Villarini-Garcia v. Hospital Del Maestro

UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT

No. 96-2024

AWILDA VILLARINI-GARCIA,

Plaintiff, Appellee,

v.

HOSPITAL DEL MAESTRO, ET AL.,

Defendants, Appellees.

MARIO J. TOMASINI, DR.,

Defendant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF PUERTO RICO

[Hon. James L. Watson,* Senior Judge]

Before

Boudin, Circuit Judge,

Aldrich, Senior Circuit Judge,

and Lynch, Circuit Judge.

Raul Davila-Rivera and Alberto O. Jimenez with whom Bauza and

Davila were on briefs for appellant.

Kevin G. Little with whom Law Offices of David Efron was on brief

for appellee.

April 24, 1997

*Of the Court of International Trade, sitting by designation.

BOUDIN, Circuit Judge. Dr. Mario J. Tomasini appeals

from an adverse judgment against him for medical malpractice.

Dr. Tomasini makes several claims of error, only one of which

requires extended discussion. On that claim, which presents

a difficult question concerning offsets to damage awards, we

conclude that a deduction is required in this case to account

for payment already received in settlement by the plaintiff,

Awilda Villarini-Garcia, from the hospital for the same

injury.

This case began with an operation performed by Dr.

Tomasini in September 1986 at Hospital del Maestro in Puerto

Rico. During the operation, Dr. Tomasini removed a birthmark

or mole from Villarini's back, and a piece of muscle tissue.

In her later complaint against Dr. Tomasini and the hospital,

Villarini charged the doctor with negligence in removing the

muscle tissue, causing her continuing pain and severely

impairing her career as a concert pianist.

Villarini did not file her complaint against the doctor

and hospital until June 1990, well after Puerto Rico's normal

one year statute of limitations. 31 L.P.R.A. 5298.

Villarini argued that the statute was tolled under Puerto

Rico's discovery rule until she acquired sufficient knowledge

of the basis of her claim. The district court dismissed the

case on summary judgment for failure to meet the statute of

limitations, and Villarini appealed.

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This court affirmed the dismissal as to three of

Villarini's four claims of negligence but reversed as to one

claim. Villarini v. Hospital del Maestro, 8 F.3d 81 (1st

Cir. 1993). On that last claim, we said that summary

judgment was improper and that it was likely to be a jury

question whether Villarini had exercised sufficient due

diligence to give her the protection of the discovery rule.

Following remand, the hospital settled with Villarini for

$50,000, and the case proceeded to trial against Dr.

Tomasini.

At the end of the trial, the jury awarded Villarini

$100,000 for physical and mental damage and $500,000 for loss

of earnings. Among other post-trial requests, Dr. Tomasini

sought a deduction from the judgment of $50,000, representing

the amount that the hospital had paid in settlement. The

district court refused. This appeal followed. On appeal,

Dr. Tomasini makes six claims of error, the last one being

the denial of the deduction.

Four of the claims relate to sufficiency of the

evidence: Dr. Tomasini says that the evidence was

insufficient to allow Villarini to escape the statute of

limitations, or to establish malpractice, or to show

causation, or to support the amount awarded. A fifth claim

is directed at testimony of an agent, who represents

musicians, offered by Villarini to support her claimed loss

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of income; Dr. Tomasini says that the witness was not

qualified and lacked an adequate basis for his testimony.

The challenges to the evidence--as to timeliness,

negligence, causation, and damages--are legitimate issues;

but having considered the evidence described in the briefs

and set forth in the record, we think that the jury's verdict

is not irrational on any of these issues and that the

district court acted within its discretion in holding the

expert to be qualified and his opinion adequately grounded.

There is nothing about these fact-bound issues that warrants

discussion in a published opinion.

The one issue that does require discussion is Dr.

Tomasini's final argument that the $600,000 jury verdict

should be reduced by $50,000 to reflect the amount Villarini

received in settlement from his former co-defendant, the

Hospital del Maestro. After the jury rendered its verdict,

Dr. Tomasini filed a timely motion under Fed. R. Civ. P.

59(e) to amend the judgment to deduct the $50,000 settlement,

and the district court denied the motion.

The court based its denial on the fact that the hospital

was not "jointly" liable for the injury along with Dr.

Tomasini; rather it was sued only on vicarious liability

grounds. See 31 L.P.R.A. 5142. Villarini presses the same

objection on appeal. Implicit in the district court's

ruling, and explicit in Villarini's argument, is the notion

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that there is no right to offset an earlier settlement made

by a co-defendant where the remaining co-defendant did not

have a right of contribution against the settling co-

defendant.1 This presents a legal issue that we consider de

novo, and conclude that the linkage of contribution and

offset has no sound basis.

In almost all jurisdictions, settlement payments to the

plaintiff from one of several joint tortfeasors--those who

actively contributed to the same injury--reduce any judgment

later secured against the nonsettling tortfeasor(s).

McDermott v. AmClyde, 511 U.S. 202, 208 (1994). The only

debate is whether this reduction is to be made by a simple

dollar-for-dollar offset or through a more complicated

proportional liability formula. Id. at 208-17. See 6 Minzer

et al., Damages in Tort Actions 51.25[1] (1966).

Conversely, the usual rule is that a plaintiff's award

will not be reduced for payments or benefits received from

sources independent of those who wronged him. See

Restatement (Second) of Torts 920A(2) (1991); Robertson v.

White, 81 F.3d 752, 758 (8th Cir. 1996). This "collateral

source" rule allows a plaintiff to receive payments such as

charitable donations and payments from his own insurer

1For obvious reasons, under Puerto Rico law, as
elsewhere, the active tortfeasor has no right of contribution
against another whose liability to the victim is at best
vicarious. See FDIC v. Consolidated Mortgage, 805 F.2d 14,

19 (1st Cir. 1986).

