Zollman v. Gregory

that relates award arbitration interpretation erroneous to the clause, and remand adjustment Fee

MOW with instructions trial court to the

this case pur- for ease to arbitration

to submit if the Fee determining the MOW

poses proper agree unable to

parties are Agreement. pursuant

fee instruc- and remanded

Reversed

tions. J., RILEY,

SHARPNACK, C.J., and

concur. M.D., ZOLLMAN,

Charles Wallace

Appellant-Defendant,

Melinda GREGORY Appellees

Gregory,

-Plaintiffs.

No. 49A02-0002-CV-126. of Indiana. Appeals 7, 2001.

Feb. Murray, Blackwell Julia

Kevin Charles LLP, Indianapo- Gelinas, Reynolds Locke lis, IN, Attorneys Appellant. for Dudley & Young Riley Riley, N. William IN, DeBrota, Attorney Indianapolis, Appellees.

498

OPINION in bankruptey court to allow their malpractice claim proceed. to SULLIVAN, Judge. 17, 1999, bankruptey On November Appellant, Charles Wallace court issued an order that modified thе M.D., appeals the trial court's denial of his The order authorized the malpractice motion a to dismiss medical to before the medical complaint. Upon appeal, pres- Zollman panel, provided review they levy not issue, ents one which we restate as wheth- upon any judgment ultimately execution failing er the trial court erred in to dismiss obtained against Zollman or the a malpractice complaint that was сy estate's assets without obtaining first

filed with the Department Indiana of In- leave of the bankruptcy court. The bank- ("IDI") days surance two before the stat- ruptey court modified the expired ute prior of limitations to re- making any "without determination of the questing relief from the automatic in legal effect to the Plain- and/or the bankruptey court. tiffs' action in their medical review We affirm. panel in claims violation of the automatic stay in prоceeding." this Record at 25. 12, 1999, March On Zollman filed a vol 24, 1999, On November Gregorys sup- untary petition Chapter for relief under 11 22, plemented response their October XI of Title Bankrupt United States with a copy bankruptey court's mod- cy Code the United States later, ification days order. Five trial Court for the Southern District of Indiana. court held a hearing and issued an 27, 1999, July On Melinda denying Zollman's motion to dismiss. Gregory attorney retained an represent to aрpeals. Zollman now malpractice them a medical action against two-year Zollman. The In determining whether the trial period Gregorys' action was to ex power adjudicate court has the pres 4, pire 2, August on August 1999.1 On action, ent accept we as true the facts as 1999, the Gregorys' attorney pro filed a complaint. set forth in Surgical MHC posed IDI, complaint with alleging Assocs., Center Inc. v. State Med Office of medical nеgligence against Zollman. Policy icaid and Planning Ind. 12, 1999, pursuant On October App., 699 Upon ‍​‌‌‌‌‌​‌​‌​‌​‌​​​‌‌​​​​‌‌‌​​‌‌‌‌​‌​‌​‌​‌‌​​​‌‌‌​‍appeal N.E.2d 308. (Burns Indiana Code 34-18-11-2 Code Ed. case, from a motion to dismiss such a we Repl1998), Zollman a filed motion to dis- good position as a as the trial court proposed complaint miss the in the Marion jurisdiction. determine whether it has Superior Court. Zollman asserted that Id. trial court lacked because The Bankruptey Code's automatic the Gregorys had violated 11 U.S.C. stay provision states that a bankruptcy 362(a) § by filing proposed complaint petition operates a stay as of: with the IDI during proceed- the Title XI ings obtaining prior continuation, relief from the "the commencement or in- 22, 1999, court. On cluding October employment issuance or filed with the trial court a process, administrative, judicial, of a response dismiss, to Zollman's motion to proceeding other action or agаinst had, 22, 1999, noting on October debtor that was or could have been com- filed a motion for relief from the automatic menced before the commencement of According Gregorys' complaint, Me- might against she a have Gregory linda surgery performed by Zoll- Zollman. No contention is made thai 4, 1995, again man on December saw him expired prior August statute of limitations 21, 1997, procedure May on and learned 4, 1999. 4, surgeon August from another on (1989) Ind.App., 545 N.E.2d Corp. a Health title, recover or to under this case Supreme While our 1139.3 arose be- the debtor claim rule, un- case it created an general with this agrees commencement

