Rashidi v. Moser

Decision Date15 December 2014
Docket NumberNo. S214430.,S214430.
Citation181 Cal.Rptr.3d 59,60 Cal.4th 718,339 P.3d 344
CourtCalifornia Supreme Court
PartiesHamid RASHIDI, Plaintiff and Appellant, v. Franklin MOSER, Defendant and Appellant.

Balaban & Speilberger, Los Angeles, Daniel Balaban, Andrew J. Speilberger; Esner, Chang & Boyer, Stuart B. Esner, Los Angeles, and Holly N. Boyer for Plaintiff and Appellant.

Thorsnes Bartolotta McGuire and Benjamin I. Siminou, San Diego, for Michael J. Barger as Amicus Curiae on behalf of Plaintiff and Appellant.

Steven B. Stevens, Los Angeles, for Consumer Attorneys of California as Amicus Curiae on behalf of Plaintiff and Appellant.

Reback, McAndrews, Kjar, Warford & Stockalper, Robert C. Reback, Manhattan Beach; Cole Pedroza, Pasadena, Curtis A. Cole, Kenneth R. Pedroza, Matthew S. Levinson and Cassidy C. Davenport for Defendant and Appellant.

Tucker Ellis, Los Angeles, E. Todd Chayet, Rebecca A. Lefler, Lauren H. Bragin and Corena G. Larimer for California Medical Association, California Dental Association, California Hospital Association and American Medical Association as Amici Curiae on behalf of Defendant and Appellant.

Manatt, Phelps & Phillips and Harry W.R. Chamberlain II, Sacramento, for Association of Southern California Defense Counsel as Amicus Curiae on behalf of Defendant and Appellant.

Fred J. Hiestand, Sacramento, for The Civil Justice Association of California as Amicus Curiae on behalf of Defendant and Appellant.

Opinion

CORRIGAN, J.

In professional negligence actions against health care providers, recovery of noneconomic damages is capped at $250,000. (Civ.Code, § 3333.2, enacted as part of the Medical Injury Compensation Reform Act of 1975 (MICRA).)1 In any action, liability for noneconomic damages is several only, so that defendants pay in proportion to their share of fault. (§ 1431.2, part of the Fair Responsibility Act of 1986, enacted by passage of Proposition 51.)2

Here we consider whether a jury's award of noneconomic damages, reduced by the court to $250,000 under MICRA, may be further diminished by setting off the amount of a pretrial settlement attributable to noneconomic losses, even when the defendant who went to trial failed to establish the comparative fault of the settling defendant. The Court of Appeal held that such a further reduction is required by the MICRA cap.

We disagree. It would be anomalous to allow a defendant to obtain a setoff against damages for which he is solely liable. Neither the text nor the history of section 3333.2 reflects such an intent. Rather, the Legislature sought to address the problem of unpredictable jury awards. The limitation on noneconomic damages restrains settlements indirectly, by providing a firm ceiling on potential liability as a basis for negotiation. Only noneconomic damages awarded in court are actually capped.

I. BACKGROUND
A. Trial Court Proceedings

According to the complaint, 26–year–old Hamid Rashidi went to the emergency room at Cedars–Sinai Medical Center (Cedars–Sinai) in April 2007 with a severe nosebleed. He was treated and discharged, but returned the next month with the same symptom. Dr. Franklin Moser examined him and recommended surgery. In an operation performed the same day, Moser ran a catheter through an artery in Rashidi's leg up into his nose. Tiny particles were injected through the catheter to irreversibly block certain blood vessels. The particles were manufactured by Biosphere Medical, Inc. (Biosphere Medical). When Rashidi awoke after surgery, he was permanently blind in one eye.

Rashidi sued Moser and Cedars–Sinai for medical malpractice and medical battery. He sued Biosphere Medical for product liability, failure to warn, negligence per se, breach of express and implied warranty, and misrepresentation. The theory of liability against Biosphere Medical was that its particles were able to travel through very small blood vessels and collateral veins, causing a significant risk they would migrate to places other than the intended sites. They did so here, causing Rashidi's blindness. Rashidi claimed Biosphere Medical had failed to disclose this risk, or the fact that the particles were irregular in size. Instead it marketed them as being uniform, allowing particular arteries to be accurately targeted.

Rashidi settled with Biosphere Medical for $2 million and with Cedars–Sinai for $350,000. The case went to trial against Moser alone. Moser presented no evidence of Cedars–Sinai's fault, and the court ruled that the evidence was insufficient to support instructions on Biosphere Medical's degree of fault. The jury found that Moser's negligence caused Rashidi's injury. It awarded $125,000 for future medical care, $331,250 for past noneconomic damages, and $993,750 for future noneconomic damages. The court reduced the noneconomic damages to $250,000, conforming to the MICRA cap.

