Felton v. Rebsamen Medical Center, Inc.

• Decision Date: 22 May 2008
• Docket Number: No. 07-724.,07-724.
• Citation: 284 S.W.3d 486,373 Ark. 472
• Parties: Thomas K. FELTON, as Personal Representative of the Estate of A.G. Felton, Deceased, Appellant, v. REBSAMEN MEDICAL CENTER, INC., and The Medical Assurance Company, Inc., The Liability Insurance Carrier for Rebsamen Medical Center, Inc., Appellees.
• Court: Arkansas Supreme Court

284 S.W.3d 486

373 Ark. 472

Thomas K. FELTON, as Personal Representative of the Estate of A.G. Felton, Deceased, Appellant, v. REBSAMEN MEDICAL CENTER, INC., and The Medical Assurance Company, Inc., The Liability Insurance Carrier for Rebsamen Medical Center, Inc., Appellees.

No. 07-724.

Supreme Court of Arkansas.

May 22, 2008.

Rehearing Denied June 26, 2008.

Hare, Wynn, Newell & Newton, LLP, by: Paul Byrd, Little Rock; and Brian G. Brooks, Attorney at Law, PLLC, by: Brian G. Brooks, for appellants.

Anderson, Murphy & Hopkins, LLP, by: Mariam T. Hopkins, Scott D. Provencher, and Mindy D. Pipkin, Little Rock, for appellees.

PAUL E. DANIELSON, Justice.

Appellant Thomas K. Felton, as personal representative of the estate of A.G. Felton, deceased, appeals from the circuit court's order of dismissal with prejudice granting summary judgment to appellees Rebsamen Medical Center, Inc., and its insurer, The Medical Assurance Co., Inc. Felton asserts that the circuit court erred in granting summary judgment to both Rebsamen and Medical Assurance. We affirm the circuit court's order.

On December 17, 2004, Felton filed a complaint against Rebsamen and Medical Assurance, asserting a cause of action for wrongful death, including claims of medical malpractice and ordinary negligence, and survival.¹ The complaint alleged that Rebsamen "was and remains a non-profit corporation engaged in caring for individuals who are in need of medical care and treatment." It further alleged that if Rebsamen asserted that it was not subject to suit for tort, "Plaintiff hereby brings a direct action against THE MEDICAL ASSURANCE COMPANY, INC. ("MEDICAL ASSURANCE"), the liability insurance carrier for REBSAMEN, pursuant to Ark.Code Ann. § 23-79-210."

Rebsamen answered the complaint, admitting that Medical Assurance had provided it with liability insurance coverage at certain times and further admitting "that it is entitled to immunity from damages exceeding its insurance policy limits based on its status as a charitable institution." It further affirmatively pled that it was "a charitable institution and is entitled to immunity from any damages beyond its insurance policy limits." Medical Assurance also answered, denying that the circuit court had jurisdiction over it and admitting that it had provided liability insurance coverage during certain time periods for Rebsamen, "a charitable institution." It further pled, affirmatively, that Rebsamen was a charitable institution and was entitled to immunity from any damages beyond its insurance policy limits. In addition, Medical Assurance affirmatively pled that "based on Clayborn v. Bankers Standard Ins. Co., 348 Ark. 557, 75 S.W.3d 174 (2002), no cause of action lies against this defendant and, therefore, the complaint against it should be dismissed."²

On February 18, 2005, the circuit court entered an order of dismissal without prejudice as to Medical Assurance, based upon Felton's oral motion to nonsuit his claims against it.³ However, on July 12, 2006, Felton filed a first amended complaint reasserting its claims against Medical Assurance, stating:

6. On December 15, 2005, the Arkansas Supreme Court specifically overruled both the Scamardo [v. Jaggers, 356 Ark. 236, 149 S.W.3d 311 (2004)] and Clayborn [v. Bankers Standard Ins. Co., 348 Ark. 557, 75 S.W.3d 174 (2002)] cases in the case of Low v. Insurance Co. of N. Am., 364 Ark. 427, 220 S.W.3d 670 (2005) (Attached hereto as Exhibit A). In overruling these cases, the Arkansas Supreme Court returned to the statutory interpretation that the "not subject to suit for tort" language in the direct action statute (Ark.Code Ann. § 23-79-210), as being synonymous with a charitable/not-for-profit organization's immunity from tort liability. Id. at 438.

7. Thus, according to the Arkansas Supreme Court's ruling in Low, supra, MEDICAL ASSURANCE is a proper party to this action. Therefore, Thomas K. Felton, as Plaintiff herein, adopts, re-alleges and incorporates by reference each and every allegation set forth in Plaintiff's original Complaint together with any and all additional charging allegations set forth herein not inconsistent with the preceding and as if set forth word for word against both REBSAMEN and MEDICAL ASSURANCE.

