Comm'r of the Indiana Dep't of Ins. v. Black

• Citation: 962 N.E.2d 675
• Decision Date: 10 February 2012
• Docket Number: No. 64A05–1104–CT–240.,64A05–1104–CT–240.
• Parties: COMMISSIONER OF the INDIANA DEPARTMENT OF INSURANCE, Appellant–Defendant, v. Tim BLACK, as Husband and Personal Representative of Kay Black, Deceased, Appellee–Plaintiff.
• Court: Court of Appeals of Indiana

962 N.E.2d 675

COMMISSIONER OF the INDIANA DEPARTMENT OF INSURANCE, Appellant–Defendant,

v.Tim BLACK, as Husband and Personal Representative of Kay Black, Deceased, Appellee–Plaintiff.

No. 64A05–1104–CT–240.

Court of Appeals of Indiana.

Feb. 10, 2012.

Susan E. Cline, Lewis Wagner, LLP, Indianapolis, IN, Attorney for Appellant.

Robert D. Brown, Kenneth J. Allen & Assoc., P.C., Valparaiso, IN, Attorney for Appellee.

OPINION

RILEY, Judge.

STATEMENT OF THE CASE

Appellant–Defendant, the Commissioner of the Indiana Department of Insurance (the Commissioner), appeals the trial court's denial of his motion to dismiss and its order granting Appellee–Plaintiff's, Tim Black (Black), as husband and personal representative of Kay Black, deceased, Petition for Payment of Damages from the Patient's Compensation Fund in an amount of $1,000,000.00.

We reverse and remand.

ISSUE

The Commissioner raises two issues on appeal, one of which we find dispositive and which we restate as: Whether the trial court properly denied the Commissioner's motion to dismiss, concluding that Black satisfied the conditions precedent for access to the Patient's Compensation Fund (PCF) as outlined in Ind.Code § 34–18–15–3.

FACTS AND PROCEDURAL HISTORY

This appeal arises out of an underlying claim for medical malpractice in which Black filed a complaint against his wife's, Kay Black (Kay), health care providers for failing to diagnose Kay's cardiac condition. On October 26, 2000, Kay presented to the emergency room of Porter Memorial Hospital complaining of severe chest pain radiating down her left arm and nausea. A blood enzyme test came back as abnormal, possibly indicating the onset of a heart attack. Dr. Fred Harris (Dr. Harris), a cardiologist, was consulted by telephone. Dr. Harris did not come to the emergency room nor did he order repeat enzyme testing or heart monitoring. Instead, Dr. Harris advised the emergency room doctor that Kay was not having, nor was she about to have, a heart attack and agreed to admit Kay with a diagnosis of abdominal pain to the general floor without heart monitoring equipment. At approximately 3 a.m. the following morning, Kay suffered a severe cardiac arrest that placed her in a debilitated cardiac state, resulting in the need for a heart transplant. On September 22, 2008, Kay died from a condition unrelated to the malpractice.

On November 13, 2001, Kay and Black filed a proposed complaint for damages under the Indiana Medical Malpractice Act against Dr. Harris, Abdus Lakhani, M.D., Samara Kester, M.D., and Porter Memorial Hospital. The proposed complaint alleged that the defendants had rendered negligent medical care to Kay, resulting in permanent injury, medical expenses, lost earnings and loss of enjoyment of life. The medical review panel unanimously concluded that Dr. Harris had failed to comply with the appropriate standard of care.

On March 31, 2009, Black, as husband and personal representative of Kay, filed a Petition for Payment of Damages from the PCF, asserting that Dr. Harris had agreed “to make payment of his liability limit in the amount of $250,000.00, thereby establishing liability of the [PCF] under the Act.” (Appellant's Amended App. p. 13). Responding to the Petition, the Commissioner indicated that he did not have sufficient information to form a belief as to the truth or falsity of the allegations in general and specifically the assertion that Dr. Harris had agreed to make payment. In essence, the Commissioner contended that Black had failed to satisfy all conditions precedent for access to the PCF. On April 21, 2009, the Commissioner served discovery seeking additional information about the claim. Specifically, the Commissioner sought the production of all documents evidencing payment received in connection with Kay's injury, as well as a copy of all fully executed settlement agreements entered into by Black and any health care provider concerning the underlying medical malpractice cause.