Moser sought offsets against the judgment for the pretrial settlements with Cedars–Sinai and Biosphere Medical. The court rejected this claim, finding no basis for allocating the settlement sums between economic and noneconomic losses, and noting that the jury made no finding as to the settling defendants' proportionate fault. Moser appealed, contending he was entitled to offsets against both the economic and noneconomic damage awards. He did not dispute the ruling that he had made an insufficient showing of comparative fault on the part of Cedars–Sinai or Biosphere Medical. Rashidi cross-appealed, challenging the constitutionality of MICRA.

B. The Court of Appeal Decision

The Court of Appeal held that offsets were required. Code of Civil Procedure section 877 allows a nonsettling tortfeasor to set off the amount of a jointly liable tortfeasor's settlement against damages awarded at trial. However, tortfeasors are jointly liable for only economic damages. Civil Code section 1431.2 imposes “a rule of strict proportionate liability” on noneconomic damages. (DaFonte v. Up–Right, Inc. (1992) 2 Cal.4th 593, 600, 7 Cal.Rptr.2d 238, 828 P.2d 140.) [E]ach defendant is liable for only that portion of the plaintiff's noneconomic damages which is commensurate with that defendant's degree of fault for the injury.” (Evangelatos v. Superior Court (1988) 44 Cal.3d 1188, 1198, 246 Cal.Rptr. 629, 753 P.2d 585.)3 Accordingly, as the Court of Appeal recognized, when a pretrial settlement does not differentiate between economic and noneconomic losses, a postverdict allocation is required because “only the amount attributable to the joint responsibility for economic damages may be used as an offset.” (Ehret v. Congoleum Corp. (1999) 73 Cal.App.4th 1308, 1320, 87 Cal.Rptr.2d 363.)

A widely accepted method for making such a postverdict allocation was provided in Espinoza v. Machonga (1992) 9 Cal.App.4th 268, 276–277, 11 Cal.Rptr.2d 498 (Espinoza ). The percentage of the jury's award attributable to economic damages is calculated and applied to the settlement, yielding the amount that the nonsettling defendant is entitled to offset. (Espinoza, at p. 277, 11 Cal.Rptr.2d 498 ; see Jones v. John Crane, Inc. (2005) 132 Cal.App.4th 990, 1006, 35 Cal.Rptr.3d 144 ; Ehret v. Congoleum Corp., supra, 73 Cal.App.4th at p. 1320, 87 Cal.Rptr.2d 363 ; Poire v. C.L. Peck/Jones Brothers Construction Corp. (1995) 39 Cal.App.4th 1832, 1838–1839, 46 Cal.Rptr.2d 631.) Following this formula, the Court of Appeal determined that the percentage of Rashidi's award attributable to economic damages was 8.62 percent ($125,000 in economic damages divided by the total award of $1,450,000). Applying that percentage to the $2 million settlement with Biosphere Medical, the court concluded that $172,400 of the settlement was for economic losses, completely offsetting the jury's $125,000 economic damages award. Rashidi does not challenge this aspect of the judgment.

The court performed a different calculation for the Cedars–Sinai settlement. Cedars–Sinai, like Moser and unlike Biosphere Medical, is a health care provider protected by MICRA. Therefore, the court first reduced the jury's award of noneconomic damages to $250,000 under section 3333.2. It added the economic damages of $125,000 to that amount, and determined that economic damages were 33.33 percent of the reduced total award. Applying that ratio to the $350,000 Cedars–Sinai settlement, the court allocated $116,655 of the settlement to economic losses and the remaining $233,345 to noneconomic losses.

The court then considered the intersection of the MICRA cap on noneconomic damages with the rule of section 1431.2 that liability for noneconomic damages is not joint, but several. It acknowledged that ordinarily each health care provider would pay a share of the noneconomic damages based on its own comparative fault. (Gilman v. Beverly California Corp. (1991) 231 Cal.App.3d 121, 128–130, 283 Cal.Rptr. 17.) The court also noted that [a] defendant bears the burden of proving affirmative defenses and indemnity cross-claims. Apportionment of noneconomic damages is a form of equitable indemnity in which a defendant may reduce his or her damages by establishing others are also at fault for the plaintiff's injuries....' (Wilson v. Ritto (2003) 105 Cal.App.4th 361, 369 .)4

Here, Moser failed to establish that any other defendant was at fault. Thus, section 1431.2 would require him to pay the entire amount of the $250,000 noneconomic damage award, unless MICRA demanded a different result. The court noted that nothing in section 3333.2 addresses the proportionate share each health care provider must pay for noneconomic damages. The statute sets an absolute limit on the total amount of damages for noneconomic loss an injured plaintiff may recover from all defendant health care providers in a single action. The court observed, “This serves the purpose of MICRA: ‘to reduce the cost of medical malpractice litigation, and thereby restrain the increase in medical malpractice insurance premiums.’ (Fein v. Permanente Medical Group (1985) 38 Cal.3d 137, 159 [211 Cal.Rptr. 368, 695 P.2d 665].)

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