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| [1] | THE SUPREME COURT OF THE STATE OF OHIO |
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| [2] | No. 93-278 |
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| [3] | 69 Ohio St.3d 638, 635 N.E.2d 331, 1994.OH.40972 <http://www.versuslaw.com> |
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| [4] | July 27, 1994. |
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| [5] | MOSKOVITZ v. MT. SINAI MED. CTR. |
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| [6] | Charles Kampinski Co., L.P.A., Charles Kampinski, Christopher M. Mellino
and Donna Taylor-Kolis, for appellants. |
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| [7] | ||
| [8] | This appeal presents four issues for our consideration. Were punitive
damages, and the amount awarded, appropriate and proper on the facts of
this case? Were the compensatory damages awarded for the survival action
and for wrongful death excessive? Should prejudgment interest have been
allowed? Was it proper to sanction appellant's attorney under Civ.R. 11?
Figgie has not appealed and, thus, the finding that Figgie was negligent
in his care and treatment of Moskovitz is not at issue. |
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| I | ||
| Punitive Damages | ||
| [9] | The jury's award of punitive damages was based upon Figgie's alteration,
falsification or destruction of medical records. The punitive damages were
awarded in connection with the survival action. The court of appeals' majority
vacated the award of punitive damages for two reasons. First, the court
of appeals' majority determined that punitive damages were not available
under the circumstances of this case, since Figgie's act of altering and
destroying records did not directly cause actual harm to appellant - i.e.,
records disappeared and were altered after the diagnosis of terminal illness
and the alteration and disappearance of the records did not adversely affect
appellant's claims. Second, the court of appeals' majority found that appellant
failed to establish a right to punitive damages under the standards set
forth in Preston v. Marty (1987), 32 Ohio St.3d 334, 512 N.E.2d 1174. We
disagree. |
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| [10] | The court of appeals held that for punitive damages to be awarded, appellant
was required to prove "a harm distinct from the medical negligence
claim and attributable solely to the alleged alteration of medical records."
To support this conclusion, the court of appeals relied upon Shimola v.
Nationwide Ins. Co. (1986), 25 Ohio St.3d 84, 25 OBR 136, 495 N.E.2d 391;
Bishop v. Grdina (1985), 20 Ohio St.3d 26, 20 OBR 213, 485 N.E.2d 704; and
Ronse v. Riverside Methodist Hosp. (1983), 9 Ohio App.3d 206, 9 OBR 355,
459 N.E.2d 593. However, nothing in these cases suggests that the malicious
intent necessary to sustain an award of punitive damages must itself proximately
result in some compensable harm. |
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| [11] | Shimola and Bishop, supra, stand for the age-old proposition that proof of actual damages in an underlying cause of action is a necessary predicate for an award of punitive damages. See, also, Seasons Coal Co. v. Cleveland (1984), 10 Ohio St.3d 77, 10 OBR 408, 461 N.E.2d 1273, and Richard v. Hunter | |
| (1949), 151 Ohio St. 185, 39 O.O. 24, 85 N.E.2d
109. In Ohio, no civil action may be maintained simply for punitive damages.
Bishop, supra, 20 Ohio St.3d at 28, 20 OBR at 214, 485 N.E.2d at 705. Rather,
punitive damages are awarded as a mere incident of the cause of action in
which they are sought. Id. Thus, compensable harm stemming from a cognizable
cause of action must be shown to exist before punitive damages can be considered. |
||
| [12] | Bishop was a case involving an award of punitive damages where no compensatory
damages were awarded on the underlying cause of action. In Bishop, we held
that proof of actual damages on the underlying claim is a necessary predicate
for an award of punitive damages. Id. at 28, 20 OBR at 214, 485 N.E.2d at
705. In so holding, we relied upon Richard, supra, which also involved a
situation where punitive damages were found to be improper in the absence
of an award of compensatory damages on an underlying claim. The court of
appeals in the case at bar seized upon the statement in Bishop that "[p]unitive
damages are awarded as punishment for causing compensable harm and as a
deterrent against similar action in the future." (Emphasis added.)
Id. at 28, 20 OBR at 214, 485 N.E.2d at 705. However, that statement in
Bishop does not require the conclusion that malicious conduct giving rise
to punitive damages must produce some compensable harm. Again, the matter
at issue in Bishop was whether an award of punitive damages is legally supportable
where no actual harm is shown in the underlying cause of action. |
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| [13] | In Shimola, supra, 25 Ohio St.3d 84, 25 OBR 136, 495 N.E.2d 391, an insured
sued his insurer for the tort of bad faith. The insured sought an award
of punitive damages in connection with that claim. The jury awarded no actual
damages on the claim, but awarded the insured $160,000 in punitive damages.
