IN THE SUPREME COURT OF CALIFORNIA
HAMID RASHIDI,
Plaintiff and Appellant,
S214430
v.
Ct.App. 2/4 B237476
FRANKLIN MOSER,
Los Angeles County
Defendant and Appellant.
Super. Ct. No. BC392082
In professional negligence actions against health care providers, recovery of
noneconomic damages is capped at $250,000. (Civ. Code, § 3333.2, enacted as
part of the Medical Injury Compensation Reform Act of 1975 (MICRA).)1 In any
action, liability for noneconomic damages is several only, so that defendants pay
in proportion to their share of fault. (§ 1431.2, part of the Fair Responsibility Act
of 1986, enacted by passage of Proposition 51.)2
Here we consider whether a jury‟s award of noneconomic damages,
reduced by the court to $250,000 under MICRA, may be further diminished by
1
Further statutory references are to the Civil Code, unless otherwise
specified.
2
Noneconomic damages compensate the plaintiff for “pain, suffering,
inconvenience, physical impairment, disfigurement and other nonpecuniary
damage.” (§ 3333.2, subd. (a).) Section 1431.2, subdivision (b)(2) similarly
defines noneconomic damages as “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.”
1
setting off the amount of a pretrial settlement attributable to noneconomic losses,
even when the defendant who went to trial failed to establish the comparative fault
of the settling defendant. The Court of Appeal held that such a further reduction is
required by the MICRA cap.
We disagree. It would be anomalous to allow a defendant to obtain a setoff
against damages for which he is solely liable. Neither the text nor the history of
section 3333.2 reflects such an intent. Rather, the Legislature sought to address
the problem of unpredictable jury awards. The limitation on noneconomic
damages restrains settlements indirectly, by providing a firm ceiling on potential
liability as a basis for negotiation. Only noneconomic damages awarded in court
are actually capped.
I. BACKGROUND
A. Trial Court Proceedings
According to the complaint, 26-year-old Hamid Rashidi went to the
emergency room at Cedars-Sinai Medical Center (Cedars-Sinai) in April 2007
with a severe nosebleed. He was treated and discharged, but returned the next
month with the same symptom. Dr. Franklin Moser examined him and
recommended surgery. In an operation performed the same day, Moser ran a
catheter through an artery in Rashidi‟s leg up into his nose. Tiny particles were
injected through the catheter to irreversibly block certain blood vessels. The
particles were manufactured by Biosphere Medical, Inc. (Biosphere Medical).
When Rashidi awoke after surgery, he was permanently blind in one eye.
Rashidi sued Moser and Cedars-Sinai for medical malpractice and medical
battery. He sued Biosphere Medical for product liability, failure to warn,
negligence per se, breach of express and implied warranty, and misrepresentation.
The theory of liability against Biosphere Medical was that its particles were able
to travel through very small blood vessels and collateral veins, causing a
2
significant risk they would migrate to places other than the intended sites. They
did so here, causing Rashidi‟s blindness. Rashidi claimed Biosphere Medical had
failed to disclose this risk, or the fact that the particles were irregular in size.
Instead it marketed them as being uniform, allowing particular arteries to be
accurately targeted.
Rashidi settled with Biosphere Medical for $2 million and with Cedars-
Sinai for $350,000. The case went to trial against Moser alone. Moser presented
no evidence of Cedars-Sinai‟s fault, and the court ruled that the evidence was
insufficient to support instructions on Biosphere Medical‟s degree of fault. The
jury found that Moser‟s negligence caused Rashidi‟s injury. It awarded $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, conforming to the MICRA cap.
Moser sought offsets against the judgment for the pretrial settlements with
Cedars-Sinai and Biosphere Medical. The court rejected this claim, finding no
basis for allocating the settlement sums between economic and noneconomic
losses, and noting that the jury made no finding as to the settling defendants‟
proportionate fault. Moser appealed, contending he was entitled to offsets against
both the economic and noneconomic damage awards. He did not dispute the
ruling that he had made an insufficient showing of comparative fault on the part of
Cedars-Sinai or Biosphere Medical. Rashidi cross-appealed, challenging the
constitutionality of MICRA.
