MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be
regarded as precedent or cited before any                                    FILED
court except for the purpose of establishing                            Mar 13 2018, 5:47 am

the defense of res judicata, collateral                                      CLERK
estoppel, or the law of the case.                                        Indiana Supreme Court
                                                                            Court of Appeals
                                                                              and Tax Court




ATTORNEY FOR APPELLANTS                                  ATTORNEY FOR APPELLEE
Robert A. Montgomery                                     Scott B. Cockrum
Law Offices of Robert Montgomery                         Patrick P. Devine
Munster, Indiana                                         Hinshaw & Culbertson LLP
                                                         Schererville, Indiana



                                          IN THE
    COURT OF APPEALS OF INDIANA

Ellington Jeffrey, a minor by his                        March 13, 2018
mother and father, Victor Jeffrey                        Court of Appeals Case No.
and Lynell Jeffrey and Victor                            45A04-1706-CT-1452
and Lynell Jeffrey, individually,                        Appeal from the Lake Superior
Appellants-Plaintiffs,                                   Court
                                                         The Honorable John M. Sedia,
        v.                                               Judge
                                                         Trial Court Cause No.
Stephen Robertson, Insurance                             45D01-1208-CT-170
Commissioner, Indiana
Department of Insurance,
Appellee-Defendant.



Robb, Judge.




Court of Appeals of Indiana | Memorandum Decision 45A04-1706-CT-1452 | March 13, 2018            Page 1 of 20
                                   Case Summary and Issue
[1]   In 2012, Victor and Lynell Jeffrey (the “Jeffreys”) 1 reached a settlement

      agreement with the healthcare provider for their adopted son, Ellington Jeffrey.

      The settlement agreement provided for a cash payment of $150,000 to the

      Jeffreys, individually and as parents of Ellington, and for Ellington’s healthcare

      provider to purchase and make contributions to an annuity for Ellington’s

      benefit. The total value of the annuity is $100,000 and is payable to the

      Ellington Jeffrey Special Needs Trust.


[2]   The Jeffreys then sought additional compensation from the Indiana Patient’s

      Compensation Fund and filed a lawsuit naming as defendant Stephen

      Robertson, as the commissioner of the Indiana Department of Insurance (the

      “Commissioner”). The Commissioner subsequently filed a motion for

      summary judgment alleging the Jeffreys’ individual claims did not meet the

      Indiana’s Medical Malpractice Act’s (“MMA”) definition of “malpractice” and

      that they were not “patients” under the MMA. The trial court agreed with the

      Commissioner and determined the $150,000 cash payment to the Jeffreys was

      not for claims of malpractice; therefore, the Jeffreys failed to meet the statutory

      minimum amount of a healthcare provider’s or insurer’s liability to seek




      1
       Victor and Lynell divorced in 2014 and Lynell now goes by her maiden name, Lynell Canagata. The
      Jeffreys’ Notice of Appeal states the appellant is “Ellington Jeffrey, a minor, by his mother, Lynell Jeffrey.”
      Amended Notice of Appeal at 1. Their complaint, however, states the plaintiffs are “Ellington Jeffrey, a
      minor by his mother and father Victor and Lynell Jeffrey, and Victor and Lynell Jeffrey, Individually.”
      Indiana Rule of Appellate Procedure 17(A) dictates “the party of record in the trial court . . . shall be a party
      on appeal.” Consequently, both Victor and Lynell are parties and we still refer to them as “the Jeffreys.”

      Court of Appeals of Indiana | Memorandum Decision 45A04-1706-CT-1452 | March 13, 2018                Page 2 of 20
      additional compensation from the Patient’s Compensation Fund. The Jeffreys

      now appeal, raising two issues for our review, which we consolidate and restate

      as whether the trial court erred in granting summary judgment in favor of the

      Commissioner. Concluding the trial court erred in granting summary

      judgment, we reverse and remand for further proceedings.



                            Facts and Procedural History                               2




[3]   In 2006, the Jeffreys planned to adopt a child. The Jeffreys specifically

      intended to adopt a child only if there were no signs of significant health issues

      and had rejected at least three prior adoptions due to concerns about the child’s

      health. On February 12, 2006, V.S. gave birth to her son at Methodist Hospital

      and planned to place him with an adoptive family. Lynell spoke with

      Methodist Hospital’s social worker, whose job included discussing a child’s

      birth abnormalities with prospective adoptive parents, and told her she was

      relying on her judgment in deciding to adopt V.S.’s child. The social worker

      informed Lynell that V.S.’s child was born healthy and without any

      abnormalities.