We held that the award of punitive damages could not be sustained absent
proof of actual damages stemming from the underlying claim for bad faith.
Id at 86, 25 OBR at 138, 495 N.E.2d at 393. Shimola clearly does not support
the conclusion reached by the court of appeals' majority. |
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| [14] | Here, appellant was awarded compensatory damages in the survival claim
for Figgie's medical malpractice and that award formed the necessary foundation
for the award of punitive damages. Figgie suggests that his alteration of
medical records constitutes a separate claim requiring proof of actual damages,
that no actual damages were shown to flow from the alteration, and that
punitive damages were therefore improper. In this regard, we have recently
held that "[a] cause of action exists in tort for interference with
or destruction of evidence * * *." Smith v. Howard Johnson Co., Inc.
(1993), 67 Ohio St.3d 28, 29, 615 N.E.2d 1037, 1038. However, nothing in
Smith can be interpreted to say that a separate cause of action for spoliation
of evidence is the only way such conduct can be addressed and remedied.
We expressly reject any such notion. Isappellant were constrained to bring
a separate cause of action for spoliation of evidence, that claim would
inevitably fail, since there is no damage flowing directly from the alteration
of records. Therefore, no punitive damages could be awarded to punish the
unlawful conduct. Thus, if Figgie's argument is taken to its logical conclusion,
litigants and prospective litigants could alter and destroy documents with
impunity so long as no actual damage was caused thereby. Of course, if the
damning evidence were destroyed without trace, no liability would attach
on any claim, since no evidence would remain to implicate the spoliator.
In our judgment, Figgie's alteration of records was inextricably intertwined
with the claims advanced by appellant for medical malpractice, and the award
of compensatory damages on the survival claim formed the necessary predicate
for the award of punitive damages based upon the alteration of medical records. |
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| [15] | The purpose of punitive damages is not to compensate a plaintiff, but
to punish and deter certain conduct. See, e.g., Preston, supra, 32 Ohio
St.3d at 335, 512 N.E.2d at 1176; Detling v. Chockley (1982), 70 Ohio St.2d
134, 136, 24 O.O.3d 239, 240, 436 N.E.2d 208, 209; and Calmes v. Goodyear
Tire & Rubber Co. (1991), 61 Ohio St.3d 470, 473, 575 N.E.2d 416, 419.
See, also, Bishop and Richard, supra. Therefore, it would make no sense
for this court to establish a rule requiring that malicious conduct giving
rise to a claim for punitive damages must independently cause compensable
harm before punitive damages may be awarded. If the act of altering and
destroying records to avoid liability is to be tolerated in our society,
we can think of no better way to encourage it than to hold that punitive
damages are not available in this case. We believe that such conduct is
particularly deserving of punishment in the form of punitive damages and
that a civilized society governed by rules of law can require no less. Figgie's
conduct of altering records should not go unpunished. We should warn others
to refrain from similar conduct and an award of punitive damages will do
just that. |
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| [16] | We recognize that certain language in Rouse, supra, 9 Ohio App.3d at 208-209,
9 OBR at 358, 459 N.E.2d at 597, lends some support to Figgie's and the
court of appeals' position that later concealment or destruction of evidence
of negligence cannot render an act of negligence malicious and, thus, punitive
damages are unavailable in such a case absent proof of actual harm stemming
from the concealment or destruction. However, we are more persuaded by the
case of Spadafore v. Blue Shield (1985), 21 Ohio App.3d 201, 21 OBR 215,
486 N.E.2d 1201. In Spadafore, Judge Moyer (now Chief Justice Moyer) concurred
in the following statement of the law concerning punitive damages and the
alteration of documents: |
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| [17] | "[T]here was some additional evidence, although not substantial,
of possible intentional alteration of documents. Such conduct is the type
of intentional and deceptive behavior more indicative of actual malice.
