Bd. of Trs., Cmty. Coll. of Balt. Cnty. v. Patient First Corp.
| Decision Date | 18 August 2015 |
| Docket Number | No. 89, Sept. Term, 2014.,89, Sept. Term, 2014. |
| Citation | 444 Md. 452,120 A.3d 124 |
| Parties | BOARD OF TRUSTEES, COMMUNITY COLLEGE OF BALTIMORE COUNTY v. PATIENT FIRST CORPORATION. |
| Court | Court of Special Appeals of Maryland |
James J. Nolan, Jr., Asst. Co. Atty. (Michael E. Field, Co. Atty., Towson, MD), on brief, for Petitioner.
Karen A. Doner (Genevieve C. Bradley, Roth, Doner, Jackson, PLC, McLean, VA), on brief, for Respondent.
Argued before: BARBERA, C.J., HARRELL* , BATTAGLIA, GREENE, ADKINS, McDONALD and WATTS, JJ.
In an indemnification provision of a contract, one party agrees to reimburse the other party for a liability, loss, or damage that the other party might incur.1 This case concerns the application of an indemnification provision in an agreement between a community college and a medical facility under which student medical technicians gained useful experience doing blood draws at the facility. The college agreed to indemnify the facility for any liability that the facility might incur (including attorneys' fees) arising from a negligent act or omission of a student.
As a result of an unfortunate incident involving a failed blood draw by a student, the facility paid money to settle a lawsuit and incurred attorneys' fees. The community college contested its obligation to indemnify the facility for the settlement payment and attorneys' fees, asserting that the liability arose from the facility's own negligence. After a bench trial, the Circuit Court decided in favor of the facility.
We hold that: (1) the medical facility had the burden of proving its entitlement to indemnification—i.e., the existence of the indemnification agreement, negligent conduct of a student at the facility, its payment of money in settlement and for attorneys' fees, and the failure of the college to indemnify it; (2) the college had the burden of proving, as an affirmative defense, that the facility itself was negligent and that the liability arose from that negligence; and (3) the trial court was not clearly erroneous in concluding that the facility bore its burden, but the college did not. We remand for further consideration of the reasonableness of the attorneys' fee award.
Among the programs offered by Petitioner Community College of Baltimore County (“CCBC”) is training for a Phlebotomy Technician Certification.2 In connection with that program, CCBC entered into arrangements with local hospitals and medical providers in the Baltimore area to permit its students to obtain clinical experience at those facilities. The terms of the arrangement were incorporated in a written agreement drafted by CCBC entitled “Community College of Baltimore County—Agreement for Clinical Program—Venipuncture” (the “Agreement”). The Agreement was to be executed by representatives of CCBC and the particular facility, referred to in the agreement as the Provider.
The Agreement provided that CCBC and the Provider agreed to establish a “supervised clinical experience for the Venipuncture Students” at the Provider's facilities. It then set forth various “rights and responsibilities” of CCBC and the Provider with respect to the program, the term of the Agreement, and various other general provisions. Pertinent to this case, the Agreement included a section on indemnification, which reads, in pertinent part:
In September 2003, CCBC entered into the Agreement with Respondent Patient First Corporation (“Patient First”).3 Patient First is a provider of preventative, primary, and urgent care services at medical centers throughout the mid-Atlantic area, including several located in the Baltimore area.
In January 2007, as part of the CCBC program and pursuant to the Agreement between CCBC and Patient First, a CCBC student worked as a student phlebotomist at Patient First's medical center in Perry Hall, Maryland. At the end of her first week at the facility, the CCBC intern attempted to draw blood from Dimitris Politis, a six-year old patient. At the time of the attempted blood draw, the treating physician who had ordered the blood draw had left the examining room and only the child's mother and grandmother were present. The CCBC intern accidentally nicked herself with a needle and then used the same needle to attempt, unsuccessfully, to draw blood from the child. The treating physician, who was also the medical director for the facility, later discovered what had happened and ordered that the CCBC intern be tested for infectious diseases. The CCBC intern subsequently tested positive for Hepatitis C
. The child was tested for a year, but did not test positive for Hepatitis C.
In December 2009, the child's mother, Susan Politis, filed a complaint against Patient First, its affiliates, and the CCBC intern in the Circuit Court for Baltimore County. The complaint consisted of three counts alleging negligence on the part of the CCBC intern and Patient First and sought $5 million in damages as to each count. The specific allegations of negligence largely concerned the actions of the CCBC intern.4 The complaint also alleged that the CCBC intern acted as “an actual and/or apparent agent, servant, and employee of” Patient First and that she “was not supervised at the time she negligently attempted a blood draw from the minor Plaintiff.” The complaint alleged that the defendants collectively acted negligently in failing to utilize appropriate safeguards or procedures to protect the plaintiffs from injury or contaminated blood.
On January 26, 2010, Patient First's General Counsel sent a letter to CCBC asserting that CCBC was obligated to defend and indemnify Patient First for any liability with respect to the Politis lawsuit pursuant to paragraph 7.1 of the Agreement between CCBC and Patient First. CCBC responded by referring Patient First to CCBC's counsel. CCBC denied that it was obligated to defend or indemnify Patient First. Patient First eventually hired its own outside counsel to defend against the Politis complaint.
The parties in the Politis lawsuit conducted discovery and participated in mediation. On March 16, 2011, they reached a settlement agreement in which the plaintiffs agreed to release the CCBC intern and Patient First from liability in exchange for a payment of $50,000. The insurance that CCBC had obtained to cover its students, including the intern placed at Patient First, contributed $40,000 toward the settlement and Patient First contributed $10,000. The settlement agreement recited that the CCBC intern and Patient First expressly denied all allegations of negligence and that they denied that any conduct on their part caused damage or injury to Ms. Politis or her child. The settlement agreement also stated that the settlement was not to be construed as an admission of liability on behalf of the CCBC intern or Patient First “at any time for any purpose.”
In June 2011, Patient First initiated this action for breach of contract in the Circuit Court for Baltimore County, alleging that CCBC had failed to comply with the terms of their Agreement by failing to indemnify Patient First for (1) the $10,000 that Patient First had paid toward the settlement of the Politis lawsuit and (2) attorneys' fees and costs in the amount of $78,937.395 related to the defense of that lawsuit. In its answer, CCBC generally denied liability for breach of contract and asserted a number of defenses, including that the Agreement did not obligate it to indemnify Patient First for Patient First's own negligence.
At the conclusion of a two-day bench trial in April 2013,6 the Circuit Court ruled from the bench that Patient First was entitled to indemnification. The court reasoned that, in light of the mutual indemnification provisions in the Agreement, resolution depended not on the allegations in the Politis complaint, but on “where liability rests.” The court found that negligence on the part of the CCBC intern had been established, but that there was insufficient evidence to show negligence on the part of Patient First—what the court referred to as an “independent breach” of a duty. The court awarded Patient First $87,097.08 in damages, which included the $10,000 that Patient First contributed to the Politis settlement and attorneys' fees and costs accrued in defending the Politis law suit.7 A written judgment reflecting the oral ruling followed.
CCBC appealed. The Court of Special Appeals affirmed the judgment of the Circuit Court. 219 Md.App. 69, 98 A.3d 1072 (2014). We granted CCBC's petition for a writ of certiorari to consider (1) whether the Circuit Court made an error of law when it ruled in favor of Patient First in the breach of contract action; and (2) whether the Circuit Court abused its...
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