B. The Court of Appeal Decision
The Court of Appeal held that offsets were required. Code of Civil
Procedure section 877 allows a nonsettling tortfeasor to set off the amount of a
jointly liable tortfeasor‟s settlement against damages awarded at trial. However,
tortfeasors are jointly liable for only economic damages. Civil Code section
3
1431.2 imposes “a rule of strict proportionate liability” on noneconomic damages.
(DaFonte v. Up-right, Inc. (1992) 2 Cal.4th 593, 600.) “[E]ach defendant is liable
for only that portion of the plaintiff‟s noneconomic damages which is
commensurate with that defendant‟s degree of fault for the injury.” (Evangelatos
v. Superior Court (1988) 44 Cal.3d 1188, 1198.) 3 Accordingly, as the Court of
Appeal recognized, when a pretrial settlement does not differentiate between
economic and noneconomic losses, a postverdict allocation is required because
“only the amount attributable to the joint responsibility for economic damages
may be used as an offset.” (Ehret v. Congoleum Corp. (1999) 73 Cal.App.4th
1308, 1320.)
A widely accepted method for making such a postverdict allocation was
provided in Espinoza v. Machonga (1992) 9 Cal.App.4th 268, 276–277
(Espinoza). The percentage of the jury‟s award attributable to economic damages
is calculated and applied to the settlement, yielding the amount that the nonsettling
defendant is entitled to offset. (Espinoza, at p. 277; see Jones v. John Crane, Inc.
(2005) 132 Cal.App.4th 990, 1006; Ehret v. Congoleum Corp, supra, 73
Cal.App.4th at p. 1320; Poire v. C.L. Peck/Jones Brothers Construction Corp.
(1995) 39 Cal.App.4th 1832, 1838-1839.) Following this formula, the Court of
Appeal determined that the percentage of Rashidi‟s award attributable to economic
damages was 8.62 percent ($125,000 in economic damages divided by the total
award of $1,450,000). Applying that percentage to the $2 million settlement with
Biosphere Medical, the court concluded that $172,400 of the settlement was for
3
“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.”
(§ 1431.2, subd. (a).)
4
economic losses, completely offsetting the jury‟s $125,000 economic damages
award. Rashidi does not challenge this aspect of the judgment.
The court performed a different calculation for the Cedars-Sinai settlement.
Cedars-Sinai, like Moser and unlike Biosphere Medical, is a health care provider
protected by MICRA. Therefore, the court first reduced the jury‟s award of
noneconomic damages to $250,000 under section 3333.2. It added the economic
damages of $125,000 to that amount, and determined that economic damages were
33.33 percent of the reduced total award. Applying that ratio to the $350,000
Cedars-Sinai settlement, the court allocated $116,655 of the settlement to
economic losses and the remaining $233,345 to noneconomic losses.
The court then considered the intersection of the MICRA cap on
noneconomic damages with the rule of section 1431.2 that liability for
noneconomic damages is not joint, but several. It acknowledged that ordinarily
each health care provider would pay a share of the noneconomic damages based
on its own comparative fault. (Gilman v. Beverly California Corp. (1991) 231
Cal.App.3d 121, 128–130.) The court also noted that “ „[a] defendant bears the
burden of proving affirmative defenses and indemnity cross-claims.
Apportionment of noneconomic damages is a form of equitable indemnity in
which a defendant may reduce his or her damages by establishing others are also
at fault for the plaintiff‟s injuries. . . .‟ (Wilson v. Ritto (2003) 105 Cal.App.4th
361, 369.)”4
Here, Moser failed to establish that any other defendant was at fault. Thus,
section 1431.2 would require him to pay the entire amount of the $250,000
4
See Western Steamship Lines, Inc. v. San Pedro Peninsula Hospital (1994)
8 Cal.4th 100, 118 (indemnity plaintiff bears burden of proving indemnitor‟s
fault); Conrad v. Ball Corp. (1994) 24 Cal.App.4th 439, 444 (defendant seeking
offset under § 1431.2 must prove each fact essential to recovery).
