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Should We Quantify Third Party Fault Even When A Non-Qualified Healthcare Provider Is Involved?

by Jeffrey A. Mitchell

The starting point in analyzing the quantification of fault of the defendant non-qualified health care provider must begin with a survey of the statutory and jurisprudential rules established when the defendant is a qualified health care provider pursuant to the Louisiana Medical Malpractice Act (referred to herein as the “Act”).

A.  Quantification of Fault Involving a Qualified Health Care Provider

La.R.S. 40:1299.44 C provides in part:
In approving a settlement or determining the amount, if any, to be paid from the patient’s compensation fund, the court shall consider the liability of the health care provider as admitted and established where the insurer has paid its policy limits of one hundred thousand dollars, or where the self-insured health care provider has paid one hundred thousand dollars.

In Graham v. Willis-Knighton Medical Center, 97-0188, (La. 9/9/97), 699 So.2d 365, 372, the supreme court explained:

[T]he legislative intent of “liability” in Section 1299.44 C(5) was that the payment of $100,000 in settlement establishes proof of liability for the malpractice and for damages of at least $100,000 resulting from the malpractice, which is a very significant benefit to the medical malpractice victim.  However, at the trial against the Fund, the plaintiff has the burden of proving that the admitted malpractice caused damages in excess of $100,000.

In Stuka v. Fleming, 561 So.2d 1371 (La. 1990), cert. denied, 498 U.S. 982, 111 S.Ct. 513, 112 L.Ed.2d 525 (1990), the Louisiana Patient’s Compensation Fund (referred to herein as the “PCF”), contested its liability to the plaintiff who had compromised his malpractice claim against one health care provider for $100,000, then dismissed the other defendants and sued the PCF to recover damages in excess of the $100,000 settlement.  The court concluded that the only issue to be litigated against the PCF was the amount of damages sustained by the plaintiff as a result of the admitted malpractice.  In reaching this conclusion, the court recognized the impact of its holding on the PCF stating:

[w]e recognize that this literal interpretation of the statute affords fewer rights to the Fund when claims against multiple health care providers are settled than when such claims are tried.  In the case of a trial, the Fund has the opportunity for reduced exposure when more than one health care provider is determined to be liable.  But in the case of a settlement with one health care provider for $100,000 the Fund does not have this opportunity in the subsequent litigation with the victim.  However, the Legislature chose in cases of settlement simply to declare the admission of liability by the $100,000 payment of one health care provider and did not provide for the Fund’s affirmative right to litigate liability on the part of any other named or unnamed health care providers.  

Id. at 1374. (emphasis added).

Prior to 1996, Stuka made it clear that the fault of all involved health care providers could not be litigated by the PCF once one of the defendants paid their $100,000 and admitted fault. However, in 1996, the legislature amended article 2323 of the Louisiana Civil Code to require the quantification of the fault of all persons whether or not they were parties to the lawsuit.  The impact of this broad new legislation on the Act was unclear.  Following this amendment, the PCF began to argue that article 2323 superceded the Act and required quantification of third party fault even when the fault in the case had already been established.

In 1999, the Louisiana Third Circuit Court of Appeals handed down the decision of Bridgers v. Southwest Louisiana Hospital Association, d/b/a/ Lake Charles Memorial Hospital, 99-520 (La. App. 3rd Cir. 11/3/99), 746 So.2d 731.  In that case, the trial court specifically struck the PCF’s affirmative defense of third party fault where another health care provider admitted fault through payment of $100,000.  The PCF appealed this ruling arguing that the evidence which was excluded by the trial court was relevant to third party fault and admissible under the Act.  The court rejected this argument and affirmed the trial court’s exclusion of evidence related to third party fault.   In so doing, the court reasoned:

The trial court concluded that since proof of liability and damages of at least $100,000 was established by Dr. Vines’ settlement with the [plaintiff], any evidence addressing the issue of liability, whether it be the liability of Dr. Vines or the liability of others, was irrelevant and inadmissible….We find no error with these rulings, including their application to the medical review panel opinion and the panel members’ testimony…To the extent that they addressed the issue of liability only, they were irrelevant under Stuka , 561 So.2d 1371, and Graham, 699 So.2d 365.  Furthermore, they would have been confusing to the jury, who had already been instructed that Dr. Vines had admitted liability. 

Id. at 736. (emphasis added).

