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Webster v. CDI Indiana, LLC

United States District Court, S.D. Indiana, Indianapolis Division

August 29, 2018

COURTNEY WEBSTER, BRIAN WEBSTER, Plaintiffs,
v.
CDI INDIANA, LLC, Defendant.

          ORDER

          Hon. Jane Magnus-Stinson, Chief Judge

         On Friday June 15, 2018, a jury returned a verdict for Plaintiffs Courtney and Brian Webster after finding that Defendant CDI Indiana, LLC (“CDI”) was legally responsible for the conduct of a radiologist who negligently reviewed a CT examination performed on Ms. Webster, resulting in a missed diagnosis of recurrent, terminal rectal cancer. [Filing No. 167; Filing No. 166-1 at 17.] The jury awarded Ms. Webster $14, 000, 000 and Mr. Webster $1, 000, 000. [Filing No. 167.] Presently pending before this Court are two motions filed contemporaneously by CDI that each seek to undo the jury's verdict: a Motion to Alter or Amend Judgment pursuant to Federal Rule of Civil Procedure 59(e), [Filing No. 184], and a Motion for Judgment as a Matter of Law pursuant to Federal Rule of Civil Procedure 50(b), or, alternatively, for a New Trial or Remittitur pursuant to Federal Rule of Civil Procedure 59(a), [Filing No. 182].

         Although CDI's pending Motions cover a wide range of arguments, their Motions primarily take issue with this Court's decision to apply the Indiana Supreme Court's decision in Sword v. NKC Hospitals, 714 N.E.2d 142 (Ind. 1999) to this case. In response, the Websters address CDI's various arguments, but contend throughout that CDI could have taken simple steps to avoid or significantly limit its liability by either providing notice to Ms. Webster that the radiologist who would review her CT examination was an independent contractor who was not subject to CDI's control, or by becoming a qualified health care provider under Indiana's Medical Malpractice Act.

         In the pages that follow, the Court will follow CDI's arguments down many winding paths, but the Court continues to reject CDI's arguments concerning Sword. As for the jury's verdict, the Websters' point that CDI could have taken fairly simple steps to limit or eliminate its liability is well taken. The jury in this matter found that CDI had failed to give meaningful notice to Ms. Webster that it was not the provider of radiology services before the treatment, and that the services were being provided by a physician who was an independent contractor and not subject to the control and supervision of CDI. In addition, despite a complex corporate arrangement which CDI's own representative admitted was “Byzantine, ” [Filing No. 126 at 29], the jury determined that Ms. Webster reasonably believed that that the radiology services were being rendered by CDI or its employee. The Court finds no reason to vacate or alter the jury's determination in this matter and, for the reasons set forth herein, CDI's pending Motions, [Filing No. 182; Filing No. 184], are DENIED.

         I.

         Background

         A. Factual Background

         The background of this case was set forth in a jury instruction to which neither party objected. It provides, in relevant part, as follows:

The case arises out of a radiologist's review and report of a CT examination performed on Courtney Webster at CDI's Carmel [Indiana] location on November 17, 2014.
The Websters claim that CDI is responsible for the conduct of Dr. [Michael] Walker, the radiologist who read Ms. Webster's CT scan on that date, because he was acting as an apparent agent of CDI. The Websters also claim that Dr. Walker was negligent in reviewing and reporting the CT scan. The Websters claim that as a result of Dr. Walker's negligence, Ms. Webster's recurrent rectal cancer went undiagnosed for more than 17 months and spread to the point that the cancer was incurable. The Websters seek compensation for their injuries and losses. . . .
CDI denies that Dr. Walker was acting as its apparent agent, denies that Dr. Walker was negligent in his review of Ms. Webster's CT scan, and denies that Dr. Walker's conduct was a responsible cause of harm to the Websters. CDI is not required to disprove the Websters' claims.

[Filing No. 159-1 at 2.]

         B. Procedural Background

         In order to properly frame CDI's Motions, a brief recitation of the procedural background of this case is helpful. On August 31, 2017, this Court denied CDI's Motion for Summary Judgment, and the Websters' Motion for Partial Summary Judgment. [Filing No. 50.] In the Summary Judgment Order, the Court found that Sword v. NKC Hospitals, 714 N.E.2d 142 (Ind. 1999) applies to the facts of this case. The Court explained that Sword was “a 1999 case in which the Indiana Supreme Court faced the question of whether a hospital ‘could be held liable for the alleged negligence of its independent contractor physician.'” [Filing No. 50 at 14 (quoting 714 N.E.2d at 144).] This Court went on to explain that Indiana's highest court ultimately adopted the formulation of apparent or ostensible agency set forth in the Restatement (Second) of Torts Section 429. [Filing No. 50 at 15 (quoting 714 N.E.2d at 152).] This Court “found no reason why the concerns underlying Sword do not apply equally to the medical center at issue in this case, ” [Filing No. 50 at 18], and found that there were genuine issues of material fact as to whether Dr. Walker was an apparent agent of CDI such that CDI is liable for Dr. Walker's negligence, [Filing No. 50 at 20].

