2014-00165562-CU-MM

Sheila Waters vs. Mercy San Juan Medical Center

Nature of Proceeding: Motion Contesting Good Faith Settlement

Filed By: Phillips, Robert K.

** If any party requests oral argument, then at the time the request is made, the requesting party shall inform the court and opposing counsel of the specific issue(s) on which oral argument is sought. **

Defendant Raley’s Supermarkets (Raley’s) Motion Contesting Good Faith Settlement under CCP § 877.6 is DENIED. The settlement is in good faith.

Raley’s requests for judicial notice of court documents are GRANTED. One of the judicially noticeable documents Raley’s tenders is this court’s order denying the motion for summary judgment (MSJ) brought by Defendant and settling party Dignity Health dba Mercy San Juan Medical Center (Dignity Health). On its own motion, the court takes judicial notice of the moving, opposing and reply papers filed in connection with the MSJ.

This is a wrongful death case. The plaintiff is Sheila Waters (Waters), as personal representative of the Estate of Robert Waters (Decedent). Waters’ operative pleading is the first amended complaint (FAC), which contains a single cause of action for “Medical Malpractice/Wrongful Death.” The defendants still litigating are Raley’s, Dignity Health, Med 7 Urgent Care (Med 7), Tarang Patel, M.D. (Dr. Patel), Dean Kim, M.D. (Dr. Kim), and Ghayyur Qureshi, M.D., F.C.C.P. (Dr. Qureshi). Waters alleges that each of the individual defendants other than Dr. Kim (i.e., Drs. Patel and Qureshi) is the employee of Dignity Health. Dr. Kim is alleged to be associated with Med 7.

According to Waters, Decedent was 58-years-old when, in order to obtain treatment for

shingles on July 27, 2013, he consulted with Med 7 / Dr. Kim. Decedent disclosed his history of dialysis and limited kidney function at that time. Dr. Kim prescribed Valtrex, which can be dangerous and even lethal to persons in dialysis. “The aforementioned negligent, careless, and unskillful conduct of Defendants, MED 7 URGENT CARE, DEAN KIM, M.D. and DOES 36-50 led to severe complications, including but not limited to, cephalopathy and cardiac arrest, thereby proximately causing [Decedent’s] death.” (FAC, ¶ 18.)

Raley’s liability is predicated on the fact that it filled the Valtrex prescription on 7/27/13 despite the inherent danger to Decedent. Waters alleges that Raley’s negligence led to Decedent’s cephalopathy, cardiac arrest and death. (FAC, ¶ 19.)

Turning to Dignity Health, Dr. Patel, Dr. Qureshi and Dignity Health’s nursing and other staff (collectively the “Dignity Health Defendants”), Waters alleges they treated Decedent between 7/27/18 and August 8, 2013, but failed properly to diagnose or treat his drug interactions. (FAC, ¶ 20.) She also alleges the Dignity Health Defendants failed to dialyze Decedent properly, and that the negligence led to cephalopathy, cardiac arrest and death. (Id.) Decedent experienced cardiac arrest at approximately 12:35AM on 7/31/13.

In February 2015, Waters served a Statement of Damages setting the amount of damages at $6 million. (Navaratnasingham Decl., Exh. D.)

In July 2016, the court denied Dignity Health’s MSJ, which presented the theory that none of the doctors who treated Decedent were its agents. (See McPherson Decl., Exh. C.) As to Dr. Patel and former defendant Dr. Pai, the court concluded ostensible agency presented a triable issue.

Trial is set to commence on 10/29/18. At this point, Waters’ case against Dignity Health appears to be based on the theory that the Dignity Health Defendants improperly overloaded Decedent with fluids. Dignity Health’s liability is vicarious.

“[T]he intent and policies underlying section 877.6 require that a number of factors be taken into account including a rough approximation of plaintiffs’ total recovery and the settlor’s proportionate liability, the amount paid in settlement, the allocation of settlement proceeds among plaintiffs, and a recognition that a settlor should pay less in settlement than he would if he were found liable after a trial. Other relevant considerations include the financial conditions and insurance policy limits of settling defendants, as well as the existence of collusion, fraud, or tortious conduct aimed to injure the interests of nonsettling defendants. [Citation.] Finally, practical considerations obviously require that the evaluation be made on the basis of information available at the time of settlement. ‘[A] defendant’s settlement figure must not be grossly disproportionate to what a reasonable person, at the time of the settlement, would estimate the settling defendant’s liability to be.’ [Citation.]” ( Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 38 Cal. 3d 488, 499.)

The nonsettling party contesting good faith has the burden of proof on that issue. (CCP § 877.6(d).) “At a minimum, [however,] a party seeking confirmation of a settlement must explain to the court and to all other parties: who has settled with whom, the dollar amount of each settlement, if any settlement is allocated, how it is allocated between issues and/or parties, what nonmonetary consideration has been included, and how the parties to the settlement value the nonmonetary consideration.

(Alcal Roofing & Insulation v. Superior Court (1992) 8 Cal.App.4th 1121, 1129.)

