Opinion
Rehearing Denied April 5, 1973.
Hearing Granted May 30, 1973.
Opinions on pages 143-174 omitted.
HEARINGS GRANTED [*]
[107 Cal.Rptr. 201]Green, Seuthe & Royce, Irving H. Green, Los Angeles and Leonard Sacks, Pico Rivera, for appellant and cross-respondent.
Home & Clifford by DeForrest Home, North Hollywood, for respondents and cross-appellants.
FLEMING, Associate Justice.
Plaintiff, and his father, filed this medical malpractice action for compensatory damages against defendants Gibson and Grizzell, the obstetricians who delivered him into the world. According to plaintiff's evidence, he suffered brain damage as a result of lack of oxygen during or shortly after his birth. He is mentally retarded, subject to cerebral palsy and epilepsy, and is cared for in a special nursery for retarded children. A jury returned a verdict in plaintiff's favor for $90,000, and judgment was entered for that amount. Thereafter, plaintiff's motion for a new trial because of inadequate damages was denied, as was defendant's motion to correct the amount of the judgment.
Plaintiff appeals the judgment, contending that (1) references during the trial to collateral source benefits should not have been condoned, and (2) an instruction limiting his damages for loss of earnings to the period of his curtailed life expectancy should not have been given. Defendants likewise have appealed, arguing that (3) the trial court should have corrected the judgment to allow them credit for amounts paid plaintiff in settlement by other defendants.
Plaintiff also appeals the order denying his motion for a new trial. Such order is non-appealable, and that appeal is dismissed.
1. Collateral Source Benefits.
On one occasion during the presentation of evidence defense counsel asked a witness in the presence of the jury whether plaintiff's parents had paid any of the bills for his care in the special nursery. An objection to the question was sustained.
During closing argument by defense counsel, the following occurred: "[Counsel for Doctors]: ... Medical care, home, training, nursing care, all of the things that it needs, come under that general classification, and I submit to you in discussing this, deciding this case on the merits, this child will never lack for adequate care, nursing, hospital, or otherwise, whether your verdict is for the plaintiff or whether your verdict is for the defendant[s]. [Counsel for Hixon]: I assign that as misconduct, your Honor, and improper argument on the part of counsel. I ask the Court to instruct the jury to disregard that statement. THE COURT: I will overrule it. [Counsel for Doctors]: This child is going to receive adequate care for its lifetime, whatever that may be. [Counsel for Hixon]: There is no such evidence in the case, your Honor, and I again assign it as misconduct, ask the Court to instruct the jury to disregard that statement. THE COURT: Oh, I think it belongs in the field of argument. I will overrule the objection. [Counsel for Doctors]: And I think it is interesting to call attention to the fact that no single bill has been presented for the cost of care for this child from the day of birth to the present. Has anyone produced a bill--[Counsel for Hixon]: We assign that, you Honor, as misconduct [107 Cal.Rptr. 202] on the part of counsel, and the Court knows the reason why that wasn't done because of counsel's motion. THE COURT: Well, I think you can remedy it in your argument. I will overrule the objection. [Counsel for Doctors]: Consider it. No bills here...."
Plaintiff contends his case was prejudiced by defense counsel's question as to whether the parents were paying any of the bills for nursery care and by defense counsel's references in final argument to the lack of bills for medical care and to the adequacy of plaintiff's future care regardless of the verdict. Plaintiff argues that these references were equivalent to an improper admission of evidence of collateral source benefits and their indulgence by the court had the effect of leading the jury astray.
The collateral source rule generally provides that if an injured person has been compensated for his injuries by a source wholly independent of the tortfeasor, such compensation need not be deducted from the damages that person would otherwise collect from the tortfeasor. (Hrnjak v. Graymar, Inc., 4 Cal.3d 725, 729, 94 Cal.Rptr. 623, 484 P.2d 599.) Ordinarily, evidence of collateral source benefits can be placed before the jury only when relevant to some other issue in the case. (Helfend v. Southern Cal. Rapid Transit Dist., 2 Cal.3d 1, 16-17, 84 Cal.Rptr. 173, 465 P.2d 61.) The rule applies whenever "plaintiff has been compensated by an independent collateral source--such as insurance, pension, continued wages, or disability payments--for which he had actually or constructively ... paid or in cases in which the collateral source would be recompensed from the tort recovery through subrogation, refund of benefits, or some other arrangement." (Helfend v. Southern Cal. Rapid Transit Dist., supra, at 13-14, 84 Cal.Rptr. at 181, 465 P.2d at 69.) (Italics added.)
