Indiana Appellate Court Says Fraudulent Concealment Tolls Statute Of Repose In Medical Malpractice Case

The Court of Appeals of Indiana (“Indiana Appellate Court”) held in its opinion dated June 26, 2020: “where there is a sufficient factual demonstration of fraudulent concealment, such concealment equitably estops the fraudulent party from invoking the five-year nonclaim limit in the IBTA to time-bar a claim and thereby benefit from its own fraud.”

The Underlying Facts

Plaintiff Teresa Blackford (“Blackford”) was tested by defendant Welborn Clinic (“Welborn”) in 2003 for hepatitis as a possible cause of her skin condition, Lichens Planus. At that time, Welborn allegedly informed Blackford that the test results were negative for hepatitis. In 2014, Blackford learned that the 2003 test results had actually been positive, and she sued Welborn for medical malpractice.

The defendant filed a motion for summary judgment, arguing that the plaintiff’s Indiana medical malpractice lawsuit was filed after the expiration of the five-year nonclaim limitation (statute of repose) imposed by the Indiana Business Trust Act (“IBTA”). The plaintiff argued that the five-year nonclaim limitation should be tolled because Welborn’s fraudulent concealment prevented her from discovering she had a cause of action any sooner. The trial court granted the defendant’s motion for summary judgment, and the plaintiff appealed.

Indiana Appellate Court Opinion

The Indiana Appellate Court stated that in this case of first impression, “[t]he equitable principles and exceptions for fraud that serve to toll the applicable statute of limitations justify a parallel exception for the IBTA’s nonclaim statute. To allow otherwise would permit a now-defunct business trust to fraudulently conceal information that would reveal a cause of action until the five-year nonclaim limit had expired, at which point the former business entity would be off the hook—which is precisely the type of incentive the doctrine of fraudulent concealment, as applied to statutes of limitation, is intended to prevent.”

Doctrine Of Fraudulent Concealment

The doctrine of fraudulent concealment is an equitable remedy that bars a defendant from asserting the statute of limitations as a defense if the defendant prevented a plaintiff from discovering an otherwise valid claim, by violation of duty or deception. Upon a sufficient factual showing, fraudulent concealment may toll the running of the two-year limitation period in medical malpractice cases until either (1) the physician-patient relationship is terminated, or (2) the patient discovered, or in the exercise of reasonable diligence should have discovered, the physician’s alleged malpractice.

Fraudulent concealment may be either active or passive. A physician’s actions amount to active concealment if they are calculated to mislead and hinder a claimant using ordinary diligence from obtaining information, or otherwise prevent inquiry and investigation. Passive or constructive concealment, on the other hand, may be merely negligent and arises when the physician does not disclose to the patient certain material information.

The Indiana Appellate Court stated that Blackford testified in her deposition that she was told by a Welborn employee in 2003 that the results of her test for hepatitis were negative. Blackford also testified that it was not until 2014, when her health significantly worsened without explanation, that her new doctor had reason to conduct a new test that showed Blackford was positive for hepatitis. The 2014 test prompted Blackford to seek a copy of the Welborn records containing the results of the 2003 test, which actually stated that the 2003 test showed she had been “highly reactive” and positive for hepatitis, not negative.

Blackford testified in her deposition that she continued seeking medical treatment for her Lichens Planus from Welborn, and later from a new provider, and never exhibited symptoms of hepatitis nor was given treatment for hepatitis as the potential underlying cause of the skin condition. Blackford testified that she was administered steroid medications that are contraindicated for a patient who has hepatitis—further suggesting that she and her physicians, both at Welborn and later on, relied on the assumption that the test was negative.

The Indiana Appellate Court stated: “Therefore, Blackford’s continued efforts to seek treatment for Lichens Planus and determine a cause of the condition show that she investigated her condition following the termination of the physician-patient relationship with Welborn in a reasonably diligent manner. Blackford states the issue here well: “the issue is not whether Welborn’s misrepresentation prevented inquiry. It did not. What it did block was [Blackford’s] inquiry from being effective” … To expect more of her in this scenario would effectively require that every patient in Blackford’s position—having received test results from a physician and then being treated for a condition based on those test results—continually question the accuracy of the information disclosed by their doctors and to “obtain their medical records to determine whether their physicians might have misled them.””

The Indiana Appellate Court held: “As such, the evidence is undisputed that Welborn failed to disclose to Blackford that her hepatitis test was positive and, in fact, told her precisely the opposite. Based on this record, we hold as a matter of law that Welborn fraudulently concealed—at the least, passively; at the worst, actively—material medical information from Blackford … we find that Blackford successfully demonstrated that (1) because an equitable exception for fraudulent concealment applies to the IBTA’s nonclaim statute, it was erroneous for the trial court to grant Welborn’s motion for summary judgment on this basis; and (2) the undisputed evidence in the record establishes as a matter of law that Welborn committed passive fraudulent concealment, which does, in fact, prevent application of the five-year limit under the IBTA, rendering denial of Blackford’s motion for partial summary judgment inappropriate. Therefore, we reverse the trial court’s order and remand with instructions to enter partial summary judgment in Blackford’s favor on this issue … we find as a matter of law that Welborn fraudulently concealed Blackford’s positive hepatitis test result. This act tolled the five-year nonclaim limitation such that Blackford’s complaint was timely filed under the IBTA. Accordingly, the trial court erred by granting Welborn’s summary judgment motion and denying Blackford’s partial summary judgment motion.”

Source Blackford v. Welborn Clinic, Opinion 19A-CT-2054.

If you or a loved one may have been injured as a result of medical malpractice in Indiana or in another U.S. state, you should promptly find an Indiana medical malpractice lawyer, or a medical malpractice lawyer in your state, who may investigate your medical malpractice claim for you and represent you or your loved one in a medical malpractice case, if appropriate.

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This entry was posted on Thursday, August 6th, 2020 at 5:21 am. Both comments and pings are currently closed.


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