                                                                              FILED
                                                                          Aug 04 2016, 8:34 am

                                                                              CLERK
                                                                          Indiana Supreme Court
                                                                             Court of Appeals
                                                                               and Tax Court




ATTORNEY FOR APPELLANT                                     ATTORNEYS FOR APPELLEE
Nicholas C. Deets                                          Nelson Nettles
Hovde Dassow & Deets LLC                                   J. Kirk LeBlanc
Indianapolis, Indiana                                      LeBlanc Nettles Davis
                                                           Brownsburg, Indiana

ATTORNEY FOR AMICUS CURIAE
INDIANA TRIAL LAWYERS
ASSOCIATION
Edward B. Mulligan V
Cohen & Malad, LLP
Indianapolis, Indiana



                                            IN THE
    COURT OF APPEALS OF INDIANA

David Shelton, as Personal                                 August 4, 2016
Representative of the Estate of                            Court of Appeals Case No.
Sharon K. Clearwaters,                                     49A02-1601-CT-75
Appellant-Plaintiff,                                       Appeal from the Marion Superior
                                                           Court
        v.                                                 The Honorable James B. Osborn,
                                                           Judge
Kroger Limited Partnership I,                              Trial Court Cause No.
Appellee-Defendant.                                        49D14-1312-CT-43909




Bradford, Judge.



Court of Appeals of Indiana | Opinion 49A02-1601-CT-75 | August 4, 2016                           Page 1 of 12
                                           Case Summary
[1]   In December of 2012, Sharon Clearwaters died as a result of medical

      complications after taking Levofloxacin. In November of 2013, Appellant-

      Plaintiff David Shelton, in his position as personal representative for

      Clearwaters’s estate, filed a proposed complaint with the Indiana Department

      of Insurance (“IDI”) against Appellee-Defendant Kroger Limited Partnership I,

      John Doe, M.D. (“Dr. Doe”) and ABC, Inc. (“ABC”).1 After receiving notice

      from the IDI that only Dr. Doe and ABC were qualified providers under the

      Indiana Medical Malpractice Act (“Medical Malpractice Act”), Shelton filed a

      wrongful death complaint in the trial court against Kroger, Dr. Doe and ABC.

      In this complaint, Shelton alleged that in light of other medications which

      Clearwaters took in connection with a chronic heart condition, Dr. Doe and

      ABC were negligent in prescribing Clearwaters with Levofloxacin and Kroger,

      the pharmacy which filled the prescription, was negligent in filling the

      prescription. Dr. Doe and ABC were eventually dismissed from the underlying

      trial court action after settling with Shelton.


[2]   Following the dismissal of Dr. Doe and ABC, Kroger sought and received

      permission to amend its answer to Shelton’s complaint to assert a non-party




      1
        ABC is Dr. Doe’s employer. Dr. Doe and ABC were named anonymously in the trial court
      action as required by the Indiana Medical Malpractice Act. See Ind. Code § 34-18-8-7. We will
      therefore refer to Dr. Doe and ABC in their anonymous form.



      Court of Appeals of Indiana | Opinion 49A02-1601-CT-75 | August 4, 2016           Page 2 of 12
      defense as to Dr. Doe and ABC. Kroger also filed a motion for partial

      summary judgment in which it sought a judicial ruling that it was entitled to a

      credit or set-off for Shelton’s settlement with Dr. Doe and ABC. Shelton

      opposed Kroger’s motion, arguing that under the Indiana Comparative Fault

      Act, Kroger was not entitled to a credit or set-off and that Kroger’s only remedy

      was to name Dr. Doe and ABC as non-parties and to ask the jury to apportion

      them fault. The trial court subsequently issued an order granting Kroger’s

      motion for partial summary judgment. Concluding that the trial court erred in

      granting Kroger’s motion for partial summary judgment, we reverse and

      remand the matter to the trial court with instructions.