5
noneconomic damage award, unless MICRA demanded a different result. The
court noted that nothing in section 3333.2 addresses the proportionate share each
health care provider must pay for noneconomic damages. The statute sets an
absolute limit on the total amount of damages for noneconomic loss an injured
plaintiff may recover from all defendant health care providers in a single action.
The court observed, “This serves the purpose of MICRA: „to reduce the cost of
medical malpractice litigation, and thereby restrain the increase in medical
malpractice insurance premiums.‟ (Fein v. Permanente Medical Group (1985) 38
Cal.3d 137, 159.)”
Rashidi relied on Hoch v. Allied-Signal, Inc. (1994) 24 Cal.App.4th 48
(Hoch). The Hoch plaintiffs sought only noneconomic damages at trial after
settling with several defendants for a total of $382,500. The jury returned a
damages award of $500,000, and the court entered judgment against the
nonsettling defendant for $175,000, consistent with the jury‟s finding that it was
35 percent at fault. The trial court refused to set off the settlements against the
judgment. (Id. at p. 62.) On appeal, the nonsettling defendant contended the
plaintiffs had obtained a windfall because their total recovery ($557,500, including
the settlements), exceeded the amount of damages awarded by the jury. (Id. at p.
66.)
The Hoch court disagreed. It reasoned in part that comparing the total
recovery with the jury‟s award was inappropriate, because “ „settlement dollars are
not the same as damages. Settlement dollars represent a contractual estimate of
the value of the settling tortfeasor‟s liability and may be more or less than the
proportionate share of the plaintiff[‟]s damages. The settlement includes not only
damages, but also the value of avoiding the risk, expense, and adverse public
exposure that accompany going to trial. There is no conceptual inconsistency in
allowing a plaintiff to recover more from a settlement or partial settlement than he
6
could receive as damages.‟ ” (Hoch, supra, 24 Cal.App.4th at pp. 67-68, quoting
Duncan v. Cessna Aircraft Co. (Tex. 1984) 665 S.W.2d 414, 431–432.)
The Court of Appeal here was not persuaded. Noting that neither Hoch nor
Duncan involved a cap on damages like MICRA‟s, the court said, “MICRA does
not distinguish between settlement dollars and judgments; it addresses a plaintiff‟s
total recovery for noneconomic losses.” The court concluded that MICRA, as the
more specific statute, must be read as an exception to section 1431.2‟s more
general limitation on liability for noneconomic damages according to
proportionate fault. It modified the judgment to reflect a deduction of $233,345
for the part of the Cedars-Sinai settlement attributable to noneconomic losses,
resulting in a total award to Rashidi of $16,655. The court rejected Rashidi‟s
constitutional challenge to MICRA.
We granted Rashidi‟s petition for review, limiting the question to the
propriety of the setoff against noneconomic damages granted by the Court of
Appeal.
II. DISCUSSION
The relevant MICRA provisions are these:
“(a) In any action for injury against a health care provider based on
professional negligence, the injured plaintiff shall be entitled to recover
noneconomic losses to compensate for pain, suffering, inconvenience, physical
impairment, disfigurement and other nonpecuniary damage.
“(b) In no action shall the amount of damages for noneconomic losses
exceed two hundred fifty thousand dollars ($250,000).” (§ 3333.2.)
Rashidi argues that the plain terms of section 3333.2 distinguish between
“losses” and “damages.” He contends he was entitled to recover his
“noneconomic losses” without limitation by way of settlement under subdivision
(a), while his recovery of “damages for noneconomic losses” at trial was limited
7
to $250,000 under subdivision (b). If the statute is read this way, the conflict
discerned by the Court of Appeal between sections 1431.2 and 3333.2 does not
exist. With no cap on settlement recoveries, Rashidi would be entitled to the full
amounts of both the noneconomic portion of the Cedars-Sinai settlement, under
the Espinoza formula, and the capped award of noneconomic damages at trial, for
which Moser was solely liable under section 1431.2 because he failed to establish
fault on the part of any other defendant.
