Case Title: Leung v. Verdugo Hills Hosp.

Citation: 

Docket Number: S192768

State: california

Court: California Supreme Court

Date: 2012-08-23T00:00:00Z

Document:
1 
 
Filed 8/23/12 
 
 
 
IN THE SUPREME COURT OF CALIFORNIA 
 
 
 
AIDAN MING-HO LEUNG, a Minor, etc., ) 
 
 
) 
 
Plaintiff and Appellant, 
) 
 
 
) 
S192768 
 
v. 
) 
 
 
) 
Ct.App. 2/4 B204908 
VERDUGO HILLS HOSPITAL, 
) 
 
) 
Los Angeles County 
 
Defendant and Appellant. 
) 
Super. Ct. No. BC343985 
 
____________________________________) 
 
Six days after his birth, plaintiff suffered irreversible brain damage.  
Through his mother as guardian ad litem, he sued his pediatrician and the hospital 
in which he was born.  Before trial, plaintiff and the pediatrician agreed to a 
settlement of $1 million, the limit of the pediatrician‟s malpractice insurance 
policy.  At a jury trial, plaintiff was awarded both economic and noneconomic 
damages.  The jury found that the pediatrician was 55 percent at fault, the hospital 
40 percent at fault, and the parents 5 percent at fault.   
On the hospital‟s appeal, a major contention was that under the common 
law “release rule,” plaintiff‟s settlement with the pediatrician also released the 
nonsettling hospital from liability for plaintiff‟s economic damages.  The Court of 
Appeal reluctantly agreed.  It observed that although this court “has criticized the 
common law release rule,” it “has not abandoned it.”  Considering itself bound by 
principles of stare decisis, the Court of Appeal then applied the common law 
release rule to this case, and it reversed that portion of the trial court‟s judgment 
 
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awarding plaintiff economic damages against the hospital.  We granted plaintiff‟s 
petition for review, which asked us, as the Court of Appeal did in its opinion, to 
repudiate the common law release rule.  Today, we do so.   
I 
Helpful in our review of this case is the Court of Appeal‟s lengthy and 
detailed explanation, not in dispute here, of the relevant facts and the medical 
conditions — jaundice, hyperbilirubinemia, and kernicterus — that led to 
plaintiff‟s postbirth brain injury.  Our brief summary follows. 
A.  Medical Conditions 
The skin and eyes of an infant with jaundice have a yellowish tint, which 
may be caused by an accumulation in the blood of bilirubin, a waste substance 
produced by the normal breakdown of red blood cells.  All infants have increasing 
levels of bilirubin for the first three to five days after birth.  Unless an 
exacerbating condition exists, the bilirubin level reduces in about a week as the 
infant‟s liver develops and the bilirubin is expelled.  A common way of preventing 
a rise in the bilirubin level is to give the infant adequate milk, resulting in 
sufficient stool to expel the bilirubin.   
Excessive bilirubin can lead to hyperbilirubinemia, in which bilirubin after 
migrating to the brain can cause kernicterus, leading to severe brain damage.  
Hyperbilirubinemia is readily treatable by exposure to light (phototherapy), or in 
more serious cases by a blood-exchange transfusion.  The risk of kernicterus is 
higher for some infants than for others.  The risk factors include these 
characteristics:  (1) male, (2) East Asian descent, (3) born at less than 38 weeks‟ 
gestation, (4) exclusively breastfed, (5) bruising, (6) jaundice within the first 24 
hours, and (7) weight loss. 
 
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In April 2001, the Joint Commission (formerly the Joint Commission on 
Accreditation of Healthcare Organizations) issued “Sentinel Event Alert No. 18” 
(Alert No. 18) to warn the medical community of the reemergence of kernicterus.  
The alert identified the various risk factors and recommended certain protective 
measures, such as medical check-ups of all newborns within 24 to 48 hours of 
birth, and educating neonatal caregivers on the danger of and risk factors for 
kernicterus in newborn infants.   
B.  Facts Leading to Lawsuit 
On Monday, March 24, 2003, Aidan Ming-Ho Leung, of East Asian 
descent, was born at Verdugo Hills Hospital in Glendale, Los Angeles County.  He 
was born at less than 38 weeks‟ gestation (37 weeks and two days).  On the day of 
his birth, his mother, Nancy Leung, tried to breastfeed him five or six times, but 
she could not tell whether he was taking in milk.  At least three times she 
expressed her concern to two of the attending nurses; two entries in Aidan‟s 
hospital medical chart indicated problems with breastfeeding.   
The next day, Aidan‟s pediatrician, Steven Wayne Nishibayashi, examined 
Aidan at the hospital.  Dr. Nishibayashi told the parents that Aidan was a healthy 
baby, that two bruises on the side of Aidan‟s head were nothing to worry about, 
that it was safe to take Aidan home, and that a followup appointment should be 
made for the next week.  Later that morning, about 24 hours after his birth, Aidan 
was discharged from the hospital.  The hospital gave Aidan‟s parents a manual 
entitled “Caring For Yourself and Your New Baby,” and the nurses told the 
parents to consult the manual if there were problems.  When the parents arrived 
home, Aidan‟s mother made an appointment for a followup visit with 
Dr. Nishibayashi for March 31, seven days after Aidan‟s birth. 
 