                             Facts and Procedural History
[3]   The underlying facts leading to this appeal are largely undisputed. These facts

      demonstrate that Clearwaters visited Dr. Doe on December 12, 2012,

      complaining of head and chest congestion, a dry cough, a low-grade fever, and

      chills. Upon examining Clearwaters, Dr. Doe diagnosed her with acute

      bronchitis. Despite knowing that Clearwaters suffered from a chronic heart

      condition for which she was taking Amiodarone and Warfarin, Dr. Doe

      prescribed Clearwaters with Levofloxacin.2 Dr. Doe called the prescription for

      the Levofloxacin into a Kroger pharmacy, which filled the prescription. On



      2
        Levofloxacin is known by those in the medical profession to be contraindicated for a patient
      also taking Amiodarone and Warfarin due to the potential for a drug interaction which would
      take the patient’s heart out of rhythm.

      Court of Appeals of Indiana | Opinion 49A02-1601-CT-75 | August 4, 2016            Page 3 of 12
      December 12, 2012, Clearwaters went into cardiopulmonary arrest and died

      after taking the Levofloxacin.


[4]   On November 21, 2013, Shelton, in his position as personal representative for

      Clearwaters’s estate, filed a proposed complaint for damages with the IDI

      against Kroger, Dr. Doe and ABC. On December 11, 2013, the IDI notified

      Shelton that Dr. Doe and ABC were qualified providers under the Medical

      Malpractice Act. After being notified that Kroger was not a qualified medical

      provider subject to the Medical Malpractice Act, Shelton filed a wrongful death

      complaint in the trial court against Kroger, Dr. Doe and ABC.


[5]   In August of 2014, Dr. Doe and ABC agreed to settle Shelton’s claims,

      providing Shelton access to the Indiana Patients Compensation Fund (“IPCF”).

      Shelton then filed a petition for payment from the IPCF. Shelton subsequently

      settled his claims against Dr. Doe, ABC, and the IPCF after which the action

      pending before the IDI was dismissed with prejudice. On November 21, 2014,

      Dr. Doe and ABC were dismissed from the underlying trial court action.


[6]   Following the dismissal of Dr. Doe and ABC, Kroger moved it amend its

      answer to Shelton’s complaint to assert a non-party defense as to Dr. Doe and

      ABC. Kroger’s amended answer asserted the following: “Any damages

      claimed by the Plaintiff were solely caused by the negligent acts of the following

      non-parties: [ABC] and [Dr. Doe].” Appellant’s App. p. 37. The trial court

      granted Kroger’s request on December 30, 2014.




      Court of Appeals of Indiana | Opinion 49A02-1601-CT-75 | August 4, 2016   Page 4 of 12
[7]   On June 11, 2015, Kroger filed a motion for partial summary judgment in

      which it sought a judicial ruling that it was entitled to a credit or set-off for

      Shelton’s settlement with Dr. Doe, ABC, and the IPCF. Shelton opposed

      Kroger’s motion, arguing that under Indiana’s Comparative Fault Act, Kroger

      was not entitled to a credit or set-off and that Kroger’s only remedy was to

      name Dr. Doe and ABC as non-parties and to ask the jury to apportion them

      fault. The trial court subsequently issued an order granting Kroger’s motion for

      partial summary judgment. This interlocutory appeal follows.



                                  Discussion and Decision
                                     A. Standard of Review
[8]           The standard of review for a partial summary judgment is the
              same as that used in the trial court: summary judgment is
              appropriate only where the evidence shows that there is no
              genuine issue of material fact and that the moving party is
              entitled to judgment as a matter of law. Allen v. Great American
              Reserve Ins. Co., 766 N.E.2d 1157, 1161 (Ind. 2002). Where the
              challenge to the trial court’s summary judgment ruling presents
              only legal issues, not factual ones, the issues are reviewed de novo.
              Robertson v. B.O., 977 N.E.2d 341, 343 (Ind. 2012). Similarly, a
              question of statutory interpretation is subject to our de novo
              review. Pinnacle Prop. Dev. Grp., LLC v. City of Jeffersonville, 893
              N.E.2d 726, 727 (Ind. 2008).


