Stuka v. Fleming

• Decision Date: 17 May 1990
• Docket Number: No. 89-CC-1391,89-CC-1391
• Citation: 561 So.2d 1371
• Parties: Wally Eugene STUKA, et ux. v. Dr. Michael FLEMING, et al. 561 So.2d 1371
• Court: Louisiana Supreme Court

Page 1371

561 So.2d 1371

Wally Eugene STUKA, et ux. v. Dr. Michael FLEMING, et al.

No. 89-CC-1391.

561 So.2d 1371

Supreme Court of Louisiana.

May 17, 1990.

Rehearing Denied June 28, 1990.

Donald Miller, for applicants.

Caldwell Roberts, Mayer, Smith & Roberts, Shreveport, Ambrose Ramsey, III, Carruth, Cooper & Adams, Baton Rouge, Jerald Perlman, Walker, Tooke, Perlman, Lyons & Clawson, Shreveport, for respondents.

LEMMON ^*, Justice.

The issue in this case is whether the Patient's Compensation Fund (the Fund), created by La.Rev.Stat.Ann. 40:1299.44, may contest its liability to a medical malpractice victim who has compromised his claim against one health care provider for $100,000, while voluntarily dismissing others, and is seeking recovery against the Fund of damages in excess of the settlement amount. We conclude that payment of $100,000 to a medical malpractice victim by one qualified health care provider (or the provider's insurer) triggers the admission of the liability provision of La.Rev.Stat.Ann. 40:1299.44 C(5), and the only contested issue remaining thereafter between the victim and the Fund is the amount of the victim's damages in excess of the amount already paid.

Plaintiffs filed this action against Dr. Michael Fleming, Dr. Ricky Jones and Dr Marion Cash, alleging that plaintiff wife had been treated by the three associated doctors between November, 1985 and March, 1986 for sinus problems, that she developed severe nausea, vomiting and headaches, and that she was ultimately diagnosed as having a brain abscess caused by sinus infection. ¹ The petition alleged that substandard medical care by the three doctors caused her to undergo surgery and to suffer residual brain damage and susceptibility to seizures.

Plaintiffs and the doctors' malpractice insurer thereafter reached an agreement to settle the claim. Plaintiffs filed an amended petition seeking judicial approval of the settlement agreement pursuant to La.Rev.Stat.Ann. 40:1299.44 C. ² In the amended petition plaintiffs added as defendants the medical corporation which employed the three doctors, the medical malpractice insurer of the doctors and the corporation, the State of Louisiana, and the Fund. Under the terms of the settlement the insurer agreed to pay $100,000 on behalf of Dr. Jones and the corporation. ³ In return plaintiffs agreed to release Dr. Jones, the medical corporation and the insurer, reserving their rights against Dr. Jones, the medical corporation, the insurer and the Fund to the extent necessary to preserve their claim for damages in excess of $100,000 from the Fund. Plaintiffs further agreed to dismiss with prejudice any claims against Dr. Fleming and Dr. Cash.

After the twenty-day period provided by Section 1299.44 C(3) elapsed without any opposition to the settlement, the trial court rendered judgment approving the settlement. The judgment noted that the trial as to the amount of damages, if any, due by the Fund was to be conducted at a later date.

The Fund then filed an answer, denying negligence on the part of any health care provider and asserting its right to litigate the issue of liability. The Fund contended that the $100,000 settlement which resulted in the dismissal of four health care providers did not constitute an admission of liability under Section 1299.44 C(5). ⁴ The Fund also requested a jury trial on all issues.

Plaintiff then filed a motion to strike the jury trial request and to strike the Fund's opposition to the court's considering the settlement as an admission of liability.

The trial court rendered judgment on the motion, striking the jury trial and effectively ruling that the settlement constituted an admission of liability as between plaintiffs and the Fund. The court of appeal reversed, declaring the Fund's right to litigate the issue of liability and granting the Fund's request for a jury trial. ⁵ 543 So.2d 1374. The intermediate court recognized that plaintiffs had settled, according to the terms of the agreement, only with Dr. Jones, the medical corporation and their insurer, and had received no additional consideration for the voluntary release of Dr. Fleming and Dr. Cash. However, the court characterized the settlement as one of a potential $400,000 claim against four health care providers (three doctors and the medical corporation) for $100,000. ⁶ Because the insurer had not paid $100,000 on behalf of each named health care provider, the court held that the issue of liability may be litigated by the Fund.

