Lake Imaging LLC v. Franciscan Alliance, Inc

CourtIndiana Court of Appeals
DecidedDecember 21, 2023
Docket22A-CT-02783
StatusPublished

This text of Lake Imaging LLC v. Franciscan Alliance, Inc (Lake Imaging LLC v. Franciscan Alliance, Inc) is published on Counsel Stack Legal Research, covering Indiana Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lake Imaging LLC v. Franciscan Alliance, Inc, (Ind. Ct. App. 2023).

Opinion

FILED Dec 21 2023, 8:24 am

CLERK Indiana Supreme Court Court of Appeals and Tax Court

ATTORNEY FOR APPELLANT ATTORNEYS FOR APPELLEE Robert J. Palmer Libby Yin Goodknight May Oberfell Lorber Krieg DeVault, LLP Mishawaka, Indiana Indianapolis, Indiana Julie A. Rosenwinkel Shannon L. Noder Krieg DeValult, LLP Merrillville, Indiana

IN THE COURT OF APPEALS OF INDIANA

Lake Imaging, LLC, December 21, 2023 Appellant-Defendant, Court of Appeals Case No. 22A-CT-2783 v. Appeal from the Johnson Superior Court Franciscan Alliance, Inc. The Honorable Marla K. Clark, f/d/b/a Saint Margaret Mercy Judge Health Care Centers, Trial Court Cause No. Appellee-Plaintiff 41D04-1810-CT-157

Opinion by Judge Riley. Judges Bailey and Tavitas concur.

Riley, Judge.

Court of Appeals of Indiana | Opinion 22A-CT-2783 | December 21, 2023 Page 1 of 17 STATEMENT OF THE CASE [1] Appellant-Defendant, Lake Imaging, LLC (Lake Imaging), appeals the trial

court’s summary judgment on remand in favor of Appellee-Plaintiff, Franciscan

Alliance, Inc. f/d/b/a Saint Margaret Mercy Health Care Centers (Franciscan),

on Franciscan’s indemnification claim stemming from Lake Imaging’s contract

to provide radiology services to Franciscan. 1

[2] We affirm.

ISSUES [3] In its appeal after remand, Lake Imaging presents this court with two issues,

which we restate as follows:

(1) Whether the trial court properly declined to apply the two-year statute of

limitations period, as included in the Professional Services Statute (PSS),

Ind. Code § 34-1-2-3, to Franciscan’s indemnity claim; and

(2) Whether the trial court properly entered summary judgment in

Franciscan’s favor on its indemnification claim.

FACTS AND PROCEDURAL HISTORY [4] Between 2004 and 2011, Lake Imaging was a qualified healthcare provider, as

defined in the Medical Malpractice Act (MMA), who provided radiology

1 The trial court also entered summary judgment against defendant, ProAssurance Indemnity Co. (ProAssurance), and in favor of Franciscan on the parties’ cross-claims for a declaratory judgment on insurance coverage. ProAssurance elected not to appeal that ruling.

Court of Appeals of Indiana | Opinion 22A-CT-2783 | December 21, 2023 Page 2 of 17 services to Franciscan’s patients. Pursuant to the Agreement, effective January

1, 2004, Lake Imaging agreed to “indemnify and hold [Franciscan] harmless

from any liability claimed as a result of [Lake Imaging’s] negligence in the

provisions of services undertaken under this [A]greement.” (Appellee’s App.

Vol. II, p. 36).

[5] Joseph Shaughnessy (Shaughnessy) was a patient at Franciscan in April 2011.

While in Franciscan’s care, Lake Imaging’s radiologists interpreted two CT

scans performed on Shaughnessy. Shaughnessy passed away on April 25, 2011.

