Lake Imaging LLC v. Franciscan Alliance, Inc
Date Filed2023-12-21
Docket22A-CT-02783
Cited0 times
StatusPublished
Full Opinion (html_with_citations)
FILED
Dec 21 2023, 8:24 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEY FOR APPELLANT ATTORNEYS FOR APPELLEE
Robert J. Palmer Libby Yin Goodknight
May Oberfell Lorber Krieg DeVault, LLP
Mishawaka, Indiana Indianapolis, Indiana
Julie A. Rosenwinkel
Shannon L. Noder
Krieg DeValult, LLP
Merrillville, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Lake Imaging, LLC, December 21, 2023
Appellant-Defendant, Court of Appeals Case No.
22A-CT-2783
v. Appeal from the Johnson Superior
Court
Franciscan Alliance, Inc. The Honorable Marla K. Clark,
f/d/b/a Saint Margaret Mercy Judge
Health Care Centers, Trial Court Cause No.
Appellee-Plaintiff 41D04-1810-CT-157
Opinion by Judge Riley.
Judges Bailey and Tavitas concur.
Riley, Judge.
Court of Appeals of Indiana | Opinion 22A-CT-2783 | December 21, 2023 Page 1 of 17
STATEMENT OF THE CASE
[1] Appellant-Defendant, Lake Imaging, LLC (Lake Imaging), appeals the trial
courtâs summary judgment on remand in favor of Appellee-Plaintiff, Franciscan
Alliance, Inc. f/d/b/a Saint Margaret Mercy Health Care Centers (Franciscan),
on Franciscanâs indemnification claim stemming from Lake Imagingâs contract
to provide radiology services to Franciscan. 1
[2] We affirm.
ISSUES
[3] In its appeal after remand, Lake Imaging presents this court with two issues,
which we restate as follows:
(1) Whether the trial court properly declined to apply the two-year statute of
limitations period, as included in the Professional Services Statute (PSS),
Ind. Code § 34-1-2-3, to Franciscanâs indemnity claim; and
(2) Whether the trial court properly entered summary judgment in
Franciscanâs favor on its indemnification claim.
FACTS AND PROCEDURAL HISTORY
[4] Between 2004 and 2011, Lake Imaging was a qualified healthcare provider, as
defined in the Medical Malpractice Act (MMA), who provided radiology
1
The trial court also entered summary judgment against defendant, ProAssurance Indemnity Co.
(ProAssurance), and in favor of Franciscan on the partiesâ cross-claims for a declaratory judgment on
insurance coverage. ProAssurance elected not to appeal that ruling.
Court of Appeals of Indiana | Opinion 22A-CT-2783 | December 21, 2023 Page 2 of 17
services to Franciscanâs patients. Pursuant to the Agreement, effective January
1, 2004, Lake Imaging agreed to âindemnify and hold [Franciscan] harmless
from any liability claimed as a result of [Lake Imagingâs] negligence in the
provisions of services undertaken under this [A]greement.â (Appelleeâs App.
Vol. II, p. 36).
[5] Joseph Shaughnessy (Shaughnessy) was a patient at Franciscan in April 2011.
While in Franciscanâs care, Lake Imagingâs radiologists interpreted two CT
scans performed on Shaughnessy. Shaughnessy passed away on April 25, 2011.
It was later discovered that Lake Imagingâs employed radiologists had missed
the presence of a right-sided subdural hematoma on the CT scans. Just under
two years laterâon April 10, 2013âShaughnessyâs sons (the Shaughnessys)
filed a proposed medical malpractice complaint with the Department of
Insurance (DOI) against Franciscan and other providers, alleging that negligent
medical care resulted in Shaughnessyâs death. Lake Imaging was not named in
the proposed complaint. During discovery, one of the named providers
divulged that Lake Imagingâs radiologists had failed to report the presence of a
right-sided hematoma on Shaughnessyâs CT scans. The Shaughnessys
subsequently amended their proposed complaint to pursue a vicarious liability
claim against Franciscan based on the radiologistsâ negligence. Because the
two-year statute of limitations for medical malpractice claims under the MMA
had expired by then, the Shaughnessys could not name Lake Imaging or its
employed radiologists as defendants in their amended proposed complaint.
