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NOTE: The contents of this post consist primarily, but not completely, of words taken directly from the appellate court opinion with citations generally omitted. Anyone intending to rely upon the opinion should consult the published decision.IN THE NEWS: “LAWYERS CRITICAL OF JUDGES FIGHT FOR RIGHTS”The National Law Journal, February 9, 2009:“Maybe it’s something in the air. In Florida, an attorney faces discipline this spring over a blog entry on a courthouse blog in which he described a judge as an “evil, unfair witch” with an “ugly, condescending attitude” and questioned her mental stability. The Florida Supreme Court refused to hear the lawyer’s constitutional argument in October. He will be reprimanded in April and has to pay a $1,200 fine. Florida State Bar v. Conway, No. SC08-326 (Fla.). In Michigan, flamboyant trial attorney Geoffrey Fieger, the one-time lawyer to Dr. Jack Kevorkian, is pursuing a highly watched right-to-criticize-judges lawsuit. Fieger is challenging a state rule that was used to sanction him for calling state appeals judges “jackasses” in a radio show and comparing them to Nazis for overturning a $15 million verdict he had won.“Even though we all thought we had First Amendment rights, be careful,” Conway warned. “It’s going to cost you a lot of money and maybe even your practice.”1. Statute of Limitations for Wrongful Death/Medical Malpractice. Newkirk v. Bethlehem Woods Nursing and Rehabilitation Center, 898 N.E.2d 299 (Ind., December 24, 2008). (Sullivan) On September 10, 2001, Martha O'Neal was admitted to Bethlehem Woods Nursing and Rehabilitation Center (“Bethlehem”) for rehabilitation following surgery. During her stay at Bethlehem, O'Neal was the victim of several acts of medical malpractice. On September 22, 2001, a Bethlehem employee discovered O'Neal lying in a pool of her own blood. She was transferred to the hospital. O'Neal died on November 6, 2001.On October 22, 2003, more than two years after the medical negligence occurred, but within two years of O'Neal's death, the Estate of Martha O'Neal (“Estate”) filed a complaint under the Wrongful Death Act, Ind.Code § 34-23-1-2, against Bethlehem alleging that Bethlehem provided negligent medical care to O'Neal that ultimately led to her death. Bethlehem moved for summary judgment, arguing that the Estate's action was barred by the requirement to bring an action for medical malpractice within two years of the alleged act or omission. The trial court agreed and granted Bethlehem's motion.The Court of Appeals reversed. It held (as had the trial court) that the Estate's claim arose under the Indiana Professional Services Statute (“PSS”), I.C. § 34-11-2-3, not the Indiana Medical Malpractice Act (“MMA”), I.C. § 34-18-7-1(b), because Bethlehem was not a “qualified provider” under the MMA and, therefore, not eligible for its protections. But the Court of Appeals went on to hold that because the Estate's lawsuit had been filed within the limitations period of the WDA, its claim was timely filed.In this case, the substantive tort claim underlying the wrongful death action is precisely the same as it was in the Ellenwine [v. Fairley, 846 N.E.2d 657 (Ind. 2006)] scenario: medical malpractice. The PSS did not create or establish the medical malpractice claim but the Legislature did establish a two-year limitations period for filing such claims. As we said in Ellenwine: “Because a patient who has been the victim of medical negligence could well live many more than two years beyond the occurrence of the malpractice only to ultimately die as a result of it, applying the two-years-after-death limitations period of the wrongful death statute where a patient dies from the malpractice seems to us totally inconsistent with this legislative goal.” 846 N.E.2d at 664.The Estate filed its complaint on October 22, 2003, more than two years after the last date upon which Bethlehem's alleged negligent conduct could have occurred, but less than two years from O'Neal's death. If death is caused by the malpractice, the malpractice claim terminates at the patient's death, and a wrongful death claim must be filed by the personal representative within two years of the occurrence of the malpractice. Id. at 665. O'Neal's death was alleged to have been caused by Bethlehem's medical malpractice. As such, the wrongful death claim was required to have been filed by her personal representative within two years of the occurrence of the malpractice. The Estate did not do so and the trial court properly concluded that its claim was not timely filed.Lesson: A wrongful death claim for medical malpractice must be filed within 2 years of the malpractice; within two years of death may be too late. 2. Statute of Limitations for Wrongful Death/Products Liability. Technisand, Inc. v. Melton, 898 N.E.2d 303 (Ind., December 24, 2008). (Sullivan) Patty Melton (“Patty”) died from leukemia on July 25, 2002. Her husband, Jessie Melton (“Jessie”), is the personal representative of her estate. In July, 2003, KIPT [Patty’s employer] provided Jessie's counsel with a letter from KIPT and a Material Safety Data Sheet for resin-coated sand made by Technisand. The letter stated that Patty might have been exposed to the