         Following the Court's denial of summary judgment, CDI requested an interlocutory appeal on the question of whether Sword applies to this case, [Filing No. 52], which the Court denied, finding that CDI had failed to satisfy the criteria for such an appeal pursuant to 28 U.S.C. § 1292(b), [Filing No. 61].

         On February 1, 2018, the Court denied CDI's Motion to Bifurcate Trial, finding that bifurcation was unnecessary and inappropriate and would unfairly prejudice the Websters. [Filing No. 78 at 5.]

         In advance of trial, the Court considered a series of Motions, [1] including the Websters' Motion in Limine 6, which sought to exclude “[a]ny testimony or evidence that the Websters have a companion case pending against Dr. Walker and Medical Scanning Consultants, Inc. at the Indiana Department of Insurance.” [Filing No. 104 at 1-2.] The Court granted the Motion, finding “that evidence concerning the state-court case against Dr. Walker is not relevant and could confuse the jury, ” but also finding “that some instruction is appropriate to prevent the jury from speculating about why Dr. Walker is not a party to the lawsuit.”[2] [Filing No. 150 at 4-5.]

         The trial in this matter took place from June 11 to June 15, 2018. [Filing No. 159; Filing No. 166.] On the third day of trial, CDI moved for a judgment as a matter of law pursuant to Federal Rule of Civil Procedure 50, arguing that the Websters had not demonstrated a relationship between a contractor and an independent contractor as required by Restatement Section 429. [Filing No. 178 at 3-5.] The Court rejected this argument, and found that “looking at the Sword language itself . . . a trier of fact must focus on the reasonableness of the patient's belief that the hospital - or in this case, CDI or its employees - were rendering healthcare” and concluded that the relationship between the corporate entities is not “determinative” of the patient's belief “in any way.” [Filing No. 178 at 6.]

         The next day, CDI made an offer of proof regarding the Websters' Motion in Limine 6, arguing that, but for the Motion, “Dr. Walker would testify that he and Medical Scanning Consultants, P.A., have been sued by the Websters in a medical malpractice action pending before the Department of Insurance.” [Filing No. 179 at 3-4.] CDI argued that such evidence would prove the “nature of the agency relationship . . . that exists between Medical Scanning Consultants, P.A., and Dr. Walker” and the Websters' “knowledge of that fact . . . .” [Filing No. 179 at 5.] The Court stood on its earlier ruling, noting that “knowledge has to be based on notice provided to [Ms.] Webster before the treatment” so her subsequent suit against Dr. Walker and Medical Scanning Consultants, P.A., does not “tend[] to prove” Ms. Webster's knowledge prior to treatment. [Filing No. 179 at 5-6.] Moreover, the Court found that evidence of the relationship between Medical Scanning Consultants, P.A., and Dr. Walker was “already in evidence.” [Filing No. 179 at 5-6.]

         CDI also moved for judgment as a matter of law at the close of all evidence, arguing that CDI was not a provider of medical care, and that Restatement 429 requires an independent contractor relationship with a doctor, which was not present in this case. [Filing No. 180 at 11-12.] After questioning with skepticism CDI's argument that it could not provide medical care, the Court denied CDI's Motion, finding that the jury had to decide whether CDI held itself out by offering to provide radiology services and whether Ms. Webster accepted such services in the reasonable belief that the radiology services were being provided by CDI or its employee. [Filing No. 180 at 13-14.] The Court also highlighted the dispositive importance of the patient's reasonable belief that the services are being rendered by the employer or by his servants, noting that Sword adopted Restatement 429, which focuses on this belief, rather than Restatement 267, which focuses on representations of the provider of care. [Filing No. 180 at 15.]

         On June 15, 2018, the fifth and final day of trial, the jury returned its verdict. [Filing No. 166.] On Verdict Form #1, the jury found that CDI “IS legally responsible for the conduct of the radiologist, Dr. Walker.” [Filing No. 167 at 1.] On Verdict Form #2, the jury found as follows:

We, the jury, find for the plaintiffs, Courtney Webster and Brian Webster, and against the defendant, CDI Indiana, LLC. We find that the Websters' damages are:
Courtney Webster $ 14, 000, 000, 00
Brian Webster $1, 000, 000, 00

[Filing No. 167 at 2.]