On 5/17/18, Dignity Health filed and served its notice of a good faith settlement (Notice) with Waters for $35,000. Dignity Health filed some evidence with the Notice. First, Dignity Health filed medical records indicating Decedent suffered from end-stage renal disease. The medical records describe Decedent as hallucinating at the time he presented to Dignity Health after taking the Valtrex he received from Raley’s.

Perhaps anticipating an opposition from a non-settling party, the Notice also includes a nurse’s opinions, which Waters submitted in opposition to Dignity Health’s MSJ. The Notice refers to objections Dignity Health raised in response to the nurse’s opinions, but which the court did not rule on when it denied the MSJ. The nurse opined that Dignity Health’s nursing staff negligently failed to “discuss with the physician and/or go up the chain of command related to the use of Normal Saline IV at 100ml/hour in light of the fact that [Decedent] was anuric (had little or no urine) and was developing worsening edema.” (Notice, Exh. C. at 5:21-23.) The nurse also opined that the negligence “caused or contributed” to Decedent’s death. (Id., Exh. C at 6:3-4.) In the Notice, Dignity Health reasserts its objections to the nurse’s opinions.

Dignity Health’s objection that the opinion its nursing staff caused or contributed to Decedent’s death is SUSTAINED. An expert must tether an opinion to the supporting facts. (See Lynn v. Tatitlek Support Svcs., Inc. (2017) 8 Cal.App.5th 1096, 1116[“’”[A] n expert’s opinion rendered without a reasoned explanation of why the underlying facts lead to the ultimate conclusion has no evidentiary value because an expert opinion is worth no more than the reasons and facts on which it is based”’”].) The nurse in question offers no clues about the reason(s) she believes any Dignity Health nurse’s negligence was causal, and consequently the opinion about causation is inadmissible. Hence, the Notice disposes of the nurse’s causation opinion as a basis upon which to conclude that the settlement lacks good faith.

In response to the Notice, Raley’s filed this motion contesting good faith. Raley’s argues the settlement “is not proportionate to [Dignity Health’s] liability to [Waters] and is not within the ballpark of [Waters’] perceived settlement of this entire action within the remaining defendants.” (Notice of Mot. Contesting Good Faith, at 2:2-4.) In its moving papers, Raley’s relies primarily on the nurse’s opinions discussed above. As previously stated, the opinion about causation is inadmissible, and hence the nurse’s opinions do not prove the settlement is in bad faith.

Raley’s also cites Waters’ 2015 Statement of Damages in the amount of $6 million. Using this figure as the denominator, Raley’s argues Dignity Health is settling

for .005% of Waters’ total damages. On the other hand, despite the facts that this case was filed in 2014 and is slated for an October 2018 trial, Raley’s does not tender any evidence of special damages (medical bills). Nor does Raley’s tender evidence of Decedent’s likely future earnings. As noted above, Decedent suffered from end-stage renal disease.

Dignity Health tenders additional evidence in opposition. First, it cites Waters’ April 2016 998 offers to Dr. Patel, Dignity Heath, former defendant Dr. Pai, Dr. Kim and Med

7. (McPherson Decl., ¶ 8.) Each offer was for amount of $325,000, but none were accepted. (Id.) Dignity Health also tenders a doctor’s expert opinions that its nurses abided by the professional standard of care when they treated Decedent and did not cause or contribute to Decedent’s injuries. (See McPherson Decl., Exh. E.)

Furthermore, Dignity Health tenders evidence meant to show that the doctors who treated Decedent at its facilities did not injure him by overloading him with fluids. Dignity Health tenders the deposition transcript of Rafieh Hajiani, M.D. (Dr. Hajiani). The testimony discloses that Dr. Hajiani examined and treated Decedent after Decedent took the Valtrex. Dr. Hajiani examined Decedent after Decedent went “code blue” at Dignity Health and recorded “trace edema,” i.e., minimal swelling in the lower extremities. Dr. Hajiani never determined Decedent to be markedly or critically fluid overloaded when he saw him. Dr. Hajiani also believed Decedent’s health was improving the day before he went code blue.

Dignity Health tenders the deposition transcript of another treating physician, Parimal Bharucha, M.D. (Dr. Bharucha). Dr. Bharucha explained that “[a]ll test results pointing towards respiratory failure to due to pulmonary edema, with sever

hypertension.” (Bharucha Depo. Tr. at 21:14-15.) Dr. Bharucha added that “[w]hen your blood pressure goes that high, the heart can go into something called diastolic dysfunction whereby you will have a backup of your fluids and the blood into the lungs, and you can go into like a flash pulmonary edema, like a flash flooding of the lungs, and you can have some problems breathing.” (Id. at 21:24-22:4.) Dr. Bharucha testified he did not see Decedent before code blue and therefore had “absolutely no idea if the patient had any evidence of fluid overload before I got involved.” (Id. at 26:1-4; see id. at 26:8-12 [“[I]f the question is did the patient have underlying fluid overload, I would not know”].) And he testified he did not know if Decedent experienced the diastolic dysfunction that otherwise can cause fluid overload. (Id. at 36:14-16.)

