Hamid Rashidi v. Franklin Moser ---P.3d---(2014) Westlaw citation: 2014 WL 701400 No. S214430 December 15, 2014
HOLDING
The application of the Medical Injury Compensation Reform Act (MICRA) cap of $250,000 on damages for non-economic losses, codified in Civil Code Section 3333.2, is limited to an injured party's award for damages at trial against the defendant health care provider and does not include settlements of other health care providers in the same action, unless the judgment at trial includes a finding of apportionment of fault of those that settled.
WHY THIS CASE IS IMPORTANT
The Supreme Court has narrowed the application of the cap on non-economic damages. A defendant health care provider can no longer seek to offset non-economic damages awarded against him based upon pre-trial settlements of other defendants. The non-settling defendant must establish comparative fault of the settling defendants to secure an offset.
The Supreme Court also addressed the Legislative intent of the MICRA cap by clarifying that the primary concern in its enactment was to combat "capricious" jury awards. MICRA statutes were enacted at a time when the state was in the midst of a serious healthcare crisis. The Supreme Court found that the Legislature did not intend for there to be a cap on non-economic damages allotted in settlement, nor did it intend for any such allotment to be included in the statutory cap of $250,000. The cap was intended to apply to money judgments only. As a result, in actions against multiple health care providers, plaintiffs may enter into settlement negotiations with one or more of the defendants to include unlimited compensation for non-economic damages. By placing a limitation on the maximum potential award of non-economic damages at trial, the Legislature ultimately increased the likelihood of settlement by making it more favorable to plaintiffs.
IMPACT OF DECISION
This decision will likely impact future litigation, as it may encourage injured parties to name multiple defendants in actions for damages with the hope of settling with one or more of the defendants and thereby potentially circumventing the MICRA limitations. Plaintiff can still proceed to trial with the non-settling defendant and receive up to an additional $250,000 in non-economic damages. With there being no limitation on non-economic damages for settlements, we may see an overall increase in the number of lawsuits in general, as well as an increase in the degree of frivolity.
In turn, non-settling defendants may be inclined to rigorously challenge Good Faith Settlement Applications and certainly, must strongly consider submitting evidence at trial of comparative fault of the settling defendants. This will undoubtedly affect the length of trial as well as cost. Finally, there may be long-term ramifications affecting our insurance industry as it dilutes the favorable impact of the cap on non-economic damages, which has been in place since 1975.
FACTS OF THE CASE
In a recent Supreme Court case, twenty-six-year-old, Hamid Rashidi, lost his vision in one eye following a surgical procedure performed by Franklin Moser, M.D., for a complaint of excessive nose bleed. Co-defendants, Cedars-Sinai Medical Center and Biosphere Medical, Inc., entered into separate pre-trial settlements in the amount of $350,000 and $2,000,000, respectively. At trial, Dr. Moser did not introduce evidence of liability as to either settling defendant. The jury found in favor plaintiff and awarded plaintiff $125,000 in economic damages for future medical care, $331,250 for past non-economic damages, and $993,750 for future non-economic damages. The trial court reduced the non-economic damages to $250,000, pursuant to Civil Code Section 3222.2.
In post-trial motions, Dr. Moser argued that he was entitled to offsets against the judgment, given the settlements with Cedars-Sinai Medical Center and Biosphere Medical, Inc. The trial court rejected this claim, finding no basis for allocation of non-economic versus economic damages in the settlement agreements and based upon the fact that the jury did not make a finding as to the settling defendants' proportion of fault. Dr. Moser appealed, contending that he was entitled to offsets as to the jury's award for both economic and non-economic damages. Dr. Moser did not contest the finding that he failed to establish comparative fault at trial. The Court of Appeal held that offsets were required pursuant to Code of Civil Procedure Section 877 and Civil Code Section 1431.2, and reduced the non-economic award to $16,655.
Plaintiff challenged the decision and the Supreme Court concluded that the cap imposed by MICRA applies only to judgments awarding non-economic damages. The Supreme Court found that the Court of Appeal erred in allowing Dr. Moser a setoff against damages for which he alone was responsible.