[4]   On February 15, 2006, Lynell traveled to Indiana from her home in New York

      and met with Methodist Hospital’s social worker and head nurse. Both assured

      Lynell that the child, aside from being lactose intolerant, had no significant




      2
        We held oral argument in this case on February 20, 2018, in Indianapolis, Indiana. We commend counsel
      for their advocacy.

      Court of Appeals of Indiana | Memorandum Decision 45A04-1706-CT-1452 | March 13, 2018       Page 3 of 20
      health issues or abnormalities. The Jeffreys executed a guardianship and took

      the child, who was later named Ellington, home to New York.


[5]   Prior to completing the adoption, the Jeffreys’ attorney requested V.S.’s and

      Ellington’s medical records from Methodist Hospital. Methodist Hospital

      responded to their request by sending inpatient records, but did not send the

      Jeffreys any outpatient records.


[6]   The Jeffreys completed Ellington’s adoption in August of 2006. In December

      of 2006, the Jeffreys learned Ellington had severe neurological deficits. If the

      Jeffreys had known of Ellington’s medical condition, they would not have

      adopted him. In April of 2007, the Jeffreys finally received all the medical

      records they had requested. They discovered V.S.’s medical records included a

      sonogram taken on February 1, 2006, indicating Ellington had a large hole in

      the left side of his brain, a condition associated with developmental delay,

      intellectual disabilities, paralysis, and other severe neurological defects.


[7]   Thereafter, the Jeffreys filed a proposed medical malpractice complaint against

      Methodist Hospital and V.S.’s and Ellington’s doctor with the Indiana

      Department of Insurance and with the trial court. Methodist Hospital and the

      doctor both filed motions for summary judgment, which the trial court granted.

      As to Methodist Hospital, the trial court determined the sonogram report did

      not fit within the description of the documents requested by the Jeffreys. The

      trial court also determined that, with respect to the Jeffreys’ claim of negligent




      Court of Appeals of Indiana | Memorandum Decision 45A04-1706-CT-1452 | March 13, 2018   Page 4 of 20
      misrepresentation, the Jeffreys should not have relied on general statements

      made by the social worker and nurse.


[8]   The Jeffreys then initiated the first appeal in this case in Jeffrey v. Methodist

      Hosps., 956 N.E.2d 151 (Ind. Ct. App. 2011), and argued the trial court erred in

      granting summary judgment in favor of Methodist Hospital and the doctor. We

      affirmed the entry of summary judgment in favor of the doctor, but reversed

      with respect to Methodist Hospital. We concluded a genuine issue of material

      fact existed as to whether the Jeffreys’ request to Methodist Hospital for “any

      and all . . . information” should have included the sonogram. Id. at 155. We

      further concluded that, with respect to the Jeffreys’ claim of negligent

      misrepresentation, genuine issues of material fact existed as to whether their

      reliance on the statements by the nurse and social worker was justified. Id. at

      157.


[9]   In January of 2012, the Jeffreys filed their fourth amended complaint with the

      Indiana Department of Insurance. The Jeffreys alleged Methodist Hospital

      failed to render reasonable medical care to Ellington, failed to inform the

      Jeffreys of any abnormal test results, failed to refer Ellington for a neurologic

      consultation, failed to communicate complete and accurate medical

      information, and negligently misrepresented Ellington’s medical status. As to

      Ellington, the Jeffreys’ complained he suffered damages as a result of Methodist

      Hospital’s allegedly negligent acts; specifically, the complaint alleged Methodist

      Hospital’s failure to inform the Jeffreys of Ellington’s test results and failure to

      provide Ellington with prompt care significantly exacerbated Ellington’s

      Court of Appeals of Indiana | Memorandum Decision 45A04-1706-CT-1452 | March 13, 2018   Page 5 of 20
       preexisting condition and reduced Ellington’s chances of leading an

       independent life. The Jeffreys also alleged a derivative action as Ellington’s

       parents seeking medical expenses, lost income, emotional injuries, loss of

       services, loss of consortium, and future lost income and medical expenses.

