American Nat. Bank and Trust Co. v. Bransfield
| Decision Date | 28 June 1991 |
| Docket Number | No. 1-88-2833,1-88-2833 |
| Citation | 576 N.E.2d 1013,216 Ill.App.3d 494 |
| Parties | , 160 Ill.Dec. 59 AMERICAN NATIONAL BANK AND TRUST COMPANY, Guardian of the Estate of Kennicki Freeman, a disabled minor, and Sherron Freeman, Plaintiffs-Appellants, v. Dr. James BRANSFIELD, Defendant-Appellee (Columbus-Cuneo-Cabrini Medical Center et al., Defendants; Columbus-Cuneo-Cabrini Medical Center, Defendant and Counterplaintiff-Appellant; Dr. Mohammed Hafeez, et al., Defendants and Counterdefendants-Appellees). |
| Court | United States Appellate Court of Illinois |
Rehearing Denied Aug. 14, 1991.
James P. Chapman, Kathleen Hogan Morrison, James P. Chapman & Associates, Chicago, for plaintiffs-appellants.
Wildman, Harrold, Allen & Dixon, Chicago (Frank R. Petrek, Jr., Ruth E. VanDemark, and Susan J. Flieder, of counsel), for defendant-appellee.
John J. Reidy, Douglas C. Rose, Charles E. Reiter III, Ruff, Weidenaar & Reidy, Ltd., Chicago, for defendant and counterplaintiff-appellant Columbus-Cuneo-Cabrini Medical Center.
Hinshaw, Culbertson, Moelmann, Hoban & Fuller, Chicago (Gary A. Grasso, Joshua G. Vincent, and Bruce L. Carmen, of counsel), for defendants and counterdefendants-appellees Dr. Mohammed Hafeez, Anesthesia Associates of Lake Shore, Ltd., and Julia Lester.
Columbus-Cuneo-Cabrini Medical Center (the Medical Center), defendant and counterplaintiff, appeals from an order of the circuit court of Cook County dismissing a claim for implied indemnity in favor of Dr. Mohammed Hafeez, Julia Lester, and Anesthesia Associates of Lake Shore, Ltd. (cumulatively referred to as the Anesthesia defendants), defendants and counterdefendants.
The questions presented on appeal are (1) whether the trial court properly dismissed the Medical Center's counterclaim for implied indemnity against the Anesthesia defendants; and (2) whether the settlement agreement between plaintiffs and the Anesthesia defendants was made in good faith.
We affirm.
Kennicki Freeman is a 2 1/2-year-old boy who suffered profound brain damage during a routine hernia surgery at the Medical Center. Plaintiffs, American National Bank and Trust Company (as guardian for the estate of Kennicki Freeman, a disabled minor) and Sherron Freeman (Freeman's mother) brought a medical malpractice action against the Medical Center, Dr. James Bransfield, the physician who performed the surgery, and the Anesthesia defendants (Dr. Mohammed Hafeez, the anesthesiologist who administered the anesthesia, Julia Lester, the nurse anesthetist who assisted Dr. Hafeez, and Anesthesia Associates of Lake Shore, Ltd., the exclusive provider of anesthesia services at the Medical Center).
The Medical Center filed a counterclaim against the Anesthesia defendants seeking recovery for principal/agent indemnity and contribution. Subsequently, the Anesthesia defendants entered into a settlement agreement with plaintiffs. In a consolidated action, the trial court dismissed the Medical Center's claim for contribution and indemnity against the Anesthesia defendants and entered summary judgment in favor of Dr. Bransfield. Plaintiffs' appeal of the summary judgment decision in favor of Dr. Bransfield was dismissed with prejudice. The Medical Center appeals the dismissal of its claim against the Anesthesia defendants for indemnification.
On January 21, 1984, Freeman was admitted to the Medical Center for general surgery to correct an inguinal hernia. During the course of the operation, Freeman suffered irreversible brain damage as a result of oxygen deprivation. The pleadings advanced several theories to explain how the injury occurred. One theory is that the anesthesia tube, through which oxygen and anesthesia are administered to the patient, was misplaced and caused an interruption in the supply of oxygen to the brain. The lack of oxygen to the boy's brain caused his heart to stop and efforts to resuscitate his heart were unsuccessful. Another theory is that bradycardia (slackening in the pace of the heart beat) was brought on by a neurological reflex to the surgery. Under this theory, it was a delay in resuscitative measures which caused the hypoxia and resulting brain damage. A third theory focuses on the defective delivery of oxygen from the anesthesia machine.
Plaintiffs originally filed a negligence action against only the Medical Center in its capacity as employer of the Anesthesia defendants. Plaintiffs filed a first amended complaint, adding Dr. Hafeez, Dr. Bransfield, and Anesthesia Associates of Lake Shore, Ltd. as defendants. The Medical Center filed a motion for summary judgment, arguing that an independent contractor relationship existed between the hospital and the Anesthesia defendants; therefore, the Medical Center could not be liable under the doctrine of respondeat superior. The trial court denied the motion.
