Filed 10/30/13 Doctors Company v. Sherman Oaks Hospital CA2/8 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION EIGHT

DOCTORS COMPANY,
Plaintiff and Respondent,

v.
SHERMAN OAKS HOSPITAL,
Defendant and Appellant. B246818
(Los Angeles County Super. Ct . No. LC 088772)

APPEAL from a judgment of the Superior Court of Los Angeles County, Huey P. Cotton, Judge. Affirmed with modifications.

Randolph M. Even and Asso ciates, Randolph M. Even; Greines, Martin, Stein &
Richland and Robert A. Olso n for Defendant and Appellant.

McCurdy & Leibl and John D. McCu rdy for Plaintiff and Respondent.

* * * * * *2 “Before the enactment of Proposition 51 , a defendant who settled the plaintiff’s
entire claim was entitled to s eek indemnification from conc urrent tortfeasors for its payment of their joint obligation to the pl aintiff. [Citations.] Now, however, joint liability is restricted to eco nomic damages, and the righ t to seek indemnity after settlement is correspondingly limited.” ( Union Pacific Corp. v. Wengert (2000) 79 Cal.App.4th 1444, 1448.) It l ogically follows that equitabl e indemnity is available only for the portion of a settlement attr ibutable to economic damages. ( Id . at p. 1446.) This case requires us to determine the portion of a good faith settlement attributable to economic damages and the portion attributable to noneconomic damages. We modify the amount of the judgment requiring one defenda nt to equitably indemnify another and
affirm.
FACTS AND PROCEDURE The facts are undisputed. Elizabeth B ovaird filed a lawsuit in December 2005, alleging medical malpractice by Drs. Hossein Razavi, Sailila Sharma, Shivdyal Singh, and appellant Sherman Oaks Health System (the Hospital). The Doctors Company’s (Doctors’) predecessor insured Singh and Sh arma. Razavi settled for $1 million and obtained good faith settlement from the trial c ourt. The trial court did not apportion his
settlement between economic and noneconomic damages. Sharma and Singh each settled for $1 million, and the Ho spital settled for $250,000. Following the settle ments totaling $3,250, 000, Bovaird dismissed her lawsuit. On March 2, 2010, Doctors sued the Hospital for equitabl e indemnity. Jurors were asked to apportion liability between the defendan ts in the underlying malpractice lawsuit. Jurors assessed responsibility as follows: Hospital, 11 percent; Sharma, 8 percent; Singh, 13 percent; and Razavi, 68 percen t. Jurors were not asked either to apportion economic and noneconomic damages or to determine the total amount of damages. Doctors and the Hospital stipulated that the noneconomic damages totaled $750,000. The trial court ordered the Hospital to e quitably indemnify Doctors in the amount of $523,437. This amount was based on Do ctors’ approach of calculating Razavi’s noneconomic damages by determin ing 68 percent of $750,000 (the amount stipulated by3 the parties to be the total noneconomic da mages) and then concluding the remaining balance constituted payment fo r economic damages. The trial court rejected the Hospital’s approach of calcu lating the overall ratio of noneconomic and economic damages and applying that ra tio to all of the settlements including Razavi’s. The Hospital appealed, challenging only the trial court’s calculation of damages.
DISCUSSION The sole issue on appeal concerns the a pplication of the Fair Responsibility Act of 1986, known as Proposition 51, codified in Ci vil Code section 1431.2 (section 1431.2), to determine the amount of damages owed by th e Hospital to equitably indemnify Doctors. Section 1431.2 provides in pertinent part: “( a) In any action for personal injury, property damage, or wrongful death, based upon princi ples of comparative fault, the liability of each defendant for non-economic damages shall be several only and shall not be joint.
Each defendant shall be liabl e only for the amount of non-ec onomic damages allocated to that defendant in direct proportion to that de fendant’s percentage of fault, and a separate judgment shall be rendered against that defendant for that amount.” The influential opinion in Espinoza v. Machonga (1992) 9 Cal.App.4th 268 ( Espinoza ) established a formula for segregating economic and noneconomic damages in a defendant’s undifferentiated settlement paymen t (i.e. a payment that did not separate economic and noneconomic damages). In Espinoza , one defendant se ttled and the other went to trial (and a third was found not lia ble). The court calculated the ratio of noneconomic damages in the ju ry award and then applied th e same ratio to the settling defendant’s undifferentiated settlement. ( Id . at p. 277.) The nons ettling defendant had to make up for the economic damages not paid in the settlement. ( Ibid .) The Espinoza
formula has been consis tently followed. ( Wilson v. John Crane, Inc. (2000) 81 Cal.App.4th 847, 864; Ehret v. Congoleum Corp. (1999) 73 Cal.A pp.4th 1308, 1312; Conrad v. Ball Corp. (1994) 24 Cal.App.4th 439, 443-444; Poire v. C.L. Peck/Jones Brothers Construction Corp. (1995) 39 Cal.App.4th 18 32, 1841.) Under the Espinoza formula: “When prior recoveri es have not previously been allocated in a manner found by the court to be in good faith, the posttria l allocation of prior settlements should mirror4 the jury’s apportionmen t of economic and noneconomic damages.” ( Jones v. John Crane, Inc. (2005) 132 Cal.App.4th 990, 1006.) Mayes v. Bryan (2006) 139 Cal.App.4th 1075 ( Mayes ) applied the Espinoza
formula in the context of a me dical malpractice claim. In Mayes , doctors that settled with plaintiffs were adjudicated 80 percent responsible for total damages, and defendants who went to trial were adjudicated 20 percent responsible. ( Id . at p. 1087.) The settling defendants paid $650,000. On ce noneconomic damages were re duced to comp ly with the Medical Injury Compensation Re form Act of 1975 (Civ. Code , § 3333.2), the jury verdict totaled $1,616,357, comprise d of $1,366,357 in economic damages and $250,000 in noneconomic damages. ( Id . at p. 1099.) As required by Espinoza , the Mayes court calculated the ratio of economi c (84.5 percent) and noneconom ic damages (15.5 percent). ( Ibid .) Using this ratio, the court then dete rmined the settling defendants paid $549,250 in economic damages (84.5% x $650,000 = $549,250 ). The nonsettling defendants were liable for the remainder of the economic damage s and for their proportionate share of the noneconomic damages. ( Ibid .) Mayes explained the following principles ar ising out of secti on 1431.2: “[E]ach defendant is only responsible for the percen tage of noneconomic damages in proportion to his or her proportionate fault.” ( Mayes, supra , 139 Cal.App.4th at p. 1102.) Defendants’ liability for noneconomic damages could “not exceed their 20 percent share based on the jury’s determination that th ey were only 20 percent at fault.” ( Id . at p. 1103.) “Plaintiffs should bear the burden of u ndercontribution of the settling parties” for noneconomic damages. ( Ibid .)
This case is similar but not identical to Espinoza and Mayes . Both Espinoza and Mayes involved jury trials, and in both jurors determined the amount of economic and noneconomic damages. The Espinoza and Mayes courts focused on the offset available
to a defendant who went to trial. The verdicts in Espinoza and Mayes allowed the courts to easily differentiate the econo mic from the noneconomic damages. In contrast here, all defendants settled; the issue is equitable inde mnity not offset; and jurors were asked only to assess responsibility, not to calculate economic and noneconomic damages.5 Notwithstanding those ke y distinctions, the critical quest ion -- how to apportion a settling defendant’s settlement (Razavi’ s) between economic and noneconomic damages -- is the
same in this case as in Espinoza and Mayes

