Justices allow patient to sue physician group, but split over ‘new standard’

Although the Indiana Supreme Court agreed a woman who was injured during physical therapy should be able to proceed with her complaint against her doctors, the justices split over the application of the Restatement (Second) of Torts Section 429, with one justice asserting the majority was applying a new standard that rendered Section 429 redundant.

Darci Wilson unsuccessfully sued her orthopedic physician group, Athletico Ltd., and her physical therapist, Christopher Lingle, after physical therapy treatments reinjured her knee and required her to have more surgery.

The St. Joseph Circuit Court ruled Wilson’s complaint was time-barred and entered summary judgment in favor Athletico and Lingle. Also, the trial court entered summary judgment for the physician group, finding the group could not be held liable for Lingle’s actions without evidence of an employment or contractual relationship between the two.

The Court of Appeals of Indiana affirmed in a memorandum decision in Darci Wilson v. Anonymous Defendant 1, 20A-CT-923.

However, the Indiana Supreme Court reversed the grant of summary judgment in favor of Anonymous Defendant 1 and remanded for further proceedings.

In court filings, the physician group is identified as Anonymous Defendant 1 because a medical review panel has not yet rendered a decision. The Indiana Medical Malpractice Act prohibits the release of any identifying information while the case is under review.

The majority found the case of Sword v. NKC Hospitals, Inc., 714 N.E.2d 142 (Ind. 1999), did not apply because the physician group and the physical therapist did not have an employment, contractual or other defined legal relationship.

“But while Wilson argues that Anonymous held Lingle out as its apparent agent — by allowing Athletico (and Lingle) to share space in its Facility and use its physical therapy forms, and by requiring Wilson to sign an ‘Appointment Policy’ that thanked her for ‘choosing [Anonymous] for your therapy needs’ — Section 429 still requires evidence of some form of legal relationship between the hospital and the practitioner,” Justice Steven David wrote for the majority in Darci Wilson v. Anonymous Defendant 1, 21S-CT-371.

“No such legal relationship exists on this record,” David continued. “Though Anonymous and Accelerated Rehab executed a Staffing Agreement requiring Accelerated Rehab to supply Anonymous with physical therapists, the record does not include any contract between Athletico and Anonymous. And both Anonymous and Athletico denied that Lingle was their employee or agent when Wilson’s injury occurred.”

Yet the majority determined the Restatement (Second) of Agency Section 267 provided another avenue for Wilson’s complaint. Namely, Section 267 does not require a legal relationship to exist between the physician group and the physical therapist.

“We believe our adoption of Section 267 in the medical care context is fair and consistent with a national trend seeking to limit the ability of health care providers to evade potential vicarious liability based on arrangements — whether contractual or informal — that are not readily apparent to the average health care consumer,” David wrote, citing Arrendale v. American Imaging & MRI, LLC, — N.E.3d — No. 21S-CT-370 (Ind. Mar. 24, 2022), and Webster v. CDI Indiana, LLC, 917 F.3d 574, 577 (7^th Cir. 2019).

In a concurring opinion, Justice Geoffrey Slaughter agreed with the majority’s finding that Anonymous Defendant 1 is not entitled to summary judgment. However, he disputed the court had to apply what he described as “a new standard” under section 267.

The justice asserted the majority is embracing a different standard than it used in a companion case, Arrendale.

“The Court notes that the difference between the two standards is that section 429 requires a legal relationship between the principal and apparent agent, while section 267 does not,” Slaughter wrote. “But if this is the only difference, then it is not clear whether a case will ever present a factual scenario in which section 429 applies but section 267 does not. Thus, in adopting section 267, the Court appears to render section 429 redundant.

“Because we can resolve Wilson under section 429, I see no reason to adopt a new standard — especially one that jettisons our prevailing standard in favor of one the parties did not ask us to adopt,” he wrote.