Rashidi v. Moser ( 2013 )

Filed 9/23/13
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FOUR
HAMID RASHIDI, B237476
Plaintiff, Respondent and (Los Angeles County
Cross-Appellant, Super. Ct. No. BC392082)
v.
FRANKLIN MOSER, M.D.,
Defendant, Appellant
and Cross-Respondent.
APPEAL from a judgment of the Superior Court of Los Angeles County,
Richard L. Fruin, Judge. Affirmed as modified.
Reback, McAndrews, Kjar, Warford & Stockalper and Robert C. Reback;
Cole Pedroza and Curtis A. Cole for Defendant, Appellant and Cross-Respondent.
Tucker Ellis, E. Todd Chayet, Rebecca A. Lefler, Corena G. Larimer; and
Fred J. Hiestand as Amici Curiae on behalf of Defendant, Appellant and Cross-
Respondent.
Balaban & Speilberger, Daniel Balaban, Andrew J. Spielberger; Esner, Chang &
Boyer, Stuart B. Esner and Holly N. Boyer for Plaintiff, Respondent and Cross-
Appellant.
_________________________________________
In this case, we deal with the intersection of three statutes addressing the recovery
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of damages: Civil Code section 3333.2, part of the Medical Injury Compensation
Reform Act of 1975 (MICRA), limiting recovery of noneconomic damages for medical
malpractice to a total of $250,000; section 1431.2, part of the Fair Responsibility Act of
1986 adopted by the passage of Proposition 51, which provides that liability for
noneconomic damages is several only, in accordance with the percentage of fault; and
Code of Civil Procedure section 877, which addresses the impact of a good faith
settlement on settling and nonsettling tortfeasors.
Appellant Franklin Moser, a physician, challenges the damages awarded against
him in this medical malpractice action, claiming the trial court should have offset the
entire award, including both economic and noneconomic damages, based on pretrial good
faith settlements by two codefendants. In his cross-appeal, respondent Hamid Rashidi
raises constitutional challenges to the limitation on noneconomic damages in MICRA.
We find appellant was entitled to an offset as to the economic damages awarded by the
jury and to a portion of the noneconomic damages, and reject respondent‘s constitutional
challenges to MICRA.
FACTUAL AND PROCEDURAL SUMMARY
According to the allegations of the charging pleading, in April 2007, 26-year-old
Rashidi went to the emergency room at Cedars-Sinai Medical Center with a severe nose
bleed. He was treated and discharged. In May 2007, he again went to the emergency
room at Cedars-Sinai for a severe nose bleed. This time, he was examined by Dr. Moser,
who advised him ―to have an operation to treat his nose bleeds and/or arteriovenous
malformation.‖
The operation, an embolization procedure, was performed by Dr. Moser at Cedars-
Sinai the same day. It involved insertion of a catheter into an artery in Mr. Rashidi‘s leg
and up into the nose, and injection of embospheres into the catheter to permanently and
1
All further statutory references are to the Civil Code, unless otherwise specified.
2
irreversibly occlude blood vessels. The embosphere microspheres used by Dr. Moser
were manufactured by Biosphere Medical, Inc. When Rashidi regained consciousness,
he was blind in one eye. The blindness is permanent.
Mr. Rashidi brought this action against Dr. Moser, Cedars-Sinai, and Biosphere
Medical. He alleged causes of action against Dr. Moser and Cedars-Sinai for medical
malpractice and medical battery. He also alleged causes of action against Biosphere
Medical for product liability based on design or manufacturing defect, failure to warn,
negligence per se, breach of express and implied warranty, and misrepresentation. The
theory against Biosphere Medical was that the particles it manufactured had specific
chemical and elastic physical qualities which enhanced their ability to travel through very
small blood vessels and collateral veins, causing a significant risk that they would travel
through the blood system to sites other than the intended surgical sites, and that they did
so in this case, causing the blindness. Mr. Rashidi alleged that Biosphere failed to
disclose this risk, and failed to disclose that the embosphere microspheres were of
nonuniform size, instead marketing the product as being of uniform size which allowed
for accurate targeting of particular arteries.
Mr. Rashidi settled with Biosphere Medical for $2 million. He settled with
Cedars-Sinai Medical Center for $350,000. The settling defendants each moved for a
determination that its settlement was in good faith. Notice of this motion was served on
all parties, including Dr. Moser. The motions were unopposed and were granted by the
court.