       Finally, the Jeffreys alleged, individually, that Methodist Hospital’s actions

       denied them the opportunity to stop the adoption proceedings.


[10]   In May of 2012, the Jeffreys and Methodist Hospital settled their dispute. The

       Release and Settlement Agreement (“Settlement Agreement”) states as follows:


               Victor Jeffrey and Lynell Jeffrey, Individually and as the Parents
               of Ellington Jeffrey, a Minor, (hereinafter referred to collectively
               as “Claimants”), for the sole consideration documented in this
               instrument and paid to them as set forth below, do herby
               discharge and forever release The Methodist Hospitals, Inc.,
               (hereinafter referred to as “Hospital”) and its insurers,
               employees, agents, servants, successors and assigns, from all
               liabilities, claims for relief, demands, controversies, damages,
               actions and/or causes of action . . . which are based on or arise
               from hospital, nursing, healthcare or other services rendered by
               the Hospital to Claimants at any time in connection with the
               birth of Ellington Jeffrey on or about February 12, 2006, his
               subsequent adoption by Victor and Lynell Jeffrey on or about
               August 25, 2006, and the disclosure at any time of medical
               records pertaining to Ellington Jeffrey and/or his biological
               mother in contemplation of the adoption.

               ***

               Payments Due At Time of Settlement

               A cash payment in the amount of $150,000.00, payable to Victor
               Jeffrey and Lynell Jeffrey, Individually and as Parents of
               Ellington Jeffrey, a Minor . . . shall be made at the time of
               settlement.


       Court of Appeals of Indiana | Memorandum Decision 45A04-1706-CT-1452 | March 13, 2018   Page 6 of 20
        Periodic Payments Made According to Schedule

        Periodic payments shall be made to the Ellington Jeffrey Special
        Needs Trust from an annuity with a present value of $37,001, to
        be paid as follows:

            •   $150.00 per month, guaranteed 40 years . . . .
            •   $8,000.00 payable [in 2024];
            •   $10,000.00 payable [in 2032]; and
            •   $10,000.00 payable [in 2043].

        ***

        Other Provisions

        [T]his Release and Settlement Agreement is a full and final
        compromise of Claimants’ disputed medical malpractice claims
        against Hospital. The payments made pursuant to this
        instrument are not to be construed as an admission of liability by
        Hospital. Rather, this compromise is designed to avoid the
        expense of further litigation between the parties and to terminate
        all controversies between them which are based in any way upon
        hospital, nursing, healthcare or other services rendered by
        Hospital to Claimants at any time in connection with the birth of
        Ellington Jeffrey on or about February 12, 2006, his subsequent
        adoption by Victor and Lynell Jeffrey on or about August 25,
        2006, and the disclosure at any time of medical records
        pertaining to Ellington Jeffrey and/or his biological mother in
        contemplation of the adoption. . . .

        The consideration for this Release and Settlement Agreement is
        not intended as, nor is it understood to be, full compensation to
        Claimants for their claims against Hospital based on the
        aforesaid healthcare and services. It is specifically understood
        and is the intention of the parties that the consideration received
        pursuant to this instrument shall not in any way prejudice
        Claimants’ right to proceed against the Indiana Patient’s
        Compensation Fund for additional compensation based on such
        claims. It is understood by the parties that Claimants have
        always claimed actual damages in excess of $250,000, and they
        specifically reserve the right to proceed against the Indiana
        Patient’s Compensation Fund for additional compensation.

Court of Appeals of Indiana | Memorandum Decision 45A04-1706-CT-1452 | March 13, 2018   Page 7 of 20
       Appellant’s Appendix, Volume 2 at 102-05. Following the settlement, the

       Jeffreys filed their lawsuit against the Commissioner seeking additional

       compensation from the Indiana Patient’s Compensation Fund.


