Anonymous Hospital v. Mason Spencer and Steve Robertson, Commissioner of The Indiana Dept. of Insurance, and Doug Hill, Medical Review Panel Chair ( 2020 )

FILED
Oct 08 2020, 8:30 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEYS FOR APPELLANT ATTORNEYS FOR APPELLEE
Brett T. Clayton Christopher Gambill
Katherine M. Haire Katherine Gambill
Reminger Co., LPA Wagner, Crawford & Gambill
Indianapolis, Indiana Terre Haute, Indiana
ATTORNEY FOR AMICUS CURIAE
INDIANA TRIAL LAWYERS
ASSOCIATION
Jerry Garau
Garau Germano, P.C.
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Anonymous Hospital, October 8, 2020
Appellant-Petitioner, Court of Appeals Case No.
20A-CT-393
v. Interlocutory Appeal from the Vigo
Superior Court
Mason Spencer, The Honorable Lakshmi Reddy,
Appellee-Respondent, Judge
Trial Court Cause No.
and 84D02-1907-CT-5142
Steve Robertson, Commissioner of
The Indiana Department of
Insurance, and Doug Hill, Medical
Review Panel Chair,
Court of Appeals of Indiana | Opinion 20A-CT-393 | October 8, 2020 Page 1 of 15
Third Party Respondents.
Crone, Judge.
Case Summary
[1] The medical review panel (MRP) stage of a medical malpractice proceeding is
an informal process that parties must participate in within the medical
malpractice framework. The narrow single issue presented in this interlocutory
appeal is whether a vicarious liability theory of recovery against a hospital is
preserved at this informal stage of the proceedings regarding conduct of
physicians not named in the proposed medical malpractice complaint and for
which the statute of limitations has now run to add them as parties. Mason
Spencer spent twenty-five days in Anonymous Hospital (the Hospital)
undergoing multiple procedures and being cared for and treated by numerous
individuals, including physicians. He later filed a proposed medical malpractice
complaint alleging that he suffered injuries and damages as a result of
negligence and malpractice on the part of the Hospital. When, more than a
year later, Spencer tendered his MRP submission that included assertions of
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vicarious liability for the physicians that treated him, the Hospital requested a
preliminary determination of law or definitive ruling from the trial court.
Specifically, the Hospital requested that the court strike the allegations of
vicarious liability, and except the conduct of any physicians from the MRP’s
review because no physicians are named in the proposed complaint, nor were
they identified during initial discovery, and the statute of limitations has
expired. The trial court reviewed Indiana case law and initially granted the
Hospital’s petition, concluding that Spencer was precluded from proceeding
with his vicarious liability claims. However, the court later reversed course and
granted Spencer’s motion to reconsider, concluding that current Indiana law
does not preclude those claims from proceeding at the MRP stage, and even
thereafter under appropriate circumstances. We agree that the vicarious
liability claims against the Hospital may be presented to and considered by the
MRP, and therefore affirm the trial court’s grant of Spencer’s motion to
reconsider.
Facts and Procedural History
[2] Spencer is a mentally disabled young man who suffers from Pierre Robbins
Syndrome, a congenital condition that results in a smaller than typical lower
jaw, a tongue that falls back into the throat, and difficulty breathing. On May
21, 2016, then eighteen-year-old Spencer was brought to the emergency
department of the Hospital by his parents with complaints of nausea, vomiting,
and diarrhea. He was subsequently discharged and directed to follow up with
his family doctor. On May 23, 2016, Spencer’s family doctor directed him to
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return to the Hospital’s emergency department, where he was seen and
diagnosed with community acquired pneumonia and thrombocytopenia (low
blood platelet count). Spencer was later admitted to the Hospital’s intensive
care unit for respiratory insufficiency, and was intubated. Spencer’s admission
to the Hospital continued for twenty-five days and finally ended when he was
transferred to Riley Children’s Hospital for further care on June 15, 2016.
[3] During his stay at the Hospital, Spencer allegedly developed bed sores, skin
deterioration, a dislocated jaw, and several other ailments. Spencer filed his
proposed complaint against the Hospital with the commissioner of the Indiana
Department of Insurance on October 3, 2017. The complaint alleged in
pertinent part:
3. That [the Hospital] provided healthcare to [Spencer] on May
21, 2016, and thereafter.
4. That at all relevant times herein [the Hospital] held
themselves out as being capable of making proper diagnosis and
treatment of medical conditions and diseases and invited the
public, including [Spencer], to engage their services for
remuneration to be charged by them.
