                                                                     FILED
                                                                 Feb 07 2017, 9:24 am

                                                                     CLERK
                                                                 Indiana Supreme Court
                                                                    Court of Appeals
                                                                      and Tax Court



ATTORNEYS FOR APPELLANTS                                   ATTORNEY FOR APPELLEE
Danny E. Glass                                             Nicholas C. Deets
Andrew E. Skinner                                          Indianapolis, Indiana
Evansville, Indiana

Clay A. Edwards
Chad J. Bradford
Louisville, Kentucky

Lonnie D. Johnson
Michelle R. Adams
Stacy F. Thompson
Bloomington, Indiana

Rick L. Weil
Indianapolis, Indiana


                                            IN THE
    COURT OF APPEALS OF INDIANA

ABC Radiology, P.C., Jane Doe,                             February 7, 2017
John Doe, Anonymous Medical                                Court of Appeals Case No.
Associates, Inc., Sherry Patrick,                          49A05-1602-CT-446
Appellants-Defendants,                                     Appeal from the Marion Superior
                                                           Court
        v.                                                 The Honorable Michael D. Keele,
                                                           Judge
Cathy Gearhart,                                            Trial Court Cause No.
Appellee-Plaintiff                                         49D07-1509-CT-30343




Court of Appeals of Indiana | Opinion 49A05-1602-CT-446 | February 7, 2017               Page 1 of 14
      Altice, Judge.


                                                  Case Summary


[1]   Cathy Gearhart’s husband, Kent, died from renal cell cancer on January 14,

      2015. After filing her proposed complaint for damages with the Indiana

      Department of Insurance, Gearhart, individually and as personal representative

      of Kent’s estate, filed the instant action against various defendants. As

      amended, the complaint alleges two counts based on claims of negligence and

      one count seeking declaratory judgment. Count I is a medical malpractice

      claim against ABC Radiology, P.C. (ABC), John Doe, M.D. (Dr. Doe),

      Anonymous Medical Associates, Inc. (AMA), and Jane Doe, ACNP (Nurse

      Doe). Count II is a common-law negligence claim against Sherry Patrick and

      her employer, AMA. Count III (incorrectly denominated as a second Count II

      in the amended complaint) is a claim for declaratory judgment against the

      Indiana Patients Compensation Fund/Indiana Department of Insurance (the

      Fund), AMA, Patrick, and AMA’s medical malpractice and general liability

      insurers.1 Count III seeks a determination of whether the claim in Count II is

      subject to the Indiana Medical Malpractice Act (the Act), which insurance




      1
       There appears to be some disagreement regarding which parties were named as defendants in Count III.
      The parties agree, however, that the Fund is a proper party to the declaratory judgment claim, as well as the
      various insurers. We find that AMA and Patrick were incorporated by reference as defendants in paragraph
      32 of the complaint.

      Court of Appeals of Indiana | Opinion 49A05-1602-CT-446 | February 7, 2017                        Page 2 of 14
      policies provide coverage for this claim, and whether the Fund has a duty to

      make payments for any damages awarded for Count II.


[2]   Gearhart filed the complaint in the Marion Superior Court. Thereafter, the

      defendants named in Counts I and II (Defendants) jointly filed a motion

      requesting that the trial court sever Counts I and II from Count III and transfer

      venue of Counts I and II to Vanderburgh County, where the alleged negligence

      occurred and Defendants are located.2 Defendants argued further that Count

      III was improperly joined.


[3]   Gearhart responded that Marion County was a county of preferred venue

      because a necessary defendant to the action – the Fund – is a governmental

      organization with its principal office located there. See Ind. Trial Rule 75(A)(5).

      Gearhart argued also that all three counts were properly joined pursuant to Ind.

      Trial Rule 20 because they arise out of the same transaction or occurrence and

      have common questions of law and fact. Following a hearing, the trial court

      denied the motion. Defendants bring this interlocutory appeal, arguing that

      Gearhart’s joinder of the underlying negligence claims with the declaratory

      judgment claim was improper and deprived Defendants of their right to trial in

      a preferred venue county. Thus, we are asked to determine whether the trial

      court abused its discretion in denying Defendants’ motion to sever Counts I and

      II from Count III and transfer venue for those counts to Vanderburgh County.