[11]   On November 10, 2016, the Commissioner filed a motion for summary

       judgment. The Commissioner’s motion alleged that (1) Victor and Lynell are

       not “patients” under the Medical Malpractice Act, and (2) their claim of

       negligent misrepresentation does not sound in “medical malpractice.” The

       Jeffreys filed their motion in opposition to the Commissioner’s motion for

       summary judgment on January 24, 2017. On March 15, 2017, the trial court

       approved the Jeffreys’ Petition for Approval of Minor’s Personal Injury

       Settlement and Order of Distribution.3 See Appellant’s Appendix, Volume 2 at

       201-02. The Distribution Order approved the Jeffreys’ proposal to place the net

       amount of the settlement, $81,874.82, into Ellington’s Special Needs Trust

       along with his annuity payments.


[12]   On June 7, 2017, the trial court granted the Commissioner’s motion for

       summary judgment. The trial court’s summary judgment order stated as

       follows:




       3
        The record is unclear why it took five years to approve and disperse the 2012 Settlement Agreement.
       Additionally, the Commissioner disputes whether the petition is a proper part of the record. The record on
       appeal “consist[s] of the Clerk’s Record and all proceedings before the trial court . . . .” Ind. Appellate Rule
       27. The “Clerk’s Record” is the record maintained by the clerk of the court and “consist[s] of the
       Chronological Case Summary (CCS) and all papers, pleadings, documents, orders, judgments, or other
       materials filed in the trial court . . . .” App. R. 2(E). Thus, the petition is a proper part of the record on
       appeal.

       Court of Appeals of Indiana | Memorandum Decision 45A04-1706-CT-1452 | March 13, 2018                Page 8 of 20
         There is no dispute that the [$37,001] paid to Ellington was paid
         as a result of the resolution of a claim for medical malpractice.[4]
         There is also no dispute that this amount is insufficient to allow
         the case to proceed to the [Patient’s Compensation] Fund. The
         issue then becomes: if there is a material question of fact that the
         $150,000 paid to Victor and Lynell was the result of the
         resolution of a claim for medical malpractice . . . .

         ***

                   IC 34-18-2-18 provides as follows:

                   “Malpractice” means a tort or breach of contract based on
                   health care or professional services that were provided, or
                   that should have been provided, by a health care provider,
                   to a patient.

         Does the failure of the social worker to disclose Ellington’s
         condition to Victor and Lynell fit the statutory definition of
         malpractice? A case which is particularly instructive in
         answering this question is H.D. v. BHC Meadows Hosp., Inc., 884
         N.E.2d 849 (Ind. Ct. App. 2008). There, a family had their
         daughter admitted to a hospital for psychiatric treatment. The
         parents and hospital signed a confidentiality agreement stating
         that information would not be shared with the daughter’s school
         or school counselor. However, her therapist at the hospital,
         unaware of the agreement, sent a fax to the school counselor
         indicating that the daughter was being treated for depression. . . .
         The trial court dismissed [the plaintiffs’ complaint] upon finding
         that it lacked subject matter jurisdiction because the claims had
         not first been submitted to a medical review panel. The Court of
         Appeals reversed, finding that the family’s claims were ordinary
         negligence claims . . . and that the average juror could review
         them just as well as a medical review panel:




4
  Although the trial court’s summary judgment order declares there is no dispute, the Commissioner states he
“does not concede that Ellington Jeffrey’s claim constitutes medical malpractice . . . but did not raise the
issue at the trial court since the failure of the Jeffreys’ individual claims was a threshold issue . . . .” Brief of
Appellee at 14 n.6.

Court of Appeals of Indiana | Memorandum Decision 45A04-1706-CT-1452 | March 13, 2018                   Page 9 of 20
                The text of the [Medical Malpractice] Act itself thus leads
                one to conclude that the General Assembly intended to
                exclude from the legislation’s purview conduct of a
                provider unrelated to the promotion of a patient’s health or
                the provider’s exercise of professional expertise, skill or
                judgment . . . [t]he legislature’s establishment of a medical
                review panel, the sole purpose of which is to provide an
                expert determination on the question of whether a
                provider complied with the appropriate standard of care,
                suggests that the scope of the Act is likewise confined to
                actions premised upon the exercise of profession [sic]
                judgment. Moreover, we have repeatedly held that when
                plaintiffs articulate claims for ordinary negligence,
                unrelated to the provision of medical care or treatment,
                those claims do not fall within the scope of the Medical
                Malpractice Act. We fail to see why the therapist’s act of
                faxing a patient’s confidential information to a fax
                machine located in a school office without taking
                precautions to ensure that the materials are discreetly
                received by the intended recipient would necessitate
                consideration by a medical review panel, 884 N.E.2d at
                855, citations omitted.

