The Court of Appeals of Indiana (“Indiana Appellate Court”) stated in its opinion filed on May 4, 2021, “The primary issue in this case is whether an indemnity claim by a healthcare provider against another healthcare provider based on alleged medical negligence is subject to Indiana’s Medical Malpractice Act. We hold that it is.”
The Underlying Facts
Between April 19 and April 25, 2011, Joseph Shaughnessy was a patient at a Franciscan hospital, and Lake Imaging radiologists interpreted two CT scans of his head. Franciscan did not notify Joseph that radiology services would be provided by an independent contractor. Joseph died on April 25, 2011.
In November 2015, a DOI medical-review panel rendered a unanimous opinion that “[t]he evidence does not support the conclusion that [Franciscan] failed to meet the applicable standard of care as charged in the complaint.” Nonetheless, the Shaughnessys pursued their claim in court. In September 2016, Franciscan and the Shaughnessys agreed to the entry of summary judgment for Franciscan on all the Shaughnessys’ claims “except [Franciscan’s] potential vicarious liability for unnamed radiologists who interpreted [Joseph’s] head CT scans.” Later that month, the parties settled that remaining claim for $187,001.
In May 2018, Franciscan sent Lake Imaging a letter demanding indemnification of the settlement amount pursuant to their indemnification agreement. Lake Imaging did not pay, and in July 2018, Franciscan sued, claiming breach of the indemnification agreement. Lake Imaging moved for summary judgment, arguing, among other things, that Franciscan’s claim is based on alleged medical negligence by Lake Imaging, is therefore a claim for medical malpractice, and is barred by the medical-malpractice statute of limitation, which provides such actions generally must be filed “within two (2) years after the date of the alleged act, omission, or neglect[.]” Ind. Code § 34-18-7-1(b). The trial court agreed that Franciscan’s claim is one for medical malpractice. However, it did not reach the statute-of-limitation issue or grant Lake Imaging summary judgment. Instead, because Franciscan did not present its claim to the DOI and obtain an opinion from a medical-review panel before filing suit, as required by the Medical Malpractice Act (MMA), the court concluded it lacked subject-matter jurisdiction over the claim and dismissed it without prejudice, leaving Franciscan free to refile. Lake Imaging appealed and Franciscan cross-appealed.
Indiana Appellate Court Opinion
The Indiana Appellate Court stated, “the legislature did not intend to limit the MMA’s coverage to the “typical” medical-malpractice action—one brought by an injured patient or the representative of an injured patient. Rather, the language of these statutes is broad enough to include an indemnification claim by one healthcare provider against another healthcare provider, if the claim is based on the alleged medical negligence of the latter … the trial court properly concluded Franciscan’s indemnity claim, which is based on the alleged medical negligence of Lake Imaging, is subject to the requirements of the MMA.”
The Indiana Appellate Court continued: “Of course, our holding means that healthcare providers with a right to indemnification in situations like this will often have to sue before they have actually suffered a loss, in order to satisfy the medical-malpractice statute of limitation.”
Source Lake Imaging, LLC v. Franciscan Alliance, Inc., Opinion 20A-CT-1490.
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