Najam, S.J.
Statement of the Case
Appellants, the Indiana Department of Insurance and the Patient’s Compensation Fund, bring this interlocutory appeal from the trial court’s denial of their motion for summary judgment on a claim for excess damages under the Medical Malpractice Act (“the Act”) brought by Jane Doe and John Doe I, individually and as next friends and legal guardians of John Doe II, an unmarried minor (the “Does”). We conclude that there are no genuine issues of material fact and that the Fund is entitled to judgment as a matter of law. Accordingly, we reverse and remand with instructions.
Issues
The ultimate question presented is whether the Does have satisfied the statutory prerequisites for access to the Patient’s Compensation Fund. In order to answer that question, we must address the following issues:
I. Whether a freestanding claim of negligent credentialing can exist where the underlying act of negligence does not constitute medical malpractice under the Act;
II. Whether the liability of the health care provider as admitted and established under Indiana Code section 34- 18-15-3(5) precludes the Fund from disputing the compensability of a claim for excess damages;
III. Whether the doctrines of laches and equitable estoppel can prevent the Fund from contesting compensability of an excess damages claim where the Fund did not intervene before the claimant and the health care provider reached a settlement agreement to which the Fund is not a party; and
IV. Whether this Court’s opinion in Martinez v. Oaklawn Psychiatric Center, Inc., 128 N.E.3d 549 (Ind. Ct. App. 2019), clarified on reh’g, trans. denied, affects the application of the Act in this case.
First, we hold that an underlying act of medical malpractice is a necessary predicate and condition precedent to a medical credentialing malpractice claim.
Second, we hold that, where the Fund is not a party to a settlement agreement between the claimant and the provider and the court must consider the liability of the health care provider as “admitted and established,” the Fund is not precluded from making an independent determination and may dispute whether the underlying conduct is compensable under the Act.
Third, we hold that the Fund does not have an affirmative duty to intervene in settlement negotiations between a claimant and a provider or to address a claim for excess damages until the claim has been filed in court. Before such a claim is filed, the doctrines of laches and estoppel, on these facts, are unavailable to prevent the Fund from disputing the compensability of an excess damage claim under the Act.
And fourth, we conclude that Martinez v. Oaklawn Psychiatric Center, Inc. does not affect the resolution of the Does’ claims.
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I. Freestanding Claim of Negligent Credentialing
In this appeal, neither the Does nor the Hospital contend that the negligent credentialing claim turns on whether a sexual assault constitutes medical malpractice.3 And the Fund argues that the Does’ negligent credentialing claim against the Hospital is based on a claim that is not compensable under the Act. The Fund discusses our decisions in both Winona Memorial Hospital, Ltd. Partnership v. Kuester, 737 N.E.2d 824 (Ind. Ct. App. 2000) and Fairbanks Hospital v. Harrold, 895 N.E.2d 732 (Ind. Ct. App. 2008), trans. denied, and concludes that, without an underlying claim of medical malpractice, a claim of negligent credentialing cannot be brought under the Act. More particularly, a claim of negligent credentialing cannot proceed under the Act based on just any act of negligence; rather, the underlying negligence must constitute medical malpractice.
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II. Effect of Indiana Code § 34-18-15-3(5)
The Does additionally argue that the Fund cannot challenge their negligent credentialing claim against the Hospital because it is “established” as a matter of law as a result of their settlement agreement. To support this argument, the Does cite Indiana Code section 34-18-15-3(5) (2017), which provides: “In approving a settlement or determining the amount, if any, to be paid from the patient’s compensation fund, the court shall consider the liability of the health care provider as admitted and established.”
The Does conflate two distinct concepts: “factual compensability” and “legal compensability.” In Robertson v. B.O., our Supreme Court distinguished between a provider’s underlying liability for negligence (“factual compensability”) and compensability from the Fund (“legal compensability”). 977 N.E.2d 341, 347 (Ind. 2012). The Court explained that, under Indiana Code section 34-18-15-3(5), the question of factual compensability is foreclosed when a plaintiff settles with a health care provider. Id. at 347-48. However, such a settlement does not preclude the Fund from contesting the legal compensability of the claimed injury as one that is not compensable under the Act and therefore also not subject to a claim for excess damages from the Fund. Id.
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III. Laches and Estoppel
The Hospital contends the equitable doctrines of laches and estoppel should be applied to preclude the Fund from challenging the applicability of the Act to the Does’ claim. Particularly, the Hospital alleges the Fund should have contested the Does’ claim to excess damages sooner than it did. We cannot agree.