This court granted certiorari. 548 So.2d 313.

The Medical Malpractice Act, enacted by La. Acts 1975, No. 817, provides a scheme for compensation of medical malpractice victims who have been injured by qualified health care providers. Section 1299.42 B(2) limits the liability of a single qualified health care provider to $100,000 for the injury to or death of any one person. Under Section 1299.42 B(3) damages in excess of the total liability of all liable health care providers, up to $500,000, are to be paid by the Fund. Thus, according to the Act, if a suit is tried against two health care providers and a definitive judgment is rendered holding each legally responsible for the victim's damages which are found to exceed $200,000, the liability of each health care provider is $100,000, and the potential liability of the Fund is $300,000, with a total recoverable amount of $500,000. ⁷ See Kelty v. Brumfield, 534 So.2d 1331 (La.App. 4th Cir.1988), cert. denied, 536 So.2d 1221 (1989).

The present case does not involve the trial of a suit against multiple health care providers, but involves the settlement of a claim against one health care provider in a suit against several. Section 1299.44 C provides the procedure when "a health care provider ... has agreed to settle its liability" and the victim desires to pursue his claim against the Fund for an amount in excess of the settlement. (emphasis supplied). The victim files a petition seeking approval of the settlement and demanding additional damages from the Fund. Section 1299.44 C(1). The Commissioner of Insurance, as administrator of the Fund, must be served with a copy of the petition, Section 1299.44 C(2), and may agree or object to the amount demanded within twenty days. Section 1299.44 C(3). If the parties cannot agree on the amount to be paid by the Fund, the court must conduct a trial to determine the amount of the victim's damages in excess of the amount already paid by the health care provider or his insurer. In approving the settlement or determining the amount to be paid by the Fund, the court considers the liability of the health care provider as admitted if the health care provider or the insurer on his behalf has paid $100,000. Section 1299.44 C(5).

Thus, under the express terms of Section 1299.44 C, the malpractice victim's settlement with one health care provider or his insurer for $100,000 not only triggers the Fund's liability for excess damages, if any, but also precludes the Fund from contesting that health care provider's liability. The issue in this case is whether the result is different when other health care providers have been joined in the suit and are dismissed along with the release of the health care provider who paid $100,000.

The statute does not make any express provisions for a case in which multiple health care providers have been joined as defendants and only one pays $100,000 in settlement. We interpret the overall statute as dispensing with the litigation of liability between the victim and the Fund after one health care provider has paid $100,000 in settlement.

A suit under the Medical Malpractice Act is against the health care provider only and not against the Fund. The health care provider is the only party defendant contemplated by the Act. Williams v. Kushner, 449 So.2d 455 (La.1984). Indeed, the statute does not require joining the Fund as a defendant, but only requires serving the administrator of the Fund with the petition for approval of the settlement when a health care provider has agreed to settle its liability to the malpractice victim.

The status of the Fund, after a settlement between the malpractice victim and a health care provider for $100,000, is more in the nature of a statutory intervenor than a party defendant. As an intervenor the Fund may put on evidence and unite with the defendant in resisting the victim's demands, and may appeal a judgment, but may not object to the form of the action. Williams v. Kushner, 449 So.2d at 458. Moreover, when a judgment in excess of $100,000 has been rendered in a suit between the malpractice victim and the health care provider, the Fund may appeal the excess judgment against the Fund. Felix v. St. Paul Fire and Marine Insurance Co., 477 So.2d 676 (La.1985).

The Medical Malpractice Act therefore contemplates that the issue of liability is generally to be determined between the malpractice victim and the health care provider, either by settlement or by trial, and that the Fund is primarily concerned with the issue of the amount of damages. ⁸ Payment by one health care provider of the maximum amount of his liability statutorily establishes that the plaintiff is a victim of that health care provider's malpractice. Once payment by one health care provider has triggered the statutory admission of liability, the Fund cannot contest that admission. The only issue between the victim and the Fund...