The present case does not involve the admission of evidence of compensation from a collateral source. In one instance defense counsel asked a witness whether the parents had paid any of the bills for nursery care, and an objection to the question was sustained. In the other instance defense counsel pointed out in argument that no bills had been produced for the cost of plaintiff's care, and he suggested that regardless of the verdict plaintiff would never lack adequate care. Patently, our concern is not with admission of evidence but with the degree of supposition and speculation that counsel may indulge during the course of argument. We find ourselves within a twilight area whose boundaries are ill-defined, perhaps undefinable. On the one hand, counsel's argument should be based on evidence before the court. On the other, the scope of argument may extend to matters of common knowledge and to logical inferences drawn from the evidence and related in some degree to the issues in the cause. The extent of permissible reference in argument to matters of common knowledge is difficult to define with precision. About all that can be said is that in considering such a matter the trial court should be guided by a rule of reason and by common sense. At bench, plaintiff charges that defense counsel's argument on compensatory damages for costs of medical care exceeded the boundaries of permissible reference to matters of common knowledge by improperly suggesting that an award of damages was not required to assure plaintiff's future medical care. Evaluation of plaintiff's contention requires us to indulge in some speculation of our own.
Defense counsel's reference to adequate care and to the absence of paid bills for nursery care apparently alluded to public care furnished appellant as a mentally-retarded child by the State of California. (For crippled children services see Health 7 Safe.Code, §§ 249-270; for care and treatment of the mentally retarded see Welf. & Inst.Code, § 7500 ff.) The implications of defense counsel's argument have not been challenged, and it is inferable that no bills were produced to establish the cost [107 Cal.Rptr. 203] of plaintiff's care because plaintiff's parents paid none of the costs.
The issue thus centers on the extent to which counsel can refer in argument to the existence of state-furnished medical services. The Supreme Court has made it clear that double recovery from a tortfeasor for an item of damages is not normally justified. (Helfend v. Southern Cal. Rapid Transit Dist., 2 Cal.3d 1, 10, 11, 84 Cal.Rptr. 173, 465 P.2d 61.) Similarly, society cannot be expected to pay twice for the same services, as for example, once in the form of general taxes to support the cost of providing medical care for specified disabilities and again in the form of higher obstetrical fees to cover the doctor's and hospital's cost of doing business, which in instances of untoward results includes liability for the cost of providing medical care for specified disabilities. We think counsel are entitled to point out in argument that items claimed as compensable damages are available to a plaintiff at no cost or liability to him, if in fact such is the case, as it might be with medical expenses to a member of the armed forces, veteran's hospital costs to a veteran, or doctor's services to a practicing physician. (Coyne v. Campbell (1962), 11 N.Y.2d 372, 230 N.Y.S.2d 1, 183 N.E.2d 891.) The critical element in establishing the existence of free services is absence of both cost and liability, an absence which should be free from doubt in the particular case. We think it questionable practice for counsel to refer in argument to the general social policy of the state to care for persons under disability when they are unable to care for themselves and to suggest that as a consequence of this policy the disabled person will always receive adequate care. The ultimate issue in most instances of disability, as here, is not whether the disabled person will receive adequate care but who will stand the cost of such care. Social policy may be extremely clear that adequate care will be furnished a disabled person, but social policy may become extremely cloudy when allocation of the costs of care among the state, the disabled person, his insurer, his wrongdoer, his employer, his physician, and his relatives is the issue. Likewise, social policy from time to time may change the specifications for its allocation of costs. If in argument we permit unlimited speculation about future responsibility for care of the disabled, one conjecture leads to another, and, like the sorcerer's apprentice, we find that the process once started cannot be stopped, that surmise and guesswork have become a substitute for evidence.
