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Negligence Settlement Leads to Litigation Between Defendants

When there are multiple defendants in a personal injury lawsuit, those defendants may choose to work together in litigating or settling a claim. But sometimes these joint efforts result in additional litigation. One defendant may settle and demand the other pay for part of that settlement. An ongoing case in a Georgia federal court illustrates how these situations can play out.

Gold Cross EMS, Inc. v. The Children’s Hospital of Alabama

This case began in 2009, when a hospital in Georgia asked a hospital in Birmingham, Alabama, to accept one of its patients, a two-year-old burn victim. The Alabama hospital hired an ambulance company to transport the child from the Georgia hospital to a nearby airport. The Alabama hospital sent two of its employees to supervise the child’s care during the transfer. The child was secured to a stretcher during transport.

After arriving at the airport, two ambulance workers removed the stretcher as the two hospital employees monitored the patient’s vital signs. Horrifically, the stretcher tipped over. While the stretcher was quickly uprighted, the damage had been done. A subsequent examination two days later at the Alabama hospital revealed the accident caused a spinal cord hematoma, resulting in the child’s paralysis.

The child’s family sued both the Alabama hospital and the ambulance company for negligence. During this litigation, the two defendants discussed jointly negotiating with the family, but they never signed a written agreement to that effect. Ultimately, the ambulance company agreed to a multi-million dollar settlement. The ambulance company then filed its own lawsuit against the hospital, alleging breach of their joint defense agreement and demanding reimbursement for part of the cost of the settlement. In legal terms, this is known as seeking “contribution.”

On January 8, 2015, a federal judge rejected the ambulance company’s contribution arguments. The judge said the company advances two legal theories in support of its case: the hospital was “vicariously liable” for the acts of its employees at the time of the accident, and it was negligent in its care of the patient during transport. Neither of thee argument support a contribution claim under Georgia law, according to the judge.

Vicarious liability is when an employer is held legally responsible for the acts of its employees. The ambulance company tried to argue its employees were actually working for the hospital at the time of the accident, making the hospital vicariously liable. The judge said even if that were true, that would not support a contribution claim. There must be evidence of an “independent act of negligence” on the part of the hospital. And the judge noted the ambulance company never alleged such an act during the initial litigation with the victim’s family.

While rejecting the contribution argument, the judge said the ambulance company could proceed with its breach of contract claim against the hospital. This arises from the purported joint defense agreement between the two parties. Although no written agreement existed, the judge said it was for a jury to decide whether the parties entered into a valid oral agreement. According to the ambulance company, the hospital’s breach of this oral agreement led it to settle with the victim for more than it would have otherwise paid.