FOR PUBLICATION
ATTORNEY FOR APPELLANT
: ATTORNEYS FOR APPELLEE:
H. KENNARD BENNETT RICHARD B. KAUFMAN, ESQ.
Severns & Bennett, P.C. Stark Doninger & Smith
Indianapolis, Indiana Indianapolis, Indiana
THOMAS R. SCHULTZ
Schultz & Pogue, LLP
Carmel, Indiana
FLOYD JOHNSON, )
Individually and in his capacity as )
Personal Representative of the )
Estate of MABEL LUCILLE JOHNSON, )
)
Appellant, )
)
vs. ) No. 49A02-0402-CV-209
)
HOOSIER ENTERPRISES III, INC. )
f/k/a HOOSIER HEALTH SYSTEMS, INC. )
and DELMAR LIMITED PARTNERSHIP, )
d/b/a Canterbury Village, )
)
Appellee. )
OPINION FOR PUBLICATION
2.15.1 Loss or damage by fire and such other risks as may be included
in the broadest form of extended coverage insurance from time to time available
in an amount equal to the sound insurable value of the building:
2.15.2 Claims for personal injury for property damage under a policy of general public
liability insurance in an amount of at least One Million Dollars ($1,000,000) combined
limits of bodily injury and property damage per occurrence;
2.15.3 Manager [Hoosier] shall furnish adequate worker's compensation insurance;
2.15.4 Claims for professional liability with coverage in an amount of at least Three
Hundred Thousand Dollars ($300,000) per occurrence, and of at least One Million Dollars
($1,000,000) in aggregate coverage; and
2.15.5 Such other coverage or additional amounts of coverage as may be required
by the Lessee [Delmar].
(Appellant's App. 112). Also, Hoosier's failure "to obtain and keep in full
force and effect the insurance coverage required in Section 2.15 herein" was included
as an event of default the FMA. (Appellant's App. 115).
See footnote
On March 24, 2003, Johnson filed his amended complaint reciting substantially the same
information as was asserted in the original complaint. In the amended complaint,
Johnson added "Hoosier Enterprises III, Inc. f/k/a Hoosier Health Systems, Inc." as a
defendant. (Appellant's App. 36).
On July 29, 2003, Johnson filed his second amended complaint setting out the
wrongful death and loss of consortium counts individually against both Delmar and Hoosier.
Johnson alleged that:
15. Defendant "Hoosier" pursuant to the above referenced Management Agreement, was to maintain in
its own name all licenses, permits and certifications.
16. Defendant "Hoosier" failed to maintain the license to "Canterbury Village in "Hoosier's" name.
17. Pursuant to the Management Agreement, all personnel at "Canterbury Village" were considered employees
of Defendant "Hoosier."
18. By failing to maintain the license to "Canterbury Village" in its own name,
Defendant "Hoosier" fraudulently concealed its identity from the public.
(Appellant's App. 56-57).See footnote Johnson asserted that he did not learn of the
existence of the FMA until November 10, 2001, more than two years after
Mabel's death on April 18, 1999. Further, Johnson averred that he did
not receive a copy of the FMA until January 2003, after his motion
to compel its production.
In September 2003, Hoosier filed its motion for summary judgment asserting that Johnson
had failed to file his complaint adding Hoosier as a defendant until after
the two-year statute of limitations. Hoosier urged that it had not fraudulently
concealed its identity and that it had no identity of interests with Delmar
such that a tolling of the statute of limitations had occurred. In
support of its motion, Hoosier stated:
The FMA provided that Hoosier Health was to maintain in Hoosier Health's name
all licenses, permits and certifications. Accordingly, after the FMA was executed, Delmar
retained counsel in an attempt to cause the yearly license for the managed
facilities, including Canterbury Village, to be held by Hoosier Health. These yearly
licenses are issued by the Indiana State Department of Health ("ISDH"). Despite
Delmar's efforts, the ISDH determined that Hoosier Health, as manager, did not hold
a licensable interest in,
e.g., Canterbury Village. Accordingly Delmar agreed that Hoosier
Health would manage the applicable facilities, including Canterbury Village, under Delmar's ISDH license
and Medicare and Medicaid provider numbers.
(Appellant's App. 65-66) (citations and footnotes omitted).
See footnote
As to fraudulent concealment, Hoosier relied, in part, upon its assertions that Johnson
did not use due diligence to discover Hoosier's identity because: 1) a letter
on file at ISDH stated "that Hoosier Health is the 'operator' of Canterbury
Village[]"; 2) Hoosier had managed Canterbury Village throughout the year in 1999 and
had employed all employees and the administrator at Canterbury Village; thus, "had plaintiff
or his counsel bothered to inquire, any employee at Canterbury Village would have
had to answer correctly that his or her employer was Hoosier Health"; and
3) Delmar had filed bankruptcy proceedings in which Hoosier had filed a proof
of claim including a copy of the FMA that had become "a matter
of public record within the Delmar Bankruptcy." (Appellant's App. 66-67, Appellee's App.
