CERTIFIED FOR PARTIAL PUBLICATION
Six days after birth, plaintiff Aidan Ming-Ho Leung suffered irreversible brain damage caused by "kernicterus," a condition that results when an infant's level of "bilirubin" (a waste product of red blood cells which causes jaundice) becomes toxic. Through his guardian ad litem (his mother, Nancy Leung), Aidan sued his pediatrician, Dr. Steven Wayne Nishibayashi, and his professional corporation, Dr. Steven Wayne Nishibayashi, M.D., Inc., alleging that Dr. Nishibayashi was negligent in his care and treatment. Aidan also sued the hospital at which he was born, Verdugo Hills Hospital (the Hospital), alleging that the Hospital was negligent for, inter alia, failing to provide his parents with adequate education on neonatal jaundice and kernicterus, and failing to implement policies to reduce the risk of kernicterus in newborns.
The case was tried to a jury, which found both the Hospital and Dr. Nishibayashi negligent, and awarded damages of $78,375.55 for past medical costs, $250,000 for noneconomic damages, $82,782,000 for future medical care (with a present value of $14 million) and $13.3 million for loss of future earnings (with a present value of $1,154,000). Apportioning fault, the jury found the Hospital 40 percent negligent, Dr. Nishibayashi 55 percent negligent, and plaintiffs parents, Nancy and Kevin Leung, each 2.5 percent negligent.
Ultimately, the court approved a minor's compromise regarding Aidan's settlement with Dr. Nishibayashi, and incorporated the verdict into a periodic payments judgment under Code of Civil Procedure section 667.7, which declared the Hospital jointly and severally liable for 95 percent of all economic damages found by the jury and severally liable for its 40 percent share of noneconomic damages.
As we explain, although the California Supreme Court has criticized the common law release rule as applied to concurrent tortfeasors, the court has not abandoned it. Stare decisis compels us to follow the rule. We therefore reverse that portion of the judgment imposing joint and several liability on the Hospital for Aidan's economic damages. However, we urge the California Supreme Court to grant review, conclusively abandon the release rule, and fashion a new common law rule concerning the effect of a non-good-faith settlement on a nonsettling tortfeasor's liability.
Because this holding does not affect the Hospital's several liability for Aidan's noneconomic damages, we address, in the unpublished portion of our opinion, two other contentions attacking the judgment. In response to those contentions, we conclude that substantial evidence supports the jury's finding that the Hospital's negligence was a substantial factor in causing Aidan's brain damage, and that comments by the trial court neither improperly instructed the jury on causation nor influenced two jurors to change their votes on that issue. We therefore affirm that portion of the judgment that requires the Hospital to pay its proportionate share of Aidan's noneconomic damages.
I. Settlement with and Release of Dr. Nishibayashi
The Hospital contends that common law, rather than Code of Civil Procedure sections 877 and 877.6,
As we explain, although the California Supreme Court has been critical of the release rule and limited its application in some circumstances, the court has not abandoned it with respect to concurrent tortfeasors who produce a single injury. Under the doctrine of stare decisis, we conclude that we remain bound by the Supreme Court's decisions applying the rule, and therefore we reverse the judgment against the Hospital to the extent it requires the Hospital to pay economic damages for which it was jointly and severally liable with Dr. Nishibayashi. At the same time, we urge the California Supreme Court to grant review, abandon the release rule, and fashion a new common law rule concerning the effect of a non-good-faith settlement on a nonsettling tortfeasor's liability.
Before trial, Aidan entered a written "Settlement Agreement and Release" with Dr. Nishibayashi, under which Dr. Nishibayashi would pay the limit of his malpractice insurance policy, $1 million, pursuant to a specified payment schedule during Aidan's life, and would participate as a defendant in the trial. In exchange, Aidan would release Dr. Nishibayashi and his professional corporation from all claims. The settlement was conditioned on the court approving a minor's compromise for Aidan, and on the court finding the settlement to be in good faith under sections 877 and 877.6. It also provided that the release and discharge of Dr. Nishibayashi did not apply to the Hospital.
Dr. Nishibayashi moved for a declaration of good faith settlement. The trial court denied the motion, agreeing with the Hospital that the settlement did not meet the good faith standard of Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 38 Cal.3d 488 [213 Cal.Rptr. 256, 698 P.2d 159] (Tech-Bilt), in that the settlement amount was grossly disproportionate to Dr. Nishibayashi's potential share of liability and to the total expected recovery.
Rather than abandoning the settlement, Aidan and Dr. Nishibayashi elected to pursue it, and amended their agreement to delete the condition requiring the court to declare the settlement to be in good faith, though the condition requiring approval of the minor's compromise remained. On May 9, 2007, Aidan filed a petition to approve the compromise of his claim against Dr. Nishibayashi. On May 22, 2007, shortly before trial, with the consent of Aidan's counsel, the court continued the hearing on the petition in order to have it reviewed by a staff attorney in the probate department. The court stated that a new date for hearing on the petition would be scheduled after the review was complete.