resin-coated sand during her work at KIPT. The data sheet said that the use of the resin-coated sand could create formaldehyde fumes, and that formaldehyde was a carcinogen. On November 29, 2004, Patty's doctor, Dr. James K. Hwang, wrote to Jessie and disclosed that formaldehyde exposure “may have placed [Patty] at a greater risk for leukemia.”Jessie contends that the limitations period under the Indiana Products Liability Act controls the time limitation on his ability to bring a claim. The PLA allows a product liability action to be filed within two years after the cause of action accrues. I.C. § 34-20-3-1(b)(1). A cause of action “accrues” under the PLA, “[o]nce a plaintiff's doctor expressly informs the plaintiff that there is a 'reasonable possibility, if not a probability' that an injury was caused by an act or product.” Degussa Corp. v. Mullens, 744 N.E.2d 407, 411 (Ind.2001). Jessie's claim was clearly filed within two years of the accrual of the products liability claim.Technisand argues that Jessie's claim was required to be filed within the limitations period of Indiana’s Wrongful Death Act (“WDA”). Because Patty died more than two years before Jessie's claim was amended to name Technisand, Technisand maintains that Jessie's claim against it should be dismissed as untimely.The Court of Appeals reasoned that because Jessie's claim “involves products liability,” and Technisand was added timely pursuant to the PLA, Jessie's claim against Technisand could proceed. The Court of Appeals was incorrect in this regard because it failed to take into account the operation of Indiana's Survival Statute (“Survival Act”), I.C. § 34-9-3-1. The Survival Act provides that if an individual who has a personal injury claim or cause of action dies, the claim or cause of action does not survive-unless the individual dies from causes other than those personal injuries. The claim here is that Patty died from personal injuries allegedly caused by Technisand. As such, once Patty died, Jessie's claim was a claim for wrongful death.The Legislature's intent was that the limitations period provided in the WDA always serves as an outside limit on the amount of time that the personal representative of a person whose death is caused by the wrongful act or omission of another will have to file the lawsuit.The injuries forming the basis for the substantive tort claim, that of products liability, caused Patty's death. Pursuant to the Survival Act, Patty's products liability claim against Technisand terminated at her death; only the WDA claim survived. The WDA requires that a wrongful death action be commenced within two years of the decedent's date of death. Jessie conceded that he did not bring suit against Technisand within two years of Patty's death. Jessie cannot use the PLA statute of limitations as an alternative to the statute of limitation contained within the WDA. His claim against Technisand was not timely filed.Lesson: A wrongful death claim based on an underlying product liability claim must be filed within two years of the date of the decedent's death; two years after accrual of the product liability claim may be too late.3. Statute of Limitations; Successor Liability Following Asset Sale. Cooper Industries v. South Bend, 899 N.E.2d 1274 (Ind., January 22, 2009). (Shepard)The City of South Bend now owns much of the land where Studebaker Corp. once manufactured automobiles. It has sued Cooper Industries, LLC and others for environmental damage done to the site. Cooper contends that South Bend’s claims are barred by the statute of limitation. In response, South Bend argues that its cause of action for damages to the Studebaker property did not accrue for limitation purposes until it became the owner of the property and had a right to commence the action. We cannot agree. Indiana adheres to the rule that “third parties are usually held accountable for the time running against their predecessors in interest.” Accepting South Bend's argument would have the practical effect of allowing the mere transfer of property to resurrect the claims of prior landowners and predecessors-in-interests who had actual knowledge of injuries to property.One of South Bend’s claims is an “environmental legal action” (ELA) to recover costs of removal or remedial action pursuant to a statute enacted in 1997. “A statute of limitation does not begin to run against a cause of action before that cause of action exists, i.e., before a judicial remedy is available to the plaintiff.” Martin v. Richey, 711 N.E.2d 1273, 1284 n. 12 (Ind.1999). The substance of a cause of action, rather than its form, determines the applicability of the statute of limitation. Cooper asserts that “South Bend had several ways to sue exactly the same parties for the same contamination under the same (or more stringent) standards long before the ELA amendments.” If the ELA simply amends, for clarification or other purposes, pre-existing environmental claims, any change would apply strictly on a prospective basis. On the other hand, if the ELA creates an entirely new action, no cause of action could have existed until its effective date. ELA seems to fall somewhere in the middle. In this case, however, South Bend did not have a complete cause of action until the ELA became effective. Therefore, the statute of limitation could not have begun to accrue until that date.Cooper further asserts that the statute of limitation should have run against South Bend in accord with standard discovery rule principles-when it knew or should have known of the injury. This misses a broader point about applying statutes of limitation: a statute does not run until a cause of action is complete.Cooper claims that under this logic a claim could be brought based on facts known for a hundred years. Such a claim still must be brought, however, within the applicable statute of limitation from the point of a new cause of action's effective date. In other words, any opening of the floodgates would have a time limit. That time for the ELA passed either on February 28, 2004 or February 28, 2008, depending on which statute of limitation applies.Though the parties join in debate over whether South Bend has agreed that the property damage statute of limitation applies in this case, we will adopt six years as the applicable time period. Six years from the accrual date was February 28, 2004. Because South Bend filed this action March 19, 2003, it filed within even the shortest arguable limitation.Both parties moved for summary judgment on whether Cooper is the corporate successor of Studebaker with regard to the environmental liabilities involved in this case. Cooper contends that the liabilities did not pass from Studebaker to Studebaker-Worthington in the 1967 asset sale and therefore did not end up with Cooper. Cooper's theory is that asset purchases do not transfer liability, so the liabilities stayed with Studebaker until Studebaker terminated its corporate existence, at which point the liabilities expired. South Bend argues that the liabilities were transferred to Studebaker-Worthington in the 1967 sale, and, in any event, the situation merits application of either the de facto merger or the “mere continuation” doctrines.Under Indiana law, where a corporation purchases the assets of another, the general rule is that the buyer does not assume the liabilities of the seller. There are well-recognized exceptions to this rule. The “de facto merger” and “mere continuation” doctrines are widely accepted in the law of American states, including Indiana. Courts sometimes treat asset transfers as de facto mergers where the economic effect of the transaction makes it a merger in all but name. Some pertinent findings might include continuity of the predecessor corporation's business enterprise as to management, location, and business lines; prompt liquidation of the seller corporation; and assumption of the debts of the seller necessary to the ongoing operation of the business. We conclude that the facts here suffice to warrant the trial court's finding that the 1967 transaction constituted a de facto merger such that Cooper may be held to answer South Bend's claims.The doctrine of “mere continuation” has a slightly different focus. It asks whether the predecessor corporation should be deemed simply to have re-incarnated itself, largely aside of the business operations. Factors pertinent to this determination include whether there is a continuation of shareholders, directors, and officers into the new entity. The trial court properly found that the 1967 transaction was a mere continuation of the earlier corporate forms.The trial court was correct that the ELA claim is timely, and that Cooper is the rightful corporate successor of Studebaker.Lessons:1. A statute of limitations may begin to run on a claim under a new law even before its enactment if the substance of the cause of action already existed.2. A new statute may create a timely cause of action for events 100 years ago.3. The “de facto” merger and “mere continuation” doctrines create exceptions to the general rule that the purchaser in an asset sale does not assume the seller’s liabilities. 4. Consolidation of Preliminary Injunction Hearing with Trial on the Merits. Roberts v. Community Hospital of Indiana, 897 N.E.2d 458 (Ind., December 9, 2008). (Boehm)On May 31, 2006, Dr. John Roberts sued Community for breach of his residency contract. He did not request a jury trial, but moved for both a temporary restraining order and a preliminary injunction reinstating him as a resident at Community. Approximately two months after the suit was filed, the trial court held a preliminary injunction hearing. Over the course of approximately eight hours, testimony was received from several witnesses and the parties also introduced several dozen documents. After the hearing, in a single order entitled “Final Judgment,” the trial court consolidated the preliminary injunction hearing with a trial on the merits pursuant to Trial Rule 65(A)(2), denied Dr. Roberts's application for a preliminary injunction, and entered final judgment in favor of Community on the breach of contract claim. The court had not provided notice of consolidation to the parties prior to the entry of judgment. Dr. Roberts filed a Motion to Correct Error challenging the consolidation. Indiana Trial Rule 65(A)(2) provides that “[b]efore or after the commencement of the hearing of an application for a preliminary injunction, the court may o…
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