Lorenz v. Anonymous Physician # 1

• Decision Date: 19 February 2016
• Docket Number: No. 28A01–1501–CT–50.,28A01–1501–CT–50.
• Citation: 51 N.E.3d 391
• Parties: Richard W. LORENZ and any Successor Trustee, as Trustee, of the Bankruptcy Estate of Willie R. Gauldin, Appellant, v. ANONYMOUS PHYSICIAN # 1, et al., Appellees.
• Court: Indiana Appellate Court

51 N.E.3d 391

Richard W. LORENZ and any Successor Trustee, as Trustee, of the Bankruptcy Estate of Willie R. Gauldin, Appellant

v.ANONYMOUS PHYSICIAN # 1, et al., Appellees.

No. 28A01–1501–CT–50.

Court of Appeals of Indiana.

Feb. 19, 2016.

Joshua E. McAfee, McAfee Law, LLC, Bloomington, IN, Attorney for Appellant.

Joseph C. Klausing, Stephanie L. Caldwell, O'Bryan, Brown & Toner, PLLC, Louisville, KY, Attorneys for Appellees Anonymous Physician # 1 and Anonymous Physician # 2.

Adriana Katzen, James L. Bleeke, Bleeke Dillon Crandall, Indianapolis, IN, Attorneys for Appellee Anonymous Physician # 3.

David G. Field, Michael F. Mullen, Schultz & Pogue, LLP, Indianapolis, IN, Attorneys for Appellee Anonymous Nurse Practitioner.

Anthony L. Holton, Wilkinson, Goeller, Modesitt, Wilkinson & Drummy, LLP, Terre Haute, IN, Attorneys for Appellees Anonymous Corporation and Anonymous Hospital.

ROBB

, Judge.

Case Summary and Issues

[1] Willie Gauldin filed for Chapter 7 bankruptcy in July 2012 and was discharged in November 2012. In March 2014, Gauldin filed with the Indiana Department of Insurance a proposed complaint for medical malpractice against Anonymous Physician # 1, Anonymous Physician # 2, Anonymous Physician # 3, Anonymous Nurse Practitioner, Anonymous Hospital, and Anonymous Corporation (collectively, the “Medical Providers”), alleging acts of negligence occurring in March and April 2012. The Medical Providers filed motions for preliminary determination in the trial court seeking to have the proposed complaint dismissed because the medical malpractice claim had not been included as a possible asset in the bankruptcy. Richard W. Lorenz, the trustee of Gauldin's bankruptcy estate (the “Trustee”), thereafter filed a motion for relief from judgment in the bankruptcy court. The bankruptcy court granted the motion, reopened the bankruptcy, and reappointed the Trustee. The Trustee sent an amended proposed medical malpractice complaint naming the Trustee as plaintiff to the Department of Insurance and also moved the trial court to substitute the Trustee as the real party in interest. The trial court did not rule on the motion to substitute but granted the Medical Providers' motions for preliminary determination and ordered the proposed complaint be dismissed.

[2] The Trustee now appeals, raising the following consolidated and reordered issues for our review: 1) whether the trial court had subject matter jurisdiction to rule on the motions for preliminary determination after the bankruptcy court reopened the bankruptcy; and 2) if so, whether the trial court erred in dismissing the proposed complaint. Concluding the trial court had jurisdiction to rule on the motions but erred in dismissing the proposed complaint, we reverse.

Facts and Procedural History

[3] On March 30, 2012, Gauldin began feeling ill. Over the course of the next several days, he was treated at Anonymous Hospital and Anonymous Corporation by Anonymous Physician # 1, Anonymous Physician # 2, Anonymous Physician # 3, and Anonymous Nurse Practitioner. Ultimately, Gauldin was admitted to Bloomington Hospital in acute renal failure

. By the time Gauldin was discharged, he had incurred medical expenses of approximately $190,000.00 and was unable to continue working as a truck driver due to disability.

[4] On August 22, 2012, Gauldin and his wife filed a Voluntary Petition for Chapter 7 bankruptcy protection in the United States Bankruptcy Court for the Southern District of Indiana. The assets listed on Schedule B—Personal Property included automobiles, household goods, and bank accounts worth approximately $8,000.00. Under “[o]ther contingent and unliquidated claims of every nature,” Gauldin listed “none.” Appellant's Appendix at 23.¹ He listed debts of $194,536.74, including his medical debts from March and April of 2012. Lorenz was named trustee of the bankruptcy estate. Based on the Trustee's report to the court that there was no property available for distribution, the bankruptcy court entered an Order in No Asset Case on November 2, 2012, ordering the scheduled property of the estate be abandoned, any secured creditors be granted relief from the stay, and the Trustee be discharged. On November 27, 2012, the bankruptcy court granted a discharge of debtors and the bankruptcy case was closed.

