The Indiana Supreme Court stated in its opinion dated August 31, 2021: “the plaintiff, having been misinformed of a medical diagnosis by her provider, which dissolved its business more than five years prior to the plaintiff filing her complaint, seeks relief for her injuries on grounds of fraudulent concealment, despite expiration of the applicable limitation period. Because we consider the limitation period at issue a statute of repose (rather than a general statute of limitation or non-claim statute), we conclude that fraudulent concealment may not extend the time in which to file a claim. And even if the limitation period were subject to tolling, the defendant’s constructive fraud precludes equitable relief.”
The Underlying Facts
In 2003, the Welborn Clinic (“Clinic”) tested Teresa Blackford (“Blackford”) for hepatitis, a known cause of a skin condition from which she suffered at the time. Upon completing the test, the Clinic informed Blackford that the results were negative. For the next several years, Blackford continued to receive treatment for her skin condition from the Clinic. But on June 30, 2009, the Clinic, under the Indiana Business Trust Act (“IBTA”), surrendered its authority to conduct business in the state, effectively terminating its relationship with Blackford.
In 2014, as Blackford’s health declined, her new doctor diagnosed her with hepatitis. This diagnosis prompted Blackford to request her medical records from the Clinic, which revealed that she had in fact tested positive for hepatitis in 2003. Though treated for her condition by her new doctor, Blackford had developed cirrhosis of the liver because of the delay in treatment, exposing her to a heightened risk of other medical problems.
Upon discovering the original test results, Blackford, on March 13, 2015, sued for medical malpractice—first with the Indiana Department of Insurance and then in the trial court. At trial, the Clinic moved for summary judgment, arguing that, because Blackford sued more than five years after the Clinic dissolved, the IBTA time-barred her claim.
Indiana Supreme Court Opinion
The Indiana Supreme Court held: “we conclude that the IBTA’s five-year limitation period is a statute of repose rather than a general statute of limitation or a condition precedent to filing suit. And because statutes of repose preclude equitable rules of tolling, we hold that Blackford’s claim—filed beyond the IBTA’s five-year limitation period—is untimely.”
The Indiana Supreme Court stated that the doctrine of fraudulent concealment is an equitable remedy that bars a statute-of-limitations defense when the defendant who invokes it prevented the plaintiff from discovering an otherwise valid claim. Fraudulent concealment may be active or it may be passive. The former category involves affirmative acts of concealment intended to mislead or hinder the plaintiff from obtaining information concerning the malpractice. Passive fraud, on the other hand, involves the failure to disclose material information to the patient. The significance of this distinction lies in the different points in time at which plaintiffs may commence their malpractice actions.
With passive concealment, the physician’s duty to disclose ceases at the termination of the physician-patient relationship, leaving the plaintiff with no remedy if he fails to exercise due diligence in filing his claim after the equitable grounds cease to be operational as a valid basis for inducing his delay. With active concealment, by contrast, the tolling period continues for a reasonable time after the plaintiff discovers the alleged malpractice or discovers information which in the exercise of reasonable diligence would lead to discovery of the malpractice.
The Indiana Supreme Court held: “Based on our long-standing distinction between active and passive fraud, which we re-affirm yet again today, we hold that, even if the IBTA’s statute of repose were the rare one subject to tolling, that tolling would have ended—and Blackford’s claim accrued—at the latest, upon termination of the doctor-patient relationship on June 30, 2009 (when the Clinic surrendered its authority to conduct business). And because Blackford filed suit more than five years later—on March 13, 2015—we consider her claim untimely.”
Source Blackford v. Welborn Clinic, Supreme Court Case No. 21S-CT-85.
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