Markley v. Oak Health Care Investors of Coldwater, Inc.

• Decision Date: 18 April 2003
• Docket Number: Docket No. 230056.
• Citation: 255 Mich. App. 245,660 N.W.2d 344
• Parties: Robert MARKLEY, Sr., as Personal Representative of the Estate of Sally Markley, Plaintiff-Appellee, v. OAK HEALTH CARE INVESTORS OF COLDWATER, INC., d/b/a Laurels of Coldwater, f/k/a Carriage Inn Convalescent Center, and Leona Elliott, L.P.N., Defendants-Appellants.
• Court: Court of Appeal of Michigan — District of US

660 N.W.2d 344

255 Mich. App. 245

Robert MARKLEY, Sr., as Personal Representative of the Estate of Sally Markley, Plaintiff-Appellee, v. OAK HEALTH CARE INVESTORS OF COLDWATER, INC., d/b/a Laurels of Coldwater, f/k/a Carriage Inn Convalescent Center, and Leona Elliott, L.P.N., Defendants-Appellants.

Docket No. 230056.

Court of Appeals of Michigan.

Submitted November 5, 2002, at Grand Rapids.

Decided February 7, 2003, at 9:00 a.m.

Released for Publication April 18, 2003.

Worsham, Victor & Ahmad, P.C. (by Richard B. Worsham), Southfield, for the plaintiff.

Plunkett & Cooney, P.C. (by Robert G. Kamenec), Bloomfield Hills, for the defendants.

Before: MURPHY, P.J., and SAWYER and DANHOF¹, JJ.

MURPHY, P.J.

In this wrongful death action involving medical malpractice, defendants appeal as of right from a $354,133 judgment entered in favor of plaintiff following a jury trial to determine damages. Defendants maintain that the judgment should have been reduced to reflect plaintiff's earlier settlement with Community Health Center (Community) that was reached in a separate action. In the alternative, defendants argue that the statutory limit on noneconomic damages in a medical malpractice action, M.C.L. § 600.1483, should have been applied by the trial court to cap plaintiff's total recovery. Defendants also take issue with the trial court's award of prejudgment interest. We reverse and remand.

I. UNDERLYING FACTS and PROCEDURAL HISTORY

The facts of this case are not in dispute and are set forth in this Court's earlier opinion in Markley v Oak Health Care Investors of Coldwater, Inc, unpublished opinion per curiam of the Court of Appeals, issued April 6, 2001 (Docket No. 220494), 2001 WL 694486 (Markley I). In short, plaintiff's decedent was admitted to Community where her eventual misdiagnosis resulted in a large-bowel resection and left-leg amputation in 1994. The decedent's family cared for her immediately after her release from Community, but she was eventually admitted to a nursing home owned and operated by defendant Oak Health Care Investors of Coldwater, Inc. (OHC). While at the nursing home, OHC's nurse practitioner increased the prescribed infusion rate for decedent's intravenous feeding, causing her to go into respiratory distress and, shortly thereafter, die of cardiac arrest.

Plaintiff sued Community, which settled with plaintiff for $460,000; $220,000 of that amount was allocated to "the legal theory arising from the Wrongful Death of [the decedent]" and $240,000 was allocated to "the legal theory arising from the conscious pain and suffering from the injuries to [the decedent] during her lifetime." Before the settlement was reached, plaintiff sued defendants for the same wrongful death in the case at bar.² Defendants failed to respond to plaintiff's complaint with an affidavit of meritorious defense as required by M.C.L. § 600.2912e, and partial summary disposition was granted to plaintiff pursuant to MCR 2.116(C)(9) and (10). A trial was held solely to determine the amount of damages.

The jury awarded plaintiff $300,000 in total wrongful death damages, to which was added prejudgment interest and taxable costs. Defendants had moved to file notice of nonparty fault shortly before trial, and the trial court apparently denied the motion on the basis of defendants' failure to timely file pursuant to MCR 2.112(K). The jury did not consider the fault of anyone other than defendants.

II. TRIAL COURT'S RULINGS ON LEGAL ISSUES

The trial court found the statutory damage cap, M.C.L. § 600.1483, to be unconstitutional as violative of the right to trial by jury. With regard to the requested $220,000 setoff against the $300,000 verdict, the trial court ruled that the amendment of M.C.L. § 600.2925d, which until the enactment of 1995 tort reform legislation had expressly allowed a setoff against a judgment predicated on an earlier settlement payment, abrogated any common-law right to a setoff; therefore, defendants were not entitled to any setoff. The trial court ruled that the law now provided for the apportionment of fault; however, this could not form the basis for a reduction in the judgment because defendants failed to timely file notice of nonparty fault, and thus the issue was not before the jury. Regarding prejudgment interest, which was awarded on the entire $300,000 verdict, the trial court ruled that there was no authority requiring a plaintiff to apportion between past and future damages for purposes of computing interest. We find that the only issues necessary for us to resolve concern setoff and prejudgment interest.