fore the Hammes/Hendrix, 862(a)(1). supra, exception title. ..." U.S.C. this der our N.E.2d at 1027. juris has exclusive stated that the trial court Supreme Court and application interpret to diction question" jurisdiction "without was stay. Reich v. of the scope court's "obvious detеrmination bankruptcy 1178, (1998) N.E.2d Ind.App., 605 Reich 862(d) her state Furthermore, plaintiff] pursue of the could [the that Section 1182. reaching bank- at 1028. In its that the action...." Id. provides Code decision, relief authority grant Supreme Court noted has our ruptey court "by terminating, expressly modified bankruptcy the automatic "the court from conditioning such annulling, modifying, plaintiff] pursue stay, allowing [the 862(d). ability ..." 11 U.S.C. insur complaint to the extent of the her 4 modify its own court "to bankruptcy of the bankruptcy that the proceeds" ance policy of the Code's injunction fits with all be lifted court "ordered bankruptey dis a maintaining control over tune, effective date together [the nune (1995) Brumley v. Hammes charge...." was Id. at bankruptey petition filed]." 1021, In the Ind., (quoting 1027 N.E.2d 659 Supreme Court concluded 1027. Our (1991) Cir., 950 F.2d 7th Matter Shondel Appeals clearly of of Court 1309)2 1301, plaintiff's complaint to bar the of in the state that, light "even as a has held This court ... at least to of limitаtions statute rule, in violation complaint filed general Id. at proceeds." insurance extent of the null void. stay is an automatic of presented question Mercy 1028. Whiting v. Sisters Bank First of of 905, Cir., (1993) Sev F.2d 910. The 6th 990 Court our 2. In Hammes v. Brumley, Supreme yet the issue. See Appeals de has to decide separate enth Circuit five considered so, doing Consultants, the Court upon In Investigative cisions transfer. In re Confidential 739, Appeals decision in IIl., (1995) the Court overturned 178 BR. 750 Bankr.N.D. Inc. (1993) Ind.App., opined N.E.2d Page 622 v. 10. One commentator Hendrix n. portion which of Hammes actions "voida 564. Because courts label such reason some purposes which is that justify relevant for our appears is to be in order to ble" case, we Hendrix specifically with the power dealt actions bankruptcy to validate court's as Ham Hammes case refer to the modifying shall stay by taken violation mes/Hendrix. § 263. stay retroactively. 11[1] 3 Corner Sеe to 362-116. at 362-15 authority supports weight of Federal 3. "The event, beyond filing of a lawsuit any In violation actions taken in the conclusion that applicable statute of limi expiration of the stay provisions of section void, as render the does not tations (1999) Ill v. Salata void." Cohen 362 are Rule opined by dissent. Indiana Trial 413, 1060, Ill.Dec. Ill.App.3d 237 .App., 303 8(C) vio provides that a statute of 668, concluding 672. For cases 709 N.E.2d which must be defense is an affirmative lation void, see In re Soares actions are that such As a defendant. presented and established Cir., 969; (1997) In re 48th Street 107 F.3d 1st therefore, is such defense general proposition, 427, Cir., Steakhouse, (1987) 2d 835 F.2d Inc. Plan presented, Custer v. if not so waived (1992) denied; 3d Raymark v. Lai Indus. cert. (1998) Ind.App., City Garrett Comm'n 1125; (1992) Cir., re F.2d 973 Schwartz 795; 793, v. Weddle Barrow N.E.2d 699 569; (1990) Cir., In re Calder F.2d 9th 954 601, (1974) Ind.App. 161 Brothers Constr. 953; Cir., Borg Warner F.2d 10th Cir., (1982) 11th 853. 316 N.E.2d Corps. v. Acceptance Hall minority Examples of the 1306. 685 F.2d permit policy" public "sound 'There view, violation of the actions taken in bankrupt against a "debtor ting an action section 362 are stay provisions of cases, the extent of at least to voidable, cy in some v. Global Ma merely include Sikes su Cir., proceeds[.]" rine, insurance 881 F.2d Inc. 5th Michigan Corps. Easley pra, Pettibone N.E.2d at 1028. (East- Hastern, present bankruptcy Similarly, case is whether the plaintiff ern) 17, 1999 modification or- court's November brought against Forty suit Eight applied retroactively, der such that the United States District Court for the Gregorys' original claim was not void and Southern District of New York ten months proceed. could Forty Right after filed for Eastern, protection. supra, 157 F.3d at argues Zollman that the modification or 170. Eastern then moved to have the prospective der was because there was "no bankruptcy court lift the automatic stay, clear intent" that the bankruptcy court and the granted the mo- intended to make thе modification "retro tion so that [Hlitigationmay proceed "[the spective." Appellant's Brief at 5. Zollman obligation to determine the Forty Eight contends that because the modification was compensate [Eastern] for its claim of prospective, Gregorys' original com contribution." Id. at 171. though Even plaint they was void and should have re bankruptcy the court's order did not recite complaint filed their after the date of the tunс, operate that it would pro nunc bankruptcy court's sup modification. Eastern court believed there was "no port argument, of his attempts Zollman doubt" that the intent of bankruptey distinguish present case from the facts permit court's order was "previous- bankruptcy orders in Haommes/Hen ly-filed, post-petition proceed. lawsuit" to drix and Eastern Co. Inc. v. Refractories determination, Id. at 178. In reaching this Forty Eight Insulations Inc. 2d the Fastern court noted that the Cir., 157 F.3d 169. cy court's order defined "the [lMitigation" purposes comparison, For we set out post-petition as the lawsuit and included the facts first in Hommes/Hendrix specific about information the lawsuit in then Eastern: which included the date filing, the court injured "Page was in an automobile acci- filed, in which the claim was the nature of April, dent with Hendrix in 1990. Hen- the claim and the in controversy. amount bankruptcy drix filed for on June Id. at 172. the Hastern court con- Page but did not list aas creditor "that cluded court's order petition. Page his filed a negligence represented a pro modification nune tune claim against Hendrix in state court on of the automatic retroactively lifting (before expiration June stay" to. allow proceed Eastern to limitations). applicable statute of its action the Southern District Court. petition Hendrix amended his to add Id. at 172. a Page having disputed as creditor case, present In the the Gregorys also July. claim in The bankruptey court dis- proposed filed their complaint against Zoll- charged September, Hendrix's debts in man after the stay automatic was in effect. 