If such evidence is believedsthe jury could award punitive damages. With
the proper caution exercised in instructing the jury as to when punitive
damages are proper, the issue of punitive damages should have been submitted
to the jury." Id. at 204-205, 21 OBR at 218, 486 N.E.2d at 1205. |
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| [18] | Moreover, in Calmes, supra, 61 Ohio St.3d at 473, 575 N.E.2d at 419, this
court stated that "[p]unitive damages in this state are available upon
a finding of actual malice." (Emphasis added.) The term "actual
malice" has been defined in the case of Preston, supra, 32 Ohio St.3d
334, 512 N.E.2d 1174, and the definition does not include an element of
actual harm. In Preston, syllabus, we held that: |
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| [19] | "Actual malice, necessary for an award of punitive damages, is (1)
that state of mind under which a person's conduct is characterized by hatred,
ill will or a spirit of revenge, or (2) a conscious disregard for the rights
and safety of other persons that has a great probability of causing substantial
harm." (Emphasis sic.) |
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| [20] | Figgie's alteration of records exhibited a total disregard for the law
and the rights of Mrs. Moskovitz and her family. Had the copy of page seven
of Figgie's office chart not been recovered from the radiation department
records at University Hospitals, appellant would have been substantially
less likely to succeed in this case. The copy of the chart and other records
produced by Figgie would have tended to exculpate Figgie for his medical
negligence while placing the blame for his failures on Moskovitz. We find
that the evidence adduced at trial fully supported an award of punitive
damages under the standards set forth in the Preston syllabus. |
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| [21] | The court of appeals' majority also determined that there was no evidence
that Figgie altered or destroyed records to conceal his medical negligence.
However, upon a thorough review of the record, we are convinced that the
jury was presented with sufficient evidence which, if believed, supported
the inference that records were altered, destroyed or concealed by Figgie
in an effort to conceal his medical negligence. A unanimous panel of "arbitrators"
determined that records were altered with bad motive, and that Figgie was
the responsible party. Further, having awarded punitive damages, the jury,
which heard the evidence and observed the demeanor of the witnesses, apparently,
also so found. A competent and respected trial judge upheld the award of
punitive damages and denied a motion for a new trial. With all due respect
to the court of appeals' majority, we believe that the appellate court simply
substituted its judgment for that of the jury and, thereby, invaded the
province of the finder of fact. Further, as we stated in Myers v. Garson
(1993), 66 Ohio St.3d 610, 614, 614 N.E.2d 742, 745, "we have often
noted in the past, where the decision in a case turns upon credibility of
testimony, and where there exists competent and credible evidence supporting
the findings and conclusions of the trial court, deference to sucsfindings
and conclusions must be given by the reviewing court." In our judgment,
the court of appeals' majority erred in holding that, as a matter of law,
appellant was not entitled to an award of punitive damages. |
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| [22] | Accordingly, we reverse the judgment of the court of appeals on the issue
of punitive damages. We hold that in a case involving medical malpractice
where liability is determined and compensatory damages are awarded, punitive
damages pled in connection with the claim for malpractice may be awarded
upon a showing of "actual malice" as that term is defined in the
syllabus of Preston v. Murty, supra. An intentional alteration, falsification
or destruction of medical records by a doctor, to avoid liability for his
or her medical negligence, is sufficient to show actual malice, and punitive
damages may be awarded whether or not the act of altering, falsifying or
destroying records directly causes compensable harm. However, we reiterate
that the purpose of punitive damages is to punish and deter. The jury's
reaction in awarding $3 million in punitive damages may be understandable,
given its findings of Figgie's activities, but it is wrong. Punishment does
not mean confiscation. Figgie's net worth (depending on who is believed)
is somewhere between $2.1 million and $3 million. We find that a portion
of that net worth will send the message. |
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| [23] | In determining the appropriate amount of punitive damages to be awarded,
we are guided by the perspicuous observations of Judge John W. McCormac
in Shoemaker v. Crawford (1991), 78 Ohio App.3d 53, 603 N.E.2d 1114. In
ordering a remittitur in Shoemaker for an award of compensatory damages
found to be excessive, Judge McCormac stated: |
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| [24] | "Determining the amount of damages which is the maximum for adequate
compensation is not an easy task. No simple mathematical formula can be
applied as to either a minimum or a maximum, and there is a wide range between
those figures. The decision rests as much on policy considerations as it
does anything else and some degree of arbitrariness cannot be totally divorced
from the decision, whether made by us or by the jury." Id. at 66, 603
N.E.2d at 1121-1122. |
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| [25] | Much the same can be said in the case at bar with regard to a determination
of the appropriate amount of punitive damages. Upon a review of the record,
we find that $1 million in punitive damages is the appropriate amount to
be awarded. Therefore, with respect to the jury's verdict for $3 million
in punitive damages, we order a remittitur of $2 million.*fn6
Upon remand, appellant may elect to accepsthe remittitur, in which case
the trial court shall enter judgment in appellant's favor for $1 million
in punitive damages. Conversely, appellant may elect to refuse the remittitur,
in which case a new trial should be conducted only on the issue of punitive
damages. A jury,*fn7 if one is impanelled
for this purpose, shall be instructed that punitive damages in some amount
must be awarded and that the jury's determination is to be based upon the
evidence presented to them which, we fully recognize, might require a re-presentation
of much of the underlying case. |
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| II | ||
| Compensatory Damages | ||
| [26] | The court of appeals' majority found that the award of compensatory damages
for the survival action and wrongful death was excessive and that the jury's
award was influenced by passion and prejudice. Accordingly, the court of
appeals' majority vacated the award and remanded for a new trial only on
the issue of compensatory damages. We find that the court of appeals erred
in this regard. |
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| A. Survival Action Award | ||
| [27] | With respect to the jury's award on the survival claim, the court of appeals'
majority found that the award of $2 million was so high that it amounted
to a denial of substantial justice, and that the award "was impermissibly
influenced by the jury's erroneous consideration of punitive damages."