The present case provides a good example of the futility of surmise about matters on which we possess no knowledge. We do not know as a fact whether plaintiff ever received federal, state, or county care, and if he did, whether he became obligated to repay all or part of its cost. We do not know the extent to which plaintiff might become entitled in the future to received federal, state, or county care and, if he did receive such care, the extent to which he would become obligated to repay all or part of its cost. In the field of indemnification and subrogation a bewildering variety of statutes has sprung up in the attempt by public authorities to staunch the flow of funds from the public purse for the support of the disabled. Statutes that might directly apply to plaintiff's situation include Health and Safety Code, section 257, and Welfare and Institutions Code, section 7513, which suggest that in certain instances the estate of a crippled child or a mentally-retarded person may become obligated to reimburse the state for all or part of the cost of care and treatment furnished by the state. Statutes that might indirectly [107 Cal.Rptr. 204] apply include those that permit subrogation or lien against a tort recovery by the federal government, by the state, or by the county for medical services furnished an injured person.
Health and Safety Code, section 257, reads in part: "The designated agency shall enter into an agreement with the parents or estate of the child to repay the program for the costs of treatment in accordance with the formula for repayment established by the department. ..."
Whenever the United States has furnished medical care to a person tortiously injured by a third person, it may recover the reasonable value of the care furnished from the third-party tortfeasor by subrogation or by direct suit. (42 U.S.C. § 2651.) The United States may compromise or waive its claim when undue hardship would result to the injured person. (42 U.S.C. § 2652.) Comparable procedures apply to the federal government's payments to its own employees for work-related injuries (5 U.S.C. § 8131) and to government payments under the Longshoremen's and Harbor Workers' Compensation Act (33 U.S.C. §§ 918 and 933).
Additionally, an obligation to repay the cost of medical services out of amounts recovered from a tortfeasor who brought about the need for such services may be created by contract or by equity as well as by statute.
The vast possibilities of liability based on contract or equity may be discerned from the few cases and articles that have touched upon the subject. See Fleming, The Collateral Source Rule and Loss Allocation in Tort Law, 54 Cal.L.Rev. 1478, 1501, 1526; Reichle v. Hazie, 22 Cal.App.2d 543, 547, 71 P.2d 849; Purcell v. Goldberg, 34 Cal.App.2d 344, 350, 93 P.2d 578; Block v. California Physicians' Service, 244 Cal.App.2d 266, 268-269, 53 Cal.Rptr. 31; Helfend v. Southern Cal. Rapid Transit Dist., 2 Cal.3d 1, 10, 11, 84 Cal.Rptr. 173, 465 P.2d 61.
Thus damages recoverable by plaintiff might have become subject to a statutory or equitable or contractual lien for repayment of the cost of past state care or for payment of the cost of future state care. If such a possibility existed in the case at bench (a matter on which we have no information), defense counsel's implication that the receipt of past and future state benefits (if such were received) carried on obligation of repayment might not have accurately reflected the true legal situation, for the benefits might have been classifiable as advances, repayable by plaintiff when, as, and if able, and recoverable from third parties through lien or subrogation of plaintiff's claims. (Cf. Reichle v. Hazie, 22 Cal.App.2d 543, 547, 548, 71 P.2d 849; Purcell v. Goldberg, 34 Cal.App.2d 344, 93 P.2d 578.) Thus the innuendo in defense counsel's argument that plaintiff had not incurred any liability to the state for the [107 Cal.Rptr. 205] care he received (if he received state care) might not have been fully justified.
On the other hand, it is possible that plaintiff had no obligation to repay. We have no exact information that plaintiff was under any liability to repay the cost of benefits received, or that such a liability, if it existed, would ever be enforced. The situation differs sharply from that in workmen's compensation, where in employee suits against third-party tortfeasors employers are given a lien for benefits paid out under workmen's compensation and may become parties to litigation to enforce their lien. (Lab.Code, § 3852 ff.)
This brief speculative foray fortifies our view that in an area of such surmise and conjecture, unsubstantiated speculation by counsel with respect to adequacy of future care and allocation of the cost of future care should be discouraged. On this subject we think argument unsupported by evidence is inappropriate, and if such argument is made the jury should be instructed to disregard it. Under this view of the case it would have been better for the trial curt to have instructed the jury to disregard defense counsel's suggestion that plaintiff would never lack adequate care rather than, as it did, require plaintiff's counsel to counter this suggestion in his closing argument. We find no error in the trial court's handling of the objection to the question whether plaintiff's parents were paying any of the bills for nursery care, nor do we find error in the trial court's refusal to instruct the jury to disregard defense counsel's comment in final argument that no bills were produced. Counsel's latter comment accurately reflected the state of the record, and since the complaint, brought in the name of plaintiff and his parent, sought reimbursement for past medical costs the comment had some relationship to the issues raised by the pleadings in the case, for paid bills are usually the best evidence of what past medical costs have amounted to.
