Tort Law for Paralegals Chapter 8

Bilger-Engler v Brieg, Inc. 2017

Court of Appeal, Fourth District, Division 1, California.

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Opinion 063556 01-06-2017 Virginia BIGLER-ENGLER, as Administrator, etc., Plaintiff and Appellant, v. BREG, INC. et al., Defendants and Appellants. Law Office of Marc O. Stern and Marc O. Stern, La Jolla; Boudreau Williams and Jon R. Williams, San Diego; Williams lagmin and Jon R. Williams, San Diego, for Plaintiff and Appellant Virginia Bigler- Engler, as Administrator, etc. Bowman & Brooke and Michael J. Hurvitz, San Diego; Gibson, Dunn & Crutcher, Theodore J. Boutrous, Jr., Los Angeles, Daniel J. Thomasch, and Blaine H. Evanson, Los Angeles, for Defendant and Appellant Breg, Inc. Cole Pedroza, Kenneth R. Pedroza, Matthew S. Levinson and Joshua C. Traver, San Marino; Neil, Dymott, Frank, McFall & Trexler, Clark Hudson and Jonathan R. Entessabian, San Diego, for Defendant and Appellant David J. Chao, M.D. Law Offices of Adrienne D. Cohen, Adrienne D. Cohen, Danielle M. Dalton and Julie R. Ursic, Santa Ana, for Defendant and Appellant Oasis MSO, Inc. HALLER, J. Certified for Partial Publication. Pursuant to California Rules of Court, rule 8.1110, this opinion is certified for publication with the exception of discussion parts I.; IV. C., D., E.; V. A.; and VI Law Office of Marc O. Stern and Marc O. Stern, La Jolla; Boudreau Williams and Jon R. Williams, San Diego; Williams lagmin and Jon R. Williams, San Diego, for Plaintiff and Appellant Virginia Bigler- Engler, as Administrator, et Bowman & Brooke and Michael J. Hurvitz, San Diego; Gibson, Dunn & Crutcher, Theodore J. Boutrous, Jr., Los Angeles, Daniel J. Thomasch, and Blaine H. Evanson, Los Angeles, for Defendant and Appellant Breg, Inc. Cole Pedroza, Kenneth R. Pedroza, Matthew S. Levinson and Joshua C. Traver, San Marino; Neil, Dymott, Frank, McFall & Trexler, Clark Hudson and Jonathan R. Ehtessabian, San Diego, for Defendant and Appellant David J. Chao, M.D. Law Offices of Adrienne D. Cohen, Adrienne D. Cohen, Danielle M. Dalton and Julie R. Ursic, Santa Ana, for Defendant and Appellant Oasis MSO, Inc. OPINION ON REHEARING 284 HALLER, J. 284 This matter arises from Whitney Engler's use of a 91 medical device, the Polar *91 Care 500, that was manufactured by Breg, Inc. (Breg) and prescribed by David Chao, a medical doctor. Engler suffered injuries as a result of her use of the Polar Care 500, and she brought various tort claims against Chao, his medical group Oasis MSO, Inc. (Oasis), and Breg, among others. At trial, the jury considered Engler's claims for medical malpractice, design defect (under theories of negligence and strict iability), failure to warn (also under theories of negligence and strict liability), breach of fiduciary duty, intentional misrepresentation, and intentional concealment. With a few exceptions, the jury generally found in favor of Engler, and against the defendants, on these claims. The jury awarded $68,270.38 in economic compensatory damages and $5,127,950 in noneconomic compensatory damages to Engler. It allocated responsibility for Engler's harm as follows: 50 percent to Chao, 10 percent to Oasis, and 40 percent to Breg. The jury made findings of malice, oppression, or fraud as to each defendant on at least one claim. In the punitive damages phase of trial, the jury awarded $500,000 against Chao and $7 million against Breg. The jury declined to award any punitive damages against Oasis. Breg, Chao, Oasis, and Virginia Bigler-Engler, as administrator of Engler's estate, appeal.' They raise numerous challenges to the 285 judgment. In the *285 published portions of this opinion, we consider the following issues: (1) whether Engler's counsel committed prejudicial misconduct during trial; (2) whether the jury's awards of noneconomic compensatory damages and punitive damages are excessive; (3) whether the evidence supported the jury's verdict against Breg for intentional concealment in the absence of actional relationship between Breg and Engler (or her parents); (4) whether Oasis falls within the medical provider exception to the doctrine of strict products liability; (5) whether Breg was entitled to an instruction on the learned intermediary doctrine; (6) whether the Medical Injury Compensation Reform Act of 1975 (MICRA) (Civ. Code, $ 3333-2 ) and Proposition 51 (Civ. Code, $ 1431 et seq. ) apply to the jury's verdict; and (7) whether