In its answer to this complaint, Rebsamen admitted this court's decision in Low v. Insurance Co. of North America, 364 Ark. 427, 220 S.W.3d 670 (2005), but denied the allegations in paragraphs six and seven of the complaint. It further incorporated by reference, "as if set out word for word, its answer to the plaintiff's original complaint, including affirmative defenses, ... [that] would include, but not be limited to, the affirmative defense of charitable immunity." Medical Assurance similarly responded and affirmatively asserted that the first amended complaint was barred by the statute of limitations.

On January 31, 2007, Medical Assurance moved for summary judgment in the matter, asserting that Felton's cause of action against it was time-barred. In its brief in support of its motion for summary judgment, Rebsamen claimed that it was entitled to summary judgment due to its status as a nonprofit, charitable entity, rendering it immune from tort liability under Arkansas law. Felton responded to Rebsamen's motion, claiming that it had "conditioned its charitable immunity defense" and, thus, waived the defense. He further alleged that because Rebsamen led him to believe his claims were covered up to its policy limits by documents turned over in discovery, Rebsamen should be estopped from asserting that it was immune from the action. In response to Medical Assurance's summary-judgment motion, Felton claimed that Medical Assurance had waived its statute-of-limitations defense and should be estopped from asserting it. He further asserted that laches should also bar its defense.

On March 14, 2007, a hearing was held on the motions for summary judgment. During the hearing, counsel for Felton urged that this court's decision in Low v. Insurance Co. of North America, supra, should be applied prospectively to cases filed after the date of the decision, December 15, 2005. Midway through the hearing, the circuit court made the following ruling with respect to Medical Assurance's motion:

I've heard enough. Thank you. All right. I'm going to grant your motion for a summary judgment with regards to this. I do think that the Low case does apply. I think that in this particular case there's no question that the action was filed outside the time limit, so I don't really think that's the issue.

I think that the arguments are more so along the lines of whether there's an estoppel or waiver, but I think that based upon the case law and the cases cited that the—I don't believe that the court would prospectively apply with Low. I think it has already retrospectively applied Low. So it would, I guess, go against its own rulings if it decides to do that. So I'll grant [Medical Assurance's] motion with regards to that.

It later ruled on Rebsamen's motion, stating:

All right. I think the situation that exists here is one where a party has insurance and there's no question that they have insurance and that there may be liability on the part of the party, but the issue becomes whether or not the limitations period in the statute or whether a defense in the statute be the one that would be applicable and in this case, what I have not heard is that the argument with regards to charitable immunity does not apply.

So I think that there's no question under Low that Rebsamen would be immune from liability. So I think that part of the case is easy to decide.

I think the only issue is whether or not there's been a waiver of that in the answer and I agree that if the first answer had been the only answer in this case that had been filed, then I would be with you on that one because it does not state—or it does not state that it is immune completely.

It just says that it's immune up to the point of liability, but the problem is that in July of 2006, they file an answer incorporating word for word everything that was filed in the first answer, which basically says that, and then adds in an additional line saying "and also we assert the defense of charitable immunity."

Now, in asserting that defense, then I have to go back to Low and Low says that basically the hospital is immune unless there's something that would indicate that the filing of it was not proper and that it is not appropriate—it wasn't appropriately raised in the pleading. You know, the waiver may arguably apply. Is it one of those 12(b)(6) motions that should have been raised when the complaint was filed or 12(b)(10) or (8) or whichever one one [sic] may arguably say would apply?

That might be true with regards to the first one, but when they filed a response to the amended complaint and they assert that, then I believe that is timely.

So I'm going to grant their motion for summary judgment with regards to that as well.

An order granting the motions for summary judgment and dismissing Rebsamen and Medical Assurance was entered, and Felton timely filed his notice of appeal.

The first issue to be addressed is whether the circuit court erred in granting summary judgment to Rebsamen. Felton argues that Rebsamen failed to raise the defense of charitable immunity in its answer to his original complaint and neglected to amend its answer until after the limitations period had run with respect to Medical Assurance. He claims that because Rebsamen did not timely amend its pleadings to assert the full measure of charitable immunity as it was obligated to do, it waived the defense. He maintains that Rebsamen misled him to his prejudice and that its actions substantially affected his rights. He further avers that Rebsamen should be estopped from asserting its charitable-immunity defense in that it led him to believe throughout the course of the case that it only intended to claim...