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without losing the ability to recover the full amount of his

loss from the wrongdoer or wrongdoers.

A few courts have refused to offset payments made by a

settling co-defendant who turned out later not to be liable

as a joint tortfeasor with the nonsettling defendant. E.g.,

Medical Center of Delaware v. Mullins, 637 A.2d 6, 9-10 (Del.

1994); Collier v. Eagle-Picher Indus., Inc., 585 A.2d 256,

265-67 (Md. App. 1991). The rationale of these holdings is

that since the primarily liable defendant would have been

obligated to pay the entire damage amount if the settling

party had never been sued (or did not settle), the former

should not reap the benefit of a fortuitous settlement by the

latter. Mullins, 637 A.2d at 10.

The so-called "modern rule" expressed in the Restatement

(Second) of Torts is very much to the contrary: it says that

any payment "made in compensation of a claim for a harm" will

reduce the liability of the remaining defendants, "whether or

not the person making the payment is liable to the injured

person." Id. 885(3) and comment (f). See also Restatement

(Second) of Judgments 50(2) (1982). Many cases express the

right of offset in the same unqualified terms as the

Restatement (although not all happen to involve a settling

co-defendant who is vicariously liable).2 So, too, does a

2See Husky Refining Co. v. Barnes, 119 F.2d 715, 716

(9th Cir. 1941); Lafayette v. County of Los Angeles, 208 Cal.

Rptr. 668, 672-73 (Cal. Ct. App. 1984); Harriss v. Elliott,

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lucid discussion in the leading text, together with reasons

for the Restatement rule. Keeton et al., Prosser and Keeton

on Torts 49, at 335-36 (5th ed. 1984).

Puerto Rico law is controlling in this case and if the

Puerto Rico courts had spoken to the precise question before

us, their expressed view would be followed here. But no such

ruling has been cited to us, and we can find none on our own.

In such situations we may refer to common law rules.

Fireman's Fund Am. Ins. Co. v. Almacenes Miramar, Inc., 649

F.2d 21, 25 & n.3 (1st Cir. 1981); Futurama Import Corp. v.

Trans Caribbean Airways, 104 D.P.R. 609, 4 O.T.S.C.P.R. 854,

861-62 (1976). Perhaps more importantly, we do know that

Puerto Rico has disallowed double recoveries in a somewhat

analogous context, expressing a general hostility to double

recovery.

In a set of cases, the Supreme Court of Puerto Rico held

that a plaintiff's tort recovery against a non-employer

defendant must be reduced by any workers' compensation

payments that the plaintiff had already received from, or on

behalf of, his employer. See Robles v. Superior Court, 85

565 N.E.2d 1041, 1044-45 (Ill. App. Ct. 1991); Mulinix v.

Saydel Consol. Sch. Dist., 376 N.W.2d 109, 110-11 (Iowa Ct.

App. 1985); Steger v. Egyud, 149 A.2d 762, 767-68 (Md. 1959);

Midway Nat'l Bank v. Estate of Bollmeier, 504 N.W.2d 59, 65-

66 (Minn. Ct. App. 1993); Kirby v. New Mexico State Highway

Dep't, 643 P.2d 256, 259-260 (N.M. Ct. App. 1982); Mead v.

Bloom, 464 N.Y.S.2d 904, 904-05 (N.Y. App. Div. 1983);

Bellamy v. Prime, 270 N.Y.S.2d 93, 94 (N.Y. App. Div. 1966).

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P.R.R. 640, 647 (1962); Sanabria v. White Star Bus Line, 50

P.R.R. 722, 725 (1936); Machado v. The American R.R. Co. of

P.R., 49 P.R.R. 823, 831-32 (1936). The Robles court said

that these cases were "inspired on the principle that no one

should or may unjustly enrich himself by receiving double

compensation for the same accident." 85 P.R.R. at 647.

The collateral source rule, also followed in Puerto

Rico, Futurama, 4 O.T.S.C.P.R. at 857-60, obviously does

permit double recovery in certain situations; but it does so

primarily where the extra benefit comes from insurance for

which the plaintiff could easily have paid or from private

generosity aimed at benefiting the victim rather than a

wrongdoer. Payments from prospective co-defendants, whether

vicariously or jointly liable, are clearly of a different

character. See Restatement (Second) of Judgments 50,

comment (e) (1982).

Absent good reason--and none is suggested to us--courts

are loath to promote double recoveries. See generally

Torres-Troche v. Municipality of Yauco, 873 F.2d 499, 501-02

(1st Cir. 1989). Even more troubling, without an offset the

primary tortfeasor could easily be made to pay twice:

ordinarily, a vicariously liable master who settled would

have an independent claim for indemnification against the

careless servant. See 31 L.P.R.A. 5143; Restatement

(Second) of Agency 401 and comment (d) (1958).

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Here, we are told that the hospital not only paid

$50,000 to Villarini but purported to transfer its claim for

indemnification to Villarini; and Villarini told us at oral

argument that no further suit on the indemnification claim is

now possible. Even so, no apparent justification is

suggested here for double recovery by the victim. The jury

assessed total injury at $600,000 and until Puerto Rico

instructs otherwise, we see no reason why Villarini should

enjoy compensation of $650,000 from the former co-defendants.

Accordingly, we remand the case to the district court,

direct that the judgment be reduced by $50,000 representing

the amount paid in settlement by the hospital, and otherwise

affirm the judgment.

It is so ordered.

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