South Carolina Supreme Court: Medical Malpractice Statute of Repose Bars Claims for Equitable Indemnity

In Columbia/CSA-HS Greater Columbia Healthcare Sys., LP v. S. Carolina Med. Malpractice Liab. Joint Underwriting Ass’n, 2015 WL 249536 (S.C. Jan. 21, 2015), the Supreme Court of South Carolina affirmed two lower courts’ constructions of the medical malpractice statute of repose and barred a hospital from seeking indemnification from an ER doctor who misdiagnosed a patient, despite a strong dissent by two justices, including Chief Justice Toal.

In May of 1997, patient Arthur Sharpe sought medical treatment in Providence Hospital’s emergency room for chest pains.  Doctors Hayes and Taillon evaluated Sharpe and discharged him with a diagnosis of reflux.  A few days later, Sharpe sought attention elsewhere and was diagnosed with having had a heart attack.  In May of 1999, Sharpe and his wife brought suit against Providence Hospital and only Dr. Hayes for the failed diagnosis, claiming medical malpractice and loss of consortium.  Providence Hospital and the Sharpes settled their dispute in 2004.

In 2007, Providence filed an equitable indemnification action against Dr. Taillon and his medical malpractice insurer, The South Carolina Medical Malpractice Liability Joint Underwriting Association (collectively “Respondents”).  Respondents moved for summary judgment claiming South Carolina’s statute of repose bars the action, which was granted both in circuit court and the court of appeals.

The South Carolina medical malpractice statute of repose provides a six year “absolute time limit” to bringing an action to “recover damages for injury to the person arising out of any medical . . . treatment.”  The three-judge majority reasoned that for Providence to recover under a theory of equitable indemnification, it must prove that Dr. Taillon is liable for causing the damages to Sharpe for injury to his person arising out of a medical treatment.  Seeking to effectuate the intent of the legislature, the court ruled this claim for equitable indemnification falls squarely within the statute of repose as the integral element of the indemnity cause of action is the type of claim contemplated by the statute.

Providence analogized this statute to the construction statute of repose, which includes indemnity claims, and argued that because the medical malpractice statute did not include indemnity claims, they should not be barred.  The court however disagreed with this opinion based on the distinct structures of the two statutes.  The construction statute is written to expressly include categories of claims that are barred whereas the medical malpractice statute is written to exclude categories of claims.  Thus, the court ruled that Providence’s “syncretistic approach . . . is [not] an effective approach to discerning legislative intent” and held that equitable indemnification claims for damages arising from alleged medical malpractice are subject to the medical malpractice statute of repose.

Chief justice Toal, joined by another judge, penned a vigorous dissent stating “[t]he majority’s holding represents a fundamental misunderstanding of the nature of indemnification actions which I fear will have far-reaching effects on the ability to seek indemnification.”  The dissent focuses on the distinction between the medical malpractice action, to which Dr. Taillon was not a party, and the equitable indemnification action.  The dissent is critical of the majority’s blending of the two under claims the theory that an element of equitable indemnification would also show medical malpractice.

The dissent notes that an indemnification claim is to recover amounts an innocent party paid for a third-party’s breach of duty and for the attorney fees arising therefrom.  An indemnification action is not to recover damages for injury to the person as contemplated by the statute of repose.  While Providence must prove the element of liability, the dissent claims one element “is not, by itself, ‘an action  . . . to recover damages for injury to the person,’ but instead it is a component.”  The dissent also agrees with Providence that the General Assembly is capable of expressly including indemnification claims in the statute of repose and would have done so if it intended to.  Thus, the dissent believes that indemnification claims, which are distinct from medical malpractice claims in action, damages, and accrual, should not be barred by the medical malpractice statute of repose.