UPDATES & ANALYSIS

Indiana doctor can be sued over contract dispute in Iowa, Iowa Supreme Court holds

by Rox Laird | December 20, 2023

In 2021 Des Moines lawyer Marc Harding was considering bringing a medical malpractice action in Iowa and sent records related to the case to an Indiana surgeon to review. Harding ultimately decided against bringing the malpractice suit but instead sued the Indiana doctor over a consulting-fee dispute.

That dispute led to an appeal to the Iowa Supreme Court focused on the question of whether Iowa courts have jurisdiction to hear Harding’s suit against the out-of-state doctor in the first place. The answer is yes, the Court said in a unanimous ruling written by Justice Christopher McDonald.

After reviewing the medical records provided by Harding, Indiana surgeon Rick Sasso advised Harding the potential defendants had not breached the standard of medical care. Harding abandoned the malpractice case and asked for a refund of part of all of a $10,000 retainer he had paid Sasso. When Sasso refused, Harding sued for breach of contract, breach of fiduciary duty, conversion, and fraud against Sasso.

Sasso argued in response that Iowa courts lack authority to exercise jurisdiction over him as a nonresident defendant under the 14th Amendment’s due process clause. The Polk County District Court denied Sasso’s motion to dismiss; Sasso appealed and the Iowa Supreme Court transferred the case to the Court of Appeals, which ruled in Sasso’s favor.

Hearing the case on Harding’s application for further review, the Iowa Supreme Court in its Dec. 15 decision vacated the Court of Appeals ruling and sent the case back to the district court.

The question before the Iowa Supreme Court, McDonald wrote, is whether Sasso had sufficient contacts with the state of Iowa such that an Iowa court may exercise personal jurisdiction over this contract dispute.

State and federal courts have previously held that a nonresident defendant can be sued in a state court when the plaintiff’s claims relate to the defendant’s contacts with that state.

Sasso testified to being surprised at being sued in the state of Iowa, saying he did not engage in business in Iowa and performed all his work for Harding from his office in Indiana.

But Sasso had entered into an agreement with an Iowa resident regarding a medical malpractice claim involving an Iowa resident, a physician practicing in Iowa, and a medical facility located in Iowa, Justice McDonald wrote. Thus, Iowa courts have jurisdiction to hear the case because the Indiana doctor had the “necessary minimum contact” with Iowa.

“We cannot conclude this is a compelling or rare case where the exercise of jurisdiction is unreasonable or offends the ‘traditional notions of fair play and substantial justice,’” Justice McDonald wrote, quoting language from a 1945 U.S. Supreme Court case. “The parties contemplated and agreed that Dr. Sasso would perform part of the contract in Iowa. In particular, the parties contemplated and agreed he would testify in an Iowa court in any medical malpractice claim. Dr. Sasso cannot now claim it is unexpected or unreasonable to make him appear in an Iowa court when he contracted to appear in an Iowa court.”

Tags: Iowa Supreme Court 2023-24