Moreover, in Knabel v. Lewis, 2000-1464 (La. App. 1st Cir. 9/28/01), another case decided after the 1996 amendment to article 2323, the court refused to quantify the fault of a third party health care provider under article 2323 because the original tortfeasor was legally responsible for all the fault.  In Knabel, the plaintiff was injured in an automobile accident.  When she was taken for medical treatment for her injuries, medical malpractice was committed upon her thereby increasing her injuries. 

The trial court instructed the jury that the defendants in the automobile case were not only liable for the injuries actually sustained in the accident, but also liable for the injuries caused by the health care providers under the legal doctrine established in Weber v. Charity Hosp. of Louisiana at New Orleans, 475 So.2d 1047 (La. 1985).  Defendants objected to this charge arguing that the amendments to 2323 required quantification of all fault including the fault of the subsequently negligent health care providers.  The court disagreed.

However, in the instant case, [defendant] is 100% liable for [plaintiff’s] injuries, as the duty of an original tortfeasor not to injure a victim includes the risk that subsequent injury would result from inappropriate treatment by medical professionals who treat the injuries directly caused by the tortfeasor.  See Weber, 475 So.2d at 1050.  There is no additional percentage of fault by another to quantify.  It was not error to charge the jury concerning [defendant’s] liability for any negligent acts by [plaintiff’s] health care providers in their treatment of [plaintiff] for injuries she sustained as a result of this accident. 

Id. at 2. (emphasis added).

Both the Knabel and Bridgers, cases decided after the 1996 amendment to article 2323, seemed to confirm that article 2323 did not require the quantification of third party fault when the fault in the case had already been legally established. 

However, earlier this year, the Louisiana Supreme Court decided the case of  Conner v. Stelly, 2002-CC-0280, (La. 1/30/02), 2002 WL 172018.  In Conner, a per curium decision, the supreme court reversed the trial court’s ruling prohibiting the PCF from arguing or presenting evidence that victim or third party fault caused any of the damages.  The court cited Graham and reasoned that although payment of $100,000 establishes proof of liability “for the malpractice and for damages of at least $100,000 resulting from the malpractice,” a plaintiff has the burden of proving at trial that the negligence caused damages in excess of $100,000.  Thus, the PCF was allowed to present evidence of victim and/or third party fault insofar as that fault may have caused any of the damages in the case.

This past summer, the Louisiana Third Circuit Court of Appeal decided the case of   Caesar v. Barry, 2002-52 (La. App. 3rd Cir. 7/17/02), 823 So2d 998.  In Caesar, plaintiffs instituted a medical malpractice action against Dr. Richard Barry and Lake Charles Memorial Hospital following the birth of their baby who suffered from Erb’s Palsy, dystocia and a learning disability.
Dr. Barry’s bankrupt insurer entered into a settlement agreement for payment of the underlying $100,000 (even though payment of the whole amount was doubtful, the continuing obligation to pay it was deemed enough to trigger the statutory admission of liability). The plaintiffs then moved for and the trial court granted summary judgment awarding the statutory cap of $500,000. The PCF then appealed arguing that the trial court erred in implicitly ruling that the statutory admission of liability included an admission that defendant Dr. Barry was 100 percent responsible for the damages incurred by the plaintiff.  Further, the PCF argued that summary judgment was inappropriate where genuine issues of fact existed with respect to causation of damages above the $100,000 threshold.

The court began its analysis by pointing out that the plaintiffs were still pursing their claims against the hospital, a co defendant, following the settlement by Dr. Barry’s insurer. It then cited Griggs v. Riverland Medical Center, 98-256 (La. App. 3rd Cir. 10/14/98); 722 So.2d 15, for the proposition that when a claim still exists against the hospital,  a trial court should allow the PCF to present evidence of comparative fault of a third party in order to gain a proportionate reduction of damages.  The court then took note of the Conner v. Stelly decision and found that, as a matter of law, the plaintiffs were not entitled to summary judgment against the PCF based on the sole liability of Dr. Barry.

B.   Allocation of Fault When the Third Party is not a
      Qualified Health Care Provider

Where do the Conner and Caesar decisions leave us with respect to those cases involving the fault of third party health care providers which are not qualified under the Act?  Although no reported decisions have yet to be handed down on this issue, the PCF is actively raising the third party fault defense even in cases which involve non-qualified health care providers.  For instance, in Gonzalez v. Barona, et. al, Civil District Court Number 95-7189 c/w 97-2446, the PCF made this exact argument. 

