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Board of Trustees v. Patient First Corp.

Court of Special Appeals of Maryland

August 29, 2014

BOARD OF TRUSTEES, COMMUNITY COLLEGE OF BALTIMORE COUNTY
v.
PATIENT FIRST CORPORATION

Appeal from the Circuit Court for Baltimore County. Kathleen G. Cox, Judge.

Argued by: James J. Nolan, Jr., (Michael Field, County Attorney on the brief) all of Towson, MD for Appellant.

Argued by: Genevieve C. Schmitt and Karen A. Doner (Roth, Doner, Jackson PLC on the brief) all of McLean, VA for Appellee.

Eyler, Deborah S., Graeff, Moylan, Charles E., Jr. (Retired, Specially Assigned), JJ.

OPINION

Page 1073

[219 Md.App. 72] Graeff, J.

This case arises from an agreement between Patient First Corporation (" Patient First" ), appellee, and the Board of Trustees of the Community College of Baltimore County (" CCBC" ), appellant, pursuant to which Patient First allowed CCBC students to gain " supervised clinical experience" as phlebotomists at Patient First centers in the Baltimore area. The agreement contained an indemnification provision, which provided that CCBC would indemnify Patient First for any liability arising from negligent acts of CCBC students.

On January 13, 2007, a CCBC student phlebotomist at a Patient First clinic accidentally stuck herself with a needle and then drew blood from a child using the contaminated needle. As a result of the ensuing lawsuit by the child's family, Patient

Page 1074

First was required to pay $10,000 to settle the case. Patient First sought to enforce the indemnification provision of the agreement to recover its payment, as well as the attorneys' fees incurred in defending the negligence action. The circuit court found that CCBC breached the agreement by failing to indemnify Patient First for its costs. It awarded $87,097.08, consisting of $10,000 paid toward the [219 Md.App. 73] settlement of the lawsuit and the remainder toward attorneys' fees.

On appeal, CCBC presents two questions for our review, which we have rephrased slightly, as follows:

1. Did the circuit court err in determining that the indemnification provision of the agreement required CCBC to indemnify Patient First for its defense of the negligence action?
2. Did the circuit court abuse its discretion in allowing testimony regarding the reasonableness of Patient First's attorneys' fees, and in awarding attorneys' fees based on that testimony?

For the reasons set forth below, we shall affirm the judgment of the circuit court.

FACTUAL AND PROCEDURAL BACKGROUND

On September 12, 2003, CCBC and Patient First entered into an Agreement for Clinical Program - Venipuncture (the " Agreement" ). Pursuant to the Agreement, Patient First would provide a " supervised clinical experience" for students in CCBC's venipuncture program, and CCBC would maintain " professional liability insurance that covers the Venipuncture Students and [CCBC] faculty in the Program in the amounts of $1,000,000 per occurrence and $3,000,000 in the aggregate." The Agreement, which was drafted by CCBC, also contained a section entitled " Indemnification," which provided, in pertinent part, as follows:

7.1 [CCBC] will defend, indemnify, and hold [Patient First] harmless from any and all losses, claims, liabilities, damages, costs and expenses (including reasonable attorneys' fees) which arise out of the negligent acts or omissions of [CCBC], its agents, employees, or Venipuncture Students in connection with this Agreement. . . . The obligations of [CCBC] under this subparagraph 7.1 are subject to and limited by its liability under Section 5-301 et [s]eq. [a]nd 5-519, Courts and Judicial Proceedings, Annotated Code of Maryland, as amended.
[219 Md.App. 74] It is further understood and agreed that [CCBC] is not waiving or relinquishing in any manner any defenses that may be available to [CCBC] including, but not limited to, government sovereign immunity or breach of contract or otherwise, nor is [CCBC] relinquishing any defenses that may become available to it at any time during the term of this Agreement, but that [CCBC] is free to assert all defenses that may be available to it at law or in equity.

On January 13, 2007, Morgan Ebaugh, a CCBC student working as a student phlebotomist at a Patient First clinic pursuant to the Agreement, drew blood from a six-year-old patient, Dimitris Politis (" Dimitris" ), after she first stuck herself with the needle she was using. Ms. Ebaugh subsequently tested positive for Hepatitis C. Dimitris was then tested for a year, but he did not test positive for Hepatitis C.