        Here, the Court cannot see why the social worker’s act,
        intentional or not, of failing to release full and complete medical
        records regarding Ellington, or Methodist’s failure to have a
        medical record filing and retrieval system that would have
        assured that Victor and Lynell would have known of Ellington’s
        condition, would necessitate consideration by a medical review
        panel.

        The language of the release document signed by Victor and
        Lynell and Methodist clearly sets forth their intent that the
        settlement meet the statutory minimum and allow Victor and
        Lynell to proceed against the [Patient’s Compensation] Fund.
        However, the designated materials demonstrate no material issue
        of fact that the [Patient’s Compensation] Fund was not a party to
        the release document, and that the $150,000 paid to Victor and
        Lynell was made in compensation for Methodist failing to inform
        them of the results of the sonogram taken before Ellington’s
        birth, a breach of duty not encompassed by the Medical
        Malpractice Act.

Court of Appeals of Indiana | Memorandum Decision 45A04-1706-CT-1452 | March 13, 2018   Page 10 of 20
       Appealed Order at 3-7. The Jeffreys now appeal.



                                  Discussion and Decision
                                      I. Standard of Review
[13]   In reviewing a summary judgment order, we apply the same standard as the

       trial court. City of Lawrence Util. Serv. Bd. v. Curry, 68 N.E.3d 581, 585 (Ind.

       2017). Summary judgment is appropriate only when “the designated

       evidentiary matter shows that there is no genuine issue as to any material fact

       and that the moving party is entitled to a judgment as a matter of law.” Ind.

       Trial Rule 56(C). An issue is “genuine” if a trier of fact is required to resolve

       the truth of the matter; a fact is “material” if its resolution affects the outcome

       of the case. Hughley v. State, 15 N.E.3d 1000, 1003 (Ind. 2014).


[14]   Summary judgment is a “blunt instrument” by which the non-prevailing party

       is prevented from resolving its case at trial. Id. Because of this, our supreme

       court has cautioned that summary judgment “is not a summary trial” and

       courts on appeal should carefully “assess the trial court’s decision to ensure [a

       party] was not improperly denied [their] day in court.” Id. at 1003-04 (citations

       omitted). In other words, “Indiana consciously errs on the side of letting

       marginal cases proceed to trial on the merits, rather than risk short-circuiting

       meritorious claims.” Id. at 1004.




       Court of Appeals of Indiana | Memorandum Decision 45A04-1706-CT-1452 | March 13, 2018   Page 11 of 20
                                       II. Summary Judgment
[15]   Indiana’s Medical Malpractice Act caps a claimant’s recoverable damages at

       $1,250,000. Ind. Code § 34-18-14-3(a)(3). Of that $1,250,000, a healthcare

       provider or its insurer is only liable for $250,000. Ind. Code § 34-18-14-3(b)(1).5

       Any amount of damages in excess of the healthcare provider or insurer’s

       liability shall be paid from the Indiana Patient’s Compensation Fund. Ind.

       Code § 34-18-14-3(c). If a healthcare provider or its insurer agrees to settle its

       liability by paying its policy limits and the claimant is demanding a sum greater

       than the policy limit, then the procedure outlined by the statute must be

       followed in order to recover from the Patient’s Compensation Fund. Ind. Code

       § 34-18-15-3.


[16]   To fall within the MMA, a patient must have suffered from an act of medical

       “malpractice.” The MMA defines “malpractice” as a “tort or breach of

       contract based on health care or professional services that were provided, or

       that should have been provided, by a health care provider, to a patient.” Ind.

       Code § 34-18-2-18. “Health care” means an “act or treatment performed or

       furnished, or that should have been performed or furnished, by a health care

       provider for, to, or on behalf of a patient during the patient’s medical care,




       5
         These stated recovery limitations existed for an act of malpractice that occurred between June 30, 1999 and
       July 1, 2017. For an act of malpractice occurring between June 30, 2017 and July 1, 2019, a claimant’s total
       recoverable damages are $1,650,000; a healthcare provider or insurer is only liable for $400,000. Ind. Code §
       34-18-14-3(a)(4), (b)(2).

