Anderson v. Jackson Hosp. & Clinic, Inc. (Ex parte Jackson Hosp. & Clinic, Inc.)

• Decision Date: 07 November 2014
• Docket Number: 1130357.,1130342
• Parties: Ex parte JACKSON HOSPITAL & CLINIC, INC., et al. (In re: Joanne Anderson v. Jackson Hospital & Clinic, Inc., et al) Ex parte Joanne Anderson (In re: Joanne Anderson v. Jackson Hospital & Clinic, Inc., et al).
• Court: Alabama Supreme Court

167 So.3d 324

Ex parte JACKSON HOSPITAL & CLINIC, INC., et al.

(In re: Joanne Anderson

v.Jackson Hospital & Clinic, Inc., et al)

Ex parte Joanne Anderson

(In re: Joanne Anderson

v.Jackson Hospital & Clinic, Inc., et al).

1130342

1130357.

Supreme Court of Alabama.

Nov. 7, 2014.

Bethany L. Bolger, L. Peyton Chapman III, and Philip A. Sellers II of Rushton, Stakely, Johnston & Garrett, P.A., Montgomery, for petitioners/respondents Jackson Hospital & Clinic, Inc., Capital Cardio–Thoracic, P.C., and Stephen K. Kwan, M.D.

Victoria D. Relf of The Relf Law Firm, LLC, Montgomery; and Tamika R. Miller and Ashley N. Smith of Miller Smith, LLC, Montgomery, for petitioner/respondent Joanne Anderson.

Gerald C. Brooks of Brooks, Hubbard & James, P.C., Birmingham, for Daniel Hamm, bankruptcy trustee.

Opinion

STUART, Justice.

Joanne Anderson sued Jackson Hospital and Clinic, Inc., Dr. Stephen K. Kwan, and Dr. Kwan's practice group, Capital Cardio–Thoracic, P.C. (hereinafter referred to collectively as “the Jackson Hospital defendants”), in the Montgomery Circuit Court, asserting medical-malpractice claims against them. Thereafter, the trial court granted a motion to substitute bankruptcy trustee Daniel G. Hamm for Anderson as the real party in interest pursuant to Rule 17, Ala. R. Civ. P., because Anderson had filed a petition for Chapter 7 bankruptcy pursuant to 11 U.S.C. § 701 et seq. after her medical-malpractice claim had accrued. The Jackson Hospital defendants subsequently petitioned this Court for permission to file an interlocutory appeal pursuant to Rule 5, Ala. R.App. P., arguing that Hamm's attempt to be substituted as the real party in interest was untimely under Rule 17 ; Anderson filed a separate Rule 5 petition for permission to appeal, challenging the trial court's decision to remove her as the plaintiff in this case. We granted both petitions; however, as explained infra, we now treat the parties' petitions for permissive appeals as petitions for writs of mandamus, and we deny those petitions.

I.

On October 5, 2010, Anderson presented herself at the Jackson Hospital emergency room complaining of chest pain. Anderson had previously been diagnosed with coronary heart disease

, and it was ultimately determined that she now needed coronary-artery-bypass surgery ; on October 8, 2010, Dr. Kwan performed the procedure. Anderson thereafter had circulation issues in her feet; however, she was discharged from the hospital on October 25, 2010. Dr. Kwan conducted follow-up examinations with Anderson on November 2, 2010, and November 23, 2010, and on those visits she complained of continuing pain and circulation issues with her feet. During those examinations, Dr. Kwan determined that parts of Anderson's feet, including at least some toes, would likely have to be amputated; however, a final decision on the matter was delayed because the swelling and blistering on Anderson's feet made it difficult to fully evaluate them.

On November 24, 2010, Anderson was again admitted to Jackson Hospital. On November 27, 2010, Dr. Kwan examined her again. He noted at that time that circulation in her legs was fine above the ankles, but that she had developed gangrene

and that parts of her feet were dead with no circulation at all. After waiting for her overall condition to improve—she was also experiencing kidney and respiratory failure at this time—Dr. Kwan performed surgery on December 8, 2010, to amputate parts of Anderson's feet. During the course of the surgery, he ultimately determined that the feet were no longer viable and he accordingly performed bilateral below-the-knee amputations.

For all that appears, Anderson thereafter recovered to some extent and was discharged from Jackson Hospital. On November 8, 2011, Anderson filed a petition for Chapter 7 bankruptcy in the United States Bankruptcy Court for the Middle District of Alabama. As part of that petition, Anderson completed schedules detailing her debts and her assets. Those schedules indicated that she had approximately $28,000 of unsecured debt, consisting mostly of medical and consumer debt, and that she had no significant assets. Notably, she did not include among her assets any potential cause of action against the Jackson Hospital defendants, even though she was required by bankruptcy law to do so. See, e.g., Transouth Fin. Corp. v. Murry, 311 B.R. 99, 102 (M.D.Ala.2004) ( “One who files bankruptcy must disclose all of his assets, including causes of action, lawsuits, or potential lawsuits.”). On March 1, 2012, the bankruptcy court granted Anderson a complete discharge of her debts, presumably putting an end to those bankruptcy proceedings.