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[6] On January 29, 2014, Franciscan notified Lake Imaging of its intent to seek
indemnification pursuant to the Agreement. Lake Imaging did not respond.
On July 21, 2016, Franciscan sent correspondence to Lake Imaging and its
insurance company, ProAssurance Indemnity Co. (ProAssurance), offering to
tender the defense in the medical malpractice lawsuit instigated by the
Shaughnessys. Franciscan advised that it intended to settle the lawsuit
premised solely on the negligence of Lake Imagingâs radiologists and to pursue
indemnification against Lake Imaging unless it received written notice within
twenty days that ProAssurance intended to assume the defense or objected to
Franciscan settling the matter. While Lake Imaging did not respond,
ProAssurance responded on August 9, 2016, rejecting Franciscanâs tender and
instructing Franciscan to use its âown judgment regarding the advisability of
settling [the lawsuit].â (Appelleeâs App. Vol. III, pp. 110-11). Franciscan
settled with the Shaughnessys on September 25, 2016.
[7] On July 17, 2018, Franciscan filed its Complaint against Lake Imaging, alleging
breach of contract for Lake Imagingâs failure to provide competent medical care
and for failure to indemnify Franciscan. Franciscan also sought a declaratory
judgment against ProAssurance for payment of any judgment rendered against
Lake Imaging. Lake Imaging moved for summary judgment, claiming that,
because Franciscan premised its claim on alleged medical malpractice by Lake
Imaging, the MMAâs two-year statute of limitations had lapsed. See I.C. § 34-
18-7-1(b). Instead of addressing the statute of limitations claim, the trial court
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dismissed Franciscanâs indemnification claim without prejudice, 2 concluding
that it lacked subject-matter jurisdiction because the MMA required Franciscan
to present its claim to the DOI for an opinion rendered by the medical review
panel before filing its Complaint. See I.C. § 34-18-8-4. Lake Imaging appealed
and Franciscan cross-appealed. The court of appeals affirmed, holding that,
because Franciscanâs claim rested on Lake Imagingâs alleged negligence, the
MMA applied. The Indiana Supreme Court disagreed and concluded that
Franciscanâs indemnification claim is âan ordinary contract claim, rather than a
claim for medical malpractice[.]â See Lake Imaging, LLC v. Franciscan Alliance,
Inc., 182 N.E.3d 203, 210 (Ind. 2022). As such, the procedural requirement of submitting a claim to the medical review panel does not apply to Franciscanâs indemnification claim, and the trial court âerred in dismissing the case for lack of subject matter jurisdiction.âId.
Turning to the nature of the claim and the statute of limitations, the supreme court held that, â[b]ecause the MMA does not apply to Franciscanâs claim, neither does the Actâs two-year statute of limitations.âId.
Instead, either the ten-year or the six-year statute of limitations for actions upon written contracts governed, depending on whether the partiesâ indemnity agreement is treated as a contract âfor the payment of money.âId.
However, our supreme court determined that it did not need to
reach the issue of âwhether the ten-year or six-year statute of limitations
2
The trial court also dismissed Franciscanâs claim that Lake Imaging breached its contract by failing to
provide appropriate radiology services. Franciscan did not appeal the trial courtâs dismissal of that claim.
Court of Appeals of Indiana | Opinion 22A-CT-2783 | December 21, 2023 Page 5 of 17
applie[d] because Franciscanâs indemnification claimâhaving accrued when it
settled with the Shaughnessys on September 25, 2016âfalls within both of
them.â Id. at 210-11. Characterizing Franciscanâs indemnification claim as an
âordinary contract claimâ subject to either the ten-year or the six-year statute of
limitations period for actions upon written contract, the supreme court declined
to address the two-year statute of limitations found in the PSS. Id. at 210.
Delving into Franciscanâs indemnification claim, the supreme court rejected
Lake Imagingâs argument that its obligation to indemnify Franciscan for the
settlement payment expired when the Agreement expired. See id. at 211. The
supreme court remanded with instructions for the trial court to conduct further
proceedings on Franciscanâs indemnification claim and also to consider the
potential liability of ProAssurance under Lake Imagingâs insurance policy with
ProAssurance.
[8] On remand and in light of the supreme courtâs decision, the trial court ordered
supplemental briefing on all motions for summary judgment. Although the
parties largely rested on their prior summary judgment briefing and evidentiary
designations filed in the trial court prior to the first appeal, they also submitted
briefing on the law of the case doctrine.
