Troyer v. Adams, 25174.

• Decision Date: 25 September 2003
• Docket Number: No. 25174.,25174.
• Citation: 102 Haw. 399,77 P.3d 83
• Parties: Jennifer L. TROYER, formerly known as Jennifer L. Decker, Plaintiff-Appellee, v. Carl W. ADAMS, M.D., Defendant-Appellant, and John Bellatti, M.D., and Patricia Bailey, M.D., Defendants-Appellees.
• Court: Hawaii Supreme Court

77 P.3d 83

102 Haw. 399

Jennifer L. TROYER, formerly known as Jennifer L. Decker, Plaintiff-Appellee, v. Carl W. ADAMS, M.D., Defendant-Appellant, and John Bellatti, M.D., and Patricia Bailey, M.D., Defendants-Appellees.

No. 25174.

Supreme Court of Hawaii.

September 25, 2003.

Ellen Godbey Carson (Ellen Godbey Carson and Larisa L. Heroldt of Alston Hunt Floyd & Ing, on the brief), Honolulu, for the defendant-appellant, Carl W. Adams, M.D.

Stuart M. Kodish (Ian L. Mattoch, Stuart M. Kodish, and Ian Scott Mattoch, of the Law Offices of Ian L. Mattoch, on the brief), Honolulu, for the plaintiff-appellee, Jennifer L. Troyer, formerly known as Jennifer L. Decker.

J. Richard Peterson, Hilo, for the defendant-appellee, John Bellatti, M.D.

Kathy K. Higham (Elton John Bain and Kathy K. Higham of Kessner Duca Umebayashi Bain & Matsunaga, on the brief), Honolulu, for the defendant-appellee, Patricia Bailey, M.D.

MOON, C.J., LEVINSON, NAKAYAMA, and DUFFY, JJ., and ACOBA, J., Dissenting.

Opinion of the Court by LEVINSON, J.

The defendant-appellant Carl W. Adams, M.D., appeals from the order of the third circuit court, the Honorable Ronald Ibarra presiding, granting the petition of the plaintiff-appellee Jennifer L. Troyer, formerly known as Jennifer L. Decker, for issuance of order determining good faith settlement, pursuant to Act 300 (2001),¹ with the defendants-appellees John Bellatti, M.D., and Patricia Bailey, M.D. Dr. Adams argues that the circuit court erred in granting the petition on the bases that: (1) Act 300 does not apply to the present matter, because Troyer's claims arose out of a contract entered into prior to January 1, 2002, and Act 300, § 6(1) states that the Act shall not apply to "claims arising out of a contract made prior to January 1, 2002"; (2) the settlement in the present matter was not given in good faith, because (a) it exposes Dr. Adams to a "grossly disproportionate allocation" of the damages that Troyer seeks, (b) Troyer withheld "essential information" from the circuit court regarding the total damages that she seeks and the opinions of two of her experts regarding the medical care provided to her by Drs. Bailey and Bellatti, and (c) Dr. Adams was deprived of material witnesses and essential testimony related to the Act 300 good faith determination; and (3) Act 300 violates Dr. Adams's right to due process, pursuant to article I, section 5 of the Hawai'i Constitution² and the fourteenth amendment to the United States Constitution,³inter alia, because the statute destroys his cross-claims for contribution against the settling tortfeasors and prevents him from collecting from them based on their proportionate share of liability.

The meaning of a settlement "given in good faith" pursuant to HRS § 663-15.5 (Supp.2002), see supra note 1, the statute promulgated by Act 300, raises a question of first impression for this court. For the reasons discussed more fully infra in section III, we hold that the question of whether a settlement is "given in good faith" for purposes of HRS § 663-15.5 is a matter left to the discretion of the trial court in light of all of the relevant circumstances extant at the time of settlement; thus, absent an abuse of discretion, the trial court's determination should not be disturbed. In addition, we hold that (1) Act 300 applies to Troyer's claims of medical malpractice, because they do not arise from contracts, (2) the circuit court did not abuse its discretion in determining that the instant settlement was entered into in good faith, and (3) Dr. Adams's due process rights were not violated in the present matter.

Accordingly, we affirm the order of the third circuit court, filed on June 5, 2002, granting Troyer's petition for issuance of an order determining that the instant settlement was given in good faith.