5. That as a direct and proximate result of the acts of negligence
and malpractice on the part of [the Hospital], Spencer suffered
damages and losses.
Appellant’s App. Vol. 2 at 27. Written discovery ensued, and the parties
thereafter agreed to and formed an MRP consisting of three Indiana healthcare
providers. On July 2, 2019, Spencer timely tendered his evidentiary submission
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to the MRP. The submission included allegations that the Hospital should be
held vicariously liable for the negligent acts committed by the various
physicians, as well as other hospital employees and/or agents, who treated
Spencer during his hospitalization.
[4] On July 22, 2019, the Hospital invoked the jurisdiction of the trial court
through a motion for preliminary determination of law or discovery sanctions.
The Hospital sought a definitive ruling or discovery sanctions striking Spencer’s
vicarious liability claims involving physician negligence, for which the Hospital
claimed it had no notice. Specifically, the Hospital complained that the statute
of limitations had expired, so the unnamed physicians could not be added as
parties.
[5] The trial court held oral argument on the Hospital’s motion on September 30,
2019. Thereafter, the trial court issued its order granting the Hospital’s motion.
The trial court stated that it believed, based upon current Indiana case law, that
Spencer’s failure to name specific physicians in his proposed complaint and/or
during initial discovery was fatal to any claims of vicarious liability on the
Hospital’s part, and therefore that he is prohibited from proceeding with these
claims before the MRP. Accordingly, the trial court instructed in its order:
The best remedy appears to be to order that the Medical Review
Panel is only charged with reviewing the conduct of Hospital
employees, agents, and representatives, except for physician
conduct since no physicians were named in the proposed
complaint and/or identified during discovery. This will require
that Patient amend/modify its Submission or that the Medical
Review Panel Chairman instruct the Panelists to limit their
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review and analysis to Hospital employees and staff, except for
any physicians.
Appellant’s App. Vol. 2 at 149-50.
Spencer thereafter filed a motion to reconsider. On November 14, 2019, the
trial court granted the motion to reconsider in light of its determination that, in
its prior order, it had misinterpreted this Court’s opinions in Columbus Regional
Hospital v. Amburgey, 976 N.E.2d 709 (Ind. Ct. App. 2012), trans. denied (2013)
and Helms v. Rudicel, 986 N.E.2d 302 (Ind. Ct. App. 2013), trans. denied.
Accordingly, the trial court ruled that Spencer “may proceed with his
arguments and allegations of physician negligence (even if those physicians
were not named in the proposed Complaint) in his submission to be evaluated
by the [MRP].” Appellant’s App. Vol. 2 at 170.
[6] The Hospital filed a motion to certify the issue for interlocutory appeal. The
trial court granted the motion for certification following oral argument, noting,
“I think my last order is probably a correct recitation of the current law … [but]
the best thing is [to] let an Appellate Court decide now.” Tr. Vol. 2 at 56. This
Court accepted jurisdiction on March 19, 2020, and this appeal ensued.
Discussion and Decision
[7] Indiana’s Medical Malpractice Act (the Act), enacted in 1975, dictates the
statutory procedures for medical malpractice actions. See Ind. Code § 34-18-1-1et seq. Pursuant to the Act, a party to a malpractice action may request the
appropriate trial court to “preliminarily determine an…issue of law or fact.”
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Ind. Code § 34-18-11-1(a)(1). The trial court has jurisdiction to entertain a
motion filed under this chapter only during that time after a proposed
complaint is filed with the commissioner under this article but before the MRP
gives the panel’s written opinion under Indiana Code Section 34-18-10-22. Ind.
Code § 34-18-11-1(c). A preliminary-determination proceeding is unique in
nature but is inextricably linked to the larger medical malpractice case as a
mechanism to decide threshold issues. Ramsey v. Moore, 959 N.E.2d 246, 253
(Ind. 2012).
[8] The Hospital contends that the trial court erred in denying its motion for
preliminary determination and granting Spencer’s motion to reconsider and
determining that Spencer may proceed with his allegations of physician
negligence/vicarious liability in his submission to be evaluated by the MRP,
even if those physicians were not named in the proposed complaint or during
initial discovery, and the statute of limitations has expired to join them to the
case or add them as non-parties. Specifically, the Hospital argues that the trial
court erred in interpreting Indiana case law which formed the basis for the
court’s decision. A trial court’s interpretation of statutes and/or case law is a
question of law to which this Court owes no deference. Harlett v. St. Vincent
Hosps. & Health Servs., 748 N.E.2d 921, 924 (Ind. Ct. App. 2001), trans. denied.
