The Pennsylvania Supreme Court Holds Contribution is Available Whenever Two or More Persons are Jointly or Severally Liable in Tort, Irrespective of the Theory by Which Tort Liability is Imposed
In McLaughlin v. Nahata, No. 7 WAP 2022, (Pa. 2023), the Pennsylvania Supreme Court held that Washington Hospital (“Hospital”) was permitted to pass-through its vicarious liability for the negligence of its ostensible agents, Drs. Ganjoo and Nahata (“Doctors”), to the Doctors’ employer, Dialysis Clinic, Inc. (“DCI”) by way of a contribution claim.
During their employment with DCI, Drs. Ganjoo and Nahata (“Doctors”) maintained staff privileges and worked at the Hospital. McLaughlin received care and treatment from the Doctors during an admission to the Hospital and filed a lawsuit against the Doctors and the Hospital, alleging that the Doctors’ negligence caused severe and permanent neurological injuries. McLaughlin alleged that the Hospital was vicariously liable for the Doctors’ conduct via the theory of ostensible agency. A motion was filed to join DCI to the action as an additional defendant on the ground that DCI was the Doctors’ actual employer. Thereafter, the Hospital filed a cross-claim against DCI seeking indemnity or contribution for any liability the Hospital incurred. The trial court severed the Hospital’s cross-claim for indemnity or contribution from the McLaughlin’s claims and ordered that the indemnity and contribution claims would be resolved at separate trials.
During the bench trial, the court ruled that the Doctors’ negligence caused McLaughlin’s injuries and damages; the Doctors were the ostensible agents of the Hospital; and McLaughlin was entitled to approximately $15 million in damages, which was increased to $17 million due to delay damages. The court denied the parties’ motions for summary judgment, and DCI filed an appeal to the Superior Court, arguing that Pennsylvania law did not permit a secondarily liable party to shift its blame to another secondarily liable party. Bird Hill Farms, Inc. v. U.S. Cargo & Courier Serv., Inc., 845 A.2d 900, 908 (Pa. Super. 2004). DCI also argued that under the Uniform Contribution Among Tortfeasors Act (UCATA), DCI was not a “joint tortfeasor” subject to contribution. 42 Pa. C.S. § 8322 (defining “joint tortfeasors” as “two or more persons jointly or severally liable in tort for the same injury to persons or property”), and Mattia v. Sears, Roebuck & Co., 531 A.2d 789, 791 (Pa. Super. 1987) (“Two actors are jointly liable for an injury if their conduct causes a single harm which cannot be apportioned, even though the actors may have acted independently.”)
The Superior Court concluded that the UCATA did not limit the right of contribution to tort-feasors who have been guilty of negligence. Straw v. Fair, 187 A.3d 966, 1002 (Pa. Super. 2018). The Superior Court also held that a corporate entity was entitled to seek indemnity from another corporate entity whose employees have been negligent. Philadelphia Co. v. Central Traction Co., 30 A. 934 (Pa. 1895). The Superior Court also ruled that DCI could defeat the indemnity claim if it could demonstrate direct liability against the Hospital. DCI appealed the Court’s decision to the Pennsylvania Supreme Court.
The Supreme Court held that the UCATA does not bar contribution between two parties that are vicariously liable in tort for a common agent. “[Section 8322] does not limit the right of contribution to tortfeasors who have been guilty of negligence; rather, contribution is available whenever two or more persons are jointly or severally liable in tort, irrespective of the theory by which tort liability is imposed.” Straw, 187 A.3d at 1002. Accordingly, the Court concluded that two principals that are vicariously liable in tort for a common agent meet the definition of “joint tortfeasors” under Section 8322 of UCATA and are, therefore, subject to UCATA’s rules of contribution. However, the Court held that Pennsylvania law did not permit a party that is vicariously liable in tort to obtain indemnity from another party that is vicariously liable for a common agent.
McLaughlin v. Nahata, No. 7 WAP 2022, (Pa. 2023) can be accessed here.