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On Thursday, March 27, 2003, Aidan‟s parents noticed that his eyes looked 
yellow and that his lips were chapped.  They checked the care manual that the 
hospital had given them.  The manual said that jaundice is common in newborns, 
that in most cases jaundice can be ignored, and that although jaundice can be 
dangerous, it rarely is so, depending on various factors such as age, premature 
birth, and “any other medical conditions.”  The manual also stated that any bruises 
on the head were not dangerous and would heal in a few days, and that any 
questions about the baby‟s jaundice should be directed to the baby‟s treating 
physician. 
That same day, Aidan‟s mother telephoned the office of pediatrician 
Nishibayashi and told the responding nurse about Aidan‟s yellowish tint.  The 
nurse told her not to worry but said she would check with the doctor.  When the 
nurse returned to the telephone, she asked whether Aidan was “feeding, peeing, 
and pooping.”  Aidan‟s mother responded, “Yes.”  After saying that Aidan seemed 
fine, the nurse suggested putting Aidan in the sunlight.  When Aidan‟s mother 
mentioned his chapped lips, the nurse told her to apply lotion.  When the mother 
asked whether she should bring Aidan in that day or wait for the scheduled 
appointment with Dr. Nishibayashi four days later, the nurse said to wait until that 
appointment.   
The next day (Friday) and the day thereafter (Saturday), Aidan‟s mother 
continued trying to breastfeed him and, as suggested by Dr. Nishibayashi‟s office, 
put him in the sunlight, but the jaundice remained.  By Saturday evening, Aidan 
appeared lethargic.  Early Sunday, Aidan was very sleepy and would not wake up 
to be fed.  His mother telephoned Dr. Nishibayashi‟s office and left a message 
with his answering service.  An on-call physician returned the call and, after 
listening to a description of Aidan‟s symptoms, said to immediately take Aidan to 
the emergency room at Huntington Memorial Hospital in Pasadena.  There Aidan 
 
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was given a blood-exchange transfusion to reduce the level of bilirubin, but it was 
too late.  Aidan had already developed kernicterus, resulting in severe brain 
damage.   
C.  The Lawsuit, the Trial, and the Court of Appeal’s Decision 
Through his mother, Nancy, as guardian ad litem, Aidan brought a 
negligence action against his pediatrician and the hospital in which he was born.   
Before trial, plaintiff settled with defendant pediatrician for $1 million, the 
limit of the pediatrician‟s malpractice insurance policy.  Defendant pediatrician 
agreed to participate as a defendant at trial, and plaintiff agreed to release him 
from all claims.  The pediatrician petitioned the trial court for a determination that 
the written settlement agreement met the statutory requirement of having been 
made in “good faith,” seeking to limit his liability to the amount of the settlement.  
(Code Civ. Proc., § 877 [judicial determination of settlement in good faith 
discharges the settling party “from all liability for any contribution to any other 
parties”].)   
The trial court denied that motion, as it found the settlement to be “grossly 
disproportionate to the amount a reasonable person would estimate” the 
pediatrician‟s share of liability would be.  (See Tech-Bilt, Inc. v. Woodward-Clyde 
& Associates (1985) 38 Cal.3d 488, 499 (Tech-Bilt) [a settlement is in good faith 
when the trial court has determined it to be “within the reasonable range of the 
settling tortfeasor‟s proportional share of comparative liability for the plaintiff‟s 
injuries”].)  Plaintiff and defendant pediatrician nevertheless decided to proceed 
with the settlement.   
At trial, a jury found both defendant pediatrician and defendant hospital 
negligent.  The jury awarded plaintiff $250,000 in noneconomic damages; 
$78,375.55 for past medical costs; $82,782,000 (with a present value of $14 
 
6 
 
million) for future medical costs; and $13.3 million (with a present value of 
$1,154,000) for loss of future earnings.  The jury apportioned negligence as 
follows:  55 percent as to the pediatrician, 40 percent as to the hospital, and 2.5 
percent as to each of Aidan‟s parents.  The judgment stated that, subject to a setoff 
of $1 million, representing the amount of settlement with the pediatrician, the 
hospital was jointly and severally liable for 95 percent of all economic damages 
awarded to plaintiff.  Defendant hospital appealed, and plaintiff filed a cross-
appeal. 
The Court of Appeal agreed with defendant hospital that under the common 
law release rule, plaintiff‟s settlement with, and release of liability claims against, 
defendant pediatrician also released nonsettling defendant hospital from liability 
for plaintiff‟s economic damages.  The court did so reluctantly, observing that 
although our court has criticized the common law release rule, it has not 
abandoned it.  We granted plaintiff‟s petition for review. 
II 
Under the traditional common law rule, a plaintiff‟s settlement with, and 
release from liability of, one joint tortfeasor also releases from liability all other 
joint tortfeasors.  That common law rule originated in England at a time when, 
under English law, a plaintiff could sue in a single action only those tortfeasors 
who had acted in concert against the plaintiff.  In this context, the rule developed 
that if a joint tortfeasor paid compensation to the plaintiff, and received in 
exchange a release from liability, the remaining joint tortfeasors were also 
released.  (Rest.2d Torts (appen.) § 885, reporter‟s notes, p. 162.)  The common 
law rule‟s rationale is that there can be only one compensation for a single injury 
and because each joint tortfeasor is liable for all of the damage, any joint 
tortfeasor‟s payment of compensation in any amount satisfies the plaintiff‟s entire 
claim.  (5 Witkin, Summary of Cal. Law (10th ed. 2005) Torts, § 70, pp. 142-143.)   
 