Trial proceeded against Dr. Moser, the remaining defendant. The jury found he
was negligent in the diagnosis or treatment of Mr. Rashidi and that this negligence was a
cause of injury to Mr. Rashidi. It awarded Mr. Rashidi $125,000 present cash value for
future medical care resulting from this negligence, $331,250 for past noneconomic
damages, and $993,750 for future noneconomic damages. In accordance with MICRA‘s
cap on noneconomic damages, the court reduced the noneconomic damages to $250,000.
Dr. Moser argued there should be an offset against this judgment, based upon the
pretrial settlements with Cedars-Sinai and Biosphere Medical that were found to be in
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good faith. The trial court rejected this argument, finding no basis for allocating the
settlement sums between economic and noneconomic damages. As the court explained,
the agreements with the settling defendants did not make any such allocation, those
defendants did not participate in the trial, and the jury was not requested to make any
finding of proportionate fault attributed to the settling defendants. Dr. Moser filed a
timely notice of appeal. Mr. Rashidi filed a cross-appeal, challenging the
constitutionality of MICRA.
DISCUSSION
I
The issues raised by Dr. Moser concern the amount of economic and noneconomic
offset he should have been given against the award of damages, based on the pretrial
settlements by Cedars-Sinai and Biosphere Medical. The easier question—the right to an
offset of economic damages—involves the interplay between Code of Civil Procedure
section 877 and section 1431.2.
Code of Civil Procedure section 877 describes the impact of a good faith
settlement on settling and nonsettling tortfeasors: ―Where a release, dismissal with or
without prejudice, or a covenant not to sue or not to enforce judgment is given in good
faith before verdict or judgment to one or more of a number of tortfeasors claimed to be
liable for the same tort, . . . it shall have the following effect: [¶] (a) It shall not discharge
any other such party from liability unless its terms so provide, but it shall reduce the
claims against the others in the amount stipulated by the release, the dismissal or the
covenant, or in the amount of the consideration paid for it, whichever is the greater. [¶]
(b) It shall discharge the party to whom it is given from all liability for any contribution
to any other parties.‖
Section 1431.2 provides in pertinent part: ―(a) In any action for personal injury,
property damage, or wrongful death, based upon principles of comparative fault, the
liability of each defendant for non-economic damages shall be several only and shall not
be joint. Each defendant shall be liable only for the amount of non-economic damages
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allocated to that defendant in direct proportion to that defendant‘s percentage of fault, and
a separate judgment shall be rendered against that defendant for that amount.‖
Section 1431.2 ―retains the joint liability of all tortfeasors, regardless of their
respective shares of fault, with respect to all objectively provable expenses and monetary
losses. On the other hand, the more intangible and subjective categories of damage were
limited by [section 1431.2] to a rule of strict proportionate liability.‖ (DaFonte v. Up-
Right, Inc. (1992) 2 Cal.4th 593, 600.) With respect to economic damages, codefendants
are jointly and severally liable, but with respect to noneconomic damages, liability is
several but not joint: ―each defendant is liable for only that portion of the plaintiff‘s
noneconomic damages which is commensurate with that defendant‘s degree of fault for
the injury.‖ (Evangelatos v. Superior Court (1988) 44 Cal.3d 1188, 1198.)
As we have noted, in this case there was no allocation between economic and
noneconomic damages in either of the good faith settlements.2 ―The absence of a court
approved pretrial allocation of a settlement between economic and noneconomic damages
does not preclude a court from making a postverdict allocation. . . . Some allocation of
an undifferentiated settlement between economic and noneconomic damages is required
because only the amount attributable to the joint responsibility for economic damages
may be used as an offset.‖ (Ehret v. Congoleum Corp. (1999) 73 Cal.App.4th 1308,
1320.)
In the absence of a pretrial allocation, courts have developed a method for
applying the allocations of the jury verdict to the settlements. (Espinoza v. Machonga
(1992) 9 Cal.App.4th 268, 276–277; see also Poire v. C.L. Peck/Jones Brothers
Construction Corp. (1995) 39 Cal.App.4th 1832, 1838-1839; Greathouse v. Amcord, Inc.
