Ind. Patient's Comp. Fund v. Everhart

• Decision Date: 21 December 2010
• Docket Number: No. 84A01-0912-CV-614.,84A01-0912-CV-614.
• Parties: INDIANA DEPARTMENT OF INSURANCE, INDIANA PATIENT'S COMPENSATION FUND, Appellant-Defendant, v. Robin EVERHART, Personal Representative of the Estate of James K. Everhart, Jr., Appellee-Plaintiff.
• Court: Indiana Appellate Court

932 N.E.2d 684

INDIANA DEPARTMENT OF INSURANCE, INDIANA PATIENT'S COMPENSATION FUND, Appellant-Defendant,

v.Robin EVERHART, Personal Representative of the Estate of James K. Everhart, Jr., Appellee-Plaintiff.

No. 84A01-0912-CV-614.

Court of Appeals of Indiana.

July 21, 2010.

Rehearing Denied December 21, 2010.

Elizabeth H. Knotts, Rori L. Goldman, Indianapolis, IN, Attorneys for Appellant.

James O. McDonald, Terre Haute, IN, John P. Young, Indianapolis, IN, Attorneys for Appellee.

OPINION

SULLIVAN, Senior Judge.

Appellant Indiana Department of Insurance, Indiana Patient's Compensation Fund (the Fund) appeals the trial court's Findings of Fact, Conclusions of Law, and Judgment in favor of Appellee Robin Everhart, as Personal Representative of the Estate of James K. Everhart, Jr. (Everhart). We reverse and remand.

On October 4, 2004, James K. Everhart, Jr. (James) was riding his motorcycle in Terre Haute, Indiana, when he was run over by a semi-truck. James suffered severe injuries and was taken to Terre Haute Regional Hospital, where he was treated by Dr. C. Bilston Clarke. James died in the emergency room. Testimony introduced at a trial court hearing indicated that if Dr. Clarke had administered appropriate medical care, James would have had a “better than 80% chance” of surviving his injuries. Appellant's Appendix p. 338.

Everhart sued the truck driver's employer, and the parties settled the case. Everhart also sued Dr. Clarke. The parties settled the case for $250,000 in a structured settlement before a medical review panel issued its decision.

Next, Everhart filed a claim against the Fund for excess damages resulting from James' wrongful death. ¹ After a hearing, the trial court entered judgment in Everhart's favor in the amount of $1,000,000.00. The trial court noted, in relevant part:

17. To the Patient's Compensation Fund's Credit, it did not advocate that Mr. Everhart's widow and son had been fully compensated based on the settlements previously received from the trucking company and Dr. Clarke's insurance company. Instead, utilizing a theoretical eighty percent (80%) chance of Mr. Everhart surviving his injuries, if he had received appropriate medical care, the Fund advocated an award of an additional Five Hundred Thousand Dollars ($500,000.00). However, that calculation is based on a misconstruction of the Loss of Chance Doctrine. See Cahoon v. Cummings, 734 N.E.2d 535, 544 (Ind.Ct.App.2000) [ (Ind.2000) ] and Mayhue v. Sparkman, 653 N.E.2d 1384, 1387 (Ind.1995). Here, where the Plaintiff has proven by a preponderance of the evidence that had Mr. Everhart been rendered proper medical care upon his admission to the emergency trauma care room, he would have survived his injuries, no basis exists for basing the Estate's damages on any allocation percentage of survivability or lost chance of survival. Therefore, were this Court to accept the Fund's advocated values for each of the elements of damages which the Estate is entitled to recover, the Court would increase the Fund's propounded award by twenty percent (20%) or Seven Hundred Thousand Dollars ($700,000.00).

Appellant's Appendix p. 21. ²

The Fund raises two issues, which we restate as:

A. Whether the trial court erred by awarding full damages to Everhart rather than damages in proportion to the increased risk of harm to James resulting from medical malpractice.

B. Whether the Fund is entitled to a set-off for Everhart's settlement with another party, and, if so, whether the set-off should be reduced to account for Everhart's attorney's fees and expenses.

I. STANDARD OF REVIEW

At the Fund's request, the trial court issued findings of fact and conclusions pursuant to Indiana Trial Rule 52. Typically, when reviewing a judgment based on such findings, we must first determine whether the evidence supports the findings and then determine whether the findings support the judgment. Atterholt v. Robinson, 872 N.E.2d 633, 638-639 (Ind.Ct.App.2007). We will set aside the trial court's findings of fact and judgment only if they are clearly erroneous. Id. at 639. Findings of fact are clearly erroneous when the record lacks any reasonable inference from the evidence to support them and the judgment is clearly erroneous if it is unsupported by the findings and conclusions thereon. Id. In assessing whether findings are clearly erroneous, we will not reweigh the evidence nor judge the credibility of the witnesses. Id. Rather, we consider the evidence that supports the judgment and the reasonable inferences to be drawn therefrom. Id. A finding or conclusion is clearly erroneous when our review of the evidence leaves us with the firm conviction that a mistake has been made. Id. While we defer to the trial court's findings of fact, we do not defer to its conclusions as to the applicable law. Id. When the specific issue on review relates to the award of damages, a damage award should not be reversed if within the scope of the evidence before the trial court. Smith v. Washington, 734 N.E.2d 548, 550 (Ind.2000), reh'g denied.

