stephen-w-robertson-indiana-comm-of-insurance-as-admin-of-indiana ( 2012 )

ATTORNEYS FOR APPELLANTS ATTORNEYS FOR APPELLEE ATTORNEYS FOR AMICUS
Susan E. Cline Robert L. Thompson CURIAE THE INDIANA TRIAL
Meggan Brumbaugh F. John Rogers LAWYER’S ASSOCIATION
Indianapolis, Indiana Fort Wayne, Indiana Steven L. Langer
Richard L. Schultheis Tara M. Worthley
Indianapolis, Indiana Valparaiso, Indiana
ATTORNEY FOR AMICUS CURIAE
THE INDIANA STATE MEDICAL
ASSOCIATION
Libby Y. Goodknight
Indianapolis, Indiana
In the FILED
Oct 31 2012, 2:20 pm
Indiana Supreme Court
CLERK
of the supreme court,
court of appeals and
tax court
No. 49S04-1111-CT-671
STEPHEN W. ROBERTSON, INDIANA
COMMISSIONER OF INSURANCE, AS
ADMINISTRATOR OF THE INDIANA PATIENT’S
COMPENSATION FUND AND THE INDIANA
PATIENT’S COMPENSATION FUND,
Appellants (Defendants below),
v.
B.O., A MINOR, BY HIS PARENTS AND NEXT
FRIENDS, LISA A. ORT AND KEVIN C. ORT,
Appellee (Plaintiff below).
Appeal from the Marion Superior Court, No. 49D14-0706-CT-23482
The Honorable S.K. Reid, Judge
On Petition to Transfer from the Indiana Court of Appeals, No. 49A04-1009-CT-528
October 31, 2012
Massa, Justice.
In defending against a petition to recover excess damages arising from a medical
malpractice action, may the Indiana Patient’s Compensation Fund—after the healthcare provider
settles with the plaintiff and admits liability—present evidence to dispute the existence or cause
of the plaintiff’s injury? In some types of cases, we have previously said yes. In the type of case
before us today, however, we say no.
Facts and Procedural History
At age four, B.O. was diagnosed with a mild form of cerebral palsy known as spastic
diplegia. Subsequently, his parents filed a complaint under the Indiana Medical Malpractice Act,
claiming that the healthcare providers who attended B.O.’s birth were negligent. Specifically,
they asserted that the healthcare providers failed to adequately monitor his condition during labor
and delivery and then failed to respond when signs of fetal distress appeared. That fetal distress,
they maintained, lasted for nearly two hours before his delivery and resulted in the development
of his condition.
Shortly before trial, B.O.’s healthcare providers settled for a sum allowing B.O. to seek
excess damages from the Indiana Patient’s Compensation Fund (PCF). See Ind. Code § 34-18-
15-3 (2008). B.O.’s parents then filed a petition for excess damages, after which the PCF
disclosed five expert witnesses prepared to testify that B.O. either did not have cerebral palsy
consisting of spastic diplegia or that if he did, it did not result from the conduct of the healthcare
providers at his birth. The parents then sought partial summary judgment seeking to limit the
issue at trial to
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the amount of the compensable damages for the injury alleged by
[B.O.] which is mild cerebral palsy consisting of spastic diplegia;
and . . . the [PCF] may not contend or offer testimony to establish
that [B.O.] does not have mild cerebral palsy consisting of spastic
diplegia and/or [B.O.’s] condition was not caused by the conduct
of [the healthcare providers].
Appellant’s App at 233–34. The trial court granted partial summary judgment for B.O., and the
Court of Appeals reversed. Robertson v. B.O. ex rel. Ort, 949 N.E.2d 404, 407, 411 (Ind. Ct.
App. 2011). We granted transfer and now affirm the trial court.
Standard of Review
In reviewing a grant of summary judgment, the appellate court “faces the same issues that
were before the trial court, and analyzes them in the same way.” Carie v. PSI Energy, Inc., 715
N.E.2d 853, 855 (Ind. 1999). Where the challenge to the trial court’s summary judgment
presents only legal issues, not factual ones, the issues are reviewed de novo. Spangler v. Bechtel,
958 N.E.2d 458, 461 (Ind. 2011).
The PCF is Precluded from Disputing the Existence or Cause of B.O.’s Claimed Injury
The Indiana Medical Malpractice Act (MMA) creates a bifurcated procedure for
determining medical malpractice claims against a qualified healthcare provider. This process is
correlated to the separate damages caps imposed by the MMA.