Meanwhile, the trial occurred, and the jury returned its verdict on July 2, 2007, awarding damages and finding Dr. Nishibayashi 55 percent negligent and the Hospital 40 percent. On July 20, 2007, after the court informed Aidan's attorney of recommendations for changes to the proposed special needs trust, Aidan filed a revised petition which was heard on September 21, 2007.
Aidan's counsel argued that the settlement was in Aidan's best interests because although Dr. Nishibayashi was 55 percent liable for the judgment, Aidan's parents had determined that it was economically unfeasible to try to
The Hospital did not oppose the petition, and did not initially argue that the common law release rule would extinguish the Hospital's joint and several liability for Aidan's economic damages. Rather, it argued that if the petition were approved and Aidan settled with Dr. Nishibayashi, then under the terms of the settlement, the Hospital would be relieved of its joint liability for Dr. Nishibayashi's 55 percent share of the economic damages.
After argument, the court granted the petition to approve the minor's compromise, but referred the revised plan for a special needs trust to the probate department for further review. The order approving the minor's compromise was not signed and entered until October 12, 2007.
In the meantime, the parties filed competing versions of the judgment. As part of that debate, the Hospital filed objections to the judgment which invoked the common law release rule and argued that the settlement with and release of Dr. Nishibayashi released the Hospital's joint liability for Aidan's economic damages, leaving only the Hospital's several liability for its proportionate share of the $250,000 in noneconomic damages. Alternatively, the Hospital argued that its liability was reduced (as reflected in Rest.3d Torts, § 16) to its comparative share of economic damages—40 percent. The court rejected the arguments, finding that the common law release rule was not "the current state of the law," and noting that "it would be nice to have a court of appeal opinion on it and maybe this is the case that is going to do it. And I would urge you to go find out." The court entered judgment on November 2, 2007.
The Hospital then moved to vacate the judgment, reiterating its argument that Aidan's settlement with and release of Dr. Nishibayashi released the Hospital's joint and several liability for Aidan's economic damages. The court denied the motion.
Although before enactment of section 877 the court chipped away at the release rule, it never fully repudiated it. Its decisions leave the rule in effect as to concurrent tortfeasors, such as Dr. Nishibayashi and the Hospital, whose independent acts concur to produce a single harm.
In Ash v. Mortensen (1944) 24 Cal.2d 654 [150 P.2d 876] (Ash), the court acknowledged the release rule, but refused to apply it to successive tortfeasors who produced separate, though related, injuries. The court held that the plaintiff's release of the negligent driver in a car accident in which the plaintiff was injured did not bar her malpractice suit against the treating doctors who aggravated the injuries she suffered in the accident. (Id. at pp. 658-659.) The court reasoned that "[a] release of a cause of action against a wrongdoer is not a release of a separate or distinct cause of action against another independent wrongdoer.... We are of the opinion that a release of the original wrongdoer should release an attending doctor from liability for aggravation of the injury `if there has been full compensation for both injuries, but not otherwise.' [Citations.]" (Ibid.)
One year after Ash, in Pellett, supra, 26 Cal.2d 705, the court refused to apply the release rule to a plaintiff's covenant not to execute on any future judgment that might be obtained against one joint tortfeasor—a pledge that was "not strictly a release or a covenant not to sue, although it par[took]
Pellett was followed by Lamoreux, supra, 48 Cal.2d 617, a wrongful death action in which the court again refused to apply the release rule. The court held that the plaintiff's claim against the railroad whose train struck the decedent's car was not barred by the plaintiff's release of the decedent's employer, who had been sued along with the railroad, but who received a release in a collateral workers' compensation proceeding. The court acknowledged that "[s]ome California decisions which followed the general rule that the release, for a consideration, of one of several asserted joint tort feasors bars an action against another have stated that it is immaterial whether the person who made the payment for the release was or was not legally liable." (Id. at p. 627.) Rather than disapproving such decisions, however, the court distinguished them, "because none of them involved the settlement of a claim based upon a special limited liability such as workmen's compensation, the settlement of which does not, as a matter of law, constitute full payment or satisfaction for all the damage suffered." (Ibid.)