Nearly a year later, on March 3, 2010, Black provided an unauthenticated copy of a check dated April 3, 2009 in the amount of $250,000.00 from the Medical Assurance Company Co., Inc. made payable to Black and his counsel. No other annotation appears on the check. Black objected to the production of the settlement agreement stating that the agreement contained a confidentiality clause that prohibited him from disclosing the document. On May 6, 2009, Black served Requests for Admissions, asking the Commissioner to admit, among other things, that Black and Dr. Harris had entered into a settlement agreement and payment of Dr. Harris' liability limit had been tendered to Black. The Commissioner responded that he could not admit or deny the request as Black had failed to provide a copy of the settlement agreement. On May 17 and May 20, 2010, well over a thousand additional medical records, deposition transcripts, and other documents were disclosed but again, no settlement agreement was provided.

Subsequently, on May 26, 2010, the Commissioner's counsel sent correspondence to Black pursuant to Ind. Trial Rule 26(F) in an attempt to informally resolve the discovery disputes pertaining to the release of the settlement agreement and to the disclosure of voluminous medical records and depositions barely a month before a scheduled June 29, 2010 damages hearing. In her letter, counsel asserted that the settlement agreement was necessary to establish the identity of the settling health care provider and to evaluate whether Black had met the conditions precedent of the Medical Malpractice Act to gain access to the PCF, and any additional terms which could impact Black's payment from the PCF. Black never responded to this letter. Thereafter, on May 28, 2010, the Commissioner moved to continue the bench trial scheduled for June 29, 2010. The trial court granted the motion and continued the damages hearing to November 30, 2010.

On October 29, 2010, the Commissioner filed his verified motion to dismiss for failure to state a claim and to vacate trial setting, asserting that by refusing to disclose the settlement agreement in the underlying medical malpractice action, Black had failed to satisfy the conditions precedent for access to the PCF. By filing the motion, the Commissioner sought to have the cause dismissed without prejudice. On November 5, 2010, Black responded, claiming that pursuant to the provisions of the Medical Malpractice Act he was not required to provide the settlement agreement and that the evidence tendered to date was sufficient to gain access to the PCF. Attached to Black's response was a copy of the unauthenticated check in the amount of $250,000.00, as previously submitted, as well as copies of correspondence between Black's counsel and Dr. Harris' counsel referencing an acceptance to the settlement amount “contingent upon [an] agreement to a confidentiality clause and other customary settlement terms as set out in the form of Settlement and Agreement Release[.]” (Appellant's Amended App. p. 118). No Settlement and Agreement Release was attached.

On November 29, 2010, a day before the scheduled bench trial on damages, the trial court conducted a hearing on the Commissioner's motion to dismiss. During the hearing, the Commissioner reiterated his position that a settlement agreement needed to be submitted because

[n]ot every health care provider or physician in the State of Indiana is covered under the Medical Malpractice Act, so there has to be a determination that that provider is, in fact covered. And once that determination is made, then did that provider meet all of the criteria, did the plaintiff then meet the criteria of the Act in order to make their petition to the [PCF] for excess damages.... There has to be a determination that the settling health care provider has paid the surcharge and has provided proof of financial responsibility.

(Transcript pp. 5–6). The Commissioner assured the trial court that he stood ready to settle the cause for the maximum statutory amount upon confirming that Black satisfied the condition precedent for access to the PCF. But he could “not make any payment without the settlement agreement.” (Tr. p. 10). The following day, on November 30, 2010, and prior to the scheduled hearing, the trial court denied the Commissioner's motion.

On November 30, 2010, the trial court conducted a bench trial on the issue of damages. At the onset of trial, the Commissioner stipulated that the value of Black's claim was $1,000,000.00, the statutory cap for medical negligence, subject to the submission of a settlement agreement that met the conditions precedent for access to the PCF. At the close of Black's case-in-chief, the Commissioner moved for judgment on the evidence, which the trial court took under advisement. In its case-in-chief, the Commissioner presented no evidence, he again reiterated his stipulation that Black's claim was valued at $1,000,000.00 subject to presentation of an appropriate settlement agreement, and renewed his position that Black had failed to meet the conditions precedent for access to the PCF. On December 3, 2010, the trial court entered its Order granting Black's Petition for Payment of Damages from the PCF in the amount of $1,000,000.00.

On December 29, 2010, the Commissioner filed a motion to correct error claiming that the trial court had erred (1) by granting Black access to the PCF without evidence that he had met the conditions precedent of the Medical Malpractice Act; (2) by denying the Commissioner's motion for judgment on the evidence; and (3) by awarding damages without evidence of an underlying settlement. On February 23, 2011, the trial court held a hearing on the motion to correct error. During the hearing, the Commissioner again assured the trial court and Black that he stood ready to settle the cause for the statutory cap and asked the trial court to order production of the settlement agreement to allow the Commissioner...