Fetick v. American Cyanamid Co.

• Decision Date: 06 March 2001
• Citation: 38 S.W.3d 415
• Parties: (Mo.banc 2001) Michael Fetick, Executor of the Estate of Paul G. Fetick, M.D., Appellant/Cross-Respondent, v. American Cyanamid Company and Hesselberg Drug Company, Respondents/Cross-Appellants. SC82337 0
• Court: Missouri Supreme Court

38 S.W.3d 415 (Mo.banc 2001)

Michael Fetick, Executor of the Estate of Paul G. Fetick, M.D., Appellant/Cross-Respondent, v. American Cyanamid Company and Hesselberg Drug Company, Respondents/Cross-Appellants.

SC82337

Supreme Court of Missouri

03/06/2001

Appeal From: Circuit Court of the City of St. Louis, Hon. David C. Mason

Counsel for Appellant: Mark R. Dunn, Marc S. Moller, Henry Gluckstern and Stanley P. Kops

Counsel for Respondent: Kenneth R. Heineman, Dale R. Joerling, Roger W. Yoerges, Nicholas P. Coleman, David P. Donovan and Lara A. Englund

Opinion Summary: American Cyanamid manufactured, Hesselberg Drug distributed, and Dr. Michael Fetick administered a vaccine to baby Danny Callahan. Following negligent treatment by others, the baby contracted polio. He sued Dr. Fetick, American Cyanamid, and others. Dr. Fetick settled and sued American Cyanamid and Hesselberg Drug for contribution, and alleged fraud by Cyanamid. The trial court granted summary judgment for the defendants. Dr. Fetick appealed.

Court en banc holds: (1) By settling, Dr. Fetick extinguished the baby's claim only against himself, while insulating himself from the contribution claims of other defendants. But in procuring this protection, Dr. Fetick also triggered the "settlor-barred" doctrine, which precludes him from pursuing his own contribution claims. This doctrine continues to apply after the judgment is satisfied, pending appeal, and before trial.

(2) Moving for summary judgment, American Cyanamid claimed that Dr. Fetick was not entitled to recover for fraud because he did not suffer damages. A fraud claim may not be brought if it is disguised as a claim for contribution. Dr. Fetick failed to set forth specific facts to show a genuine issue of fact as to whether he suffered damages.

White and Holstein, JJ., and Garrison and Prewitt, Sp.JJ., concur. Price, C.J.,

Limbaugh and Wolff, JJ., not participating.

Duane Benton, Judge

Dr. Paul G. Fetick, M.D., sued American Cyanamid Company and Hesselberg Drug Company for contribution. The circuit court granted summary judgment to both defendants, while dismissing a separate fraud count against American Cyanamid. After opinion by the Court of Appeals, this Court granted transfer. Mo. Const. art. V, sec. 10. Affirmed.

I.

American Cyanamid manufactured Orimune, an oral poliomyelitis vaccine, which Hesselberg Drug distributed. On November 4, 1978, Dr. Fetick administered Orimune to three-month-old Danny Callahan. Danny appeared in good health until December 2, when diagnosed with an unrelated perirectal abscess. Following negligent treatment by Cardinal Glennon Hospital and St. Louis University (SLU), Danny contracted polio, which permanently paralyzed his legs and left arm. See Callahan v. Cardinal Glennon Hosp., 863 S.W.2d 852, 856-58 (Mo. banc 1993).

Danny originally sued Dr. Fetick, the Hospital, SLU, and American Cyanamid. At trial, only SLU and the Hospital remained as defendants. Before trial, Danny settled with Dr. Fetick for $290,000. Later, but also before trial, Danny dismissed American Cyanamid without prejudice. St. Louis University v. Hesselberg Drug Company, 35 S.W.3d 451 (Mo. App. 2000). The jury found SLU and the Hospital jointly and severally liable, assessing $16 million in damages. After offsetting the $290,000 pretrial settlement, the judgment was reduced to $15,710,000. See section 537.060 RSMo 2000; Callahan v. Cardinal Glennon Children's Hosp., 901 S.W.2d 270, 271 (Mo. App. 1995).

In this case, Dr. Fetick sued American Cyanamid and Hesselberg Drug, seeking contribution for the $290,000 settlement, and alleging fraud by Cyanamid. The trial court entered summary judgment for both defendants. Dr. Fetick appealed.

II.

By settling, Fetick extinguished Danny's claim only against himself, while insulating himself from the contribution claims of other defendants. Lowe v. Norfolk and Western Ry. Co., 753 S.W.2d 891, 894 (Mo. banc 1988). But in procuring this protection, Fetick also triggered the "settlor-barred" doctrine, which precludes him from pursuing his own contribution claims. Cardinal Glennon Hospital v. American Cyanamid Company, 997 S.W.2d 42, 45 (Mo. App. 1999). A settling defendant is barred from seeking contribution against another defendant unless the settling defendant has discharged the liability of that defendant. Id. at 44.