23-24).See footnote
Thus, according to Hoosier Health,
The [Second Amended Complaint] against Hoosier Health is barred as a matter of
law by the expiration of the applicable two-year statute of limitations. There
is no genuine issue of material fact: there is no "relation back"; there
is no "concealment" by Hoosier Health, "fraudulent" or otherwise; and, there is no
tolling under any "identity of interest" doctrine. Additionally, plaintiff failed to exercise
his own due diligence to timely prosecute this action. There is no
just reason for delay. Hoosier Health is entitled to final judgment.
(Appellant's App. 72).
In his response, Johnson filed his designation of evidence and memorandum contending therein
that genuine issues of material fact prevented summary judgment. Johnson argued in
general that his action against Hoosier was not barred by the statute of
limitations because of the existence of tolling provisions and exceptions to the limitations
period. Specifically, Johnson urged that Hoosier "fraudulently concealed its identity" and prevented
him or the public from obtaining the information necessary to pursue a claim
against it. (Appellant's App. 76).
Johnson asserted that by all indications, Delmar operated Canterbury Village. He urged
that despite statutory requirements that one operating a health facility "must obtain a
license," pursuant to Indiana Code § 16-28-2-1, and that such licenses were exclusive
in that a "license issued under this chapter is not assignable or transferable
and may be issued only for the person and premises named in the
application," pursuant to Indiana Code § 16-28-2-5, the ISDH license for Canterbury was
issued to "Delmar Limited Partnership d/b/a/ Canterbury Village" for the period "April 01,
1999 through March 31, 2000 . . . ." (Appellant's App. 84).
Johnson also noted that 410 I.A.C. 16.2-3.1-13(n) requires that the license be
conspicuously posted for public view within the health facility. Johnson urged that
Hoosier "circumvented this law by operating Canterbury Village while falsely indicating to the
public, including the plaintiff herein, that Delmar Limited Partnership was the operator."
(Appellant's App. 78).
Further, Johnson designated documents related to Mabel's admission to Canterbury, none of which
indicated that Hoosier operated the facility. Johnson noted:
a. There were no signs up in the public area that identified Hoosier Enterprises
or Hoosier Health Systems as the operator of Canterbury Village. Exhibit 2,
[Stuart] ReedSee footnote Depo. Pg. 36-37.
b. The employees at Canterbury Village did not have Hoosier Health Systems on their
nametags; rather, those name tags and paychecks all said simply "Canterbury Village."
Exhibit 2, Reed Depo. Pg. 37.
c. When asked, "Back in 1999 if I walked into [Canterbury Village] do you
know whether there would have been any signage or any other evidence of
Hoosier Health Systems, Inc. being involved with the operation of Canterbury Village?" Mr.
Stuart Reed stated, "I don't believe there would be." Id.
(Appellant's App. 77) (footnote added).
Also, Johnson designated:
a. Authorization/Consent/Waiver Form. Exhibit 4.
b. Statement to Permit Payment of Hospital and/or Medical Insurance Benefits to Provider and
Physicians. Exhibit 5.
c. Authorization for and Consent to Skilled Nursing and/or Intermediate Nursing Care. Exhibit
6.
d. Admission Screening Form for Determining Benefit Period. Exhibit 7.
e. PCA Pharmaceutical Service Corp. Authorization for Medications. Exhibit 8.
f. Authorization for Assignment of Benefits. Exhibit 9.
g. Release Statement of Confidentiality and Authorization to Obtain Medical Information. Exhibit 10.
h. Patient Trust Fund Authorization. Exhibit 11.
i. Requested Healthcare Decisions. Exhibit 12.
j. [Advance] Directives/Statement Acknowledgement of Resident Rights, Canterbury Village Bed Hold Policies/facility, Cost
Lists/Medicare/Medicaid information form. Exhibit 13.
k. Advance Directive Information Acknowledgement. Exhibit 14.
(Appellant's App. 77). None of the above documents disclosed that Canterbury was
operated or managed by Hoosier. To the extent that the above documents
contained a name for the assignment of benefits, release of information, or any
reciprocal duties, only the name of the facility appeared: Canterbury Village.
On February 9, 2004, the trial court held a hearing on summary judgment.
On February 18, 2004, the trial court entered summary judgment for Hoosier.
Ind. Code § 34-11-5-1.
"Fraudulent concealment is an equitable doctrine that operates to estop a defendant from
asserting the statute of limitations as a bar to a claim whenever the
defendant, by his own actions, prevents the plaintiff from obtaining the knowledge necessary
to pursue a claim." Doe v. Shults-Lewis Child & Family Servs., 718
N.E.2d 738, 744 (Ind. 1999). The doctrine is available to the plaintiff
when the defendant "has either by deception or by a violation of duty,
concealed from the plaintiff material facts thereby preventing the plaintiff from discovering a
potential cause of action." Id. at 744-45 (quoting Fager v. Hundt, 610
N.E.2d 246, 251 (Ind. 1993)). "When this occurs, equity will toll the
statute of limitations until the equitable grounds cease to operate as a reason
for delay." Doe, 718 N.E.2d at 745.