In addition to finding that the jury's consideration of punitive damages
was appropriate and proper, wsalso believe that the jury's consideration
of punitive damages cannot form the basis for vacating the award of compensatory
damages. |
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| [28] | In Ohio, it has long been held that the assessment of damages is so thoroughly
within the province of the jury that a reviewing court is not at liberty
to disturb the jury's assessment absent an affirmative finding of passion
and prejudice or a finding that the award is manifestly excessive. See Toledo,
Columbus & Ohio River RR. Co. v. Miller (1923), 108 Ohio St. 388, 402-403,
140 N.E. 617, 621. In the case.at bar, we make no such finding as to the
compensatory damages awarded by the jury. The jury's $2 million award on
the survival claim is not so manifestly excessive that a conclusion must
be drawn therefrom that the award was the product of passion and prejudice.
The bulk of the award was obviously for the pain and suffering Moskovitz
experienced in the final year of her life, and the jury was undoubtedly
in the best position to make the assessment of damages. The record is devoid
of any evidence that the jury was wrongfully influenced in returning a large
award, and the amount of the award itself is not so manifestly excessive
at to have warranted the court of appeals' interference with the province
of the jury. In addition, the trial judge was in the best position to determine
whether the award on the survival claim was manifestly excessive or influenced
by passion and prejudice. See, generally, Villella v. Waikem Motors, Inc.
(1989), 45 Ohio St.3d 36, 40, 543 N.E.2d 464, 469, and Larrissey v. Norwalk
Truck Lines, Inc. (1951), 155 Ohio St. 207, 219, 44 O.O. 238, 243, 98 N.E.2d
419, 426. The trial judge refused to set the verdict aside and denied the
motion for a new trial. That determination is entitled to deference. |
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| B. Wrongful Death Award | ||
| [29] | As to the jury's $1.25 million award for wrongful death, the court of
appeals' majority held that the award was manifestly excessive in light
of the economic damages proven and in light of Moskovitz's frail condition
prior to the onset of her terminal illness. Again, the determination of
damages was a question for the jury and the court of appeals was not at
liberty to substitute its judgment for that of the finder of fact. The jury
heard evidence concerning a variety of damages suffered by the wrongful-death
beneficiaries. Although the jury's award was large, it cannot be said with
any degree of certainty that the award was excessive. While Moskovitz may
have been frail prior to the onset of her illness, the dissent in the court
of appeals ably noted that Moskovitz "was neither an amputee, dead,
nor dying when Dr. Figgie failed to adequately diagnose and then treat the
cancer." Moskovitz's family unquestionably suffered the loss of a loving
wife and mother, and the jury was in a far better position than the court
of appeals to determine the value of the losses suffered. |
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| [30] | The court of appeals' majority also suggested that the jury's award for
wrongful death may have been improperly influenced by certain references
astrial to Moskovitz's concentration camp experience and her survival of
the Holocaust. However, we note that both appellant and Figgie commented
and presented evidence on this matter. Moreover, upon a careful review of
the entire record, we do not find that the jury's award was affected by
passion and prejudice. |
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| [31] | Based upon the foregoing, we find that the court of appeals erred in vacating
the award of compensatory damages on the claims for survival and wrongful
death. Therefore, on those issues, we reverse the judgment of the court
of appeals and reinstate the judgment of the trial court. |
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| III | ||
| Prejudgment Interest | ||
| [32] | The issue of prejudgment interest has become a complex question. This
case is a perfect example of the problem. Accordingly, the matter of prejudgment
interest generally, and in this specific case, needs some discussion. |
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| A. Prejudgment Interest at Common Law | ||
| [33] | Since the 1800s, have recognized a common-law right to prejudgment interest.
