FILED Aug 19 2019, 9:00 am
CLERK Indiana Supreme Court Court of Appeals and Tax Court
ATTORNEYS FOR APPELLANTS ATTORNEYS FOR APPELLEES Jerry Garau Curtis T. Hill, Jr. Barbara J. Germano Attorney General of Indiana Garau Germano, P.C. Thomas M. Fisher Indianapolis, Indiana Solicitor General Bryan R. Findley Julia C. Payne Mollie A. Slinker Kian J. Hudson Deputy Attorneys General Indianapolis, Indiana A. Richard M. Blaiklock Charles R. Whybrew Lewis Wagner, LLP Indianapolis, Indiana
IN THE COURT OF APPEALS OF INDIANA
Garau Germano, P.C., and August 19, 2019 Faith Fenner, Court of Appeals Case No. Appellants-Plaintiffs, 18A-CT-2739 Appeal from the Marion Superior v. Court The Honorable James A. Joven, Stephen W. Robertson Judge (Commissioner of the Indiana Trial Court Cause No. Department of Insurance and 49D13-1710-CT-37220 Administrator of the Indiana Patient’s Compensation Fund), Indiana Department of
Court of Appeals of Indiana | Opinion 18A-CT-2739 | August 19, 2019 Page 1 of 23 Insurance, and Indiana Patient’s Compensation Fund, Appellees-Defendants.
Mathias, Judge.
[1] The law firm of Garau Germano, P.C., (“Garau Germano”) and its client Faith
Fenner (“Fenner”) (collectively “the Plaintiffs”) filed a complaint for
declaratory judgment and mandate against the Indiana Patient’s Compensation
Fund (“PCF”), the Indiana Department of Insurance (“IDOI”), and Stephen
W. Robertson, the Commissioner of the IDOI and the Administrator of the
PCF (“the Commissioner”) (collectively “the Fund Defendants”). In their
complaint, the Plaintiffs sought to prevent the Fund Defendants from requiring
that a claimant’s periodic payments agreement with a qualified health care
provider pay out the provider’s maximum liability under the Indiana Medical
Malpractice Act (“MMA”) before the claimant can gain access to the PCF. The
Plaintiffs appeal the trial court’s order granting the Fund Defendant’s motion to
dismiss and present three issues for our review, which we reorder and restate as:
I. Whether the Plaintiffs’ claim for declaratory judgment is ripe for review; II. Whether the Plaintiffs’ claim is justiciable under the Declaratory Judgments Act; and III. Whether Fenner, individually, and Garau Germano, on its own behalf, have standing to bring a complaint for mandate against the Fund Defendants seeking to force them to comply with what they contend to be the requirements of the MMA.
Court of Appeals of Indiana | Opinion 18A-CT-2739 | August 19, 2019 Page 2 of 23 [2] We affirm.
Statement of Facts1 [3] Garau Germano is a law firm that represents over one hundred clients with
medical malpractice claims, one of whom is Fenner. Garau Germano’s fees are
based on the amount its clients recover from the health care providers and the
PCF. At the time of the Plaintiffs’ complaint in the instant case, Fenner was
seventy-three years old. Represented by Garau Germano, Fenner is pursuing a
claim for medical malpractice under the MMA, alleging that her husband’s
death in February 2016 was caused by the negligence of various qualified health
care providers.
[4] The MMA, codified at Title 34, Article 18 of the Indiana Code, allows a patient
or the representative of a patient to bring a malpractice claim for bodily injury
or death. Atterholt v. Robinson, 872 N.E.2d 633, 639 (Ind. Ct. App. 2007) (citing
Ind. Code § 34-18-8-1; Goleski v. Fritz, 768 N.E.2d 889, 891 (Ind. 2002)). The
MMA was designed to curtail liability for medical malpractice. Id. (citing
Chamberlain v. Walpole, 822 N.E.2d 959, 963 (Ind. 2005)).
[5] For an act of malpractice that occurs after June 30, 1999 and before July 1,
2017,2 such as the malpractice alleged by Fenner, the MMA provides that the
1 We take the facts from the Plaintiffs’ complaint as true. Thomas v. Blackford Cty. Area Bd. of Zoning Appeals, 907 N.E.2d 988, 990 (Ind. 2009) (citing Huffman v. Ind. Office of Envtl. Adjudication, 811 N.E.2d 806, 814 (Ind. 2004)). 2 Indiana Code section 34-18-14-3 was amended effective July 1, 2017 to provide that, for acts of malpractice that occur after June 30, 2017 but before July 1, 2019, the total amount recoverable for an injury or death of a
Court of Appeals of Indiana | Opinion 18A-CT-2739 | August 19, 2019 Page 3 of 23 total amount recoverable for an injury or death of a patient may not exceed
$1,250,000. Ind. Code § 34-18-14-3(a)(3). A qualified health care provider is
liable for the initial $250,000 of damages,3 and the remainder of the judgment or
settlement amount is paid from the PCF.4 Id. § 34-18-14-3(b)(1), (c); Robinson,
872 N.E.2d at 639. Thus, if a plaintiff obtains a judgment against a health care
provider in excess of this $250,000 limit, the remainder of the judgment, up to
$1,000,000 (for a total recovery of $1,250,000), is paid from the PCF. See M.O.