7 
 
The rule, however, can lead to harsh results.  An example:  A plaintiff 
might have settled with a joint tortfeasor for a sum far less than the plaintiff‟s 
damages because of the tortfeasor‟s inadequate financial resources.  In that 
situation, the common law rule precluded the plaintiff from recovering damages 
from the remaining joint tortfeasors, thus denying the plaintiff full compensation 
for the plaintiff‟s injuries.  (Mesler v. Bragg Management Co. (1985) 39 Cal.3d 
290, 298.)  In an effort to avoid such unjust and inequitable results, California 
courts held that a plaintiff who settled with one of multiple tortfeasors could, by 
replacing the word “release” in the settlement agreement with the phrase 
“covenant not to sue,” and by stating that the agreement applied only to the parties 
to it, preserve the right to obtain additional compensation from the nonsettling 
joint tortfeasors.  (Kincheloe v. Retail Credit Co., Inc. (1935) 4 Cal.2d 21, 23; 
Lewis v. Johnson (1939) 12 Cal.2d 558, 562; Holtz v. United Plumbing & Heating 
Co. (1957) 49 Cal.2d 501, 504; 5 Witkin, Summary of Cal. Law, supra, Torts, 
§ 70, p. 143.)  As this court later recognized, “the distinction between a release 
and a covenant not to sue is entirely artificial.”  (Pellett v. Sonotone Corp. (1945) 
26 Cal.2d 705, 711.)  We explained:  “As between the parties to the agreement, the 
final result is the same in both cases, namely, that there is no further recovery from 
the defendant who makes the settlement, and the difference in the effect as to third 
parties is based mainly, if not entirely, on the fact that in one case there is an 
immediate release, whereas in the other there is merely an agreement not to 
prosecute a suit.”  (Ibid.) 
It was against that backdrop of criticism of the traditional common law 
release rule that the California Legislature in 1957 enacted Code of Civil 
Procedure section 877.  (Stats. 1957, ch. 1700, § 1, p. 3077; see 5 Witkin, 
Summary of Cal. Law, supra, Torts, § 70, p. 142.)  The statute modified the 
common law release rule by providing that a “good faith” settlement and release 
 
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of one joint tortfeasor, rather than completely releasing other joint tortfeasors, 
merely reduces, by the settlement amount, the damages that the plaintiff may 
recover from the nonsettling joint tortfeasors, and that such a good faith settlement 
and release discharges the settling tortfeasor from all liability to others.  (Code 
Civ. Proc., § 877, subds. (a), (b).)  But because the statute governs only good faith 
settlements, and the trial court here determined that the settlement was not made in 
good faith (see ante, at p. 5), the statute does not apply to this case.   
We reject defendant hospital‟s contention that in enacting Code of Civil 
Procedure section 877 in 1957, the Legislature signaled an intent to preclude 
future judicial development of the law pertaining to settlements involving joint 
tortfeasors, thus preventing us from abrogating the common law release rule.  As 
we observed in American Motorcycle Assn. v. Superior Court (1978) 20 Cal.3d 
578 (American Motorcycle), nothing in the statute‟s legislative history suggests an 
intent to foreclose the courts from rendering future decisions that would further the 
statute‟s main purpose of ameliorating the harshness and the inequity of the 
common law rule at issue.  (Id. at p. 601.)  So also here, our decision today 
abrogating the common law release rule furthers the statute‟s legislative purpose. 
Here, adherence to the common law release rule would, as a result of 
plaintiff‟s settlement with defendant pediatrician for $1 million (the limit of the 
pediatrician‟s medical malpractice insurance policy), relieve nonsettling defendant 
hospital from any liability for plaintiff‟s economic damages, even though the jury 
apportioned to the hospital 40 percent of the fault for plaintiff‟s severe postbirth 
brain damage (assigning 55 percent of the fault to defendant pediatrician) and 
calculated plaintiff‟s total economic damages at roughly $15 million.  Under the 
common law release rule, plaintiff, injured for life through no fault of his own, 
would be compensated for only a tiny fraction of his total economic damages, a 
harsh result. 
 