(1995) 35 Cal.App.4th 831, 840–841.) The idea is to allocate the settlements so that they
mirror the jury‘s apportionment of economic and noneconomic damages. (Jones v. John
Crane, Inc. (2005) 132 Cal.App.4th 990, 1006.) This is done by calculating the
2
Dr. Moser did not object to the good faith determination as to either settlement,
nor did he ask the court at the time of either good faith hearing to make a determination
as to the allocation of the settlement between economic and noneconomic damages.
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percentage of the award attributable to economic damages in relationship to the entire
award, and then applying that same percentage to the settlement. (Espinoza v.
Machonga, supra, at p. 277.) This will yield the portion of the settlement attributable to
economic damages, for which the nonsettling defendant is entitled to an offset.
The jury awarded Mr. Rashidi a total of $1,450,000 against Dr. Moser. Of this,
$125,000 was for economic damages. The percentage of the award attributable to
economic damages is 8.62 percent. Applying that percentage to the $2 million settlement
with Biosphere Medical, we calculate that $172,400 of that settlement should be allocated
to economic damages. Under section 877, Dr. Moser is entitled to a reduction of the
claim against him in that amount. Since the jury‘s verdict for economic damages against
Dr. Moser was only $125,000, the Biosphere Medical settlement completely offsets that
portion of Dr. Moser‘s obligation to Mr. Rashidi. The judgment should reflect this offset.
II
The other settling defendant, Cedars-Sinai, and nonsettling defendant, Dr. Moser,
are both healthcare providers, so the calculation of the percentage of the award
attributable to economic damages is different. These health care providers are entitled to
the benefit of MICRA, which limits the amount of noneconomic damages a plaintiff may
recover for injury by health care providers.
The relevant portion of MICRA is found in section 3333.2: ―(a) In any action for
injury against a health care provider based on professional negligence, the injured
plaintiff shall be entitled to recover noneconomic losses to compensate for pain,
suffering, inconvenience, physical impairment, disfigurement and other nonpecuniary
damage. [¶] (b) In no action shall the amount of damages for noneconomic losses
exceed two hundred fifty thousand dollars ($250,000).‖
Because the MICRA cap applies, the noneconomic portion of the total award to be
used in the percentage calculation must be reduced to $250,000. (Mayes v. Bryan (2006)
139 Cal.App.4th 1075, 1101–1102; Gilman v. Beverly California Corp. (1991) 231
Cal.App.3d 121, 128–129.) The total award for this purpose is $375,000: $125,000 in
economic damages and $250,000 in noneconomic damages. The percentage of economic
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damages to the total is 33.33 percent. Applying that percentage to the $350,000
settlement with Cedars-Sinai, $116,655 of the settlement is attributable to economic
damages; the remaining $233,345 is consequently attributable to noneconomic damages.
III
That brings us to the intersection of section 1431.2 and MICRA. Ordinarily, each
health care provider would pay its share of the noneconomic loss, based on its portion of
liability, in accordance with the several but not joint obligation for noneconomic losses
under section 1431.2. (Gilman v. Beverly California Corp., supra, 231 Cal.App.3d at
pp. 128–130.) ―A defendant bears the burden of proving affirmative defenses and
indemnity cross-claims. Apportionment of noneconomic damages is a form of equitable
indemnity in which a defendant may reduce his or her damages by establishing others are
also at fault for the plaintiff‘s injuries. Placing the burden on defendant to prove fault as
to nonparty tortfeasors is not unjustified or unduly onerous.‖ (Wilson v. Ritto (2003)
105 Cal.App.4th 361, 369.) It is similarly reasonable to place the burden on a nonsettling
defendant to prove fault as to settling tortfeasors for purposes of apportioning
noneconomic damages.