Engler's pretrial settlement offer under Code of Civil Procedure section 998 complied with the statute. In the unpublished portions of the opinion, we consider additional challenges to the sufficiency of the evidence, the trial court's jury instructions, and the trial court's evidentiary rulings. Tragically, Engler was killed during the pendency of this appeal Following her death, Bigler-Engler was appointed administrator of Engler's estate. In that capacity, Bigler-Engler has been substituted in place of Engler in this appeal. For reasons we will explain, we reverse the judgment in part. We conclude the jury's verdict as to several claims was not supported by the evidence, including Engler's intentional concealment claim against Breg and her strict products liability claim against Oasis. In light of our reversal of Engler's intentional concealment claim against Breg, the jury's punitive damages award against Breg must be reversed as well. We further conclude the jury's award of noneconomic compensatory damages and the jury's award of punitive damages as to Chao are excessive. Those awards will be reversed as well and remanded for a new trial unless Bigler-Engler accepts reductions in those awards to $1,300,000 and $150,000 respectively. In all 986 other respects, the judgment is affirmed."*92 *286 Following the filing of our initial opinion in this appeal (previously published as Bigler - Engler v. Breg, Inc. (2016) 4 Cal.App.5th 1031, 209 Cal.Rptr.3d 619 ), Bigler-Engler petitioned the court for rehearing. Bigler-Engler argued that the opinion decided how MICRA and Proposition 51 applied to Oasis's liability for noneconomic damages without affording her the opportunity to brief the issue rehearing under Government Code section 68081, vacated our initial opinion, and gave the parties the opportunity to address the issue in supplemental briefing. (See People v. Alice (2007) 41 Cal.4th 668, 679, 61 Cal.Rptr.3d 648, 161 P.3d 163.) Having considered the supplemental briefs filed by Bigler-Engler and Oasis, we conclude our original disc sion of the interplay between MICRA and Proposition 51 was incorrect. We have modified the discussion accordingly. (See part VII.C., post.) We have also modified the disposition to ensure the trial court may address any additional damages and allocation issues that may arise on remand, certified part VIII for publication, and addressed certain requests for modification from Bigler-Engler's rehearing petition. Otherwise, this opinion is substantively identical to our initial opinion.FACTUAL AND PROCEDURAL BACKGROUND "As required by the rules of appellate procedure, we state the facts in the light most favorable to the judgment." (Orthopedic Systems, inc. v. Schlein (2011) 202 Cal.App.4th 529, 532, fin. 1, 135 Cal.Rptr.3d 200.) In this section we provide an overview of those facts necessary to understand the disputed issues in these appeals. Additional relevant facts will be discussed in the following sections. 3 3 We note that Bigler-Engler's statement of facts in her respondent's brief is inadequate. Significant portions discuss documents and statements that were not admitted at trial (such as premarked or identified exhibits) as if they provided a basis for the jury's verdict. Throughout her briefing, Bigler-Engler does not distinguish between facts derived from evidence actually admitted at trial and other facts. In 2003, Engler, a high school athlete, consulted Chao regarding possible surgery on her left knee. Engler had injured her knee while running hurdles and suffered from pain and weakness, especially during sports. Chao identified the presence of a loose body underneath her patella and diagnosed Engler with "patella alta" (misalignment of the patella). Chao also noted a possible tear in Engler's meniscus. Chao recommended arthroscopic surgery. He provided Engler and her parents with a written disclosure of the risks of surgery, which Engler's mother signed. Chao recommended that Engler use a Polar Care 500 device after surgery. The Polar Care device, manufactured by Breg, is a Class II medical device under Ca available only by prescription. The Polar Care device is intended to deliver cold therapy to the site of surgery or injury, along the same general lines as an ice vegetables. The Polar Care device consists of a reservoir of ice water, a small pump, and a pad to be placed on the site of surgery or injury. The pump circulates cold water through