EMAIL TO A FRIEND COMMENT

 

Expert Required: Reasonableness of Settlement and Third-Party Damages Responsibility


An employee hit a woman with a hand cart, and after the accident the woman commenced a course of treatment with various health care providers. She underwent a lumbar laminectomy and bilateral foraminotomies on various levels of her spine. After the surgery she developed neurologic symptoms including severe postural headaches.

 

Shortly after the first surgery, she underwent another surgery, during which multiple dural tears were identified and repaired. After the second surgery the woman began to experience low back pain, which worsened over time and became severe. She also had occasional pain radiating into her lower extremities.

 

For about seven months after her second surgery, the woman sought treatment for severe and persistent pain, which required use of prescription pain medications. She also complained of other symptoms, including nausea and body aches. During this period, no diagnosis was made.

 

Seven months after the second surgery she was admitted to the hospital. A biopsy was performed. The biopsy confirmed a diagnosis of osteomyelitis and discitis at the L3–L4 level of plaintiff's spine. In addition, an MRI of the woman's lumbar spine, performed about a week after the biopsy, revealed findings consistent with discitis/osteomyelitis, and significant vertebral body destruction. The findings also were consistent with angulation at L3–L4, and presumed epidural and paraspinal inflammatory changes. The woman underwent an extensive lumbar surgery performed at multiple stages to address the lumbar spinal osteomyelitis and discitis at multiple levels of her spine.

 

The woman sued the owner of the premises where she was hit with the hand cart and the company that employed the person who operated the hand cart. The company that employed the person who operated the hand cart filed a third-party complaint naming the woman’s healthcare providers. The third-party complaint alleged the healthcare providers were negligent in their treatment of the woman. Specifically, they allegedly failed to heed the woman's complaints and did not undertake the appropriate evaluation and interpretation of her subjective complaints. The suit claimed that if the healthcare providers had properly diagnosed the osteomyelitis and discitis during the seven-month period of time in which the woman's infection developed, the infection could have been treated, avoiding the ultimate outcome. The company whose employee operated the hand cart sought indemnification and/or contribution under the common law for any damages awarded against it on the woman's complaint.

 

The trial court severed the third-party action for discovery and trial. The company whose employee operated the hand cart entered into a settlement agreement with the woman and agreed to pay her $1.5 million for the personal injuries. The healthcare providers filed a motion to dismiss the third-party complaint. They argued that, because the woman had settled her claim against the company whose employee operated the hand cart, there would be no expert at trial to establish that the company was liable, which was required for contribution. The company stated that it was stipulating to liability in the underlying action; therefore, the motions were moot and should be withdrawn. The motions were not withdrawn.

 

In a pretrial hearing, the Hudson County Superior Court of New Jersey, Law Division, determined that the company's common law claim for indemnification could proceed, even though the company settled the woman's claim in the underlying action. The court observed that the issue as to whether the company required an expert for its indemnification claim had not been resolved. Trial court noted that the company would have to address that issue prior to trial. On the trial date, the healthcare providers filed a motion to dismiss the third-party complaint because the company had not provided expert testimony on the reasonableness of its settlement with the woman. One of the defendant doctors also filed a motion to dismiss the third-party complaint against him. He argued that the company had not produced an expert opinion as to how the responsibility for the woman’s harm should be allocated among all of the defendants, including multiple healthcare providers.

 

The judge determined that a jury could not assess the reasonableness of the settlement without expert testimony and an expert was required to apportion damages among the parties. The judge stated that the company's stipulation to responsibility was not sufficient to allow jurors to distinguish between the damage caused by the company and the damage caused by the healthcare providers. The judge concluded that the third party complainant would not be able to satisfy its requirements in the damages part of the case. The trial court dismissed the third-party complaint against the woman’s healthcare providers.

 

The Appellate Division of the Superior Court of New Jersey affirmed. The court held the judge did not abuse her discretion by electing to consider the motions before starting what was expected to be a lengthy jury trial and expert testimony was required for the company’s indemnification claims.

 

The judge did not err by relaxing the applicable requirements of the court rules in order to avoid the unjustifiable expense and delay that would have resulted if the judge had waited until the end of the company's case to consider the motions to dismiss. In their pretrial information exchanges, the parties identified nine potential fact and expert witnesses. The parties also indicated that they intended to introduce an array of medical billing records into evidence. Several months before the trial, when arguing pretrial motions, the healthcare providers asserted that the company had to present expert testimony on its indemnification claim. The motion judge did not rule on the issue at that time but said the company would have to address it. Thus, the company should have expected that the healthcare providers would seek a ruling on this issue at some point before or during the trial.

 

When seeking indemnification from third-party defendants for the portion of a settlement attributable to their alleged medical malpractice, the defendant has to prove not only that the doctors committed malpractice, but also the quantum of damages that could be reasonably imposed upon these defendants. The damages part of the case would involve the reasonableness of the amount paid to settle the case, and the extent to which the injuries were increased by the third-party defendants' malpractice. An expert in the settlement of claims, such as an experienced torts attorney or claims adjuster, was necessary to explain the various factors that are taken into consideration when a case is settled. The expert's testimony could include a comparison of similar claims in the area, an assessment of the strengths and weaknesses of the claim, and an analysis of how legal issues might affect the settlement amount. Additionally, the company must offer expert testimony with regard to the allocation of responsibility among the healthcare providers. Without such evidence, any allocation of responsibility between the company and the healthcare providers would be based on speculation.

 

The Superior Court of New Jersey, Appellate Division, affirmed the trial court’s dismissal of the third-party complaint against the woman’s healthcare providers.

 

See: Kapuscenski v. Hess, 2014 WL 1125055 (N.J.Super.A.D., March 24, 2014) (not designated for publication).

 

 

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