Hospital Purchase Indemnification Suit Hits Federal Court

On Tuesday a case was filed in Eastern District of Washington by Multicare Health System against CHS Washington Holdings, LLC. The case is regarding an indemnification included in the sale contract for a chain of hospitals for malpractice and other liabilities incurred prior to the sale.

The plaintiff, the complaint said, purchased a chain of hospitals from the defendant in 2017. As a part of the contract between the parties, the plaintiffs allege the defendants agreed to indemnify the plaintiff for damages based off of malpractice or general liability claims arising from events predating the effective date of the contract.

The plaintiffs then said they were subjected to a lawsuit for malpractice from the date span affected by the contract provision. The plaintiffs tendered a request for defense and indemnification which the defendants rejected, stating that the plaintiffs should have purchased liability coverage for the time period instead of relying upon the indemnification agreement.

Plaintiffs are suing for breach of contract, indemnification, and declaratory judgment. Plaintiffs are represented by Perkins Coie.