At trial, Dr. Moser presented no evidence that Cedars-Sinai was at fault, and the
court ruled he had presented insufficient evidence to support instructions on that theory
as to Biosphere Medical. 3 The special verdict form asked the jury to determine if
Dr. Moser was negligent in the diagnosis and treatment of Mr. Rashidi, and, if so,
whether that negligence was a cause of injury to him. The jury answered both questions
in the affirmative. Mr. Rashidi argues that since Dr. Moser is the only defendant found at
fault, Dr. Moser is liable for all of the MICRA-reduced noneconomic damages of
$250,000. This result is consistent with the express purpose of section 1431.2, ―to
eliminate the perceived unfairness of imposing ‗all the damage‘ on defendants who were
‗found to share [only] a fraction of the fault.‘ [Citation.]‖ (DaFonte v. Up-Right, Inc.,
supra, 2 Cal.4th at p. 603.) Under section 1431.2, since there was no apportionment of
3
Dr. Moser does not challenge that ruling on appeal, nor does he claim there was
error in the special verdict form.
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fault to another, Dr. Moser would be liable for the entire amount of noneconomic
damages, if MICRA did not apply to this case.
But MICRA does apply, and it sets an absolute limit on the total amount of
damages a plaintiff can recover from health care providers for noneconomic losses.
Dr. Moser urges us to apply the portion of Cedars-Sinai‘s settlement with Mr. Rashidi
which was attributable to noneconomic damages up to the MICRA maximum of
$250,000 recovery for noneconomic damages. Under that approach, Mr. Rashidi would
be entitled to recover only a total of $250,000. Since $233,345 from Cedars-Sinai is
attributable to noneconomic damages, he could recover only an additional $16,655 from
Dr. Moser for noneconomic damages. This is consistent with the way MICRA has
phrased its damages cap: ―In no action shall the amount of damages for noneconomic
losses exceed two hundred fifty thousand dollars ($250,000).‖ Nothing in the statute
addresses the proportionate share each healthcare provider must pay for noneconomic
damages. Instead, the focus is on the total amount of damages for noneconomic loss an
injured plaintiff may recover from all defendant healthcare providers in a single action.
This serves the purpose of MICRA: ―to reduce the cost of medical malpractice litigation,
and thereby restrain the increase in medical malpractice insurance premiums.‖ (Fein v.
Permanente Medical Group (1985) 38 Cal.3d 137, 159 (Fein).)
Mr. Rashidi seeks to avoid this result, relying on language in Hoch v. Allied-
Signal, Inc. (1994) 24 Cal.App.4th 48, 67–68 (Hoch). In Hoch, as in our case, the
noneconomic damages paid in settlement exceeded the settling parties‘ proportionate
share of fault. After trial, the court applied section 1431.2 and held the nonsettling
defendant liable for the portion of noneconomic damages consistent with its percentage
of fault; it did not offset that amount by the noneconomic damages received in settlement.
As a result, plaintiffs‘ net recovery of noneconomic damages exceeded the amount
awarded at trial. In allowing this, the court relied on language in Duncan v. Cessna
Aircraft Co. (Tex. 1984) 665 S.W.2d 414, 431–432 (Duncan): ―[S]ettlement dollars are
not the same as damages. Settlement dollars represent a contractual estimate of the value
of the settling tortfeasor‘s liability and may be more or less than the proportionate share
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of the plaintiff[‘]s damages. The settlement includes not only damages, but also the value
of avoiding the risk, expense, and adverse public exposure that accompany going to trial.
There is no conceptual inconsistency in allowing a plaintiff to recover more from a
settlement or partial settlement than he could receive as damages.‖ Neither the Hoch
case, nor the Duncan case on which it relies, had to consider a damages cap such as that
in MICRA.
―To the extent a specific statute is inconsistent with a general statute potentially
covering the same subject matter, the specific statute must be read as an exception to the
more general statute.‖ (Salazar v. Eastin (1995) 9 Cal.4th 836, 857.) While section
1431.2 protects any joint tortfeasor from paying more than its proportionate share of
noneconomic damages, MICRA prohibits a plaintiff from recovering more than $250,000
for noneconomic damages from all healthcare providers in the same action. MICRA does
not distinguish between settlement dollars and judgments; it addresses a plaintiff‘s total
recovery for noneconomic losses. Since MICRA, with its absolute limit on the total
recovery of noneconomic damages from health care providers, is the more specific
statute, we read it as an exception to the more general limitation on liability in section
1431.2.
IV
We turn to Mr. Rashidi‘s cross appeal, in which he challenges the constitutionality
of MICRA. As the court observed in Stinnett v. Tam (2011) 198 Cal.App.4th 1412, 1419,
―After MICRA‘s enactment, judicial challenges to various provisions of MICRA were
abundant, but unsuccessful.‖ We find settled, well-reasoned authority rejecting each of
the constitutional claims.
