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Neil v. Kavena8/31/1993
The sole issue in this appeal is whether a non-settling defendant in a medical malpractice action, who is severally liable, is entitled to a credit of the amount received by the plaintiffs in settlement of a related action for the same injury from other defendants. For the following reasons, we reverse the trial court's determination that the defendant is entitled to such a credit.
FACTS AND PROCEDURAL HISTORY
The facts are undisputed. On August 27, 1987, Cedric Kavena, M.D., and Joseph Vander Veer, M.D., performed gallbladder surgery on Catherine Neil at Good Samaritan Hospital. Subsequently, Neil and her husband filed a medical malpractice action against Dr. Vander Veer and CIGNA Health Plan of Arizona, Inc., Dr. Vander Veer's employer, for injuries resulting from the surgery. Neil settled her claim against CIGNA and Dr. Vander Veer for $175,000.
On August 28, 1989, Neil and her husband filed a medical malpractice action against Dr. Kavena, his wife, and Samcor, Inc., dba Good Samaritan Hospital, for injuries arising out of the same surgery. Settlement negotiations stalled when the parties disagreed regarding whether Dr. Kavena and Good Samaritan were entitled to a $175,000 credit or offset for the settlement paid to Neil by Dr. Vander Veer and CIGNA. Instead of proceeding to trial, the parties submitted the matter to the trial court, stipulating that a jury would award Neil $175,000 "as full damages sustained by [Neil]." The stipulation further provided that Neil's claim against Dr. Kavena would be dismissed, leaving Good Samaritan as the only defendant. The parties agreed also that if the final decision was that Good Samaritan was not entitled to any credit for the settlement amount, it would pay Neil $100,000 in resolution of all claims. Conversely, they agreed that if Good Samaritan was entitled to such a credit, it would pay Neil $30,000.
The trial court determined that Good Samaritan was entitled to a credit of $175,000 and that, because the parties had stipulated that $175,000 was the amount of damages, Neil was not entitled to additional damages from Good Samaritan. Neil timely appealed.
Discussion
On appeal, Neil maintains that because her lawsuit against Good Samaritan and Dr. Kavena was commenced after the abrogation of joint and several liability, the trial
court erroneously ruled that Good Samaritan was entitled to a credit for the amount Neil received in settlement from other defendants. Dr. Kavena and Good Samaritan argue the applicability of Ariz.Rev.Stat.Ann. section ("A.R.S. § ") 12-2504(1), which provides that, when one of two or more tortfeasors settles with a plaintiff in good faith, the plaintiff's claim against the non-settling tortfeasors shall be reduced by the settlement amount. Neil's response is that the statute does not apply in this case in which a non-settling tortfeasor is not jointly and severally liable for the plaintiff's damages. We agree with Neil.
In an effort to increase the fairness of the tort system and promote settlement of multi-party litigation, Arizona, in 1984, adopted the Uniform Contribution Among Tortfeasors Act ("Act"). The Act retained a comparative negligence scheme and created a right of contribution in a joint tortfeasor who paid more than his pro rata share of the common liability for the same injury . Dietz v. General Electric Co., 169 Ariz. 505, 510, 821 P.2d 166, 171 (1991). Included in the Act was A.R.S. § 12-2504, which provides that a release of one tortfeasor does not discharge other tortfeasors who are not pa
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