In its decision filed on August 31, 2016, the Superior Court of New Jersey Appellate Division (“Appellate Court”) was faced with the issue whether the New Jersey medical malpractice defendants were entitled to a pro tanto credit for the amount that the plaintiffs had obtained by way of an out-of-state settlement with tortfeasors who were never defendants in the New Jersey medical malpractice case and could not have been sued in New Jersey because New Jersey lacked personal jurisdiction.
The Underlying Facts
A child born in New York in December 2003 came under the medical care of a series of doctors in New York. In January 2005, the child and and her family moved to New Jersey, where the child began receiving pediatric care from the defendant New Jersey physician and his medical practice. In January 2006, the defendant physician suspected that the child suffered from left hip dysplasia, which was later confirmed and required open reduction surgery and a second follow-up surgery to correct the condition.
On July 30, 2007, the child’s mother filed a New York medical malpractice lawsuit alleging medical negligence against the hospital where the child was born and several doctors who treated the child prior to the family’s move to New Jersey, claiming damages resulting from the failure to diagnose the dysplasia. On April 7, 2011, the New York court entered an order approving a structured settlement in the amount of $2 million in the New York medical malpractice case.
On March 12, 2012, the child’s parents filed the New Jersey medical malpractice lawsuit, alleging that the New Jersey defendants negligently failed to timely diagnose and treat the child’s dysplasia (i.e., that the New Jersey medical malpractice defendants’ failure to diagnose the dysplasia earlier was a breach of the professional standard of care and likely increased the probability that the child would require open reduction surgery to address her condition and that she would likely develop arthritis in later life). The defense argued that there was no breach of the professional standard of care because the child’s dysplasia was not clinically detectable until age two, and that the defendant physician properly and timely diagnosed the condition and recommended further appropriate treatment.
The defendants in the New Jersey medical malpractice case sought a court order providing them with a credit of $2 million against any judgment returned in the plaintiffs’ favor, arguing that the New Jersey medical malpractice case sought damages for the exact same harm as in the earlier New York medical malpractice litigation. The trial judge concluded on “general principles of equity . . . that it would be a windfall to the plaintiff[s]” if a $2 million credit was not applied to any verdict in their favor. The trial judge therefore entered an order that provided the defendants with a $2 million credit “based upon the plaintiffs[‘] previously pending and now resolved New York State action involving the same claims of negligence and compensating the plaintiff for the same injuries that are at issue in the instant litigation,” and that $2 million would be deducted from any verdict “rendered by a jury against [d]efendants,” who “shall only be responsible for the remainder of the verdict after the credit is applied . . . .”
The Appellate Court Decision
The Appellate Court stated that it appeared from the record that the New York medical malpractice defendants and the New Jersey medical malpractice defendants are not successive tortfeasors, but rather joint tortfeasors, whose alleged collective negligence delayed the diagnosis of the child’s dysplasia. The Appellate Court stated that the New York medical malpractice defendants were never parties to the New Jersey medical malpractice lawsuit, nor could they have been, because New Jersey lacked personal jurisdiction over them.
The Appellate Court held “[w]e are convinced that equity is not achieved by providing defendants with a pro tanto credit in this litigation for the amount of the New York settlement. That result is an undeserved windfall for defendants, and it finds no support in relevant case law. The equitable result is to permit defendants to have any judgment that plaintiffs may secure against them reduced by the amount of fault a jury attributes to the New York defendants.”
Source Kranz v. Schuss, Docket No. A-4918-13T1.
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