v. Ind. Dep’t of Ins. Patient’s Comp. Fund, 968 N.E.2d 254, 259 (Ind. Ct. App.
2012) (citing Atterholt v. Herbst, 902 N.E.2d 220, 222 (Ind. 2009), clarified on
reh’g, 907 N.E.2d 528 (2009)), trans. denied.
[6] If a health care provider decides to settle a claim with a plaintiff, there are two
ways in which that plaintiff may be eligible to recover additional damages from
the PCF. The provider may simply pay the first $250,000. Green v. Robertson, 56
N.E.3d 682, 691 (Ind. Ct. App. 2016) (citing Ind. Code § 34-18-15-3(b)), trans.
denied. The provider may alternatively agree to a settlement involving what is
termed a periodic payments agreement.5 If a provider opts to discharge its
patient may not exceed $1,650,000. Id. at § 3(a)(4). And for acts of malpractice that occur after June 30, 2019, the total amount recoverable may not exceed $1,800,000. Id. at § 3(a)(5). 3 For acts of malpractice that occur after June 30, 2017 but before July 1, 2019, a qualified health care provider is liable for the first $400,000, and for acts occurring after June 30, 2019, the provider is liable for the first $500,000. Id. at § 3(b)(1), (3). 4 The IDOI, which administers the PCF, funds the PCF by levying an annual surcharge on all health care providers. See Ind. Code §§ 34-18-5-1 to 35-18-5-4. 5 A “periodic payments agreement” is defined by statute as: a contract between a health care provider (or its insurer) and the patient (or the patient’s estate), under which the health care provider is relieved from possible liability in consideration of:
Court of Appeals of Indiana | Opinion 18A-CT-2739 | August 19, 2019 Page 4 of 23 possible liability through such a periodic payments agreement, then “the
amount of the patient’s recovery from a health care provider in a case under this
subsection is the amount of any immediate payment made by the health care
provider or the health care provider’s insurer to the patient, plus the cost of the
periodic payments agreement to the health care provider or the health care
provider’s insurer.” Ind. Code § 34-18-14-4(b).
[7] In cases, such as this one, where the act of malpractice occurred after June 30,
1999 but before July 1, 2017, to determine the limitations on recovery stated in
Indiana Code subsections 34-18-14-3(b) and -(3)(d):
the sum of the present payment of money to the patient (or the patient’s estate) by the health care provider (or the health care provider’s insurer) plus the cost of the periodic payments agreement expended by the health care provider (or the health care provider’s insurer) must exceed:
(1) one hundred eighty-seven thousand dollars ($187,000)[.]
I.C. § 34-18-14-4(b).6
(1) a present payment of money to the patient (or the patient’s estate); and (2) one (1) or more payments to the patient (or the patient’s estate) in the future; whether or not some or all of the payments are contingent upon the patient’s survival to the proposed date of payment. Ind. Code § 34-18-14-2. 6 If a provider opts to enter into a periodic payments plan to discharge its possible liability for an act of malpractice that occurs after June 30, 2017, the limitation on recovery is “(2) seventy-five percent (75%) of the maximum amount a health care provider is responsible for under section 3(b) and 3(d) of this chapter[.]”
Court of Appeals of Indiana | Opinion 18A-CT-2739 | August 19, 2019 Page 5 of 23 [8] In other words, to determine whether a provider has reached the limits on its
liability, thereby triggering access to the PCF, the total cost of the present
payment to the patient plus the cost of procuring a periodic payments
agreement must exceed $187,000. See Herbst, 902 N.E.2d at 222 (“Recovery of
excess damages from the Fund is allowed only after a health care provider or
the provider’s insurer has paid the first $250,000, or made a settlement in which
the sum of the present cash payment and cost of future periodic payments
exceeds $187,000.”) (citations omitted); Green, 56 N.E.3d at 691 (noting that a
claimant may gain access to the PCF by agreeing to a settlement in which the
present payment of money and the cost of future payments exceeds $187,000)
(citing Ind. Code § 34-18-14-4(b)).