In Hogg v. Zanesville Canal & Mfg. Co. (1832), 5 Ohio 410, 424, this
court said, "But interest is allowed, not only on account of the loss
which a creditor may be supposed to have sustained by being deprived of
the use of his money, but on account of the gain made from its use by the
debtor." In the last paragraph of the syllabus of Hogg, this court
said, "In actions for torts the jury may calculate interest on the
damages actually sustained and add it to their verdict." |
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| [34] | In Lawrence RR. Co. v. Cobb (1878), 35 Ohio St. 94, paragraph four of
the syllabus, this court said, "In awarding damages for an injury resulting
from a tort, compensation in the nature of interest may be included."
Further, in Cobb, at 98-99, the court stated that "[t]he rule of damages
in such case is compensation for the injury, or, in other words, that the
injured party should be made whole. And while it is true that such a claim
is not one, which, under the statute, bears interest, nevertheless, if reparation
for the injury is delayed for a long time by the wrong-doer, the injured
party can not be made whole unless the damages awarded include compensation,
in the nature of interest, for withholding the reparation which ought to
have been promptly made." |
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| [35] | In Clevenger v. Westfield Co. (1978), 60 Ohio App.2d 1, 14 O.O.3d 3, 395
N.E.2d 377, paragraph two of the syllabus, the court said that "[t]he
jury may assess prejudgment interest in favor of the insured under an automobile
collision insurance policy where the insurer does not make a reasonable
offer of settlement on or before the date the loss is due and payable."
While, admittedly, thascourt was dealing with a predecessor version of R.C.
1343.03, it also discussed possible recovery of interest under common-law
principles. The allowance of prejudgment interest by the Hogg and Cobb courts
without a specific statutory provision and the discussion of the common-law
right to interest by the Clevenger court confirm that prejudgment interest
was known at common law. |
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| [36] | Having established that prejudgment interest was known at common law in
Ohio, we now move to correct our statement in Bell v. Mt. Sinai Med. Ctr.
(1993), 67 Ohio St.3d 60, 63, 616 N.E.2d 181, 183, that "[a]ppellants
correctly observe that an action for prejudgment interest pursuant to R.C.
1343.03(C) constitutes a special proceeding inasmuch as the right to obtain
such relief is purely statutory in nature and was unavailable at common
law." This statement was incorrect and the cases cited as authority
for the proposition do not support it. Prejudgment interest was known at
common law and, consequently, an action seeking prejudgment interest does
not constitute a special proceeding. See Polikoff v. Adam (1993), 67 Ohio
St.3d 100, 616 N.E.2d 213, syllabus, where we said that "[o]rders that
are entered in actions that were recognized at common law or in equity and
were not specially created by statute are not orders entered in special
proceedings pursuant to R.C. 2505.02." See, also, Dayton Women's Health
Ctr. v. Enix (1990), 52 Ohio St.3d 67, 74, 555 N.E.2d 956, 962 (Douglas,
J., dissenting). Accordingly, we modify Bell to correct our previous error. |
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| B. The Statute - R.C. 1343.03(C) - Purpose | ||
| [37] | In 1982, Representative (now Judge, Tenth District Court of Appeals) Dana
Deshier, Jr., introduced and sponsored Am.Sub.H.B. No. 189, 139 Ohio Laws,
Part I, 2034. Eventually passed by the General Assembly and signed into
law by the Governor, the bill enacted R.C. 1343.03(C), which permits an
injured party, in certain circumstances, to recover interest in a tort action
from the date the cause of action accrues. Thus, Ohio has created a statutory
right to prejudgment interest. |
|
| [38] | R.C. 1343.03(C) reads: |
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| [39] | "Interest on a judgment, decree, or order for the payment of money
rendered in a civil action based on tortious conduct and not settled by
agreement of the parties, shall be computed from the date the cause of action
accrued to the date on which the money is paid, if upon motion of any party
to the action, the court determines at a hearing held subsequent to the
verdict or decision in the action that the party required to pay the money
failed to make a good faith effort to settle the case and that the party
to whom the money is to be paid did not fail to make a good faith effort
to settle the case." |
|
| [40] | In Peyko v. Frederick (1986), 25 Ohio St.3d 164, 167, 25 OBR 207, 209,
495 N.E.2d 918, 921, we said that "[t]he purpose of R.C. 1343.03(C)
is to encouragslitigants to make a good faith effort to settle their case,
thereby conserving legal resources and promoting judicial economy."