9 
 
The rationale for the common law release rule was “that there could be only 
one compensation for a joint wrong and since each joint tortfeasor was responsible 
for the whole damage, payment by any one of them satisfied plaintiff‟s claim 
against all.”  (Tech-Bilt, supra, 38 Cal.3d at p. 493; see Lamoreux v. San Diego 
etc. Ry. Co. (1957) 48 Cal.2d 617, 624; 5 Witkin, Summary of Cal. Law, supra, 
Torts, § 70, p. 142.)  That rationale assumes that the amount paid in settlement to a 
plaintiff in return for releasing one joint tortfeasor from liability always provides 
full compensation for all of the plaintiff‟s injuries, and that therefore anything 
recovered by the plaintiff beyond that amount necessarily constitutes a double or 
excess recovery.  The assumption, however, is unjustified.  For a variety of 
reasons — such as the settling defendant‟s limited resources or relatively minor 
role in causing the plaintiff‟s injury — a plaintiff may be willing to release one 
tortfeasor for an amount far less than the total necessary to fully compensate the 
plaintiff for all injuries incurred.  As Dean Prosser observed in his criticism of the 
common law release rule:  “There is a genuine distinction between a satisfaction 
and a release.”  (Prosser & Keeton on Torts (5th ed. 1984) § 49, p. 332.) 
In light of the unjust and inequitable results the common law release rule 
can bring about, as shown in this case, we hold that the rule is no longer to be 
followed in California.1 
We now consider our holding‟s effect on the apportionment of liability 
among joint tortfeasors when, as here, one tortfeasor‟s settlement, resulting in a 
                                              
1  
Overruled are this court‟s decisions in Tompkins v. Clay Street R.R. Co. 
(1884) 66 Cal. 163, Chetwood v. California Nat. Bank (1896) 113 Cal. 414, Bee v. 
Cooper (1932) 217 Cal. 96, Kincheloe v. Retail Credit Co., Inc., supra, 4 Cal.2d 
21, Pellett v. Sonotone Corp., supra, 26 Cal.2d 705, Lamoreux v. San Diego etc. 
Ry. Co., supra, 48 Cal.2d 617, and their progeny, to the extent they are 
inconsistent with the views expressed here.   
 
10 
 
release of liability, was determined by the trial court not to have been made in 
“good faith,” thus rendering inapplicable the apportionment scheme under Code of 
Civil Procedure section 877.   
III 
In deciding how to apportion liability in a negligence action when a 
plaintiff‟s settlement with one of several defendants has been determined by a trial 
court not to have been made in good faith, we begin with two legal concepts that 
are central to California negligence law.  The first concept is comparative fault, 
the second is joint and several liability.  Under comparative fault, “liability for 
damage will be borne by those whose negligence caused it in direct proportion to 
their respective fault.”  (Li v. Yellow Cab Co. (1975) 13 Cal.3d 804, 813.)  Under 
joint and several liability, “each tortfeasor whose negligence is a proximate cause 
of an indivisible injury remains individually liable for all compensable damages 
attributable to that injury.”  (American Motorcycle, supra, 20 Cal.3d at p. 582.)   
As has been recognized, “[n]o perfect method exists for apportioning 
liability among a plaintiff, a settling tortfeasor, and a nonsettling tortfeasor.”  
(Rest.3d Torts, Apportionment of Liability, § 16, com. c, p. 133.)  Three 
alternative approaches have developed.  (Rest.2d Torts, § 886A, com. m, pp. 343-
344.)  We describe each. 
Under the first approach, the money paid by the settling tortfeasor is 
credited against any damages assessed against the nonsettling tortfeasors, who are 
allowed to seek contribution from the settling tortfeasor for damages they have 
paid in excess of their equitable shares of liability.  (Rest.2d Torts, § 886A, com. 
m, p. 343.)  We will call this the setoff-with-contribution approach.   
Under the second approach, as under the first, nonsettling tortfeasors are 
entitled to a credit in the amount paid by the settling tortfeasor.  But, unlike under 
the first alternative, nonsettling tortfeasors may not obtain any contribution from 
 
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the settling tortfeasor.  (Rest.2d Torts, § 886A, com. m, p. 343.)  We will call this 
the setoff-without-contribution approach.   
The third approach differs from the first and second by subtracting from the 
damages assessed against nonsettling tortfeasors the settling tortfeasor‟s 
proportionate share of liability, rather than the amount paid in settlement.  (Rest.2d 
Torts, § 886A, com. m, p. 344.)  We will call this the proportionate-share 
approach. 
Which of these three approaches should we apply when, as here, one 
tortfeasor settles but another does not, and the settlement is judicially determined 
not to meet Code of Civil Procedure section 877‟s “good faith” requirement?  That 
is the issue we explore and resolve below. 
The second approach — setoff without contribution by the settling 
tortfeasor to the nonsettling tortfeasor — is easy to dispose of, as it is not an 
option here.  Although the Legislature has statutorily adopted this apportionment 
method, it has expressly limited its application to settlements made in good faith.  
(Code Civ. Proc., §§ 877, 877.6, subd. (c).)  The Legislature did not define what 
“good faith” means in this context, but this court has held that the trial court 
should “inquire, among other things, whether the amount of the settlement is 
within the reasonable range of the settling tortfeasor‟s proportional share of 
comparative liability for the plaintiff‟s injuries.”  (Tech-Bilt, supra, 38 Cal.3d 488, 
499.)  We further explained that the factors to be considered in determining 
whether a settlement was made in good faith include the settling defendant‟s 
financial condition and insurance policy limits, a rough approximation of the 
plaintiff‟s total recovery and the settling defendant‟s proportionate share of fault, 
and any evidence of collusion or fraud, as well as “a recognition that a settlor 
should pay less in settlement than he would if he were found liable after a trial.”  
(Ibid.) 
 