       Court of Appeals of Indiana | Memorandum Decision 45A04-1706-CT-1452 | March 13, 2018           Page 12 of 20
       treatment, or confinement.” Ind. Code § 34-18-2-13. A “patient” is defined as

       an


               individual who receives or should have received health care from
               a health care provider, under a contract, express or implied, and
               includes a person having a claim of any kind, whether derivative
               or otherwise, as a result of alleged malpractice on the part of a
               health care provider. Derivative claims include the claim of a
               parent or parents, guardian, trustee, child, relative, attorney, or
               any other representative of the patient including claims for loss of
               services, loss of consortium, expenses, and other similar claims.


       Ind. Code § 34-18-2-22. A “representative” means “the spouse, parent,

       guardian, trustee, attorney, or other legal agent of the patient.” Ind. Code § 34-

       18-2-25.


[17]   The Commissioner’s motion for summary judgment and his brief on appeal

       argue certain conditions precedent to recovery must be met in order to seek

       additional compensation from the Patient’s Compensation Fund. Those

       conditions precedent are (1) a settlement agreement in the amount of $250,000

       from a qualified healthcare provider6; (2) the claimant must be a “patient”; and

       (3) the claim must be for one of medical “malpractice.” The trial court,

       agreeing with the Commissioner, determined the $150,000 cash payment made

       to the Jeffreys was compensation for Methodist Hospital’s failure to inform the




       6
         In the case of a structured settlement, the threshold amount can be met with if “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)” exceeds $187,000. Ind. Code § 34-18-14-4(b).

       Court of Appeals of Indiana | Memorandum Decision 45A04-1706-CT-1452 | March 13, 2018           Page 13 of 20
       Jeffreys of the result of the sonogram—a breach of duty the trial court

       determined was outside the scope of the MMA. Because the trial court

       concluded the $150,000 cash payment to the Jeffreys was not for claims of

       “malpractice,” the Jeffreys could not aggregate the $150,000 cash payment with

       the value of Ellington’s annuity to reach the statutory minimum necessary to

       pursue additional compensation. Essentially, the trial court concluded there

       was no genuine issue of material fact as to whether the Jeffreys met the

       minimum threshold necessary to seek additional compensation from the

       Patient’s Compensation Fund.


[18]   As noted, the Jeffreys’ proposed complaint alleged, on behalf of Ellington, that

       Methodist Hospital failed to render reasonable medical care to Ellington, failed

       to inform the Jeffreys of any abnormal test results, failed to refer Ellington for a

       neurologic consultation, failed to communicate complete and accurate medical

       information, and negligently misrepresented Ellington’s medical status. Their

       complaint alleged that as a result of these failures, Ellington suffered a direct

       harm to his health. The Jeffreys, derivatively as Ellington’s parents, alleged

       they suffered emotional damages, medical expenses, and lost income. Finally,

       the Jeffreys, in a separate count, alleged they lost the opportunity to stop the

       adoption proceedings.


[19]   The Jeffreys’ settlement of these claims with Methodist Hospital included two

       separate payments, an annuity with a present value of $37,001 (total value of

       $100,000) payable to the Ellington Jeffrey Special Needs Trust, and a cash

       payment of $150,000 payable to Victor and Lynell Jeffrey, “Individually and as

       Court of Appeals of Indiana | Memorandum Decision 45A04-1706-CT-1452 | March 13, 2018   Page 14 of 20
       Parents of Ellington Jeffrey[.]” Appellant’s App., Vol. 2 at 102. The

       Commissioner contends because the Settlement Agreement includes the

       Jeffreys’ claims of wrongful adoption and negligent misrepresentation—claims

       he alleges are not “malpractice,” the $150,000 cash payment cannot be

       aggregated by the Jeffreys to meet the statutory minimum to seek additional

       compensation from the Patient’s Compensation Fund. We disagree with the

       Commissioner.


[20]   The Jeffreys and Methodist Hospital’s Settlement Agreement states it

       constitutes a “full and final compromise of Claimants’ disputed medical

       malpractice claims against the Hospital . . . [but] is not intended as, nor is it

       understood to be, full compensation to Claimants . . . [as] they specifically

       reserve the right to proceed against the Indiana Patient’s Compensation

       Fund[.]” Appellant’s App., Vol. 2 at 103-04. It further states that Methodist

       Hospital compensated the Jeffreys, not as an admission of liability, but to

       “avoid the expense of further litigation between the parties and to terminate all

       controversies between them which are based in any way upon” services

       provided to the Jeffreys by Methodist Hospital in connection with Ellington’s

       birth. Id.