[9] The Plaintiffs claim that the Fund Defendants do not follow the language of the
statute as explained in Herbst and Green and impose an additional non-statutory
requirement before allowing a claimant access to the PCF. Specifically, they
allege that the Fund Defendants also require that a periodic payments
agreement pay out the provider’s maximum liability before allowing a claimant
to access the PCF. In other words, not only must the cost of the present
payment plus the cost to procure a periodic payments agreement exceed
$187,000, but the amount of the present payment plus total amount paid out
over time must also equal $250,000.7
7 Garau Germano sent a letter to the IDOI’s counsel advising it of Garau Germano’s interpretation of the periodic payments statute. In response, the IDOI informed Garau Germano that the Fund Defendants would
Court of Appeals of Indiana | Opinion 18A-CT-2739 | August 19, 2019 Page 6 of 23 [10] The Plaintiffs assert that the MMA does not require a periodic payments
agreement to pay out the health care provider’s maximum liability and instead
contend that a claimant may gain access to the PCF merely by entering into a
settlement agreement where the present payment, plus the cost to the provider
to procure a period payments agreement, costs more than $187,000. See Herbst,
902 N.E.2d at 222; Green, 56 N.E.3d at 691.
[11] Such periodic payments are usually procured by the provider purchasing an
annuity.8 Interest rates are now very low. Thus, in order to purchase an annuity
where any present payment plus the total amount paid out of the annuity over
time amounts to $250,000 requires the future payments to be paid out over
decades. This is an issue with an elderly plaintiff such as Fenner, who, in order
to gain access to the PCF, might agree to a settlement including an annuity that
would not pay out over her expected lifetime. This, the Plaintiffs contend,
“forces older claimants to forfeit a portion of a recovery which is already
limited by the terms of the [MMA],” whereas “younger victims of medical
malpractice can structure their annuities in such a way that they likely will
receive the payments in their lifetime[.]” Appellants’ Br. at 10.
not grant claimants access to the PCF “unless the periodic payments agreement results in a payout of the health care provider’s maximum liability.” Appellants’ App. p. 34. 8 Both parties agree that a common arrangement in such cases includes the immediate payment of $150,000 to the claimant plus purchasing an annuity for $37,001 that will, over time, pay out the remaining $100,000. This meets the $250,000 limit required of provider liability and, according to the Fund Defendants’ interpretation, triggers access to the PCF.
Court of Appeals of Indiana | Opinion 18A-CT-2739 | August 19, 2019 Page 7 of 23 [12] Garau Germano alleges that it often settles claims with health care providers
via periodic payments agreements that grant its clients access to the PCF.
Garau Germano represents Fenner and many similarly situated clients “who
face the effective forfeiture of a portion of their already limited settlements
because of the Fund Defendants’ requirement that periodic payments
agreements pay out the health care provider’s maximum liability.” Id. at 11.
Because of the Fund Defendants’ policy, Garau Germano claims that it cannot
advise its clients to accept a periodic payments agreement that costs over
$187,000 but that does not pay out the health care provider’s maximum liability
over time.
[13] Fenner claims she is therefore unable to evaluate any potential settlement offers
or options because of the Fund Defendants’ interpretation of the MMA. Fenner
alleges that if she were to purchase an annuity as part of a settlement, she “may
be required to essentially forfeit a portion of any settlement she receives from
the defendant health care providers in her action.” Appellants’ App. p. 35. She
does not, however, allege that she has received any actual settlement offers.
Procedural History [14] On October 3, 2017, Garau Germano filed a verified complaint for mandate
against the Fund Defendants, which sought a mandate to prohibit them from
requiring that a claimant’s periodic payments agreement pay out the health care
provider’s maximum liability before granting that claimant access to the PCF.
Court of Appeals of Indiana | Opinion 18A-CT-2739 | August 19, 2019 Page 8 of 23 [15] On January 12, 2018, the Fund Defendants filed a motion to dismiss Garau
Germano’s complaint for lack of standing. In response, on March 20, 2018,
Garau Germano filed an amended complaint, adding Fenner as a plaintiff and
the Commissioner as a defendant. The amended complaint also included a
request for declaratory judgment. On April 29, 2018, the Fund Defendants
again moved to dismiss the complaint.
[16] The trial court held a hearing on the motion to dismiss on August 14, 2018, and
issued an order dismissing the case on October 26, 2018. The trial court
concluded that Garau Germano lacked standing to bring the suit, that Fenner’s
claim was not ripe for review because she had not alleged that she was entitled
to access to the PCF, and that the Plaintiffs’ claims were not the appropriate
subject of an action for mandate because they were not alleging that they were
entitled to a ministerial act. The Plaintiffs now appeal.