Five expert witnesses were identified and deposed in the case. Plaintiffs and Dr. Bransfield each presented two witnesses who testified that Dr. Hafeez was negligent in his administration of the anesthesia. Dr. Hafeez presented one expert witness who raised doubts as to Dr. Bransfield's care and treatment during the operation. There was no expert testimony regarding the Medical Center's standard of care. In their amended complaint, plaintiffs charged, inter alia, that the Medical Center was negligent in meeting its obligation to ensure quality health care and in hiring unqualified personnel.
On March 11, 1987, the Medical Center filed a counterclaim against the Anesthesia defendants for contribution under "An Act in relation to contribution among joint tortfeasors" (Contribution Act) (Ill.Rev.Stat.1979, ch. 70, par. 301 et seq.) and for indemnity. The counterclaim asserted that in the event it was found vicariously liable for the act of the Anesthesia defendants, it would be entitled to indemnification or 100% contribution. The Anesthesia defendants requested a dismissal of both counts of the counterclaim, arguing that the indemnity theory of the Medical Center's counterclaim was invalid, pursuant to section 2(d) of the Contribution Act. The court dismissed the implied indemnity claim and the contribution claim based upon its determination that implied indemnity "should not apply." The court further stated that the settlement between plaintiffs and the Anesthesia defendants fell within the sense and purview of the contribution statute and, therefore, the indemnification claim should be denied.
On August 10, 1988, the Anesthesia defendants reached a settlement with plaintiffs for $4.3 million. The available insurance coverage for the Anesthesia defendants was $5 million. After an extensive oral argument on the good faith of the settlement was held, the trial court found the settlement to be in good faith and dismissed the Medical Center's counterclaim with prejudice. The court certified the order for immediate appeal pursuant to Supreme Court Rule 304 and the Medical Center filed a notice of appeal on September 22, 1988.
The Medical Center contends that the trial court erred in dismissing its implied indemnity action based upon vicarious liability against the Anesthesia defendants. It further asserts that implied indemnity is a viable action where liability is imposed by policy of law rather than culpability of conduct. (Allison v. Shell Oil Co. (1986), 113 Ill.2d 26, 35, 99 Ill.Dec. 115, 495 N.E.2d 496.) The Medical Center argues that since there was no testimony criticizing any of its acts, its potential liability is not based on fault but upon the policy choice that it should be vicariously liable for the actions of another. The Anesthesia defendants maintain that the trial court properly dismissed the Medical Center's counterclaim because the Contribution Act supersedes common law implied indemnity based upon the vicarious liability of a principal for the acts or omissions of his agent. We agree with the Anesthesia defendants.
Both indemnity and contribution arise out of the same principle of restitution or unjust enrichment. "A person who has been unjustly enriched at the expense of another is required to make restitution to the other." (Restatement of Restitution § 1 (1937).) Unlike contribution which requires that joint tortfeasors share responsibility for injury to a plaintiff, indemnity shifts the entire burden of judgment to one party. The theory underlying implied indemnity is that liability is placed upon the party whose fault was the primary cause of the injury. (Heinrich v. Peabody International Corp. (1985), 139 Ill.App.3d 289, 291, 93 Ill.Dec. 544, 486 N.E.2d 1379.) However, "[b]ecause of either confusion or deliberate departure from prevailing usage, there are decisions in which full reimbursement has been allowed under the name of contribution, or some form of distribution has been allowed under the name of indemnity." Prosser & Keeton, Torts § 51, at 341 (5th ed. 1984).
At common law, implied indemnity involved a restitutionary device, "a contract implied in law arising from the legal obligation of an indemnitee to satisfy liability caused by actions of his indemnitor." (Frazer v. A.F. Munsterman, Inc. (1988), 123 Ill.2d 245, 255, 123 Ill.Dec. 473, 527 N.E.2d 1248; see F. Woodward, Quasi Contracts § 259 (1913).) In response to the prevailing no-contribution rule, courts began to expand the judicially created doctrine of implied indemnity. (See Liberty Mutual Insurance Co. v. Williams Machine & Tool Co. (1975), 62 Ill.2d 77, 338 N.E.2d 857; Heinrich, 139 Ill.App.3d at 291, 93 Ill.Dec. 544, 486 N.E.2d 1379.) Initially, implied indemnity required a pretort relationship and a qualitative distinction in the culpable conduct of the defendants; however, "the doctrine increasingly focused on qualitative distinctions, also termed primary-secondary liability or active-passive negligence." Heinrich, 139 Ill.App.3d at 292, 93 Ill.Dec. 544, 486 N.E.2d 1379.
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