The [MMA] caps a recovery for a patient’s injury or death at
$1,250,000. Ind. Code § 34-18-14-3(a)(3) (2008). The Act limits
the liability of a qualified health care provider whose medical
negligence proximately caused the injury or death to the first
$250,000 of damages. Ind. Code § 34-18-14-3(b). If a judgment
or settlement fixes damages in excess of a qualified health care
provider’s liability, then a plaintiff may recover excess damages
from the PCF. Ind. Code § 34-18-14-3(c).
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Ind. Dep’t of Ins. v. Everhart, 960 N.E.2d 129, 133 (Ind. 2012). An injured plaintiff thus
proceeds first against the healthcare provider, Ind. Code §§ 34-18-8-1 to -8 (2008), and then
against the PCF, Ind. Code § 34-18-15-3 (2008). Central to the resolution of this case is the
meaning of Indiana Code § 34-18-15-3(5) which states in part:
If the commissioner, the health care provider, the insurer of the
health care provider, and the claimant cannot agree on the amount,
if any, to be paid out of the patient’s compensation fund, the court
shall, after hearing any relevant evidence on the issue of claimant’s
damage submitted by any of the parties described in this section,
determine the amount of claimant’s damages, if any, in excess of
the two hundred fifty thousand dollars ($250,000) already paid by
the insurer of the health care provider. The court shall determine
the amount for which the fund is liable and make a finding and
judgment accordingly. In approving a settlement or determining
the amount, if any, to be paid from the patient’s compensation
fund, the court shall consider the liability of the health care
provider as admitted and established.
Ind. Code § 34-18-15-3(5) (emphasis added).1 The contentions of the parties hinge on the
precise meaning of “liability” and in what manner it is “admitted and established” in the second
stage of the bifurcated MMA proceedings.
The PCF believes that the evidence it seeks to introduce is “not only relevant, but
necessary” to a determination of damages. Appellant’s Br. at 9. As we understand the argument,
the final sentence of Indiana Code Section 34-18-15-3(5), which requires the trial court to
“consider the liability of the health care provider as admitted and established,” Ind. Code § 34-
18-15-3(5) (emphasis added), is inapplicable for two reasons: (1) recent Indiana case law has
interpreted this provision “to allow causation type evidence” because “[e]vidence of the
1
B.O.’s action falls under a previous version of the statute in which the statutory cap on damages was
lower. See Ind. Code § 34-18-15-3 (1996). The remainder of this section, however, remains unchanged,
see P.L. 233-1999 § 15, 1999 Ind. Acts 1584, 1609, and the increased damages cap does not alter the
analysis in this case.
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existence of an injury can be relevant to both causation and damages,” Appellant’s Br. at 18, and
(2) Section 34-18-15-3(5) does not preclude the PCF “from challenging the compensable nature
of B.O.’s injury.” Appellant’s Br. at 12. Under the facts of this case, we disagree on both counts.
A. Foreclosure of Existence and Causation of Injury
1. “Liability” under Ind. Code §34-18-15-3(5)
The PCF argues that it may introduce evidence of “medical issues of causation relevant to
determining damages.” Appellant’s Br. at 15. Specifically, the PCF seeks to introduce evidence
at trial to dispute the nature of B.O.’s injury, contending that B.O. either has no injury or that his
injury was not caused by the healthcare providers’ breach of duty. This argument raises a
question we briefly addressed in Atterholt v. Herbst, 902 N.E.2d 220 (Ind. 2009): what is meant
when “liability” is “admitted and established” under Indiana Code § 34-18-15-3(5)? In Herbst
we said:
The Medical Malpractice Act does not define “liability.”
However, the Act provides that undefined legal terms have the
meaning consistent with the common law. [Ind. Code] § 34–18–2–
2. According to Black’s Law Dictionary (8th ed. 2004), liability is
the “quality or state of being legally obligated or accountable.”
