Courtney Webster v. CDI Indiana, LLC
917 F.3d 574
7th Cir.2019Background
- Courtney Webster underwent a CT scan at CDI Indiana’s Carmel imaging center in November 2014; radiologist Dr. Brian Walker (engaged through Medical Scanning Consultants, MSC) reported no mass though images showed a presacral mass.
- The mass was diagnosed over a year later (2016) after growth and metastasis, worsening Courtney’s prognosis; Websters sued for medical malpractice.
- CDI operates a national diagnostic-imaging network and had a services agreement with MSC, which provided independent-contractor radiologists to interpret studies at CDI’s facility.
- CDI had not registered as a “qualified health care provider” under Indiana’s Medical Malpractice Act; MSC and Dr. Walker had. The Websters sued CDI in federal court under state common law (Indiana Code § 34-18-3-1) and filed malpractice claims with the Indiana Department of Insurance against MSC and Dr. Walker.
- The district court applied Indiana’s apparent-agency doctrine from Sword v. NKC Hosps., Inc., found factual disputes about whether Dr. Walker was CDI’s apparent agent, and sent the case to a jury; the jury found CDI vicariously liable and awarded $15 million.
- On appeal, CDI argued Sword should not apply because it did not directly employ Dr. Walker and raised policy arguments about the Medical Malpractice Act’s caps; the Seventh Circuit affirmed, rejecting CDI’s contention that formal employment ties are required for apparent agency liability.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a health‑care facility can be vicariously liable under Indiana’s apparent‑agency doctrine for negligence of an independent‑contractor physician engaged through a separate contracting entity | Websters: CDI held out the radiology services as part of its center; patient reasonably relied on CDI’s authority and had no notice of separate contracting arrangements | CDI: Sword requires or should be limited to situations where the facility directly employs the physician; CDI didn’t employ Dr. Walker (MSC did), so no apparent agency | Affirmed: Sword applies; apparent agency focuses on the facility’s manifestations and patient reliance, not formal employment ties |
| Whether CDI waived policy arguments (e.g., conflict with Medical Malpractice Act caps, indemnity concerns) by procedural posture | Websters: waiver applies; CDI failed to raise these issues timely | CDI: (argued on appeal) exposure of qualified providers to common‑law claims undermines the Act | Court: CDI waived these arguments by not raising them in pre‑verdict Rule 50(a) motion and failing to preserve in opening brief; forfeited |
Key Cases Cited
- Sword v. NKC Hosps., Inc., 714 N.E.2d 142 (Ind. 1999) (adopting Restatement (Second) of Torts § 429 apparent‑agency test for hospital liability for independent‑contractor physicians)
- Thompson v. Cope, 900 F.3d 414 (7th Cir. 2018) (discussing Indiana Medical Malpractice Act procedure and panel requirements)
- Plank v. Cmty. Hosps. of Ind., Inc., 981 N.E.2d 49 (Ind. 2013) (describing the Medical Malpractice Act’s liability caps and compensation fund)
- Robertson v. B.O., 977 N.E.2d 341 (Ind. 2012) (explaining Patient Compensation Fund’s role in paying amounts above a qualified provider’s liability)
- Salve Regina Coll. v. Russell, 499 U.S. 225 (1991) (federal courts answer questions of state law as state’s highest court would; de novo review of state‑law interpretation)