David Shelton, as Personal Representative of the Estate of Sharon K. Clearwaters v. Kroger Limited Partnership I , 58 N.E.3d 229 ( 2016 )

FILED
Aug 04 2016, 8:34 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEY FOR APPELLANT ATTORNEYS FOR APPELLEE
Nicholas C. Deets Nelson Nettles
Hovde Dassow & Deets LLC J. Kirk LeBlanc
Indianapolis, Indiana LeBlanc Nettles Davis
Brownsburg, Indiana
ATTORNEY FOR AMICUS CURIAE
INDIANA TRIAL LAWYERS
ASSOCIATION
Edward B. Mulligan V
Cohen & Malad, LLP
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
David Shelton, as Personal August 4, 2016
Representative of the Estate of Court of Appeals Case No.
Sharon K. Clearwaters, 49A02-1601-CT-75
Appellant-Plaintiff, Appeal from the Marion Superior
Court
v. The Honorable James B. Osborn,
Judge
Kroger Limited Partnership I, Trial Court Cause No.
Appellee-Defendant. 49D14-1312-CT-43909
Bradford, Judge.
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Case Summary
[1] In December of 2012, Sharon Clearwaters died as a result of medical
complications after taking Levofloxacin. In November of 2013, Appellant-
Plaintiff David Shelton, in his position as personal representative for
Clearwaters’s estate, filed a proposed complaint with the Indiana Department
of Insurance (“IDI”) against Appellee-Defendant Kroger Limited Partnership I,
John Doe, M.D. (“Dr. Doe”) and ABC, Inc. (“ABC”).1 After receiving notice
from the IDI that only Dr. Doe and ABC were qualified providers under the
Indiana Medical Malpractice Act (“Medical Malpractice Act”), Shelton filed a
wrongful death complaint in the trial court against Kroger, Dr. Doe and ABC.
In this complaint, Shelton alleged that in light of other medications which
Clearwaters took in connection with a chronic heart condition, Dr. Doe and
ABC were negligent in prescribing Clearwaters with Levofloxacin and Kroger,
the pharmacy which filled the prescription, was negligent in filling the
prescription. Dr. Doe and ABC were eventually dismissed from the underlying
trial court action after settling with Shelton.
[2] Following the dismissal of Dr. Doe and ABC, Kroger sought and received
permission to amend its answer to Shelton’s complaint to assert a non-party
1
ABC is Dr. Doe’s employer. Dr. Doe and ABC were named anonymously in the trial court
action as required by the Indiana Medical Malpractice Act. See Ind. Code § 34-18-8-7. We will
therefore refer to Dr. Doe and ABC in their anonymous form.
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defense as to Dr. Doe and ABC. Kroger also filed a motion for partial
summary judgment in which it sought a judicial ruling that it was entitled to a
credit or set-off for Shelton’s settlement with Dr. Doe and ABC. Shelton
opposed Kroger’s motion, arguing that under the Indiana Comparative Fault
Act, Kroger was not entitled to a credit or set-off and that Kroger’s only remedy
was to name Dr. Doe and ABC as non-parties and to ask the jury to apportion
them fault. The trial court subsequently issued an order granting Kroger’s
motion for partial summary judgment. Concluding that the trial court erred in
granting Kroger’s motion for partial summary judgment, we reverse and
remand the matter to the trial court with instructions.
Facts and Procedural History
[3] The underlying facts leading to this appeal are largely undisputed. These facts
demonstrate that Clearwaters visited Dr. Doe on December 12, 2012,
complaining of head and chest congestion, a dry cough, a low-grade fever, and
chills. Upon examining Clearwaters, Dr. Doe diagnosed her with acute
bronchitis. Despite knowing that Clearwaters suffered from a chronic heart
condition for which she was taking Amiodarone and Warfarin, Dr. Doe
prescribed Clearwaters with Levofloxacin.2 Dr. Doe called the prescription for
the Levofloxacin into a Kroger pharmacy, which filled the prescription. On
2
Levofloxacin is known by those in the medical profession to be contraindicated for a patient
also taking Amiodarone and Warfarin due to the potential for a drug interaction which would
take the patient’s heart out of rhythm.
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December 12, 2012, Clearwaters went into cardiopulmonary arrest and died
after taking the Levofloxacin.