III. STANDARD OF REVIEW

The parties agree, and we also concur, that the issues presented to us involve only questions of law. This Court reviews questions of law de novo. Cardinal Mooney High School v. Michigan High School Athletic Ass'n, 437 Mich. 75, 80, 467 N.W.2d 21 (1991).

IV. ANALYSIS and HOLDING

Although the parties and the trial court framed the issues, in part, with reference to principles concerning contribution and allocation of fault, the heart of the question that we must answer is whether the common-law rule of setoff survived 1995 tort reform legislation in situations still requiring the application of joint and several liability.

A. Common-Law Rule of Setoff

In Thick v. Lapeer Metal Products, 419 Mich. 342, 348 n. 1, 353 N.W.2d 464 (1984), our Supreme Court noted the common-law rule "that where a negligence action is brought against joint tortfeasors, and one alleged tortfeasor agrees to settle his potential liability by paying a lump sum in exchange for a release, and a judgment is subsequently entered against the nonsettling tortfeasor, the judgment is reduced pro tanto by the settlement amount." See also Larabell v. Schuknecht, 308 Mich. 419, 423, 14 N.W.2d 50 (1944); Cooper v. Christensen, 29 Mich.App. 181, 183-184, 185 N.W.2d 97 (1970).

The common-law rule of setoff is predicated on the principle that a plaintiff is entitled to only one recovery for his injury. Great Northern Packaging, Inc. v. Gen. Tire & Rubber Co., 154 Mich.App. 777, 781, 399 N.W.2d 408 (1986). The Great Northern panel, rejecting a claim by the plaintiff that the trial court erred in allowing a setoff against a verdict premised on a mediation settlement involving a separate tortfeasor, stated:

As a general rule, only one recovery for a single injury is allowed under Michigan law. The amount that a plaintiff recovers from one defendant is set off against a subsequent verdict obtained against a codefendant. Stitt v. Mahaney, 403 Mich. 711, 272 N.W.2d 526 (1978). See also Hall v. Citizens Ins. Co. of America, 141 Mich.App. 676, 368 N.W.2d 250 (1985). [Great Northern, supra at 781, 399 N.W.2d 408.]

The roots of the "one injury, single recovery" principle are found in Verhoeks v. Gillivan, 244 Mich. 367, 371, 221 N.W. 287 (1928), wherein our Supreme Court, adopting the "American" rule and quoting 58 L.R.A. 410, p. 430, 27 A.L.R. 805, stated:

"[T]he American cases offer equitable and convincing reasons for their course, viz.: The liability of tort-feasors for a joint tort is joint and several. The injured party has the right to pursue them jointly or severally at his election, and recover separate judgments; but, the injury being single, he may recover but one compensation. Therefore, he may elect de melioribus damnis and issue his execution accordingly, but if he obtains only partial satisfaction he has not precluded himself from proceeding against another cotort-feasor; his election of the first judgment concluding him only as to the amount he may receive, and whatever has been paid must apply pro tanto upon his further recovery."

Assuming here for the moment that defendants are jointly and severally liable for decedent's wrongful death and that the common-law rule of setoff is applicable, it is clear that the $300,000 verdict would be reduced by the $220,000 settlement payment made by Community to plaintiff.

B. Joint and Several Liability

Under the current statutory scheme, M.C.L. § 600.2956 abolished joint liability in most circumstances. However, joint and several liability still exists in medical malpractice cases where the plaintiff is without fault, such as the present case. M.C.L. § 600.6304(6)(a).³

Under established principles of joint and several liability, where the negligence of two or more persons produces a single, indivisible injury, the tortfeasors are jointly and severally liable despite there being no common duty, common design, or concert of action. Watts v. Smith, 375 Mich. 120, 124-125, 134 N.W.2d 194 (1965); Maddux v. Donaldson, 362 Mich. 425, 433, 108 N.W.2d 33 (1961). Here, with regard to wrongful death, Community and defendants, through successive negligent acts, produced a single, indivisible injury, i.e., the death of plaintiff's decedent. Although plaintiff filed separate lawsuits, Community and defendants are in theory jointly and severally liable for wrongful death, and we shall treat them as such, otherwise a plaintiff in a similar situation could avoid the effect of our ruling today by simply suing joint tortfeasors in separate actions. We shall effectively treat defendants as if they had been sued jointly with Community by plaintiff in a single action.

C. Contribution and Allocation of Fault

We find it necessary, in light of some apparent confusion in the trial court, to distinguish setoff from other theories and principles not implicated in the present case. With regard to contribution, the settlement discharged Community from liability to defendants for contribution. M.C.L. § 600.2925d(b). We are not dealing with contribution because contribution affixes the rights as between joint tortfeasors and not as between one tortfeasor and a plaintiff. M.C.L. § 600.2925a. With joint and several liability, each tortfeasor is liable for the full amount of damages. As noted by this Court in Smiley v. Corrigan, 248 Mich.App. 51, 55, 638 N.W.2d 151 (2001):...