United States District Court, E.D. Kentucky, Southern Division
OPINION AND ORDER
K. CALDWELL, CHIEF JUDGE UNITED STATES DISTRICT COURT
matter is before the Court on multiple motions in limine and
other motions filed by the parties in preparation for trial.
this action, plaintiff Appalachian Regional Healthcare, Inc.
primarily seeks reimbursement for the costs it incurred in
defending and settling an action against it in Letcher
state-court action was brought in 2008 by Ralph Profitt and
his wife after Ralph suffered a severe spinal-cord injury
while he was working at a sawmill in Whitesburg, Kentucky.
(DE 189, Statement at 1.) At the time of the injury, Profitt
was attempting to repair a piece of sawmill equipment. After
the injury, Profitt's co-employees drove him in a pickup
truck to a hospital in Whitesburg operated by Appalachian
where he was treated. Profitt is now paralyzed from the waist
down. (DE 189, Statement at 1-2.)
time, certain members of Appalachian's nursing staff were
on strike. (DE 52, Compl., ¶ 9, Ex. A.) To replace its
striking staff, Appalachian entered into a staffing agreement
with defendant U.S. Nursing Corporation, which agreed to
provide temporary personnel to fill the vacant nursing
positions. (DE 52, Compl., Ex. A, Agreement.) One of the
nurses who U.S. Nursing provided was Constance Foote. She was
on duty at Appalachian's emergency room when Proffitt
arrived at the hospital.
being treated at the hospital, Profitt and his wife brought
suit in state court, initially asserting claims against the
manufacturer and installer of the equipment and Appalachian.
(DE 197-1, Original Compl.) Later, the Profitts amended the
complaint to add as defendants U.S. Nursing and three nurses:
Nurses Foote, Sheila Hurt, and Roxanna Parsons. (DE 65-2,
First Am. State Ct. Compl.) The Profitts alleged that the
three nurses “failed to stabilize and immobilize”
Ralph when moving him from the pickup to the emergency room,
which worsened his injuries. (DE 65-2, First Am. State Court
Compl., ¶16.) Nurses Hurt and Parsons are regularly
employed by Appalachian.
Profitts asserted in the state-court action that Appalachian
was vicariously liable for the actions of Hurt, Parsons, and
Foote and that U.S. Nursing was vicariously liable for
Foote's actions. (DE 25-1, Second Am. State Ct.
Complaint, ¶¶ 27-28.) The Profitts also asserted
that Appalachian was directly liable for Profitt's
injuries because it negligently staffed the hospital and
negligently trained the hospital staff. (DE 25-1, State Ct.
Compl. ¶¶ 30-31.) According to Appalachian, the
Profitts sought compensatory damages of $23.5 million and
additional punitive damages. (DE 208, Statement at 2.)
state court eventually granted Appalachian summary judgment
on all claims against it except for the claim of vicarious
liability for the negligent actions of Nurse Foote. (DE
197-16, Nov. 13, 2015 Order (summ. j. on negligent training
and staffing claims); DE 206-8 Jan. 10, 2014 Order (summ. j.
for all acts inside the emergency room.))
the court entered summary judgment in favor of
Appalachian's nurses Hurt and Parsons. (DE 208-13, Aug.
23, 2012 Order.) The trial judge also entered an order
prohibiting any party from arguing or introducing evidence
that Nurse Hurt or Parsons was the individual who came out of
the emergency room to assist Profitt with entering the
hospital. The trial judge determined that all parties had an
opportunity to respond to the motions for summary judgment
filed by Nurses Hurt and Parsons and that U.S. Nursing filed
no response. Accordingly, the trial judge found that the
liability of the two nurses had been litigated and resolved
and was no longer an issue for the jury to decide. (DE
208-11, Mar. 26, 2016 Order.)
manufacturer and installer of the equipment settled with the
Profitts for around $3 million. (DE 189, Statement at 10; DE
208, Statement at 5.) That left as defendants Appalachian,
U.S. Nursing, and Nurse Foote.
April 1, 2016 - the last business day before trial was
scheduled to begin - Appalachian settled with the Profitts
for $2 million. At this point, it had incurred legal fees of
$1 million defending the claims against it. (DE 208,
Statement at 3.) Appalachian asserts that, at that time, the
“only conceivable basis” for its liability was
its vicarious liability for Nurse Foote's actions. (DE
208, Statement at 8.) On the same day, U.S. Nursing
separately settled with the Profitts for $1.1 million. (DE
208, Statement at 3.)
staffing agreement, U.S. Nursing agreed to indemnify and
defend Appalachian from “any and all liability or
damage that arises from . . . the negligent or intentional
act or omission” of any U.S. Nursing employee assigned
to Appalachian. (DE 52-1, Staffing Agreement § D(15).)
There is no dispute that U.S. Nursing did not defend
Appalachian in the state-court action. Nor is there any
dispute that U.S. Nursing has not indemnified Appalachian for
any costs it incurred in settling or defending the
Profitts' action against it. That is what brings
Appalachian to this Court.
complaint, Appalachian asserts four claims: 1) a claim that
U.S. Nursing breached the staffing agreement by failing to
defend it in the Profitt litigation (Count I); 2) a claim
that U.S. Nursing breached the staffing agreement by failing
to indemnify it for the costs it incurred in defending and
settling the Profitt litigation (Count II); 3) a claim that
U.S. Nursing breached the implied covenant of good faith and
fair dealing that applied to its “contractual
obligation to maintain and provide proof of insurance
coverage for malpractice claims ...