[4] On November 21, 2013, Shelton, in his position as personal representative for
Clearwaters’s estate, filed a proposed complaint for damages with the IDI
against Kroger, Dr. Doe and ABC. On December 11, 2013, the IDI notified
Shelton that Dr. Doe and ABC were qualified providers under the Medical
Malpractice Act. After being notified that Kroger was not a qualified medical
provider subject to the Medical Malpractice Act, Shelton filed a wrongful death
complaint in the trial court against Kroger, Dr. Doe and ABC.
[5] In August of 2014, Dr. Doe and ABC agreed to settle Shelton’s claims,
providing Shelton access to the Indiana Patients Compensation Fund (“IPCF”).
Shelton then filed a petition for payment from the IPCF. Shelton subsequently
settled his claims against Dr. Doe, ABC, and the IPCF after which the action
pending before the IDI was dismissed with prejudice. On November 21, 2014,
Dr. Doe and ABC were dismissed from the underlying trial court action.
[6] Following the dismissal of Dr. Doe and ABC, Kroger moved it amend its
answer to Shelton’s complaint to assert a non-party defense as to Dr. Doe and
ABC. Kroger’s amended answer asserted the following: “Any damages
claimed by the Plaintiff were solely caused by the negligent acts of the following
non-parties: [ABC] and [Dr. Doe].” Appellant’s App. p. 37. The trial court
granted Kroger’s request on December 30, 2014.
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[7] On June 11, 2015, Kroger filed a motion for partial summary judgment in
which it sought a judicial ruling that it was entitled to a credit or set-off for
Shelton’s settlement with Dr. Doe, ABC, and the IPCF. Shelton opposed
Kroger’s motion, arguing that under Indiana’s Comparative Fault Act, Kroger
was not entitled to a credit or set-off and that Kroger’s only remedy was to
name Dr. Doe and ABC as non-parties and to ask the jury to apportion them
fault. The trial court subsequently issued an order granting Kroger’s motion for
partial summary judgment. This interlocutory appeal follows.
Discussion and Decision
A. Standard of Review
[8] The standard of review for a partial summary judgment is the
same as that used in the trial court: summary judgment is
appropriate only where the evidence shows that there is no
genuine issue of material fact and that the moving party is
entitled to judgment as a matter of law. Allen v. Great American
Reserve Ins. Co., 766 N.E.2d 1157, 1161 (Ind. 2002). Where the
challenge to the trial court’s summary judgment ruling presents
only legal issues, not factual ones, the issues are reviewed de novo.
Robertson v. B.O., 977 N.E.2d 341, 343 (Ind. 2012). Similarly, a
question of statutory interpretation is subject to our de novo
review. Pinnacle Prop. Dev. Grp., LLC v. City of Jeffersonville, 893
N.E.2d 726, 727 (Ind. 2008).
Ballard v. Lewis, 8 N.E.3d 190, 193 (Ind. 2014) (emphasis on words “de novo” in
original). “When examining a statutory provision, we look at the statute as a
whole and give common and ordinary meaning to the words employed.”
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Mendenhall v. Skinner & Broadbent Co., 728 N.E.2d 140, 142 (Ind. 2000) (citing
Robinson v. Wroblewski, 704 N.E.2d 467 (Ind. 1998)). “The term ‘may’ in a
statute generally indicates a permissive condition.” Id. (citing Haltom v. Bruner
& Meis, Inc., 680 N.E.2d 6 (Ind. Ct. App. 1997)).
B. The Traditional Common Law Rule and the
Comparative Fault Act
[9] Indiana courts have traditionally followed the one satisfaction
principle. By this we have meant that courts should take account
of settlement agreements and credit the funds received by the
plaintiff through such agreements, pro tanto, toward the judgment
against a co-defendants. The principle behind this credit is that
the injured party is entitled to only one satisfaction for a single
injury and the payment by one joint tortfeasor inures to the
benefit of all. Sanders v. Cole Mun. Fin., 489 N.E.2d 117 (Ind. Ct.
App. 1986). This policy was articulated, of course, long before
enactment of the Comparative Fault Act.
****
The Comparative Fault Act, Ind. Code § 34-51-2-1, applies
generally to damages actions based in fault that accrued on or
after January 1, 1985. The primary objective of the Act was to
modify the common law rule of contributory negligence under
which a plaintiff was barred from recovery where he was only
slightly negligent. Indianapolis Power v. Brad Snodgrass, Inc., 578
N.E.2d 669 (Ind. 1991). The Act seeks to achieve this result
through proportional allocation of fault, ensuring that each
person whose fault contributed to cause injury bears his or her
proportionate share of the total fault contributing to the injury.