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Accordingly, our appellate review of the trial court’s determination here is de
novo. 1
[9] We begin by underscoring that this case is simply at the MRP stage. Before a
plaintiff may pursue a malpractice complaint in court against a qualified
healthcare provider, the Act requires the plaintiff to present a proposed
complaint to an MRP, and the MRP must give its opinion as to whether the
provider breached the standard of care. See Ind. Code § 34-18-8-4. Our
supreme court has emphasized that the MRP process is intended to be
“informal” and “limited.” Johnson v. St. Vincent Hosp., 273 Ind. 374, 390, 404
N.E.2d 585, 596 (1980), overruled on other grounds by In re Stephens, 867 N.E.2d
148 (Ind. 2007), and abrogated on other grounds by Collins v. Day, 644 N.E.2d 72(Ind. 1994). Indeed, the Johnson court noted there is little likelihood that a
plaintiff “will incorrectly estimate the steps that should be taken in procuring
and presenting evidence and authorities to the panel, and should he do so there
is little or no risk that he will be harmed thereby.” Id. at 391, 404 N.E.2d at
596.
1
Both parties suggest that our standard of review of the trial court’s preliminary determination of law is
abuse of discretion. However, in addition to being presented with a pure legal question regarding the
interpretation of Indiana case law on appeal, we emphasize that, although the trial court heard arguments
from the parties, the court acknowledged that it did “not have any actual evidence before it to make a
decision.” Appellant’s App. Vol. 2 at 149. Our standard of review of a trial court’s decision depends on
whether the court “resolved disputed facts, and if so, whether the trial court conducted an evidentiary hearing
or ruled on a paper record.” Popovich v. Danielson, 896 N.E.2d 1196, 1201 (Ind. Ct. App. 2008), trans. denied
(2009). Where, as here, the court neither conducted an evidentiary hearing nor resolved any disputed facts,
our appellate review is de novo. Id. This is different from the grant or denial of a pretrial motion on
evidentiary issues, an adjunct of the trial court’s inherent power to admit and exclude evidence, the standard
of review for which is abuse of discretion. Butler ex rel. Estate of Butler v. Kokomo Rehab. Hosp., Inc., 744 N.E.2d
1041, 1046 (Ind. Ct. App. 2001), trans. denied. Regardless, as we further discuss later, we would find no abuse
of discretion in this case.
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[10] In Griffith v. Jones, 602 N.E.2d 107 (Ind. 1992), our supreme court reiterated the
informal nature of the MRP process and further explained the trial court’s very
limited role when asked to make preliminary determinations at this stage:
In view of the fact that the legislature clearly intended for the
medical review panel to function in an informal manner in
rendering its expert medical opinion, we believe that the
legislature did not simultaneously intend to empower trial courts
to dictate to the medical review panel concerning either the
content of the panel’s opinion or the manner in which the panel
arrives at its opinion, or the matters that the panel may consider
in arriving at its opinion. In other words, the grant of power to
the trial court to preliminarily determine matters is to be
narrowly construed.
Id. at 110.
[11] This Court recently emphasized, and our supreme court agreed, that to treat the
MRP process as something more than it is would wholly defeat its purposes:
It is intended to be informal and limited; it is also intended to
place little to no risk on the participants. If plaintiffs were
required to present each and every possible theory of negligence
to the MRP, and were bound by those allegations, then plaintiffs
would be required to conduct full and complete discovery long
before the litigation even began. This would create barriers of
expense and time that would be insurmountable for most, if not
all, potential plaintiffs, and the cost of the process would also be
borne by the defendants. We do not believe that our Legislature
intended such a result in creating the MRP process.
McKeen v. Turner, 61 N.E.3d 1251, 1261 (Ind. Ct. App. 2016), opinion adopted
and incorporated by reference in 71 N.E.3d 833 (Ind. 2017).
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[12] Having clarified the informal nature of the MRP process, we now consider the
general theory of liability asserted by Spencer in his proposed complaint.
Specifically, Spencer alleged that the Hospital held itself out “as being capable
of making proper diagnosis and treatment of medical conditions and diseases
and invited the public, including [Spencer], to engage their services for
remuneration to be charged by them” and that “as a direct and proximate result
of the acts of negligence and malpractice on the part of [the Hospital], Spencer
suffered damages and losses.” Appellant’s App. Vol. 2 at 28. Under our broad
principles of notice pleading, see Miller v. Mem’l Hosp. of S. Bend, Inc., 679 N.E.2d
1329, 1332 (Ind. 1997) (a plaintiff “essentially need only plead the operative
facts involved in the litigation”), this allegation falls squarely within our
supreme court’s decision in Sword v. NKC Hospitals, Inc., 714 N.E.2d 142 (Ind.