Moser argues that subdivisions (a) and (b) of section 3333.2 are both
concerned with a plaintiff‟s total recovery in the entire “action.” He claims the
Legislature used the terms “losses” and “damages” interchangeably. Moser
contends that recovery should not vary depending on the number of health care
provider defendants, and that permitting a plaintiff to recover more than $250,000
in noneconomic losses by settling with one defendant and going to trial with
another would subvert MICRA‟s purpose.
Rashidi‟s reading of section 3333.2 is the more reasonable. “Ordinarily,
where the Legislature uses a different word or phrase in one part of a statute than it
does in other sections or in a similar statute concerning a related subject, it must be
presumed that the Legislature intended a different meaning. (Committee of Seven
Thousand v. Superior Court (1988) 45 Cal.3d 491, 507.)” (Campbell v. Zolin
(1995) 33 Cal.App.4th 489, 497.) The distinction between “damages,” which are
capped under subdivision (b) of section 3333.2, and “losses,” which are addressed
in subdivision (a), is well understood. “Loss” is the generic term, which includes
“damage” as a subset. (Nordahl v. Department of Real Estate (1975) 48
Cal.App.3d 657, 664.)
“[T]he term „damages‟ . . . , both in its legal and commonly understood or
„ “ordinary and popular sense,” ‟ is limited to „money ordered by a court‟ . . . .”
(County of San Diego v. Ace Property & Casualty Ins. Co. (2005) 37 Cal.4th 406,
8
417, quoting Certain Underwriters at Lloyd’s of London v. Superior Court (2001)
24 Cal.4th 945, 969; see 24 Cal.4th at p. 962 [“ „[d]amages‟ exist traditionally
inside of court”].) Noneconomic damages, in particular, are ascertainable only at
trial. “They are inherently nonpecuniary, unliquidated and not readily subject to
precise calculation. The amount of such damages is necessarily left to the
subjective discretion of the trier of fact.” (Greater Westchester Homeowners
Assn. v. City of Los Angeles (1979) 26 Cal.3d 86, 103; see Walnut Creek Manor v.
Fair Employment & Housing Com. (1991) 54 Cal.3d 245, 263 [noneconomic
damages “defy a fixed rule of quantification” and are traditionally left to the trier
of fact].) Accordingly, the ordinary meaning of the statutory terms indicates that
the noneconomic “damages” identified in section 3333.2, subdivision (b) are
limited to amounts awarded by a court.
It is clear that the Legislature knew how to include settlement dollars when
it designed limits for purposes of medical malpractice litigation reform. Business
and Professions Code section 6146, subdivision (a), a MICRA provision capping
the contingency fees of plaintiffs‟ counsel, specifies that its fee limitations “shall
apply regardless of whether the recovery is by settlement, arbitration, or
judgment . . . .” (See Roa v. Lodi Medical Group, Inc. (1985) 37 Cal.3d 920, 923-
924.) No similar provision appears in section 3333.2. “ „Where a statute, with
reference to one subject contains a given provision, the omission of such provision
from a similar statute concerning a related subject is significant to show that a
different intention existed.‟ ” (City of Port Hueneme v. City of Oxnard (1959) 52
Cal.2d 385, 395; accord, Committee of Seven Thousand v. Superior Court, supra,
45 Cal.3d 491, 507.)
Neither the parties nor amici curiae direct us to anything in the legislative
history of section 3333.2 that indicates an intent to include settlement recoveries in
the cap on noneconomic damages. To the contrary, we have noted that the
9
Legislature had jury awards in mind when it enacted the cap, and that only a
collateral impact on settlements was contemplated. In Fein v. Permanente
Medical Group, supra, 38 Cal.3d 137, where the constitutionality of the cap was
upheld, this court observed that one problem identified in the legislative hearings
was the unpredictable size of large noneconomic damage awards, “resulting from
the inherent difficulties in valuing such damages and the great disparity in the
price tag which different juries placed on such losses. The Legislature could
reasonably have determined that an across-the-board limit would provide a more
stable base on which to calculate insurance rates. Furthermore, as one amicus
suggests, 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.‟ ” (Id. at
p. 163.)