      Ballard v. Lewis, 8 N.E.3d 190, 193 (Ind. 2014) (emphasis on words “de novo” in

      original). “When examining a statutory provision, we look at the statute as a

      whole and give common and ordinary meaning to the words employed.”


      Court of Appeals of Indiana | Opinion 49A02-1601-CT-75 | August 4, 2016      Page 5 of 12
      Mendenhall v. Skinner & Broadbent Co., 728 N.E.2d 140, 142 (Ind. 2000) (citing

      Robinson v. Wroblewski, 704 N.E.2d 467 (Ind. 1998)). “The term ‘may’ in a

      statute generally indicates a permissive condition.” Id. (citing Haltom v. Bruner

      & Meis, Inc., 680 N.E.2d 6 (Ind. Ct. App. 1997)).


               B. The Traditional Common Law Rule and the
                          Comparative Fault Act
[9]           Indiana courts have traditionally followed the one satisfaction
              principle. By this we have meant that courts should take account
              of settlement agreements and credit the funds received by the
              plaintiff through such agreements, pro tanto, toward the judgment
              against a co-defendants. The principle behind this credit is that
              the injured party is entitled to only one satisfaction for a single
              injury and the payment by one joint tortfeasor inures to the
              benefit of all. Sanders v. Cole Mun. Fin., 489 N.E.2d 117 (Ind. Ct.
              App. 1986). This policy was articulated, of course, long before
              enactment of the Comparative Fault Act.
                                               ****
              The Comparative Fault Act, Ind. Code § 34-51-2-1, applies
              generally to damages actions based in fault that accrued on or
              after January 1, 1985. The primary objective of the Act was to
              modify the common law rule of contributory negligence under
              which a plaintiff was barred from recovery where he was only
              slightly negligent. Indianapolis Power v. Brad Snodgrass, Inc., 578
              N.E.2d 669 (Ind. 1991). The Act seeks to achieve this result
              through proportional allocation of fault, ensuring that each
              person whose fault contributed to cause injury bears his or her
              proportionate share of the total fault contributing to the injury.
              See Bowles v. Tatom, 546 N.E.2d 1188 (Ind. 1989).

              Under Indiana’s comparative fault scheme, a named defendant
              may assert a “nonparty” defense, seeking to attribute fault to a
              nonparty rather than to the defendant. Ind. Code [ ] § 34-51-2-14

      Court of Appeals of Indiana | Opinion 49A02-1601-CT-75 | August 4, 2016   Page 6 of 12
               [ ]. When a defendant asserts this defense, the court instructs the
               jury to determine the percentage of fault of each party and “any
               person who is a nonparty.” Ind. Code [ ] § 34-51-2-7(b)(1) [ ]. A
               nonparty is: “a person who caused or contributed to cause the
               alleged injury, death, or damage to property but who has not
               been joined in the action as a defendant.” Ind. Code [ ] § 34-6-2-
               88 [ ]. A defendant must affirmatively plead the nonparty
               defense, and the defendant carries the burden of proof on the
               defense. Ind. Code [ ] § 34-51-2-15 [ ].


       Id. at 141-42 (emphasis on words “pro tanto” added, brackets added, footnotes

       omitted). In Mendenhall, the Indiana Supreme Court held that the Comparative

       Fault Act is best served by a rule that obliges defendants to name the settling

       nonparty if they are to seek “credit” or apportionment of fault at trial. Id. at

       144.


[10]   In R.L. McCoy, Inc. v. Jack, the Indiana Supreme Court expanded upon its

       holding in Mendenhall, providing as follows:


               We have previously stated that credits, at common law, were a
               tool to avoid overcompensation of plaintiffs. [Mendenhall, 728
               N.E.2d at 143-44]. Equally important, credits were a tool to
               avoid a single defendant’s bearing too much responsibility for the
               plaintiff’s damages. These rules were developed in the pre-
               comparative fault era of joint and several liability. Under that
               common law regime, each defendant whose negligence
               contributed to the plaintiff’s loss was liable for the entire amount
               of damages. Without credits for settlement payments by the
               other defendants, a defendant could be liable for an amount
               greatly in excess of its fair share, and the result was to
               overcompensate the plaintiff. There were no nonparty defenses,
               and the jury was not aware of an absent tortfeasor’s settlement.
               Credits insured that the defendants at trial would not have to pay

       Court of Appeals of Indiana | Opinion 49A02-1601-CT-75 | August 4, 2016    Page 7 of 12
        more than their collective share of liability, and overcompensate
        the plaintiff, simply because the jury was unable to consider the
        fault of others.

