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August 31, 2012 / Jordan Parkhurst

California Changes Rule on Multiple Defendant Liability

The California Supreme Court last week abandoned the application of “,” an old doctrine borrowed from the British court system that previously prevented a plaintiff from recovering against multiple defendants if the claim was settled with any of them.  With this change, Plaintiff may now recover the full amount of damages suffered against all defendants regardless of whether a settlement occurs with one of them.

In the case before the Supreme Court, the medical malpractice of a doctor and hospital were at issue with respect to their care of an infant child of the Leung family of Los Angeles.  The Leung’s infant suffered permanent brain damage after his parents alerted their pediatrician about his jaundiced appearance, but were told by the doctor to wait until the infant’s scheduled appointment in a few days.  Over the next two days, the infant’s jaundiced appearance failed to improve and he became lethargic and unwilling to feed. The Leungs called their pediatrician again and he instructed them to take the infant immediately to the emergency room. By that time, however, the infant had already developed kernicterus, a rare condition that develops in infants with severe jaundice and may, as in this case, result in brain damage. The trial court found the pediatrician 55% at fault, the original hospital 40% at fault and the infant’s parents 5% at fault.

Before the jury reached a verdict of $15 million, the Leungs settled with their pediatrician for $1 million, the maximum under the doctor’s insurance policy. The hospital appealed, arguing that the result would require them to pay the overwhelming majority of damages, despite the jury’s conclusion that the pediatrician was the primary wrongdoer. The appeals court reluctantly agreed, but asked the Supreme Court to repudiate the “Release Rule.”

In an unanimous ruling, the Supreme Court abandoned the “Release Rule,” because the rule produced such a grossly unjust result.  Under the rule, the Leungs would have “released” the hospital of all responsibility to pay the entire $15 million jury award, simply because of their decision to settle with their pediatrician beforehand, and thus found themselves limited to just $1 million in damages.

The Supreme Court took the position that the abandonment of the “Release Rule” did not mean that the hospital must pay the bill entirely.  The Court reiterated the existing principle that defendants who feel they are the unfair victims of a disproportionate settlement may bring actions for contribution against the settling party. An action for contribution exists where a plaintiff receives a settlement or judgment against one defendant, who believes that another defendant shares in the responsibility. The first defendant then brings an action effectively asking the second defendant to “contribute” to the responsibility of paying the plaintiff.

If you have been hurt or injured due to the wrongdoing of multiple individuals or entities, contact Khorrami, LLP to consider your rights.

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