Standard of Review
[17] The trial court granted the Fund Defendants’ motion to dismiss, filed pursuant
to Indiana Trial Rule 12(B)(6), for failure to state a claim upon which relief
could be granted. We have noted before that:
Indiana Trial Rule 12(B)(6) tests the legal sufficiency of a claim, rather than the facts supporting it. We review a trial court’s grant or denial of a Trial Rule 12(B)(6) motion to dismiss de novo, viewing the complaint in the light most favorable to the non- moving party and drawing every reasonable inference in favor of that party. We must stand in the trial court’s shoes, looking only at the complaint itself, and determine whether the trial court erred when it applied the law. Where it is clear that the facts Court of Appeals of Indiana | Opinion 18A-CT-2739 | August 19, 2019 Page 9 of 23 alleged in the complaint are insufficient to support relief under any set of circumstances, the trial court’s grant of the motion to dismiss is proper.
Tillman v. Tillman, 70 N.E.3d 349, 351 (Ind. Ct. App. 2013) (citations omitted),
trans. denied.
I. The Plaintiffs’ Claim for Declaratory Judgment Is Not Ripe
[18] The Plaintiffs first argue that the trial court erred in concluding that their claim
for declaratory judgment is not yet ripe9 under the Declaratory Judgment Act.
The relevant portion of this Act provides:
Any person interested under a deed, will, written contract, or other writings constituting a contract, or whose rights, status, or other legal relations are affected by a statute, municipal ordinance, contract, or franchise, may have determined any question of construction or validity arising under the instrument, statute, ordinance, contract, or franchise and obtain a declaration of rights, status, or other legal relations thereunder.
Ind. Code § 34-14-1-2 (emphasis added). In order to obtain a declaratory
judgment, the person bringing the action must have a substantial present
interest in the relief sought. Redevelopment Comm’n of Town of Munster v. Ind. State
9 The Fund Defendants address the Plaintiffs’ argument on this issue as one of standing instead of ripeness. As explained by one commentator, “[t]he justiciability doctrine is broken down into four major categories: standing (who may sue), ripeness (when would the suit be appropriate), mootness (no longer an active dispute), and political question (controversy should be left to the political branches).” 4 Charles H. Koch, Administrative Law & Practice § 13:1 (3d ed. 2010); see also Hulse v. Ind. State Fair Bd., 94 N.E.3d 726, 732 (Ind. Ct. App. 2018) (distinguishing standing from ripeness). Although these concepts are related, we consider the Plaintiffs’ argument as being that their claims are ripe.
Court of Appeals of Indiana | Opinion 18A-CT-2739 | August 19, 2019 Page 10 of 23 Bd. of Accounts, 28 N.E.3d 272, 276 (Ind. Ct. App. 2015) (citing Hibler v. Conseco,
Inc., 744 N.E.2d 1012, 1023 (Ind. Ct. App. 2001)), trans. denied. “‘The basis of
jurisdiction under the Declaratory Judgment Act is a justiciable controversy or
question, which is clearly defined and affects the legal right, the legal status, or
the legal relationship of parties having adverse interests.’” Id. (quoting Little
Beverage Co., Inc. v. DePrez, 777 N.E.2d 74, 83 (Ind. Ct. App. 2002), trans.
denied).
[19] A court may not review an issue that is not ripe. Cavallo v. Allied Physicians of
Michiana, LLC, 42 N.E.3d 995, 1001 n.3 (Ind. Ct. App. 2015) (citing Thomas ex
rel. Thomas v. Murphy, 918 N.E.2d 656, 662–63 (Ind. Ct. App. 2009), trans.
denied). “In essence, ‘ripeness relates to the degree to which the defined issues in
a case are based on actual facts rather than on abstract possibilities[.]’” Brogan v.
State, 925 N.E.2d 1285, 1289 (Ind. Ct. App. 2010) (quoting Rene ex rel. Rene v.
Reed, 726 N.E.2d 808, 822 (Ind. Ct. App. 2000)). “The basic rationale behind
our ripeness doctrine is ‘to prevent the courts, through avoidance of premature
adjudication, from entangling themselves in abstract disagreements over
administrative policies, and also to protect the agencies from judicial
interference until an administrative decision has been formalized and its effects
felt in a concrete way by the challenging parties.’” Ind. Gas Co. v. Ind. Fin. Auth.,
977 N.E.2d 981, 989–90 (Ind. Ct. App. 2012), trans. granted, summarily aff’d in
relevant part, 999 N.E.2d 63 (Ind. 2013) (quoting Ohio Forestry Ass’n, Inc. v. Sierra
Club, 523 U.S. 726, 732–33 (1998)). As noted in Indiana Gas Co., “[a] claim is
not ripe for adjudication if it rests upon ‘contingent future events that may not
Court of Appeals of Indiana | Opinion 18A-CT-2739 | August 19, 2019 Page 11 of 23 occur as anticipated, or indeed may not occur at all.’” Id. (quoting Texas v.
