Sherman v. Kinetic Concepts, Inc.

• Decision Date: 17 November 1998
• Docket Number: No. G018314,G018314
• Citation: 79 Cal.Rptr.2d 641,67 Cal.App.4th 1152
• Court: California Court of Appeals Court of Appeals
• Parties: , 98 Cal. Daily Op. Serv. 8493, 98 Daily Journal D.A.R. 11,781 Robert SHERMAN et al., Plaintiffs and Appellants, v. KINETIC CONCEPTS, INC., Defendant and Respondent.

Page 641

79 Cal.Rptr.2d 641

67 Cal.App.4th 1152, 98 Cal. Daily Op. Serv. 8493,

98 Daily Journal D.A.R. 11,781

Robert SHERMAN et al., Plaintiffs and Appellants, v. KINETIC CONCEPTS, INC., Defendant and Respondent.

No. G018314.

Court of Appeal, Fourth District, Division 3, California.

Nov. 17, 1998.

Rehearing Denied Dec. 9, 1998.

[67 Cal.App.4th 1155] G. Geffen, Encino, for Plaintiffs and Appellants.

Murtaugh, Miller, Meyer & Nelson, Richard E. Meyer, NewPort Beach, Susan Westover and Richard P. Hidalgo, Irvine, for Defendant and Respondent.

OPINION

SONENSHINE, J.

Robert and Janice Sherman appeal from a judgment following a jury trial of their product liability/negligence action against Kinetic Concepts, Inc. (KCI). Sherman contends the court should have granted a new trial and imposed sanctions against KCI for litigation improprieties, including its failure to disclose certain evidence during discovery.

We agree. As we will explain, throughout the litigation, KCI failed to produce and concealed the existence of crucial documents relating to material issues in the Shermans' lawsuit. Compounding that inexcusable dereliction of its discovery obligations, at trial KCI created the false impression its product rarely malfunctioned and then with only transient, inconsequential effects on the consumer. In truth, the dozens of undisclosed incident reports told a far different story about both the frequency and gravity of the problem. To the Shermans' prejudice, the jury never had a chance to evaluate liability against the backdrop of the big picture.

Fortuitously learning of the evidence just after the verdict, the Shermans moved for a new trial. The court denied them relief. It further concluded it was without jurisdiction to award them sanctions under the discovery statute at such a late date.

The court erred on both counts. With regard to a new trial, relief was mandated on the basis of newly discovered evidence and irregularity in the proceedings depriving the Shermans of a fair hearing. The documents and related information KCI withheld were material to design defect and negligence, strengthened the plaintiffs' case and diluted or even impeached KCI's evidence.

As for discovery sanctions, the court had not only the power, but the duty to sanction KCI, in a monetary amount at least sufficient to cover all the costs incurred by the Shermans, including attorney fees, in going through a trial which must now be redone. Because KCI's conduct subverted justice, this was the sanction necessary "to prevent abuse of the discovery process and correct the problem presented [citations]." (McGinty v. Superior Court (1994) 26 Cal.App.4th 204, 210, 31 Cal.Rptr.2d 292.)

We publish our opinion not only because this is a case of first impression, but because we wish to send a loud and clear message to litigants and counsel alike: We will not tolerate the disgraceful tactics which hallmark the defense in this action. We intend to ensure that any victory achieved by such methods and challenged in this court will be short-lived and costly.

FACTUAL AND PROCEDURAL BACKGROUND

On March 5, 1993, Robert Sherman (Sherman), a quadriplegic, was admitted to a hospital for post-surgical treatment of a decubitis ulcer on his left buttock. His physician ordered a special therapeutic bed for Sherman. The hospital provided him with a Fluid Air bed supplied by KCI. The frame of the unit holds a basin or tray filled with sand-grain size silicon glass beads coated with an antibacterial agent. The beads are contained within a filter sheet. On top of that, there is a gore-tex cover. Forced air constantly circulates the beads, causing them to flow like liquid beneath the filter sheet. The forced air also billows the gore-tex cover, creating a cushioned surface which eliminates pressure points.

A few nights before the subject incident, the attending nurse entered Sherman's room on a routine check. She lost her footing. Turning on the light to inspect the floor, she awakened both Sherman and his roommate, Greg Ojala. She discovered bead particles which apparently had escaped from a leak in Ojala's filter sheet. Ojala suffered temporary eye irritation which with treatment cleared up in a few days.

