This case illustrates why entity coverage is an important part of your overall plan.

Practice Owner Held Responsible for Another's Actions

Nichole Markette, a 45-year-old nurse, was in excellent health when the instructor for her yoga class mentioned she should check out Redlief Clinic's onsite booth at the yoga studio.

When Markette visited the booth on July 2, 2015, Cindy Chata, DC, played her a video showcasing the clinic’s offerings of spinal adjustments, massages and more. Because Markette had no symptoms, she was only interested in the massages. However, Dr. Chata persuaded her to come into the clinic for a healthy living assessment.


July 6, 2015: Dr. Chata took Markette's X-rays and evaluated her range of motion. Dr. Chata advised Markette that she would use the results to develop a treatment plan for her. Markette scheduled an appointment for the following week.

July 11, 2015: When Markette returned, Dr. Chata proposed a comprehensive treatment plan. Markette still only wanted the massage component; however, Dr. Chata persuaded her to undergo the entire plan. Treatment began that day with Dr. Chata administering a light-pressure adjustment to Markette’s spine.

July 13, 2015: Markette returned for another visit and again stated that she didn’t see the need for any chiropractic adjustments. But Dr. Chata explained they were an essential part of the plan, so Markette acquiesced. Dr. Chata administered another adjustment, which was more forceful than the first.

July 20, 2015: Markette was informed that Dr. Chata was no longer with the clinic. Dr. Chad Oatt, a locum tenens doctor with decades of experience, would provide treatment instead. Known for his brusque demeanor and rough adjustment style. Dr. Oatt marched into the treatment room and tersely told Markette to lie down on the table to be adjusted.

Dr. Oatt’s first low back adjustment knocked out Markette’s breath. Dr. Oatt then repositioned her and administered a second thrust to her low back, to which she said, “ow.” Moving Markette on her right side, Dr. Oatt grabbed her left shoulder and pushed it toward her chest, pulling her left hip the opposite direction. Markette cried out in pain, prompting Dr. Oatt to wonder out loud if he had cracked her rib. Hearing no response, Dr. Oatt then adjusted Markette’s neck.

Markette recuperated from the pain over the weekend before returning to the clinic on Monday, where she shared her concerns with the clinic owner, George Redlief, DC. Dr. Redlief said she was suffering from an overzealous adjustment and treated her with mild adjustments, massage, and electrical stimulation to try to relieve the pain — all to no avail.

Surgery Follows

On August 2, 2015, Dr. Redlief referred Markette to a pain management specialist. When none of his treatments relieved the pain, the specialist obtained an MRI, which revealed an L5-S1 disc bulge with central protrusion and annular tear. Markette was referred to neurosurgeon who performed a bilateral L5-S1 hemilaminotomy, facetectomy, and foraminotomy and a L5-S1 microscopic discectomy with an annuloplastomy device implantation to prevent the disc from resting on Markette’s leg nerves. Unfortunately, Markette suffered a pulmonary embolism during surgery and was hospitalized for three days.

Although the surgery provided some immediate relief, Markette’s pain began to return over the next several months, and she started experiencing leg numbness. Seeing no improvement during the next three months, the neurosurgeon performed another L5-S1 discectomy in March 2016. Following this second surgery, Markette became very weak and suffered constant pain. Moreover, she contracted C-diff, a staph infection, became dangerously ill and required a month of antibiotics.

Lawsuit Ensues

Nearly two years later, on January 11, 2018, Markette filed a lawsuit against Drs. Oatt, Redlief, and Chata, as well as the Redlief Clinic, alleging failure to:

  • Obtain an adequate history
  • Perform adequate physical, orthopaedic and neurological examinations
  • Perform proper chiropractic manipulations
  • Obtain informed consent
  • Respond properly to the patient after complications ensued

Dr. Redlief would periodically ask if Dr. Oatt carried malpractice insurance; Dr. Oatt always replied that he did. However, Dr. Redlief did not request Dr. Oatt to provide documentation of coverage, and unfortunately, Dr. Oatt did not have malpractice insurance. What’s more, the practice itself, Redlief Clinic, did not have entity coverage and was not named as an insured under Dr. Redlief’s policy. However, since NCMIC insured the remaining defendants, NCMIC agreed to provide a courtesy defense to the clinic, but not to pay for any damages.