      2
          Gearhart resides in Warrick County, which is adjacent to Vanderburgh County.


      Court of Appeals of Indiana | Opinion 49A05-1602-CT-446 | February 7, 2017         Page 3 of 14
[4]   We affirm.3


                                        Facts & Procedural History


[5]   When Kent was diagnosed with renal cell cancer in July 2009, Dr. Doe – a

      urologist associated with AMA – became his treating physician. Dr. Doe

      removed Kent’s right kidney shortly after the diagnosis. Thereafter, Kent

      continued to see Dr. Doe or another member of the practice for routine follow-

      up about every six months.


[6]   On September 13, 2013, Dr. Doe ordered a routine CT scan of Kent’s chest,

      abdomen, and pelvis. A radiologist employed by ABC interpreted the scans

      and reported that there was a 2.6 cm mass in the left kidney. The radiologist

      recommended further evaluation of the mass. There was no follow-up by Dr.

      Doe or AMA regarding this report, and Kent was not made aware of the

      results. Kent saw Nurse Doe, a nurse practitioner with AMA, in March 2014

      for another routine follow-up with no mention of the abnormalities seen in the

      September 2013 scans.


[7]   On September 23, 2014, Kent saw another nurse practitioner with AMA for

      complaints of bright red urine. This nurse noted the findings from the

      September 2013 scans and immediately ordered follow-up CT scans. These

      scans revealed that the mass on Kent’s left kidney had grown. The cancer had




      3
        We held oral argument in this matter in Indianapolis on January 19, 2017, and we extend our appreciation
      to counsel for their presentations.

      Court of Appeals of Indiana | Opinion 49A05-1602-CT-446 | February 7, 2017                     Page 4 of 14
      also spread to several lymph nodes and his liver. Following a PET/CT scan on

      October 1, 2014, Kent was diagnosed with terminal renal cell cancer to which

      he succumbed on January 16, 2015.


[8]   Gearhart filed her proposed complaint for damages with the Indiana

      Department of Insurance, alleging the medical malpractice of Dr. Doe, Nurse

      Doe, AMA, and ABC. Thereafter, on August 5, 2015, Dr. Doe was deposed by

      Gearhart’s counsel. Dr. 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 upon receiving the report. As a result, the

      report was not forwarded to Dr. Doe or put on his list of items that needed

      follow-up. Dr. Doe testified that the error was purely clerical/administrative

      and did not involve the exercise of medical skill or judgment.


[9]   On September 11, 2015, Gearhart filed her complaint for damages and for

      declaratory judgment in the Marion Superior Court. The complaint was

      amended the following month and alleged three counts as set out above.

      Counts I and II were for damages resulting from the negligence of Defendants –

      medical malpractice and common law negligence, respectively alleged. Count

      III sought a declaratory judgment determining whether the claim in Count II,

      involving the data entry error, was subject to the Act. In this regard, Gearhart

      pointed to Preferred Prof’s Ins. Co. v. West, 23 N.E.3d 716 (Ind. Ct. App. 2014),

      trans. denied, for the proposition that clerical or administrative errors that do not

      involve the exercise of medical judgment or skill by the medical provider are

      matters of common-law negligence not subject to the Act.

      Court of Appeals of Indiana | Opinion 49A05-1602-CT-446 | February 7, 2017   Page 5 of 14
[10]   On November 19, 2015, Defendants filed their joint motion in which they asked

       the trial court to either dismiss Counts I and II or sever them from Count III

       and transfer venue of Counts I and II to Vanderburgh County. After Gearhart

       filed a response to the motion, the trial court scheduled the matter for oral

       argument on January 27, 2016. The trial court denied the motion on February

       4, 2016, and Defendants now appeal. This is an interlocutory appeal as of

       right. Ind. Appellate Rule 14(A)(8).


                                              Standard of Review


[11]   This case boils down to a determination of whether the declaratory judgment

       claim involving the Fund in Count III was properly joined with the tort claims

       in Counts I and II against Defendants. Determinations regarding joinder rest

       within the trial court’s discretion and will be reversed on appeal only for an

       abuse of that discretion. United of Omaha v. Hieber, 653 N.E.2d 83, 87 (Ind. Ct.

       App. 1995), trans. denied.


                                            Discussion & Decision


[12]   Defendants argue that misjoinder of the tort counts with the declaratory

       judgment count impermissibly deprived Defendants of their right to trial in a

       preferred venue county. They ask that we order the tort claims severed from

       the declaratory judgment claim and transferred to Vanderburgh County, leaving

       only the declaratory judgment action in Marion County.


