In other words, don't wait more than five years to file your counterclaim, as the co-defendant hospital did in Uldrych v VHS of Illinois, Inc.

The Illinois Supreme Court held that the proper time limit for a defendant hospital's implied indemnity claim against its co-defendant physicians is the same four-year statute of repose that applies to the underlying medical malpractice claim. In other words, don't wait more than five years to file your counterclaim, as the hospital did in Uldrych v VHS of Illinois, Inc, No 110170, January 21, 2011, 2011 WL 190292 (Ill Sup Ct).

Affirming the trial, appellate courts

The matter arose from a timely action for medical malpractice against a hospital, two surgeons, and the surgeons' firm who performed a gastric bypass operation in February 2003. The hospital agreed to settle the matter. In August 2008, the hospital filed a counterclaim against the physicians and their firm, seeking indemnification for the settlement amount.

The surgeons and their firm filed motions to dismiss the counterclaim under 735 ILCS 5/2-619, arguing that the four-year limitation period of the medical malpractice statute of repose, 735 ILCS 5/13-212(a), applied and that it was not filed within that period. The circuit court granted the motions and dismissed the counterclaim. The appellate court affirmed.

Affirming the lower courts' rulings, the supreme court identified three statutes of repose set forth in the Code of Civil Procedure for discussion. Section 13-204, which governs actions for contribution and indemnity where the underlying action seeks recovery for personal injuries or death unless otherwise specified, provides a two-year statute of repose with one exception: matters in which medical or healing art malpractice is alleged on the part of the person from whom contribution or indemnity is sought. 735 ILCS 5/13-204(e). Section 13-205 provides a five-year statute of repose for actions on unwritten contracts and all civil actions not otherwise provided for. Section 13-212(a) provides a four-year statute of repose for any action against a hospital or medical personnel.

Implied indemnity in med-mal not governed by a "generic" statute

The court said that the legislature's specific exemption of medical malpractice actions in paragraph (3) of section 13-204 reasonably suggested that the medical malpractice statute of repose - that is, section 13-212(a) - should govern those actions. The hospital's argument that section 13-205 should apply would require accepting that the legislature had been careful to exempt implied indemnity actions arising out of healing art malpractice from the statute that would otherwise control them "only to dump them into a generic, catchall provision" that had nothing to do with medical malpractice, the court said. That result would be inconsistent with the legislative framework. Uldrych at *5.

The court noted that it had already held that third-party contribution actions are subject to the four-year statute of repose of section 13-212(a). Hayes v Mercy Hospital and Medical Center, 136 Ill 2d 450, 557 NE2d 873 (1990).

In that matter, the court discussed the reason underlying the legislature's enactment of the medical malpractice statute of repose: a perceived medical malpractice insurance crisis that called for limiting the exposure of doctors and other medical personnel to potential liability so that their insurance companies could better predict future liabilities. Determining that the medical malpractice statute of repose governed contribution actions for damages arising out of medical malpractice matters was consistent with the legislature's apparent goals, the court said.

In fact, the court continued, subsequent enactments showed that the legislature evidently approved of its holding in Hayes as well as of the appellate court's extension of that holding to third-party actions for implied indemnity arising out of medical malpractice actions. Pointing to PA 88-538, effective January 1, 1995, the court observed that that statute expanded and refined section 13-204 in a manner that was consistent with its ruling in Hayes and the appellate court's rulings in Roberson v Belleville Anesthesia Associates, Ltd, 213 Ill App 3d 47, 571 NE2d 1131 (4th D 1991).

The court also rejected the hospital's argument that the nature of the liability at issue was quasi-contractual, which would have subjected it to the default five-year statute of repose of section 13-205. "The aim of the legislature in enacting any statute of repose is to preclude the filing of actions after a specified number of years….[I]n the case of the medical malpractice statute of repose, the legislature meant to prohibit all actions 'arising out of patient care' that are brought more than four years after the date of the alleged malpractice." Uldrych at *7; emphasis in original.