[5] On March 28, 2014, Gauldin filed with the Department of Insurance a proposed complaint for damages alleging medical malpractice by the Medical Providers during their treatment of him in March and April of 2012. On July 14, 2013, Anonymous Physicians # 1 and # 2 filed in the trial court a Petition for Preliminary Determination and Motion for Summary Judgment. The petition alleged that because Gauldin failed to list a cause of action for medical malpractice in his bankruptcy petition filed after the alleged negligence occurred, he had no standing to pursue this cause of action. On July 29, 2014, Anonymous Physician # 3 filed in the trial court a Motion for Preliminary Determination of Law to Dismiss [Gauldin's] Proposed Complaint for Damages alleging the lawsuit was barred for lack of standing and also precluded on the basis of judicial estoppel. Anonymous Nurse Practitioner later joined in Anonymous Physician # 3's motion.²

[6] On July 28, 2014, Lorenz, as trustee of Gauldin's bankruptcy estate, filed in the bankruptcy court a Motion to Reopen Bankruptcy Case and Motion for Relief from the November 2, 2012 Order in No Asset Case. On July 29, 2014, the bankruptcy court granted the Motion for Relief from Judgment and also granted the Motion to Reopen Bankruptcy Case. The case was reopened and Lorenz was reappointed Trustee of the bankruptcy estate. On August 1, 2014, Gauldin filed in the bankruptcy court an amended Schedule B, which, under “[o]ther contingent and unliquidated claims of every nature,” now included “[p]ossible collection from proposed complaint for damages with the State of Indiana Department of Insurance for injuries sustained prior to the filing of the bankruptcy case, and which claim is an asset of this bankruptcy estate.” Appellant's App. at 160. The value of the claim was listed as unknown. On August 7, 2014, an Amended Proposed Complaint for Damages was filed with the Department of Insurance listing “Richard W. Lorenz, Trustee of the Bankruptcy Estate of Willie R. Gauldin” as the plaintiff. And on August 8, 2014, Gauldin filed in the trial court a Motion for Substitution of Real Party in Interest seeking to have Lorenz, as Trustee, substituted for Gauldin.

[17] The trial court held a hearing on December 8, 2014, at which it considered the two motions for preliminary determination and the motion for substitution. On January 14, 2015, the trial court issued an order granting the petitions for preliminary determination and ordering the proposed complaint be dismissed with prejudice. The trial court did not rule on the motion for substitution.³ The Trustee now appeals.

Discussion and Decision

I. Trial Court's Jurisdiction

[8] In most instances, the Medical Malpractice Act (the “Act”) requires that before a party may commence a medical malpractice action against a health care provider in an Indiana trial court, the party's proposed complaint must first be presented to a medical review panel through the Department of Insurance, and the panel must render an opinion as to whether the defendant failed to act within the appropriate standard of care. Ind.Code § 34–18–8–4

; Ind.Code § 34–18–10–22. Thus, a trial court does not generally have jurisdiction over a medical malpractice action until proceedings before the Department of Insurance conclude. However, the Act does give a trial court limited authority to assert jurisdiction over threshold issues while a proposed complaint is pending before the medical review panel. Haggerty v. Anonymous Party 1, 998 N.E.2d 286, 294 (Ind.Ct.App.2013) ; see also Ind.Code § 34–18–8–7(a)(3). The trial court may set a trial date, Ind.Code § 34–18–8–7(a)(3) ; dismiss the action for failure to prosecute, Ind.Code § 34–18–8–8 ; compel discovery, Ind.Code § 34–18–11–1(a)(2) ; or “preliminarily determine an affirmative defense or issue of law or fact that may be preliminarily determined under the Indiana Rules of Procedure[,]” Ind.Code § 34–18–11–4(a)(1). The effect of this section is to allow a trial court to dismiss a proposed action at an early stage in the proceedings.

[9] The Trustee claims that, despite this authority to determine matters regarding affirmative defenses (such as standing and judicial estoppel), the trial court lost subject matter jurisdiction “[a]fter the bankruptcy court allowed Mr. Gauldin to cure his bankruptcy case and list his Medical Malpractice Complaint as an asset of the bankruptcy[.]” Appellant's Brief at 30. The Trustee is mistaken.

[10] “Subject matter jurisdiction exists when the Indiana Constitution or a statute grants the court the power to hear and decide cases of the general class to which any particular proceeding belongs.” R.L. Turner Corp. v. Town of Brownsburg, 963 N.E.2d 453, 457 (Ind.2012)

. “All standard superior courts have ... original and concurrent jurisdiction in all civil cases and in all criminal cases[.]” Ind.Code § 33–29–1–1.5(1). The Medical Providers filed their motions for preliminary determination in Greene Superior Court, “a standard superior court as described in IC 33–29–1.” Ind.Code § 33–33–28–2(b). Indiana Code section 34–18–11–1 grants a court with jurisdiction over the subject matter the limited power to determine an affirmative defense or issue of law while a proposed complaint for medical malpractice is pending before the medical review panel. Therefore, notwithstanding the bankruptcy court's actions, the trial court clearly had subject matter jurisdiction over the Medical Providers' motions for preliminary determination. Cf.

West v. Wadlington, 933 N.E.2d 1274, 1277 (Ind.2010) (holding that a court with general authority to hear claims of defamation and invasion of privacy...