In 1957, the same year the court decided Lamoreux, the Legislature enacted section 877. As of that date, the state of the common law, never repudiated by the California Supreme Court, was that a release for consideration of one concurrent tortfeasor who acted with other tortfeasors to cause a single harm barred suit against the others. Section 877 abrogated that rule only as to releases given in "good faith" and "before verdict or judgment." (§ 877.) Later, in 1980, responding to the California Supreme Court's decision in American Motorcycle Assn. v. Superior Court (1978) 20 Cal.3d 578 [146 Cal.Rptr. 182, 578 P.2d 899], the Legislature enacted section 877.6, which, among other things, "codifies the American Motorcycle result by providing that a section 877 settlement bars claims for partial or comparative indemnity as well as for contribution." (Tech-Bilt, supra, 38 Cal.3d at p. 496.) But the California Supreme Court, to date, has not authoritatively abandoned the release rule. To the contrary, as late as 1985, in Mesler, supra, 39 Cal.3d 290, the court implicitly acknowledged that the rule remains part of California common law.
The court in Mesler thus recognized the dubious lineage of the release rule and questioned its wisdom. But the court also acknowledged its continued viability as part of California common law. In summarizing the issue presented in the case and its holding, the court stated: "At issue is the applicability of ... section 877, which abrogates the common law rule that settlement with one alleged tortfeasor bars action against any others claimed liable for the same injury. We conclude that the statute does apply, and thus release of an alleged tortfeasor under these circumstances does not preclude suit against its claimed alter ego." (Mesler, supra, 39 Cal.3d at pp. 294-295, italics added, fn. omitted.) Later in its discussion, the court was even clearer concerning the viability of the release rule: "the alter ego corporation would be dismissed together with the subsidiary under the common law release rule, unless section 877 applies." (Id. at p. 301, italics added.) It thus appears that the court was acknowledging the continued viability of the release rule in California common law.
Our research has disclosed only one decision, River Garden Farms, Inc. v. Superior Court (1972) 26 Cal.App.3d 986 [103 Cal.Rptr. 498] (River Garden Farms), which holds that after the passage of section 877, the common law release rule does not apply to non-good-faith settlements. In River Garden Farms, the trial court approved the minors' compromises for claims against three of four tort defendants, but made no determination whether the settlements were in good faith under section 877, subdivision (a). The case was decided before the 1980 enactment of section 877.6, which specified the procedure for determining good faith. Following the trial court's denial of its motion to dismiss, the fourth defendant petitioned for a writ of mandate, contending that the settlements were not in good faith. (River Garden Farms,
But in a separate portion of the opinion, the court also held that section 877 abrogated the release rule, even for settlements not in good faith. The court reasoned that section 877's purpose of encouraging settlements "cannot co-exist with the rule releasing all upon the release of one," because "[a]n injured party would have little motivation for settling with one defendant at the possible sacrifice of his claim against the other." (River Garden Farms, supra, 26 Cal.App.3d at p. 999.) The court declared: "Only its utter demise and its supersession by statutory controls are consistent with the settlement goal of the contribution law. Section 877 implicitly but firmly dispatched it." (Id. at p. 1000.)
We find several problems in this analysis. First, it ignores the express language of section 877, which by its terms applies to a release only when "given in good faith before verdict or judgment." (§ 877.) Given this language, it is difficult to see how section 877 can be read to "implicitly ... dispatch" the release rule for non-good-faith settlements occurring after verdict or judgment. Second, it does not accord proper respect for stare decisis, and fails to consider that, although the California Supreme Court certainly appeared to be moving toward abandoning the release rule entirely, it did not do so. Third, as we have noted, in Mesler (decided after River Garden Farms), the California Supreme Court necessarily acknowledged that the release rule remained part of California common law. For all these reasons, we find River Garden Farms unpersuasive.
Because the California Supreme Court never repudiated the release rule with respect to concurrent tortfeasors, such as Dr. Nishibayashi and the
Because the release rule applies, we reverse that portion of the judgment imposing joint and several liability on the Hospital for Aidan's economic damages. However, because the Hospital remains liable for its proportionate share of noneconomic damages, we address, in the unpublished portion of our
The judgment is reversed insofar as it imposed joint and several liability on the Hospital for Aidan's economic damages, and affirmed insofar as it imposed several liability on the Hospital for Aidan's noneconomic damages. Otherwise, the judgment is affirmed. Aidan's cross-appeal is dismissed as moot. Each side shall bear its own costs.
Epstein, P. J., and Suzukawa, J., concurred.
As part of the judgment, the court ordered the Hospital to provide security for the periodic payments within 30 days in the form of a bond from an admitted California surety, or an annuity from an approved list of companies sufficient to fund the periodic payments. The court also ordered that if the Hospital failed to post such security, then plaintiff would recover from the Hospital the sum of $14,893,277.56, representing the present value of the judgment. In Leung v. Verdugo Hills Hospital (2008) 168 Cal.App.4th 205 [85 Cal.Rptr.3d 203], we denied the Hospital's petition for writ of supersedeas seeking to compel the trial court to reduce the amount of the appeal bond.
