Milicevich v. Sacramento Medical Center

• Decision Date: 16 May 1984
• Citation: 155 Cal.App.3d 997,202 Cal.Rptr. 484
• Parties: Mirko Anton MILICEVICH et al., Plaintiffs and Appellants, v. SACRAMENTO MEDICAL CENTER et al., Defendants and Respondents. Civ. 22310.
• Court: California Court of Appeals Court of Appeals

Page 484

202 Cal.Rptr. 484

155 Cal.App.3d 997

Mirko Anton MILICEVICH et al., Plaintiffs and Appellants, v. SACRAMENTO MEDICAL CENTER et al., Defendants and Respondents.

Civ. 22310.

Court of Appeal, Third District, California.

May 16, 1984.

Thomas F. Mortimer, Los Angeles, Meyer & Mitchell and Herman C. Meyer, Hayward, for plaintiffs and appellants.

Thomas A. Tweedy, Sacramento, for defendants and respondents.

BLEASE, Associate Justice.

Plaintiffs Mirko and DeVonna Milicevich, husband and wife, appeal from a summary judgment in favor of defendant Sacramento Medical Center. (See Code Civ.Proc., § 437c.) Plaintiffs' tort action seeks damages for injuries arising out of a suicide attempt by Mirko. The motion for summary judgment was premised on the theory that satisfaction of a statutory consent judgment (Code Civ.Proc., § 998) by other defendants discharged the liability of the medical center by operation of law.

We hold that satisfaction of a judgment, entered pursuant to Code of Civil Procedure section 998, does not work a discharge of the liability of defendants who are not parties to the agreement.

FACTS

Plaintiffs sued Sacramento Medical Center, Dr. James Johnson and Kaiser Foundation Health Plan, Inc., on grounds of medical malpractice for injuries arising out of Mirko's suicide attempt. The liability of Sacramento Medical Center is premised on the release of Mirko from hospitalization in a dangerous condition. The liability of Dr. Johnson and his employer, Kaiser, is premised upon the doctor's alleged breach of a duty to treat plaintiff husband two days after the discharge by Sacramento Medical Center.

Dr. Johnson and Kaiser made a statutory offer to compromise the action against them for $10,001, pursuant to section 998. Plaintiffs filed a notice of acceptance. Dr. Johnson and Kaiser repudiated the settlement and made a motion for an order preventing entry of judgment. The motion was denied and the trial court ordered entry of the judgment. ¹ Plaintiffs then filed a form "Acknowledgment of Full Satisfaction of Judgment" releasing Dr. Johnson and Kaiser. (See former Code Civ.Proc., § 675; Stats.1980, ch. 600, § 1.) Sacramento Medical Center successfully moved for summary judgment on the ground the satisfaction discharged it. This appeal followed.

DISCUSSION

I

Section 998, ² as relevant here, provides that any party to an action may "serve an offer in writing upon any other party to the action to allow judgment to be taken in accordance with the terms and conditions stated at that time." If the offer is accepted a judgment encompassing the terms and conditions is entered. Section 998 provides that such a judgment "shall be deemed to be a compromise settlement."

Defendants Johnson and Kaiser satisfied the 998 judgment entered pursuant to their agreement with plaintiffs. Sacramento Medical Center, a non-settling party, seeks a discharge of its liability by reliance upon the rule that "[a]n injured person is entitled to only one satisfaction of judgment for a single harm, and full payment of a judgment by one tortfeasor discharges all others who may be liable for the same injury." ³ (Fletcher v. California Portland Cement Co. (1979) 99 Cal.App.3d 97, 99, 159 Cal.Rptr. 915; see also, e.g., Tompkins v. Clay Street R.R. Co. (1884) 66 Cal. 163, 166, 4 P. 1165; Southern California Edison Co. v. Harnischfeger Corp. (1979) 99 Cal.App.3d 9, 160 Cal.Rptr. 23; Annot., Payment of, or proceeding to collect, judgment against one tort-feasor as release of others (1947) 166 A.L.R. 1099; see generally Annot., Voluntary Payment Into Court of Judgment Against One Tortfeasor as Release of Others (1971) 40 A.L.R.3d 1181.)

The single satisfaction rule is not based upon the effect of the judgment itself, which, in any event, does not preclude pursuit of joint or concurrent tortfeasors. (See e.g. Grundel v. Union Iron Works (1900) 127 Cal. 438, 59 P. 826; Rest.2d Judgments, § 49, com. a, p. 34.) ⁴ Rather, the rule in Fletcher is "designed to prevent double recovery...." (Id., 99 Cal.App.3d at p. 99, 159 Cal.Rptr. 915; see also Butler v. Ashworth (1895) 110 Cal. 614, 618, 43 P. 4.) ⁵ "[T]his rule is equitable in its nature, and ... its obvious purpose is to prevent unjust enrichment." (Prosser. Joint Torts and Several Liability (1937) 25 Cal.L.Rev. 413, 421.) ⁶ Whether there is in fact a double recovery cannot be determined unless the damages which measure the full recovery for the injury have been litigated on their merits. In Fletcher and the authority upon which it relies ⁷, the judgments were predicated upon litigation which adjudicated the full amount of plaintiff's damages. When the judgment which has been satisfied is predicated upon such an adjudication the logic of discharge is clear. Plaintiff is only entitled to a single recovery of full compensatory damages for a single injury. But this reasoning loses its force if the magnitude of damage has not been established in the antecedent litigation.