[21]   A fair reading of the Settlement Agreement indicates the Jeffreys and Methodist

       Hospital intended to resolve all claims, including those sounding in medical

       malpractice, in a single settlement, as parties often do, and that the Jeffreys

       always intended to seek further compensation from the Patient’s Compensation

       Fund. At this point, Ellington has alleged, through his parents, that he suffered

       Court of Appeals of Indiana | Memorandum Decision 45A04-1706-CT-1452 | March 13, 2018   Page 15 of 20
damages as a result of medical care that should have been provided by

Methodist Hospital. In return for a release of all claims, Methodist Hospital

purchased an annuity with a total value of $100,000 payable to the Ellington

Jeffrey Special Needs Trust over a period of forty years. The Jeffreys,

derivatively of Ellington’s claims of malpractice, alleged they suffered

emotional damages, medical expenses, and lost income. See, e.g., Ind. Patient’s

Comp. Fund v. Wolfe, 735 N.E.2d 1187, 1193 (Ind. Ct. App. 2000) (holding

parents with a derivative claim are not entitled to a separate damages cap;

rather, their claims are included within the patient’s claim), trans. denied.

Although the Jeffreys’ claims also include a claim of wrongful adoption and

negligent misrepresentation, which the Commissioner alleges are not claims of

“malpractice,” the Settlement Agreement does nothing to carve out which part,

if any, of the $150,000 cash payment was allocated to the Jeffreys’ derivative

claims and which part, if any, was allocated to the Jeffreys’ remaining claims.

A “terminat[ion of] all controversies” does not necessarily mean a payment for

each of those specific claims. Appellant’s App., Vol. 2 at 103-04. The Jeffreys

may have intended the entire $150,000 be allocated to their derivative claim, as

the trial court’s March 15, 2017, Distribution Order placing the net proceeds

from the $150,000 payment into the Ellington’s Special Needs Trust suggests,

or they may have intended none of it to be allocated for that purpose;

regardless, that is an issue for trial. In short, a genuine issue of material fact

exists as to whether the Jeffreys have met the statutory minimum of a

healthcare provider’s or insurer’s liability necessary to seek additional

compensation from the Patient’s Compensation Fund.
Court of Appeals of Indiana | Memorandum Decision 45A04-1706-CT-1452 | March 13, 2018   Page 16 of 20
[22]   Moreover, the Commissioner is not prejudiced by this resolution as he may

       continue to litigate the issue of damages at trial, rather than asking this court to

       resolve issues that are unclear from the record. In this sense, the issue is similar

       to that of excess claims to a general insurance policy, and we look to State Farm

       Fire & Cas. Co. v. T.B. ex rel. Bruce, 762 N.E.2d 1227 (Ind. 2002), for guidance.

       In State Farm, the insured operated a day care center. Thereafter, the insured’s

       husband molested one of the children at the day care center and was

       subsequently convicted of child molesting. The child then sued the insured and

       her husband claiming negligence and premises liability. The insured had a

       homeowner’s policy issued by State Farm; however, the homeowner’s policy

       specifically excluded negligence relating to child care services. State Farm

       received notice of the suit but denied coverage and refused to defend the

       insured. The plaintiff and insured eventually entered into a consent judgment

       for $375,000, in addition to the insured assigning all rights, interests and

       remedies against State Farm arising from their homeowner’s policy to the

       plaintiff. The consent judgment also included language that tended to separate

       the molestation from any childcare activities undertaken by the insured. The

       trial court accepted the consent judgment and later granted summary judgment

       in favor of the plaintiff in proceedings supplemental against State Farm.