It was later discovered that Lake Imaging’s employed radiologists had missed

the presence of a right-sided subdural hematoma on the CT scans. Just under

two years later—on April 10, 2013—Shaughnessy’s sons (the Shaughnessys)

filed a proposed medical malpractice complaint with the Department of

Insurance (DOI) against Franciscan and other providers, alleging that negligent

medical care resulted in Shaughnessy’s death. Lake Imaging was not named in

the proposed complaint. During discovery, one of the named providers

divulged that Lake Imaging’s radiologists had failed to report the presence of a

right-sided hematoma on Shaughnessy’s CT scans. The Shaughnessys

subsequently amended their proposed complaint to pursue a vicarious liability

claim against Franciscan based on the radiologists’ negligence. Because the

two-year statute of limitations for medical malpractice claims under the MMA

had expired by then, the Shaughnessys could not name Lake Imaging or its

employed radiologists as defendants in their amended proposed complaint.

Court of Appeals of Indiana | Opinion 22A-CT-2783 | December 21, 2023 Page 3 of 17 [6] On January 29, 2014, Franciscan notified Lake Imaging of its intent to seek

indemnification pursuant to the Agreement. Lake Imaging did not respond.

On July 21, 2016, Franciscan sent correspondence to Lake Imaging and its

insurance company, ProAssurance Indemnity Co. (ProAssurance), offering to

tender the defense in the medical malpractice lawsuit instigated by the

Shaughnessys. Franciscan advised that it intended to settle the lawsuit

premised solely on the negligence of Lake Imaging’s radiologists and to pursue

indemnification against Lake Imaging unless it received written notice within

twenty days that ProAssurance intended to assume the defense or objected to

Franciscan settling the matter. While Lake Imaging did not respond,

ProAssurance responded on August 9, 2016, rejecting Franciscan’s tender and

instructing Franciscan to use its “own judgment regarding the advisability of

settling [the lawsuit].” (Appellee’s App. Vol. III, pp. 110-11). Franciscan

settled with the Shaughnessys on September 25, 2016.

[7] On July 17, 2018, Franciscan filed its Complaint against Lake Imaging, alleging

breach of contract for Lake Imaging’s failure to provide competent medical care

and for failure to indemnify Franciscan. Franciscan also sought a declaratory

judgment against ProAssurance for payment of any judgment rendered against

Lake Imaging. Lake Imaging moved for summary judgment, claiming that,

because Franciscan premised its claim on alleged medical malpractice by Lake

Imaging, the MMA’s two-year statute of limitations had lapsed. See I.C. § 34-

18-7-1(b). Instead of addressing the statute of limitations claim, the trial court

Court of Appeals of Indiana | Opinion 22A-CT-2783 | December 21, 2023 Page 4 of 17 dismissed Franciscan’s indemnification claim without prejudice, 2 concluding

that it lacked subject-matter jurisdiction because the MMA required Franciscan

to present its claim to the DOI for an opinion rendered by the medical review

panel before filing its Complaint. See I.C. § 34-18-8-4. Lake Imaging appealed

and Franciscan cross-appealed. The court of appeals affirmed, holding that,

because Franciscan’s claim rested on Lake Imaging’s alleged negligence, the

MMA applied. The Indiana Supreme Court disagreed and concluded that

Franciscan’s indemnification claim is “an ordinary contract claim, rather than a

claim for medical malpractice[.]” See Lake Imaging, LLC v. Franciscan Alliance,

Inc., 182 N.E.3d 203, 210 (Ind. 2022). As such, the procedural requirement of

submitting a claim to the medical review panel does not apply to Franciscan’s

indemnification claim, and the trial court “erred in dismissing the case for lack

of subject matter jurisdiction.” Id. Turning to the nature of the claim and the

statute of limitations, the supreme court held that, “[b]ecause the MMA does

not apply to Franciscan’s claim, neither does the Act’s two-year statute of

limitations.” Id. Instead, either the ten-year or the six-year statute of

limitations for actions upon written contracts governed, depending on whether

the parties’ indemnity agreement is treated as a contract “for the payment of

money.” Id. However, our supreme court determined that it did not need to

reach the issue of “whether the ten-year or six-year statute of limitations

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