[9] On October 24, 2022, the trial court issued summary judgment in favor of
Franciscan on its indemnification claim against Lake Imaging. In denying
Lake Imagingâs request to apply the PSSâs two-year statute of limitations, the
trial court noted that the supreme court had already âacknowledge[ed] that the
language of Ind. Code [§] 34-11-2-3 [of the PSS] and Indianaâs [MMA] is
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âstrikingly similarââ but had decided âto apply either a six-or ten-year statute of
limitations to the indemnification claim.â (Appellantâs App. Vol. II, p. 22).
Therefore, the trial court âdecline[d] to reconsider the same.â (Appellantâs
App. Vol. II, p. 22). Furthermore, the trial court concluded that Franciscanâs
âtender of payment in settlement of the [MMA] trigger[ed] Lake Imagingâs duty
to indemnify Franciscanâ under the Agreement as Lake Imagingâs obligation to
indemnify arises âwhen the party seeking indemnity 1) pays the underlying
claim; 2) pays judgment on the underlying claim; or 3) tenders payment in
settlement of the underlying claim.â (Appellantâs App. Vol. II, pp. 26, 27).
[10] Lake Imaging now appeals. Additional facts will be provided as necessary.
DISCUSSION AND DECISION
I. Standard of Review
[11] Lake Imaging challenges the trial courtâs grant of summary judgment to
Franciscan. âThe purpose of summary judgment is to terminate litigation
about which there can be no factual dispute and which can be determined as a
matter of law.â Lamb v. Mid Ind. Serv. Co., 19 N.E.3d 792, 793 (Ind. Ct. App.
2014). âThe party moving for summary judgment has the burden of making a
prima facie showing that there is no genuine issue of material fact and that it is
entitled to judgment as a matter of law.â Mint Mgmt., LLC v. City of Richmond,
69 N.E.3d 561, 564 (Ind. Ct. App. 2017); Ind. Trial Rule 56(C). Summary
judgment is a âhigh barâ for the moving party to clear in Indiana. Hughley v.
State, 15 N.E.3d 1000, 1004 (Ind. 2014). If âthe moving party satisfies this
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burden through evidence designated to the trial court, the non-moving party
may not rest on its pleadings, but must designate specific facts demonstrating
the existence of a genuine issue for trial.â Biedron v. Anonymous Physician 1, 106
N.E.3d 1079, 1089 (Ind. Ct. App. 2018) (quoting Broadbent v. Fifth Third Bank,
59 N.E.3d 305, 311 (Ind. Ct. App. 2016), trans. denied), trans. denied. âA fact is
material if its resolution would affect the outcome of the case, and an issue is
genuine if a trier of fact is required to resolve the partiesâ differing accounts of
the truth, or if the undisputed material facts support conflicting reasonable
inferences.â Williams v. Tharp, 914 N.E.2d 756, 761 (Ind. 2009) (citation and
quotation marks omitted).
[12] We review a courtâs ruling on a summary judgment motion de novo, applying
the same standard as the trial court. Hughley, 15 N.E.3d at 1003. âIn
conducting our review, we consider only those matters that were designated to
the trial court during the summary judgment stage.â Lowrey v. SCI Funeral
Servs., Inc., 163 N.E.3d 857, 860 (Ind. Ct. App. 2021), trans. denied. âIn
determining whether issues of material fact exist, we neither reweigh evidence
nor judge witness credibility [but] accept as true those facts established by the
designated evidence favoring the non-moving party.â Id. (citations omitted).
âAny doubts as to any facts or inferences to be drawn from those facts must be
resolved in favor of the nonmoving party.â Denson v. Est. of Dillard, 116 N.E.3d
535, 539 (Ind. Ct. App. 2018). However, â[m]ere speculation is insufficient to
create a genuine issue of material fact to defeat summary judgment.â Biedron,
106 N.E.3d at 1089. In the summary judgment context, we are not bound by
Court of Appeals of Indiana | Opinion 22A-CT-2783 | December 21, 2023 Page 8 of 17
the trial courtâs findings of fact and conclusions thereon, but they aid our review
by providing the reasons for the trial courtâs decision. Howard Cnty. Sheriff's
Depât v. Duke, 172 N.E.3d 1265, 1270 (Ind. Ct. App. 2021), trans. denied. The
party that lost in the trial court bears the burden of persuading us that the trial
court erred. Biedron, 106 N.E.3d at 1089.