1990.... Hendrix moved summary Zollman then moved pro- to dismiss the judgment on the Page basis that had no posed complaint grounds on the that the standing to bring the claim. Subse- complaint was filed in violation of the auto- (but quently after the stay. matic Subsequently, applicable limitations), statute of petitioned bankruptcy court for relief bankruptcy court issued an order from the automatic they so that could March, 1994, reopening the bankruptcy proceed complaint. with their On Novem- and lifting the automatic stay mune 17, 1999, ber the bankruptey court issued tunc from the date of the the following modifying the automat- petition's filing 'so Pages may stay: ic proceed court, with their action in state only аgainst but proceeds insurance "This Matter is before the Court on the Consolidated Motion for Relief from of [Hendrix].'" N.E.2d at 1025. Stay of Melinda Gregory in filing action to the Plaintiffs' ("Plaintiffs") that requesting Gregory panel claims in violation in order medical review modified stay be automatic proceeding. with a cause this proceed can that Plaintiffs Zoll-W. it involving Accordingly, Dr. Charles Surgery Center Zollman man and the ORDERED, AND DE- ADJUDGED ("Zollman"). appeared parties in- the autоmatic CREED to the Court reported counsel in order to herein is volved modified modifica- to a limited agreeable proceed following allow Plaintiffs tion of the panels review medical before Plaintiffs' violation agreeing without levy ex- no shall condition that Plaintiff or proper judgment ultimately upon any ecution any rights waiving and without justified Dr. in said causes obtained defenses, agrees Plaintiffs or the Estates' assets Zollman with their be allowеd should obtaining leave first claims, currently (em- Record at 24-25 to do so." on panels medical review pending before phases added). shall not Plaintiffs condition that meaningful distinction be find no We in said judgment obtained levy upon any court's order tween leave of the obtaining first cause without bankruptcy court or and the present case Because to do so. Bankruptey Court or Eastern. ders Hammes/Hendrizx M.D., the Zoll- P.C. and Wally Here, bankruptcy court's November the Center, Inc. have demon- Surgery man and 19, specifically order 1999 modification Insurance Commissioner strated to the pro Gregorys the expressly authorized required they have the Indiana that of they filed complaint original with the ceed any poten- coverage, statutory insurance bankruptcy court Zollman. The come judgment will or tial settlement Grego- mentioned that the specifically also any excess proceeds from insurance "cur claim was malpractice rys' the Patient's come from proceeds would pan medical review rently pending before by the Fund maintained Compensation be Gregorys when it ordered els" of the no assets of Indiana. Since State Record at 25. proceed.5 allowed question or bankruptcy petitioner approval sufficiently need clear Thus, further court jeopardy, no we believе it is bankruptcy court's the sought. though be even specifically state order did not Court, the Mo- having considered The tung, operate pro nune would now modification parties, agreement of tion bankruptcy represent the order did stay should be automatic finds that the modify the retroactively intent to court's any determina- making without modified bankruptcy stay.6 Clearly, legal effect propriety tion of and/or apply retro- meaning, must the mоdification Gregorys proceed, 5. We that for the note filing be voida- original must retroactively, ‍​‌‌‌‌‌​‌​‌​‌​‌​​​‌‌​​​​‌‌‌​​‌‌‌‌​‌​‌​‌​‌‌​​​‌‌‌​‍actively, and the apply must modification ble, rath original filing was voidable such that not void. so, origi if the because void. This is er than language initio, significant the also finds not 6. Zollman then it could filing was void ab nal wherein it bankruptcy court's order of regardless of whether the statute be saved of the no "determination made expired, would and the [Gregorys'] аction legal effect complaint their before required to re-file and/or be panel claims in However, filing medical review their proceed. could pro- stay in this of the automatic violation complaint and could not re-file 17, language, Zoll- at 25. This ceeding." Record after the November with their claim contends, "{alls clear far short man limi the statute of order because modification apply the modification еxpression of intent to expired on action tations for the tunc, by expressed 4, as it bankruptcy nunc August for the [Hammes/Hendrix] Courts in stay to have modifying order court's jurisdiction interpret court has exclusive plaintiff] pur termination [the could scope the application of the automatic sue her state Id. at action[.]" added). stay and a retroactive (emphasis supreme to make modifica- Our court fur light tion In ther concluded that the court appeals cy clearly court's retroactive modification of the was to bar the jurisdic- plaintiff's complaint trial court had in light "even Accordingly, over this case. we find . the state statute of limita denying tions[.]" no error in Zollman's motion to Id. at 1028.