the pad. A dial controls the amount of water that can flow through the pad. This dial is intended to affect the temperature of the pad, i.e., as the amount of water flowing through the pad decreases, the water flows more slowly through the pad and the patient's body has a greater opportunity to warm it. A thermometer displays the temperature of the water exiting the pad. The Polar Care device can operate continuously for up to 11 hours before the reservoir of ice must be refilled. Chao told Engler and her parents that the Polar Care device was superior to traditional methods of cold therapy, such as an icepack, because it could be used "continuously" rather than intermittently. Chao said the Polar Care device would decrease her risk of infection and otherwise help Engler recover from her 93 surgery. Chao did *93 not disclose any risks of using the Polar Care 287 device, even though he knew risks existed. 287 Chao gave Engler and her parents the choice of buying the Polar Care device from his medical group, Oasis, or renting it from Oasis for a period after Engler's surgery. Chao provided Engler and her parents with an Oasis form informing them of Chao's recommendation that Engler use the Polar Care d escribing the two options. The form stated, "Polar Care is a disposable cold therapy system that provides the advantages of early cold therapy at a cost effective price. ["] ... ["] Polar Care cold therapy has been prescribed by your doctor to maximize your return to full function." The form did not discuss any risks of using the Polar Care device. Engler and her parents chose to rent the Polar Care device from Oasis. Although Oasis (and therefore Chao) profited from the sale and rental of the Polar Care device, Chao did not inform Engler or her parents of the financial interest he had in the transaction.* Chao also did not inform Engler or her parents that the Polar Care device was available from sources other than Oasis. s a shareholder in Oasis. He attended shareholders' meetings where revenues and profits from sales and rentals of medical devices such as the to had also performed research for Breg and written publications with Breg personnel unrelated to cold therapy. Chao was friendly with Breg executi ers and golf outings with Chao. Historical ties also existed between other individuals at Oasis and Breg. For example, Oasis's founder was a Breg shareholder, and another Oasis employee was a paid Breg consultant who later went to work for Breg. Engler's surgery occurred in May 2003, and it proceeded without incident. When Engler awoke in a recovery room after surgery, her surgical wound had been dressed and a Polar Care 500 device was attached to her knee. Chao's written discharge instructions told Engler to use the device "at 45OF as much as possible for pain/swelling." Chao also provided Engler and her parents with Breg's instructions for use, which indicated that the "[djesired temperature is typically between en 45 to 55OF for continuous use and below 450F for sessions of 20 minutes or less." When Engler's mother asked whether continuous use meant "24/7," Chao replied, "Yes, use it as much as possible." Similarly, when Engler's mother asked Chao whether Engler should use the Polar Care device even when she slept, Chao said yes. N Chao's written discharge instructions nor Breg's use instructions provided any warnings about injuries from the use of the Polar Care device or disclosed 288 any risk of injury. "288 Engler and her parents faithfully followed 94 Chao's instructions. Engler wore the *94 Polar Care device as much as possible, including at night. Engler removed it only when she howered, rode in the car, or attended physical therapy. Except for one instance when the thermometer on the device dipped below 45 degrees, Engler kept the temperature between 45 and 50 degrees. 