         The same day, the Court entered final judgment in favor of the Websters pursuant to Federal Rule of Civil Procedure 58, consistent with the jury's verdict. [Filing No. 169.]

         On July 13, 2018, CDI filed a Motion for Judgment as a Matter of Law pursuant to Fed.R.Civ.P. 50(b), or, alternatively, for a New Trial or Remittitur pursuant to Fed.R.Civ.P. 59(a), [Filing No. 182], and a Motion to Alter or Amend Judgment pursuant to Fed.R.Civ.P. 59(e), [Filing No. 184]. Both Motions are fully briefed and ripe for this Court's review.

         II.

         Standard of Review

         A. Motion for Judgment as a Matter of Law pursuant to Fed. R. Civ. P. 50(b)

         Under Federal Rule of Civil Procedure 50, a court may grant judgment as a matter of law where “the court finds that a reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue.” Fed.R.Civ.P. 50(a). “If the court does not grant a motion for judgment as a matter of law made under Rule 50(a), the court is considered to have submitted the action to the jury subject to the court's later deciding the legal questions raised by the motion.” Fed.R.Civ.P. 50(b). Upon a timely-filed renewed motion for judgment as a matter of law “the court may: (1) allow judgment on the verdict, if the jury returned a verdict; (2) order a new trial; or (3) direct the entry of judgment as a matter of law.” Id.

         In considering a Rule 50(b) motion, a court must “construe the trial evidence strictly in favor of the party who prevailed before the jury.” Thorne v. Member Select Ins. Co., 882 F.3d 642, 644 (7th Cir. 2018) (quotations omitted). In short, a court's task “is to decide whether a highly charitable assessment of the evidence supports the jury's verdict or if, instead, the jury was irrational to reach its conclusion.” Id. In so doing, the “court does not make credibility determinations or weigh the evidence.” Passananti v. Cook Cty., 689 F.3d 655, 659 (7th Cir. 2012).

         B. Motion for a New Trial or Remittitur pursuant to Fed. R. Civ. P. 59(a)

         “The court may, on motion, grant a new trial on all or some of the issues” after a jury trial “for any reason for which a new trial has heretofore been granted in an action at law in federal court.” Fed.R.Civ.P. 59(a)(1)(A). “A new trial is appropriate if the jury's verdict is against the manifest weight of the evidence or if the trial was in some way unfair to the moving party.” Venson v. Altamirano, 749 F.3d 641, 656 (7th Cir. 2014) (citing Willis v. Lepine, 687 F.3d 826, 836 (7th Cir. 2012)).

         In considering a request for remittitur, a district court must grant “proper deference to the jury's verdict and limit[] its inquiry to three questions: whether the award is monstrously excessive; whether there is no rational connection between the award and the evidence, indicating that it is merely a product of the jury's fevered imaginings or personal vendettas[;] and whether the award is roughly comparable to awards made in similar cases.” Farfaras v. Citizens Bank & Tr. of Chicago, 433 F.3d 558, 566 (7th Cir. 2006) (internal quotations omitted).

         C. Motion to Alter or Amend Judgment pursuant to Fed. R. Civ. P. 59(e)

         A “district court possesses the power . . . to alter or amend a judgment after its entry” pursuant to Federal Rule of Civil Procedure 59(e). Fed.R.Civ.P. 59(e) 1946 Committee Notes. Relief under Rule 59(e) is an “extraordinary remed[y] reserved for the exceptional case.” Childress v. Walker, 787 F.3d 433, 442 (7th Cir. 2015) (quoting Foster v. DeLuca, 545 F.3d 582, 584 (7th Cir. 2008)). A Rule 59(e) motion “does not provide a vehicle for a party to undo its own procedural failures, and it certainly does not allow a party to introduce new evidence or advance arguments that could and should have been presented to the district court prior to the judgment.” United States v. Resnick, 594 F.3d 562, 568 (7th Cir. 2010) (quoting Bordelon v. Chicago Sch. Reform Bd. of Trustees, 233 F.3d 524, 529 (7th Cir. 2000)). Nor may a party use Rule 59(e) to “rehash previously rejected arguments.” Vesely v. Armslist LLC, 762 F.3d 661, 666 (7th Cir. 2014) (internal quotation omitted). “Amendment of the judgment is proper only when ‘the movant presents newly discovered evidence that was not available at the time of trial or if the movant points to evidence in the record that clearly establishes a manifest error of law or fact.'” Stragapede v. City of Evanston, Illinois, 865 F.3d 861, 868 (7th Cir. 2017) (quoting In re Prince, 85 F.3d 314, 324 (7th Cir. 1996)). A manifest error occurs “when the district court commits a wholesale disregard, misapplication, or failure to recognize controlling precedent.” Id. at 868 (internal quotation omitted).

         III.

...


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