Blackford v. Welborn Clinic

• Court: Indiana Appellate Court
• Writing for the Court: Baker, Judge.
• Citation: Blackford v. Welborn Clinic, 150 N.E.3d 687 (Ind. App. 2020)
• Decision Date: 26 June 2020
• Docket Number: Court of Appeals Case No. 19A-CT-2054
• Parties: Teresa BLACKFORD, Appellant-Plaintiff, v. WELBORN CLINIC, Appellee-Defendant

150 N.E.3d 687

Teresa BLACKFORD, Appellant-Plaintiff,

v.WELBORN CLINIC, Appellee-Defendant

Court of Appeals Case No. 19A-CT-2054

Court of Appeals of Indiana.

FILED June 26, 2020

Attorney for Appellant: John P. Young, Young & Young, Indianapolis, Indiana

Attorneys for Appellee: David C. Jensen, James L. Hough, Eichhorn & Eichhorn, LLP, Hammond, Indiana

Baker, Judge.

[1] Teresa Blackford was tested by Welborn Clinic ("Welborn") in 2003 for hepatitis as a possible cause of her skin condition, Lichens Planus. At that time, Welborn allegedly informed Blackford that the test results were negative for hepatitis. In 2014, Blackford learned that the 2003 test results had actually been positive, and she sued Welborn for medical malpractice. Blackford now appeals the trial court's order granting Welborn's motion for summary judgment and denying Blackford's motion for partial summary judgment, arguing that the five-year nonclaim limitation imposed by the Indiana Business Trust Act (IBTA) should be tolled because Welborn's fraudulent concealment prevented her from discovering she had a cause of action any sooner.

[2] Finding that the nonclaim limitation is tolled due to Welborn's fraudulent concealment, we reverse and remand (1) with instructions to enter partial summary judgment in favor of Blackford on the issue of the timeliness of the complaint under the IBTA; and (2) for further proceedings.

Facts¹

[3] In 1963, Welborn was created as a business trust under the IBTA with its principal place of business in Evansville. Blackford first became a patient at Welborn in 1999. Sometime in 2003, Blackford sought treatment from Welborn for Lichens Planus, an inflammatory skin condition.² Because hepatitis can be an underlying cause of Lichens Planus, Welborn tested Blackford for hepatitis on October 1, 2003. Shortly thereafter, Welborn informed Blackford that the test results were negative and that hepatitis was therefore not a cause of her Lichens Planus. For the next several years, Blackford continued to see providers at Welborn to seek treatment for and determine the cause of her Lichens Planus.

[4] In the fall of 2008, Welborn sold its assets to Deaconess Clinic, Inc., and the medical clinic previously owned and operated by Welborn was renamed Deaconess Clinic. Following the sale, on October 1, 2008, Welborn changed its name to WC Liquidating Corp. On June 30, 2009, WC Liquidating Corp. gave notice under the IBTA that it was surrendering its authority to transact business in Indiana.

[5] Sometime in 2014, Blackford's health significantly worsened, and she "became ill with places on her arms and ... didn't feel very good." Appellant's App. Vol. II p. 28. Blackford's new family physician³ sent her to another doctor, who ran some tests and determined that Blackford was positive for hepatitis C. To confirm that the original test performed in 2003 showed that Blackford was negative for hepatitis, Blackford signed a release for her medical records from Welborn to view the 2003 test results and share them with her new doctor. In November 2014, Blackford received the records from Welborn, which stated that the 2003 test showed she had been "highly reactive" and positive for hepatitis, not negative. Id. at 29.

[6] Over the eleven years that had elapsed between the original hepatitis test in 2003 and the one in 2014, Blackford exhibited no symptoms of hepatitis and had received no treatment for hepatitis ; in fact, she had been administered steroid treatments that are contraindicated for a patient who has hepatitis. See Appellant's App. Vol. II p. 28-29, 34, 37. Once discovered, the hepatitis was successfully treated in 2014, but due to the lack of earlier treatment, Blackford developed cirrhosis of the liver and now must undergo regular testing every two years due to a heightened risk for developing liver cancer. Blackford was also diagnosed with cryoglobulinemia and xanthelasma, two conditions which, like the cirrhosis and Lichens Planus, were likely caused by the hepatitis. Blackford believes that "had [she] received proper treatment" and "had [she] been told of the Hepatitis C positive result before 2014," she "could have avoided these ... medical conditions." Id. at 38. Blackford also transmitted hepatitis to her husband.

[7] At the time of the alleged malpractice, Welborn was a qualified provider under the Indiana Medical Malpractice Act and had filed the required proof of financial responsibility and paid the required surcharge to the IDOI. See Appellant's App. Vol. II p. 46. This financial responsibility took the form of a malpractice liability insurance policy with ProAssurance Indemnity Company, Inc. ("ProAssurance"), for coverage up to $250,000.00 per occurrence. Id.

