Russo v. Vasquez

• Decision Date: 17 January 1995
• Citation: 648 So.2d 879
• Parties: 94-2407 La
• Court: Louisiana Supreme Court

Page 879

648 So.2d 879

94-2407 La. 1/17/95

Lillian W. RUSSO, et al. v. Dr. Hiram VASQUEZ, et al.

No. 94-CC-2407.

Supreme Court of Louisiana.

Jan. 17, 1995.

Milo A. Nickel, Jr., Woodley, Williams, Fenet, Boudreau, Norman & Brown, Lake Charles, for applicants.

William P. Crews, Jr., Watson, Murchison, Crews, Arthur & Corkern, Natchitoches, Edward P. Chevallier, Jr., Burkett & Chevallier, many, for respondents.

[94-2407 La. 1] KIMBALL, Justice. ^*

The issue in this case is whether a settlement between a medical malpractice claimant and a qualified health care provider and his insurer, wherein the insurer paid the claimant $95,000.00 in cash and accepted a $5,000.00 discount, constitutes a $100,000.00 settlement sufficient to trigger the Louisiana Patient Compensation Fund (PCF)'s liability for excess damages and preclude the PCF from contesting the qualified health care provider's liability. We conclude that the settlement in this case is not a $100,000.00 settlement and does not trigger the PCF's liability for excess damages or preclude the PCF from contesting the qualified health care provider's liability because the PCF's liability can only be triggered when a qualified health care provider's insurer or a self insured qualified health care provider settles with a medical malpractice claimant by paying the claimant a full $100,000.00.

FACTS AND PROCEDURAL HISTORY

On July 12, 1993, Mrs. Lillian W. Russo, individually and as representative of the estate of her late husband, Dr. Anthony Russo, filed a petition for damages against Dr. Hiram Vasquez, a physician duly qualified under the Louisiana Medical Malpractice Act; St. Paul Fire [94-2407 La. 2] and Marine Insurance Company (St. Paul), Dr. Vasquez's liability insurer; and the PCF. ¹ In her petition, Mrs. Russo alleged that she sustained severe and permanent neurological dysfunction after she underwent an epidural anesthesia administered by Dr. Vasquez on or about June 2, 1988, while she was his patient at Physicians' and Surgeons' Hospital in Shreveport. In addition to her allegations of malpractice, Mrs. Russo also alleged that in order to settle her case within the parameters of the Louisiana Medical Malpractice Act, she accepted ninety-five thousand dollars ($95,000.00) and granted Dr. Vasquez and St. Paul a five thousand dollar ($5,000.00) discount in exchange for prompt payment, dissolution of the Medical Review Panel, associated costs, and the ability to pursue immediately whatever rights she had against the PCF. Moreover, she alleged that because she had reached a settlement agreement with Dr. Vasquez and St. Paul, those parties had judicially confessed all liability, and the only remaining issue for the trial court to decide was the amount of general and special damages, including past, present and future medical care, that she should be awarded.

On the same day Mrs. Russo filed the aforementioned petition for damages, she also filed a petition, along with Dr. Vasquez, St. Paul, and Dr. Felix K. Prakasam ², seeking court approval of the settlement of the malpractice claim and the demand for payment of excess damages by the PCF. The trial court concluded that the settlement conformed to the provisions of the Louisiana Medical Malpractice Act and held that Dr. Vasquez and his insurer were released from any and all claims arising out of the malpractice claim but that Mrs. Russo, individually and as representative of her late husband's estate, had reserved her rights against the PCF.

After the trial court concluded that the settlement conformed to the provisions of the Louisiana Medical Malpractice Act, the PCF answered Mrs. Russo's petition for approval of the settlement and set forth several affirmative defenses, including a denial that any liability on its part, statutory or otherwise, had been triggered. The PCF alleged that because the settlement [94-2407 La. 3] in this case was for less than $100,000.00, Mrs. Russo was not entitled to excess damages because the PCF's statutory liability had not been triggered. Mrs. Russo then moved to strike all portions of the PCF's answer relating to or touching upon any matter other than the issue of the amount of damages that she would ultimately be entitled to recover. Citing Stuka v. Fleming, 561 So.2d 1371 (La.1990), cert. denied 498 U.S. 982, 111 S.Ct. 513, 112 L.Ed.2d 525 (1990) and Koslowski v. Sanchez, 576 So.2d 470 (La.1991), the trial court granted Mrs. Russo's motion and ordered several paragraphs of the PCF's answer stricken from the record.

