Stephens v. Bohlman

• Decision Date: 03 January 1996
• Parties: Geraldine STEPHENS, Personal Representative of the Estate of Pamela Jennings, Deceased, Respondent, v. John BOHLMAN, M.D., Appellant, and Karl Ordelheide, M.D., and North Lincoln Hospital, Defendants. 881548; CA A83842.
• Court: Oregon Court of Appeals

Page 208

909 P.2d 208

138 Or.App. 381

Geraldine STEPHENS, Personal Representative of the Estate of Pamela Jennings, Deceased, Respondent, v. John BOHLMAN, M.D., Appellant, and Karl Ordelheide, M.D., and North Lincoln Hospital, Defendants.

881548; CA A83842.

Court of Appeals of Oregon.

Argued and Submitted July 25, 1995.

Decided Jan. 3, 1996.

Gregory B. Snook, Portland, argued the cause for appellant. With him on the briefs was Kilmer, Voorhees & Laurick, P.C.

J. Michael Alexander, Salem, argued the cause for respondent. With him on the brief was Burt, Swanson, Lathen, Alexander, McCann & Smith, P.C.

Before WARREN, P.J., and EDMONDS and ARMSTRONG, JJ.

WARREN, Presiding Judge.

Defendant, a physician, appeals a judgment entered on a verdict for plaintiff in this medical malpractice case. He challenges the trial court's failure to dismiss plaintiff's claims against North Lincoln Hospital (hospital), a codefendant, before the close of the evidence and its refusal to give his requested jury instruction concerning medical judgment. We affirm.

This case was previously before us on plaintiff's appeal of the trial court's grant of summary judgment in favor of hospital based on plaintiff's alleged failure to give a timely tort claims notice. We reversed, and the Supreme Court affirmed our decision. Stephens v. Bohlman, 107 Or.App. 533, 813 P.2d 43 (1991), aff'd, 314 Or. 344, 838 P.2d 600 (1992). The opinions on the previous appeal describe most of the relevant facts. In short, plaintiff is the personal representative of Jennings, who died while being treated at the hospital for chicken pox; defendant was her treating physician. During the treatment, defendant placed Jennings on a respirator, using an endotracheal breathing tube. When Jennings coughed the tube out of her trachea, hospital's respiratory therapist reinserted it into her esophagus rather than her trachea. Jennings soon became unconscious and unresponsive. Defendant responded to the resulting emergency "code" and attempted to treat her respiratory arrest; neither he nor any hospital employee discovered that the tube was misplaced. Jennings died from lack of oxygen.

After the remand in the previous appeal, plaintiff dismissed her claims against Ordelheide, defendant's partner, and reached a settlement with hospital. The nature and effect of that settlement is the basis of defendant's first two assignments of error.

The settlement between hospital and plaintiff was an attempted "Mary Carter" agreement. See Grillo v. Burke's Paint Co., Inc., 275 Or. 421, 551 P.2d 449 (1976). ¹ Under the agreement, hospital paid plaintiff $90,000, in return for which plaintiff agreed not to execute on any judgment that she might receive against hospital, released hospital from any liability in excess of $90,000, and agreed never again to sue hospital as a result of the events involved in this lawsuit. Hospital, for its part, agreed to remain as a defendant in the lawsuit through its case in chief; plaintiff would present her claim, and hospital would present its defenses, as though they had not reached a settlement. ²

Although hospital agreed nominally to remain in the case, its payment of $90,000 was absolute; nothing in the agreement entitles it to recover any portion or to pay any additional amount no matter what the outcome of the lawsuit against defendant. Thus, hospital's only purpose for appearing at the trial was to fulfill its contractual obligation to plaintiff because it had no interest in the outcome. ³ At the close of the evidence plaintiff, in accordance with the settlement, moved to dismiss its claims against hospital; the court granted that motion. The effect was that throughout the presentation of evidence hospital appeared to the jury to be an active party to the case. The jury learned of the settlement during closing arguments only because defendant decided that it was strategically necessary to let it know hospital's true role.

In accordance with ORS 18.455, plaintiff and hospital notified defendant of the terms of the settlement. Both before and during the trial, defendant moved to dismiss hospital as a party on the ground that there was no justiciable controversy between it and plaintiff but the court denied the motions. The first issue is whether those rulings were prejudicial error.

In a true Mary Carter agreement, the settlement limits the settling defendant's liability in a variable amount, usually in some inverse ratio to the plaintiff's recovery against the nonsettling defendants. Thus, in Grillo, the settling defendant "loaned" the plaintiff $16,000 under an agreement that the plaintiff would repay all or part of the loan only if it recovered on its claim against the other defendant. 275 Or. at 423-25. As a result of that agreement, it was in the settling defendant's interest for the plaintiff to receive as large a recovery against the other defendant as possible. Although, as a result of the settlement, the settling defendant's interest in the cases became adverse to that of the other defendant, the settling defendant clearly retained an interest in the outcome.

The agreement between plaintiff and hospital in this case is different from a true Mary Carter agreement in that plaintiff had no obligation to repay any part of the settlement amount under any circumstances. The hospital thus had no interest in the outcome of the case against defendant because it could neither gain nor lose anything as a result of the trial. In no circumstance would the jury's verdict affect hospital. Indeed, in no circumstance would the jury even consider the issues to which hospital directed its primary attention at trial. Hospital remained in the case only to put on a defense because it had promised plaintiff that it would do so. There was no context in which the jury would determine hospital's share of liability for Jennings' death. Plaintiff and hospital, in short, agreed to try a moot case.

The case was moot because there was no way that the trial could have affected the rights of plaintiff and hospital between themselves. That hospital assumed a contractual obligation to proceed as though it had not settled is irrelevant to this decision; when the parties have actually resolved a controversy, they cannot give it substance by agreeing to pretend otherwise. Although hospital apparently honored its obligation to proceed as if it were a viable party, in fact it acted a sham; a pretense of adversity, no matter how well played, does not avoid mootness. Cf. Oregon Medical Association v. Rawls, 281 Or. 293, 574 P.2d 1103 (1978) (legislature cannot create case for courts to decide when parties are not in fact adverse). A court should dismiss as moot a case in which the court's decision could have no practical effect on or concerning the rights of the parties; this is true whether or not the case is technically justiciable. Brumnett v. PSRB, 315 Or. 402, 405-06, 848 P.2d 1194 (1993). See also Cox v. Kelsey-Hayes Co., 594 P.2d 354, 359 (Okla.1979) (if a pretrial agreement completely settles a case between the plaintiff and one defendant, the court should dismiss the settling defendant as being unnecessary...