II. Statute of Limitations
[13] Characterizing Franciscanâs indemnification claim as a breach of contract claim
for failing to provide competent medical services to a patient, Lake Imaging
contends that Franciscanâs claim is barred by the two-year statute of limitations
of the PSS, which provides that
An action of any kind for damages, whether brought in contract or
tort, based upon professional services rendered or which should have been
rendered, may not be brought, commenced, or maintained in any
of the courts of Indiana against physicians, dentists, surgeons,
hospitals, sanitariums, or others, unless the action is filed within
two years from the date of the act, omission or neglect
complained of.
I.C. § 34-11-2-3 (emphasis added). Although the statutory language in Indiana
Code section 34-11-2-3, which defines the scope of liability for professional
services related actions, is âstrikingly similarâ to that of the MMA, the PSS was
the âoriginal medical malpractice statuteâ âused to determine the limitation
period for all medical malpractice suitsâ in Indiana. Lake Imaging, LLC, 182
N.E.2d at 210 n.4; Kroger Co. v. Estate of Hinders, 773 N.E.2d 303, 306 (Ind. Ct.
App 2002). When the MMA was enacted in 1975, it contained its own statute
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of limitations, but the âlanguage of the [PSS] remain[ed] intact.â Kroger Co.,
773 N.E.2d at 306. Since the MMAâs passage, the application of the MMA and
the PSS has been distinguished based on the nature of healthcare providers
alleged to have committed medical malpractice. The MMA defines the
procedures for medical malpractice claims against âqualifiedâ healthcare
providers. I.C. § 34-18-3-1. Qualified healthcare providers under the MMA are
those providers who have complied with the requirements of Indiana Code
Chapter 34-18-3, including the payment of surcharges into the Patientâs
Compensation Fund, to avail themselves of the MMAâs protections. I.C. § 34-
18-2-24.5 (defining qualified provider); Rumell v. Osolo Emergency Med. Servs.,
Inc., 88 N.E.3d 1111, 1114 (Ind. Ct. App. 2017) (reiterating that medical
malpractice claims against healthcare providers who are not qualified under the
MMA are not subject to the protections of the MMA). On the other hand,
since the MMAâs inception, the PSS only governed medical malpractice claims
against ânon-qualifiedâ healthcare providers who are not covered under the
MMA. Newkirk v. Bethlehem Woods Nursing & Rehab. Ctr., LLC, 898 N.E.2d 299,
300-01 (Ind. 2008) (confirming that the MMA applied to medical malpractice
claims brought against qualified healthcare providers, whereas the PSS applied
to medical malpractice claims against those who are not qualified providers
under the MMA).
[14] In its designated evidence, Lake Imaging averred that â[a]t all times relevant to
the allegations in [Franciscanâs] Complaint, Lake Imaging [] was a qualified
Health Care Provider, as defined by the [MMA].â (Appellantâs App. Vol. II, p.
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69). Accordingly, contrary to Lake Imagingâs contention, any claims against it
would not be covered by the PSS, rendering its two-year statute of limitations
period inapplicable.
[15] However, despite Lake Imagingâs second appellate attempt to apply a two-year
statute of limitations on Franciscanâs claim and regardless of its status as a
healthcare provider, based on our supreme courtâs opinion in Lake Imaging and
the law of the case doctrine, we must conclude that Franciscanâs
indemnification claim is not barred as the viability of the claim is governed by
the statute of limitations for actions upon written contracts. See Lake Imaging,
182 N.E.3d at 210.
[16] The law of the case is a doctrine used to facilitate the finality of issues decided
within the same action. CBR Event Decorators, Inc. v. Gates, 4 N.E.3d 1210, 1216
(Ind. Ct. App. 2014). The law of the case provides that an appellate courtâs
determination of a legal issue is binding on the trial court and in any subsequent
appeal in the same case and on substantially the same facts. Id. Essentially, the
law of the case means all issues decided directly or by implication in a prior
decision are binding in all further portions of the same case. Dean V. Kruse
Found., Inc. v. Gates, 973 N.E.2d 583, 590 (Ind. Ct. App. 2012), trans. denied.