The parties to a medical malpractice claim cannot bind the Fund, a non-party, by an adjudication or stipulation establishing the health care provider’s factual liability in negligence. As we discussed in Issue II, a settlement establishing a provider’s factual liability does not necessarily establish whether the claim is covered under the Act or the Fund’s liability for excess damages. Rather, the Fund is permitted to make an independent determination of whether a claim for excess damages is based upon a claim covered by the Act, and the Fund’s responsibility in this regard is not ripe until a claim for excess damages is made. See Ind. Code § 34-18-15-3(1) (if plaintiff demands damages in excess of provider’s policy limits, plaintiff must file petition in court demanding payment from the Fund); -3(2) (petition must contain sufficient information to inform parties about nature of claim and amount demanded, and plaintiff must serve petition on commissioner (administrator of Fund)); -3(3) (commissioner may object to demand); -3(5) (at hearing on petition and objections, court shall hear evidence to determine amount, if any, to be paid from the Fund). Until such time as a petition demanding payment of damages from the Fund is filed under Subsection 34-18-15-3(1), the Fund is not required to participate in settlement of the plaintiff’s claim or to intervene in the plaintiff’s action. Accordingly, the Fund cannot be faulted for not having indicated or made an excess damages determination before the plaintiff’s petition for excess damages has been filed and triggers the Fund’s statutory responsibility to weigh in. It is the plaintiff’s burden to show he or she has met the statutory prerequisites under Section 34- 18-15-3 in order to petition the Fund for excess damages. McCarty v. Walsko, 857 N.E.2d 439, 443 (Ind. Ct. App. 2006).
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We conclude, therefore, that the doctrines of laches and estoppel do not apply on these facts. And where the Fund is not a party to a settlement agreement between the claimant and the provider, the Fund has no affirmative duty to address a claim for excess damages until a claimant has filed a petition in court demanding payment of damages from the Fund.
IV. Application of Martinez v. Oaklawn Psychiatric Center
As we have seen, the ultimate question presented here is whether the Does are entitled to claim excess damages from the Fund based upon their negligent credentialing claim against the Hospital. In considering that question, the parties have addressed whether this Court’s opinion in Martinez v. Oaklawn Psychiatric Center affects application of the Act in this case.
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Here, just as in Martinez, scope of employment and vicarious liability are not at issue. We acknowledge, of course, that in a given case, a health care provider’s scope of employment may be relevant and potentially dispositive in making an employer liability determination under the Act, but this is not the case.
In sum, in Martinez we did not apply the “current test.” Doe, 194 N.E.3d at 1204. Rather we concluded both that Oaklawn’s employee was acting within the scope of his employment with Oaklawn, a health care provider, and that the employee’s “attempt to enforce Martinez’s curfew was a part of Oaklawn’s provision of healthcare to Martinez.” Martinez, 128 N.E.3d at 562. In other words, we held that the alleged medical malpractice fell squarely within the well-established purview of the Act. While we stated that we would “apply [the current] test to the facts and circumstances of this case” and alluded to “the broadened scope of employment set forth in” Cox v. Evansville Police Dep’t, 107 N.E.3d 453 (Ind. 2018), we did not apply the “current test” to any conduct not already within the recognized scope of the Act. Martinez, 128 N.E.3d at 558, 562. A close reading of Martinez shows that the test was not a factor and was not dispositive. Instead, in Martinez we followed—and did not broaden or otherwise deviate from—well-established medical malpractice case law. Thus, we conclude that the actual holding in Martinez does not affect the application of the Act in this case.
Conclusion
Based upon the foregoing, we hold that an underlying act of medical malpractice which is a proximate cause of the patient’s harm is a necessary predicate and condition precedent to a medical credentialing malpractice claim. We also hold that, where the Fund is not a party to a settlement agreement between the claimant and the provider and the court must consider the liability of the health care provider as “admitted and established,” the Fund is not precluded from making an independent determination and disputing whether the underlying conduct is compensable under the Act. Finally, we conclude that the Fund has no affirmative duty to intervene in settlement negotiations between the claimant and the provider or to address a claim for excess damages until a claimant has filed a petition in court for payment of damages from the Fund. Accordingly, we find there are no genuine issues of material fact, and the Fund is entitled to judgment as a matter of law.
Reversed and remanded with instructions for the trial court to enter summary judgment in favor of the Fund.
Foley, J., concurs.
Robb, J., concurs in part and dissents in part with separate opinion.
Robb, J., concurring in part and dissenting in part.
I concur in Parts II, III, and IV of the majority opinion. As to Part I, I respectfully dissent. The Fund has asked this court to decide, first, if this act of sexual abuse of a minor by a doctor that occurred during an appointment with the victim patient sounds in medical malpractice and, second, whether a claim of negligent credentialing can only occur when the underlying misconduct is one of medical malpractice. The Fund takes the position that the Does’ claim for excess damages from the Fund cannot stand absent a claim of medical malpractice. According to the Fund, Cavins’ sexual abuse of his minor patient did not amount to medical malpractice and negligent credentialing is not a standalone claim.
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