On December 14, 2009, Susan Politis, Dimitris' mother, filed suit, individually and as parent and next friend of Dimitris, against Patient First, Patient First's affiliates, and Ms. Ebaugh. The complaint asserted that Ms. Ebaugh " acted as an actual and/or apparent agent, servant and employee of" Patient First. It further asserted

Page 1075

that the defendants, including both Patient First and Ms. Ebaugh, owed a duty of care, which included " the performance of a simple blood draw without injury and the protection of the Plaintiffs from contaminated needles." On March 16, 2011, the parties reached a settlement agreement, in which Patient First agreed to pay $10,000 toward the $50,000 agreed upon.

Pursuant to the Agreement, Patient First requested that CCBC indemnify it for Ms. Ebaugh's negligence and reimburse Patient First for the $10,000 in settlement funds, as well as its attorneys' fees in defending the lawsuit. CCBC refused Patient First's request for indemnification.

Patient First subsequently filed suit for breach of contract, alleging that CCBC's " failure to indemnify Patient First as required by Paragraph 7.1 of the Agreement constitutes a [219 Md.App. 75] breach of the Agreement." [1] Patient First sought $88,937.39 in damages, consisting of the $10,000 settlement payment and $78,937.39 in costs and attorneys' fees.

On August 25, 2011, CCBC filed its answer to Patient First's Amended Complaint, generally denying liability for breach of contract. Although CCBC admitted that the student was negligent, it asserted in its answer that " [t]he contract does not indemnify [Patient First] against its own negligence," and " [t]o construe the contract to indemnify [Patient First] for its own negligence would violate public policy."

On June 25, 2012, both parties filed motions seeking summary judgment. In its motion, CCBC argued that Patient First was " not entitled to indemnification for its own admitted negligence," asserting that Patient First was negligent in supervising Ms. Ebaugh at the time she performed the needle stick on Demitris. It contended that it would be " against public policy to uphold Patient First's breach of contract claim for indemnification for its own admitted negligence and the costs of defending itself from a claim based on that negligence."

Patient First argued that " the plain language of the Agreement require[d] CCBC to indemnify Patient First," noting that it was undisputed that Ms. Ebaugh was a Venipuncture Student under the Agreement, that she was negligent, and that Patient First incurred losses, costs, and expenses in defending the lawsuit that resulted from Ms. Ebaugh's negligence. It disagreed with CCBC's argument that it was not entitled to indemnification because of negligence in supervising Ms. Ebaugh, asserting that Paragraph 7.1 of the Agreement [219 Md.App. 76] " does not except circumstances where Patient First is allegedly negligent."

On August 24, 2012, the court denied both motions, noting that, although it was undisputed that Ms. Ebaugh " performed a negligent act" while working as a student phlebotomist at Patient First, it was not " sufficiently clear as to whether there was negligence or not in supervision of [Ms.] Ebaugh at the time she was negligent in performing a vein puncture." The court concluded that, because there was " a dispute of material facts," and due to the " absence of specifics sufficient to allow [it] to conclude that either party is correct in its assertions," summary judgment was not proper.

Page 1076

On January 11, 2013, Patient First filed a motion in limine to " exclude any evidence or legal argument by [CCBC] that Patient First's claims are barred because of its own negligence." It asserted that CCBC " could not point to any facts that constituted Patient First's negligence other than its alleged failure to supervise [Ms.] Ebaugh -- which was not required by the parties' Agreement." It argued that any negligence on its part was not relevant, and in any event, CCBC could not prove that it was negligent, asserting that expert testimony is required to establish negligence, and CCBC had " failed to identify any expert." Patient First argued that, without expert testimony that it was negligent, CCBC should be excluded from introducing evidence or legal argument in that regard.[2]

Trial began on April 10, 2013. Melanie Mendoza, the Medical Director of the Patient First facility where Ms. Ebaugh performed the needle stick on Dimitris, ordered blood work to be performed on Dimitris during his visit on January 13, 2007.[3] She informed Ms. Politis that someone would come to draw the blood, and she left the room to see other patients. Dr. Mendoza's expectation was that a " lab person" ...


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