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McNamara v. Benchmark Insurance Co.

Supreme Court of Alabama

September 8, 2017

Joseph L. McNamara, Jr.
Benchmark Insurance Company

         Appeal from Shelby Circuit Court (CV-14-900180)


         Joseph L. McNamara, Jr., a pharmacist, appeals from a summary judgment entered by the Shelby Circuit Court in favor of Benchmark Insurance Company ("Benchmark") in Benchmark's indemnity action against McNamara. Benchmark commenced the indemnity action in an effort to recover funds expended to settle a medical-malpractice action brought against Southern Medical, Inc. ("Southern Medical"), Benchmark's insured and McNamara's employer. The medical-malpractice action was brought against Southern Medical by Ricky Avant and Kim Avant and was based, at least in part, on the alleged tortious acts and omissions of McNamara.


         In October 2011, the Avants commenced their medical-malpractice action against Southern Medical, a compounding pharmacy. In their complaint, the Avants alleged that, in December 2009, Mr. Avant's doctor, Dr. Raul Magadia, "issued a physician order for Mr. Avant to receive ... [the antibiotic] Tobramycin 5mg/kg intravenously every 24 hours for two weeks."

         The Avants also asserted that Southern Medical, when processing Mr. Avant's prescription, discovered that Medicare would not pay for tobramycin. Thus, the Avants claimed, Southern Medical sought to have the prescription for tobramycin replaced by a prescription for gentamicin, a different antibiotic that was covered by Medicare. According to the Avants' complaint, "Dr. Magadia issued a verbal physician order, " which called for the administration of gentamicin instead of tobramycin. Mr. Avant, however, was to receive gentamicin for only one week, as opposed to the two weeks' dosage of tobramycin previously prescribed. The Avants alleged that Dawn Hobbs, a registered nurse, relayed Dr. Magadia's new order to McNamara.

         The Avants further alleged that McNamara breached the applicable standard of care by "incorrectly recording and/or filling the gentamicin order, " which resulted in Mr. Avant receiving gentamicin for two weeks instead of one week. The administration of two weeks' of gentamicin allegedly resulted in Mr. Avant suffering permanent injuries. According to the Avants' complaint in their action against Southern Medical, the last dose of gentamicin was administered to Mr. Avant on or about January 4, 2010, and, on January 10, 2010, he presented to a hospital emergency room, complaining of weakness, difficulty walking, and tinnitus. The Avants alleged that, on January 14, 2010, Mr. Avant was diagnosed with "severe Gentamicin toxicity, ototoxicity, bilateral vestibulopathy, and acute renal failure." The Avants also asserted that Mr. Avant's condition caused him to suffer multiple falls, permanent hearing loss, loss of mobility, and other problems.

         In addition to Southern Medical, the Avants also sued AlaCare Home Health Services, Inc., which employed the medical-care providers who intravenously administered the gentamicin to Mr. Avant in his home. The Avants did not sue McNamara.

         The Avants asserted that Southern Medical was liable for the acts and omissions of its employees and agents based on the doctrine of respondeat superior. In addition, the Avants alleged that Southern Medical was directly liable for failing to hire competent pharmacists, failing to properly train its staff, failing to properly supervise its staff, and failing to implement policies and procedures aimed at preventing errors in dispensing medication. Mrs. Avant stated a claim alleging loss of consortium.

         Benchmark provided Southern Medical with a defense to the Avants' claims. Eventually, the Avants and Southern Medical settled their dispute, and Benchmark paid the settlement amount. In February 2014, Benchmark, as Southern Medical's subrogee, sued McNamara, seeking to recover the funds it had paid the Avants as settlement of their claims against Southern Medical. Benchmark's complaint alleged that "Benchmark, pursuant to its policy of insurance issued to Southern Medical, is contractually and equitably subrogated to Southern Medical's rights and privileges." Benchmark also alleged that the Avants' claims against Southern Medical were "predicated upon the alleged malfeasance, actions and/or omissions and active negligence of Southern Medical employee ... McNamara" and that "[a]ny and all monies paid for [the] settlement were expressly for any and all allegations of liability arising out of vicarious liability and/or respondeat superior." Benchmark asserted various claims against McNamara based on the theory of indemnity. Benchmark also sought a judgment declaring that McNamara was "legally responsible for any and all damages incurred by Benchmark for his malpractice and for damages awarded and/or settlements paid [to the Avants]."

         Benchmark and McNamara filed cross-motions for a summary judgment. The trial court denied McNamara's motion and granted Benchmark's, awarding it $465, 000 in damages. McNamara filed a postjudgment motion to alter, amend, or vacate the summary judgment. Subsequently, he filed a motion to "supplement the record" or, alternatively, for relief from the summary judgment. McNamara's postjudgment motions were denied by operation of law, pursuant to Rule 59.1, Ala. R. Civ. P., and McNamara appealed.