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Here, as we noted earlier, the trial court ruled that plaintiff‟s settlement 
with defendant pediatrician was not made in good faith.  The pediatrician 
challenged that ruling by petitioning the Court of Appeal for a writ of mandate, 
but that court summarily denied the petition, and the issue is not before us here.  
For purposes of our discussion, we accept that the settlement was not in good 
faith.  As we noted earlier, the Legislature has expressly limited the second 
apportionment method, setoff without contribution, to settlements made in good 
faith.  (Code Civ. Proc., § 877.)  Applying the setoff-without-contribution 
approach to settlements not made in good faith would effectively nullify that 
statutory provision.  Consequently, that apportionment method is not available 
here.  
Of the two remaining alternatives — setoff with contribution and 
proportionate share — nonsettling defendant hospital argues that we should adopt 
the latter.  Plaintiff, however, prefers the setoff-with-contribution approach.  In 
deciding which of these two alternatives to adopt, we evaluate their practical 
implications for tort plaintiffs and for settling and nonsettling joint tortfeasor 
defendants, their consistency with established legal principles, and their likely 
effect on the public policy to promote settlement and on the interest of judicial 
economy.  (See McDermott, Inc. v. AmClyde (1994) 511 U.S. 202, 211 
(McDermott) [identifying, as criteria for selecting an approach, consistency with 
principles of comparative fault, promotion of settlement, and judicial economy].) 
We begin by considering the practical effect of the two apportionment 
approaches in terms of the amounts ultimately paid by each joint tortfeasor and the 
total amount recovered by the plaintiff.  We also consider the extent to which each 
approach is consistent with the two basic legal concepts we mentioned earlier:  
comparative fault, and joint and several liability. 
 
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Under the setoff-with-contribution approach, the settlement has little or no 
practical effect on the defendants‟ ultimate liabilities or the plaintiff‟s ultimate 
recovery, nor is the resulting apportionment inconsistent with either the 
comparative fault principle or the rule of joint and several liability.  Without the 
settlement, each tortfeasor is, under the principle of joint and several liability, fully 
liable for all of the plaintiff‟s damages less only the amount of fault attributed to 
the plaintiff.  If another joint tortfeasor is for any reason unable to satisfy its share 
of liability, the remaining tortfeasors are still liable for all the economic damages 
awarded to the plaintiff, even though the amount exceeds their proportionate 
shares of liability. 
With the settlement, under the setoff-with-contribution approach, this 
liability exposure of joint tortfeasors is not affected.  In a suit against the 
nonsettling defendants, the plaintiff may recover damages less the settlement 
amount and the amount attributable to the plaintiff‟s own fault.  Consistent with 
the comparative fault principle, the nonsettling tortfeasors may then seek 
contribution from the settling tortfeasor for any amount they must pay to the 
plaintiff in excess of their proportionate shares of liability.  If in such a 
contribution action the settling tortfeasor is for any reason unable to fully 
discharge its share of liability, each nonsettling tortfeasor, consistent with the rule 
of joint and several liability, remains liable for the difference. 
The net result, under the setoff-with-contribution approach, is that the 
plaintiff recovers the total economic damages amount (less an amount attributable 
to the plaintiff‟s own negligence), with the settlement amount providing part of 
that recovery and the judgment against the nonsettling tortfeasors providing the 
rest.  An action for contribution remains available to ensure that the amounts 
ultimately paid by each tortfeasor are, so far as possible, consistent with that 
party‟s proportionate share of fault for the plaintiff‟s damages.  For the parties, the 
 
14 
 
only practical difference that the settlement makes is that the settling tortfeasor‟s 
proportionate share of liability is paid in two parts rather than one, with the first 
part being paid to the plaintiff in the form of the settlement amount, and the 
second part to the nonsettling tortfeasors as contribution.   
We next consider the proportionate-share approach.  As explained below, it 
does have a significant practical impact on the liability positions of the parties.  
Moreover, it is not consistent with California‟s law of joint and several liability. 
Under proportionate-share apportionment, the plaintiff‟s total recovery for 
economic damages is limited to the settlement amount plus the proportionate 
shares of the nonsettling tortfeasors.  If the settlement payment turns out to be less 
than the settling tortfeasor‟s proportionate share, as determined by the trial court 
or the jury, the plaintiff may not recover the difference from any of the tortfeasors 
and thus is precluded from obtaining full compensation.  Therefore, the settling 
tortfeasor‟s liability is not its proportionate share, but only the amount paid in 
settlement.  Because the nonsettling tortfeasors‟ liability to the plaintiff for 
economic damages cannot exceed their proportionate shares, their liability is not 
joint and several, but several only.   
We conclude that the practical implications of the two available 
apportionment approaches and their consistency or inconsistency with basic tort 
principles support our adoption of the setoff-with-contribution alternative over the 
proportionate-share alternative.  As explained earlier, setoff-with-contribution 
apportionment does not change the respective positions of the parties and is fully 
consistent with both the comparative fault principle and the rule of joint and 
several liability.  In contrast, proportionate-share apportionment alters the parties‟ 
positions and would require us to recognize a new exception to our established law 
of joint and several liability. 
 
