Indiana Court of Appeals Clears Up Misconception, Rules Plaintiff Can Sue Employer Without Suing Employee

Many more moons have passed than I care to count since we first discussed the doctrine of respondeat superior. (To borrow, a line, “I don’t remember growing older”). Translated from Latin to English, the doctrine means to let the master answer. It obligates a principal to be liable for the acts of its agent done within the course and scope of the agent’s services to the principal. An employer being held to answer for the acts of its employee is where the doctrine most frequently arises, but employee-employer is merely a specie of principal-agent, arising under the same legal tradition.

In the realm of medical malpractice, as we’ve twice discussed, it is well-established that a hospital may be held liable for its agents, both actual and ostensible, even if the statute of limitations has passed without the agent having been sued. Oddly, despite there being nothing in the medical-malpractice cases to indicate that the principles embodied in such cases were at all unique to claims arising under Indiana’s Medical Malpractice Act, at least one federal district court had viewed that caselaw confined to such claims. In Kapitan v. DT Chicagoland Express Inc., the Northern District of Indiana wrote:
Plaintiffs cite to two medical malpractice cases for the proposition that “employers can be held vicariously liable even though the statute of limitations barred suit against the employee.” (As conceded by Plaintiffs, in both Helms and Amburgey, the issue was whether a medical institution was liable for its doctors’ malpractice claims. In Amburgey, the court noted that “some of our sister states have concluded that the running of a statute of limitations with respect to a physician does not preclude a complaint against a hospital on a theory of vicarious liability and apparent authority.” Yet the medical malpractice context has been treated differently, and the Indiana Court of Appeals has “acknowledge[d] the decisions cited by [defendant] that hold, in other contexts, that a principal cannot be vicariously liable if an action could not be maintained against the tortfeasor agent.” Here, CXI Trucking cites two main cases holding that because the employee could not be held liable, no action based upon respondeat superior is maintainable against the employer. Both Riffle and Cole are personal injury negligent actions, like this one, thus they are controlling.
Plaintiffs try to distinguish Riffle and Cole, arguing that here, it has not been determined that a claim cannot be maintained against Norris — rather the Court simply dismissed him without prejudice due to a failure to timely serve. As Defendant points out, though, in addition to being dismissed for not being timely served, the statute of limitations has run with regard to Norris. Under Indiana law, the applicable statute of limitations expired on September 2, 2012, because the accident occurred on September 2, 2010. . . .This case is analogous to Cole, where the court concluded that a negligence action could not be maintained against the employee because the statute of limitations had expired; therefore, the plaintiff also could not pursue an action against the employer for respondeat superior.
As the District of Minnesota surmised, looking to Kapitan and cases from other jurisdictions, the Northern District of Indiana’s conclusion was “that a statute-of-limitations dismissal of an agent bars the imposition of vicarious liability against the principal.”

That sets the stage for Monday’s ruling from the Indiana Court of Appeals in Hogan v. Magnolia Health Systems 41, LLC, which soundly and unequivocally rejected that proposition. There, a claim was brought against an assisted living facility. After the applicable statute of limitations had come and gone, the plaintiff sought unsuccessfully to name the employee of the facility for whose negligence the facility was to be held liable under the doctrine of respondeat superior. The trial court, concluded, as the Northern District of Indiana had in Kapitan: that the bar to adding the employee precludes a claim against the employer. The Court of Appeals, reversing the lower court’s ruling, wholly rejected that position:
The general rule is that vicarious liability can be imposed when an employer, who is not liable because of his own acts, is found responsible for the wrongful acts of his employee committed within the scope of employment. The employer and employee are jointly and severally liable: both the employer and employee are liable for any injury and damages caused by the employee’s negligence, and either or both may be sued for such damages at the option of the injured party. For an employee’s act to fall within the scope of employment, the act must be incidental to authorized conduct or further the employer’s business to an appreciable extent. An employer is not held liable under the doctrine of respondeat superior because it did anything wrong, “but rather because of the [employe’’s] relationship to the wrongdoer.” “[F]or respondeat liability to attach, there must also be underlying liability of the acting party.”