See Bowles v. Tatom, 546 N.E.2d 1188 (Ind. 1989).
Under Indiana’s comparative fault scheme, a named defendant
may assert a “nonparty” defense, seeking to attribute fault to a
nonparty rather than to the defendant. Ind. Code [ ] § 34-51-2-14
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[ ]. When a defendant asserts this defense, the court instructs the
jury to determine the percentage of fault of each party and “any
person who is a nonparty.” Ind. Code [ ] § 34-51-2-7(b)(1) [ ]. A
nonparty is: “a person who caused or contributed to cause the
alleged injury, death, or damage to property but who has not
been joined in the action as a defendant.” Ind. Code [ ] § 34-6-2-
88 [ ]. A defendant must affirmatively plead the nonparty
defense, and the defendant carries the burden of proof on the
defense. Ind. Code [ ] § 34-51-2-15 [ ].
Id. at 141-42 (emphasis on words “pro tanto” added, brackets added, footnotes
omitted). In Mendenhall, the Indiana Supreme Court held that the Comparative
Fault Act is best served by a rule that obliges defendants to name the settling
nonparty if they are to seek “credit” or apportionment of fault at trial. Id. at
144.
[10] In R.L. McCoy, Inc. v. Jack, the Indiana Supreme Court expanded upon its
holding in Mendenhall, providing as follows:
We have previously stated that credits, at common law, were a
tool to avoid overcompensation of plaintiffs. [Mendenhall, 728
N.E.2d at 143-44]. Equally important, credits were a tool to
avoid a single defendant’s bearing too much responsibility for the
plaintiff’s damages. These rules were developed in the pre-
comparative fault era of joint and several liability. Under that
common law regime, each defendant whose negligence
contributed to the plaintiff’s loss was liable for the entire amount
of damages. Without credits for settlement payments by the
other defendants, a defendant could be liable for an amount
greatly in excess of its fair share, and the result was to
overcompensate the plaintiff. There were no nonparty defenses,
and the jury was not aware of an absent tortfeasor’s settlement.
Credits insured that the defendants at trial would not have to pay
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more than their collective share of liability, and overcompensate
the plaintiff, simply because the jury was unable to consider the
fault of others.
In 1985, Indiana’s comparative fault system addressed these
problems in two respects. First, it replaced joint and several
liability with several liability, leaving each defendant responsible
only for its share of the total liability. Control Techniques, Inc. v.
Johnson, 762 N.E.2d 104, 109 (Ind. 2002); Matthew Bender, 2
Comparative Negligence § 13.30[3][c] (2001) (“The Indiana
statute expressly incorporates several liability.”). Second, it
permitted the assertion of a nonparty defense, allowing a
defendant to prove the negligence of an absent or settling
tortfeasor. I.C. § 34-51-2-15. Thus the jury’s apportionment of
fault now provides a more complete picture of the relative
responsibility for the plaintiff’s injuries.
All of this led us in Mendenhall to hold that credits were no longer
warranted in cases where the remaining defendant at trial did not
assert a nonparty defense against a settling tortfeasor. In
Mendenhall we pointed out that the remaining defendant in that
case already had “a potent tool” to limit its liability—the
nonparty defense. Mendenhall, 728 N.E.2d at 144. Allowing that
defendant to resort to a common law doctrine to further reduce
its liability made little sense “in light of the modernization of tort
law represented by the adoption of comparative negligence.”
Bender, supra, at § 13.50[2][a] (discussing the common law rule
of releases that the release of one amounted to the release of all
defendants). That same logic applies in this case as well.
As one treatise notes:
If defendants are severally but not jointly liable, most
of the difficult release problems are avoided. The
release of a severally liable defendant, whether
executed before trial or after judgment, should have
no effect upon the liability of the other defendants.
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The liability of each defendant stands independently
and is unaffected by that of other defendants.
Id. at § 13.50[2][c] (emphasis added). That treatise notes that
problems may remain in several liability jurisdictions where the
fault of absent tortfeasors is not considered. Id. But the nonparty
defense eliminates those problems in Indiana.
772 N.E.2d 987, 989-90 (Ind. 2002).
[11] The Indiana Supreme Court further explained,
elimination of credit requires the comparative fault defendant to
pay for its own share, but no more. Nor is the plaintiff
“overcompensated.” In a comparative fault regime, the notion
that a plaintiff is overcompensated when he or she settles with a
defendant for more than a jury later awards takes too narrow a
view of what a settlement represents. There is no “overpayment”
if the parties agree on the dollar value of a several liability claim
against a given defendant, even if a jury reaches a different result.