Fetick argues that once a judgment is fully satisfied, the settlor-barred doctrine should not apply. Because any claim by Danny against American Cyanamid and Hesselberg is effectively ended, Fetick now asserts a right to contribution against Cyanamid and Hesselberg.

A. Post-satisfaction "settlement"

In support of a "satisfaction of judgment" exception, Fetick cites a decision of the United States Court of Appeals for the Eighth Circuit, American Cyanamid Company v. St. Louis University, 205 F.3d 1344 (8th Cir. 2000). In that federal case, American Cyanamid sought declaratory judgment to bar SLU from seeking contribution from it. Id. American Cyanamid -- after the state trial but before the federal case -- settled with Danny for $300,000.

The District Court allowed SLU to seek contribution from American Cyanamid. American Cyanamid Company v. St. Louis University, Case No. 4:94CV2483-SNL (E.D. Mo, April 15, 1999). The Eighth Circuit affirmed, without opinion. 205 F.3d at 1344. The federal courts held that Danny's claim was fully extinguished by the $16 million satisfaction of judgment he received before receiving the $300,000 from American Cyanamid. The federal courts held that the $300,000 was not a true settlement: "at the time American Cyanamid entered its 'settlement' . . . Callahan no longer had a claim to settle." Id. Cyanamid, therefore, could not claim protection against contribution-seeking tortfeasors. Id.

The federal courts did not discuss the settlor-barred doctrine, let alone establish any exception to it. Moreover, the federal case is irrelevant to the settlor-barred doctrine, because neither Cyanamid nor SLU were "settlors" within the meaning of the settlor-barred doctrine.

B. Pending-appeal settlement

After the original malpractice trial, the Hospital separately settled with Danny for $4 million, and thus did not appeal the $15,710,000 verdict. The appeal did continue; the Hospital did not discharge the liability of SLU, American Cyanamid or Hesselberg.

In another state case, the Hospital sued Hesselberg for contribution, and American Cyanamid for contribution, fraud and indemnification. Cardinal Glennon, 997 S.W.2d at 43-44. The Court of Appeals held that by the settlor-barred doctrine, the Hospital could not seek contribution from American Cyanamid or Hesselberg because the Hospital did not discharge their liability. Cardinal Glennon, 997 S.W.2d at 45. The Court of Appeals expressly rejected exceptions to the settlor-barred doctrine. Id.

This state case controls here. By settling with Danny, Fetick discharged only his liability to Danny, and protected himself from contribution claims of other defendants. Equally, he is barred from seeking contribution from American Cyanamid or Hesselberg in the present case.

C. Pre-trial settlement

Fetick argues, in the alternative, that the settlor-barred doctrine violates equal protection in this case, alleging that a pre-trial settlor (Fetick) is treated differently from a pending-appeal settlor (Hospital). To the contrary, the Hospital was denied contribution, just as Fetick now cannot seek contribution. See Cardinal Glennon, 997 S.W.2d at 43-44.

III.

Moving for summary judgment, American Cyanamid claimed that Fetick was not entitled to recover for fraud as a matter of law because he did not suffer damages. Summary judgment is appropriate "where the moving party has demonstrated, on the basis of facts as to which there is no genuine dispute, a right to judgment as a matter of law." ITT Commercial Fin. Corp. v. Mid-America Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993).

American Cyanamid, as a defending party moving for summary judgment, may "establish a right to judgment by showing . . . facts that negate any one of the claimant's elements . . .." Id. at 381. One of the elements of fraud is "the hearer's consequent and proximately caused injury." Heberer v. Shell Oil Co., 744 S.W.2d 441, 443 (Mo. banc 1988). Failing to establish damages defeats a fraud claim. Id.

In his petition, Fetick first alleged as damages the settlement amount and expenses (including attorney fees) from the original Callahan suit. A related case holds that such an allegation is meritless: a fraud claim may not be brought if it is a disguised claim for contribution. Cardinal Glennon, 997 S.W.2d at 45-46.

The only other damage Fetick pleads is his "loss of reputation and standing in the medical community." In accord with Rule 74.04(c), American Cyanamid set forth the material facts warranting summary judgment. Cyanamid quoted Fetick's deposition that he: (1) did not know how, or whether, his reputation was damaged, (2) could not name a specific doctor that held him in lesser esteem due to the Callahan lawsuit, and (3) was unaware of any doctor who stopped referring patients to him.

Once American Cyanamid made this prima facie showing, Fetick had a specific burden: "'an adverse party may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided in this Rule 74.04, shall set forth specific facts showing that there is a genuine issue for trial.'" ITT Commercial Fin. Corp, 854 S.W.2d at 381.

In response, Fetick asserted (without pointing to any evidence) that the "entire Cardinal Glennon medical community" knew of Danny's injuries. In support, Fetick offered his own deposition, the affidavit of Susan and John Hoffman, and tax returns showing a decreased income. Neither of the Hoffmans -- Fetick's daughter and son-in-law -- is a member of the medical community. Their affidavit testifies to Fetick's emotional...