Acknowledgement Letter Used to Establish Pre-suit Notice

In Runions v. Jackson-Madison County General Hospital Dist., No. W2016-00901-COA-R9-CV (Tenn. Ct. App. Feb. 7, 2017), the Tennessee Court of Appeals analyzed a case in which pre-suit notice for an HCLA claim was mistakenly sent to the wrong defendant/defendants. Under the specific facts of this case, the Court determined that the proper defendant did in fact receive notice and that a motion to amend and substitute the proper defendant was rightly granted.

Plaintiff’s infant daughter had been born and died shortly thereafter at Jackson-Madison County General Hospital, and plaintiff accordingly sent pre-suit notice of an HCLA suit pursuant to Tenn. Code Ann. § 29-26-121. Plaintiff sent her notices to three defendants: (1) Bolivar General Hospital, Inc. (“BGH”), (2) West Tennessee Healthcare, Inc. (“WTH”), and (3) West Tennessee Healthcare Network (“WTHN”). All of these were addressed as d/b/a Jackson-Madison County General Hospital, Inc., and all were sent to the same registered agent and the same address.

One week after the pre-suit notices were sent, Laura Zamata, who was “Director of Risk Management” for the Jackson-Madison County General Hospital District (“the District”) sent plaintiffs’ counsel a letter “acknowledging receipt of a pre-suit notice letter.” The letter stated that “The District is a governmental entity and has elected to be self-insured, therefore, there is no insurance carrier.” It also stated that Ms. Zamata was the designated contact for future correspondence.

After serving pre-suit notice, plaintiff filed her HCLA suit naming the three notified parties as defendants. Defendants all filed motions to dismiss, alleging that they were not the proper parties to the lawsuit as none of them provided any medical care to plaintiff or her child. Plaintiff disputed the allegations that WTHN and WTH did not provide relevant medical care, pointing to records from her hospital stay as evidence. Regarding BGH, however, plaintiff asserted that “she had mistakenly named BGH in her complaint instead of the District.” Plaintiff pointed to material on the Secretary of State’s website as the reason the mistake was made and filed a motion to amend her complaint to substitute the District for BGH.

After a hearing, the trial court denied defendants’ motions to dismiss and granted plaintiff’s motion to amend. The trial court found that a previous Court of Appeals case, Shockley v. Mental Health Cooperative, Inc., 429 S.W.3d 582 (Tenn. Ct. App. 2013), was not controlling here and dismissal was not required due to the failure to send notice to the correct party. The Court of Appeals affirmed.

First, the Court summarily affirmed the denial of the motions to dismiss. On appeal, the only issue here was whether the dismissal was warranted under § 29-26-121, and since the defendants at issue had never asserted that “they did not receive notice of a potential health care liability action,” the Court affirmed the refusal to dismiss. The Court did point out in a footnote, though, that it was “express[ing] no opinion whatsoever on whether dismissal of these parties might be appropriate under other theories.”

The main issue on this appeal was whether plaintiff’s motion to amend and substitute the proper party should have been allowed. The District argued that it did not receive pre-suit notice under the HCLA and that it would thus be dismissed from the case, making an amendment futile. The District asserted that the Shockley case controlled the outcome in this matter, requiring dismissal. In Shockley, plaintiff mistakenly named and sent pre-suit notice to a foundation associated with the medical group she was attempting to sue. The foundation was the “fundraising arm” of the medical group, and the two had the same registered agent and business address, but they “where wholly separate and distinct legal entities.” The Court of Appeals affirmed dismissal in that case, holding that “[b]y sending the pre-suit notice to a party that was neither a healthcare provider, nor the ultimate defendant in the suit, the plaintiff failed to strictly comply with Tennessee Code Annotated Section 29-26-121(a)(1).” (citing and quoting Shockley).

Agreeing that an amendment would be futile if the District did not receive notice, the Court cited “the pivotal question” in this case as “whether the District received notice of a potential health care liability claim against it prior to the commencement of this litigation.” The Court determined, however, that the instant matter was distinguishable from Shockley and that dismissal was not warranted here. The Court held that “pre-suit notice was, in fact, established vis-à-vis the District in this case.”

In finding that notice was given, the Court relied almost solely on the letter sent from Ms. Zamata to plaintiff’s counsel, in which she stated that “the District is a governmental entity…” Looking at that letter, the Court ruled:

As we view the record, there is no question that the District was aware that a potential health care liability claim might be asserted against it. …[T]he District’s Director of Risk Management, Laura Zamata, sent a letter to [plaintiff’s] counsel in October 2013 acknowledging receipt of a pre-suit notice letter. …The substance of Ms. Zamata’s letter quite plainly associates [plaintiff’s] claim as being brought vis-à-vis the District. In no uncertain terms, the letter (1) acknowledges receipt of [plaintiff’s] pre-suit notice letter, (2) states that the District is self-insured, and (3) states that further inquires regarding the claim should be pursued with Ms. Zamata, the Director of Risk Management. It belies common sense to suggest that Ms. Zamata’s letter does not show that the District was aware of a potential health care liability claim against it.

Despite finding for plaintiff here, the Court went to great pains to limit its decision to this particular factual scenario. It specifically stated that Shockley was still good law, that most plaintiffs can only give pre-suit notice by showing that they served the proper defendant, and that without Ms. Zamata’s letter, it would “be obliged to take a different position on whether pre-suit notice was achieved.” It further specifically noted that its “opinion on this issue [was] not grounded in disregarding the corporate separateness of the individual defendants. Notice is not accomplished simply because a related entity received notice.”

Of note, Judge Gibson wrote a dissenting opinion here, as she did not believe that “the letter from Laura Zamata so factually distinguishes this case from Shockley so as to require a different result.” She also called into question the practical effect of the majority’s holding, stating: “I also question whether the majority opinion encourages recipients of pre-suit notice to ‘sit back idly,’ waiting from an opportunity to assert ignorance as to whether it received notice of a claim.”