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COA: Declaratory judgment, tort actions can arise from same occurrence

February 7, 2017

A declaratory judgment action can arise from the same occurrence as an underlying tort action for purposes of permissive joinder under Trial Rule 20, the Indiana Court of Appeals held Tuesday. The judges affirmed the denial of a request to sever two tort counts from a count seeking declaratory judgment.

After Kent Gearhart was diagnosed with renal cell cancer in 2009, Dr. Doe, a urologist associated with Anonymous Medical Associates Inc., became his treating physician. However, when a 2013 CT scan revealed a mass on Gearhart’s left kidney, Doe and AMA failed to follow up or make Gearhart aware of the results.

One year later, a follow-up CT scan after a visit to another AMA nurse practitioner revealed that the mass had grown and the cancer had spread. Gearhart’s diagnosis was changed to terminal renal cell cancer, and he died in January 2015.

Gearhart’s widow, Cathy Gearhart, filed a complaint for damages with the Indiana Department of Insurance, alleging malpractice on the part of Doe, an AMA nurse practitioner, AMA and ABC Radiology, P.C. During his deposition, Doe testified that he did not follow-up on the September 2013 radiology report because Sherry Patrick, an administrative staff member, made a data entry error when she received the report, so the report was not forwarded to him or put on his list of follow-up items as a result of Patrick’s clerical error.

Cathy Gearhart filed a complaint for damages and declaratory judgment in Marion Superior Court in 2015 alleging three counts. Counts I and II sought damages resulting from the medical malpractice and common law negligence of the defendants, while Count III sought declaratory judgment against the Indiana Patients Compensation Fund/Indiana Department of Insurance to determine whether the data entry error was subject to the Medical Malpractice Act.

The defendants moved to either dismiss the first two counts or sever them from Count III and transfer them to Vanderburgh County, where the alleged negligence took place. The Marion Superior Court denied that motion, prompting the instant appeal.

The panel of the Indiana Court of Appeals focused on the question of whether Gearhart’s two tort counts and her count for declaratory judgment arise out of the same occurrence, as is required to join defendants under Trial Rule 20(A).

The defendants argued that state and federal courts routinely hold that declaratory judgment actions do not arise out of the same occurrence as the underlying tort action. Additionally, the defendants noted that the policy in Indiana is to keep insurance issues out of personal injury litigation.  But Judge Robert Altice, writing for the unanimous panel, noted that the jurisprudence the defendants pointed to doesn’t necessarily apply to their case.

Instead, Altice pointed to the case of Preferred Profs Ins. Co. v. West, 23 N.E.3d 716 (Ind. Ct. App. 2014), in which the court held that “it would not be expeditious or efficient, judicially or otherwise, for the Wests to wait for the conclusion of the medical review panel process to determine if the (Act) applies.”

“Accordingly, we hold that a declaratory judgment action addressing the application of the Act arises out the same transaction or occurrence…as the tort claims,” Altice wrote Tuesday. “In other words, the two are logically related and allowing permissive joinder in this context effectuates T.R. 20’s intended purpose of promoting trial convenience, expediting claims, and avoiding multiple lawsuits.”

The case is ABC Radiology, P.C., Jane Doe, John Doe, Anonymous Medical Associates, Inc., Sherry Patrick v. Cathy Gearhart, 49A05-1602-CT-446.

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