[23]   On appeal, State Farm argued collateral estoppel did not bar it from raising a

       policy exclusion defense and that it should not be bound by the factual

       statements in the consent judgment that were not “necessary” to resolving the

       underlying lawsuit. Id. at 1230. State Farm conceded that it was collaterally


       Court of Appeals of Indiana | Memorandum Decision 45A04-1706-CT-1452 | March 13, 2018   Page 17 of 20
       estopped from disputing that the insureds were negligent, but sought to

       challenge certain factual statements in the consent judgment on the ground that

       those findings were not necessary elements of the consent judgment. State

       Farm argued that the underlying plaintiff had characterized events with the

       “obvious intent” of bringing the consent judgment within the policy’s coverage.

       Id. at 1231.


[24]   Our supreme court agreed that the characterizations were “unnecessary to

       sustain [the] complaint for damages regarding negligence” and that their “sole

       purpose” was to assure the claims fall within coverage. Id. The court held that,

       if an insurer has notice of the factual determinations that will be made to

       resolve a lawsuit, the insurer’s failure to participate in the lawsuit “will bind it

       to those determinations,” but an insurer cannot be estopped from contesting

       unnecessary matters resolved in the underlying litigation. Id. at 1232. Thus,

       because the underlying plaintiff’s claim did not specifically address State Farm’s

       contractual obligations under the policy—even though the consent judgment

       did—collateral estoppel did not bar State Farm from challenging certain factual

       statements in the consent judgment.


[25]   In sum, because the underlying lawsuit alleged negligence, State Farm was

       estopped from challenging findings relating to negligence. However, State

       Farm was not estopped from challenging factual statements in the consent

       judgment that were not necessary to the case’s resolution. Therefore, it could

       challenge the factual determinations in the consent judgment establishing that



       Court of Appeals of Indiana | Memorandum Decision 45A04-1706-CT-1452 | March 13, 2018   Page 18 of 20
       the child’s injury was unrelated to any daycare activities and summary

       judgment was inappropriate.


[26]   Here, the Jeffreys are seeking additional compensation from the Patient’s

       Compensation Fund and have alleged damages exceeding $250,000. In the

       Settlement Agreement, the Jeffreys stated their intention to pursue additional

       damages from the Patient’s Compensation Fund and included language

       reserving their right to do so. However, similar to State Farm’s ability to

       challenge the consent agreement, the Commissioner, who is not in any way

       bound by the Settlement Agreement, may still challenge at trial whether the

       Jeffreys have met the statutory prerequisites necessary to seek additional

       compensation from the Patient’s Compensation Fund. While it may be

       possible for the Commissioner to demonstrate some of the $150,000 cash

       payment was for non-medical claims, it is also possible, given the language in

       the Settlement Agreement, that none was to be so allocated. However, at this

       stage in the litigation, the record is undeveloped regarding how the Jeffreys

       allocated the cash payment with respect to each of their claims and we decline

       the Commissioner’s invitation to speculate on this issue thereby denying the

       Jeffreys their day in court.


[27]   Finally, from a public policy standpoint, our resolution is consistent with

       Indiana’s general policy of encouraging parties to negotiate and settle their

       disputes. Mendenhall v. Skinner and Broadbent Co., Inc., 728 N.E.2d 140, 145

       (Ind. 2000) (noting the policy of the law is to discourage litigation and

       encourage negotiation and settlement of disputes). If we were to accept the

       Court of Appeals of Indiana | Memorandum Decision 45A04-1706-CT-1452 | March 13, 2018   Page 19 of 20
       Commissioner’s argument that any medical malpractice settlement agreement

       containing an additional claim that does not qualify as “malpractice”

       automatically denies access to the Patient’s Compensation Fund, we would

       discourage the settlement of an entire transaction in one single act and

       incentivize the piecemeal settlement of multiple claims. It seems vastly more

       efficient to settle an entire transaction in one settlement agreement rather than

       require parties to settle their disputes claim by claim. This is especially true

       given the fact the Commissioner may still prove at trial that the Jeffreys’ claims

       do not sound in “malpractice” or that the damages do not meet the statutory

       amount required for access to the Patient’s Compensation Fund.



                                               Conclusion
[28]   A genuine issue of material fact exists as to whether the Jeffreys have met the

       statutory minimum amount necessary to seek additional compensation from the

       Patient’s Compensation Fund and the trial court improvidently entered

       summary judgment in favor of the Commissioner. Accordingly, we reverse the

       trial court’s summary judgment order and remand for further proceedings.


[29]   Reversed and remanded.


       Crone, J., and Bradford, J., concur.




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