[13]   T.R. 20(A)(2) provides for permissive joinder of defendants as follows:


       Court of Appeals of Indiana | Opinion 49A05-1602-CT-446 | February 7, 2017   Page 6 of 14
               All persons may be joined in one [1] action as defendants if there
               is asserted against them jointly, severally, or in the alternative,
               any right to relief in respect of, or arising out of, the same
               transaction, occurrence, or series of transactions or occurrences
               and if any question of law or fact common to all defendants will
               arise in the action.


       T.R. 20(A) also provides:


               A … defendant need not be interested in … defending against all
               the relief demanded. Judgment may be given … against one or
               more defendants according to their respective liabilities.
               Unwilling plaintiffs who could join under this rule may be joined
               by a plaintiff as defendants, and the defendant may make any
               persons who could be joined under this rule parties by alleging
               their interest therein with a prayer that their rights in the
               controversy be determined, along with any counterclaim or cross-
               claim against them, if any, as if they had been originally joined as
               parties.


       The purpose of T.R. 20(A) is to promote trial convenience, expedite claims, and

       avoid multiple lawsuits. Hieber, 653 N.E.2d at 87 (citing McCoy v. Like, 511

       N.E.2d 501, 503 (Ind. Ct. App. 1987), trans. denied). To accomplish these goals,

       Indiana courts give T.R. 20(A) the broadest possible reading. Id. This is

       especially true in light of the fact that T.R. 20(B) and Ind. Trial Rule 42(B)

       allow for separate trials after all parties have been joined. Hieber, 653 N.E.2d at

       87.


[14]   To join defendants under T.R. 20(A), three requisites must be met. First, a

       right of relief must be asserted against the defendants jointly, severally, or in the



       Court of Appeals of Indiana | Opinion 49A05-1602-CT-446 | February 7, 2017   Page 7 of 14
       alternative. Russell v. Bowman, Heintz, Boscia & Vician, P.C., 744 N.E.2d 467, 472

       (Ind. Ct. App. 2001), trans. denied.


[15]   Second, and most importantly, the claims must have arisen out of the same

       transaction, occurrence, or series of transactions or occurrences. Id. In this

       regard, we apply the logical relationship test (also applied in the context of

       compulsory counterclaims under Trial Rule 13(A)): “all logically related events

       entitling a person to institute a legal action against another generally are

       regarded as comprising a transaction or occurrence.” Russell, 744 N.E.2d at

       472. In the related context of T.R. 13(A) we have explained:

               The phrase “transaction or occurrence” should be broadly
               defined so as to effectuate the rule’s intended purpose of avoiding
               multiple lawsuits between the same parties arising from the same
               event or events. Two causes of action arise from the same
               transaction or occurrence if there is a logical relationship between
               them, meaning that the counterclaim arises from the same
               aggregate set of operative facts as the opposing party’s claim.


       Ratcliff v. Citizens Bank of W. Indiana, 768 N.E.2d 964, 967 (Ind. Ct. App. 2002),

       trans. denied.


[16]   The third and final requirement for T.R. 20(A) joinder is that there is at least

       one common question of law or fact among the parties. Id. In other words, the

       rule does not require that every question of law or fact in the action be common

       among the parties. Id.




       Court of Appeals of Indiana | Opinion 49A05-1602-CT-446 | February 7, 2017   Page 8 of 14
[17]   Defendants focus their appellate argument on the second requirement and

       provide no analysis regarding the other two. Accordingly, we confine our

       analysis to a determination of whether the tort claims and the declaratory

       judgment claim arise out of the same transaction or occurrence.


[18]   In this regard, Defendants assert that federal and state courts throughout the

       country have routinely held that a declaratory judgment action does not arise

       out of the same transaction or occurrence as the underlying tort action for

       purposes of permissive joinder. See Cramer v. Walley, 2015 WL 3968155, at *4

       (D.S.C. June 30, 2015) (“The weight of authority holds that claims for negligent

       operation of an automobile do not arise from the same transaction or

       occurrence as a subsequent claim against an insurer or a declaratory judgment

       action involving coverage questions, and therefore cannot be joined under

       Fed.R.Civ.P. 20.”); St. Paul Fire & Marine Ins. Co. v. Mannie, 91 F.R.D. 219, 221

       (D.C.N.D. 1981) (“The terms of the policy and their application to a given set

       of facts is a question entirely separate from the question of Larry Mannie’s

       alleged negligence”); Colonial Penn Ins. Co. v. Hart, 291 S.E.2d 410, 414 (Ga.