United States, 523 U.S. 296, 300 (1998)). A court’s ruling on a ripeness challenge
must consider “the fitness of the issues for judicial decision and the hardship to
the parties of withholding court consideration.” Brogan, 925 N.E.2d at 1289
(quoting Pacific Gas & Electric Co. v. State Energy Resources Conservation & Dev.
Comm’n, 461 U.S. 190, 201 (1983)).
[20] Here, the Plaintiffs argue that their claim is ripe for a declaratory judgment
because Fenner is pursuing a claim for medical malpractice against several
qualified health care providers under the MMA and does not know how to
proceed. They claim that, if Fenner accepts a settlement that includes a periodic
payments agreement that costs over $187,000, the Fund Defendants will deny
her access to the PCF unless the total payout also equals the provider’s
maximum liability of $250,000, contrary to what the Plaintiffs contend to be the
plain language of the relevant statute. The Plaintiffs argue that to require
Fenner to enter into a settlement now is to require her to take a “shot in the
dark” and hope that she will be successful in arguing that their interpretation of
the statute is correct. If so, she will have access to the PCF. But if not, she may
be deprived of further benefits from the PCF, and Garau Germano may be
liable for misadvising its client.
[21] Our problem with this argument is that it presupposes that Fenner has a valid
claim for medical malpractice, will eventually enter into a settlement agreement
with the providers who she claims have committed malpractice, and that this
settlement will include a periodic payments agreement that costs at least
Court of Appeals of Indiana | Opinion 18A-CT-2739 | August 19, 2019 Page 12 of 23 $187,000. Yet the Plaintiffs have not alleged that Fenner has even been offered
a settlement, much less entered into a settlement agreement. Because Fenner
has not yet received an offer of settlement from any of the providers, the
Plaintiffs have no “rights, status, or other legal relations” to be determined
under the Declaratory Judgment Act.
[22] For all we know at this stage, Fenner’s claims may be meritless. They may also
be wholly meritorious. And even if meritorious, her claims may not result in a
settlement that includes a periodic payments agreement that costs at least
$187,000. Indeed, it may not result in a settlement agreement at all and instead
go to trial where the issue of damages will be for the jury to determine.
Accordingly, the Plaintiffs’ arguments regarding the Fund Defendants’
interpretation of the relevant statutes rests on a future contingency that might
not occur as anticipated, or might not occur at all. See Ind. Gas Co., 977 N.E.2d
at 989–90.
[23] The cases relied upon by the Plaintiffs are therefore distinguishable. For
example, in Indiana Education Employment Relations Board v. Benton Community
School Corp., the court held that the case before it presented “not merely the
‘ripening seeds’ of a controversy, but present[ed] an already existing and actual
controversy.” 266 Ind. 491, 496, 365 N.E.2d 752, 754 (1977). In that case,
however, the Education Employment Relations Board had already scheduled a
hearing on the appropriate collective bargaining unit. Id. Without declaratory
relief, the plaintiff would have been required to proceed with a hearing from
which, according to the statute at issue, there would have been no judicial
Court of Appeals of Indiana | Opinion 18A-CT-2739 | August 19, 2019 Page 13 of 23 review. Id. Thus, there was an actual administrative decision at issue, not
merely the potential for a controversy, and the court therefore concluded that
“[t]he plaintiff was not merely seeking an advisory opinion[.]” Id. at 497, 365
N.E.2d at 754.
[24] Here, however, the Plaintiffs merely allege that there might be an adversary
administrative decision (denial of access to the PCF) if Fenner enters into a
settlement agreement that contains a periodic payments agreement that costs
over $187,000 but does not pay out $250,000 over time.
[25] And in Indiana Department of Environmental Management v. Twin Eagle LLC, 798
N.E.2d 839 (Ind. 2003), the developer already had a definite plan to develop the
property, and regardless of the outcome of IDEM’s ultimate determination, the
developer would still have to go through an administrative process to determine
if its development project required a permit and, if so, whether it could obtain
such a permit. Thus, our supreme court held that the developer’s claim
presented a genuine controversy that was sufficiently ripe for adjudication. Id.
at 844. In contrast, here, Fenner’s claims are still hypothetical because she has
yet to obtain any offer for a settlement agreement, much less one that would
cost in excess of $187,000. Her claims are, at this point, still purely speculative.