dismiss. However, diverge I majority from the affirmed. when it finds judgment meaningful no distinction between the bankruptey Hammes/Hendrix

BAKER, J., concurs. present order and the case. In bankruptcy J., BROOK, opinion. dissents with Pages' sаved the explicitly BROOK, Judge, dissenting. making lifting its order retroac- resolving questions When tive to June 1990. The order created Pages fiction that the filed their com- law, the federal courts cannot decide what plaint before the bankruptcy petition was effect the aof state court action in filed, hence before the be- violation of a injunction effect, came effective. With no no running has on the of a state statute of (which stay violation could void the negli- Corp. limitations. See Pettibone v. Easley, genee (7th Cir.1991). action and require later re-filing) 935 F.2d That occurred. question determination is a of state law. However, Id. in order to resolve the effect contrast, court's or- under state law of violation of the auto- der in present provided: case matic the state court must defer to This Matter is before the Court on the court's of determination Consolidated Mоtion for Relief from stay.

whether an act violates See Stay of Melinda Gregory and Reich, 605 N.E.2d at 1182. ("Plaintiffs") Gregory requesting that I agree with the majority that our su stay the automatic be modified in order preme exception court an created to the that proceed Plaintiffs can with a cause general rule a plaintiff prohibited that of action involving Dr. Charles W. Zoll- from proceeding plain with a lawsuit if the man and Surgery the Zollman Center ("Zollman"). tiff complaint files a in violation of an parties appeared The by stay. automatic See counsel and reported to the Court that Specifically, N.E.2d at 1027.7 our su they agreeable to a limited modifi- preme court stated that where ‍​‌‌‌‌‌​‌​‌​‌​‌​​​‌‌​​​​‌‌‌​​‌‌‌‌​‌​‌​‌​‌‌​​​‌‌‌​‍the Zollman, bank- cation the automatic of ruptey court later "expressly agreeing without viola- modified Plaintiffs' stay, allowing plaintiff] pursue [the her tion stay the automatic propеr or of complaint to the justified extent of the insurance and wawing any without rights defenses, proceeds" or agrees that the Plain- and "ordered that be tunc," lifted together all nune the trial should proceed be allowed to tiffs court was jurisdiction "without to ques claims, malpractice cur- tion" the bankruptcy court's rently "obvious de pending medical review before However, Appellant's