The Third Circuit Court of Appeal denied the PCF's application for a supervisory writ to review the trial court's decision on the Motion to Strike. In denying the application, the third circuit noted:

The issues presented in this writ application are presented in the context of reviewing the trial court's granting of a Motion to Strike which motion was filed by plaintiff-respondent, Lillian W. Russo. This court finds that the trial court must have determined that the parties to the settlement at issue in this matter intended that the settlement be for One Hundred Thousand Dollars ($100,000) since the judgment refers to the reasons articulated in Stuka v. Fleming, 561 So.2d 1371 (La.1990), and Koslowski v. Sanchez, 576 So.2d 470 (La.1991). Relator, the Louisiana Patient's [Sic] Compensation Fund, has provided this court with no basis for finding that this conclusion as to the intent of the parties to this settlement was in error. Accordingly, we find no error in the trial court's ruling. This court expresses no opinion on the issues regarding the proof required of the plaintiff at the trial of this matter in order for her to recover against the PCF as these issues are not properly before this court in reviewing the ruling on the Motion to Strike.

Russo v. Vasquez, 93-1387 (La.App. 3d Cir. 12/23/93).

Pursuant to plaintiffs' motion, the trial court scheduled a jury trial for Monday, January 10, 1994. On January 6, 1994, the PCF filed a motion to continue, advising the trial court that it was applying to this Court for supervisory writs to determine whether the parties to this case would have to prove and/or contest issues concerning the medical causation of Mrs. Russo's alleged injuries. The trial court denied the PCF's motion for a continuance on January 6, 1994, and the third circuit, finding no error in the trial court's ruling on the continuance, denied the PCF's application for supervisory writs on January 7, 1994. The PCF then filed a priority application in this Court seeking supervisory relief in the form of an emergency stay. This Court granted the PCF's application, noting:

Granted. Remanded to the trial court for evidentiary hearing to [94-2407 La. 4] determine amount of discount allowed and to determine if settlement equated to $100,000.00. If so, the motion to strike is properly granted; if not then the trial court must deny the motion. See Koslowski v. Sanchez, 576 So.2d 470 (La.1991). Thereafter, the matter shall proceed according to law.

Russo v. Vasquez, 94-0054 (La. 1/11/94), 631 So.2d 457.

On January 12, 1994, the trial court, on its own motion, issued an order which stated in pertinent part:

Pursuant to order of the Supreme Court dated January 11, 1994, this Court ex proprio motu, clarifies its previous ruling to specify that which it deemed implicit, that being that it is clear from the settlement documents that the full sum of One Hundred Thousand and No/100 ($100,000.00) Dollars was paid and a discount was given to cover allowable costs in accord with Koslowski v. Sanchez, 576 So.2d 470 (La.1991).

The trial court set the matter for trial on January 19, 1994. On January 14, 1994, pursuant to an application for supervisory relief filed by the PCF, the third circuit reversed and set aside the judgment of the trial court and directed the trial court to conduct the evidentiary hearing previously mandated by this court.

The trial court set the evidentiary hearing for January 18, 1994, and noted that depending upon the outcome of the evidentiary hearing, trial would proceed on January 19, 1994. The PCF sought emergency relief from this Court on January 18, 1994, and this Court stayed the evidentiary hearing and trial, stating that the hearing could be reset after ten days, and the trial could be reset thereafter so long as that setting allowed adequate time to seek review of the judgment on the evidentiary hearing. Russo v. Vasquez, 94-0136 (La. 1/18/94); 629 So.2d 1187.

By agreement of counsel, the matter was submitted on briefs on April 25, 1994, and on April 29, 1994, the trial court concluded that the settlement in this case was in excess of $100,000.00. The trial court observed that while the evidence in the record revealed that the only other costs incurred by the insurer totalled $875.62, making the insurer's total payment $95,875.62, the insurer avoided paying any costs associated with a jury trial by settling this case. This prompted the trial court to add the $95,875.62 the insurer actually paid to the reasonably anticipated costs of a jury trial, which the court estimated at $6,099.26. The trial court then concluded that the settlement was in excess of $100,000.00. The PCF sought review of the trial court's ruling in the third circuit on July 19, 1994, and that court, finding no error [94-2407 La. 5] in the trial court's ruling, denied the PCF's application on September 23, 1994. Russo v. Vasquez 94-869 (La.App. 3d Cir. 9/23/94). We granted the PCF's application for supervisory review on September 26, 1994 to review the trial court's decision on the issue of whether the settlement in this case is a $100,000.00 settlement. Russo v. Vasquez, 94-2407 (La. 9/26/94); 642 So.2d 1311.

ANALYSIS

I.

In 1975, the Louisiana legislature enacted the Louisiana Medical Malpractice Act, La.R.S. 40:1299.41 et seq., to provide a scheme of compensation for medical malpractice victims who suffer injury or death after being treated by...