5 The Polar Care device itself had a label with the following ICENSED HEALTH CARE PRACTITIONER MUST DETERMINE THE CORRECT TEMPERATURE RANGE FOR EACH PATIENT. PATIENTS THE TEMPERATURE MUST BE MADE AFTER A FLOW RATE HAS BEEN ESTABLISHED FOR THE PATIENT. CAUTION SHOULD BE TAKEN DURING PROLONGED USE, FOR CHILDREN, DIABETICS, INCAPACITATED PATIENTS, AND THOSE WI Y OR POOR CIRCULATION." Although Engler's surgery occurred in 2003. this label dated from 1994. In the intervening years, Breg had updated its labeling. Breg added warnings regarding skin blistering, itching, discoloration, and increased swelling. Breg did not have a system for replacing labeling on devices that had already been sold, however, and Breg's sales personnel in the San Diego area were unaware of labeling updates. A week after her surgery, Engler saw Chao for a postoperative appointment. Engler's knee was very swollen and painful. She "felt like it was going to explode." Chao aspirated Engler's knee, which involved draining fluid using a large needle. Engler's mother asked Chao whether Engler should continue to use the Polar Care device. He said Engler should use it for at least one week as long as she had pain and swelling. Engler scheduled a follow-up appointment for a month later. Engler continued to use the Polar Care device as much as possible. After almost two weeks, Engler noticed increased redness and several small blisters on her knee. Engler's mother left a message ut she did not receive a call back. By the next day, the blisters had increased in size, and one burst. Engler's mother called Chao's office and left a message, but again she did not receive a call back. The next morning, Engler noticed a large black area of dead tissue covering much of the upper half of her knee. Engler's parents called Chao's office again. Chao called them back and told them to bring Engler to his office immediately. Chao examined Engler's knee. He told Engler and her parents that he had never seen anything like Engler's wound before. He wrote eve she has at least partial-thickness, possibility full-thickness skin damage, and needs emergent plastic surgery consultation. She is likely to need a future proce ement, wound closure and possibly even flap. Referred to Plastic Surgeon. We will hold off on any icing or physical therapy." Chao also wrote, "At this point in time, I am not sure as to the exact reason [for the damage], possibly over-icing versus infection."Chao referred Engler to a specialist for immediate treatment. That specialist determined Engler's wound was too difficult for him to handle and referred Engler to Deniz Gocken, a medical doctor specializing in plastic surgery and wound treatment. Gocken examined Engler and admitted her into *289 the hospital. After observing the wound, Gocken performed surgery on June 12 to remove the dead tissue from Engler's knee. Engler remained in the hospital for one week. Engler's surgery left a large open wound, which took nine additional procedures in 2003 to clean and close. Each of these procedures was performed under local anesthetic and was very painful. Gocken believed that continuous use of the Polar Care device had caused Engler's injury When the wound healed, it left a scar covering a large portion of Engler's knee, approximately four inches by three inches in size. The scar caused Engler emotional distress because she was self- conscious about its appearance and be lassmates and her boyfriends teased her. Engler subsequently had two scar reduction surgeries in 2007 surgery, Engler was forced to immobilize her knee for six weeks. Engler felt guilty about having the scar reduction surgeries because her father became unemployed during this time and her family paid for the second surgery out-of-pocket. By the time of trial in 2012, Engler had a scar across the top portion of her knee. Engler's mended two *95 more scar revision surgeries, each to be followed by six weeks of immobilization, that would furth e the size of the scar. The area surrounding the scar was hypersensitive and painful to the touch. Engler also felt numbness an deep itching sensation that she could not scratch. Engler had some functional limitations, including weakne kneeling, inability to continue to ride horses competitively, difficulty with some dance styles (specifically hip-hop), and difficulty riding a bike accompanied by her leashed dog. In 2006, after seeing a news article about a lawsuit involving Chao and a Polar Care device, Engler filed her own suit against Chao, Oasis, Breg, and others. Several years of contentious litigation ensued, and the court held an eight-week jury trial beginning in May 2012. At trial, in addition to numerous other lay and expert witnesses, Engler presented evidence from three medical experts that Breg's Polar Care device inflicted a nonfreezing cold injury (NFCI) on her knee. Engler's medical experts testified that the application of cold therapy causes blood vessels to constrict (vasoconstriction), which lowers blood flow and d rounding tissues of oxygen and nutrients. Dangerous