Friday, April 8, 2011

Vanderford Company, Inc. v. Knudson and Greif - Idaho Supreme Court Decision

The Vanderford decision was issued on March 21, 2011 and is a unanimous decision by the Idaho Supreme Court. The Idaho Supreme Court reverses the district court's decision to grant summary judgment and enforce purported settlement agreements.

This Idaho Supreme Court decision is a follow up to previous appeal in Vanderford Co. v. Knudson, 144 Idaho 547, 165 P.3d 261 (2007) (known as Vanderford I). In Vanderford I, the Idaho Supreme Court remanded various issues and the district court ordered mediation among the parties. The parties mediated and the issue in the second appeal, which is this case, is whether the parties reached various settlement agreements resolving the case.

Vanderford and the Greifs argued before the district court that a settlement agreement had been reached in the case. The terms of the settlement included: Knudson agreed to let Vanderford negotiate on his behalf with the Greifs, Knudson agreed to join in any settlement reached by Vanderford and the Greifs, that because Knudson and Vanderford agreed, the Greifs settled with Vanderford settling all claims, and that all that remained was memorializing the agreement in written form. Vanderford and the Greifs maintained the position that Knudson failed to join and comply with the settlement agreement. Knudson disagreed and asked for a trial date. The district court then asked Knudson to submit and unsworn statement explaining the failure to reach a settlement agreement.

The Greifs filed a motion to enforce the settlement agreement, requiring Knudson to perform. Knudson responded with a brief and a sworn affidavit. Vanderford also submitted a brief and affidavit. Knudson then responded to Vanderford's filings with another brief and affidavit. The Court heard oral argument in March 2009 and granted the motion in April 2009, dismissing Knudson's claims and resolving the case.

The Idaho Supreme Court treated the motion to enforce as a motion for summary judgment because no evidentiary hearing was held and matters outside the pleadings were considered.

The Court finds triable issues of material fact as to whether the Vanderford-Knudson settlement agreement even exists. Settlement agreements are governed by the same contract principles that govern other agreements. The existence of settlement agreement has to satisfy the same requirements and standards of any other contract. Otherwise, a contract/settlement agreement cannot be said to exist.

The Court finds fault with the district court's methodology, primarily reliance by the district court on the unsworn explanation offered by Knudson. A district court should only considered evidence that would be admissible at trial. The unverified and unsworn nature of Knudson's statement was not "a proper source for facts on summary judgment" and did not rise to the level of a judicial admission. The Idaho Supreme Court notes that when the statements of the explanation are placed into context, they are ambiguous and "internally contradictory."

The affidavits submitted by the Greifs and Vanderford seem to establish the existence of a settlement agreement; however, Knudson also submitted an affidavit to the district court. In Knudson's affidavit he explained that he "never authorized anyone to negotiate a settlement with the Greifs on his behalf, that he never entered into any settlement with Vanderford and that the discussions he had with Vanderford never culminated in a meeting of the minds necessary to form a binding agreement." As the nonmoving party on a motion that should have been analyzed as a motion for summary judgment, Knudson's affidavit generates triable issues of material fact sufficient to defeat a summary judgment motion.

The Court also considers the Greif-Vanderford settlement agreement. Knudson argued that only a framework had been reached rather than a final agreement in connection with the Greifs. The Court finds triable issues that any agreement was merely "an agreement to agree" and was not yet an enforceable settlement agreement.

The Idaho Supreme Court also notes that the district court appears to have engaged in a credibility analysis as part of the summary judgment hearing. This was improper. The district court should not be concerned with credibility issues since its role is to give all favorable inferences to the nonmoving party, recognizing that a jury ultimately has to make the determination on credibility.

