Lalonde v. Cent. Me. Med. Ctr. — Jan. 2017 (Summary)

INDEMNIFICATION POLICIES

Lalonde v. Cent. Me. Med. Ctr.
Docket: And-16-68 (Me. Jan. 31, 2017)

The Supreme Judicial Court of Maine refused to dismiss a claim for indemnification brought against a hospital by a physician whose employment it had terminated, on the basis that the hospital’s corporate bylaws language stated that the hospital would indemnify any person who was or is a party to an action, suit, or proceeding, by reason of the fact that the person was an employee of the hospital.  Interestingly, the physician was seeking indemnification for the costs associated with defending an investigation and complaint brought against him by the Board of Licensure in Medicine.  And that investigation and complaint arose as a result of the hospital filing a report with the Board stating that the physician’s employment was terminated “because of concerns about his clinical competence and behavior.”

The hospital claimed that it could not be made to indemnify the physician for his defense because it was immune from liability for reporting the physician’s termination to the Board.  The court agreed that the hospital was immune for reporting, but held that the claim for indemnification was unrelated to whether the hospital was the entity that reported the physician to the Board.  Accordingly, immunity would not apply to the claim for indemnification.