Sunday, November 9, 2014

Duty to Defend

State of Vermont v. Prison Health Services, Inc., 2013 VT 119

By Elizabeth Kruska

On August 14, 2009, a young woman reported to serve a jail sentence at Vermont’s correctional facility in Swanton. On August 16, 2009, she died. It came to light that she had a medical condition that required her to have potassium supplements, and that she didn’t get them while incarcerated.

This case isn’t exactly about that, though. It’s about whether Prison Health Services (PHS), the contract health provider in 2009 has a duty to defend the State in the lawsuit that followed, relative to this young woman’s death. The trial court said no. SCOV disagreed.

Here’s why. Vermont has some prisons within the State. When people are imprisoned, they’re in the custody of the State. The State has the duty to provide appropriate shelter, nutrition, and care for those people. Just because people ended up in jail for whatever reason doesn’t mean the State can mistreat them when they’re there. The shelter part is easy; Vermont owns the prisons and maintains them (I’m sure to what degree would be debated by those who’ve spent time there, but that’s not really the point here). The nutrition part isn’t that hard, either (ditto). The care part gets a little tricky, though.

Vermont DOC isn’t in the position to keep its own doctors and healthcare workers on staff. It’s easier for Vermont to make a contract with an outside company whose job it is to staff the prisons with people qualified to do healthcare. That’s where PHS comes in. Vermont put its prison healthcare needs out to bid and ultimately awarded PHS a twenty-four-million dollar contract to provide the services.

The contract included express provisions about what PHS would dolike have all medical shifts covered, do medical intakes with incoming prisoners, keep a fully-stocked pharmacy and obtain necessary medicines when the pharmacy wasn’t stocked, and respond to emergenciesamong other things. It also included a provision that said PHS would defend the State if the State got sued for some sort of medically-related incident that occurred.

When the young woman died in Swanton, it’s fair to say everyone knew there would be a suit filed against the State and PHS. That’s exactly what happened. Her estate sued the State of Vermont, who felt it should be defended by PHS, since PHS was the health care entity in the jail when the woman died. PHS didn’t want to have to defend the State, though. The State sought a declaratory judgment from the court determining whether there was a duty to defend. The trial court said nothat there were no allegations of wrongdoing by PHS staff, so the duty to defend was never triggered.

The State disagreed and appealed. SCOV agreed with the State and reversed the lower court.

SCOV reasoned that whether or not PHS had a duty to defend is a question of law, so they reviewed it de novo, or totally anew. They looked at the face of the contract itself and determined that they’d enforce the contract as written. They also assume that if there are things written into the contract, that they’re meant to be there; nobody puts extraneous language in contracts. Well, at least they shouldn’t.

The contract itself said that PHS would “indemnify, defend, and hold harmless the State and its officers and employees from liability and any claims, suits, judgments, and damages which arise as a result of [PHS’s] acts and/or omissions in the performance of this contract.” There was more language that clarified that this applied to things done (or not done) by PHS employees or contractors, and not to things done (or not done) by State employees. In other words, if a State employee somehow did something wrong within the correctional facility and it didn’t have to do with PHS, PHS wouldn’t have to indemnify the State. Makes sense.

PHS tried to argue that since the contract didn’t say it related to incidents solely caused by PHS, that it shouldn’t be required to defend. For example, if both a State employee and a PHS employee were involved, that since the contract doesn’t specifically say PHS has a duty to defend, then they don’t have to. SCOV pretty much says this is ridiculous, and that of course the contract applies to that kind of situation.

Since SCOV decided the contract means PHS had the duty to defend the State, SCOV then has to decide whether the estate’s allegations against the State arise from the PHS contract. SCOV decides that they do. SCOV determined that PHS was supposed to acquire and stock medicines needed by inmates, and that in this case, they didn’t have the medicine this woman needed. They’re supposed to have a system to make sure meds are stocked, and they didn’t. They didn’t have access to a mouthguard for CPR (which seems pretty basic), and as a result couldn’t even attempt to resuscitate her when she was unconscious. The decedent made sure to provide the facility with her medical information before arriving, and apparently that wasn’t communicated between the State and PHS. Finally, even though PHS tried to argue that they had short-staffing issues, SCOV is unconvinced this is a good excuse because the contract says that every medical shift will be covered.

SCOV wasn’t deciding the merits of the case, just whether PHS had a duty to defend the State. It found the contract required such a defense if PHS alone or PHS and the State together were sufficiently involved in the incident. Here they said both were, so PHS is on the hook for the defense.

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