Herbst, 902 N.E.2d at 223. We thus begin with a look to the common law definition of liability
in a negligence case.
Traditionally, negligence consists of “(1) a duty owed by the tortfeasor to the tort victim,
(2) a breach of that duty, and (3) an injury to the tort victim proximately caused by the breach.”
Spangler, 958 N.E.2d at 468 (citing Estate of Mintz v. Conn. Gen. Life Ins. Co., 905 N.E.2d 994,
998–99 (Ind. 2009)). A plaintiff proving each of these elements establishes that a defendant is
“legally obligated or accountable,” Herbst, 902 N.E.2d at 223 (quoting Black’s Law Dictionary
(8th ed. 2004)). That is to say, the defendant is liable. All that remains is a determination of the
amount of damages to which the plaintiff is entitled. See id.
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This definition, then, gives us two criteria relevant to the PCF’s appeal. First, “[i]t is
axiomatic that, before liability can be imposed, there must be proof that the defendant’s
negligence proximately caused the plaintiff’s harm.” Dunn v. Cadiente, 516 N.E.2d 52, 55 (Ind.
1987); see also Dillon v. Glover, 597 N.E.2d 971, 973 (Ind. Ct. App. 1992) (quoting Dunn and
reasoning: “[i]t therefore follows that once liability is established, the issue of proximate cause
is decided.”). Likewise, in order to establish liability, a plaintiff must demonstrate an injury;
without a connection between the breach of duty and the injury, causation fails. Dunn, 516
N.E.2d at 55. From this it seems clear that, for purposes of determining excess damages, if “the
court shall consider the liability of the health care provider as admitted and established” pursuant
to Section 34-18-15-3(5), then the supporting requirements that the healthcare providers’ breach
of duty caused an injury to B.O. must—by necessity—also be viewed as “admitted and
established.”
Here, B.O. has claimed a single injury: cerebral palsy consisting of spastic diplegia.
That is the claim that the healthcare providers chose to settle, and thus that is the claim for which
liability is “admitted and established”—including, by implication, the required elements of
causation and injury. All that remains to be determined is the amount of damages to which B.O.
is entitled from the PCF for the malpractice.
We recognize that this means that the existence and type of injury that B.O. sustained is
determined without the full explication that may have been adduced at a trial. But this was the
method chosen by the General Assembly when enacting the MMA. In an effort to control the
costs associated with medical malpractice claims, the General Assembly placed numerous
constraints on plaintiffs such as a statute of limitations, Ind. Code §§ 34-18-7-1 to -3 (2008), the
use of medical review panels, Ind. Code §§ 34-18-10-1 to -26 (2008), caps on recoverable
damages, Ind. Code §§ 34-18-14-1 to -5 (2008), and retention of the contributory negligence
defense, Ind. Code § 34-51-2-1 (2008). Perhaps in an effort to balance this sweeping reform, the
legislature chose to provide plaintiffs with the benefit of final and established liability when the
healthcare provider chooses to settle. It is not our place to upset that balance.
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2. Application of Atterholt v. Herbst2
The PCF also contends that “Herbst establishes that there are instances where the PCF is
entitled to introduce relevant evidence to assist the trier of fact in determining the appropriate
amount of damages, even if that evidence is also relevant to liability issues foreclosed by the
judgment or settlement of the underlying cause.” (Appellant’s Br. at 14.) However, as the PCF
admits, “Herbst was considered in the context of an increased risk of harm analysis.”
Appellant’s Br. at 13–14 (emphasis added). We find this distinction to be dispositive.
As we said in Everhart, Herbst was a “necessary consequence” of Cahoon v. Cummings,
734 N.E.2d 535 (Ind. 2000), wherein we held that a successful claim for increased risk of harm
brought pursuant to Mayhue v. Sparkman, 653 N.E.2d 1384 (Ind. 1995) entitled a plaintiff only
to damages proportional to the increased risk. Everhart, 960 N.E.2d at 133. But as we explain in
greater detail below, because this is not an increased risk of harm claim, Herbst is inapplicable.
