When Is an Indemnity Action Time-Barred under the AMLA?
McNamara v. Benchmark Ins. Co.: An indemnity action that arises from an underlying claim of medical malpractice is time-barred if commenced more than four years after the medical injury is incurred, pursuant to Alabama Code (1975) § 6-5-482.
Facts of the Matter
In December 2009, Ricky Avant’s doctor prescribed him to take Tobramycin for two weeks. Southern Medical was assigned to fill the prescription but discovered that Medicare would not pay for Tobramycin. At Southern Medical’s suggestion, Avant’s prescription was changed to gentamicin, which Avant was to take for only one week (rather than two). Avant’s doctor relayed the new order to the pharmacist Joseph McNamara at Southern Medical who incorrectly recorded and filled the gentamicin prescription. Avant received gentamicin for two weeks. In January 2010, Avant was hospitalized for severe gentamicin toxicity and other related conditions.
In October 2011, Avant sued Southern Medical for medical malpractice. Benchmark Insurance Company provided Southern Medical with a defense for the claims made by Avant. Eventually, Avant and Southern Medical reached a settlement agreement, which Benchmark paid. Then in February 14, Benchmark (as subrogee of Southern Medical) sued McNamara, attempting to recover the settlement funds it had paid out to Avant.
Benchmark alleged that Avant’s claims against Southern Medical were “predicated upon the alleged malfeasance, actions and/or omissions and active negligence of” McNamara and that “all monies paid for [the] settlement were expressly for any and all allegations of liability arising out of vicarious liability and/or respondeat superior.” Benchmark therefore sought declaratory judgment that McNamara was “legally responsible for any and all damages incurred by Benchmark for his malpractice and for damages awarded and/or settlements paid [to Avant].”
Benchmark and McNamara both filed motions for summary judgment. The trial court in Shelby County denied McNamara’s motion and granted Benchmark’s, entering an award of $465,000. McNamara appealed. McNamara v. Benchmark Ins. Co. [Ms. 1151314 Sep. 8, 2017], ___ So.3d ___ (Ala. 2017).
Appellate Issues: Legislative Intent behind Alabama Code § 6-5-482
McNamara argued on appeal that Benchmark’s indemnity action was time-barred under Alabama Code (1975) § 6-5-482 (part of the Alabama Medical Liability Act), which requires generally that actions against healthcare providers be commenced within two years after the act, omission, or failure being complained of. But more specifically, § 6-5-482 provides that “in no event may the action be commenced more than four years after such act.” McNamara’s alleged actions that gave rise to Avant’s claim occurred in December 2009. Benchmark did not initiate its indemnity action against McNamara until February 2014, more than four years later.
Benchmark contended that the AMLA does not apply to all actions against healthcare providers. But in each of the cases cited by Benchmark, the claims against the medical providers did not derive from the provision of medical treatment. Benchmark argued that its suit against McNamara was based on an indemnity right arising from the principal/agent relationship between Southern Medical and McNamara, and that it was not a medical-malpractice case seeking redress for medical injury.
McNamara responded that although Benchmark’s indemnity action was not technically seeking recovery for a medical injury, it is undisputed that the indemnity action is predicated on Avant’s efforts to recover for a medical injury. McNamara directed the court’s attention to Alabama Code (1975) § 6-5-482(b), which specifically references Alabama Code (1975) § 6-2-6 (the statute governing the computations of the limitations period typically application to principal/agent indemnity action), and states, “notwithstanding any provisions of such sections, no action shall be commenced more than four years after the act, omission, or failure complained of.”
Therefore, in reading the plain language of the statute, the legislative intent is clear that “actions in which a principal seeks indemnification for liability arising from the medical malpractice of its agent are subject to the time-bar provisions of § 6-5-482” (“[N]o action shall be commenced more than four years after the act, omission, or failure complained of.”). Applying that interpretation to the facts at bar, Benchmark’s indemnity action against McNamara was time-barred by the provisions of § 6-5-482
 Thomasson v. Diethelm, 457 So.2d 397 (Ala. 1984); George H. Lanier Memorial Hospital v. ANdrews, 901 So.2d 714 (Ala. 2004); Taylor v. Smith, 982 So.2d 887 (Ala. 2004); Ex parte Addiction & Mental Health Services, Inc., 948 So.2d 533 (Ala. 2006).
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