Indemnity and Contribution of Vicariously Liable Party

McLaughlin v. Nahata, 260 A.3d 222 (Pa. Super. 2021), allocatur granted Feb. 24, 2022, appeal docket 7 WAP 2022

This case concerns whether a party found to be liable (TWH) can seek indemnity and/or contribution from a secondarily vicariously liable entity (DCI). TWH is the ostensible employer and DCI is an actual employer of two physicians who provided treatment to Mrs. McLaughlin while she was a patient at TWH. The trial court determined that Drs. Ganjoo and Nahata, the physicians who treated Mrs. McLaughlin, were negligent and entered a verdict against the physicians and TWH. It is this liability that TWH is seeking indemnity/contribution against DCI. In the initial proceeding, DCI was not named as a defendant.  

During the proceedings before the trial court TWH filed a cross claim against DCI seeking indemnification and/or contribution from DCI. Multiple motions for summary judgment were filed by TWH and DCI, which the trial court denied on February 5, 2020. As the trial court summarized:

The trial court pointed to [Appellant’s Fifth Supplemental Pre-Trial Statement, filed within three weeks of the February trial date. In that filing, for the first time [Appellant] identified expert witnesses with regard to TWH’s direct liability. The trial court ruled that such evidence could show TWH’s active fault and defeat its indemnity claim. Further, the issue of control over Drs. Ganjoo and Nahata remained a jury question. The possibility existed that both TWH and [Appellant] could be determined to have jointly controlled these physicians while they rendered substandard care to Mrs. McLaughlin. The trial court ruled, in that circumstance, TWH may seek contribution from [Appellant].

Slip op. at 6-7 (emphasis in original). With respect to DCI’s and TWH’s “joint control” of the physicians, the trial court stated:

[N]either the [Medical Care Availability and Reduction of Error] Act nor common law precludes a finding that two parties may be vicariously liable for the negligent acts of a physician. The MCARE Act in permissive language provides that a hospital through “ostensible agency” principles “may” be vicariously liable for the acts of a physician. [40 P.S. § 1303.516 . . .]. the MCARE Act does not provide that “ostensible agency” is the exclusive means for establishing vicarious liability for the negligent acts of a physician. [] A long-standing common law principle in Pennsylvania recognizes that a jury may properly find two defendants to be vicariously liable for the negligence of another.  Kissell v. Motor Age Transit Line, . . . 53 A.2d 593 ([Pa.] 1947). Such principle applies to a claim of professional medical negligence. See McConnell v. Williams, . . . 65 A.2d 243 [(Pa. 1949)], as cited in Yorston v. Pennell, . . . 153 A.2d 255, 259-60 ([Pa.] 1959), and Tonsic v. Wagner, . . . 329 A.2d 497, 500-501 ([Pa.] 1974)[.] in this instance, [TWH] possesses sufficient evidence to establish [DCI’s] vicarious liability for the negligence of Drs. Ganjoo and Nahata. . . .

Slip op. at 7-8. After the trial court’s decision, TWH filed a motion for reconsideration of the trial court’s February 5, 2020 order and DCI filed a motion requesting the trial court amend its February 5, 2020 order so that it could file an immediate appeal. The trial court thereafter issued its memorandum and order ruling that TWH may seek to prove a claim for contribution and indemnity against DCI. The trial court also granted DCI’s motion for interlocutory appeal.

DCI petitioned Superior Court for permission to file an interlocutory appeal from the trial court’s February 5, 2020 order. Superior Court granted DCI permission to appeal on the following issue: “[c]an a secondarily liable party pass through its vicarious liability for the negligence of a tortfeasor to another secondarily liable party in the form of either contribution or indemnity?” Slip op. at 11.

On the first issue of whether TWH may seek contribution from DCI, DCI argued that it did not contribute to the McLaughlins’ injuries and is not a ‘joint tortfeasor’ under the Uniform Contribution Among Tortfeasors Act (UCATA) or common law; thus, DCI cannot be held liable for contribution to TWH. DCI further argued that the UCATA has never been interpreted “to include those parties who themselves did not contribute to a Plaintiff’s injuries.” Slip op. at 15 (internal quotations omitted).

Superior Court explained that the trial court’s rationale supports its analysis. The trial court, in concluding that TWH may seek contribution from DCI, explained:

Drs. Ganjoo and Nahata are undeniably the ostensible agents of TWH and the actual employees of [DCI]. . . . Recognizing that issues of agency and control exercised by joint employers requires consideration by a jury in the setting of a medical negligence action, the trial court denied summary judgment. See Kissell [v. Motor Age Transit Lines, 53 A.2d 593 (Pa. 1947)] and Tonsic [v. Wagner, 329 A.2d 497 (Pa. 1974).] Specifically, the trial court ruled that TWH possessed a right of contribution against [DCI], because each could be viacariously liable for the fault of Drs. Ganjoo and Nahata. With regard to TWH’s contribution claim, the trial court applied the holding in Sleasman v, Brooks, 32 Pa. D. & C.3d 187, 194-95 (Pa. Com. Pl. 1984). No Pennsylvania Appellate Court has addressed Sleasman.

Sleasman’s holding and the trial court’s application of it, may appear to be at odds with Pennsylvania appellate decisions that define the term “joint tortfeasor” differently. For instance, “joint tortfeasors are parties who either act together in committing a wrong or whose acts, if independent of each other, unite to form a single injury.” L.B. Foster Co. v. Charles Caracciolo Steel & Metal Yard, Inc, 777 A.2d 1090, 1095 (Pa. Super. 2001). Joint tortfeasors exist where two or more persons owe to any other the same duty and by their common neglect, such other is injured. LaZar v. RUR Indus., Inc., 487 A.2d 29, 32 ([Pa. Super.] 1985) [(emphasis added by trial court);] and see Crowell v. City of Philadelphia, 613 A.2d 1178, 1181 (Pa. 1992) [(]“Joint tortfeasor liability . . . arises when two or more persons acting together injure another. It is distinguished from vicarious liability in that liability attaches by virtue of the actions of each person as opposed to by operation of law.” [(citation omitted))].The Supreme Court has also held “ . . . that an agent and its principal are not joint tortfeasors under UCATA when the liability of the principal is vicarious liability and  is not based upon the principal’s independent actionable fault.” Mamalis v. Atlas Van Lines, Inc., 560 A.2d 1380, 1381 ([Pa.] 1989).

However, in the complex setting of this protracted medical negligence case, relying on targeted precedent such as Mamalis is not appropriate. As the Supreme Court later held, Mamalis “was directed to a simple fact pattern involving a single principle, a single agent, a single event[.]” Maloney [v. Valley Med. Facilities, Inc., . . . 984 A.3d 478, 485 ([Pa.] 2009) . . . . Such is not the facts of this dispute between TWH and [DCI].

Slip op. at 15-16 (emphasis in original). The trial court thus concluded that neither TWH nor DCI should be allowed to escape liability without a full and fair hearing. Superior Court agreed with the trial court’s assessment and reasoning and rejected DCI’s claim that a secondarily liable party has no legal right to seek contribution from another secondarily liable party. Additionally, Superior Court agreed with the trial court that further evidentiary proceedings  are warranted and, therefore, ordered a remand.

Next, Superior Court addressed whether TWH is entitled to indemnity from DCI. DCI, relying on the Supreme Court’s ruling in Builder’s Supply Co. v. McCabe, 77 A.2d 368 (Pa. 1951), argued that the Court’s holding “that the right of a person vicariously or secondarily liable for a tort to recover from one primarily liable has been universally recognized.” Slip op. at 19 (emphasis in original). DCI thus argued that there were no allegations that DCI is primarily liable in this case and, under Pennsylvania law, an employer is not primarily liable when tortious acts are committed by its employees. Accordingly, “[b]ecause [DCI] cannot be a primary tortfeasor and indemnity under Pennsylvania law cannot be obtained against a secondarily liable part, the [t]rial [c]ourt erred in failing to dismiss TWH’s indemnity claim.” Slip op. at 20.

Superior Court again found the trial court’s analysis and reasoning persuasive. The trial court stated:

[DCI’s] application of Builders Supply, . . . Burch [v. Sears Roebuck & Co., 467 A.2d 615 (Pa. Super. 1983], . . . and Sirianni [v. Nugent Bros.,Inc., 506 A.2d 868 (Pa. 1983)] . . . appears unprecedented and does not necessarily square with the purposes of indemnity. Indemnity is a common law equitable remedy that is aimed at preventing an unjust result. See . . . Burch, 467 A.2d at 622. In this instance, if the McLaughlins had included [DCI] as an original defendant in this action, the right to proceed to trial against [DCI] would be clear. Because the McLaughlins failed to do so in an action they filed two years after the offending incidents of malpractice, [DCI] has no sole liability to the McLaughlins.

However, [DCI’s] lack of sole liability to the Mclaughlins does not preclude TWH’s right to pursue its equitable remedies. As the Superior Court in Burch explained:

These remedies between defendants are available even against defendants whom the plaintiff does not sue, and their statute of limitations does not commence at the time of the Plaintiff’s injury. Wnek v. Boyle, . . . 96 A.2d 857 ([Pa.] 1953). Thus, victims may not, by the timing of their complaint, choose which tortfeasor will pay, and defendants faced with the frequent occurrence of eleventh-hour lawsuits may still pursue their rightful equitable remedies against other tortfeasors. Id.

Burch, 467 A.2d [at] 622 []. . . . The combination of the McLaughlins’ choice of defendants and the mechanical application of statutory ostensible agency principles should not compel TWH to pay for liabilities [DCI’s] employees created while acting within the course and scope of their employment. Denying TWH its “day in court” appears inequitable and unjust.

Slip op. at 20-21 (emphasis in original). Accordingly, Superior Court concluded that TWH may seek to prove its right to indemnity from DCI at trial.  

The Supreme Court granted allocatur to consider the following issues:

(1) Did the Superior Court err when it affirmed the Trial Court’s expansion of causes of action not recognized under Pennsylvania law on grounds that the Superior Court could not reverse the Trial Court’s expansion of causes of action where there is absence of Supreme Court precedent?

(2) Did the Superior Court err by permitting the Washington Hospital to pursue an indemnity claim against [Petitioner], an admittedly non-negligent secondarily (vicariously) liable party, which is inconsistent with the established law of Pennsylvania that permits indemnity claims only against actively negligent parties, while simultaneously recognizing that the Trial Court expanded Pennsylvania Law?

 (3) Did the Superior Court err by permitting the Washington Hospital to pursue a contribution claim against DCI, a party whom the Washington Hospital specifically admits is not a tortfeasor, despite the fact that the Uniform Contribution Among Tortfeasors Act and precedential case law only allow for contribution among tortfeasors?


For more information, contact Kevin McKeon or Dennis Whitaker.