The Case

During mediation, Drs. Chata and Redlief didn’t deny that Dr. Oatt was negligent in adjusting Markette’s spine or that surgery was necessary. However, they did deny that they contributed to her alleged injuries or were responsible for Dr. Oatt’s negligence. The case was complicated by the fact that Dr. Oatt could not be reached, although numerous attempts to contact him were made.

A chiropractic consultant retained by the defense found:

  • The treatment plan prepared for Markette was reasonable.
  • Markette was provided with adequate information to give her informed consent. (However, the expert criticized the fact that nothing was in the records regarding informed consent or a signed informed consent form.)
  • Dr. Redlief acted reasonably in relying on Dr. Oatt as a locum tenens chiropractor.

The Outcome 

Markette’s attorney made an initial settlement demand of $1 million. To justify this number, he pointed to Markette’s medical expenses in excess of $100,000, lost wages of $17,000 and projected future lost wages of $365,000. For noneconomic damages, the attorney asserted a claim for pain and suffering for an amount to be determined by a jury. Markette initially wanted to hold Dr. Chata responsible for bringing the patient into the clinic and allowing Dr. Oatt to treat her. However, her defense pointed out that she was not a partner or owner of the clinic; was not involved in Dr. Oatt’s treatment; and did not affect Dr. Oatt’s actions in any way. In response, Markette’s attorney agreed to remove Dr. Chata from the case.

Although the defense team felt confident that Dr. Oatt held the majority of the liability, they were concerned that Dr. Redlief, as theclinic owner, held some risk:

  • The mediator viewed Markette being solicited at a yoga studio as equivalent to ambulance chasing.
  • Markette would likely be perceived as a credible witness who was experiencing pain and suffering — likely eliciting the sympathy of a jury.
  • The apparent lack of informed consent.
  • The patient’s skepticism about receiving chiropractic care.


With these factors at play, Dr. Redlief realized it was in his best interest to attempt to settle the case. Though Markette’s attorney initially demanded $1 million, the case eventually resolved for $250,000. NCMIC’s legal defense costs and fees were more than $83,000. As for Dr. Oatt, he was finally located, and Markette pursued a personal claim against him. Because Dr. Oatt had no malpractice insurance, all his personal assets — including his home — were at risk.

What Can We Learn

  • Entity Coverage. When a practice doesn’t have entity coverage, a lawsuit may target the owner of the practice.
  • Malpractice insurance. A plaintiff attorney could contend that not verifying Oatt's coverage indicated a poorly run clinic and was a violation of state guidelines.
  • Locum tenens doctors. Steps should have been taken to show that Dr. Redlief selected Dr. Oatt with scrutiny, including familiarizing Oatt with the clinic’s processes and having Redlief receive treatment from him.
  • Inducements. Use care when marketing in unique locations, such as yoga studios and health/county fairs, where potential patients may have different profiles, needs and expectations.
  • Informed consent. Patients should be asked if they understand the risks and be given an opportunity to ask questions. All of this should be documented in the notes. Further, some state regulations require the consent to be in writing and signed by the patient. 
  • Personal liability. With no malpractice coverage, Oatt was on his own to pay for legal counsel and for any judgments against him. His disappearance and lack of insurance did not prevent him from being sued, facing board actions, and dealing with future license or coverage restrictions.
  • Litigation complexity. Whether a doctor caused an injury is merely one aspect of litigation. This case demonstrates how different insurance aspects — including corporation and locum tenens coverage — can come into play. This complexity is why coverage with a company that recognizes and can navigate complex legal issues is so essential.

Although this case study is based on a real case, names, dates and details have been changed to protect patient and doctor privacy.

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