Thus, the Legislature was primarily concerned with capricious jury awards
when it established the MICRA cap. However, excluding settlement dollars from
the cap does not leave settlements unaffected. The prospect of a fixed award of
noneconomic damages not only increases plaintiffs‟ motive to settle, as noted in
Fein, but also restrains the size of settlements. Settlement negotiations are based
on liability estimates that are necessarily affected by the cap. By placing an upper
limit on the recovery of noneconomic damages at trial, the Legislature indirectly
but effectively influenced the parties‟ settlement calculations.
Allowing the proportionate liability rule of section 1431.2 to operate in
conjunction with the cap on damages imposed by section 3333.2 enhances
settlement prospects. As Rashidi points out, if nonsettling defendants were
assured of an offset against noneconomic damages regardless of their degree of
fault, an agreement with one defendant would diminish the incentive for others to
settle. Conversely, if all defendants are responsible for their proportionate share of
10
noneconomic damages, settlements are encouraged. Nonsettling defendants must
weigh not only their exposure to liability for noneconomic damages within the
limits imposed by section 3333.2, but also the prospect of having to prove the
comparative fault of settling defendants in order to obtain a reduction under
section 1431.2.
Our reading of the statutes is confirmed by considering an alternate
scenario, where it is clear the MICRA cap could not function effectively as a limit
on recovery for noneconomic losses by way of settlement. Suppose the Cedars-
Sinai and Biosphere Medical settlements in this case were interchanged, so that
Cedars-Sinai settled for $2 million and Biosphere Medical for $350,000. In that
circumstance, under either of the allocation formulas applied by the Court of
Appeal, the portion of the Cedars-Sinai settlement attributable to noneconomic
losses would far exceed the $250,000 cap imposed by section 3333.2. Yet no
MICRA provision, and no other statute, authorizes a posttrial reduction in the
amount of a settlement.
We conclude that the cap imposed by section 3333.2, subdivision (b)
applies only to judgments awarding noneconomic damages. Here, the cap
performed its role in the settlement arena by providing Cedars-Sinai with a limit
on its exposure to liability. Had Moser established any degree of fault on his
codefendants‟ part at trial, he would have been entitled to a proportionate
reduction in the capped award of noneconomic damages. The Court of Appeal
erred, however, in allowing Moser a setoff against damages for which he alone
was responsible.
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III. DISPOSITION
The Court of Appeal‟s judgment is reversed insofar as it reduced the award
of noneconomic damages below $250,000, and affirmed in all other respects.
CORRIGAN, J.
WE CONCUR:
CANTIL-SAKAUYE, C. J.
BAXTER, J.
WERDEGAR, J.
CHIN, J.
LIU, J.
DETJEN, J.*
______________________________
*
Associate Justice of the Court of Appeal, Fifth Appellate District, assigned
by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
12
See next page for addresses and telephone numbers for counsel who argued in Supreme Court. Name of Opinion Rashidi v. Moser
__________________________________________________________________________________
Unpublished Opinion
Original Appeal
Original Proceeding
Review Granted XXX 219 Cal.App.4th 1170
Rehearing Granted
__________________________________________________________________________________
Opinion No.
S214430Date Filed: December 15, 2014
__________________________________________________________________________________
Court:
SuperiorCounty: Los Angeles
Judge: Richard L. Fruin, Jr.
__________________________________________________________________________________
Counsel:
Balaban & Speilberger, Daniel Balaban, Andrew J. Speilberger; Esner, Chang & Boyer, Stuart B. Esnerand Holly N. Boyer for Plaintiff and Appellant.
Thorsnes Bartolotta McGuire and Benjamin I. Siminou for Michael J. Barger as Amicus Curiae on behalf
of Plaintiff and Appellant.