This court's decision in Stephens v. Irvin, 730 N.E.2d 1271 (Ind. Ct. App.
2000), on reh'g. 734 N.E.2d 1133, trans. denied., is instructive. In Stephens,
we analyzed Indiana's Fraudulent Concealment Statute and noted:
There is a split of opinion on this Court, however, as to whether
the "concealment" discussed in this statute refers solely to the case where a
wrongdoer conceals the cause of action itself, or whether the statute may be
applied when concealment or misrepresentation of the party against whom a cause of
action has arisen occurs.
Id. at 1278. We determined that the doctrine applies to concealment of
parties, as well as concealment of the cause of action. Id. at
1280-81. Moreover, Stephens is illustrative of the principle that the violation of
a duty, e.g., the failure to act, can constitute grounds for tolling the
statute of limitation under the doctrine of fraudulent concealment.
See footnote
As distilled, Hoosier contends that at least three sources existed from which Johnson
could have discerned that Hoosier operated the Canterbury facility: by reviewing the letter
on file at ISDH, by questioning the employees at Canterbury, and by reviewing
the filings within the bankruptcy proceedings. However, Hoosier's argument and the designated
documentation presuppose that Johnson would have had any reason to make those inquiries
when all of the common sources of that information listed Delmar as the
"operator" of the facility or only referred to Canterbury Village.
As Johnson asserted, Indiana Code § 16-28-2-1 provides: "A person must obtain a
license from the director [Indiana State Department of Health] before the person may
operate a health facility." (Emphasis added).
See footnote By statute, the licenses are
exclusive to the person and premises licensed: "A license issued under this chapter
is not assignable or transferable and may be issued only for the person
and premises named in the application." I.C. § 16-28-2-5. Further, 410
I.A.C. 16.2-3.1-13 (n) states: "Each facility shall conspicuously post the license or a
true copy thereof within the facility in a location accessible to public view."
The license posted at the facility stated:
This is to Certify: That a license is hereby granted by the Indiana
State Department of Health to:
DELMAR LIMITED PARTNERSHIP D/B/A
CANTERBURY VILLAGE
To conduct and maintain a 223 BED COMPREHENSIVE CARE FACILITY
In the premises located at 5353 EAST RAYMOND ST INDIANAPOLIS, Indiana
This License is effective for the period April 01, 1999 through March 31,
2000, and is subject to the provisions of IC 16-28. This license
shall not be assignable or transferable, and shall be subject to revocation, replacement,
or reduction for failure to comply with the laws of the State of
Indiana or the rules promulgated thereunder.
(Appellant's App. 84). The license was signed. Under the signature line
appeared the following: "This License Must Be Posted In A Conspicuous Place On
The Premises." (Appellant's App. 84).
As noted above in FACTS, Johnson signed several documents upon Mabel's admission to
the facility in March 1998. All of the admission paperwork signed by
Johnson listed only Canterbury Village and made no reference to Delmar or Hoosier.
Within its memorandum in support of summary judgment, Hoosier now readily acknowledges
that it was the "'operator' of Canterbury Village[]" during the relevant time period,
and in particular, on the date of Mabel's injury April 8, 1999.
(Appellant's App. 66, Appellee's App. 23). However, Hoosier offers no legal
analysis for its failure to disclose to the public that it operated Canterbury
Village from the inception of the FMA on January 1, 1997 until May
2000. Hoosier simply asserts through affidavits by its president, Reed, and its
counsel that it did not obtain the license to operate the facility because
it was unable to do so.
The clear intention of Indiana Code §§ 16-28-2-1 et. seq. is to provide
information to the public for quality and safety assurance purposes. Those goals
are expanded within the ISDH administrative rules that appear in the Indiana Administrative
Code.
See e.g. 410 I.A.C. 16.2-3.1-2 (specific requirements for licensing new facilities
or facilities after change in ownership, or in "officers, directors, agents, or managing
employees or the corporation, association, or other company responsible for the management" of
a health facility); 410 I.A.C. 16.2-3.1-3 ("[a] facility must protect and promote the
rights of each resident"); 410 I.A.C. 16.2-3.1-4 (oral and written notification of residents'
rights must be given by facility upon admission and "available in a publicly
accessible area."). In light of the clear intention of the statutes to
protect the public through full disclosure of information, Hoosier's inability to obtain the
license in its own name and its failure to disclose its existence to
the public cannot serve as a barrier to claims against it.
Here, Johnson presented evidence that Hoosier failed in its duty to disclose its
identity to the public, thereby concealing its identity from anyone "entitled to bring"
an action. See I.C. § 34-11-5-1. "The policy in our
state is to freely allow amendments in order to bring all matters at
issue before the trial court." Stephens, 730 N.E.2d at 1281 ("trial court
properly allowed Plaintiffs leave to amend their complaints and add Stephens as a
defendant, despite the running of the statute of limitations."). Thus, genuine issues
of material fact prevent the granting of summary judgment to Hoosier.
The trial court's determination granting summary judgment to Hoosier is reversed and the
cause is remanded for further proceedings consistent with this decision.
BAKER, J., and FRIEDLANDER, J., concur.