15 
 
We next consider the relative merits of the setoff-with-contribution 
approach and the proportionate-share approach in regard to promoting the public 
policy of settling a case before trial.  (See Cassel v. Superior Court (2011) 51 
Cal.4th 113, 132 [public policy of encouraging resolution of disputes short of 
litigation]; T.M. Cobb Co. v. Superior Court (1984) 36 Cal.3d 273, 281 [public 
policy of encouraging settlements].)  That public policy‟s laudable goals — 
decreasing the substantial litigation cost to the parties and lessening the burden 
that litigation imposes on scarce judicial resources — are not necessarily satisfied 
in all pretrial settlements.  Although good faith settlements are to be encouraged, 
the same cannot be said of settlements not made in good faith.  Indeed, by 
providing in Code of Civil Procedure section 877 that only good faith settlements 
will preclude a nonsettling tortfeasor‟s contribution action against the settling 
tortfeasor, the Legislature indicated that settlements not made in good faith should 
be discouraged.  (See Tech-Bilt, supra, 38 Cal.3d at p. 495.)  As explained below, 
the public policy of encouraging good faith pretrial settlements is furthered by the 
setoff-with-contribution approach, but not by the proportionate-share approach.   
As we have pointed out (ante, at pp. 13-14), the setoff-with-contribution 
approach does not change the respective liabilities of the joint tortfeasors.  Thus, it 
provides no incentive for them to enter into a settlement that is not in good faith.  
In contrast, the proportionate-share approach would encourage settlements not 
made in good faith:  by limiting the liability of the settling tortfeasor (who would 
be liable only for the settlement amount irrespective of the settling tortfeasor‟s 
proportionate share of liability), and by limiting the liability of the nonsettling 
tortfeasor (who, under principles of joint and several liability, would no longer be 
liable for the settling tortfeasor‟s proportionate share).  Consequently, with respect 
to a settlement not made in good faith, the setoff-with-contribution approach is 
 
16 
 
superior to the proportionate-share approach in furthering the statutory scheme‟s 
goal of encouraging settlements made in good faith.   
With respect to the public interest in promoting judicial economy, we 
conclude that neither approach is better than the other.  Under both approaches, all 
issues can be resolved in a single action.  Under the settlement-with-contribution 
approach, nonsettling tortfeasors may seek contribution from the settling 
tortfeasor, but their claims may be combined with the plaintiff‟s action against the 
nonsettling defendants, so that the respective shares of liability can be determined, 
and all issues resolved, in the same trial.  Under the proportionate-share approach, 
the liability of all tortfeasors is likewise determined in one action, at which the 
court or jury will establish the total damages and the proportionate fault share of 
the plaintiff and each of the tortfeasors.   
On balance, we conclude that here the settlement-with-contribution 
approach is preferable to the proportionate-share approach.  Unlike proportionate 
share, settlement with contribution does not change the liability position of the 
parties from what it would be without a settlement; nor does it require 
modification of, or a new exception to, our established rule of joint and several 
liability.  Also, the settlement-with-contribution method is, as explained earlier, 
superior to the proportionate-share approach in serving the policy of promoting 
settlements made in good faith. 
The United States Supreme Court‟s decision in McDermott, supra, 511 
U.S. 202, deserves mention.  There, the high court selected the proportionate-share 
method of apportioning liability, a view later adopted in the Restatement Third of 
Torts, section 16.  McDermott involved a plaintiff‟s pretrial settlement with some 
of the joint tortfeasors.  The settling tortfeasors agreed to pay $1 million, an 
amount that, as later determined at trial, far exceeded their proportionate liability.  
Because the jury found that the settling tortfeasors were only 30 percent at fault, 
 