        In 1985, Indiana’s comparative fault system addressed these
        problems in two respects. First, it replaced joint and several
        liability with several liability, leaving each defendant responsible
        only for its share of the total liability. Control Techniques, Inc. v.
        Johnson, 762 N.E.2d 104, 109 (Ind. 2002); Matthew Bender, 2
        Comparative Negligence § 13.30[3][c] (2001) (“The Indiana
        statute expressly incorporates several liability.”). Second, it
        permitted the assertion of a nonparty defense, allowing a
        defendant to prove the negligence of an absent or settling
        tortfeasor. I.C. § 34-51-2-15. Thus the jury’s apportionment of
        fault now provides a more complete picture of the relative
        responsibility for the plaintiff’s injuries.

        All of this led us in Mendenhall to hold that credits were no longer
        warranted in cases where the remaining defendant at trial did not
        assert a nonparty defense against a settling tortfeasor. In
        Mendenhall we pointed out that the remaining defendant in that
        case already had “a potent tool” to limit its liability—the
        nonparty defense. Mendenhall, 728 N.E.2d at 144. Allowing that
        defendant to resort to a common law doctrine to further reduce
        its liability made little sense “in light of the modernization of tort
        law represented by the adoption of comparative negligence.”
        Bender, supra, at § 13.50[2][a] (discussing the common law rule
        of releases that the release of one amounted to the release of all
        defendants). That same logic applies in this case as well.

        As one treatise notes:

                 If defendants are severally but not jointly liable, most
                 of the difficult release problems are avoided. The
                 release of a severally liable defendant, whether
                 executed before trial or after judgment, should have
                 no effect upon the liability of the other defendants.
Court of Appeals of Indiana | Opinion 49A02-1601-CT-75 | August 4, 2016          Page 8 of 12
                        The liability of each defendant stands independently
                        and is unaffected by that of other defendants.

               Id. at § 13.50[2][c] (emphasis added). That treatise notes that
               problems may remain in several liability jurisdictions where the
               fault of absent tortfeasors is not considered. Id. But the nonparty
               defense eliminates those problems in Indiana.


       772 N.E.2d 987, 989-90 (Ind. 2002).


[11]   The Indiana Supreme Court further explained,

               elimination of credit requires the comparative fault defendant to
               pay for its own share, but no more. Nor is the plaintiff
               “overcompensated.” In a comparative fault regime, the notion
               that a plaintiff is overcompensated when he or she settles with a
               defendant for more than a jury later awards takes too narrow a
               view of what a settlement represents. There is no “overpayment”
               if the parties agree on the dollar value of a several liability claim
               against a given defendant, even if a jury reaches a different result.
               A settlement payment normally incorporates an assessment of
               the exposure to liability. But a settlement also reflects several
               other considerations, including the parties’ desires to avoid the
               expense and effort of litigation and the tactical effect of
               eliminating a defendant and its counsel from trial. In McDermott,
               Inc. v. AmClyde & River Don Castings Ltd., 511 U.S. 202, 215, 114
               S.Ct. 1461, 128 L.Ed.2d 148 (1994), the United States Supreme
               Court rejected a pro tanto rule in admiralty tort cases in favor of a
               proportionate share approach for this reason. It stated:

                        The law contains no rigid rule against
                        overcompensation.... [W]e must recognize that
                        settlements frequently result in the plaintiff’s getting
                        more than he would have been entitled to at trial.
                        Because settlement amounts are based on rough
                        estimates of liability, anticipated savings in litigation

       Court of Appeals of Indiana | Opinion 49A02-1601-CT-75 | August 4, 2016      Page 9 of 12
                        costs, and a host of other factors, they will rarely
                        match exactly the amounts a trier of fact would have
                        set. It seems to us that a plaintiff’s good fortune in
                        striking a favorable bargain with one defendant gives
                        other defendants no claim to pay less than their
                        proportionate share of the total loss.

