$18.7 million default judgment shows risk of trying to stall
February 1, 1998 8 minutes read
$18.7 million default judgment shows risk of trying to stall
Hospital accused of hiding key physician, withholding documents
If you’ve ever wondered what it means to be too aggressive in manipulating the defense of a malpractice claim, a recent case from California shows just how badly it can turn out. An overly aggressive defense can turn out to be no defense at all if you succeed only at angering the judge.
The University of California at Irvine (UCI) Medical Center and its parent, the Regents of the University of California, suffered a default judgment of $18.7 million after years of apparently delaying a medical malpractice case.1 The presiding judge struck the hospital’s response to the lawsuit, in effect declaring that the hospital had not answered the plaintiff’s claims and was not making a good faith effort to defend itself. Since the defendant was not, in the court’s eyes, mounting a defense, the plaintiff was free to submit a list of damages and expenses for the judge to approve without objection by the defense.
Such a response by the court is extremely uncommon and reflects the degree to which the judge was exasperated by the whole affair, says Richard W. Boone, JD, an attorney in Vienna, VA, who specializes in medical malpractice. He says an attorney would have to work hard to produce that much anger in a judge.
"The judge was really annoyed in that case, no doubt about it," Boone says. "By that point, I don’t believe that judge would have believed the defense panel in that case if they had told him it was Thursday. When they screw em up in California, they really screw em up big, don’t they?"
Even though the outcome was extraordinary, the circumstances of the injury leading to the malpractice case were not. It started out as a routine, albeit tragic, incident. The plaintiff, 34-year-old Denise Desoto, was admitted to the medical center on Dec. 6, 1993, after a car accident caused a crushing injury to her left hand. The hand was partially amputated and restored, and then she underwent a second surgery on the hand seven days later. At the end of that surgery, Desoto had problems breathing and the apparent cause of the trouble went untreated by the attending clinicians.
The patient became progressively hypoxic and went into total cardiac arrest. Oxygen deprivation led to severe brain damage, and Desoto is now in a coma that is expected to be permanent. The exact circumstances leading to the breathing problems and eventual coma were in dispute, and the plaintiff’s attorney did not discover the actual cause until three and a half years after the incident. That is partly why California Superior Court Judge C. Robert Jameson issued a judgment of default and awarded the plaintiff an astounding $18.7 million in the absence of a defense by the hospital. (See p. 15 for how the $18.7 million breaks down and p. 16 for the transcript of the judge’s order.)
Key physician changed deposition
But the judge made clear that he was issuing the judgment of default precisely because the hospital was willfully forfeiting its opportunity to defend itself. These are some of the allegations from the plaintiff that persuaded the judge to issue the unusual ruling:
• When the plaintiff requested a copy of the medical record in February 1994, the UCI Medical Center’s Custodian of Records provided 1,518 pages and declared under penalty of perjury that they represented the full and complete medical record. In May 1996, a discovery referee appointed by the court found there were 3,179 pages in the record.
• The presence of a key physician was conspicuously absent from the chart. Eugene Lai, MD, pulled the patient’s endotracheal tube during the cardiac arrest and discovered that it was totally blocked by a mucous plug. His presence and his efforts to resuscitate Desoto were not charted and went undiscovered for three and a half years.
The Code Blue sheet initially was missing from the medical record. Once discovered, it did not list Lai or other clinicians in attendance. Lai left UCI Medical Center after the Desoto incident, and a private investigator hired by the plaintiff eventually located him at his new place of employment. Arrangements were made to serve a subpoena, but the doctor then refused the subpoena on advice of his attorney.
Lai eventually underwent a four-hour deposition that revealed critical details of the resuscitation effort previously unknown to the plaintiffs. The nurse responsible for charting the Code Blue had testified under oath, just hours before Lai’s deposition, that he had not been present.
• During the discovery process, the medical center sent bill collectors after Desoto’s husband. The insurer already had paid more than $600,000 for her care.
• One of the physicians involved in the resuscitation effort changed his deposition very late in the game in a way that suggested improper conduct by the defense attorneys. J.A. Makena Marangu, MD, originally was deposed on Aug. 13, 1996, but provided sworn corrections on June 1, 1997. During the time of the incident and continuing during the discovery process, Marangu disputed the hospital’s decision not to provide a certificate of completion for his plastic surgery residency. Many of the changes included notations that his original statements were made at the behest of attorneys Mark Maizel, JD, and Marshall Silberberg, JD, representing the defendant hospital. These were among the corrections filed with the court:
"I was instructed by Mr. Silberberg and Mr. Maizel not to disclose my ongoing disputes with UCI. I was instructed to pretend that my ongoing disputes with UCI had been resolved and that I was testifying as though I were in the future after receiving a certificate of completion."