What disposition should be made of a judgment reached after a 19-day jury trial in which the court failed to instruct the jury to disregard defense counsel's suggestion in final argument that regardless of the verdict plaintiff would never lack adequate care? No evidence of collateral source benefits was introduced, and no argument was directly made by counsel that the jury should reduce its verdict because of collateral source benefits. Nor did counsel's argument misrepresent the facts by suggesting the existence of fictitious facts, as for example, that a judgment would ruin the defendant when in fact defendant was insured. (Hoffman v. Brandt, 65 Cal.2d 549, 55 Cal.Rptr. 417, 421 P.2d 425.)
We think jurors are sufficiently familiar with the existence of welfare benefits in modern society to have already taken into account the probability that plaintiff, as a mentally-retarded child, would never lack adequate care under state and federal law. The jury was instructed to include in any plaintiff's award "The reasonable value of medical [hospital and nursing] care, services and supplies reasonably required and actually given in the treatment of the plaintiff [and the reasonable value of similar items reasonably certain to be required and given in the future]" and to include "... The present cash value of any medical care and attention reasonably certain to be required and given in the future treatment of said minor." These instructions accurately stated the law on this subject.
Since no actual evidence of collateral source benefits was admitted, we conclude that the trial judge's failure to instruct the jury to disregard defense counsel's argument about adequate care was an imperfection that did not rise to the level of error. But if it did, we think the correctness of the subsequent instructions on the measure of compensatory damages for medical expenses prevented the error from producing a miscarriage of justice sufficient to require a new trial. (Cal.Const., art. VI, § 13.)
[107 Cal.Rptr. 206]2. Instructions on Life Expectancy.
The trial court instructed the jury: "If your verdict is in favor of the plaintiff, then in determining the amount of damages for loss of earnings, if any, you should determine his reasonable life expectancy as shown by the evidence and fix the present value of the anticipated loss of earnings only for the number of years of his life expectancy as you determine it from the evidence."
Plaintiff contends this instruction was erroneous. He argues defendants should not benefit from plaintiff's decreased life expectancy and consequent diminished expectation of earnings, because defendants' own acts brought about this diminution, and they should not be allowed to profit from their own wrong.
The issue remains undecided in California. (See Fleming, The Lost Years: A Problem in the Computation and Distribution of Damages, 50 Cal.L.Rev. 598, 612-615.) However, plaintiff waived the right to question the validity of this instruction on appeal when he failed to object to the instruction at the trial and failed to tender an alternative instruction to the trial court. A party may not remain silent, chance a favorable verdict, and when disappointed in the outcome, raise an issue for the first time on appeal. (Downing v. Silberstein, 89 Cal.App.2d 838, 844-845, 202 P.2d 91.)
3. Credit for Settlement.
In advance of trial plaintiff settled his claim against certain other defendants (the hospital and the anesthetist) for $90,000. At the beginning of the trial defense counsel requested the court to instruct the jury that the $90,000 settlement reached with other defendants should be subtracted from any verdict the jury might return against the remaining defendants (CODE CIV.PROC., § 877 ). Plaintiff's counsel admitted the settlement had been made but objected to the jury being instructed about it. He offered to stipulate that the amount of any plaintiff's verdict could be reduced by the amount of the settlement after the verdict had been reached. (See Cseri v. D'Amore, 232 Cal.App.2d 622, 625, 43 Cal.Rptr. 36; Albrecht v. Broughton, 6 Cal.App.3d 173, 177-178, 85 Cal.Rptr. 659; Shepherd v. Walley, 28 Cal.App.3d 1079, 1092-1083, 105 Cal.Rptr. 387.) Counsel for defendants continued to insist that evidence of the settlement be made available to the jury. The trial court resolved the question by ruling that evidence of the settlement could not be presented to the jury and could not be mentioned during the trial. After the jury returned a verdict in plaintiff's favor, coincidentally also for $90,000, the trial court entered judgment for the full amount of the verdict and refused to modify the judgment by allowing any credit for amounts paid in settlement by other defendants.