With the demise of the doctrine that any release is a retraxit ⁸, the single satisfaction rule has one creditable basis; when there is a satisfaction of a judgment which is predicated upon actual litigation of the damages for the injury, there arises a collateral estoppel to seek further recovery. The basis for the rule has been succinctly stated in the Restatement Second of Judgments: "The adjudication of the amount of the loss ... has the effect of establishing the limit of the injured party's entitlement to redress, whoever the obligor may be. This is because the determination of the amount of the loss resulting from actual litigation of the issue of damages results in the injured person's being precluded from relitigating the damages question. See § 29 [relating to issuepreclusion]. Therefore, when a judgment is based on actual litigation of the measure of a loss, and the judgment is thereafter paid in full, the injured party has no enforcible claim against any other obligor who is responsible for the same loss." (Rest.2d Judgments, § 50, com. d, p. 43; see also Rest.2d Torts, § 886, com. b.) In this case there has been no adjudication of the amount of damages, which is a precondition to the collateral estoppel.

A judgment obtained pursuant to section 998 is not predicated upon an adjudication of the amount of damages. The statute provides: "Any judgment entered pursuant to this section shall be deemed to be a compromise settlement." (§ 998, subd. e.; ante fn. 1.) "Compromise" connotes mutual concessions; it reflects the settling parties' temporal resolution of the risks of suit as between them. A compromise agreement does not as such constitute an adjudication of either liability or damages. (See United States v. International Bldg. Co. (1952) 345 U.S. 502, 503, 73 S.Ct. 807, 808, 97 L.Ed. 1182; 4 Witkin, Cal.Procedure, supra, Proceedings Without Trial, § 40, pp. 2705-2706; cf. Taylor v. Hawkinson (1957) 47 Cal.2d 893, 896, 306 P.2d 797; Lea v. Shank (1970) 5 Cal.App.3d 964, 971, 85 Cal.Rptr. 709.) The "language ["compromise settlement"] makes it clear that the element of litigated issues ... is absent, and that the judgment cannot be used as a collateral estoppel...." (Witkin, Cal.Procedure, supra, Judgments, § 215, p. 3351; see generally, Annot., Consent Judgment as Res Judicata, 91 A.L.R.3d 1170, 1183, § 6[a].) The judgment, however, is conclusive between the settling parties "in accordance with the terms and conditions stated" in the 998 offer which are incorporated in the judgment. (§ 998, subd. (b); emphasis added.) This makes the 998 agreement the measure of the effect of the judgment. ⁹

Sacramento Medical Center cites Burton v. Gardner Motors, Inc. (1981) 117 Cal.App.3d 426, 172 Cal.Rptr. 647 as contrary authority. In Burton the plaintiff was injured in an automobile collision. She sued the owner, the bailee in possession, and the driver of the other car. The driver was not served and the plaintiff accepted a section 998 offer from the bailee. The section 998 judgment was satisfied and the owner successfully moved for summary judgment on the theory of discharge. The court's reasoning depends heavily upon the Vehicle Code statutes which limit the vicarious liability of the owner of the car in an action against the negligent driver and the owner. In our view, Burton should be limited to this unique statutory context. ¹⁰ The liability of the discharged defendant was vicarious, i.e., derivative of the liability of the settling party. Case law has often distinguished the fact of subordinate liability for purposes of discharge. (See Annot., Release of, or Covenant Not to Sue, One Primarily Liable for Tort, But Expressly Reserving Rights Against One Secondarily Liable, As Bar to Recovery Against Latter (1983) 24 A.L.R. 4th 547.) In this case plaintiffs' theory is one of independent concurrent tortfeasance. Under common law precepts this circumstance gives rise to as many causes of action as there are tortfeasors. (See Prosser, Joint Torts, supra, 25 Cal.L.Rev. 413.)

To the extent Burton holds a section 998 judgment "fixes" the amount of compensatory damages (id., at p. 435, 172 Cal.Rptr. 647) we respectfully part company. The only justification offered for this conclusion is the generalized assertion that a "judgment by stipulation has the same effect as a judgment after a trial." (Id., at p. 431, 172 Cal.Rptr. 647.) The authorities cited do not support the literal application of this rule. In each case cited the effect of the judgment was limited to the parties to the compromise. (See Avery v. Avery (1970) 10 Cal.App.3d 525, 89 Cal.Rptr. 195; Nielsen v. Emerson (1931) 119 Cal.App. 214, 6 P.2d 281; Rogers v. Springfield Fire etc. Ins. Co. (1928) 92 Cal.App. 537, 268 P. 679; Gregory v. Hamilton (1978) 77 Cal.App.3d 213, 142 Cal.Rptr. 563.) ¹¹ "It is axiomatic that cases are not authority for propositions not considered." (People v. Gilbert (1969) 1 Cal.3d 475, 482, fn. 7, 82 Cal.Rptr. 724, 462 P.2d...