Appeals Court Frees School District of Hospital Company’s Indemnity Claim in Concussion Case

May 26, 2017

A Montana state appeals court has ruled that when a school district settled a lawsuit brought by a concussed high school football player and his family that it effectively dismissed the indemnity claim against the school district brought by the hospital that treated the player.
In so ruling, the panel of judges found that the public policy of encouraging settlements outweighed the hospital’s bid for relief.
Plaintiff Robert Back sued after he suffered a head injury during a football game on September 5, 2014. Back was taken to the Benefis Health System’s emergency room where he was diagnosed with a minor concussion.
Back rested at home for a couple days, bypassing both the classroom and the practice field. He then went to see a doctor at the Great Falls Clinic, who evaluated him and affirmed the diagnosis of a concussion. The doctor told him he was not to resume practice until September 15, 2014. Back reportedly delivered the note from Great Falls Clinic on September 10, 2014 to his head coach, Jeff Graham.
Graham, allegedly, exchanged text messages about Back’s symptoms with the athletic trainer, who was employed by Benefis. The athletic trainer allegedly told Graham that Back could possibly have the flu. She also allegedly told Graham that an ImPACT test may help determine Back’s readiness to return to play. Graham had Back take an ImPACT test. According to the lawsuit, the athletic trainer reviewed the results of the test on September 11, 2014 and determined that he had passed the test, allegedly without reviewing the medical records at Benefis. Back was allowed to return that day to a noncontact practice.
Just before the game on Friday, September 12, 2014, Graham and/or the athletic trainer verbally cleared Back to play, according to the lawsuit, even though he had not been medically cleared. Back played. While he did not suffer any major collisions during the game, the damage was apparently done. While standing on the sideline at halftime, Back collapsed. Unconscious and unresponsive, he was taken by ambulance to Benefis, where he underwent an emergency craniotomy. As a result of the incident, Back has severe neurological and brain deficits. He is a quadriplegic, who cannot speak, requiring 24-hour care.
Back sued the Belt Valley School District, Graham, Benefis, the athletic trainer, EMC Insurance Group Inc., Dakota Fire Insurance Company, and Employers Mutual Casualty Company.
The instant Legal Challenge
Belt School District 29 settled with the plaintiffs in December of 2016, claiming it bought “peace with finality,” State ex rel. Deere & Co. v. District Court, 224 Mont. 384, 393, 730 P.2d 396, 402 (1986), terminating its own claims and any claims against it, including Benefis’s cross claim against it for indemnity. Benefis has objected.
By way of background, the appeals court noted that on August 1, 2014, Belt and Benefis entered into a Services Agreement, pursuant to which Belt agreed to pay Benefis to provide certain sports medicine and athletic training services to Belt’s sports teams. After the plaintiffs filed the lawsuit, Belt and Benefis cross-claimed against each other, each relying on an indemnity provision in the August 1 Services Agreement.
But the school district claimed that the settlement with the plaintiffs ended its exposure to any claims by the remaining tortfeasors for contribution or indemnity.
Benefis, however, questioned the applicability of the school district’s case law, claiming it “dealt only with equitable or common-law indemnity, and that the rule is different when the indemnity claim arises from a contract,” citing Howard S. Wright Construction Co. v. F.E. DeBeer Mech Constr. Co., 185 Mont. 47, 604 P.2d 323 (1979) to support this argument.
“Thirteen years later, the Supreme Court (in Durden v. Hydro Flame Corp., 1996 MT 186, ¶ 31, 295 Mont. 318, 983 P.2d 943) held that the public policy in favor of promoting settlements was so important that it outweighed the competing policy of placing ultimate responsibility on ‘up stream’ manufacturers of defective products:
“A system which allows indemnity claims to be maintained in product liability actions in which one of the defendants chooses to settle with the plaintiff . . . would make it virtually impossible for less than all defendants to settle a case. No defendant would ever settle if it thought it could be brought back into the action and have to pay attorney fees and a potential judgment. On the other hand, by following the policy articulated in Deere, defendants who do not settle will be put at risk if other defendants settle. In the long run, this will promote settlement rather than trials.”
In summary, the appeals court noted that “the indemnity provision does not operate the way Benefis says it does. Its plain language does not indemnify Benefis against its own negligence. Moreover, the Supreme Court has said indemnity language that was much more direct than the clause at issue here does not indemnify the indemnitee for its own negligence. Slater v. Central Plumbing & Heating Co., 275 Mont. 266, 270-271, 912 P.2d 780, 782 (1996)(Slater I)(suggesting Wright would be decided differently under current law).
“A contractual claim for indemnity attributable only to the other party’s negligence is really a claim for contribution. Slater v. Central Plumbing & Heating Co., 1999 MT 257, ¶ 32, 297 Mont. 7, 993 P.2d 654 (Slater II). Belt concedes that Mont. Code Ann. § 27-1-703(6) still entitles Benefis to try to reduce its liability by arguing, settlement notwithstanding, that Belt contributed to the Plaintiffs’ damages. This is consistent with the Supreme Court’s recent holdings that § 27-1-703 displaces and supersedes separate claims for contribution or indemnity. Langemo v. Montana Rail Link, 2001 MT 273, ¶ 31, 307 Mont. 293, 38 P.3d 782; Metro Aviation, Inc. v. United States, 2013 MT 193, ¶¶ 18-19, 371 Mont. 64, 305 P.3d 832.”
Robert G. Back et al. v. Belt School District 29, and Benefis Health System, INC; 8th Jud. Dist. Ct. of Mon., Cascade Co.; Cause No. CDV-16-230, 2017 Mont. Dist. LEXIS 5; 4/26/17


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