At the close of the decision, the Court footnotes something that confuses me. The Court admonishes practioners that they should be amending their pleadings when a settlement agreement is reached to include an alternative count for breach of contract. The Court advises, "The court can then hold an evidentiary hearing on the issues going to the formation of the new agreement and can decide credibility issues and disputed issues of fact." The reason I am confused is because contract formation is a fact intensive inquiry. Fact questions are reserved for jury adjudication not for judges. From what I understand of Idaho's jury system, if there are disputed issues of material fact, and there has been a jury demand, then juries get to decide the fact questions. Merely holding an evidentiary hearing attendant to a motion to enforce the settlement agreement does not obviate the Court's duty to refrain from resolving factual disputes and deferring to a jury. When there is no jury demand, then I understand the rationale by the Court. However, this case involves a jury demand under Rule 38, so I fail to see how an evidentiary hearing short of a jury trial could have helped things in this case or any other case when a jury has been demanded. Maybe I am missing something but I learned in law school that juries get to resolve factual disputes.

Overall an interesting decision and chalk one up for pro se appellants. I've rarely seen pro se appellants win on appeal. Though that's largely been a function of the pro se party not preserving issues for the appeal. It appears that Knudson was savvy enough to know how to submit potentially admissible evidence to the district court and preserve the issue for the appellate court. Once he got before the appellate court, it really appears to be a no brainer decision when decided under the summary judgment standard. I do not have the record in front of me, so maybe the district decided the case under a different standard, I don't know. But when the effect of the decision to summarily resolve the case without a jury trial, I imagine the district court applied the summary judgment standard but engaged in improper evidence weighing and credibility determinations.

Thursday, April 7, 2011

Stuard v. Jorgenson--Idaho Supreme Court

The Court decided Stuard v. Jorgenson on April 1, 2011. It is a 3-2 decision affirming the district court's decision to grant summary judgment in a medical malpractice action in favor of Dr. Jorgenson. The district court dismissed the action based on the expiration of the statute of limitations. The Court's discussion of the various arguments is quite interesting.

The facts are simple and simultaneously unique. Patrick Stuard saw Dr. Samuel Jorgenson for back pain. Jorgenson performed spinal surgery on Stuard in July 2004. Jorgenson mistakenly operated on the wrong spinal level during the surgery. Jorgenson cut open Stuard's back, removed tissue, and installed a plate to stabilize the spine. Jorgenson apparently did not notice that he was operating on the wrong spinal level throughout the surgery and during the post-operative treatment.

In August 2006, Stuard was injured at work and experienced spinal pain. He went back to Jorgenson, who then discovered that he had operated on the wrong spinal level back in 2004. Stuard arranged for a different doctor to perform a second surgery, including correcting the original mistake by Jorgenson from 2004.

Stuard sued Jorgenson and Jorgenson moved for summary judgment based on the statute of limitations. Stuard argued that the injuries he suffered were not objectively ascertainable at the time of the surgery and alternatively that the placement of the plate in his back invoked the foreign-object exception to the statute of limitations. The court discusses each of these arguments in affirming the district court.

The statute of limitations for medical malpractice, as every Idaho lawyer knows, is two years after accrual, unless the foreign-object exception applies. Idaho recognizes that malpractice actions only accrue when there has been "some damage" caused by the malpractice. There has to be objectively ascertainable evidence of some damage having been caused. To be considered "objectively ascertainable" there has to be objective medical proof that supports the existence of actual injuries.

In this case, Stuard argued that he did not suffer any damage until August 2006, when he suffered a workplace injury. His rationale is that since he did not have symptoms or knowledge of the negligence, then there could not have been injury. The Court finds Stuard's arguments infirm.

In rejecting Stuard's arguments the Court reiterates that a patient's knowledge of the damage is irrelevant to deciding whether there is an objectively ascertainable injury. A patient's knowledge is subjective and symptoms are not equivalent to there being damage. Relying on a patient's knowledge of damage, according to the majority, essentially invokes the discovery rule for medical malpractice cases, a rule that the Idaho legislature has explicitly rejected.

