Ms G and Ms B were nurse practitioners (NPs) in their early 40s. They had worked together in the past and had been friends for several years when they went into business together. The two women, with the help of their attorney, formed a limited liability company, HealthWise Medical, to run a medical clinic that would be staffed by the two women, their supervising physician, and other medical professionals. Ms G and Ms B entered into an operating agreement governing HealthWise, which addressed what would happen in case either woman wanted to leave the company. 

Specifically, the contract specified that, “Each Member agrees to adhere to the standards of personal and professional conduct and practice established by the profession and the Company. If a Member becomes legally disqualified to render the professional services rendered by the Company or accepts employment that, pursuant to existing law, places restrictions or limitations on his or her continued rendering of professional services, he or she shall withdraw from the Company pursuant to section 5.2 of this Article within a reasonable period, not to exceed ten days, after the event giving rise to the disqualification, and thereby sever all association, employment and financial interest in the Company. If such Member shall fail to voluntarily withdraw, the Company shall take such action as may be required to compel resignation under the same terms.” Section 5.2 specified that in the event that a member is withdrawing from the company, the remaining member shall have one of two options: 1) buy out the withdrawing member’s share; or 2) liquidate the company and distribute the proceeds. 

At first, the arrangement seemed to be working out. But as time passed, Ms G began to be concerned about her business partner, Ms B, who had begun to show up for work late and act erratically. One day, Ms G found that her partner had been prescribing controlled substances for a patient of Ms G’s, even though Ms G knew of no reason why the patient would require such medications. Ms G suspected that Ms B was using the medications herself. She confronted Ms B, who did not deny having improperly written prescriptions or having abused controlled substances. 

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Ms B reassured Ms G that she would contact the state’s Health Professional Recovery Program, which supported substance abuse recovery by health professionals. However, as weeks passed by without Ms B doing anything, Ms G contacted the Health Professional Recovery Program and reported Ms B.

During the investigation by the Board of Nursing Disciplinary Committee, Ms B admitted to having written prescriptions for acetaminophen/hydrocodone and lorazepam for a patient, and then diverting and using the drugs. Following the investigation, Ms B’s supervising physician refused to supervise her, and her license was suspended and she could no longer practice. The relationship between the two partners became toxic. Ms G hoped that Ms B would simply withdraw from the agreement, leaving her in control of the company, but Ms B did not voluntarily withdraw. Thus, Ms G had to hire an attorney and file a lawsuit against Ms B, asking that the trial court expel Ms B from HealthWise and sever her financial interest and employment with the clinic. Ms B filed a counterclaim, alleging defamation—specifically, Ms B alleged that when two of her former patients called HealthWise to schedule an appointment with her, they were told that she was “no longer practicing,” and was “no longer a nurse practitioner.”

The trial court dismissed Ms B’s allegations of defamation, holding that the statements were essentially true and thus not defamatory.