               Id. at 219-20, 114 S.Ct. 1461. Our comparative fault system
               contemplates similar results. See Bender, supra, at § 13.50[2][c]
               (in several liability systems, “[t]he risks of settlement are borne
               solely by the settling parties”). McCoy received the peace of
               mind of eliminating the litigation. And although the Jacks
               received more compensation for McCoy’s liability than they
               would have at trial, they also bore the risk of receiving less. The
               point is that the settlement between McCoy and the Jacks had no
               bearing on Johnson’s obligation to pay according to its liability,
               as determined by the jury. As Mendenhall put it, a defendant who
               wants to limit its liability at trial has the tool to do so: the
               nonparty defense.


       Id. at 990-91.


           C. Applicability of the Comparative Fault Act to the
                              Instant Matter
[12]   Shelton contends that the trial court erred in granting summary judgment in

       favor of Kroger. In making this contention, Shelton argues that under Indiana’s

       Comparative Fault Act, Kroger was not entitled to receive a credit or set-off in

       relation to Shelton’s settlement with Dr. Doe, ABC, and the IPCF. Shelton

       further argues that the only way by which Kroger could seek to limit its

       potential liability at trial would be to name Dr. Doe and ABC as non-parties

       and to ask the jury to apportion them fault.

       Court of Appeals of Indiana | Opinion 49A02-1601-CT-75 | August 4, 2016   Page 10 of 12
[13]   For its part, Kroger argues that the trial court properly granted its motion for

       partial summary judgment because the Comparative Fault Act does not apply

       to cases involving claims of medical malpractice. In support, Kroger cites to the

       Indiana Supreme Court’s decision in Indiana Department of Insurance v. Everhart,

       960 N.E.2d 129 (Ind. 2012) and our opinion in Palmer v. Comprehensive

       Neurologic Services, P.C., 864 N.E.2d 1093 (Ind. Ct. App. 2007). As is discussed

       in both Everhart and Palmer, Indiana Code section 34-51-2-1(b)(1) expressly

       states that the Comparative Fault Act does not apply to an action brought

       against a qualified health care provider for medical malpractice. In addition,

       the Indiana Supreme Court held in Everhart that the law allowing for credits and

       set-offs remains good law for cases that involve joint tortfeasors but fall outside

       the Comparative Fault Act. 960 N.E.2d at 139.


[14]   In this case, the IDI determined that Kroger was not a qualified health care

       provider under the Medical Malpractice Act. Kroger, therefore, was not

       exempted from the Comparative Fault Act. As such, both Everhart and Palmer

       can be easily distinguished from the instant matter because in both cases, the

       party seeking the credit or set-off was a qualified health care provider who was

       being sued for malpractice and, thus, was exempt from the Comparative Fault

       Act.


[15]   Because Kroger was not exempted from the Comparative Fault Act, Kroger

       was not entitled to receive a credit or set-off with relation to Shelton’s

       settlement with Dr. Doe, ABC, and the IPCF. See R.L. McCoy, 772 N.E.2d at

       989-91; Mendenhall, 728 N.E.2d at 144-45. As such, we conclude that the trial

       Court of Appeals of Indiana | Opinion 49A02-1601-CT-75 | August 4, 2016      Page 11 of 12
       court erred in granting Kroger’s motion for partial summary judgment and

       reverse the trial court’s order granting said motion. We further instruct the trial

       court that on remand, Kroger may only seek to limit its potential liability

       through its asserted non-party defense.


[16]   The judgment of the trial court is reversed and the matter remanded to the trial

       court with instructions.


       Pyle, J., and Altice, J., concur.




       Court of Appeals of Indiana | Opinion 49A02-1601-CT-75 | August 4, 2016   Page 12 of 12