I. BACKGROUND

A. Act 300 (2001) And HRS § 663-15.5

HRS § 663-15.5, see supra note 1, governs, inter alia, the effect of a settlement on non-settling joint tortfeasors in the context of multi-party litigation. It provides that a settlement "given in good faith" shall: (1) not discharge the non-settling joint tortfeasors from liability, unless its terms so provide; but (2) reduce the claims against the non-settling joint tortfeasors in the amount stipulated in the settlement or in the amount of the consideration paid for it, whichever is greater; and (3) discharge the settling tortfeasor from all liability for any contribution to the non-settling joint tortfeasors. HRS § 663-15.5(a). HRS § 663-15.5 also provides for procedures by which a party may petition the court for a hearing on the issue of good faith. In addition, pursuant to HRS § 663-12 (1993),⁴ "[a] joint tortfeasor who enters into a settlement with the injured person is not entitled to recover contribution from another joint tortfeasor whose liability to the injured person is not extinguished by the settlement." On the other hand, HRS § 663-12 provides that a non-settling joint tortfeasor is entitled to contribution from other joint tortfeasors—i.e., other non-settling joint tortfeasors or joint tortfeasors whose settlements with the plaintiff or plaintiffs have not been determined to be in good faith, pursuant to HRS § 663-15.5—for any amount paid in excess of his or her pro rata share of liability, to be determined on the basis of his or her relative degree of fault, if "there is such a disproportion of fault ... as to render inequitable an equal distribution... of the common liability." See supra note 4.

This court has never had occasion to construe the meaning of "good faith" as that term is employed in HRS § 663-15.5; neither has the legislature expressly defined the term. As discussed more fully infra in section III, however, HRS § 663-15.5 is similar to a plethora of statutory acts governing contributions among tortfeasors (CATAs) that are in effect across the country. The courts that have addressed the meaning of a "good faith" settlement for purposes of their own CATAs have generally adopted one of three standards: (1) the "proportionate liability" standard formulated by the California Supreme Court in Tech-Bilt, Inc. v. Woodward-Clyde & Assocs., 38 Cal.3d 488, 213 Cal.Rptr. 256, 698 P.2d 159 (1985), which considers whether the settlement represents a fair assessment of the settling tortfeasors' share of liability at the time of settlement; (2) the "non-collusive" or "non-tortious conduct" standard, which simply examines whether the settlement is collusive, fraudulent, dishonest, or involves tortious conduct, in which case the settlement is deemed to be in bad faith; and (3) the "totality of the circumstances" approach, which grants trial courts the discretion to determine whether a settlement is given in good faith in light of any relevant circumstances, but does not dictate the factors that the trial court must consider. The present matter compels this court to determine which of the three foregoing standards, if any, best achieves the legislature's intent in promulgating Act 300.

B. Procedural History

On February 2, 2001, Troyer filed a complaint in the third circuit court naming Drs. Bailey, Bellatti, and Adams as defendants [hereinafter, collectively, "the defendants"], jointly and severally. Troyer alleged that the defendants' negligence (Count I) and failure to obtain her informed consent (Count II) were substantial factors in causing her serious personal injury, including, inter alia, the amputation of her right forefoot. Specifically, Troyer alleged that, on or about December 22, 1997, she suffered an injury to her leg when, for unknown reasons, she fell in a parking lot and was transported to the emergency room of Kona Community Hospital (KCH), where she was first treated by Dr. Bailey. Troyer alleged (1) that Dr. Bailey "failed to timely and appropriately evaluate and treat [her] injuries[,]" including the failure properly to assess the "neuro-vascular integrity of [her] injured leg[,]" "to consult radiology to arrange examination of the artery in [her] injured leg with vascular compromise[,]" and "to consult orthopedics or surgery[,]" and (2) that Dr. Bailey's "breach of the standard of care for an emergency room physician engaged in the practice of medicine ... was a substantial factor in causing [her] injury[.]"

Troyer further alleged that, on or about December 22, 1997, while still a patient at KCH, she was examined and treated by Dr. Bellatti, an orthopedic surgeon. Troyer alleged that the unusual fracture pattern of her injury required that Dr. Bellatti consider the possibility of an arterial injury to her leg, which he failed to do in a timely manner. Troyer claimed that Dr. Bellatti's misdiagnosis or delayed diagnosis prevented her immediate transfer to Queen's Medical Center (QMC) in Honolulu for further treatment of her injury. Troyer asserted that the foregoing conduct breached the standard of care for an orthopedic surgeon engaged in the practice of medicine and was a substantial factor in causing further injury to her leg.

Troyer was transported to QMC on December 23, 1997, where she was treated by Dr. Adams, a vascular surgeon. Troyer alleged that the surgical operation or operations performed by Dr. Adams did not conform to the appropriate standard of care. Specifically, she alleged that Dr. Adams constructed a bypass graft of a "small distal posterior tibial artery" using "natural/artificial vein composite conduit," which was "longer than necessary and ... also oversized for the runoff artery." Consequently, according to Troyer, the bypass graft eventually failed, "causing a thromboembolism and resulting in the loss (amputation) of [her] right forefoot."

Troyer further alleged (1) that the defendants had not "fully informed her of all of the possible risks, contraindications, and alternatives to the course of treatment/non-treatment which [the d]efendants took" and (2) that she "would have sought further evaluation and/or treatment if she had...