Wednesday, April 18, 2007
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Suit’s Dismissal Reversed by C.A. Due to Dispute Over Settlement
Court Rule Called Case Management Tool, Not Way to Litigate Agreement’s Validity
From Staff and Wire Service Reports
A litigant’s contention that a purported settlement before the court is not final and enforceable amounts to “good cause” barring the court from dismissing the action, the Fourth District Court of Appeal has ruled.
Overturning a dismissal order by Orange Superior Court Judge Randell Wilkinson, Div. Three reinstated a Southern California woman’s 2004 malpractice suit against UC Irvine Medical Center.
Elodie Irvine sued the medical center, individual doctors in its liver and kidney transplant program, and the Regents of the University of California alleging they were negligent in helping her obtain the transplantation she needed as a result of her end-stage liver disease and polycystic liver and kidney disease.
She further alleged the defendants fraudulently misrepresented her status on the transplant list maintained by United Network for Organ Sharing—the Richmond, Va-based nonprofit organization that coordinates U.S. organ transplant activities—by continuously assuring her she was high priority on the list due to her serious and life-threatening condition. In fact, she claimed, they conspired to keep her priority low on the list and granted priority to healthier patients in order to “increase the rate of successful transplantation” so they could “attract more prestige, more patients, more profit and more research funding.”
Irvine had been admitted to UC Irvine’s organ transplantation program in June 1998 but did not receive a liver and kidney transplant until December 2002, by which time her liver had grown to 15 pounds and her right kidney enlarged more than six times its normal size.
On Feb. 3, 2005, the parties attended a private mediation session at which they agreed to a “Stipulation for Settlement” providing they would settle the case for $50,000. The document stated it was “binding” on the parties, and the mediator later verified to the court that it accurately set forth the terms reached by the parties that day.
Irvine, plaintiff’s counsel, the medical center’s attorney and counsel for UC Irvine’s risk management office, on behalf of the UC Regents, signed the settlement. Irvine then notified the trial court of the settlement, and the court set a hearing on its proposed order to dismiss the case.
After securing continuances of the dismissal hearing, Irvine’s attorney sent a letter to UNOS requesting all documents regarding offers of organ transplantation that were made to or on behalf of his client from June 1, 1998 to December 31, 2002. UNOS’ response showed that it had made offers of about 40 livers or kidneys to Irvine’s social security number on specified dates.
Reasons given for refusal of the offers included “donor size/weight,” “donor age” and “multiple organ transplant required,” according to UNOS records.
Irvine then refused the $50,000 check the Regents sent to her in June 2005 and filed an ex parte application for a hearing to set aside “the conditional settlement.” In a supporting declaration, her lawyer stated his client would not have agreed to “the conditional settlement” had she been aware of the defendants’ misrepresentations.
Irvine also maintained that her original lawyer, Lawrence Eisenberg, mishandled her case and pressured her into accepting the settlement.
Irvine also sued Eisenberg, claiming he didn’t tell her about serious problems with the transplant program that could have won her a larger settlement. Irvine claimed Eisenberg learned about a systemic problem at the UCI program while researching her case but failed to tell her until after she had agreed to settle.
The discovery that UCI had turned down numerous kidneys and livers offered for transplantation in Irvine and other patients—which the medical center blamed on staffing shortages—and that the program’s one-year survival rate was below federal standards, led to decertification by federal Medicaid officials and the reported transfers of more than 100 patients to other programs.
Over the defendants’ opposition, Wilkinson granted a hearing on the plaintiff’s application to set aside the settlement, at which Irvine—now represented by Browne Greene and Mark T. Quigley of Greene, Broillet & Wheeler—argued the judge should vacate the settlement because the defendants’ fraudulent withholding of material information prevented a valid contract from being formed in the first place.
She also contended that she believed the agreement to be conditional, subject to her signing a final settlement agreement and release document, and that she consented to it only under duress, due to her medical and emotional condition at the time.
Denying Irvine’s motion, Wilkinson concluded no reason justified vacating the settlement. He later dismissed her suit in accordance with California Rules of Court, Rule 3.1385.
The rule requires a party notifying the court of a settlement to file a request for dismissal within 45 days of the settlement. In the absence of such notice, the court must dismiss the case unless “good cause” is shown why it should not.
Writing for the Court of Appeal, Justice Richard M. Aronson said Irvine’s claim that no enforceable settlement had been reached constituted good cause to restore her case.
He observed that Rule 3.1385 was intended as a case management tool, not as a means of enforcing settlements, noting:
“[T]he court’s error arose in large part from plaintiff’s attempt to use a rule 3.1385 hearing to obtain a trial court determination that the settlement reached at the mediation was unenforceable. The only decision before the court at a rule 3.1385 hearing is whether to dismiss the case or restore it to the civil active list.”
Substantive issues regarding the validity of a settlement agreement, the justice explained, must be resolved by motion to enforce under Code of Civil Procedure Sec. 664.6, by summary judgment, at trial after the settlement has been asserted in an amended pleading by the defendant, or in a separate action for breach of contract or equitable relief.
Justices William W. Bedsworth and Raymond J. Ikola concurred in the opinion.
The defendants were represented on appeal by Margaret M. Holm of Bonne, Bridges, Mueller, O’Keefe & Nichols, and by Feris M. Greenberger, Carolyn Oill, and Martin Stein of Greines, Martin, Stein & Richland for the defendants.
The case is Irvine v. Regents of the University of California, 07 S.O.S. 1891.
Copyright 2007, Metropolitan News Company