[8] Upon discovering that the 2003 test results had not been accurately disclosed, Blackford filed a complaint against Welborn for medical malpractice with the IDOI on March 13, 2015. The case was reviewed by a Medical Review Panel⁴ and was then filed in the trial court on April 27, 2018.

[9] On February 19, 2019, Welborn filed a motion for summary judgment alleging that, because Blackford's claim was filed over five years after Welborn's business trust dissolved, the claim is time barred by the IBTA's nonclaim statute, Indiana Code section 23-5-1-11. Blackford filed a motion for partial summary judgment on March 21, 2019, arguing that Welborn was equitably estopped from relying on the five-year claim limitation because Welborn's fraudulent concealment prevented her discovery of the claim within that time frame.

[10] A hearing on both motions was held on June 4, 2019. The next day, the trial court issued an order granting Welborn's motion and denying Blackford's motion. On August 2, 2019, Blackford requested that the July 5 order be made final and appealable, which the trial court granted on August 12, 2019. Blackford now appeals.

Discussion and Decision

[11] In pertinent part, Blackford argues that the five-year nonclaim limitation imposed by Indiana Code section 23-5-1-11 should be tolled because Welborn's fraudulent concealment prevented her from discovering she had a cause of action within the five-year period.

I. Standard of Review

[12] Our standard of review for summary judgment is well established:

We review a trial court's order granting summary judgment de novo. And we apply the same standard as the trial court: summary judgment is appropriate only where the moving party demonstrates there is no genuine issue of material fact and he is entitled to judgment as a matter of law. If the moving party carries his burden, the non-moving party must then demonstrate the existence of a genuine issue of material fact in order to survive summary judgment. Just as the trial court does, we resolve all questions and view all evidence in the light most favorable to the non-moving party, so as to not improperly deny him his day in court.

Alldredge v. Good Samaritan Home, Inc. , 9 N.E.3d 1257, 1259 (Ind. 2014) (internal citations omitted). "A genuine issue of material fact exists where facts concerning an issue that would dispose of the issue are in dispute or where the undisputed material facts are capable of supporting conflicting inferences on such an issue." Robbins v. Trustees of Ind. Univ. , 45 N.E.3d 1, 6 (Ind. Ct. App. 2015).

II. Fraudulent Concealment and the IBTA

[13] Blackford's primary argument on appeal is that the five-year nonclaim limitation in the IBTA is not enforceable to bar her claim where Welborn, as the entity benefitting from the statute, committed fraud that prevented Blackford from discovering that she had a cause of action within the five-year period.

[14] The difference between a statute of limitations and a nonclaim statute (or a statute of repose) is a critical one in this case. Our Supreme Court has explained this distinction as follows:

[A] nonclaim statute ... grants to every person having a claim of any kind or character against a [defendant], the right to file the same in the court having jurisdiction thereof and have the same adjudicated, provided such claim is filed within the time specified in the statute. Unless such claim is filed within the time so allowed by the statute, it is forever barred. The time element is a built-in condition of the said statute and is of the essence of the right of action. Unless the claim is filed within the prescribed time set out in the statute, no enforceable right of action is created.

While such statutes limit the time in which a claim may be filed or an action brought, they have nothing in common with and are not to be confused with general statutes of limitation. The former creates a right of action if commenced within the time prescribed by the statute, whereas the latter creates a defense to an action brought after the expiration of time allowed by law for the bringing of such an action.

Estate of Decker v. Farm Credit Servs. of Mid-Am., ACA , 684 N.E.2d 1137, 1138-39 (Ind. 1997) (first alteration in original) (internal quotations omitted) (quoting Donnella v. Crady , 135 Ind. App. 60, 185 N.E.2d 623 (1982) ).

[15] Welborn moved for summary judgment, and the trial court granted its motion, on the basis that Blackford's claim against Welborn was filed after the IBTA's five-year nonclaim limitation had expired. In response, Blackford filed a motion for partial summary judgment, arguing that the five-year limit should be tolled where Welborn had committed fraudulent concealment and that Welborn should be equitably estopped from invoking the nonclaim statute to benefit from its own fraud. The relevant inquiry, then, is two-fold: first, whether the IBTA's nonclaim statute may be tolled in cases of fraudulent concealment; and second, if so, whether the designated evidence conclusively demonstrates that Welborn committed fraudulent concealment, thereby tolling the nonclaim limitation period.

The IBTA's Nonclaim Statute

[16] When a business trust authorized by the IBTA has surrendered its authority to transact business, ...