         McNamara argues that Benchmark's indemnity action is time-barred under § 6-5-482, Ala. Code 1975, which is part of the Alabama Medical Liability Act, § 6-5-480 et seq. and § 6-5-540 et seq., Ala. Code 1975 ("the AMLA").[1] Generally speaking, that Code section requires actions against healthcare providers to be commenced within two years after the act, omission, or failure complained of. Although that deadline is subject to a discovery rule and to statutory provisions relating to the computation of limitations periods, § 6-5-482 provides further that "in no event may the action be commenced more than four years after such act" and that, "notwithstanding any provisions of such sections [relating to the computation of limitations periods], no action shall be commenced more than four years after the act, omission, or failure complained of." McNamara points out that the acts, omissions, or failures forming the basis of the Avants' medical-malpractice action against Southern Medical occurred in December 2009, that Mr. Avant first suffered injury in January 2010 or earlier, and that Benchmark did not commence the indemnity action against McNamara until February 2014, more than four years later.

         For its part, Benchmark argues that the AMLA does not apply to all actions against health-care providers. For example, in Thomasson v. Diethelm, 457 So.2d 397 (Ala. 1984), a respiratory therapist alleged that two physicians working at the hospital where the therapist worked failed to warn her that a patient for whom she was providing care had hepatitis. This Court held that the therapist's claims were not governed by the AMLA, stating that "[w]hen the entire statute is considered, particularly the section defining 'medical liability, ' it seems clear that the legislature was addressing liability of medical professionals in the context of patient-doctor and patient-hospital relationships." Id. at 399.

         In George H. Lanier Memorial Hospital v. Andrews, 901 So.2d 714 (Ala. 2004), this Court held that the AMLA did not apply to claims against nurses who had harvested the corneas of a deceased child without the proper consent. The Court in Andrews noted that "the complained-of actions were not performed in the course of providing health-care services to a patient" and that "a health-care provider cannot inflict a 'medical injury' upon a person who is already deceased." 901 So.2d at 721.

         In Taylor v. Smith, 892 So.2d 887 (Ala. 2004), the Court considered a plaintiff's action against a physician after the plaintiff had been injured in a car accident involving one of the physician's patients. At the time of the accident, the patient was under the influence of methadone that had been provided by the physician. In considering whether the AMLA applied, this Court stated:

"[T]he [AMLA] applies 'only to medical-malpractice actions, ' Mock v. Allen, 783 So.2d 828, 832 (Ala. 2000), 'in the context of patient-doctor and patient-hospital relationships.' Thomasson [v. Diethelm], 457 So.2d [397] at 399 [(Ala. 1984)]. By definition, a 'medical-malpractice action' is one for redress of a 'medical injury.' See § 6-5-540 (purpose of the Act is to regulate actions for 'alleged medical injury') (emphasis added); see also Ala. Code 1975, § 6-5-549.1 (same). Because the [plaintiff was] seeking recovery for damages and injuries arising out of an automobile accident, not 'medical injuries, ' this is not a medical--malpractice action. Consequently, it is neither subject to--nor barred by--the Act."

892 So.2d at 892-93.

         In Ex parte Addiction & Mental Health Services, Inc., 948 So.2d 533 (Ala. 2006), the plaintiff, a patient at a residential treatment center, sued the treatment center after it allegedly disclosed the patient's confidential information to third parties. This Court rejected the treatment center's argument that the venue provisions of the AMLA applied to the patient's action, holding that his claims were not subject to the AMLA because he was not seeking redress for a "medical injury":

"[I]n the instant case, the AMLA applies only if [the plaintiff's] claim seeks redress for a 'medical injury.' Yet [the plaintiff] does not claim to have suffered a 'medical injury'; rather, he argues that he 'suffered economic damages, damage to his reputation, employment related injuries, and other injuries primarily economic in nature.' Furthermore, the only medically related injury he asserts he suffered is alleged to be the result of the claimed invasion of privacy, breach of contract, and breach of a fiduciary duty:
"'As a direct and proximate result of [the defendant's] actions, [the plaintiff] sustained physical, mental and emotional anguish and distress, all to his general damage. As a direct and proximate result of [the defendant's] actions, [the plaintiff] was caused to incur medical expenses for psychiatric treatment and will continue to incur said expenses in the future.'
"Therefore, although [the plaintiff's] claims allege a breach of a duty that is derived from, and dependent upon, the health-care provider/patient relationship, they do not involve medical malpractice or medical injury per se. Thus the injuries [the plaintiff] suffered cannot properly be classified as 'medical injuries' under the AMLA, and the venue provision of the AMLA does not apply."

948 So.2d at 536.

         Benchmark argues that its action against McNamara is based on a right to indemnity stemming from the principal/agent relationship between Southern Medical and McNamara and that the action is not a medical-malpractice case in which a patient seeks redress for a medical injury. Specifically, Benchmark asserts that "[t]his case does not fall within the AMLA because it is an action in which an employer seeks indemnification from an employee." Thus, Benchmark asserts, the action is not governed by the deadlines set out in § 6-5-482.

         McNamara points out that, although Benchmark's indemnity action is technically not one in which a patient-plaintiff seeks to recover for a medical injury, it is undisputed that the indemnity action is predicated upon a patient's efforts at recovering for such a medical injury. Moreover, McNamara points out that subsection (b) of § 6-5-482 specifically references § 6-2-6, Ala. Code 1975, which is a statutory provision governing the ...

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