II. PROBABLE CAUSE AND DAMAGES

The Indiana Medical Malpractice Act (MMA) was adopted by the General Assembly under an apparent perception or misperception that the availability of healthcare services in Indiana was being eroded by tort suits, and that the MMA might help control the costs of medical liability insurance, litigation, settlements, and excessive judgments against healthcare providers. Mayhue v. Sparkman, 653 N.E.2d 1384, 1386 (Ind.1995). The MMA allows a patient or the representative of a patient to bring a malpractice claim for bodily injury or death.

Robinson, 872 N.E.2d at 639 (quotation omitted). The MMA does not create substantive rights or new causes of action and, instead, merely requires that claims for medical malpractice that are otherwise recognized under tort law and applicable statutes be pursued through the procedures of the MMA. Id. at 839-840 (quotation omitted).

Here, Everhart filed a claim for wrongful death. Wrongful death actions may be pursued when “the death is caused by the wrongful act or omission of another.” Id. (citing Ind.Code § 34-23-1-1, emphasis omitted). Wrongful death actions are purely statutory, and their purpose is not to compensate the decedent's estate for the injury but, instead, to create a cause of action to compensate the decedent's survivors for the loss sustained by the death. Id.

The Fund contends that the trial court's method of calculating damages did not follow our Supreme Court's precedent. Specifically, the Fund contends that because James had an 80% chance of surviving his injuries but for Dr. Clarke's malpractice, Everhart is only entitled to damages in proportion to the increase in risk of harm that was caused by the malpractice. Everhart argues that the trial court properly determined that she was entitled to full compensation from the Fund in the amount of $1,000,000.00.

Both parties discuss Mayhue and cases applying that decision. In Mayhue, a patient's estate sued a physician for medical malpractice, alleging that the physician's failure to adequately treat the patient's recurring cervical cancer resulted in her death and caused the patient's spouse to experience loss of consortium. 653 N.E.2d at 1385. The parties agreed that even if the physician had properly diagnosed and treated the recurring cancer, the patient had a less than 50 percent chance of recovery. Id. at 1386. Therefore, the physician asserted that his negligence could not be “the proximate cause” ³ of the patient's death, and the estate was not entitled to any damages, because it was more likely than not that the patient would have died even with proper treatment. Id. Our Supreme Court rejected the physician's contention and adopted the approach set forth in Restatement (Second) of Torts § 323 (1965) for the assessment of damages in the circumstances of the case. Id. at 1839. That section provides:

One who undertakes, gratuitously or for consideration, to render services to another which he should recognize as necessary for the protection of the other's person or things, is subject to liability to the other for physical harm resulting from his failure to exercise reasonable care to perform his undertaking, if

(a) his failure to exercise such care increases the risk of such harm, or

(b) the harm is suffered because of the other's reliance upon the undertaking.

Restatement (Second) of Torts § 323 (1965). Consequently, our Supreme Court affirmed the trial court's denial of the physician's motion for summary judgment and remanded for further proceedings. Mayhue, 653 N.E.2d at 1389.

Next, our Supreme Court applied the holding in Mayhue to a medical malpractice case concerning wrongful death. In Cahoon v. Cummings, 734 N.E.2d 535, 538 (Ind.2000), two doctors misdiagnosed a patient's esophageal cancer. The patient died, and his wife sued the doctors for wrongful death, among other claims. Id. At trial, experts testified that if the doctors had properly diagnosed the patient's cancer, he had a twenty-five to thirty percent chance of surviving the cancer. Id. at 539. The wife prevailed at trial, and the doctors appealed, claiming that the jury instructions were erroneous. Id. at 538. Specifically, the doctors contended that the jury should not have been instructed on the causation standard set forth in Mayhue because this was a wrongful death action, not a claim for loss of consortium. Id. at 539. Our Supreme Court disagreed, noting that the purpose of the holding in Mayhue was to ensure that patients with serious problems, but also a significant chance of recovery, receive the same level of care as less threatened patients. Id. at 540. Thus, our Supreme Court concluded that the causation standard set forth in Section 323 of the Restatement (Second) of Torts applies in medical malpractice cases concerning wrongful death. Id.

Another issue in Cahoon was whether the decedent's wife was entitled to...