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Community Hospitals of Indiana, Inc. v. Aspen Insurance UK Limited

Court of Appeals of Indiana

October 19, 2018

Community Hospitals of Indiana, Inc., Appellant-Defendant,
v.
Aspen Insurance UK Limited and Hiscox, LTD, Appellees-Plaintiffs

          Appeal from the Marion Superior Court The Honorable James B. Osborn, Judge Trial Court Cause No. 49D14-1204-PL-16336

          Attorneys for Appellant Robert G. Zeigler Erin E. Meyers Zeigler, Cohen & Koch Indianapolis, Indiana

          Attorneys for Appellee Robert W. York Robert W. York & Associates Indianapolis, Indiana, Christopher C. White Addie L. Jones Lewis Brisbois Bisgaard & Smith, LLP Dallas, Texas

          MAY, JUDGE.

         [¶1] Community Hospitals of Indiana, Inc. ("Community") appeals the grant of partial summary judgment in favor of Aspen Insurance UK Limited ("Aspen") and Hiscox, Ltd ("Hiscox") (collectively, "Insurance Companies") in which the trial court determined the Insurance Companies' claims fell outside the procedural and substantive provisions of the Indiana Medical Malpractice Act ("IMMA"). Because it determined the IMMA did not apply, the trial court concluded Community could not claim certain affirmative defenses available only under the IMMA.

         [¶2] Community presents three issues for our review, one of which we find dispositive: whether Insurance Companies are estopped from denying the IMMA applies to their claims. We reverse and remand.

         Facts and Procedural History [1]

         [¶3] On May 7, 2010, David Downey, [2] a truck driver for Celadon Trucking Services, Inc. ("Celadon"), was involved in a multi-vehicle accident in Texas that resulted in the death of one driver and serious injury to that driver's wife, who was in the passenger seat of the car. The deceased's children, as well as his wife and estate, sued Celadon, and the parties settled out of court in Texas. Celadon, which is located in Indiana, is insured by Insurance Companies, and Insurance Companies paid the victims' damages on behalf of Celadon.

         [¶4] Prior to the accident, Celadon and Community, which is also located in Indiana, contracted for qualified Community employees to complete physical examinations of Celadon truck drivers based on Department of Transportation ("DOT") requirements. Under the agreement, a qualified Community employee would determine whether a driver was medically able to drive, and then Community would communicate general information about that decision and any medical concerns observed to Celadon. The Community employee assigned to examine Downey was a nurse practitioner ("the NP").

         [¶5] On February 17, 2010, the NP conducted Downey's annual DOT examination. She noted Downey suffered from various medical conditions, and she suspected he also had sleep apnea. The NP certified Downey to operate a commercial motor vehicle for six months but instructed Downey to undergo a sleep study and send the results to the NP. On February 22, Downey completed the sleep study and was diagnosed with severe obstructive sleep apnea ("OSA") and prescribed a continuous positive airway pressure ("CPAP") machine. The NP attempted to call Downey the same day, but she could not hear him when she reached him via telephone. The NP did not attempt to call Downey again, and Downey did not report his diagnosis to the NP. On April 16, 2010, Downey's cardiologist sent Community a fax with the sleep study results and Downey's prescription for the CPAP machine. On April 19, the NP declared Downey was safe to drive a commercial motor vehicle.[3]

         [¶6] The accident in this case occurred May 17, 2010, when Downey drove his truck into a line of stopped cars. At the scene of the accident, Downey prepared a written statement admitting he was distracted by a wrecked truck on the side of the road and did not see the line of stopped cars until it was too late. (See Appellant's App. Vol. II at 151) (Downey's account of the accident as part of his December 16, 2010, deposition). The victims of the accident sued Celadon and received a judgment of approximately $3 million. Aspen and Hiscox are Celadon's insurance companies.

         [¶7] On April 16, 2012, Aspen filed a proposed complaint with the Indiana Department of Insurance ("IDOI") against Community, alleging

[11.] . . . Community was negligent in failing to notify Celadon on April 16, 2010, or shortly thereafter, that Downey was suffering from a medical condition which precluded his ability to drive under FMCSA regulations. Had such results been conveyed, Celadon would have removed Downey from the operation of his vehicle and placed him on a safety hold pending successful treatment of his sleep apnea.
12. The failure to [sic] Community to exercise ordinary care proximately caused, in whole or in part, the injuries sustained [by the accident victims], as well as the other minor bodily injury claimants, which caused, in whole or in part, Celadon to incur over $3 million to resolve their claims.

(Id. at 41.) Aspen indicated in its proposed complaint to the IDOI that Community's "physicians, nurse practitioners, nurses, wellness specialists, and administrative support/medical assistants . . . qualif[ied] as health care providers under the Indiana Medical Malpractice Act." (Id. at 23-4.) Aspen contemporaneously filed an action in Marion County Superior Court asserting the same facts and alleging Community[4] committed negligence and breach of contract. In the complaint before the Marion County Superior Court, Aspen indicated Community's "physicians, nurse practitioners, nurses, wellness specialists, and administrative support/medical assistants . . . qualif[ied] as health care providers under the Indiana Medical Malpractice Act." (Id. at 16.)

         [¶8] Insurance Companies[5] filed an amended proposed complaint with the IDOI on May 25, 2012, and in that amended complaint stated the Community employees allegedly involved were health care providers under the IMMA. Insurance Companies filed an amended complaint with the Marion County Superior Court on May 30, 2012, and they again noted the Community employees in question were health care providers under the IMMA.

         [¶9] On April 29, 2015, the trial court, sua sponte, scheduled an Indiana Trial Rule 41(E) hearing due to inactivity in the Marion County case. On May 6, 2015 the Insurance Companies filed an agreed motion to remove the Trial Rule 41(E) hearing from the docket stating Insurance Companies were "seeking damages for negligence and breach of contract arising from medical services or medically related services provided by [Community]." (Id. at 166.) In the motion, the Insurance Companies also explained they were awaiting the medical review panel's decision. The trial court cancelled the hearing. The same process occurred on October 13, 2015, and September 14, 2016.

         [¶10] On October 21, 2016, the medical review panel of the IDOI issued its decision on the Insurance Companies' complaint, concluding the "conduct complained of was not a factor in the resultant damages." (Br. of Appellant at 9) (citing Appellant's App. Vol II at 154).[6] On January 17, 2017, the Insurance Companies filed a second amended complaint in the Marion County case, noting "[a]ll procedural requirements of Indiana Code section 34-18-8-4 have been completed and the Medical Review Panel has provided its Opinion." (Appellant's App. Vol. II at 44.) The Insurance Companies alleged:

On or about April 16, 2010, a facsimile was sent to and received by [Community] which contained Downey's February 22, 2010 sleep study. At that point, based on the nurse practitioner's understanding of applicable DOT and/or FMCSA regulations, in conjunction with the results of the sleep study which diagnosed Downey as having uncontrolled sleep apnea, Downey would have been disqualified from operating a commercial motor vehicle. The results of the facsimile and accompanying sleep study were never conveyed to Celadon by [Community], and [Community] did not pull Downey's certification to drive or tell him he could not operate his vehicle until he [was] successfully treated for sleep apnea. As ...

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