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Hospitals litigate indemnification for resident physician's error

Ellen Lie presented to St. Joseph Mercy Oakland's Emergency Room complaining of vaginal spotting.  She was carrying twins.  She was seen by a resident, provided to St. Joseph through Detroit Osteopathic Hospital, and sent home.  The resident had suggested bed-rest and to follow-up with Lie's family doctor.  Three days later, the twins were born with significant birth defects including cerebral palsy and deafness.  Lie filed suit against St. Joseph, which ultimately settled the twins' claims for a total of $3.4 million dollars.  St. Joseph then sued Detroit Osteopathic, arguing that it should indemnify St. Joseph for the damage settlement because the case arose from the negligence of Osteopathic's resident physician.

Osteopathic defended by noting that pursuant to the parties' agreement, St. Joseph was to supervise the resident's medical care and that the Lie's attorneys had alleged negligence by nurses and supervising doctors, in addition to the Resident.  A jury trial was conducted, and the jury ruled that Osteopathic was not negligent.  The jury's decision was upheld on appeal, with the appellate panel noting that St. Joseph was bound--in terms of indemnification or contribution--by the jury's conclusion that neither Osteopathic nor its resident were negligent.
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