Stephens v. Bohlman, 138 Or App 381 (1996).
"Mary Carter" Agreement
The issue in this case is whether the trial court erred in failing to dismiss the defendant hospital who had settled with the plaintiff before trial. The settlement between the defendant hospital and the plaintiff was an attempted "Mary Carter" agreement. A "Mary Carter" agreement is an agreement between the plaintiff and some, but fewer than all of the defendants, under which the settling parties limit the financial responsibility of the settling defendants, usually in an inverse ratio to the recovery that the plaintiff is awarded against the nonsettling defendants. Grillo v. Burke’s Paint Co., Inc., 275 Or 421 (1976). Under Oregon law, a defendant who has entered a Mary Carter agreement may remain in the case as long as that defendant retains an interest in the outcome of the case. The Court recognized that as a result of Mary Carter agreement, the settling defendant’s interests are adverse to that of the other defendants.
The defendant hospital and the plaintiff had not entered a true Mary Carter agreement. Under the agreement the settlement payment was absolute, the plaintiff agreed not to execute any judgment that she might receive against the hospital and released the hospital from any liability in excess of the settlement payment. The hospital agreed to remain a defendant in the case and present a defense at trial, even though the hospital had no further liability, regardless of the outcome of the case at trial. Trial court erred in failing to dismiss settling defendant as a party before trial began because the settling defendant had no interest in the outcome of the case.
Foxworth v. Emanuel Hospital, 131 Or App 110 (1994), rev den, 320 Or 507 (1995).
It is reversible error to admit evidence of a prior settlement between the plaintiff and one of the defendants unless evidence of the settlement has independent relevance to the issue of liability.
Holger v. Irish, 316 Or 402 (1993).
Estate of patient brought a claim against a surgeon and hospital based on failure to remove a surgical sponge following surgery. Hospital settled with the plaintiff prior to trial. Plaintiff pursued claims against surgeon based on direct liability and on vicarious liability of hospital employees allegedly under control of the surgeon. Prior to trial, the court instructed the jury, consistent with Uniform Civil Jury Instruction 11.70, that the hospital had settled with the plaintiff but that the jury should not infer anything from the settlement with regard to the issues between the parties. The jury returned a defense verdict. The Oregon Supreme Court reversed, holding it was error to instruct the jury on the settlement by the hospital.
The Supreme Court held that informing the jury of settlement constitutes reversible error, unless the settlement has independent relevance regarding an issue in the case. OEC 408. The court found the settlement had no independent relevance. NOTE: In subsequent opinions, Oregon appellate courts have consistently failed to find independent relevance regarding evidence of settlement. See, e.g., Foxworth v. Emanuel Hospital et al., 131 Or App 110, 883 P2d 917 (1994), rev den, 320 Or 507 (1995). Since Holger was decided, the Oregon Legislature amended ORS 18.470 in 1995 to allow a jury to assess the fault of a settled defendant, but no Oregon appellate court has yet addressed the impact of the amendments with respect to evidentiary questions regarding evidence of settlement.
Pounds v. Holy Rosary Medical Center, 127 Or App 221 (1994).
Minor plaintiff brought a medical malpractice action against a hospital and an obstetrician. The defendant hospital settled with the plaintiff before trial. During trial, the defendant obstetrician offered into evidence the plaintiff’s original complaint which included allegations against the hospital. The trial court ruled that the original complaint was admissible. During cross-examination of the plaintiff’s guardian ad litem, the defendant elicited that the plaintiff had settled his claims against the hospital. Evidence of the plaintiff’s settlement with the hospital was inadmissible to disprove the validity of plaintiff’s claim against the defendant obstetrician. Admission of the prior pleadings in the case did not make the evidence of plaintiff’s settlement with the hospital independently relevant. OEC 408 (1)(a) provides that evidence of settlement is not admissible to prove liability for or invalidity of a claim or its amount. However, evidence of a settlement is admissible if the evidence is relevant to prove another issue in the case, such as bias or prejudice of a witness. OEC 408(2)(b); Holger v. Irish, 316 Or 402 (1993).
STANDARD
OF CARE
PRIVILEGES