Fraudulent Concealment by Nonfeasance as an Exception to the Statute of Repose

By Alex Stein

As a general rule, malpractice suits against physicians and hospitals must be filed within the repose period that starts running on the day of the alleged malpractice. Expiration of that period kills the plaintiff’s suit regardless of whether she was able to file it on time. Unlike statutes of limitations, this absolute time-bar does not depend on the accrual of the plaintiff’s cause of action nor is it subject to the discovery rule and equitable tolling. Typically, states recognize only one exception to the statute of repose: fraudulent concealment. Under that exception, when a negligent doctor or hospital intentionally gives the aggrieved patient (or her successor) false or misleading information about the treatment, the patient (or her successor) becomes entitled to toll the repose period until she becomes aware of the true facts. Many courts have ruled that this exception was only available to plaintiffs who could establish affirmative misrepresentation on the part of the doctor or the hospital. According to these decisions, fraud capable of tolling the repose period could only be committed by misfeasance, that is, by active conduct rather than by failure to disclose the relevant facts. More recent court decisions, however, obliterate the omission-commission distinction in the context of fraudulent concealment by doctors and hospitals: see, e.g., DeLuna v. Burciaga, 857 N.E.2d 229, 245-46 (Ill. 2006).

A recent decision of Michigan’s Court of Appeals, In re Estate of Doyle, 2016 WL 857204 (Mich.App.2016), continues this trend.

This case involved an open-heart cardiac bypass surgery during which doctors placed 40 sponges inside the patient’s body. At the conclusion of the surgery, doctors and nurses conducted multiple sponge counts as they removed those sponges. The counts yielded a return of only 39 sponges: one sponge was missing and could not be located. The care providers did not inform the patient, his family, or his doctors about the missing sponge. This sponge was discovered seven years later when the patient developed an acute infection in the heart area. Eleven months after this discovery and following the patient’s death, his heirs sued the doctors for medical malpractice. The doctors argued that the plaintiffs’ suit was time-barred under Michigan’s statute of repose, MCL 600.5838a(2), because it was not filed within the six-year repose period. The plaintiffs invoked the “fraudulent concealment” exception. The trial court held that this exception was unavailable because the plaintiffs failed to show any affirmative act or misrepresentation by the doctors that prevented their discovery of material facts.

The Court of Appeals reversed that decision. The Court of Appeals agreed with the trial court that the plaintiffs have shown no affirmative misrepresentations by the defendants. According to the Court, however, this finding “does not end the analysis” because “there is an exception to the affirmative—act rule when the defendant has a fiduciary relationship with the plaintiff.” This exception was applicable because “a physician/patient relationship [is] a fiduciary relationship.”

Hence,

“Although a fiduciary cannot be expected to disclose information about which he or she is unaware (e.g. inadvertently perforating a nearby organ without realizing it) or to disclose a breach when he or she failed to appreciate that his or her conduct breached the standard of care (e.g. misdiagnosing a patient’s presenting condition), a fiduciary cannot shirk his or her duty to disclose by pleading ignorance to the fact that it was malpractice despite knowing what happened (e.g. realizing that a nearby organ was inadvertently perforated but claiming not to realize it was malpractice, and thus, not telling the patient, or realizing the patient’s condition was wrongly diagnosed but claiming such misdiagnosis was not malpractice, and thus, not telling the patient). Allowing a defendant to plead ignorance in the presence of known and undisputed facts that implicate malpractice would promote self-serving defenses that would thwart the viability of the fraudulent concealment exception in fiduciary matters. Consistent with the purpose of the fraudulent-concealment exception … the intentional failure to disclose known, pertinent information, in order to deprive plaintiff of the ability to realize that he or she has a potential cause of action constitutes fraudulent concealment.”

Based on this understanding of the law, the Court of Appeals allowed the plaintiffs to toll the repose period and proceed with the suit.

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About Alex Stein

Alex Stein is a Professor of Law at Brooklyn Law School. Before joining Brooklyn, Alex was a Professor of Law at Cardozo Law School (2004-2016) and served for more than a decade at the Hebrew University of Jerusalem Faculty of Law (1991-2004). He also held visiting professorial appointments at Alabama, Columbia, Miami, and Yale Law Schools. In Fall 2016, he visited Harvard Law School, where he taught Torts and a seminar on Medical Malpractice. Alex's specialty areas include Torts, Medical Malpractice, Evidence, as well as general legal theory and economic analysis of law. He authors three books, An Analytical Approach to Evidence (with Ronald J. Allen et al.) (6th ed. 2016); Foundations of Evidence Law (2005) and Tort Liability under Uncertainty (2001, with Ariel Porat), and over sixty articles of which many have appeared in leading journals. Alex was one of the founding editors of Theoretical Inquiries in Law and is on the editorial board of the International Journal of Evidence & Proof. In 2013, he launched an e-journal STEIN on Medical Malpractice, http://www.steinmedicalmalpractice.com, that covers all significant developments in medical malpractice laws across the United States. He graduated from the Hebrew University of Jerusalem and earned a Ph.D. from the University of London.