Code of Civil Procedure, section 877, provides in part: "Where a release, [etc.] ... is given in good faith before verdict or judgment to one or more of a number of tortfeasors claimed to be liable for the same tort ... it shall reduce the claims against the others in the amount stipulated by the release, [etc.] ..."
Under the statute the trial court should have entered a judgment that gave credit for amounts paid in settlement by other tortfeasors. (Code Civ.Proc., § 877.) Plaintiff now argues the defendants failed to prove that the hospital, the anesthetist and the obstetricians were tortfeasors liable for the same tort so as to bring section 877 into play. But this post-judgment contention was never previously advanced as an issue in the cause. To the contrary, the hospital and the anesthetist were named as codefendants in the identical complaint for negligence that plaintiff filed against the obstetrical defendants. At the start of the trial plaintiff's counsel conceded--and offered to stipulate--that the amount of the settlement with the codefendants could be deducted from the amount of the jury's verdict against these defendants.
In effect, plaintiff, by keeping the fact of settlement from the jury and then obtaining [107 Cal.Rptr. 207] entry of judgment for the full amount of the verdict, had his cake and ate it, too. The cause must be remanded to the trial court for redetermination of the amount of the judgment in the light of the settlement with codefendants--a settlement, we are told, that included amounts attributable to claims by plaintiff's parents as well as by plaintiff himself.
According to cross-appellants' brief $50,000 of the $90,000 settlement was given to plaintiff and the remainder was distributed as follows: "Mr. Green [plaintiff's counsel] was first reimbursed the $3,000 he had advanced in costs; then Mr. Green was given one-third of $90,000 (not one-third of $87,000) as his one-third contingent fee. Then he father was given $2,000 and the mother was given $5,000.... [E]ach of the three parties who secured the total benefit of $90,000 should bear his proportionate share of the total $30,000 fee plus $3,000 costs. According to our calculations, with each of the three bearing his proportionate share, Mr. Green's fee plus costs should be divided $28,947.37 to plaintiff, $2,894.74 to the mother, and $1,157.89 to the father. The fee plus costs of $28,947.37 attributable to the plaintiff plus the $50,000 cash he received, totals $78,947.37 and this is the figure we believe defendants are entitled to as a credit under Section 877 C.C.P."
On plaintiff's appeal the judgment is affirmed; on defendants' appeal the judgment is reversed, and the cause is remanded to the trial court for redetermination of the amount of the judgment. Defendants to obtain costs on both appeals.
ROTH, P.J., and HERNDON, J., concur.
[*] Opinion appearing on pages 143 to 152 deleted due to hearing granted and pursuant to stipulation dismissed as moot on June 29, 1973.
Welfare and Institutions Code, section 7513, reads in part: "Each mentally retarded person and his estate shall pay the department for the cost of such person's care and treatment as defined in Section 4025 while in the state hospital and while on leave of absence at state expense, less the sums payable therefor by the county...."
The State of California likewise reserves a right to subrogation for state health care furnished recipients of public assistance, the medically indigent, and others. (Welf. & Inst.Code, § 14000ff.) Benefits provided for an injury for which a third person is civilly liable are recoverable from the third person, either directly or in the name of the injured person. (Welf. & Inst.Code, § 14117(a).) The state may compromise or waive its claim in whole or part for its own convenience or when undue hardship would result to the injured person. (Welf. & Inst.Code, § 14117(b).) Under the state employees' retirement and disability benefit system (Gov.Code, §§ 20000ff), when benefits are paid because of injury proximately resulting from the act of a third person, the state may recover, with exceptions, one-half the actuarial equivalent of benefits for which the state has become liable. (Gov.Code, § 21451.)
The county has similar rights. Whenever a county has furnished medical care to a person injured by a tortfeasor, the county may directly recover the reasonable value of the care furnished, or become subrogated to the rights of the injured person against the tortfeasor. (Gov.Code, § 23004.1(a).) The county may proceed in its own name or in the name of the injured person. If the injured person brings his own action, the county's right of action is transmuted into a first lien against any judgment recovered. (Gov.Code, § 23004.1(b).) The county may compromise or waive its claim for its own convenience or when undue hardship would result to the injured person. (Gov.Code, § 23004.2(a).) The county also has a right to subrogation under the county employee's retirement and disability system. (Gov.Code, §§ 31820-31822.)