However, only those issues conclusively determined are considered the law of
the case, and the issue decided in the prior appeal must clearly be the only
possible construction of an opinion. Id. Statements that are not necessary in
the determination of the issues presented are dicta and do not become the law of
the case. Id. at 590-91. âThe doctrine merely expresses the practice of courts
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generally to refuse to reopen what has been decided and is based upon the
sound policy that when an issue is once litigated and decided, that should be the
end of the matter.â INS Investigations Bureau, Inc. v. Lee, 784 N.E.2d 566, 574
(Ind. Ct. App. 2003).
[17] In Lake Imaging, our supreme court, after analyzing the applicability of the
MMA to Franciscanâs indemnification claim, decided that because Franciscanâs
claim was not a claim for bodily injury or death on account of malpractice, or a
derivative claim similar to a claim for loss of services, and did not fit within the
purpose of the MMA, the MMA, and by extension its two-year statute of
limitation, could not be applied. See Lake Imaging, 182 N.E.3d at 209-10.
Characterizing Franciscanâs demand for indemnification as âan ordinary
contract claim, rather than a claim for medical malpractice,â the supreme court
concluded that the statute of limitations for breach of contract applied. Id. at
210. Depending on whether the Agreement was premised on the âpayment of
money,â the Lake Imaging court held that either the six-year or the ten-year
limitation period applied. Id. Although the court determined that Franciscanâs
claim constituted a breach of contract claim rather than a medical malpractice
claim, it âneed not decide whether the ten-year or six-year statute of limitations
applie[d] because Franciscanâs indemnification claimâhaving accrued when it
settled with Shaughnessys on September 25, 2016âfalls within both of them.â
Id. Accordingly, as the supreme court decided the nature of Franciscanâs claim
and its corresponding statute of limitation as either a six- or ten-year statute of
limitations, the trial court rightly âdecline[d] to reconsiderâ the courtâs
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treatment of Franciscanâs indemnification claim. (Appellantâs App. Vol. II, p.
22). Any effort by the trial court to revisit the characterization of Franciscanâs
claim as an ordinary breach of contract issue on remand would have
encroached onto an âissue decided directlyâ by a higher court and would have
invaded the law of the case doctrine. See Dean V. Kruse Found., Inc., 973 N.E.2d
at 590.
[18] On appeal from the trial court on remand, Lake Imaging now attempts to
circumvent the law of the case doctrine by arguing that the supreme court
âspecifically refused to addressâ the applicability of the PSSâs two-year
limitations period, leaving that issue âripe for decision.â (Appellantâs Br. pp.
12-13). However, the supreme court did not decline to address the issue; rather,
after defining the nature of Franciscanâs claim as a contract claim and thereby, a
fortiori, rejecting the PSS component of Lake Imagingâs argument, the supreme
court found it unnecessary to further determine the explicit statute of
limitationsâeither six year or ten yearâapplicable to Franciscanâs
indemnification claim, as Franciscanâs claim would be able to proceed
regardless of whether the six or ten-year term would govern.
[19] Despite Lake Imagingâs insistence that the PSS, with its two-year statute of
limitations, should govern because âthe nature and substance of Franciscanâs
cause of action [for indemnification] is based on the rendering of medical
services,â the supreme court rejected this premise in the context of the MMA.
(Appellantâs Br. p. 12). In its rejection, the supreme court explained that
Franciscanâs claim âfor indemnification sounds in contract,â and âneither the
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text of the MMA nor precedent interpreting the [MMA] support categorizing
such a claim as one for medical malpractice.â Lake Imaging, 182 N.E.3d at 205.
The court advanced that the phrase âwhether in contract or tortâ in Indiana
Code section 34-18-7-1 of the MMA does not transform Franciscanâs
indemnification claim into a medical malpractice claim, because the statute
only âidentifies the MMAâs limitations period, not the type of claim subject to
the MMA.â Id. The court further pointed out that the âwhether in contract or
tortâ language merely recognizes the contractual nature of the physician-patient
relationship and does not suggest the MMA âextends beyond the physician-
patient relationship to encompass commercial contracts between healthcare
providers.â Id.