Eastern." Brief at 5. dissent herein. constitutes Hammes/Hendrix we find language merely that this recites the just upon such a state court decision a state question. law ques- court's deferral of state law tions appropriate to the couris here the 7. See authority Corp. Easley also the federal Indiana courts. See Pettibone cited in foot- Cir., 7th 935 F.2d supra. cited note 3 [Gregorys'] to the legal effect condition and/or panels Plaintiffs review claims filing ob- their medical any judgment levy upon shаll not ob- cause without in said stay [.]" tained automatic violation first exception does not leave taining the Hammes/Hendrix Zollman, M.D., Wally so. Because apply to do here. Center, Surgery the Zollman P.C. the Ham- applicability Absent Insurance have demonstrated Inc. exception, I would return mes/Hendrix have of Indiana Commissioner complaint filed in rule that a general cover- statutory insurance required is void. violation of an judg- or settlеment any potential age, dispute that at the time There is no proceeds insurance come from ment will complaint original filed their Gregorys would come proceeds any excess 362(a) IDI, with the Fund Compensation the Patient's from effect,. therefore, court, The trial was in of Indiana. by the State maintained to entertain the not have did bankruptey peti- no assets Since thus, action, nullity and void. it was a no jeopardy, question tioner are Langford, 701 S.W.2d Raikes v. See sought. need be approval further result of the As a (Ky.App.1985). Court, the Mo- having considered at defect that existed jurisdictional parties, now agreement their action time the commenced be stay should that the automatic finds they had filed it was as if making any determi- modified period If complaint. no legal nation and/or ef- lifting expired prior to the not action in Plaintiffs' fect have been would stay, then panel claims in review their medical However, under action. to re-file their free stay in this violation of two- facts, I would conclude these Accordingly, it is proceeding. Grego- limitations bars year statute ORDERED, AND DE- ADJUDGED action, making dismissal rys' in- the automatic CREED appropriate. in order to is modified volved herein note that the drafters I also would before Plaintiffs allow the prevent just attempted to bankruptcy code condition panels on the medical review including a sav- type of situation this levy execution Plaintiff shall that no feature, which states: ings ultimately obtained judgment upon any Dr. Zollman or against causes in said fix- law ... nonbankruptey applicable if first obtain- the Estates' assets commencing or continu- period es a Bankruptey to do of the ing leave than a in a court other a civil action ing so. against claim court on a period has not ex- ... and such debtor added). is, unlikе the That (Emphases the date pired before court in period such petition, then [bankruptcy] present case did bankruptcy court in the the later of- expire until does not retroac- lifting not make its order bankrupt- filed for to the date Zollman tive (1) including period, end of such stay did Hence, lifting the the order cy. occur- period of such any suspension Gregorys the fiction that not create commencement or after the ring on сomplaint before filed their case; or filed, thus before petition was the termi- notice of days 30 after To the effective. became stay ... expiration of nation or specifically bankruptey court contrary, the claim. respect to such made no "determination 108(c)8 11U.S.C. BUCKALEW, Appellant- Kim Gregorys If the had filed with the bank- Petitioner, court,

ruptey prior August limitations, expiration of the statute of stay,

motion to lift the and if the BUCKALEW, Appеllee Tim cy court had decided to lift the then -Respondent. peri- section 108 would have extended the No. 34A05-0004-CV-174. Gregorys od which the could have during is, against filed suit Zollman. That Appeals Court of of Indiana. permitted would been to re- have Feb. thirty days file their action within after lifting stay-even notice of the if expiration

that notice occurred after the period. ‍​‌‌‌‌‌​‌​‌​‌​‌​​​‌‌​​​​‌‌‌​​‌‌‌‌​‌​‌​‌​‌‌​​​‌‌‌​‍original Brown Cf. Co., Mfg. v. MRS 617 So.2d 758 (Fla.App.

19983)(concluding death wrongful ac- brought Chapter debtor thirty days

within of the termination of the timely though even years passed

more than two since the However, in question).

accident because

the Gregorys' filed their motion to lift the two-year statute of limita- after expired, they

tions had failed invoke

section provi- 108's limitations extension re-file,

sion. The did but not 19, 1999,

until December well after the

August of the statute of conclude, therefore,

limitations. I would

that the trial court had no it granted should have mo- Zollman's

tion to Accordingly, respectful- dismiss. I

ly dissent. plaintiffs 8. Some injunction states allow additional time ... the time of the continuance of to maintain suits injunction prohibition part the debtor after the is not bankruptcy case is closed. ‍​‌‌‌‌‌​‌​‌​‌​‌​​​‌‌​​​​‌‌‌​​‌‌‌‌​‌​‌​‌​‌‌​​​‌‌‌​‍See 735 ILCS time limited for the commencement (Illinois providing, Indiana, statute "When action"). however, 5/13-216 compara- has no stayed by the commencement anof action is ble statute.

Case Details

Case Name: Zollman v. Gregory

Court Name: Indiana Court of Appeals

Date Published: Feb 7, 2001

Citation: 744 N.E.2d 497

Docket Number: 49A02-0002-CV-126

Court Abbreviation: Ind. Ct. App.