       App. 1982) (injured party’s claim against tortfeasor’s insurer could not be

       maintained as a compulsory counterclaim in insurer’s declaratory judgment

       action because “the insurer’s contractual liability under a given set of facts and

       the insured’s tort liability are fundamentally distinct issues” and the tort claim

       “did not arise out of the transaction or question presented by the action for

       declaratory judgment”). Defendants also provide a string cite on pages 12 and

       13 of their appellate brief that was obtained from footnote 3 in Mannie, 91


       Court of Appeals of Indiana | Opinion 49A05-1602-CT-446 | February 7, 2017   Page 9 of 14
       F.R.D. at 221. These cases were cited in Mannie for the proposition (a narrower

       proposition than argued by Defendants here) that “the emerging majority

       rule…disallows joinder of a negligence claim against the insurer in a

       declaratory judgment action where the forum state does not allow direct actions

       against insurers.” Id.


[19]   None of the cases cited by Defendants involve a situation like the one presented

       here where the injured party filed a declaratory judgment action against the

       alleged tortfeasors’ insurers within the same complaint as the tort claims. 4

       More importantly, the declaratory judgment in those cases involved typical

       insurance coverage issues and not a determination of whether a medical

       malpractice act applied. Accordingly, we do not find these cases from other

       jurisdictions particularly helpful.


[20]   Defendants also observe that it is the policy in Indiana to keep the issue of

       insurance out of personal injury litigation. Allstate Ins. Co. v. Keltner, 842

       N.E.2d 879, 884 (Ind. Ct. App. 2006). Thus, the general practice of insurance

       companies is to file separate declaratory judgment actions to determine

       coverage outside of the principal tort cases. Cromer v. Sefton, 471 N.E.2d 700,

       704 (Ind. Ct. App. 1984). Again, however, we observe that while this general




       4
         The vast majority of the cases cited by Defendants involve a declaratory judgment action filed by the insurer
       and the injured party’s subsequent attempt to file a counterclaim based in tort. Although Cramer involved a
       complaint asserting both a tort claim and a declaratory judgment claim, the declaratory judgment claim was
       filed against the plaintiff’s insurer for bad faith, not the tortfeasor’s insurer.

       Court of Appeals of Indiana | Opinion 49A05-1602-CT-446 | February 7, 2017                       Page 10 of 14
       policy is applicable to traditional insurance coverage disputes, it is not

       necessarily applicable to determinations of whether the Act applies.


[21]   Though not presented in precisely the same procedural context, we find West,

       23 N.E.3d 716, helpful to our consideration of the issue presented. There are

       factual complexities in West which are not necessary to address for our

       purposes. It suffices to say that the plaintiffs filed a complaint for negligence in

       the St. Joseph Circuit Court against various healthcare defendants and, at the

       same time, filed a proposed complaint for damages with the Indiana

       Department of Insurance. While the case was pending before the medical

       review panel, the plaintiffs filed a motion for a preliminary determination of

       law, asking the St. Joseph court to determine whether their claims were covered

       by the Act. The Fund requested and was granted permission to intervene. The

       Fund sided with the plaintiffs in arguing that the Act did not apply, and the

       defendant opposed a preliminary determination of law. The St. Joseph court

       declined to exercise its statutory authority to make a preliminary determination

       on the issue of law.5


[22]   About a month later, the plaintiffs filed a separate complaint for declaratory

       judgment in the Marion Superior Court, naming as defendants the Fund and

       the insurers of the healthcare defendants in the St. Joseph action. This action




       5
         The Act, specifically Ind. Code § 34-18-11-1, provides a trial court, under certain circumstances and before
       the medical review panel issues its opinion, with authority to “preliminarily determine an affirmative defense
       or issue of law or fact that may be preliminarily determined under the Indiana Rules of Procedure”.

       Court of Appeals of Indiana | Opinion 49A05-1602-CT-446 | February 7, 2017                       Page 11 of 14
       sought a determination of whether the plaintiffs’ allegations in the St. Joseph

       action fell within the provisions of the Act or instead stated a common-law

       action outside of the Act. The insurance defendants filed a motion to dismiss

       the declaratory judgment complaint under Ind. Trial Rule 12(B)(8), arguing that

       the same action was pending in the St. Joseph court. The Marion Superior

       Court denied the motion to dismiss and thereafter issued its declaratory

       judgment. The court determined, based on the plaintiffs’ allegations, that the

       claims constituted claims of common-law negligence and not medical

       malpractice as a matter of law.