1999), in which the court addressed vicarious liability of a hospital for the
actions of individual physicians based upon the theory of apparent or ostensible
agency. Id. at 147. The court in Sword observed, “In the area of hospital
liability, there has been an ongoing movement by courts to use apparent or
ostensible agency as a means by which to hold hospitals vicariously liable for
the negligence of some independent contractor physicians.” Id. at 150.
Ultimately, the Sword court adopted the formulation of apparent or ostensible
agency set forth in the Restatement (Second) of Torts Section 429, which
provides:
One who employs an independent contractor to perform services
for another which are accepted in the reasonable belief that the
services are being rendered by the employer or by his servants, is
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subject to liability for physical harm caused by the negligence of
the contractor in supplying such services, to the same extent as
though the employer were supplying them himself or by his
servants.
Id. at 149. The court held:
Under Section 429, as we read and construe it, a trier of fact must
focus on the reasonableness of the patient’s belief that the
hospital or its employees were rendering health care. This
ultimate determination is made by considering the totality of the
circumstances, including the actions or inactions of the hospital,
as well as any special knowledge the patient may have about the
hospital’s arrangements with its physicians. We conclude that a
hospital will be deemed to have held itself out as the provider of
care unless it gives notice to the patient that it is not the provider
of care and that the care is provided by a physician who is an
independent contractor and not subject to the control and
supervision of the hospital. A hospital generally will be able to
avoid liability by providing meaningful written notice to the
patient, acknowledged at the time of admission. Under some
circumstances, such as in the case of a medical emergency,
however, written notice may not suffice if the patient had an
inadequate opportunity to make an informed choice.
Id. at 152 (internal citations omitted). “[I]f the patient has no special knowledge
regarding the arrangement the hospital has made with its physicians, and if
there is no reason that the patient should have known of these employment
relationships, then reliance is presumed.” Id.
[13] Here, contrary to its repeated assertions, the Hospital was clearly on notice
from the proposed complaint that Spencer was making allegations of vicarious
liability, including physician negligence, as “proper diagnosis and treatment of
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medical conditions and diseases” is performed only by or at the direction of
individual physicians. 2 While none of the factfinding necessary to determine
the agency relationship or lack thereof between the Hospital and the various
physicians who treated Spencer has occurred at this juncture, the issue becomes
whether Spencer’s failure to individually name or identify those physicians
prior to the running of the statute of limitations is fatal to his claim. Other
panels of this Court have made it abundantly clear that it is not.
[14] In Columbus Regional Hospital v. Amburgey, 976 N.E.2d 709 (Ind. Ct. App. 2012),
trans. denied (2013), a medical malpractice plaintiff sought to hold the defendant
hospital liable for the acts of independent contractor physicians, arguing that
the hospital failed to provide the plaintiff’s decedent with the notice required by
Sword. Id. at 711. The hospital argued that the plaintiff had failed to name the
physicians individually in the proposed complaint and, because the statute of
limitations had since run and extinguished any possible individual liability on
the part of the independent contractor physicians, it likewise extinguished any
possible vicarious liability on the part of the hospital. Id. at 713. The Amburgey
court rejected this argument and instead was persuaded by the conclusions of
2
The Hospital directs us to Butler v. Kokomo Rehab. Hosp., Inc., 744 N.E.2d 1041 (Ind. Ct. App. 2001), in
which a panel of this Court affirmed a trial court’s grant of a hospital’s motion for preliminary ruling
foreclosing any claim against the hospital based upon the alleged negligence of an individual physician
because the hospital argued that it did not have sufficient notice, based upon the proposed complaint, of any
apparent agency claim. Butler is factually distinguishable and unpersuasive. Indeed, in agreeing with the trial
court that the hospital was not on notice of any vicarious liability claim, we emphasized that the Butler
plaintiffs had not only narrowed their claim against the hospital in an amended complaint, the plaintiffs had
in fact, entered into a settlement agreement with the physician and specifically withdrew any claim against
the hospital with regard to that physician. Id. at 1047.
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some of our sister states in determining that the running of a statute of
limitations with respect to a physician or physicians does not preclude a
complaint against a hospital on a theory of vicarious liability and apparent
authority. Id. at 716. In Helms v. Rudicel, 986 N.E.2d 302 (Ind. Ct. App. 2013),
trans. denied, we relied on Amburgey and similarly concluded that an employer
could be held vicariously liable for medical malpractice even though the statute
of limitations barred suit against the employee. Specifically, the Helms court
held that a healthcare facility could be “vicariously liable for the acts of its
apparent agents even if the agents are individually immune from suit.” Id. at
312.