In Gonzalez, a 26-year-old female dialysis patient suffered cardiac arrest and died because her hematocrit level was allowed to drop to 17 without a transfusion being ordered.  The husband of Mrs. Gonzalez instituted a malpractice action against both the dialysis center and the treating nephrologist, Dr. Jairo Barona, for their failure to transfuse Mrs. Gonzalez before allowing her to undergo dialysis treatment.  The dialysis center defended by arguing that they had informed Dr. Barona of the critically low hematocrit and he did not order a transfusion.  Dr. Barona defended by arguing that the dialysis center never informed him of the low hematocrit and the records did not support that he was so informed.

Prior to trial, the dialysis center settled with the plaintiff.  On the eve of trial, Dr. Barona settled for $100,000 and admitted fault.  The PCF then filed a declaratory judgment arguing that even though Dr. Barona admitted fault, the fault of the settling non-qualified dialysis center should also be quantified under Conner v. Stelly. 

Although counsel for plaintiff filed an opposition brief, he intentionally conceded the issue during oral argument since (i) the case was proceeding as a bench trial, (ii) the judge was already aware of the settlement, and (iii) in an effort to deprive the PCF of any potential appealable issue.  At trial, counsel for plaintiff was able to elicit testimony from the PCF’s expert witnesses (the medical review panel) that if Dr. Barona had admitted fault, then the dialysis center was not at fault.  Counsel for plaintiff suggested in a post trial brief that the appropriate level of fault of the dialysis center could be no more than ten (10%).  The judgment was rendered against the PCF finding only 10% fault against the dialysis center. 
Of course, this case was factually unique in that the issue was whether Dr. Barona knew about the low hematocrit.  If he did, he was at fault since he was the only one who could order a transfusion.  If he did not know, then the dialysis center was at fault for not telling him.  Thus, it was easier to argue that under these facts, Dr. Barona’s admission of fault could only have meant that he did in fact know of the low hematocrit value.

Thus, there is a state district court judgment allowing the quantification of fault against a non-qualified health care provider, but it is likely not very persuading precedent which will aid the PCF or other defendant health care providers given its particular facts.

C. Ramifications Beyond Fault Allocations

Of course, the Conner and Caesar decisions have potentially far reaching and perhaps unintended effects.  Do the holdings in these cases and the language of article 2323 repudiate Stuka’s pronouncement that payment of $100,000 does not provide the PCF with the affirmative right to litigate liability with any other party?  If so, this could have a major chilling effect on releasing other named defendants after payment of $100,000 by one of them.  Plaintiff attorneys cannot risk an assignment of fault by the trier of fact against a health care provider they released without payment when the PCF attempts to blame that health care provider at the subsequent trial.  Defense lawyers are now losing summary judgments for their clients who remain in the suit following payment of $100,000 and an admission of fault by another co-defendant. Moreover, the non-settling physicians are now faced with more potential for exposure when the plaintiff settles with one underlying health care provider for $100,000 and then settles with the PCF for the $400,000 plus medical expenses, thus leaving them as the only remaining defendant.

Finally, the PCF has previously argued that Graham overruled the decision of Rey v. St Paul Fire & Marine Ins. Co., 95-0661(La. App. 4th Cir. 11/16/95); 655 So.2d 109, which held that the PCF could not raise issues of prescription and preemption once a health care provider paid $100,000 in settlement and admitted fault.  Although several courts rejected those arguments (See McGrath v. Excel Home Care, Inc, 01-1270(La. App. 5th Cir. 3/26/02); and Miller v. Southern Baptist Hospital, 00-1352 (La. App. 4th Cir. 11/21/01); 806 So.2d 10), has Conner now given the PCF the ammunition it needs to successfully make these arguments?

In short, the full ramifications and effect of the Conner decision have yet to be determined.  This is especially true when a non-qualified health care provider is involved in the case.  The Stuka court seemed to recognize the potential pitfalls to all parties by allowing the litigation and/or apportionment of fault to proceed once a co-defendant stands up and admits fault.  Surely, if the legislature intended that payment of $100,000 by a health care provider only admitted his fault thereby leaving open the question of other fault, they would have included such language in the statute.  Nevertheless, Conner will be a decision which both sides must consider.