"I was told by Mr. Silberberg and Mr. Maizel before my deposition that they were going to arrange the settlement of my disputes with UCI within the next two weeks and, therefore, I should testify as though the resolution had already occurred. Mr. Silberberg and Mr. Maizel told me that if I was a team player,’ my disputes with UCI would be resolved favorably to me."
"I carefully reviewed the operating room record and Code Blue sheet during my pre-deposition visit to Mr. Maizel’s office. When I reviewed the Code Blue sheet at Mr. Maizel’s office, there was an EKG print-out stapled to the Code Blue sheet. During my deposition, after I referred to an EKG strip, Mr. Maizel told me during a break to change my testimony to say that I only saw an EKG reading on the monitor and not on a paper printout." (An EKG strip was never produced in discovery, and Silberberg tells Healthcare Risk Management that it never existed.)
"My testimony in the transcript was the storyline I was told by Mr. Maizel to say. Mr. Maizel told me that, if I did not stick with the defense storyline, I would face a huge personal judgment in this matter. Mr. Maizel told me that if I told the truth, Mr. Silberberg would tear me apart on the stand.’"
Defense denies allegations
Silberberg denies the allegations of improper conduct and intentional efforts to deny the plaintiff complete records. He contends that the case did not drag on any more than similar malpractice cases, but he admits that there were some delays in providing complete information. While regrettable, he says, the delays were unintentional and simply a byproduct of suing a very large, very busy hospital.
"There’s no question there were some delays in getting some information, but that’s the nature of a large hospital," Silverberg tells HRM. "We’ve all been working our tails off on this case to gather the information. Nobody ever intentionally withheld information. That never happened."
The attorney specifically refutes the notion that he and the other defense attorneys simply overplayed their hand. Much of what seems to be an overly aggressive defense actually is based on misinformation provided to the court by the plaintiff, he says, citing examples in which the plaintiff alleged intentional withholding of information and which he says were unintentional delays.
"Sure, we make people jump through hoops before we give them things. We’re aggressive in defending our clients," he explains. "But the other side makes us jump through hoops, too. That’s the art of advocacy."
Silberberg is requesting a complete reversal of the court’s decision so everyone can go back to square one with the case, and if that doesn’t work, he is planning to file an appeal. He notes that in 25 years of practice he has never seen a defendant’s answer stricken, an action he refers to as "the doomsday sanction." It’s one of those odd things you read about but never encounter, he says.
"Everyone is sick about the court’s decision, the unfairness of it all, the finality of it in denying the university the opportunity to go forward with the defense," he says. "It was a total shock when the judge did this. We did not see this coming at all. Everyone is entitled to a bad day once in a while, and he certainly had one on the day he issued this decision."
Boone, the Virginia malpractice attorney who is not involved in the Desoto case, agrees that an appellate court usually would be eager to overturn a court order that denied one side the opportunity to defend itself.
"As a rule, a court of appeals doesn’t like it when you chop one party off at the ankles, and boy, that’s what this one trial court judge did, perhaps with good reason," Boone says. "He basically told the hospital, You’re out, and by the way, you owe these people $18 million.’"
If the circumstances leading to the default judgment weren’t so extreme, Boone says he would expect a quick reversal of the trial judge’s order. But considering the allegations against the defense attorneys, he’s not so sure. He also notes that the plaintiff might actually recover the damages at some point, since the Regents of the University of California have deep pockets.
Risk management could have played role
Silberberg tells HRM there is an important lesson in the case for health care risk managers. Though he denies any wrongdoing in the discovery process, he nonetheless says UCI’s experience illustrates what can happen when a risk manager is given too many different responsibilities exactly the trend seen in the industry in the past few years.
"Large facilities should have a risk manager whose job is entirely devoted to that task, not someone who wears six or seven hats. That was part of the problem here," he says. "Initially the hospital had a risk manager with several jobs, but now they have a single person in strictly risk management. That makes a world of difference because that’s who we deal with in the discovery process. They are the conduit for everything."
UCI Medical Center’s risk manager, Nancy Hove, joined the facility two years ago, after the Desoto incident but during the discovery process that figured prominently in the judge’s decision. Hove confirms that she is now the focal point for the dissemination of all information and the discovery process in any case. She declines to comment on the Desoto case because it is under appeal.
She does not dispute Silberberg’s assessment of how important it is to have a risk manager focused entirely on risk management, but she tells HRM she cannot comment specifically on the structure of the risk management department or how that might improve the discovery process in malpractice cases. Why? Because there is ongoing litigation, which she says is unrelated to the Desoto case, about the recent reorganization of the risk management department.
Reference
1. Denise Desoto, et al. v. University of California at Irvine Medical Center, etc., Superior Court of the State of California, Case No. 73 10 46.
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