Paul v. Bier, No. 96-CV-1495

• Decision Date: 24 August 2000
• Docket Number: No. 96-CV-1495, No. 97-CV-50.
• Citation: 758 A.2d 40
• Parties: Elena M. PAUL, Appellant, The George Washington University, Appellant, v. Charles J. BIER, Appellee.
• Court: D.C. Court of Appeals

758 A.2d 40

Elena M. PAUL, Appellant, The George Washington University, Appellant, v. Charles J. BIER, Appellee.

Nos. 96-CV-1495, 97-CV-50.

District of Columbia Court of Appeals.

Argued October 15, 1998.

Decided August 24, 2000.

Patrick M. Regan, with whom Jonathan E. Halperin and Victor E. Long were on the brief, Washington, DC, for appellant Elena M. Paul.

Steven A. Steinbach, with whom Craig D. Singer, Washington, DC, was on the brief, for appellant The George Washington University.

Gary A. Godard, with whom Mark R. Lightfoot and Patricia C. Karppi, West Fairfax, VA, were on the brief, for appellee.

Before SCHWELB, RUIZ and REID, Associate Judges.

RUIZ, Associate Judge:

In these consolidated appeals, we consider again the proper application of pro tanto and pro rata credits. Appellants Elena M. Paul and The George Washington University (GWU) ask us to review two post-trial orders made after a jury verdict awarding medical malpractice damages to Paul in a suit against Dr. Charles J. Bier, her private physician. According to Paul, the trial court erred in concluding that Dr. Bier was entitled to a pro tanto rather than a pro rata credit against the verdict as a result of Paul's settlement with GWU during trial. GWU asserts that the trial court abused its discretion in denying its post-verdict motion to assert a cross-claim for contribution against Dr. Bier. Because joint liability was not established between the alleged joint tortfeasors, Dr. Bier and GWU, we agree with the trial court's decision to apply a pro tanto credit to the jury's verdict. As Paul had already been compensated by the settlement with GWU in the full amount of the jury verdict, Dr. Bier had no outstanding obligation to pay Paul. We also hold that the trial court did not abuse its discretion in denying GWU's motion to file a cross-claim for contribution against Dr. Bier on the ground that the untimeliness of the motion was prejudicial to Dr. Bier, the nonsettling party.

I.

In 1994, Elena Paul sued Dr. Charles Bier and GWU, the employer of a second physician, Dr. Druy, to recover damages for medical malpractice. During trial, GWU settled with Paul in the amount of $2,000,000 and Paul's case against GWU was dismissed with prejudice¹ on July 18, 1996.² GWU denied liability in the settlement agreement.³ In the event GWU was sued for contribution by Dr. Bier, however, the agreement required Paul to stipulate that GWU and its employees were "active tortfeasors . . . for the purpose of determining the rights of the remaining nonsettling defendant [Dr. Bier] to a complete or partial set-off." The settlement agreement also required Paul to indemnify GWU for any amount it may be liable in contribution to Dr. Bier.

The trial continued against Dr. Bier and, on July 29, 1996, the jury returned a $2,000,000 verdict in favor of Paul. Dr. Bier did not file a cross-claim against either GWU or Dr. Druy for contribution or indemnification, but, instead, immediately after the jury's verdict, made a motion for the application of a pro tanto credit against the verdict of $2,000,000, the amount that Paul had received in settlement from GWU. Paul opposed the motion arguing for application of a pro rata credit in the amount of $1,000,000, to reflect what Paul claimed was GWU's one-half share, as joint tortfeasor with Dr. Bier, of the jury verdict. On September 16, 1996 the trial court ruled in favor of Dr. Bier, and applied a pro tanto credit against the verdict. As a result, appellant Paul's recovery was limited to the $2,000,000 settlement amount already paid by GWU, and Dr. Bier did not have to pay anything. On October 24, 1996, settling defendant GWU sought leave of the court to file a cross-claim for contribution against Dr. Bier, which the trial court denied as untimely. Paul appeals from the order applying a pro tanto credit.⁴ GWU appeals from the trial court's refusal to allow the cross-claim for contribution.

II.

A. Paul's Appeal (96-CV-1495): Pro Tanto v. Pro Rata Credit.

A pro tanto credit is based on the actual settlement amount, "dollar-for-dollar,"while a pro rata credit is based on proportionate shares of liability among joint tortfeasors. See Berg v. Footer, 673 A.2d 1244, 1248-49 (D.C.1996)

. Appellant Paul opposes the application of a pro tanto credit of the settlement amount against the verdict on the ground that it results in the unjust enrichment of a nonsettling defendant, such as Dr. Bier, when, as here, the amount of the verdict equals the amount of the settlement the plaintiff reached with another defendant. In addition, Paul asserts that a pro rata credit is appropriate in this case because only one of her two liability claims was submitted to the jury, and therefore the jury verdict represented only one-half of the damages arising from these claims. The question of "[h]ow to credit the judgment entered upon a jury verdict against a nonsettling defendant with the proceeds a settling defendant paid to the plaintiff" is purely a question of law, which this court reviews de novo. Berg, 673 A.2d at 1247 (citing Bertram v. Freeport McMoran, Inc., 35 F.3d 1008, 1019 (5th Cir.1994)). We stated in Berg that a nonsettling defendant is entitled to a pro tanto credit for the amount paid by settling defendants who are not joint tortfeasors, see

673 A.2d at 1245, and to a pro rata credit based on the nonsettling defendant's right of contribution against a settling joint tortfeasor, see id. at 1248.