Magnolia claims that a plaintiff “cannot chose to sue ‘either’ an employer or employee under the theory of respondeat superior.” Contrary to Magnolia’s assertion, a plaintiff does, in fact, have the option of suing either the employee, employer, or both. There is no requirement that a plaintiff must sue the individual employee in order for an employer to be held liable for the employee’s conduct under the theory of respondeat superior; an employee only needs to have committed some act within the scope of employment for which he could be sued. As stated above, it is the employer’s relationship to the wrongdoer that makes the employer liable. An injured party’s option to sue both essentially serves as a fail-safe for that plaintiff. If an employee is found to have been acting in the scope of employment, the plaintiff cannot recover from both the employee and employer. However, if the employee is found to be negligent but was not acting within the scope of employment, a plaintiff could still potentially obtain a judgment against the employee. Here, Plaintiff filed suit against Magnolia within the statute of limitations and did not have to file suit against Young or name her as a defendant in the first place. Therefore, Young’s dismissal as a defendant has no effect on Plaintiff’s respondeat superior action against Magnolia.

Magnolia cites several cases that have held, “[W]here the employee cannot be held liable, no action based solely on respondeat superior is maintainable against the employer.” In essence, Magnolia’s position is that because Young was dismissed as a defendant and a judgment cannot be entered against her individually, a cause of action based on respondeat superior for Young’s conduct cannot be maintained against Magnolia. This is not so. “Liable” means “[r]esponsible or answerable in law; legally obligated.” If our jurisprudence meant that the employee had to be named as a defendant and a judgment had to be entered against the employee for which he or she is legally obligated in order for the employer to be liable under respondeat superior, it would have so held. Instead, it is clear that where an employee has acted negligently, liability will be imputed to his or her employer by virtue of the employee/employer relationship because of the wrongful conduct. Where an employee is not negligent, his employer cannot be liable.
So what are the key takeaways from Hogan? First, the portion of Kapitan quoted above is not a sound assertion of Indiana law. And, second, these two sentences from Hogan say it all: “[A] plaintiff does, in fact, have the option of suing either the employee, employer, or both. There is no requirement that a plaintiff must sue the individual employee in order for an employer to be held liable for the employee’s conduct under the theory of respondeat superior[.]”

Join us again next time for further discussion of developments in the law.

Sources

• Kapitan v. DT Chicagoland Express Inc., No. 2:12-CV-321, 2013 U.S. Dist. LEXIS 147941, 2013 WL 5655704 (N.D. Ind. Oct. 15, 2013) (Lozano, J.).
• Helms v. Rudicel, 986 N.E.2d 302 (Ind. Ct. App. 2013) (May, J.), trans. denied.
• Columbus Reg’l Hosp. v. Amburgey, 976 N.E.2d 709 (Ind. Ct. App. 2012) (Brown, J.), trans. denied.
• Riffle v. Knecht Excavating, 647 N.E.2d 334 (Ind. Ct. App. 1995) (Staton, J.), trans. denied.
• Cole v. Shults-Lewis Child & Family Servs., Inc., 677 N.E.2d 1069 (Ind. Ct. App. 1997) (Rucker, J.), trans. granted and vacated in part sub nom. Doe v. Shults-Lewis Child & Family Servs., Inc., 718 N.E.2d 738 (Ind. 1999) (Selby, J.).
• Krekelberg v. City of Minneapolis, No. 13-3562 (DWF/TNL), 2018 U.S. Dist. LEXIS 126891, at *7, 2018 WL 3621031 (D. Minn. July 30, 2018) (Frank, J.).
• Hogan v. Magnolia Health Sys. 41, LLC, 161 N.E.3d 365 (Ind. Ct. App. 2020) (Robb, J.), trans. denied.
• Colin E. Flora, Employer Liability: Respondeat Superior Doctrine, Hoosier Litig. Blog (Apr. 26, 2013).
• Colin E. Flora, Court Finds Hospital Can be Liable Where Doctors Were Apparent Agents and Claims Agasint the Doctors Could No Longer be Brought, Hoosier Litig. Blog (Sep. 20, 2012).
• Colin E. Flora, Indiana Court of Appeals Reminds Hospital Can be Liable for Acts of Independent Contractors, Hoosier Litig. Blog (Oct. 2, 2020).

*Disclaimer: The author is licensed to practice in the state of Indiana. The information contained above is provided for informational purposes only and should not be construed as legal advice on any subject matter. Laws vary by state and region. Furthermore, the law is constantly changing. Thus, the information above may no longer be accurate at this time. No reader of this content, clients or otherwise, should act or refrain from acting on the basis of any content included herein without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue.