Lum v. Stinnett

• Decision Date: 03 September 1971
• Docket Number: No. 6220,6220
• Citation: 488 P.2d 347,87 Nev. 402
• Parties: James LUM, M.D., Appellant, v. William STINNETT, Respondent.
• Court: Nevada Supreme Court

Page 347

488 P.2d 347

87 Nev. 402

James LUM, M.D., Appellant, v. William STINNETT, Respondent.

No. 6220.

Supreme Court of Nevada.

Sept. 3, 1971.

Austin & Thorndal, Las Vegas, for appellant.

Singleton, Beckley, De Lanoy, Jemison & Reid, Las Vegas, for respondent.

OPINION

GUNDERSON, Justice:

This appeal arises from a malpractice action commenced by respondent against three physicians: Dr. Greene, who attended respondent at a hospital emergency room; Dr. Romeo, respondent's 'family doctor,' who consulted with Greene by telephone, directed that respondent be X-rayed, and thereafter attended him; and appellant Lum, who 'read' the X-rays. Respondent's theory was that defendants negligently failed to detect and treat a compression fracture in respondent's spine. Issues dispositive of this appeal concern the propriety and effect of an agreement by which respondent and insurance carriers for Greene and Romeo 'settled' their disputes, throwing all responsibility for a $50,000 verdict on appellant Lum.

All parties announced ready for trial on October 29, 1969, and jury selection continued through the morning of October 30; counsel for Greene and Romeo took a major part in choosing the jury, jurors being selected whom appellant's counsel might well have rejected had he known his apparent allies were then negotiating a 'settlement' with respondent. By a letter hand-delivered to counsel for Greene and Romeo on October 29, respondent's counsel, with some self-serving recitals, proposed: (1) if the jury awarded nothing or less than $20,000, the insurance carriers for Greene and Romeo were to pay the sum necessary to bring recovery to $20,000; (2) if the verdict exceeded $20,000, respondent would not execute against Greene and Romeo; and (3) respondent would not oppose a motion for directed verdict in favor of Greene and Romeo. ¹ On October 30, when jury selection was completed, counsel for Greene and Romeo told appellant's counsel something of this proposal, and that they had decided to accept it. By letter of October 31, counsel for Greene and Romeo did advise respondent's counsel they accepted the proposal, if respondent's counsel agreed not to 'oppose a motion made pursuant to N.R.C.P. 41(b) or N.R.C.P. 50(a) at the close of plaintiff's case,' to 'press forth actively against Dr. Lum,' not to settle with him for less than $20,000 without their written consent, and to urge a jury verdict in excess of $20,000. Respondent's counsel approved and signed this counter-proposal.

On November 3, when court reconvened to begin trial, appellant's counsel moved to withdraw and asked a continuance because he could not agree with appellant's insurance carrier on how to meet problems the 'settlement' posed to his defense. The motion being denied, a trial ensued, noteworthy aspects of which were as follows.

First, while Romeo seemed the prime target of respondent's Complaint, respondent's counsel focused on appellant in his opening statement to the jury, displaying apparent candor regarding Greene and Romeo. ² Greene's counsel then announced he would reserve his opening statement; thus, appellant's counsel could do the same, or hazard being left no way to meet opening statements made later by counsel for the 'co-defendants.'

Thereafter, though now furthering the interests of Greene, Romeo, and their insurance carriers, respondent's counsel called Greene as an 'adverse party,' and then opposed full cross-examination by appellant's counsel on the ground his own interrogation was 'cross-examination'; he defeated an objection that he was leading Romeo by contending Romeo was an 'adverse witness,' and led him at will. When respondent's counsel omitted to ask respondent's former employer if respondent had received 'tips' as well as wages, Greene's counsel went into this item of special damage on 'cross-examination,' in a notable departure from his usual nonchalance. In contrast to the placid role played by counsel for appellant's 'co-defendants,' his own counsel's efforts must have suggested only appellant had cause for concern. This inference can only have been strengthened when, at the close of respondent's case, the court granted 41(b) motions for dismissal of Greene and Romeo, without opposition by respondent's counsel, but over appellant's objection that he would be prejudiced if not similarly dismissed. Appellant's 41(b) motion for dismissal was denied.

Appellant's counsel then moved for a mistrial, on grounds that the dismissal of Greene and Romeo would 'prejudice Defendant Lum in the eyes of the jury,' that the jury would infer they were free from negligence while he was not, and that 'the overall prejudicial effect of these circumstances cannot be overcome by any instructions or admonitions to the jury.' Respondent's counsel countered, saying: 'if this court desires and if he desires to put the agreement in before the jury, I think that that would probably be all right. If he desire to put in the agreement, the written agreement into the jury.' After further colloquy, the court required copies of the agreement for the court and appellant's counsel; then, it denied the motion for mistrial, without determining whether, or how, the jury might be informed of the agreement. ³

By this time, having already called Greene and Romeo as 'adverse witnesses,' respondent had the benefit of their testimony without being bound by it. By logical extension of the trial court's rulings, if appellant recalled them now, they would be his witnesses, particularly since they now were not parties. Appellant's counsel tried another approach.

Uncontroverted testimony supporting appellant's motion for a new trial shows before closing his case, appellant's counsel asked that counsel approach the bench. He was, he told the court, prepared to call a witness to prove the terms of the agreement, and inquired how the problem was to be handled. (Perhaps recognizing dangers inherent in calling Greene or Romeo, he testified he had decided to call respondent's counsel, or counsel for Greene or Romeo.) The court told him 'the matter would be handled by jury instructions,' and it does not appear respondent's counsel manifested opposition to this.

However, the record reflects when appellant's counsel submitted an instruction on the subject, and reminded the court it had said the matter would be handled by instructions, respondent's counsel said, 'it is our position that if he desired to show that there was an agreement in existence that the best evidence would be the agreement itself.' Without indicating what instruction it had intended to give, the court refused the one offered by appellant, saying Greene and Romeo were dismissed by the court pursuant to Rule 41(b). Naturally, since Greene and Romeo had been thus dismissed, no verdict forms regarding them were provided the jury, nor could any special instructions regarding their possible liability be expected. The jury was, in effect, asked to decide if appellant was negligent, or no one was.

On final argument to the jury, respondent's counsel did not suggest that Greene or Romeo were in the least negligent, although counsel's letter of October 29 recited the belief this was so. Nor did counsel suggest the verdict be diminished 20%, or any amount, so appellant would not have to pay for the negligence of Greene and Romeo. Of them he said, 'they both are no longer in the case,' and proceeded to rely on their testimony. He even suggested Romeo's apparent respect for one of respondent's other witnesses was reason to credit the latter. ⁴

The jury returned a verdict for $50,000; judgment was entered for the amount of the verdict plus costs; appellant moved for judgment notwithstanding the verdict or alternatively for a new trial; the court denied this motion; hence, this appeal.

1. First, we perceive that strangers to the action, insurance carriers for Greene and Romeo (themselves strangers to claims against appellant), promised to pay $20,000 if respondent would prosecute his action against appellant, and not settle without consent for less than $20,000. Such an agreement is the very definition of the common law offense of maintenance. 'Maintenance exists when a person without interest in a suit officiously intermeddles therein by assisting either party with money or otherwise to prosecute or defend it.' 14 C.J.S. Champerty and Maintenance § 1b. In addition, the insurance carriers were to profit from any recovery against appellant; for while they 'settled' their liability at $20,000, any verdict against appellant was to reduce their obligation. 'Champerty is maintenance with the additional feature of an agreement for the payment of compensation or personal profit from the subject matter of the suit.' 14 C.J.S. Champerty and Maintenance § 2.

Our own decisions establish: 'To maintain the suit of another is now, and always has been, held to be unlawful, unless the person maintaining has some interest in the subject of the suit, or unless he is connected with the assignor by ties of consanguinity or affinity.' Cf. Gruber v. Baker, 20 Nev. 453, 469, 23 P. 858, 862 (1890). If insurance companies may contend, and they do, that they have so little relationship to actions against their insureds that the policies they issue are not discoverable even by vitally concerned plaintiffs, cf. Washoe Co. Bd. Sch. Tr. v. Pirhala, 84 Nev. 1, 435 P.2d 756 (1968), then surely no one will contend a carrier has such relationship to a plaintiff's action as justifies fostering it, for profit, against defendants with whom the carrier and its insureds have no relationship whatever.

Next, we perceive the insurance companies were to become the parties truly interested in the action, to the extent of $20,000, with right to refuse its being settled for less. This brings attention to a variant of the consideration first mentioned. Under a rule like our NRCP 17(a), discussing a somewhat similar 'settlement agreement,' another court...