17 
 
their proportionate share of liability came to only $630,000 out of the $2.1 million 
assessed in total damages.  A significant difference exists, however, between 
McDermott and the case now before us.  Here, unlike in McDermott, the pretrial 
settlement was determined not to have been made in good faith.  (See ante, p. 5.)  
Thus, in McDermott no need existed to decide which method of apportioning 
liability to select in a case involving a settlement not made in good faith, and 
hence McDermott did not address that issue.   
Also, as we have explained (ante, at pp. 11-12), the good-faith settlement 
provisions of California law preclude us from considering the setoff-without-
contribution approach, thus limiting us to choosing between the setoff-with-
contribution approach and the proportionate-share approach.  The high court in 
McDermott, supra, 511 U.S. 202, was not under any similar restraint.  This 
difference in the choices available to the high court (and the authors of the 
Restatement) and to this court fundamentally changes the analysis.   
Between the two alternatives available to us for consideration, we adopt the 
setoff-with-contribution approach.  As explained earlier, that approach is more 
consistent with our comparative fault principle and our rule of joint and several 
liability.  Accordingly, we hold that when a settlement with a tortfeasor has 
judicially been determined not to have been made in good faith (see Code Civ. 
Proc., §§ 877, 877.6, subd. (c)), nonsettling joint tortfeasors remain jointly and 
severally liable, the amount paid in settlement is credited against any damages 
awarded against the nonsettling tortfeasors, and the nonsettling tortfeasors are 
entitled to contribution from the settling tortfeasor for amounts paid in excess of 
their equitable shares of liability.  
 
18 
 
IV 
Defendant hospital challenges the Court of Appeal‟s determination that the 
evidence was sufficient to prove that negligence by the hospital was a legal cause 
of plaintiff‟s injuries.  We agree with the Court of Appeal, as explained below. 
The Court of Appeal correctly noted that in evaluating a claim of 
insufficiency of evidence, a reviewing court must resolve all conflicts in the 
evidence in favor of the prevailing party and must draw all reasonable inferences 
in support of the trial court‟s judgment.  (See, e.g., Scott v. Pacific Gas & Electric 
Co. (1995) 11 Cal.4th 454, 465.)  Thereafter, the Court of Appeal stated that in a 
medical negligence case, causation is adequately established if the evidence is 
sufficient to permit the jury to infer that without the negligence there is a 
reasonable medical probability the plaintiff would have obtained a better result.  It 
then quoted this language from Raven H. v. Gamette (2007) 157 Cal.App.4th 
1017, 1029-1030:  “ „If, as a matter of ordinary experience, a particular act or 
omission might be expected to produce a particular result, and if that result has in 
fact followed, the conclusion may be justified that the causal relation exists.  In 
drawing that conclusion, the triers of fact are permitted to draw upon ordinary 
human experience as to the probabilities of the case.‟ ” 
Disagreeing with that observation, defendant hospital contends that in a 
medical negligence action, common human experience is insufficient to support a 
trier of fact‟s causation determination.  Rather, defendant hospital argues, an 
actual causal link between the negligence and the injury must be shown; the 
evidence of causation must show a reasonable medical probability that the 
plaintiff‟s injury was more likely than not the result of the negligence, and only  
 
19 
 
expert testimony can establish causation.  The hospital asserts that because 
plaintiff‟s expert witness, Dr. Vinod Bhutani, testified at trial that he could not say 
what plaintiff Aidan‟s bilirubin level was on the third day after his birth, plaintiff 
did not satisfy his burden of proof that negligence by the hospital was a legal 
cause of plaintiff‟s injury. 
Even assuming that the appropriate standard applicable to plaintiff‟s claims 
against the hospital in this case is one of reasonable medical probability and that 
expert testimony is required (see generally Flowers v. Torrance Memorial 
Hospital Medical Center (1994) 8 Cal.4th 992, 996-999 [discussing standard of 
care in “ordinary” and “professional” negligence actions]), the evidence presented 
at trial was sufficient to support the jury‟s finding that the hospital‟s negligence 
was a legal cause of plaintiff‟s injury.   
Arthur Shorr, plaintiff‟s expert witness on hospital administration, testified 
that defendant hospital was negligent in failing to implement any of the 
recommendations of the Joint Commission‟s Alert No. 18.  Dr. Bhutani, another 
expert witness for plaintiff, testified that defendant hospital was negligent when its 
staff failed to tell plaintiff‟s parents that a followup appointment with his 
pediatrician within two or three days was needed, failed to assess plaintiff‟s risk of 
developing hyperbilirubinemia, failed to discuss that risk with his parents, failed to 
appropriately educate plaintiff‟s parents about jaundice, and failed to instruct 
plaintiff‟s mother on breastfeeding so that she knew whether plaintiff was getting 
an adequate amount of milk, which is a primary way of preventing the buildup in 
the blood of the bilirubin that caused plaintiff‟s injury.  Also, plaintiff presented  
 
20 
 
evidence that defendant hospital provided his parents with misleading information 
in the manual given to them upon plaintiff‟s discharge from the hospital some 24 
hours after his birth.  We agree with the Court of Appeal that this evidence 
sufficiently supports the jury‟s determination that defendant hospital‟s negligence 
was a legal cause of plaintiff‟s injury. 
Defendant hospital contends that because a hospital does not practice 
medicine, as a matter of public policy its conduct should not be considered a legal 
cause of plaintiff‟s injuries.  Defendant hospital asserts it should not be required to 
provide medical advice “beyond directing the patient to call the doctor with 
concerns.”  We disagree. 
As the Court of Appeal observed in Mejia v. Community Hospital of San 
Bernardino (2002) 99 Cal.App.4th 1448, 1453, quoting Bing v. Thunig (1957) 2 
N.Y.2d 656 [143 N.E.2d 3, 8]:  “ „Present-day hospitals, as their manner of 
operation plainly demonstrates, do far more than furnish facilities for treatment.  
They regularly employ on a salary basis a large staff of physicians, nurses and 
internes [sic], as well as administrative and manual workers, and they charge 
patients for medical care and treatment, collecting for such services, if necessary, 
by legal action.  Certainly, the person who avails himself of “hospital facilities” 
expects that the hospital will attempt to cure him, not that its nurses or other 
employees will act on their own responsibility.‟ ”  Although hospitals do not 
practice medicine in the same sense as physicians, they do provide facilities and 
services in connection with the practice of medicine, and if they are negligent in 
doing so they can be held liable.  Here, defendant hospital implicitly recognized 
that point when it requested, and the trial court gave, this jury instruction:  “A  
 