[15] In this case, we agree with the trial court that, based upon these rulings,
Spencer’s failure to name or identify any physicians individually prior to the
running of the statute of limitations is not fatal to his vicarious liability claims
against the Hospital. In other words, Spencer may proceed with his arguments
and allegations of physician negligence/vicarious liability in his submission to
the MRP even though those physicians are not named in the proposed
complaint and are now individually immune from suit.
[16] We note that we are concerned, as is counsel for amicus curiae, the Indiana
Trial Lawyers Association, by the Hospital’s attempt to so severely, and we
think unjustifiably, limit Spencer’s claims against it before the case has even been
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presented to the MRP. 3 The Hospital waxes poetic about being prejudicially
misled by what it characterizes as a “threadbare” proposed complaint and “bait-
and-switch” initial discovery responses. Reply Br. at 6, 8. 4 We remind the
Hospital that, in the words of Karen Carpenter, “We’ve only just begun.” 5 The
Hospital has yet to even craft its own submission to the MRP, and it has ample
notice and opportunity to respond to all alleged instances of negligence,
physician or otherwise, presented by Spencer in his submission. 6 Thereafter,
there is still much to be sorted out if and when this case finds its way to a
courtroom. Indeed, at trial, it is well settled that Spencer can proceed with
“any theories of alleged malpractice during litigation” so long as “(1) the
proposed complaint encompasses the theories, and (2) the evidence relating to
those theories was before the MRP.” McKeen, 71 N.E.3d at 834 (quoting
McKeen, 61 N.E.3d at 1262). This would include any claims of negligence,
3
Because the Act is in derogation of the common law, it must be strictly construed against limitations on a
claimant’s right to bring suit. Preferred Prof’l Ins. Co. v. West, 23 N.E.3d 716, 726-27 (Ind. Ct. App. 2014),
trans. denied.
4
Among its claims of prejudice, the Hospital asserts that it has been deprived of the ability “to assert a non-
party defense against” the unnamed physicians. Appellant’s Br. at 19. However, the Indiana Comparative
Fault Act, which replaced the common law defense of contributory negligence with a system for providing
for the reduction of a plaintiff's recovery in proportion to the plaintiff’s fault, “expressly exempted medical
malpractice claims from its ambit[.]” Indiana Dept. of Ins. v. Everhart, 960 N.E.2d 129, 138 (Ind. 2012); see
Palmer v. Comprehensive Neurologic Services, P.C., 864 N.E.2d 1093, 1099-1100 (Ind. Ct. App. 2007), trans.
denied. Accordingly, the non-party defense created by the Comparative Fault Act, is unavailable in medical
malpractice cases. Wilson v. Lawless, 64 N.E.3d 838, 846 (Ind. Ct. App. 2016), trans. denied (2017). The
Hospital has not been deprived of something it never had in the first place.
5
CARPENTERS, CLOSE TO YOU (A&M Records 1970).
6
We note that the Hospital has in its possession the identity of each individual, including each physician,
who attended to Spencer while he was a patient at the Hospital, as well as a record of the care provided.
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raised or not raised to the MRP, that meet these two requirements. These are
considerations for the trial court at a later date.
[17] In sum, the trial court properly determined that Spencer is not barred from
proceeding with his arguments and allegations of vicarious liability/physician
negligence in his submission to be evaluated by the MRP. 7 The trial court’s
order denying the Hospital’s motion for preliminary determination of law and
granting Spencer’s motion to reconsider is affirmed.
[18] Affirmed.
Robb, J., and Brown, J., concur.
7
To the extent that the Hospital suggests that the question is not whether Spencer is precluded from
presenting vicarious liability claims to the MRP, but whether he should be precluded from doing so as a
discovery sanction, we note that the trial court specifically determined that such a sanction was unwarranted
under the circumstances. Appellant’s App. Vol. 2 at 170. We presume that in determining appropriate
discovery sanctions, a trial court will “act in accord with what is fair and equitable in each case,” and thus we
will reverse a decision only if it “is clearly against the logic and effect of the facts and circumstances before
the court, or if the trial court has misinterpreted the law.” Wright v. Miller, 989 N.E.2d 324, 330 (Ind. 2013).
“The conduct and equities will vary with each case, and we thus generally leave that determination to the
sound discretion of the trial courts.” Id. We find no abuse of discretion here.
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