Sometime during the night of March 9, Sherman awoke to find his gore-tex cover partially dislodged and a volcano of white dust spraying into his eyes, face and mouth. His filter sheet had been punctured; the circulating air was forcing a stream of beads into the atmosphere. Sherman rang for the nurse, who turned off the air, got him a different bed and moved him to another room. He complained of burning in his throat and lungs. Within hours, a pulmonary physician examined him, performed a number of tests, obtained blood gases and a chest X-ray and concluded there was no problem. Sherman was told his symptoms would resolve within a week or two. His nursing charts reflected no further complaints after five or six days, and by the time of his discharge a few weeks later, he still had no complaints. But when he returned home, his symptoms recurred, and over the next year, new ones developed.

On March 7, 1994, the Shermans filed their lawsuit against KCI and the hospital, ¹ alleging strict liability and negligence. Sherman claimed his inhalation of the Fluid Air bed's beads caused certain immunological complications, manifested by headaches, bowel and bladder problems, swollen feet, insomnia, nausea, sinus leakage, sore throat and ringing ears. His wife, Janice, sought damages for loss of consortium.

During the discovery phase of the litigation, the Shermans requested KCI to identify and produce "[a]ll documents containing information on complaints by any customer, patient, hospital, or other individual or entity relating to the glass beads used in the Fluid Air bed from 1980 to the present." KCI's response advised the Shermans, "After a reasonable inquiry and diligent search, the only documents found and herewith produced are product incident/complaint report[s]" concerning two occurrences in 1991 and a third in 1992, and a notice of a claim relating to one of those reports. The response was signed by KCI's defense attorney and verified by corporate counsel. KCI also submitted a verified denial of the facts of the Shermans' request for admission that "[a]t least five incidents of the filter sheets leaking silicon beads in patients' rooms had occurred in the two-year period preceding the [subject] incident on March 9, 1993."

The Shermans took the deposition of KCI's director of regulatory affairs, William Quirk. At the time, the identified incident reports had not yet been produced. Quirk denied prior knowledge that silicon beads could cause breathing irritation. He could not recall any incidents of leakage except Sherman's. He was unaware of studies regarding respiratory problems associated with inhalation of the glass beads used by KCI. He acknowledged particles can escape through a torn filter sheet, but could not recall ever seeing a filter sheet with a rip or tear that allowed leakage.

In opening statement at trial, KCI's attorney told the jury, "Of the many, many [Fluid Air] beds that have been placed, we have three or four incidents of anybody complaining about the beds." During trial, the Shermans' counsel confronted Quirk with the only three incident reports which had been produced. Two of those listed Quirk as the contact person. Counsel challenged Quirk about his failure at deposition to recall the incidents. Quirk, explaining his lapse of memory, stated, "I was supposed to be testifying on certain things, and I had not reviewed any of the old stuff in our files. The only incident that I could recall at the time was Mr. Sherman's."

Quirk admitted beads leak, but testified such incidents were "not normal." He claimed he knew of silicon bead inhalation causing irritation only from having read manufacturer safety data sheets (MSDS) or hearing secondhand comments in KCI's medical department.

Dr. Wayne Schroeder, an employee of KCI's medical department for nine years and its medical director for five years, testified he would have been informed of all incidents concerning injuries caused by the beads. He was aware of complaints occurring possibly twice per year. When asked why, if there were as many as 10 incidents in the past 5 years, only 4 reports had been produced, including the one relating to Sherman, Schroeder responded, "The legal department gets the incident reports. [They do] not cross my desk unless [the legal department] ask[s] me to look at ... or review [them]." Schroeder claimed not to have heard of any incident reports indicating any type of serious illness or injury of any nature caused by the beads.

Other witnesses testified to their awareness of problems related to the beads leaking. One stated knowledge of about a dozen incidents in an 18-month period; another was aware of 4 leakage episodes in as many years.

In closing argument, KCI's counsel acknowledged beads leak from the Fluid Air beds on rare occasions, but added there were no more than "a couple three incident reports." In regard to the unaccounted-for reports alluded to by Schroeder, he denied anything had been withheld from the Shermans, stating, "We had nothing else to give [counsel].... There was nothing to give Mr. Sherman."

The Shermans' attorney reiterated his theories of design defect, to wit, filter sheets, vulnerable to rips, tears and punctures, cause release of harmful materials into the atmosphere, and gore-tex covers cannot be attached with sufficient security to protect the patient from exposure to and inhalation of the beads. He further argued KCI's liability based on its failure to warn consumers of the known risk of harm from exposure to the respirable beads and to advise them about precautions to be taken. Finally, he argued KCI had failed to disclose at least six incident reports, from which the jury could infer "[the incidents] were...