A settlement payment normally incorporates an assessment of
the exposure to liability. But a settlement also reflects several
other considerations, including the parties’ desires to avoid the
expense and effort of litigation and the tactical effect of
eliminating a defendant and its counsel from trial. In McDermott,
Inc. v. AmClyde & River Don Castings Ltd., 511 U.S. 202, 215, 114
S. Ct. 1461, 128 L. Ed. 2d 148 (1994), the United States Supreme
Court rejected a pro tanto rule in admiralty tort cases in favor of a
proportionate share approach for this reason. It stated:
The law contains no rigid rule against
overcompensation.... [W]e must recognize that
settlements frequently result in the plaintiff’s getting
more than he would have been entitled to at trial.
Because settlement amounts are based on rough
estimates of liability, anticipated savings in litigation
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costs, and a host of other factors, they will rarely
match exactly the amounts a trier of fact would have
set. It seems to us that a plaintiff’s good fortune in
striking a favorable bargain with one defendant gives
other defendants no claim to pay less than their
proportionate share of the total loss.
Id. at 219-20, 114 S. Ct. 1461. Our comparative fault system
contemplates similar results. See Bender, supra, at § 13.50[2][c]
(in several liability systems, “[t]he risks of settlement are borne
solely by the settling parties”). McCoy received the peace of
mind of eliminating the litigation. And although the Jacks
received more compensation for McCoy’s liability than they
would have at trial, they also bore the risk of receiving less. The
point is that the settlement between McCoy and the Jacks had no
bearing on Johnson’s obligation to pay according to its liability,
as determined by the jury. As Mendenhall put it, a defendant who
wants to limit its liability at trial has the tool to do so: the
nonparty defense.
Id. at 990-91.
C. Applicability of the Comparative Fault Act to the
Instant Matter
[12] Shelton contends that the trial court erred in granting summary judgment in
favor of Kroger. In making this contention, Shelton argues that under Indiana’s
Comparative Fault Act, Kroger was not entitled to receive a credit or set-off in
relation to Shelton’s settlement with Dr. Doe, ABC, and the IPCF. Shelton
further argues that the only way by which Kroger could seek to limit its
potential liability at trial would be to name Dr. Doe and ABC as non-parties
and to ask the jury to apportion them fault.
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[13] For its part, Kroger argues that the trial court properly granted its motion for
partial summary judgment because the Comparative Fault Act does not apply
to cases involving claims of medical malpractice. In support, Kroger cites to the
Indiana Supreme Court’s decision in Indiana Department of Insurance v. Everhart,
960 N.E.2d 129 (Ind. 2012) and our opinion in Palmer v. Comprehensive
Neurologic Services, P.C., 864 N.E.2d 1093 (Ind. Ct. App. 2007). As is discussed
in both Everhart and Palmer, Indiana Code section 34-51-2-1(b)(1) expressly
states that the Comparative Fault Act does not apply to an action brought
against a qualified health care provider for medical malpractice. In addition,
the Indiana Supreme Court held in Everhart that the law allowing for credits and
set-offs remains good law for cases that involve joint tortfeasors but fall outside
the Comparative Fault Act. 960 N.E.2d at 139.
[14] In this case, the IDI determined that Kroger was not a qualified health care
provider under the Medical Malpractice Act. Kroger, therefore, was not
exempted from the Comparative Fault Act. As such, both Everhart and Palmer
can be easily distinguished from the instant matter because in both cases, the
party seeking the credit or set-off was a qualified health care provider who was
being sued for malpractice and, thus, was exempt from the Comparative Fault
Act.
[15] Because Kroger was not exempted from the Comparative Fault Act, Kroger
was not entitled to receive a credit or set-off with relation to Shelton’s
settlement with Dr. Doe, ABC, and the IPCF. See R.L. McCoy, 772 N.E.2d at
989-91; Mendenhall, 728 N.E.2d at 144-45. As such, we conclude that the trial
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court erred in granting Kroger’s motion for partial summary judgment and
reverse the trial court’s order granting said motion. We further instruct the trial
court that on remand, Kroger may only seek to limit its potential liability
through its asserted non-party defense.
[16] The judgment of the trial court is reversed and the matter remanded to the trial
court with instructions.
Pyle, J., and Altice, J., concur.
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