[20] This analysis regarding the MMA applies equally to the PSS, as our supreme
court determined both statutes to have âstrikingly similarâ language. Id. at 210
n.4. Just as our supreme court noted in Lake Imaging with respect to the MMA,
â[t]he PSS [does] not create or establish [a] medical malpractice claim.â
Newkirk, 898 N.E.2d at 302. Instead, it merely establishes the limitations period
for filing medical malpractice claims against non-qualified healthcare providers.
Id. In Newkirk, the supreme court, as in Lake Imaging, found âno basis [] for
concluding that the legislative goal [behind the two-year limitations period of
the PSS] would be anything differentâ than the legislative goal underpinning the
MMAâs two-year statute of limitations. Id. Although the PSS applies to
actions âfor damages brought in contract based upon professional services
rendered or which should have been rendered,â just like the MMAâs âwhether
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in contract or in tortâ phrase, the PSSâs statutory language does not transform
Franciscanâs indemnification claim into a medical malpractice claim as the
language, just as in the MMA, is merely a recognition of the contractual nature
of the patientâs relationship with his healthcare provider. See I.C. § 34-11-2-3;
Lake Imaging, 182 N.E.3d at 210.
[21] Accordingly, based on the law of the case doctrine and our supreme courtâs
characterization of Franciscanâs indemnification claim as a contract claim, we
affirm the trial courtâs conclusion that Franciscanâs claim is not barred by the
statute of limitations. 3
II. Indemnification
[22] Lake Imaging next contends that there is no remaining breach of contract claim
upon which Franciscan can be indemnified because the trial court dismissed the
3
In its reply brief, Lake Imaging asserts that
[d]espite Franciscanâs argument that Lake Imaging committed medical malpractice, Franciscan did
nothing to join Lake Imaging in the underlying malpractice action. Instead, Franciscan acted in
concert with the underlying plaintiffs to set up a situation in which, without Lake Imaging being a
party to the medical malpractice case, Franciscan persuaded the underlying plaintiffs to amend the
complaint and obtain summary judgment in its favor on all claims other than the vicarious liability
claim that was added to plaintiffâs amended complaint at Franciscanâs urging. Then, when the
statute of limitations precluded any party from joining Lake Imaging in the medical malpractice
action, Franciscan circumvented the entire MMA by seeking to recover for Lake Imagingâs alleged
medical malpractice through the indemnity claim.
(Reply Br. pp. 5-6). Lake Imaging presents no evidence to support these claims, nor did it refer us to any
citations or references in the record. Baseless accusations of questionable legal tactics directed to opposing
counsel are inflammatory and absolutely unacceptable in filings before this or any other court; they are
certainly out of place before this tribunal and woefully unbefitting an appellate advocate.
Court of Appeals of Indiana | Opinion 22A-CT-2783 | December 21, 2023 Page 15 of 17
breach of contract claim to provide competent medical services, which was
affirmed by the supreme court.
[23] In its Complaint, Franciscan formulated two avenues upon which it sought
relief: (1) breach of contract for Lake Imagingâs failure to provide competent
medical care and (2) breach of contract for failure to indemnify Franciscan.
While we agree with Lake Imaging that the supreme court âaffirm[ed] the trial
courtâs dismissal of Franciscanâs claim that Lake Imaging breached their
contract by committing medical malpractice[,]â it also held that â[b]ecause
Franciscanâs claim for breach of contract [for failure to indemnify] was not one
for medical malpractice, we reverse the trial courtâs dismissal of that claim.â
Lake Imaging, 210 N.E.3d at 211-212. Thus, the supreme courtâs decision did
not extinguish Franciscanâs indemnification claim, it revived it.
[24] The trial court on remand concluded that because Franciscan tendered payment
to settle the medical malpractice suit with the Shaughnessys, Lake Imagingâs
duty to indemnify Franciscan was triggered. Accordingly, the trial court held
that Franciscan was entitled to judgment on its claim as a matter of law. As
Lake Imaging does not contest this holding, we affirm the trial courtâs entry of
summary judgment in Franciscanâs favor.
CONCLUSION
[25] Based on the foregoing, we hold that the trial court properly declined to apply
the PSSâs two-year limitations period and properly entered summary judgment
in favor of Franciscan on its indemnification claim.
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[26] Affirmed.
[27] Bailey, J. and Tavitas, J. concur
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