IMPORTANT
INFORMATION
FOR PHYSICIANS
(Archives - continued)
Court Defines At-Will Employment
In Guz v. Bechtel National, Inc.
(97 CDOS 3552), the First Appellate District of the Court of Appeal held that evidence of
long-term employment, consistent promotions, salary increases, and recognition for
outstanding work, coupled with personnel policies indicating that employment should be
terminated only for cause, created a triable issue of fact as to whether a terminated
employee was an at-will employee.
The absence of any of the above evidence is not determinative of at-will employment. The
question of whether employment is at-will is determined by the totality of the
circumstances.
The Court held that the absence of oral assurances of continued employment for good work
alone was not determinative of at-will employment.
Delbert C. Gee, July 1997
$250,000 MICRA Limit Increased
In Salgado v. County of Los Angeles, the California
Supreme Court unanimously held that the statutory $250,000 limit on non-economic damages
in medical malpractice cases applied to limit only the present cash value, and not the
gross value, of future pain and suffering awards.
In Salgado, the jury awarded a medical malpractice plaintiff $10,000 for
past pain and suffering plus $550,000 for future pain and suffering. Under
MICRA,
the trial court found that the $250,000 limit on non-economic damages reduced the jury's
award for pain and suffering to the $10,000 for past pain and suffering plus $240,000 for
future pain and suffering. The court then ordered the $240,000 paid in equal yearly
payments over the 66.8 year life expectancy of the plaintiff under MICRA. The
annuity purchased by defendant to fund the periodic payments ordered by the trial court
cost defendant only $61,785.
However, the Supreme Court held that the $250,000 limit applied only to limit
defendant's liability and concluded that the plaintiff would be entitled to periodic
payments over his lifetime based upon a present cash value of $240,000 for his future pain
and suffering. Accordingly, defendant was liable for either a $240,000 lump sum
payment, or an annuity for plaintiff that cost defendant $240,000, not $61,785, for
plaintiff's future pain and suffering.
The Court suggested that future jury verdicts in medical malpractice cases specify both
the present cash value and the gross value of future damage awards to clearly establish
the amount in periodic payments owed to plaintiff.
In our opinion, Salgado has greatly expanded the $250,000 MICRA cap on
recoveries for pain and suffering in cases involving catastrophic injuries. For
example, the insurer in Salgado thought that the $250,000 MICRA cap reduced its
liability for the plaintiff's future pain and suffeirng to $61,785. Instead, the
Supreme Court reinterpreted the $250,000 cap under MICRA to expand the insurer's liability
for plaintiff's future pain and suffering to $240,000.
The $250,000 limit previously limited awards for past and future pain and suffering to
a total of $250,000. The $250,000 limit now applies only to limit awards for past
pain and suffering plus the present cash value of future pain and suffering, to a total of
$250,000.
Parties who wish to settle a medical malpractice case will have to identify the present
cash value of a plaintiff's future pain and suffering before determining whether the
$250,000 limit on past and future pain and suffering awards under MICRA is
applicable. Defendants who are found liable for medical malpractice verdicts that
include an award for future pain and suffering must determine whether the periodic payment
schedule requested by the plaintiff can actually be funded by an annuity.
Delbert Gee, December 1998
Courtesy
Defense Entitled to Cumis Counsel
In Mosier v. SCPIE (98 CDPS 3574), an uninsured physician was provided a
courtesy defense by the insurer of two other codefendant physicians in a medical
malpractice case. The attorney hired by the insurer had been regularly retained to
defend their insureds in other cases.
The attorney recommended that the uninsured physician admit liability at trial and the
jury found him to be 70% at fault. The uninsured physician filed for bankruptcy and
sued the insurer for breach of fiduciary duty and fraud, claiming that his attorney acted
to protect the insuredsí interests and not his own. The Second Appellate District
held that when the insurer agreed to provide the uninsured physician with a courtesy
defense, it created a Cumis relationship that supported the lawsuit against the insurer.
The jury reallocated the uninsured physicianís percentage of fault for the malpractice
at 40%. However, the Court held that the uninsured physician had not been damaged
because he would have declared bankruptcy even if the jury in the malpractice case had
allocated his fault at 40% rather than 70%.
Nevertheless, this opinion is significant because if an insurer is to provide an
uninsured defendant with a courtesy defense, it must retain independent counsel to
represent the uninsured defendant.
Delbert C. Gee, July 1998
Court of Appeal Says Letter to
Billing Entity Is Not Valid Notice of Intent to Commence Litigation
On 24 July 1997 a California Court of Appeal concluded that a letter sent to a
physician's billing entity warning him of the intention to file a malpractice suit was not
valid notice as required by Code of Civil Procedure ß364. Because the notice was found to
be defective, the plaintiffs did not enjoy the tolling of the statute of limitations
created by proper notice under 364, and their case was dismissed against the defendant as
untimely under the controlling statute of limitations.
The court noted that a plaintiff can always obtain an address for a California physician
from the Medical Board of California, and that by statute and regulation, physicians are
required to keep the Medical Board apprised of their current address. The court opined
that a physician could not complain of non-receipt of notice sent to his or her official
address on file with the Medical Board.
Zaroug Sondra Derderian, et al. v. William Dietrick, M.D. 97 CDOS 5909
Brock Phillips, July 1997
California
Supreme Court Issues Opinion on Statute of Limitations
The California Supreme Court has issued another decision concerning the statute of
limitations in medical malpractice cases. In Russell v. Stanford University Hospital
(1997) 97 CDOS 4254, the court ruled that the three year statute of limitations which runs
from the date of the injury is tolled, rather than "extended" when the plaintiff
provides the statutory 90 day notice of intent to sue within the last 90 days of the
running of the three years. Thus a plaintiff who provides the 90 day notice at any time
within the last 90 days prior to the expiration of the 3 year statute of limitations
automatically gets an additional 90 days at the end of the three year limit in which to
file his or her lawsuit.
Brock Phillips, July 1997
Defense Verdict in Wrongful Death Medical Malpractice
Trial
Bill Sturgeon obtained a defense verdict for a physician
specializing in ear, nose, and throat, in a wrongful death medical malpractice case
involving an alleged failure to diagnose cancer of the larynx before a San Francisco
Superior Court jury in September 1998. Plaintiff asked the jury to award $3.3 million.
Vesting
Rule in Health Plans Rejected By Court
Delbert Gee of Sturgeon, Keller, Phillips, Gee
& O'Leary obtained summary judgment in August 1997 for a health plan in the
County of Placer Superior Court in a case involving an allegation by a health
plan member that her right to plan benefits became vested at the time of her
catastrophic injury and could not be modified or reduced a year later.
Relying upon the cases of Fields v. Blue Shield and Fraker v. Sentry Life, the
Superior Court held that the plan language unambiguously allowed the health plan
to change or modify the plan, and rejected the plan member's attempt to create a
general rule of vesting in health and managed care contracts in California.
The plan member is expected to appeal the decision to the Court of Appeal in an
attempt to impose a general rule of vesting on all health and managed care plans
in California.
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