Mr. Rashidi‘s first claim is that the $250,000 damages cap violates a plaintiff‘s
constitutional right to a jury trial. In Yates v. Pollock (1987) 194 Cal.App.3d 195, 200,
the court characterized this same claim as ―an indirect attack upon the Legislature‘s
power to place a cap on damages.‖ (Ibid.) In American Bank & Trust Co. v. Community
Hospital (1984) 36 Cal.3d 359, 368–369 (American Bank) and Fein, supra, 38 Cal.3d at
p. 158, the Supreme Court confirmed that a plaintiff has no vested property right in a
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particular measure of damages, and the Legislature has broad authority to modify the
scope and nature of such damages. ―‗So long as the measure is rationally related to a
legitimate state interest, policy determinations as to the need for, and the desirability of,
the enactment are for the Legislature.‘‖ (Fein, supra, at p. 158, quoting American Bank,
supra, at pp. 368–369.) The Supreme Court found that the $250,000 ceiling on the
recovery of noneconomic damages is rationally related to the objective of reducing the
costs of medical malpractice litigation and in that way restraining the costs of medical
malpractice insurance premiums. (Id. at p. 159.) The court found no California case
suggesting ―that the right to recover for noneconomic injuries is constitutionally immune
from legislative limitation or revision.‖ (Id. at pp. 159–160.)
In American Bank, supra, 36 Cal.3d at page 376, the court explained that the
constitutional guarantee of jury trial operates at the time of trial to require submission of
certain issues to the jury. Once a verdict has been returned, the effect of the
constitutional provision is to prohibit improper interference with the jury‘s decision.
There is no such improper interference under MICRA. The issue of damages is still
submitted to the jury. The subsequent reduction of the damages awarded—either under
the periodic payment provision challenged in American Bank (Code Civ. Proc., § 667.7),
or under the damages cap challenged in this case—does not improperly interfere with the
jury‘s decision. (American Bank, supra, 36 Cal.3d at pp. 376–377; Yates v. Pollock,
supra, 194 Cal.App.3d at p. 200.)
Next, Mr. Rashidi claims the damages cap violates equal protection because it
―arbitrarily imposes a one-size-fits-all‖ $250,000 limit on the noneconomic damages a
plaintiff may receive in a medical malpractice action, regardless of the jury‘s findings as
to the extent and severity of a plaintiff‘s injuries. In Fein, supra, 38 Cal.3d at pages
161–162, the Supreme Court considered and rejected a similar claim. The Legislature
had a rational basis for enacting the damages limitation, and sought to obtain the desired
cost savings only by limiting noneconomic damages. This limitation applies equally to
all plaintiffs, without precluding the more seriously injured plaintiff from obtaining
complete compensation for out-of-pocket medical expenses or lost earnings. (Id. at
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p. 162; Stinnett v. Tam, supra, 198 Cal.App.4th at p. 1425.) Mr. Rashidi‘s argument
regarding the need to adjust the MICRA cap so that it is indexed for inflation should be
directed to the Legislature. (See Stinnett v. Tam, supra, at p. 1432.)
Mr. Rashidi also argues that section 3333.2 violates the separation of powers by
requiring the courts to enter judgment in an amount unrelated to the facts found by the
jury. The Supreme Court has recognized the authority of the Legislature to limit the
recovery of noneconomic damages. (Fein, supra, 38 Cal.3d at pp. 157–160.) The
Legislature possesses broad authority to establish or to abolish tort causes of action.
(Cory v. Shierloh (1981) 29 Cal.3d 430, 439.) Although that authority necessarily affects
the work of the judiciary, it does not impermissibly impinge on that separate branch of
government. We find no violation of the separation of powers by the requirement that the
court reduce awards of noneconomic damages to comply with the MICRA ceiling.
DISPOSITION
The judgment is modified to reflect an offset against economic damages in the
amount of $125,000 and a reduction of the noneconomic damages to $16,655. In all
other respects, the judgment is affirmed. The parties are to bear their own costs on
appeal.
CERTIFIED FOR PUBLICATION
EPSTEIN, P. J.
We concur:
MANELLA, J.
SUZUKAWA, J.
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