In Kalain v. Smith (1986), 25 Ohio St.3d 157, 159, 25 OBR 201, 202, 495
N.E.2d 572, 574, this court said that "[t]he statute was enacted to
promote settlement efforts, to prevent parties who have engaged in tortious
conduct from frivolously delaying the ultimate resolution of cases, and
to encourage good faith efforts to settle controversies outside a trial
setting." |
|
| [41] | Thus, the purpose of the statute is clear. What are the components of
the statute? |
|
| C. Components of the Statute | ||
| [42] | The statute sets forth certain requirements. First, a party seeking interest
must petition the court. The decision is one for the court not any longer
a jury. The motion must be filed after judgment and in no event later than
fourteen days after entry of judgment. Cotterman v. Cleveland Elec. Illum.
Co. (1987), 34 Ohio St.3d 48, 517 N.E.2d 536, paragraph one of the syllabus.
Second, the trial court must hold a hearing on the motion. Third, to award
prejudgment interest, the court must find that the party required to pay
the judgment failed to make a good faith effort to settle and, fourth, the
court must find that the party to whom the judgment is to be paid did not
fail to make a good faith effort to settle the case. R.C. 1343.03(C). |
|
| [43] | The statute uses the word "shall." Therefore, if a party meets
the four requirements of the statute, the decision to allow or not allow
prejudgment interest is not discretionary. What is discretionary with the
trial court is the determination of lack of good faith. Since the crux of
the statute is "good faith effort" and the ultimate decision whether
to award prejudgment interest is reposed in the trial judge and, further,
since the standard of review on appeal is abuse of discretion, Ziegler v.
Wendel Poultry Serv.; Inc. (1993), 67 Ohio St.3d 10, 20, 615 N.E.2d 1022,
1032, the obvious question becomes what is a "good faith effort"
or, conversely, when has a party "failed to make a good faith effort
to settle"? |
|
| D. Good Faith Effort | ||
| [44] | R.C. 1343.03(C) clearly requires the development of a judicial standard
of good faith. In this court's recent case on the question, Kalain, supra,
25 Ohio St.3d 157, 25 OBR 201, 495 N.E.2d 572, at the syllabus, we said
that: |
|
| [45] | "A party has not 'failed to make a good faith effort to settle under
R.C. 1343.03(C) if he has (1) fully cooperated in discovery proceedings,
(2) rationally evaluated his risks and potential liability, (3) not attempted
to unnecessarily delay any of the proceedings, and (4) made a good faith
monetary settlement offer or responded In good faith to an offer from the
other party. If a party has a goosfaith, objectively reasonable belief that
he has no liability, he need not make a monetary settlement offer." |
|
| [46] | While the last sentence in this syllabus has caused some difficulty we,
nevertheless, reaffirm our holding with the caveat that the last sentence
of the syllabus should be strictly construed so as to carry out the purposes
of R.C. 1343.03(C). |
|
| [47] | The effect of Kalain is to place the burden of proof on a party seeking
prejudgment interest. This is, to a degree, unfortunate since much of the
information needed to make a case for prejudgment interest is in the possession
of the party resisting an award. Accordingly, it is incumbent on a party
seeking an award to present evidence of a written (or something equally
persuasive) offer to settle that was reasonable considering such factors
as the type of case, the injuries involved, applicable law, defenses available,
and the nature, scope and frequency of efforts to settle. Other factors
would include responses - or lack thereof - and a demand substantiated by
facts and figures. Subjective claims of lack of good faith will generally
not be sufficient. These factors, and others where appropriate, should also
be considered by a trial court in making a prejudgment interest determination. |
|
| [48] | Even though the burden of a party seeking an award is heavy, the burden
does not include the requirement that bad faith of the other party be shown.
Lack of a good faith effort to settle should not be confused with bad faith.
As we noted in Kalain, supra, 25 Ohio St.3d at 159, 25 OBR at 202-203, 495
N.E.2d at 574, a party may have failed to make a good faith effort to settle
even though he or she did not act in bad faith. In this regard, we now move
to correct a statement we made in Villella, supra. Therein, we stated that
"a lack of good faith means more than poor judgment or negligence;
rather, it imports a dishonest purpose, conscious wrongdoing or will in
the nature of fraud." Id., 45 Ohio St.3d at 42, 543 N.E.2d at 470.
