Med-mal judgment for insurers against hospital reversed

The Indiana Court of Appeals reversed the grant of summary judgment for two insurance companies when it found they were estopped from denying the applicability of the Indiana Medical Malpractice Act to their claims.

After a May 2010 trucking crash that led to a $3 million judgment against Indianapolis-based Celadon Trucking Services Inc., Celadon learned Community Hospitals of Indiana failed to inform it that the driver involved in the crash had been diagnosed with sleep apnea. Celadons’s insurers, Aspen Insurance UK Limited and Hiscox, LTD, subsequently sued Community claiming negligence, contending that its employees allegedly involved in conducting the driver’s examination were health care providers under the IMMA.

When the medical review panel issued a decision finding the accident was not caused by Community’s failure to inform, the insurance companies filed a second complaint. Community responded that it was a qualified health care provider “entitled to all rights, privileges, limitations, liability caps, defenses and immunities provided for [by the IMMA].”

Community also argued the companies were estopped from denying the applicability of the IMMA based on the doctrine of judicial estoppel. However, the trial court granted summary judgment to the insurance companies on the grounds that their claims fell outside the procedural and substantive provisions of the IMMA.

Citing Preferred Prof’l Ins. Co. v. West, 23 N.E.3d 716, 727 (Ind. Ct. App. 2014), and Manley v. Sherer, 992 N.E.2d 670, 674 (Ind. 2013) in its Friday decision, the appellate court found the trial court erred in its grant of summary judgment to the insurance companies.

Community argued that unlike West, the insurance companies waited until after the medical review panel rendered its decision contrary to the insurance companies’ interests before seeking clarification about whether the IMMA applied to the its claims.

Likewise, Community contended that West is inapposite because despite the insurance companies’ reliance on its holding for the premise they did not waive their ability to challenge the applicability of the IMMA, “the Insurance Companies consistently and repeatedly claimed to the trial court that the [IMMA] did apply[.]”

The appellate court agreed on both contentions, noting that similar to Manley, the insurance companies could not claim the IMMA did not apply because the issue was purely clerical after receiving a decision from the medical review board that did not comport with its trial strategy.

“The trial court erred when it granted summary judgment in favor of the Insurance Companies because, under Manley, they cannot proceed as if the IMMA applies to their claim and then disavow the IMMA when the Medical Review Board renders an unfavorable decision,” Judge Melissa May wrote for the court.

“Like in West, the Insurance Companies should have, and had ample time to, file a motion for declaratory judgment early in the proceedings if they believed the IMMA did not apply.”Thus, the appellate court reversed and remanded for proceedings consistent with its opinion in Community Hospitals of Indiana, Inc. v. Aspen Insurance UK Limited and Hiscox, LTD, 18A-PL-69.

This article was first published by The Indiana Lawyer.

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