Stuard also argues that the paucity of medical records in evidence made it unclear whether damage was objectively ascertainable. The Court, however, rejects that argument because it again implicates the discovery rule. Stuard's failing, according to the majority, is that he never provided a conflicting expert witness to "state that the injury was not objectively ascertainable . . . ." Nor was there an expert testifying that an MRI taken immediately after surgery would not have revealed the negligence, i.e., that Jorgenson had operated on the wrong spinal level. The majority states that the evidence in the record established that had an MRI been ordered, it would have revealed the negligence by Jorgenson.

Stuard also argues that the plate installed by Jorgenson in 2004 constituted a foreign object that would impart protection to his claim under the foreign object exception to the statute of limitations. The foreign object exception, essentially, applies to "the placement and inadvertent, accidental or unintentional leaving of any foreign object in the body of any person." The Court finds that the plate was not a foreign object for purposes of the excpetion because the plate was intentionally left in Stuard's body. Jorgenson intended to leave the plate in Stuard and Stuard consented to Jorgenson doing so. Stuard might not have consented to the location but he consented to Jorgenson's "installation" of the plate. The new rule as stated by the Court is "that a medical device which is placed in the body intentionally for the purpose of medical treatment is not a 'foreign object' under the statute." The statute requires inadvertent leaving of an object not the deliberate and intentional placement of a device.

Therefore, the majority affirms the district court's decision to grant summary judgment to Jorgenson.

The dissent, authored by Jim Jones and joined in by Justice Burdick, takes no issue with the majority's ruling on the foreign object exception. The issue where Jones and Burdick dissent is the conclusive finding of some damage by the majority. Justice Jones argues that the record is insufficient to establish, without dispute, that Stuard suffered any injuries in 2004. Jones posits that since Stuard saw Jorgenson to relieve pain, and since that was inexplicably accomplished not withstanding the surgery on the wrong spinal level, there might not have been any damage in 2004. Justice Jones argues that it is inappropriate for the majority to simply assume that some damage was done at the time of the operation.

Justice Jones also discounts the self-serving and conclusory testimony in Jorgenson's own affidavit. The problem with Jorgenson's testimony, according to Jones, is that it never explains how or what injury was caused by the surgery. Jones goes on to state that there is no credible evidence in the record suggesting that any injury caused by Jorgenson was objectively ascertainable during 2004, which is the requirement of the statute of limitations. Since Jorgenson was clearly self-interested in his testimony, and since the testimony could have been construed as such, Jones reasons that a jury should have decided the issue.

Jones also applies the legal standard for legal malpractice cases when analyzing the some damage standard. Jones would hold that "there must be some credible medical evidence demonstrating some damage of a monetary nature--in this case, an injury to Mr. Stuard's body that required the outlay of monetary resources to repair--occurred before I would find that the statute of limitations begins to run in a medical malpractice action."

So, here are my thoughts about the decision. First, just like all of the justices, I agree that the foreign object exception was a real reach by plaintiff's counsel and that the foreign object exception clearly does not apply. The statute establishing the exception clearly requires inadvertence or negligence in leaving an item in patient's body. The plate was installed as intended by both patient and doctor. Arguably, the plate accomplished its goal of alleviating pain. The location of the plate was not material in my estimation; rather, the purpose of relieving pain was the material reason for installing the plate. That makes the exception inapplicable in my opinion.

As for the some damage rule, I tend to side with Jim Jones on this one. Jim Jones' rule would certainly empower plaintiffs to seek redress through the courts, arguably the very reason for the establishment of a judicial system, without relying on technicalities, shrouded in mystery and wrapped in an enigma. The dissent's rule favors resolving cases on a complete record and moves away from resolving cases prematurely. As an attorney, I find that approach refreshing since I've seen far too many judges of the judicial philosophy of resolving cases on pretrial, dispositive motions.

The standard the dissent enunciates appears to be more of a bright-line rule that could be easier to objectively ascertain. The dissent makes a lot of good points about how some damage is determined in the context of a medical malpractice action. There seems to be a disconnect between the standard and the practicalities of proving some damage. The legal malpractice standard, in my opinion, seems like a better and easier standard to apply in all professional malpractice cases.