We now find that statement, as it relates to the lack of a good faith effort
to settle, does not represent the state of the law as set forth in Kalain.
Therefore, we now specifically modify the law stated in Villella by disapproving
the above-quoted language. We hold that in prejudgment interest determinations
pursuant to R.C. 1343.03(C), the phrase "failed to make a good faith
effort to settle" does not mean the same as "bad faith." |
|
| [49] | In making this so-called good faith determination, a trial court is faced
with a number of difficult issues. Two of those issues involve discovery
and privilege. After a ruling on discovery has been made by the trial court,
the question then arises as to the appealability of that determination. |
|
| E. Discovery - Privilege - Appealability | ||
| [50] | Our review of the extensive transcript of the prejudgment interest hearing
conducted in this case sheds some light on the difficulties facing the bench
ansbar. Without question, one of the most difficult problems concerns the
scope of discovery available in a proceeding for prejudgment interest. |
|
| [51] | In Peyko, supra, 25 Ohio St.3d 164, 25 OBR 207, 495 N.E.2d 918, paragraphs
one and two of the syllabus, this court held that: |
|
| [52] | "1. When a plaintiff, having obtained a judgment against a defendant,
files a motion for prejudgment interest on the amount of that judgment pursuant
to R.C. 1343.03(C), the plaintiff, upon a showing of 'good cause' pursuant
to Civ.R. 26(B)(3), may have access through discovery to those portions
of the defendant's insurer's 'claims file' that are not shown by the defense
to be privileged attorney-client communications. |
|
| [53] | "2. If the defense asserts the attorney-client privilege with regard
to the contents of the 'claims file,' the trial court shall determine by
in camera inspection which portions of the file, if any, are so privileged.
The plaintiff then shall be granted access to the non-privileged portions
of the file." |
|
| [54] | Peyko establishes that any determination regarding a party's good faith
effort to settle requires a review of the settlement efforts made by a party's
insurance carrier(s). Id. at 166-167, 25 OBR at 209, 495 N.E.2d at 921.
Most of the information regarding the insurer's efforts will be contained
in the claims file. In this regard, Peyko clearly recognizes that a post-trial
proceeding for prejudgment interest is amenable to the general discovery
process established by the Civil Rules. Indeed, in Cotteman, supra, 34 Ohio
St.3d 48, 517 N.E.2d 536, paragraphs two and three of the syllabus, this
court held that: |
|
| [55] | "2. The R.C. 1343.03(C) proceeding is amenable to the discovery process.
The trial court should exercise such governance so as to speedily resolve
the pose trial discovery. |
|
| [56] | "3. The Rules of Civil Procedure, as utilized in the general discovery
process, are applicable to R.C. 1343.03(C) proceedings." |
|
| [57] | However, Peyko provides little guidance on the ultimate question: What
is a privileged communication between an attorney and a client? We must
look to the purposes of R.C. 1343.03(C), 2317.02 and Civ.R. 26 to provide
the answer. |
|
| [58] | The attorney-client privilege has ancient roots. The history of the privilege
can be traced back at least as far as the reign of Elizabeth I, where the
privilege was already well established. See 8 Wigmore, Evidence (McNaughton
Rev.1961), Section 2290. See, also, Spitzer v. Stillings (1924), 109 Ohio
St. 297, 142 N.E. 365. In the modern law, the privilege is founded on the
premise that confidences shared in the attorney-client relationship are
to remain confidential. Only in this manner can there be freedom from apprehension
in the client's consultation with his or her legal advisor. Wigmore, supra,
at Section 2291. However, the privilege is not absolute. That is to say,
the mere relation of attorney and cliensdoes not raise a presumption of
confidentiality of all communications made between them. Id. at Section
2311. Moreover, it is beyond contradiction that the privilege does not attach
in a situation where the advice sought by the client and conveyed by the
attorney relates to some fixture unlawful or fraudulent transaction. Advice
sought and rendered in this regard is not worthy of protection, and the
principles upon which the attorney-client privilege is founded do not dictate
otherwise. See Wigmore, supra, at Section 2298. See, also, Lemley v. Kaiser
(1983), 6 Ohio St.3d 258, 6 OBR 324, 452 N.E.2d 1304, wherein Judge (now
Justice) Alice Robie Resnick, writing for this court, found that the attorney-client
privilege exists to aid in the administration of justice and must yield
in circumstances where justice so requires. |
|
| [59] | With these principles in mind, it is clear that statements, memoranda,
documents, etc. generated in an attorney-client relationship tending to
establish the failure of a party or an insurer to make a good faith effort
to settle a case contrary to the purposes of R.C. 1343.03(C) are not protected
from discovery in an R.C. 1343.03(C) proceeding for prejudgment interest.