21 
 
hospital must provide procedures, policies, facilities, supplies, and qualified 
personnel reasonably necessary for the treatment of its patients.”   
For the reasons given above, the evidence presented at trial was sufficient 
to support the jury‟s finding that defendant hospital‟s acts or omissions were a 
legal cause of plaintiff‟s brain injury. 
V 
The Court of Appeal reversed the judgment against defendant hospital 
insofar as the hospital was held liable for plaintiff‟s economic damages.  
Consequently, the Court of Appeal did not address the hospital‟s contentions that 
the trial court erred in excluding evidence of future insurance coverage, in 
calculating interest on future periodic payments, and in requiring the hospital to 
provide security for future periodic payments.  Nor, for the same reason, did the 
Court of Appeal address on its merits plaintiff‟s cross-appeal contending the trial 
court erred in allowing defendant hospital to acquire an annuity payable to itself as 
security for the future periodic payments it had been ordered to pay under the 
judgment.  
Having concluded that the common law release rule is no longer to be 
followed in California, and that therefore defendant hospital remains jointly and 
severally liable for plaintiff‟s economic damages, we must reverse the Court of 
Appeal‟s judgment.  On remand, the Court of Appeal will address the unresolved 
contentions, as noted in the preceding paragraph, raised by defendant hospital and 
by plaintiff.   
 
22 
 
 
DISPOSITION 
The judgment of the Court of Appeal is reversed, and the case is remanded 
to that court for further proceedings consistent with the views expressed in this 
opinion. 
 
 
 
 
 
 
 
 
KENNARD, J. 
WE CONCUR: 
 
CANTIL-SAKAUYE, C. J. 
BAXTER, J. 
WERDEGAR, J. 
CHIN, J. 
CORRIGAN, J. 
LIU, J.
 
 
See next page for addresses and telephone numbers for counsel who argued in Supreme Court. 
 
Name of Opinion Leung v. Verdugo Hills Hospital 
__________________________________________________________________________________ 
 
Unpublished Opinion 
Original Appeal 
Original Proceeding 
Review Granted XXX 193 Cal.App.4th 971 
Rehearing Granted 
 
__________________________________________________________________________________ 
 
Opinion No. S192768 
Date Filed: August 23, 2012 
__________________________________________________________________________________ 
 
Court: Superior 
County: Los Angeles 
Judge: Laura A. Matz 
 
__________________________________________________________________________________ 
 
Counsel: 
 
The Phan Law Group, LKP Global Law, Luan K. Phan; Esner, Chang & Ellis, Esner, Chang & Boyer, 
Andrew N. Chang and Stuart B. Esner for Plaintiff and Appellant. 
 
Thomas and Thomas, Michael Thomas, Maureen F. Thomas; Greines, Martin, Stein & Richland, Feris M. 
Greenberger, Jennifer C. Yang and Robert A. Olson for Defendant and Appellant. 
 
Gibson, Dunn & Crutcher, Robert L. Weigel, Marshall R. King, Theodore J. Boutrous, Jr., Julian W. Poon, 
Blaine H. Evanson, Kimberly A. Nortman; National Chamber Litigation Center, Inc., Robin S. Conrad, 
Kate Comerford Todd; Erika Frank; and Fred J. Hiestand for Chamber of Commerce of the United States 
of America, California Chamber of Commerce, the Civil Justice Association of California and Artemis, 
S.A., as Amici Curiae on behalf of Defendant and Appellant. 
 
Cole Pedroza, Curtis A. Cole and Cassidy E. Cole for California Medical Association, California Hospital 
Association and California Dental Association as Amici Curiae on behalf of Defendant and Appellant. 
 
Horvitz & Levy, David M. Axelrad and David S. Ettinger for California Medical Association, California 
Hospital Association and California Dental Association as Amici Curiae on behalf of Defendant and 
Appellant. 
 
 
 
 
 
 
 
 
Counsel who argued in Supreme Court (not intended for publication with opinion): 
 
Stuart B. Esner 
Esner, Chang & Boyer 
234 East Colorado Boulevard, Suite 750 
Pasadena, CA  91101 
(626) 535-9860 
 
Robert A. Olson 
Greines, Martin, Stein & Richland 
5900 Wilshire Boulevard, 12th Floor 
Los Angeles, CA  90036 
(310) 859-7811