vasoconstriction can occur even at the temperature recommended by Chao and Breg (45 degrees) for continuous use of the Polar Care device. Based on the manner of Engler's use, her risk of suffering an NFCI began after three or our days of use and increased with further use. The symptoms of an NFCI include redness or *290 whiteness on the skin and swelling and blistering in the affected area. A serious NFCI, such as that suffered by Engler, causes the death of the surrounding nerves and tissue. Breg had received numerous reports of individuals who had suffered injuries associated with the Polar Care device. According to Engler's experts, these reports put Breg on notice that the Polar Care device was hazardous. One injured individual was Jeff Warner, whom Chao treated several years before Engler. Warner had a history of prior knee urgeries. Chao performed an additional surgery on Warner's knee and prescribed the Polar Care device for his use. As with Engler, Chao recommended that Warner use the Polar Care device at 45 to 55 degrees "as much as possible to alleviate pai nd swelling." In the weeks that followed, Warner experienced redness, swelling, inflammation, and finally mild necrosis on his knee. Chao recommended that Warner continue to use the Polar Care device to reduce swelling. Two weeks later, Warner's necrosis had worsened and Chao referred him to a plastic surgeon. The surgeon performed a skin graft on Warner's knee, a procedure that Chao witnessed. It was highly unusual for Chao to watch such a procedure. Warner subsequently sued Breg and Chao, among others, in 1999. Chao received Warner's summons and complaint. Warner retained the same experts that Engler would later retain." 6 The same attorney represented both Engler and Warner. Based on its injury reports, and according to Engler's experts, Breg knew that use of the Polar Care device could cause injury including NFCI's. Breg did not adequately investigate these reports or make them known to the public. Breg also failed to investigate whether the Polar Care device was safe for continuous use at 45 to 55 degrees before marketing the device to the public. The Polar Care 500 was primarily designed by two founders of Breg, Bradley Mason and his brother Jeff, the latter of whom had no formal education after high school. And, although Breg conducted a *96 study on pigs several months before Engler's surgery, its results were not promising. In the study, a Breg executive researched the effects of continuous use of the Polar Care device over 72 hours.' Over the course of the study, three of the 12 pigs in the study died. Several pigs exhibited signs of focal skin necrosis, consistent with NFCI, after as few as 30 hours of continuous use. Despite this research, Breg denied that the Polar Care device could cause NFCI's when used according to its instructions.*291 Although Breg touted the benefits of continuous use cold therapy, there was no evidence the Polar Care device was more effective than intermittent icing with an icepack or bag of frozen vegetables. In addition to the risk of injury, continuous use cold therapy can slow down the healing process. Engler's medical expert testified that it was below the standard of care for Chao to prescribe continuous use cold therapy without constant professional monitoring." It was also below the standard of care for Chao to prescribe any cold therapy after the first day or two after Engler's surgery; any further cold therapy was unnecessary and potentially harmful. The Breg executive responsible for the study, Patrick Cawley, claimed on his resume to have bachelor's and doctoral degrees in science. Cawley was impeached by evidence showing that he did not obtain a bachelor's degree and his doctoral degree was granted by a school in England on the basis of professional by mail. Cawley did not take any classes at the school, sit for any exams, or participate in any interviews. In fact, Cawley had never been to the school's campus at all. Testing conducted by one of Engler's medical experts revealed that the Polar Care device's temperature controls were Except for the highest setting, the How control valve did little to m the temperature of the Polar Care pad. And, regardless of the flow control setting, the water entering the pad-w came directly from the ice reservoir-was just above freez The use of such cold water increased the risk of injury. hermometer on the device measured the temperature of the water exiting the pad after it had already been warmed by the patient's body, this hermometer was of little use.)2 )3 Chao rst learned about cold therapy during his medical residency. He has prescribed mechanized cold therapy, like the Polar Care device, to thousands of patients. Chao denied knowing that continuous use of mechanized cold therapy at temperatures of 45 to 55 degrees could cause injury if used properly or that cold therapy could cause N FCI's when no moisture was present.9 Chao denied learning from Breg or any other medical device manufacturer that continuous use of mechanized cold therapy risked injury. 