Temple Univ. Hosp., Inc. v. United States — June 2016 (Summary)

INDEMNIFICATION

Temple Univ. Hosp., Inc. v. United States
Civil Action No. 16-1073 (E.D. Pa. June 20, 2016)

The District Court for the Eastern District of Pennsylvania granted the United States’ motion to dismiss a contractual indemnity claim but did not dismiss the counts related to the common law claims for contribution and indemnity brought by a hospital.

A hospital was sued for the alleged negligence of a physician who was alleged to be the ostensible agent of the hospital but was employed by the Federal Public Health Service.  The Hospital settled the claim that had been filed against it.  The hospital then sued the physician’s employer, the United States, under the Federal Tort Claims Act, seeking indemnity and contribution because the hospital and the physician’s employer signed a physician sharing agreement and the physician’s employer allegedly received federal funding.

The hospital argued that because the employer was deemed to be a federally funded clinic, it possessed the implied authority required to bind the United States. The court rejected this argument because the hospital failed to show that an integral part of the clinic’s duties consisted of binding the United States in contract, which was required to demonstrate that the clinic plausibly had the implied contractual authority.

However, the court found that the hospital successfully stated a claim under the common law for contribution and indemnity against the United States and allowed those claims to continue. The United States argued that the hospital had not alleged facts to show it fully extinguished the physician’s liability as required for claim contribution, but the court found sufficient the hospital’s allegation that the settlement agreement expressly released the physician from liability. Additionally, the United States argued that the common law indemnity claim was insufficient because it was inconsistent with the contribution claim and the hospital lacked a legal relationship compelling it to pay the physician’s legal liabilities. The court stated that inconsistent claims were permissible and that the theory of respondeat superior may make the hospital liable for an independent contractor physician.