Contractual Indemnity Claim Not Subject to HCLA

When an medical malpractice defendant files a third-party complaint based on a contractual indemnity provision, that third-party complaint may not fall within Tennessee’s Health Care Liability Act.

In Johnson v. Rutherford County, Tennessee, No. M2017-00618-COA-R3-CV (Tenn. Ct. App. Jan. 11, 2018), plaintiffs sued various government entities for extreme injuries their son received when attacked by another inmate in the Rutherford County Adult Detention Center. In an amended complaint, plaintiffs alleged that the director of health services at the jail had been warned about the other inmate’s violent tendencies. When filing its answer, the County also filed a third-party complaint against the director of health services’ employer, Rudd Medical Services, which was the “entity that provided medical services to prisoners housed” at the jail. “The County alleged that it had entered into a contract with Rudd for the provision of health care services to inmates, which contract contained a clause requiring Rudd to indemnify and hold the County harmless from any claims based upon…the actions of Rudd employees.”

Rudd filed a motion to dismiss, asserting that the third-party complaint fell within the parameters of the HCLA and that the County had failed to file a certificate of good faith. The trial court granted the motion, but the Court of Appeals overturned the dismissal.

The County argued that “its claim based in contractual indemnity [was] not subject to the THCLA,” and the Court of Appeals agreed. Noting that there was no Tennessee precedent on this point, the Court reasoned that “the County has not sued Rudd based on Rudd’s provision of health care services to the County, but rather based upon an indemnification provision contained within the parties’ contract.” The Court found that requiring a certificate of good faith here would “strain logic,” as doing so would cause the County to “retain an expert to opine that the claims asserted by another party, against which the County is also attempting to defend, have merit.” The Court compared the third-party complaint for indemnity here to a claim by a doctor against his medical malpractice insurance carrier, which is clearly not subject to the HCLA.

Because the indemnity claim was not an HCLA claim, dismissal was reversed.