 'database' was understood in its conventional sense as an organized compilation of information. The appellate record does not clarify if a hearing occurred regarding restitution or the extent of any orders. The Commonwealth was required to prove that the property value exceeded $250 but did not contest Di-Johnson's claims. The determination of employee status hinges on the employer's control over the employee's work, with multiple factors considered. The case cited, Commonwealth v. Savage, illustrates a scenario where an individual was deemed an independent contractor due to autonomy over work conditions. Di-Johnson attempted to cross-examine Litman to establish her independent contractor status, but the prosecutor's objection on relevancy was upheld. The prosecutor argued that Di-Johnson's employment status was irrelevant to the criminal case and asserted that the database unequivocally belonged to Litman.