With its reply, Raley’s tenders evidence that one or more medical professionals treating Decedent at Dignity Health facilities did overload him with fluids. It cites additional portions of Dr. Hajiani’s deposition testimony in which the doctor concedes his conclusion close to the time of Decedent’s death that Decedent experienced acute respiratory failure and pulmonary edema due to fluid overload. (See Navarathnasingham Reply Decl., Exh. A at 27:16-24, 28:3-15, 29:2-18.)

The court must make the good faith determination based on the evidence currently available. At this point, Dr. Hajiani’s deposition testimony provides some evidence that someone who treated Decedent at Dignity Health overloaded him with fluids. Dr. Hajiani formed that opinion close to the time of Decedent’s death. But there is no evidence that a Dignity Health nurse was responsible for an injurious fluid overload. The admissible expert testimony in that regard is that no nurse caused Decedent’s death.

The evidence does not foreclose the possibility that a doctor who treated Decedent at Dignity Health facilities overloaded him with fluid. As detailed in Dignity Health’s MSJ, however, doctors who practice at Dignity Health facilities are independent contractors, not actual agents. (See Owens Decl., submitted in support of Dignity Health’s MSJ on 3/21/16, ¶¶ 4-12.) Therefore, it appears unlikely Dignity Health could be found vicariously liable for Decedent’s treating physician’s negligence on a theory of actual agency.

As Raley’s points out, Dignity Health’s MSJ was denied because ostensible agency presented a triable issue. Agency is generally a question of fact for a jury. (See Whitlow v. Rideout Mem. Hosp. (App. 3 Dist. 2015) 237 Cal.App.4th 631, 635.) Even where the patient signs an admission form acknowledging that emergency room

physicians are independent contractors, summary judgment is not generally appropriate on the theory the patient should have appreciated the acknowledgment. (See id., pp. 633, 636-641.) The motion before the court, though, is not an MSJ in which all reasonable inferences must be drawn against Dignity Health. Furthermore, the majority on Markow v. Rosner (2016) 3 Cal.App.5th 1027 concluded as a matter of law that a non-emergency patient who repeatedly signed paperwork acknowledging his chosen physician’s independent-contractor status could not overcome an MSJ on a theory the physician was the hospital’s ostensible agent. Granted, there are important differences between the patient in Markow and Decedent in this instant case. Decedent was an emergency room patient, and it does not appear he chose the physicians who treated him after he ingested Valtrex. But Dignity Health’s MSJ contained evidence that prior to the incident in question, Decedent signed paperwork eight times in which he acknowledged that physicians performing medical services at Dignity Health’s facilities were independent contractors. (See 3/21/16 Pearson Decl., Exh. G; 6/13/16 Opp. Sep. Stmt., Undisputed Material Fact 16.) Despite Decedent’s incognizance at the time he was treated after taking Valtrex, a jury could reject ostensible agency given his prior acknowledgements. In other words, whether Dignity Health will be held liable at all for any fluid overload that a doctor authorized is uncertain.

As noted above, Waters’ economic damages are also uncertain. Raley’s has not produced evidence that Decedent was employed or employable. To further explore the damages awardable at trial, the court requested supplemental briefing on MICRA’s impact on noneconomic damages. In medical negligence cases against health care providers, MICRA caps noneconomic damages at $250,000. (See, e.g., Rashidi v. Moser (2014) 60 Cal.4th 718, 724-725.) Citing Rashidi, both sides agree that MICRA only caps noneconomic damages at trial, not pretrial settlements. But Rashidi does not hold that MICRA’s cap on noneconomic damages plays no role in pretrial settlements. On the contrary, the Rashidi court observed that “[t]he limitation on noneconomic damages restrains settlements indirectly, by providing a firm ceiling on potential liability as a basis for negotiation.” (Rashidi, p. 721; see id., pp. 726-727 [“the Legislature may have felt that the fixed $ 250,000 limit would promote settlements by eliminating ‘the unknown possibility of phenomenal awards for pain and suffering that can make litigation worth the gamble’”].) As a result, in assessing the reasonableness of the proposed settlement, the court may consider the fact that Dignity Health could not be required to pay more than $250,000 in noneconomic damages if it were found liable at trial. (See Western Steamship Lines, Inc. v. San Pedro Peninsula Hosp. (1994) 8 Cal.4th 100, 104 [MICRA’s cap on noneconomic damages recoverable from health care providers applies to concurrent tortfeasors’ equitable indemnity actions].)

In sum, both Dignity Health’s liability and Waters’ economic damages are uncertain. Furthermore, the amount Dignity Health could be required to pay in noneconomic damages is capped. Raley’s has not met its burden of demonstrating a settlement grossly disproportionate with Dignity Health’s liability.

Other than the objection expressly sustained above, the court need not rule and does not rule on Dignity Health’s objections to evidence.

Disposition

The motion contesting good faith settlement is denied. The minute order is effective immediately. No formal order denying the motion is required.

Pursuant to CRC 3.1312, Dignity Health shall lodge for the court’s signature a revised formal order on its application for determination of good faith settlement that tracks the language in CCP § 877.6(c). Only equitable claims against Dignity Health based on comparative fault are barred.