. Because the question is the same in this case as in Espinoza , the Espinoza formula provides the best framework for segrega ting economic and noneconomic damages in
Razavi’s settlement consistent with section 1431.2. (See Rashidi v. Moser (2013) 219 Cal.App.4th 1170, 1177 [ Espinoza and its progeny establish method for applying allocations of jury verdict to settlements].) No evidence in this case supports the
conclusion that the ratio of economic and noneconomic dama ges in Razavi’s settlement
should differ from th at in the other defendants’ settle ments. Because jurors were not asked to assess the total amount of damages, no evidence supports Doctors’ argument that the $3,250,000 total settlement amount fa ils to represent the to tal damages (including both economic and noneconomic). It is undisputed that once the Espinoza formula is applied to Razavi’s settlement to apportion it using the same percentage of economic and noneconomic damages as the ot her settlements, the Hospital owes Doctors $402,644, not the $523,437 ordered by the court. The judgment must be modified accordingly. Doctors argues that Razavi’s settlement should be apportioned simply by taking 68 percent of $750,000 based on the jury’s determination of responsibility and the party’s stipulation of noneconomic damages. Doctors relies on Paradise Valley Hospital v.
Schlossman (1983) 143 Cal.App.3d 87 for this conclusion. Th e problem with Doctors’ argument is that Paradise Valley Hospital was decided prior to Proposition 51 and does not discuss apportionment of an undifferentiated settlement. Doctors’ calculation does not account for the fact that Singh, Sharma and the Hospital are lia ble for Razavi’s share of economic damages but are not liable for hi s share of noneconomic damages. There is
no basis to conclude that Razavi’s settle ment represented 68 percent noneconomic damages and only 32 percent economic damages. The jury concluded that Razavi was 68 percent liable for the total damages, not that he was 68 percent liable for the noneconomic damages.6 DISPOSITION The amount of the judgment is modi fied from $523,437 to $402,644. As modified, the judgment is affirmed. Appe llant, the Hospital, is entitled to costs on appeal.

FLIER, J.
WE CONCUR:

BIGELOW, P. J.

GRIMES, J.