Aidan filed a cross-appeal contending that the trial court erred in permitting the Hospital to purchase an annuity payable to the Hospital as security for its future damage payments. Because we reverse the judgment against the Hospital for Aidan's economic damages, Aidan's cross-appeal is moot.
"(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 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.
"(b)(1) For purposes of this section, the term `economic damages' means objectively verifiable monetary losses including medical expenses, loss of earnings, burial costs, loss of use of property, costs of repair or replacement, costs of obtaining substitute domestic services, loss of employment and loss of business or employment opportunities.
"(2) For the purposes of this section, the term `non-economic damages' means subjective, non-monetary losses including, but not limited to, pain, suffering, inconvenience, mental suffering, emotional distress, loss of society and companionship, loss of consortium, injury to reputation and humiliation."
"(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."
Similarly, in Far West Financial Corp. v. D & S Co., supra, 46 Cal.3d 796, which held that a good faith settlement under sections 877 and 877.6 bars a nonsettling defendant from pursuing any claim for total equitable indemnity against the settling defendant, the court discussed the effect of a non-good-faith settlement in terms of permitting the nonsettling defendant to pursue its equitable indemnity claim. (46 Cal.3d at p. 816 ["If the trial court determines that the proposed settlement is not within the reasonable range of the settling tortfeasor's proportional liability and would leave the less culpable tortfeasor to bear an unfair share of the loss, the trial court may withhold its good faith imprimatur, and the less culpable tortfeasor will be able to proceed with its equitable indemnity claim."].) The court did not mention the common law release rule or its effect of barring the plaintiff's suit against the nonsettling concurrent tortfeasor defendant. But that point does not appear to have been raised, and we do not construe the court's brief comment as authority departing from the release rule.
Milicevich held "that satisfaction of a judgment, entered pursuant to Code of Civil Procedure section 998, does not work a discharge of the liability of defendants who are not parties to the agreement." (Milicevich v. Sacramento Medical Center, supra, 155 Cal.App.3d at p. 1000.) Aidan relies on a short portion of the opinion in which the court refers to "the demise of the doctrine that any release is a retraxit." (Id. at p. 1003.) But he fails to include the accompanying footnote, which states that "the doctrine has largely been supplanted by statute," citing, "e.g., [section] 877." (Id. at p. 1003, fn. 8, italics added.) We agree that the doctrine has "largely been supplanted by statute," because the doctrine does not apply to settlements that qualify under section 877. But for settlements that do not qualify, common law controls, and that common law includes the rule, never authoritatively repudiated by the California Supreme Court, that a release for consideration of one concurrent tortfeasor releases all.
In General Motors Corp. v. Superior Court, supra, 12 Cal.App.4th at page 439, the court held that in giving a release to the negligent driver in a car accident under terms that also released "`any and all person[s], firms and corporations,'" the plaintiff forfeited his claim against General Motors. The court applied the rule of section 877, subdivision (a), that "a release given to one tortfeasor shall not discharge any other party from liability unless its terms so provide." (Ibid.) Because the court did not specifically mention in its opinion that the release was subject to a good faith determination, Aidan suggests that the opinion stands for the proposition that section 877, subdivision (a), applies to a non-good-faith settlement. But the more reasonable assumption is that the release was given in good faith under section 877, subdivision (a), in that the court "reject[ed] the trial court's conclusion that ... section 877, subdivision (a) requires a release agreement to specifically identify the tortfeasors to be released." (12 Cal.App.4th at p. 439.) In any event, nothing in the opinion intimates that the court purported to hold that the common law release rule had been statutorily abrogated for non-good-faith settlements.
Aidan also contends that because the settlement with and release of Dr. Nishibayashi did not become final until the court approved the minor's compromise, which occurred after the jury's verdict, the common law release rule does not apply. According to Aidan, the rule does not apply after a verdict in which the jury has allocated fault, because it can be objectively determined whether the settlement amount paid by one joint tortfeasor is actually received in satisfaction of the jointly caused harm. However, we find no such limitation in the language of the controlling California Supreme Court opinions. Indeed, the rationale of the rule was based not on an objective assessment of whether the settlement paid by one joint tortfeasor actually satisfied the entire harm, but on the artificial presumption that, by law, the plaintiff was deemed to have received the settlement in full satisfaction (see Mesler, supra, 39 Cal.3d at p. 298; Ash, supra, 24 Cal.2d at pp. 659-660), regardless of whether such a full satisfaction was the intent of the parties to the settlement (Bee, supra, 217 Cal. at pp. 101-102). Under that rationale, the timing of the settlement (pre- or postverdict) makes no difference. We agree with Aidan that such an application of the rule makes little sense, but it is for the California Supreme Court to change it.