[26] In re Trust of Peeples, 37 N.E.3d 502 (Ind. Ct. App. 2015), trans. denied, is also
distinguishable. In Peeples, the trial court approved the appointment of the
Johnson County Community Foundation as trustee but capped the
Foundation’s fees at 1.5% of trust assets annually and further required the
Court of Appeals of Indiana | Opinion 18A-CT-2739 | August 19, 2019 Page 14 of 23 Foundation to obtain court approval before engaging the services of most third
parties. The Foundation appealed, arguing that the trial court abused its
discretion in imposing these restrictions. The trust beneficiaries countered that
the Foundation’s argument was not ripe for appeal because the Foundation had
presented no evidence that it would ever need more than 1.5% of the trust’s
assets or ever engage the services of third parties. Our court rejected this
argument, holding that the restrictions on the Foundation’s “decision-making
as trustee will be affected by the limit, even if it does not go to the trial court
seeking more money.” Id. at 512. Also, the Foundation would have to weigh
the costs and benefits of petitioning the court to engage the services of third
parties. Id. These restrictions were “more than abstract possibilities when
viewed from [the Foundation’s] perspective.” Id.
[27] Here, however, the Plaintiffs’ issues with the Fund Defendant’s interpretation
of the periodic payments statute is still an abstract possibility, as Fenner has not
yet even received an offer of any settlement agreement. Again, her concerns, as
things currently stand, rest on a future contingency that might not occur as
anticipated or even at all. See Ind. Gas Co., 977 N.E.2d at 990.
[28] The same is true for the other cases cited by the Plaintiffs in support of their
claim that they can bring a declaratory action. In these cases, the issues were
more than abstract possibilities but actual controversies existing at the time of
the action. See Cmty. Action of Greater Indianapolis, Inc. v. Ind. Farmers Mut. Ins.
Co., 708 N.E.2d 882, 885–86 (Ind. Ct. App. 1999) (holding that the injured
victim of an insured’s tort had standing under the Declaratory Judgment Act to
Court of Appeals of Indiana | Opinion 18A-CT-2739 | August 19, 2019 Page 15 of 23 seek a declaration of the insured’s coverage under an insurance policy before
the tort claim was reduced to judgment), trans. denied; Sendak v. Allen, 164 Ind.
App. 589, 592, 330 N.E.2d 333, 335 (1975) (holding that sheriff’s deputies
running for sheriff had standing to bring declaratory judgment action regarding
the applicability of statute prohibiting police officers from running for office
because they were already running for office).
[29] The bottom line is that the question presented by the Plaintiffs is still purely
hypothetical. Fenner may enter into a settlement agreement with the providers
against whom she is claiming medical malpractice. She may not. She may enter
into a settlement including a periodic payments agreement that costs in excess
of $187,000. She may not. But now, she has not even received any offers of
settlement, much less entered into any agreement. Her ability to access the PCF
is, at this stage, contingent upon her either obtaining a judgment against the
providers after trial or by entering into a settlement agreement that meets
certain requirements. This is not to say that Fenner must necessarily enter into a
settlement agreement before her claims are ripe for determination. But there
must be more than just the mere hope or anticipation of receiving such a
settlement offer before she may seek declaratory judgment. We therefore
conclude that the Plaintiffs’ claims are not yet ripe for declaratory judgment,
and the trial court properly dismissed them for failure to state a claim upon
which relief could be granted.
Court of Appeals of Indiana | Opinion 18A-CT-2739 | August 19, 2019 Page 16 of 23 II. The Plaintiffs Lack Standing to Seek Judicial Mandate
[30] The Plaintiffs also argue that the trial court erred by concluding that they did
not have standing to seek an action for judicial mandate. We have previously
explained the requirement of standing as follows:
Standing is defined as having a “sufficient stake in an otherwise justiciable controversy.” Ind. Civil Rights Comm’n v. Indianapolis Newspapers, Inc., 716 N.E.2d 943, 945 (Ind. 1999). The point of the standing requirement is to ensure that the party before the court has a substantive right to enforce the claim that is being made in the litigation. Pence v. State, 652 N.E.2d 486, 487 (Ind. 1995). Standing is “a significant restraint on the ability of Indiana courts to act, as it denies the courts any jurisdiction absent an actual injured party participating in the case.” Id. at 488.
The standing requirement obligates courts to act only in real cases and shun action when called upon to engage only in abstract speculation. Id. An actual dispute involving those harmed is what confers jurisdiction upon the judiciary . . . . Id. (quotation omitted). Put simply, in order to have standing, the challenging party must show adequate injury or the immediate danger of sustaining some injury. Ind. Civil Rights Comm’n, 716 N.E.2d at 945.
Redevelopment Comm’n of Town of Munster, 28 N.E.3d at 276.
