Duluth funeral home owner settles suit against Essentia Health

A malpractice and personal injury suit brought by a Duluth funeral home owner against her licensed psychotherapist and the therapist’s employer has been partially settled out of court.

Mary L. Williams, one of the owners of the Williams-Lobermeier Funeral Home, brought the lawsuit against licensed psychotherapist Catherine Nelles Anderson and the therapist’s former employer, the SMDC Corp. and Duluth Clinic, now known as Essentia Health. Williams claimed she loaned Anderson more than $100,000 and wasn’t paid back.

A pretrial hearing in State District Court in Duluth had been scheduled for Tuesday with the trial to start later this month. However, Duluth attorney David Malban, who represents Williams, confirmed Tuesday that his client’s lawsuit against the health care provider has been settled. Williams has not settled with Anderson and will continue to pursue that portion of the suit against the psychotherapist.

“Ms. Williams is relieved to have settled with SMDC, now Essential Health, as to their liability on her claims,” Malban said. “A big part of my client’s concern in this case has always been the larger issue of financial abuse of vulnerable people. To that end, her case against her former therapist continues. Mary appreciates the attention her case has been afforded by the media as it may embolden others to come forward on issues of financial abuse despite their fears of potential embarrassment.”

Malban said a pending confidentiality agreement precluded him from commenting on the terms of the settlement. The attorney for the health care provider couldn’t be reached for comment Tuesday. Anderson moved to Seattle and hasn’t been represented by an attorney in the case. Malban said recent mailings to Anderson in Seattle have been returned to him as undeliverable.

Williams’ lawsuit alleged that in the course of assessment and treatment, psychotherapist Anderson negligently allowed an apparent personal relationship to develop with her patient by failing to maintain proper professional boundaries to a standard expected of a psychotherapist.

The suit claimed SMDC was vicariously liable for Anderson’s negligence, breach of fiduciary duty, fraud and misrepresentation, failure to treat and financial exploitation of a vulnerable adult on the theory of “respondeat superior,” where an employer can be liable for an employee acting within the scope of employment.

As a result of Anderson’s alleged negligence, the plaintiff claims she has suffered and will continue to suffer remorse, humiliation, mental anguish, exacerbation of her depression, post-traumatic stress, loss of respect of friends and family and financial suffering.

In an order denying the health system’s motion for summary judgment, Judge Shaun Floerke wrote: “The psychotherapy occurred during SMDC operating hours and in Ms. Anderson’s office on SMDC property, and failure to provide psychotherapy in a manner that falls within professional guidelines is reasonably foreseeable conduct by a service provider. Because (the plaintiff) has asserted facts that, if proved, would allow a jury to find SMCD vicariously liable for Ms. Anderson’s alleged negligence, the motion to dismiss the negligence claim against SMDC is denied.”

Anderson provided psychotherapy treatment to the plaintiff from 2003 through 2006. Between 2005 and 2006, Anderson borrowed $101,500 from the plaintiff to remodel and repair her home.

Floerke had also written in his order that the plaintiff at trial would have to provide evidence of when and where Anderson borrowed the money to recover damages from Essentia. SMDC fired Anderson in April 2006 after learning of her conduct.

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