Mayhue, Cahoon, and Herbst were each wrongful death cases in which the deceased had
less than a fifty percent chance of survival even prior to the claimed malpractice. For these types
of cases—and only these types of cases—in Mayhue we adopted the Restatement (Second) of
Torts § 323 (1965) increased risk of harm approach. Mayhue, 653 N.E.2d at 1388-89. The goal
of this approach was to address the inherent challenge of those cases:
2
The PCF also relies upon two Court of Appeals cases: Ind. Patient’s Comp. Fund v. Butcher, 863
N.E.2d 11 (Ind. Ct. App. 2007) and Atterholt v. Robinson, 872 N.E.2d 633 (Ind. Ct. App. 2007).
Robinson is readily distinguishable because, as we explain below in Part 2, the issue before the Court of
Appeals was application of the proper cause of action. Robinson, 872 N.E.2d at 639–41. That question is
not now before us. In Butcher, after settlement with the healthcare provider and a judgment against the
PCF, the Court of Appeals evaluated the evidence supporting the claimed injury. Butcher, 863 N.E.2d at
13–16. Under a prima facie error standard, because the plaintiff failed to respond to the PCF’s argument,
the court concluded that there was no evidence to support the recovery. Id. at 16, 20. To the extent that
Butcher is inconsistent with our holding today, we disapprove.
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Where a patient’s illness or injury already results in a probability
of dying greater than 50 percent, an obvious problem appears. No
matter how negligent the doctor’s performance, it can never be the
proximate cause of the patient’s death. Since the evidence
establishes that it is more likely than not that the medical problem
will kill the patient, the disease or injury would always be the
cause-in-fact. The plaintiff must ordinarily prove that proper
diagnosis and treatment would have prevented the patient’s injury
or death. In cases such as this one, it appears that a defendant
would always be entitled to summary judgment.
Id. at 1387. Moreover, MMA claims are ordinarily evaluated under traditional contributory
negligence. See Ind. Code § 34-51-2-1 (exempting MMA claims from the Indiana Comparative
Fault Act). This means that the plaintiff’s contributory negligence may act as a complete bar to
recovery, and also that a defendant found liable is responsible for the full amount of damages
resulting from the malpractice regardless of any aggravating preexisting condition. Dunn, 516
N.E.2d at 56 (“A pre-existing condition or susceptibility, if aggravated by a defendant’s conduct,
may result in a defendant’s full liability for the resulting injury and loss. However, if the pre-
existing condition, standing alone, independently causes injury and loss, a defendant will not be
liable for such damages.”).
Mayhue thus established an alternative means of proving causation where traditional
means are inadequate and “reflects a special concern for plaintiffs who stood a fifty percent or
worse chance of recovering before suffering some form of medical negligence.” Everhart, 960
N.E.2d at 134. What is more, because a Mayhue claim permits recovery otherwise barred by
traditional principles of proximate causation, Mayhue, 653 N.E.2d at 1387, the analysis of fault
is significantly altered. The plaintiff need only prove that the healthcare provider was a
“substantial factor in causing the harm.” Id. at 1388.
Then, in Cahoon, we held that “upon a showing of causation under Mayhue, damages are
proportional to the increased risk attributable to the defendant’s negligent act or omission.”
Cahoon, 734 N.E.2d at 541 (emphasis added). We also determined that principles of
comparative fault were the best vehicle for determining damages in a Mayhue claim. See id.
(“Holding the defendant liable for the full value of the wrongful death claim is inconsistent with
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the statutory requirement that the loss be caused by the defendant who only increased the risk of
an already likely result.”).
But both Mayhue and Cahoon were actions against the healthcare providers; it was not
until Herbst that we were presented with the question of determining the amount of damages due
from the PCF after settlement with the healthcare provider in a cause of action under Mayhue.
Herbst, 902 N.E.2d at 221–22. In response, we held that “evidence of Herbst’s underlying risk
of death whether or not he was properly treated is relevant to both liability—whether malpractice
caused his death—and to damages—the amount for which the [PCF] is responsible.” Id. at 223.
It is this holding of Herbst which the PCF argues should be applied in the present case to allow
its proposed evidence. We disagree.
Herbst was necessarily limited to Mayhue increased risk of harm claims because
“Cahoon established only the measure of damages in cases involving a Mayhue claim.”