[31] The judicial mandate statute provides:
An action for mandate may be prosecuted against any inferior tribunal, corporation, public or corporate officer, or person to compel the performance of any:
(1) act that the law specifically requires; or
Court of Appeals of Indiana | Opinion 18A-CT-2739 | August 19, 2019 Page 17 of 23 (2) duty resulting from any office, trust, or station.
Ind. Code § 34-27-3-1.
[32] Our supreme court recently explained the narrowness of the remedy provided
by this statute, writing:
Our precedent cautions against issuing a mandate, calling it an extraordinary remedy, viewed with extreme disfavor. Judicial mandate is appropriate only when two elements are present: (1) the defendant bears an imperative legal duty to perform the ministerial act or function demanded and (2) the plaintiff has a clear legal right to compel the performance of [that] specific duty. These two elements represent the narrow limits placed upon judicial mandates. These strictures mean that judicial mandate should never [be] granted in doubtful cases.
Price v. Ind. Dep’t of Child Services, 80 N.E.3d 170, 174–75 (Ind. 2017) (bold
emphasis added) (citations and internal quotation marks omitted).
A. Fenner Lacks Standing to Seek Judicial Mandate
[33] Here, we agree with the Fund Defendants that Fenner has not alleged that the
PCF bears an imperative legal duty to perform a ministerial act or function.
Instead, Fenner seeks a mandate that the Fund Defendants comply with (what
she claims to be) the plain language of the periodic payments statute. As noted
by the Fund Defendants, granting a claimant access to the PCF is no simple
ministerial act. Indeed, the PCF is not required to approve petitions for access
to the PCF simply if they meet certain statutory requirements. That is, even if
the claimant enters into a settlement agreement that meets the statutory
Court of Appeals of Indiana | Opinion 18A-CT-2739 | August 19, 2019 Page 18 of 23 requirements for access to the PCF, this does not guarantee that he or she will
be awarded damages from the PCF.
[34] Instead, after entering into a settlement agreement that meets the statutory
requirements for access to the PCF, a claimant must file a petition in the trial
court seeking court “approval of an agreed settlement” and “demanding
payment of damages from the [PCF].” Ind. Code § 34-18-15-3(1)(A), (B). Then,
the Commissioner and the health care provider (or its insurer) may agree or
object to “a settlement with the claimant from the [PCF].” Id. at § 3(3). If any of
these parties filed objections to the settlement, then the trial court must set the
matter for a hearing “as soon as practicable.” Id. at § 3(4). At the hearing, the
Commissioner, the claimant, the health care provider, and the health care
provider’s insurer may “introduce relevant evidence to enable the court to
determine whether or not the petition should be approved if the evidence is
submitted on agreement without objections.” Id. at §3(5). If, however, the
parties cannot agree on the amount to be paid out of the PCF, “the court shall,
after hearing any relevant evidence on the issue of claimant’s damage submitted
by any of the parties described in this section, determine the amount of
claimant’s damages, if any, in excess of the health care provider’s policy limits .
. . already paid by the insurer of the health care provider.” Id. The trial court
“shall determine the amount for which the [PCF] is liable and make a finding
and judgment accordingly.” Id. However, in determining the amount to be paid
Court of Appeals of Indiana | Opinion 18A-CT-2739 | August 19, 2019 Page 19 of 23 from the PCF, “the court shall consider the liability of the health care provider
as admitted and established.”10 Id.
[35] Applying this process to the present case, it is clear that, even if Fenner entered
into a settlement agreement that met the statutory requirements for access to the
PCF, she still may not be granted damages from the PCF. Given this complex,
judicial task of determining whether Fenner is entitled to excess damages from
the PCF, we agree with the Fund Defendants that this case is not the proper
subject of an action for judicial mandate because Fenner is not requesting that
the Defendants perform a ministerial task that they have a duty to perform. See
Price, 80 N.E.3d at 175. She is instead demanding that they interpret the
relevant statutes in a specific way. Nor is it yet clear that Fenner has a clear
legal right to compel the performance of this task. See id. Not only has she not
yet entered into a qualifying settlement agreement, even if she had, her ability
to receive damages from the PCF is far from established. Because Fenner lacks
standing to seek a judicial mandate, the trial court properly dismissed her claim.
B. Garau Germano Also Lacks Standing to Seek Judicial Mandate
[36] Lastly, we agree with the trial court that Garau Germano also lacks standing to
seek judicial mandate on its own behalf. First, we repeat that judicial mandate
is not appropriate in this case as the Plaintiffs do not seek to compel the Fund
Defendants to engage in any ministerial task and instead seek to compel the
10 The trial court must also consider many other factors, such as the patient’s risk of death and the degree of increased risk of harm caused by the malpractice. Herbst, 902 N.E.2d at 220–21.