Paul's complaint alleged that separate acts of negligence by Dr. Druy, a GWU employee, and Dr. Bier, her private physician, combined to proximately cause injury, namely post-phlebitic syndrome, as a result of vascular damage to her left leg. After presenting her case to the jury against all the defendants, Paul settled her negligence claim against GWU, and its employee, Dr. Druy, for $2,000,000, and they were dismissed as defendants in the case. The jury then found in favor of Paul against Dr. Bier after finding that Dr. Bier's actions were a proximate cause of Paul's injuries, and awarded her $2,000,000 as compensation for her injuries. Paul's claim that the jury verdict compensated for damages solely attributable to Dr. Bier, i.e., that it was not intended as full compensation for her injuries, is not borne out by the record.⁵ The jury valued all of Paul's injuries at $2,000,000 and assessed those damages as attributable to Dr. Bier's negligence. Paul received $2,000,000 as a result of the settlement agreement with GWU. Thus, Paul was satisfied by the settlement to the full extent of the damages found by the jury.

Notwithstanding that she has received compensation to the full extent of the jury's $2,000,000 verdict, Paul contends that she is entitled to the benefit of a pro rata credit under our Berg opinion. We recognize that Paul would have benefitted if the trial court had applied a pro rata rather than a pro tanto credit, in that Dr. Bier would have been required to pay Paul an additional $1,000,000,⁶ reflecting his proportionate share of liability. In Berg, this court applied a pro rata credit, which in the circumstances of that case resulted in total compensation to the plaintiff in excess of the jury's verdict,⁷ noting that "the law contains no rigid rule against overcompensation." Id. at 1256 & n. 19 (quoting McDermott, Inc. v. AmClyde and River Don Castings Ltd., 511 U.S. 202, 219, 114 S.Ct. 1461, 128 L.Ed.2d 148 (1994)). This holding, however, was not based on the rationale that the plaintiff was entitled to compensation in excess of the jury's verdict, but rather that, in spite of that consequence, "consistency with established precedent applicable to settlements with joint tortfeasors weighs in favor of" applying a pro rata credit to the jury verdict "even though the nonsettling defendant's pro rata contribution to the amount of the jury verdict, when added to the amounts recovered in settlement, will result in a plaintiff's recovery that exceeds the verdict." Berg, 673 A.2d at 1257. The court expressly declined to make application of a pro rata credit depend on the relative settlement and verdict amounts in an individual case, noting that "[m]aking particular credit rules contingent upon the relative amounts of the settlement and the jury's verdict . . . would only increase uncertainty and make it even more difficult for litigants to negotiate settlements." Id. But see Rose v. Associated Anesthesiologists, 163 U.S.App.D.C. 246, 250, 501 F.2d 806, 810 (1974)

(limiting the amount of pro tanto credit "so as to assure that the defendant held liable in the litigation does not pay less than his equitable [pro rata] share").⁸

In short, the injured patient in Berg was no more than an incidental beneficiary of this court's decision to adhere to the rule that when a settling defendant is a joint tortfeasor, the nonsettling defendant is entitled to a pro rata credit against the jury's verdict. See Berg, 673 A.2d at 1257

(citing Martello v. Hawley, 112 U.S.App.D.C. 129, 132, 300 F.2d 721, 724 (1962)). Although application of a pro tanto credit means that the plaintiff will not receive a windfall benefit, the court's decision to apply a pro tanto credit in no way reduces that to which the plaintiff is entitled, compensation in the amount awarded by the jury. Whether Paul will receive that windfall depends exclusively on whether a pro rata credit should have been applied in order to vindicate the right of contribution between the settling and nonsettling defendants as joint tortfeasors. We now turn to that issue.⁹

A threshold obstacle to Paul's claim that a pro rata credit should have been applied to the verdict rendered against Dr. Bier is the absence of either a judicial determination or a stipulation, see Berg, 673 A.2d at 1251

& n. 13; Lamphier v. Washington Hosp. Ctr., 524 A.2d 729, 733 & n. 5 (D.C.1987), that GWU is a joint tortfeasor with Dr. Bier. Because GWU settled mid-trial and was dismissed from the case, and it did not...