The Tennessee Supreme Court issued opinions today in two cases asserting claims under the Health Care Liability Act. In both opinions, the Court held that the plaintiffs could proceed with their vicarious liability claims against the defendant hospitals, which were timely filed, even though the statute of limitations would have barred any claims against the hospitals’ agents. The Court concluded that, in the circumstances of these cases, the Health Care Liability Act abrogates a common-law rule known as the operation-of-law exception. Under that common-law rule, even though a plaintiff ordinarily may choose whether to sue the principal, the agent, or both, a plaintiff may not bring a vicarious liability claim against the principal if the underlying claims against the agents are procedurally barred by operation of law.
The first case, Ultsch v. HTI Memorial Hospital Corp., No. M2020-00341-SC-R11-CV, arose from the death of Sheila Carol Warren upon her discharge from TriStar Skyline Medical Center. Warren’s next of kin asserted health care liability claims against Skyline but did not sue Skyline’s agents. The second case, Gardner v. Saint Thomas Midtown Hospital, No. M2019-02237-SC-R11-CV, arose from injuries sustained by Beverly Gardner while undergoing surgery at Saint Thomas Midtown Hospital. Gardner asserted health care liability claims against Saint Thomas but did not sue Saint Thomas’s agents.
>In both cases, the plaintiffs provided pre-suit notice to the defendants. Under the Health Care Liability Act, providing pre-suit notice automatically extended the statute of limitations as to claims against those defendants. The plaintiffs then filed complaints against the defendants within the extended statute of limitations, alleging vicarious liability claims against the defendants. In response to these claims, Skyline filed a motion to dismiss, and Saint Thomas filed a motion for summary judgment. Both motions argued that the plaintiffs’ vicarious liability claims were barred under the operation-of-law exception because the statute of limitations for any claims against the defendants’ agents had already expired by the time the plaintiffs filed suit. The trial courts in both cases granted the defendants’ motions. The Court of Appeals reversed, holding that the provisions of the Act prevail over the common-law exception.
The Tennessee Supreme Court granted review in both cases to consider whether the plaintiffs’ claims could proceed. The Court first considered whether the operation-of-law exception would otherwise apply in these cases. In opinions authored by Justice Bivins, a majority of the Court concluded that it would. In opinions authored by Justice Campbell, a different majority of the Court then held that the Act abrogates the operation-of-law exception in the circumstances of these cases. The Court reasoned that applying the exception in these circumstances would essentially nullify the Act’s automatic extension of the statute of limitations for defendants to whom pre-suit notice is provided. The Court thus affirmed the judgments of the Court of Appeals and remanded the actions for further proceedings.
Justice Campbell, joined only by Justice Kirby, assumed that the operation-of-law exception would otherwise apply in these cases but found it unnecessary to decide that question to resolve these appeals.
Justice Sharon G. Lee wrote separately. In her view, the operation-of-law exception applied, and Justice Campbell’s failure to resolve this threshold issue made her opinion an academic exercise, providing limited guidance to the parties. Justice Lee agreed that the Act prevails over the common-law rule in these cases.
Justice Jeff Bivins also wrote separately. Joined by Chief Justice Page and Justice Lee, he concluded for the Court that the operation-of-law exception would otherwise apply in these cases. Joined only by Chief Justice Page, he also dissented in part. He disagreed with the majority’s holding that the Act abrogated the operation-of-law exception. In his view, a statute must be strictly construed in determining whether it abrogates common law, such as the operation-of-law exception. Here, the Act and the operation-of-law exception could coexist because the plaintiff could either sue the principal within the statute of limitations applicable to claims against the agents or provide pre-suit notice to both the principal and the agents. As a result, there is not a legal conflict that requires abrogation of the operation-of-law exception.
The opinions in these cases are available here: Ultsch opinion authored by Justice Campbell; Ultsch opinion authored by Justice Lee; Ultsch opinion authored by Justice Bivins; Gardner opinion authored by Justice Campbell; Gardner opinion authored by Justice Lee; Gardner opinion authored by Justice Bivins.