Everhart, 960 N.E.2d at 134; see also id. at 133 (“Our holding in Herbst was a necessary
consequence of Cahoon, in which we held that a successful Mayhue claim for causing an
increased risk of harm entitled a plaintiff to damages in proportion to that increased risk.”). It is
thus only in Mayhue increased risk of harm claims that evidence of underlying risk would be
“relevant to both liability . . . and to damages.” Herbst, 902 N.E.2d at 223.
Unless a claim is brought under Mayhue, Herbst is inapplicable. B.O.’s complaint does
not allege an increased risk of harm, but rather traditional negligence resulting in personal injury,
and therefore Herbst does not apply.
B. Legal Compensability Versus Factual Compensability
The PCF contends that it may dispute “the compensable nature of B.O.’s alleged injury.”
Appellant’s Br. at 13. The PCF is correct that it may present evidence regarding the
compensability of a claim when that issue is in dispute, but contrary to the PCF’s contentions,
compensability is not disputed in this case. Throughout its briefing the PCF conflates the factual
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question of compensability—whether B.O. suffered an injury—with the legal question of
compensability—whether B.O.’s injury is one for which the law recognizes a cause of action. In
fact, a careful reading of one of the Court of Appeals cases upon which the PCF relies makes this
abundantly clear.
In Robinson, the plaintiff pled multiple theories of recovery, claiming that the healthcare
provider was liable under either the Indiana Adult Wrongful Death Statute (AWDS) or the
Indiana Survival Act. Robinson, 872 N.E.2d at 636. Robinson and the healthcare provider
settled, but the settlement agreement “did not specify whether the damages were awarded
pursuant to the AWDS or the Survival Act.” Id. at 637. When Robinson sought excess damages
from the PCF, it became necessary to determine under which theory of recovery the healthcare
provider was liable because the measure of damages differs significantly between the AWDS
and the Survival Act, and “a tortfeasor may be held liable under either the [AWDS] or the
[Survival Act], but not both.” Id. at 639–41 (quoting Best Homes, Inc. v. Rainwater, 714 N.E.2d
702, 705 (Ind. Ct. App. 1999)) (emphasis in original).
Because the potential recovery under the Survival Act was greater than under the AWDS,
the PCF sought to introduce evidence to prove that the healthcare provider’s negligence caused
the patient’s death. Id. at 641–42. In response, Robinson contended that the settlement with the
healthcare provider foreclosed the issue of causation by operation of the MMA. Id. at 642-43
(citing Ind. Code § 34-18-15-3(5)).
The Court of Appeals noted that “[b]ecause the MMA establishes the [PCF’s] liability if
the healthcare provider settles with the plaintiff, . . . it necessarily follows that proximate cause is
also established.” Id. at 642. However, “because recovery under the AWDS or the Survival Act
hinges on whether the victim dies as a direct result of the tortfeasor’s actions,” the court held that
where “the plaintiff asserts alternative claims against a healthcare provider and the resulting
settlement does not specify which claim the damages cover, . . . the [PCF] is allowed to contest
the proper theory of recovery.” Id. at 643 (emphasis added).
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The PCF’s reliance on Robinson is misplaced. In Robinson there was no dispute that the
underlying liability was established, id. at 643 (“. . . the [PCF] admits that it is liable . . .”),
whereas here the underlying liability is precisely what the PCF seeks to dispute. Further, the
only question in Robinson was which theory of recovery to apply in calculating the damages—a
question of law. In contrast, here B.O. asserts only a single theory of recovery: negligence
resulting in personal injury. The PCF does not contend that a different legal standard should
apply, but instead wishes to dispute the existence of the underlying liability—a question of fact.
However, as we explained above, the fact of causation is foreclosed by Indiana Code Section 34-
18-15-3(5). Thus, while the PCF is correct that it is “not required to pay non-compensable
damages,” Appellant’s Br. at 18, its characterization of its own argument as one of
compensability is incorrect.
Conclusion
Because Indiana Code § 34-18-15-3(5) precludes the PCF from disputing the existence or
cause of B.O.’s claimed injury, the trial court’s grant of partial summary judgment is affirmed.
Dickson, C.J., Rucker, and David, J.J., concur.
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