Steven B. Stevens for Consumer Attorneys of California as Amicus Curiae on behalf of Plaintiff and
Appellant.
Reback, McAndrews, Kjar, Warford & Stockalper, Robert C. Reback; Cole Pedroza, Curtis A. Cole,
Kenneth R. Pedroza, Matthew S. Levinson and Cassidy C. Davenport for Defendant and Appellant.
Tucker Ellis, E. Todd Chayet, Rebecca A. Lefler, Lauren H. Bragin and Corena G. Larimer for California
Medical Association, California Dental Association, California Hospital Association and American
Medical Association as Amici Curiae on behalf of Defendant and Appellant.
Manatt, Phelps & Phillips and Harry W.R. Chamberlain II for Association of Southern California Defense
Counsel as Amicus Curiae on behalf of Defendant and Appellant.
Fred J. Hiestand for The Civil Justice Association of California as Amicus Curiae on behalf of Defendant
and Appellant.
1
Counsel who argued in Supreme Court (not intended for publication with opinion):
Stuart B. EsnerEsner, Chang & Boyer
234 East Colorado Boulevard, Suite 750
Pasadena, CA 91101
(626) 535-9860
Kenneth R. Pedroza
Cole Pedroza
2670 Mission Street, Suite 200
San Marino, CA 91108
(626) 431-2787
2
Petition for review after the Court of Appeal modified and affirmed the judgment in a civil action. The court limited review to the following issue: If a jury awards the plaintiff in a medical malpractice action non-economic damages against a healthcare provider defendant, does Civil Code section 3333.2 entitle that defendant to a setoff based on the amount of a pretrial settlement entered into by another healthcare provider that is attributable to non-economic losses or does the statutory rule that liability for non-economic damages is several only (not joint and several) bar such a setoff?
| Date: | Docket Number: |
| Mon, 12/15/2014 | S214430 |
| Opinion Authors | |
| Opinion | Justice Carol A. Corrigan |
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| Apr 13, 2015 Annotated by Evan Stein | FACTS Plaintiff Hamid Rashidi went to Cedars-Sinai Medical Center's emergency room in April 2007, complaining of a severe nosebleed. After returning with similar symptoms a month later, Dr. Franklin Moser suggested surgery. During the surgery, Moser ran a catheter through an artery in Rashidi's leg up to his nose. Next, tiny particles—manufactured by Biosphere Medical, Inc.—were injected through the catheter in an effort to permanently block blood vessels in the nose. But the particles apparently traveled through small blood vessels to one of Rashidi's eyes, resulting in permanent blindness. Rashidi sued Moser, Cedars-Sinai, and Biosphere Medical. He alleged medical malpractice and medical battery against Moser and Cedars-Sinai; and product liability, failure to warn, negligence per se, breach of express and implied warranty, and misrepresentation against Biosphere Medical. Rashidi settled with Biosphere Medical for $2 million and with Cedars-Sinai for $350,000. Only Moser went to trial on the allegations. PROCEDURAL HISTORY At trial, Moser presented no evidence of Cedars-Sinai's fault, and insufficient evidence to support an instruction on Biosphere Medical's fault. The jury then found Moser liable for Rashidi's injuries, and awarded $125,000 for future medical care, $331,250 for past noneconomic damages, and $993,750 for future noneconomic damages. The Medical Injury Compensation Reform Act of 1975, codified in relevant part at Section 3333.2 of the California Civil Code, places a $250,000 cap on noneconomic damages found at trial. In accordance with this cap, the trial court reduced the jury's noneconomic damages awards to $250,000. But Moser requested a further setoff for Rashidi's pretrial settlements, reasoning that these amounts should count against the $250,000 cap for noneconomic damages, as well as reduce his joint liability for economic damages. The trial court rejected the claim since no basis existed for determining what part of the settlements constituted economic or noneconomic harms, and the jury hadn't found either of the settling parties liable. Moser appealed. The Court of Appeal reversed, holding first that the settlements could be allocated between economic and noneconomic damages using varying calculations. Next, the economic damages from both settlements should be applied to completely offset Moser's economic damages liability. And finally, the noneconomic damages paid by Cedars-Sinai—the only other medical