Court of Appeals of Indiana | Opinion 18A-CT-2739 | August 19, 2019 Page 20 of 23 defendants to adhere to what they believe to be the proper interpretation of the
periodic payments plan statute. As noted above, this is not the proper grounds
for an action for mandate.
[37] We further agree with the trial court that Garau Germano lacks standing to
seek mandate. We reached a similar conclusion in State ex rel. Steinke v. Coriden,
831 N.E.2d 751 (Ind. Ct. App. 2005), trans. denied. In that case, Steinke was an
attorney whose practice included representing clients before the Indiana
Worker’s Compensation Board. Steinke filed a complaint for judicial mandate
seeking to require the members of the Board to comply with various statutory
guidelines he believed the members were ignoring.11 The members of the Board
filed a motion to dismiss for lack of standing. Steinke then filed an amended
complaint asserting that he also had standing as a member of the general public.
The trial court granted the motion to dismiss, and Steinke appealed.
[38] On appeal, Steinke argued that he had standing as an attorney representing
clients before the Board and that he was injured because attorneys like him
lacked access to a Board composed of full-time members whose “sole focus and
loyalty [was] toward the proper administration” of the Worker’s Compensation
statutes. Id. at 754 (record citations omitted). We rejected Steinke’s claim of
standing, holding that although he presented a “hypothetical scenario in which
11 Specifically, he alleged that the members of the Board “fail[ed] to devote his/her entire time to the discharge of the duties of his/her office” and “[held] other position(s) of trust or profit, and/or engages in some occupation(s) or business(es) interfering with or inconsistent with the discharge of his/her duties.” Id. at 753 (record citations omitted).
Court of Appeals of Indiana | Opinion 18A-CT-2739 | August 19, 2019 Page 21 of 23 the Board’s unavailability could or would delay payments to him,” he alleged
no incidents where this harm had actually occurred. Id. We held that, “[i]n the
absence of a showing that he has suffered or will immediately suffer a direct
injury,” Steinke, as an attorney who represented clients before the Board, had
no standing to seek judicial mandate. Id.
[39] The same is true in the present case. Garau Germano is a law firm that
represents clients in medical malpractice cases. It seeks a judicial mandate that
the Fund Defendants follow what Garau Germano believes to be the correct
interpretation of the periodic payments plan statute. Garau Germano claims
that, given the number of clients it represents, many of these clients will
eventually enter into settlement agreements, and that it is unable to advise its
clients on how to proceed. But the validity of these clients’ claims, like
Fenner’s, has yet to be determined at this stage. Garau Germano, like Steinke,
presents hypothetical situations in which its clients may be denied access to the
PCF, but has not shown that it will suffer from any direct injury if mandate is
denied. Garau Germano attempts to distinguish the present case from Steinke,
but we find none of these attempts convincing.
[40] Garau Germano claims that Steinke is distinguishable because, in that case,
Steinke sought relief only on behalf of all Indiana residents, whereas Garau
Germano seeks relief on its own behalf. This is incorrect. The plaintiff in
Steinke, in addition to claiming standing as a member of the public, also asserted
standing “as an attorney affected by the Defendants’ failure to fulfill their
duties.” Id. 753 (record citation omitted). Garau Germano further contends
Court of Appeals of Indiana | Opinion 18A-CT-2739 | August 19, 2019 Page 22 of 23 that, unlike the plaintiff in Steinke, it is seeking specific action on the part of the
Fund Defendants. But as we stated above, Garau Germano seeks to mandate
the Fund Defendants to interpret the periodic payments statute in a particular
way, not simply to require them to perform a ministerial act.
[41] In short, Garau Germano does not seek a mandate to perform a ministerial act.
An action for judicial mandate is therefore inappropriate. Furthermore, Garau
Germano has not shown that it has been directly damaged by the Fund
Defendants’ interpretation of the periodic payments plan statute. For these
reasons, we affirm the trial court’s motion to dismiss Garau Germano’s
complaint for judicial mandate for lack of standing.
Conclusion [42] The trial court properly dismissed the Plaintiffs’ complaint for failure to state a
claim upon which relief could be granted. First, the Plaintiffs’ claims are not yet
ripe for a declaratory judgment, as Fenner has yet to receive, much less accept,
any proposed agreement to settle her medical malpractice claims. Furthermore,
neither Fenner nor Garau Germano has standing to seek judicial mandate
because they do not request the performance of a ministerial act and because
neither has demonstrated that they have been or will be directly harmed. We
therefore affirm the judgment of the trial court.
[43] Affirmed.
May, J., and Brown, J., concur.
Court of Appeals of Indiana | Opinion 18A-CT-2739 | August 19, 2019 Page 23 of 23