9 Historically, NirCl's were associated with moisture. For example, N FCI'S were identied in soldiers during World War] who stood in water and were subsequently exposed to cold. The resulting injury was known was \"trench foot.\" At trial, Breg, Oasis and Chao disputed that continuous use of the Polar Care device would cause injury if used correctly. They contended that continuous use mechanized cold therapy was medically appropriate and offered advantages over traditional cold therapy (e.g., an ice pack or a bag of frozen peas). Defense experts gave alternate explanations for Engler's injury. Chao's expert, for example, testied that Engler used the Polar Care device improperly, which caused her injury. Breg's expert believed that Engler's injury was caused by an infection. The jury found against Chao on Engler's claims for medical malpractice, breach of duciary duty, intentional misrepresentation, and intentional concealment. The jury found against Oasis on Bugler's claims for medical malpractice, design defect, failure *97 to warn, and breach of duciary duty. The jury found in Oasis's favor 0n Englel's claims for intentional misrepresentation and intentional concealment. As to Breg, the jury found against it on Engler's claims for design defect, failure to warn, and intentional concealment. The jury found in Breg's favor on her claim for intentional misrepresentation.'292 The jury further found that Chao and Oasis had acted with malice, oppression, or fraud in connection with Engler's claim for breach of duciary duty, that Chao had so acted in connection with Engler's claims for intentional misrepresentation and intentional concealment, and that Breg had so acted in connection with Engler's claim for intentional concealment. As noted, the jury awarded $5,196,220.38 in compensatory damages to Engler, allocating responsibility for Engler's harm as follows: 50 percent to Chao, 10 percent to Oasis, and 40 percent to Breg. In the punitive damages phase of trial, the jury awarded $500,000 against Chao and $7 million against Breg. The jury declined to award any punitive damages against Oasis. Defendants led motions forjudgment notwithstanding the verdict and for a new trial, which the trial court denied. DISCUSSION 1. Evidence Regarding "Other Similar Incidents\" \" See footnote *, ante. II. Misconduct by Engler's Counsel Oasis and Chao contend the trial court erred by denying their motions for a new trial on the grounds that Engler's counsel, Marc Stern, committed prejudicial misconduct. They argue Stern denigrated defense counsel and the court, repeatedly violated pretrial in limine rulings, and attempted to prejudice the jury through unethical trial tactics. We agree there were several instances where Stern acted inappropriately. However, based on our independent review of the record, and taking into account the trial court's observations about the nature of the proceedings during a hearing on defendants' motions for a new trial, we conclude Oasis and Chao have not shown prejudice. A The record shows Stern insulted and ridiculed defense counsel in the presence ofthe jury on multiple occasions. During his examination of a Breg executive, Stern suggested that Polar Care devices be tested on defense counsel (as in Bregs pig study) because "[t]hey're just lawyers, okay.\" When defense counsel examined BiglerEngler and asked whether she could open a Band- Aid for use during questioning (because Engler had used Band- Aids after surgery), Stern interrupted, asking whether counsel was going to put the BandrAid over her mouth: \"Are you going to put it over your mouth oril *293 don't have an objection.\" Several days later, Stern repeated his remark, more forcefully this time: \"I think this is dja vu. I'm almost sure. Am I going to have to suggest that she put that Band-Aid on her again?\