provider covered by MICRA—should partially offset the jury's noneconomic damages award. This resulted in a total award of $16,655 for Rashidi. Rashidi petitioned for review in the Supreme Court only on the noneconomic damages issue. ISSUES 1. Does MICRA require the reduction of a jury's noneconomic damages award in light of another defendant's pretrial settlement, even when the defendant who went to trial failed to establish the comparative fault of the settling defendant? HOLDING No. MICRA was enacted to address the problem of unpredictable jury awards, and restrains settlements only indirectly. So MICRA's cap applies only to damages awarded at trial. Furthermore, only a defendant who establishes—at trial—the settling defendant's degree of fault is entitled to a reduction in capped damages. The Court of Appeal is reversed. ANALYSIS In addition to MICRA, several California laws affected the Court of Appeal's ruling. Code of Civil Procedure section 877 allows a nonsettling defendant to set off the amount of a jointly liable tortfeasors settlement against damages awarded at trial. But Civil Code section 1431.2 imposes a "rule of strict proportionate liability" on noneconomic damages. While the Court of Appeal recognized the requirement of proportionate—as opposed to joint—liability for noneconomic damages, it found that MICRA's $250,000 cap acted as a strict ceiling on a plaintiff's possible recovery, including both settlement dollars and damages awarded at trial. In other words, it held that MICRA created an exception to section 1431.2's proportionate liability requirement. The Supreme Court reversed this holding. It held that, read properly, MICRA does not conflict with section 1431.2. Rather, MICRA applies only to "damages" awarded at trial, not "losses" recovered through settlement. Indeed MICRA's language entitles plaintiffs to "recover noneconomic losses to compensate for [pain and suffering]," yet limits the amount of "damages" to $250,000. From these sections the Court found that MICRA distinguishes between damages and losses, entitling Rashidi to unlimited settlement dollars. In support of this point, the Court explained that damages—especially noneconomic damages—are ascertainable only at trial. "[Noneconomic damages] are inherently nonpecuniary, unliquidated and not readily subject to precise calculation. The amount of such damages is necessarily left to the subjective discretion of the trier of fact.” (Greater Westchester Homeowners Assn. v. City of Los Angeles (1979) 26 Cal.3d 86, 103.) So it makes sense to distinguish between damages awarded at trial and losses more generally. In addition, the legislative history of MICRA supports Rashidi's argument. The Legislature intended MICRA to apply only to jury awards—thought to be unpredictable or arbitrary—not settlements. (Fein v. Permanente Medical Group (1985) 38 Cal.3d 137.) The $250,000 cap clearly affects settlements, albeit indirectly, since no party would rationally settle for more than the capped limit. But MICRA does not directly limit settlement amounts or create a setoff requirement for damages found at trial. Furthermore, this result makes sense from a policy perspective. Enforcing section 1431.2's proportionate liability requirement enhances settlement prospects. For if nonsettling defendants were assured of an offset against noneconomic damages regardless of their degree of fault, any settlements would diminish other defendants' incentive to settle. Conversely, under Rashidi's theory—the correct one—settlements are encouraged, since nonsettling defendants must weigh both their potential liability for noneconomic damages and the prospect of proving the comparative fault of settling defendants. In conclusion, the Court of Appeal is reversed insofar as it reduced Rashidi's noneconomic damages award against Moser below $250,000. If and only if Moser could have proven his codefendants' comparative fault would he be entitled to a proportionate reduction in noneconomic damages. Tags: California Civil Code § 3333, Civil Code § 1431, code of civil procedure § 877, comparative fault, damages caps, damages setoffs, joint and several liability, jury award reductions, jury awards, Medical Injury Compensation Reform Act of 1975, medical malpractice, MICRA, noneconomic damages, noneconomic losses, pain and suffering, professional negligence, settlements, joint liability Annotation by Evan Stein |