On October 9, 2012, Anderson initiated the instant medical-malpractice action against the Jackson Hospital defendants. On approximately May 2, 2013, Anderson filed responses to interrogatories served upon her by the Jackson Hospital defendants in which she revealed that she had recently filed for bankruptcy. The Jackson Hospital defendants then obtained the records from Anderson's bankruptcy proceedings and, upon discovering that Anderson had not disclosed a potential cause of action against them in the list of assets filed with the bankruptcy court, prepared a motion asking the trial court to enter a summary judgment in their favor on judicial-estoppel grounds. See, e.g., Luna v. Dominion Bank of Middle Tennessee, Inc., 631 So.2d 917, 919 (Ala.1993) (“The doctrine of judicial estoppel applies, where a debtor in bankruptcy proceedings fails to disclose any claim that may be presented in a nonbankruptcy contest, to estop the debtor from presenting the claim.”).

On Friday, May 24, 2013, one of the attorneys for the Jackson Hospital defendants notified one of Anderson's attorneys of the substance of the summary-judgment motion he had prepared to file. In an affidavit contained in the record, the attorney for the Jackson Hospital defendants states that Anderson's attorney asked him not to file the motion until after the impending Memorial Day weekend and that, as a courtesy, he waited until Tuesday, May 28, 2013, to file the motion. Prior to the filing on the afternoon of May 28 of an amended answer and the summary-judgment motion asserting judicial estoppel as a ground, however, Anderson filed a motion in the bankruptcy court seeking to reopen her bankruptcy case, along with amended schedules listing as an asset her cause of action against the Jackson Hospital defendants. Two days later, on May 30, 2013, Hamm filed a similar motion seeking to reopen Anderson's bankruptcy case and to be reappointed trustee, and he thereafter moved the bankruptcy court to authorize him to employ one of the attorneys who had been retained by Anderson in her action against the Jackson Hospital defendants as his attorney in that action as well. The bankruptcy court eventually approved all of those motions, reopening Anderson's bankruptcy case on June 14, 2013, and, on July 8, 2013, authorizing Hamm to use Anderson's attorney in the instant action.

After first learning of Anderson's medical-malpractice claim, Hamm also, on May 31, 2013, filed a motion with the trial court in this action, notifying it that he had just learned of Anderson's medical-malpractice claim and that he was seeking to reopen Anderson's bankruptcy case and to be reappointed trustee in the case. Hamm further stated in that motion that he was in current “discussions with an attorney to represent ... the plaintiff/trustee's interest” and he requested that the case be stayed until a decision was made as to representation. It is not clear whether the trial court ever explicitly ruled on Hamm's request for a stay, but the discovery process appears to have continued during this time.

On November 4, 2013, Hamm filed a motion to formally intervene in this action, asserting that he was the real party in interest under Rule 17. The Jackson Hospital defendants thereafter filed an objection, arguing that Rule 17 allows a real party in interest to be substituted for the original party only if the motion seeking to make the substitution is made within “a reasonable time” after the issue is raised, and, they argued, Hamm's more than five-month delay was not a “reasonable time.” On November 14, 2013, the trial court conducted a hearing at which it heard arguments on the issues raised by the parties in connection with the Jackson Hospital defendants' summary-judgment motion and Hamm's motion to intervene. On December 9, 2013, the trial court entered an order resolving those issues, stating as follows:

“[W]ith regard to defendants' motion for summary judgment, the court notes that such motion is based upon the doctrine of judicial estoppel (contending that the plaintiff failed to disclose her cause of action to the bankruptcy court during her Chapter 7 proceedings) and on the contention that plaintiff Joanne Anderson is not the real party in interest. ... [T]he plaintiff has now amended the complaint and [Hamm,] the trustee in bankruptcy has been permitted to intervene as the real party in interest. Pursuant to Hamm v. Norfolk Southern Railway Co., 52 So.3d 484 (Ala.2010), the defendants' motion for summary judgment is denied in part, such that [Hamm] shall be permitted to pursue Joanne Anderson's claims against the defendants for a recovery up to the amount necessary to pay the claims of Anderson's creditors and expenses associated with the related bankruptcy proceedings. The motion for summary judgment is granted in all other respects, and summary judgment is hereby entered in favor of the defendants and against Plaintiff Joanne Anderson as to all claims brought by her.”

However, the trial court recognized that there was substantial ground for difference of opinion regarding its conclusions of law, and it accordingly certified its order for an interlocutory appeal pursuant to Rule 5.

On December 23, 2013, the Jackson Hospital defendants petitioned this Court for permission to appeal immediately the trial court's order...