[23]   On appeal, we discussed Indiana’s Uniform Declaratory Judgments Act and

       noted that its stated purpose is “to settle and to afford relief from uncertainty

       and insecurity with respect to rights, status and other legal relations”. I.C. § 34-

       14-1-12. Accordingly, it is to be liberally construed and administered. Id. “The

       test to determine the propriety of declaratory relief is whether the issuance of

       declaratory judgment will effectively solve the problem involved, whether it will

       serve a useful purpose, and whether another remedy is more effective or

       efficient.” West, 23 N.E.3d at 724.


[24]   Under the facts of the case, we found that a declaratory judgment was

       permissible and appropriate. We explained:

               In this case, the [Act] affects the rights, status, and legal relations
               of the parties. The issue of the applicability of the [Act] to the
               claims alleged by the Wests is a question for which an early
               determination is necessary in order to avoid the delay and
               expense of proceeding under inapplicable procedural and

       Court of Appeals of Indiana | Opinion 49A05-1602-CT-446 | February 7, 2017   Page 12 of 14
               substantive rules, whether that be the [Act] or a common law
               negligence case. Such a determination in the context of this case
               is useful to narrow the issues and determine the path of the case;
               it determines when the case can be tried, the applicable theories
               and defenses, including expert testimony, and available limits of
               liability. Furthermore, as noted by the Marion County trial court,
               a resolution of the applicability of the [Act] by declaratory
               judgment is necessary in order for any possible resolution by
               settlement to occur.


       Id. at 724-25. We continued, “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.” Id.


[25]   West highlights the importance of a preliminary determination of the Act’s

       application to the underlying claims of negligence. 6 We find that this

       determination is uniquely bound up with the underlying claims in a way that

       traditional insurance coverage disputes are not. Accordingly, we hold that a

       declaratory judgment action addressing the application of the Act arises out of

       the same transaction or occurrence (i.e. the alleged negligent act(s)) as the tort

       claims. In other words, the two are logically related and allowing permissive




       6
         The court in West determined that the separate declaratory judgment action filed in Marion County was not
       subject to dismissal under T.R. 12(B)(8) because the “same action” was not pending in St. Joseph County.
       Id. at 725. This holding, however, does not mean that such actions could not be joined in the same court.

       Court of Appeals of Indiana | Opinion 49A05-1602-CT-446 | February 7, 2017                    Page 13 of 14
       joinder in this context effectuates T.R. 20’s intended purpose of promoting trial

       convenience, expediting claims, and avoiding multiple lawsuits. 7


[26]   Defendants have not established that the trial court abused its discretion by

       finding that Counts I, II, and III were properly joined. Thus, as the Fund is a

       necessary party to Count III, Marion County is a county of preferred venue for

       the entire action. See T.R. 75(A)(5).8


[27]   Judgment affirmed.


[28]   Riley, J. and Crone, J., concur.




       7
        Although Count III will be tried earlier than Counts I and II, there are still obvious economies to be
       achieved by keeping the counts within the same lawsuit (that is, before the same court).
       8
         T.R. 75 provides for numerous preferred venues, and there is no priority among the subsections establishing
       preferred venue. See Salsbery Pork Producers, Inc. v. Booth, 967 N.E.2d 1, 5 (Ind. Ct. App. 2012). As
       Defendants conceded at oral argument, this may result in multiple preferred venues for a given case, and a
       motion to transfer venue under T.R. 12(B)(3) cannot be granted if the plaintiff filed the action in one of the
       preferred venues. Salsbery Pork Producers, Inc., 967 N.E.2d at 5. This is true even if another county of
       preferred venue is a more convenient forum. See Am. Family Ins. Co. v. Ford Motor Co., 857 N.E.2d 971, 976
       (Ind. 2006) (“Trial Rule 75(A) does not always produce preferred venue at the most convenient location”);
       Garrison v. Ford, 53 N.E.3d 454, 456 (Ind. Ct. App. 2016).

       Court of Appeals of Indiana | Opinion 49A05-1602-CT-446 | February 7, 2017                       Page 14 of 14
