Daily Blast September 24, 2013

Yesterday, the California Court of Appeal, Second Appellate District, Division Four (Los Angeles) issued an opinion in Rashidi v. Moser (September 23, 2013, B237476) __ Cal.App.4th ___, analyzing whether the court should offset a noneconomic damages award based upon the partial settlements with co-defendants when the court has already reduced the judgment in accordance with MICRA’s cap on noneconomic damages.

Plaintiff Hamid Rashidi (“Rashidi”) went to the emergency room with a severe nose bleed. (Slip opn., p. 2.) He was examined by Dr. Moser who advised him to have an operation to treat his nose bleeds. (Ibid.) Dr. Moser performed the surgery at Cedars-Sinai. When Rashidi woke up from the surgery, he was blind in one eye. (Id. at p. 3.) Rashidi sued Dr. Moser, Cedars-Sinai and Biosphere Medical, Inc., the manufacturer of the product used during the surgery. Rashidi settled with Biosphere Medical, Inc. for $2 million and with Cedars-Sinai for $350,000. (Ibid.) These settlements were determined to be in good faith. Trial proceeded against Dr. Moser. The jury found that Dr. Moser was negligent and that his negligence caused the injury. The jury awarded Rashidi $125,000 for future medical care, $331,250 for past noneconomic damages and $993,750 for future noneconomic damages. The court reduced the noneconomic damages to $250,000 in accordance with MICRA’s cap on noneconomic damages. (Ibid.)

Dr. Moser argued there should be an offset against the judgment based on the pretrial settlements with Cedars-Sinai and Biosphere Medical. (Slip opn., p. 3.) The trial rejected this argument because the agreements with the settling parties did not allocate the sums between economic and noneconomic damages. Further, the settling defendants did not participate in trial and the jury was not requested to make any finding of proportionate fault attributed to the settling defendants. (Id. at p. 4.) Dr. Moser appealed. (Ibid.)

The Court of Appeal first determined that Dr. Moser was entitled to an offset against economic damages in the amount of $125,000. The court explained that settlements should be allocated so that they mirror the jury’s apportionment of economic and noneconomic damages.This is done by calculating the percentage of the award attributable to economic damages in the relationship to the entire award and then applying that same percentage to the settlement. (Slip opn., pp. 6-7.) The court calculated that $172,400 of Biosphere Medical’s settlement was allocated to economic damages. 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 Rashidi. 

The court then analyzed the intersection between Civil Code section 3333.2, part of MICRA, and Civil Code section 1431.2, which provides that liability for noneconomic damages is several only, in accordance with the percentage of fault. (Slip opn., p. 2.) The court determined that Dr. Moser was entitled to a reduction of the noneconomic damages to $16,655. The court explained that MICRA sets an absolute limit on the total amount of damages a plaintiff can recover from health care providers for noneconomic losses. (Id. at p. 8.) Dr. Moser urged the court to apply the portion of Cedars-Sinai’s settlement with Rashidi that was attributable to noneconomic damages up to the MICRA maximum of $250,000 recovery for noneconomic damages. Under that approach, Rashidi would be entitled to recover only a total of $250,000. This was because of the $350,000 settlement with Cedars-Sinai, $116,6555 was attributable to economic damages and the remaining $233,345 was attributable to noneconomic damages. (Id. at p. 7.) Since $233,345 from Cedars-Sinai is attributable to noneconomic damages, Rashidi could recover only an additional $16,655 from Dr. Moser for noneconomic damages. According to the court, “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.” (Id. at p. 8, emphasis in original.) Although section 1431.2 protects a 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. Rather, it addresses a plaintiff’s total recovery for nonecoomic losses. (Id. at p. 9.) The court concluded that since MICRA is the more specific statute, it is an exception to the more general limitation on liability in section 1431.2.

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