Stated otherwise, if, through the lack of a good faith effort to settle,
the purposes of R.C. 1343.03(C) have been thwarted by a party and/or the
attorneys involved in the case, a search for the truth of that fact cannot
be hindered by claims of attorney-client privilege. Documents and other
things showing the lack of a good faith effort to settle by a party or the
attorneys acting on his or her behalf are wholly unworthy of the protections
afforded by any claimed privilege. |
|
| [60] | As we have stated, the purpose of R.C. 1343.03(C) is to encourage good
faith efforts to settle a case outside the trial setting. The focus of an
R.C. 1343.03(C) post-trial hearing for prejudgment interest must be the
pretrial settlement efforts made between the plaintiffs and defendants and/or
their insurers. Often, the only way for a party to prove another party's
failure to make a good faith effort to settle is by obtaining the claims
file of an insurer. However, the attempt to do so is often met by defense
objections to the discoverability of matters contained within the file on
the basis of work product or attorney-client privilege. If access to the
file or matters contained therein is denied on the basis of privilege, the
hearing required under R.C. 1343.03(C) may amount to nothing less than a
retrial of the entire case. The case at bar is an example of this recurrent
phenomenon, although the insurer's claims file in this case was not necessary
to show that Figgie and/or those acting on his behalf failed to make a good
faith effort to settle the case. |
|
| [61] | The purpose of Civ.R. 26 is to provide a party with the right to discover
all relevant matters, not privileged, that are pertinent to the subject
of the pending proceeding. Civ.R. 26(B)(1). As indicated, in some cases,
nothing is more relevant in an R.C. 1343.03(C) proceeding than the claims
file of an insurer. Thsfile may contain memoranda or other relevant matters
which establish the lack of a good faith effort to settle. At the same time,
the matters contained within the file may be privileged work product or
attorney-client communications, beyond the scope of discovery. |
|
| [62] | The time has come for this court to define what is and is not a privileged
communication*fn8 in an insurer's claims
file for purposes of discovery in an R.C. 1343,03(C) proceeding for prejudgment
interest. In our judgment, only those attorney-client communications contained
in an insurer's claims file that go directly to the theory of defense are
to be excluded from discovery. To hold otherwise would be to undermine the
entire purpose of a hearing on the issue of prejudgment interest, i.e.,
to ascertain the truth regarding good faith efforts to settle. Civ.R. 26(B)(3)
provides, in part, that "a party may obtain discovery of documents
and tangible things prepared in anticipation of litigation or for trial
by or for another party or by or for that other party's representative (including
his attorney, consultant, surety, indemnitor, insurer, or agent) only upon
a showing of good cause therefor." In a prejudgment interest proceeding,
the good-cause requirement of Civ.R. 26(B)(3) is that which is appropriate
to effectuate the General Assembly's purposes of enacting R.C. 1343.03(C)
to encourage and bring about settlements. |
|
| [63] | In our continuing efforts to provide guidance to the bench and bar on
difficult and pressing issues, we hold that in an R.C. 1343.03(C) proceeding
for prejudgment interest, neither the attorney-client privilege nor the
so-called work product exception precludes discovery of an insurer's claims
file. The only privileged matters contained in the file are those that go
directly to the theory of defense osthe underlying case in which the decision
or verdict has been rendered. Additionally, on occasion, this rule might
also apply to the file of a party's attorney. |
|
| [64] | Having identified the character of discoverable items in an R.C. 1343.03(C)
proceeding for prejudgment interest, we reiterate our holding in Peyko,
supra, 25 Ohio St.3d 164, 25 OBR 207, 495 N.E.2d 918, paragraph two of the
syllabus, that where the defense asserts a claim of privilege with regard
to items contained in an insurer's claims file, the trial court shall conduct
an in camera inspection to determine which items are privileged. Having
so stated, we now move to the question of the appealability of a trial court's
order compelling or denying discovery in an R.C. 1343.03(C) proceeding. |
|
| [65] | Following the ruling in Peyko, supra, this court then decided Belt, supra,
67 Ohio St.3d 60, 616 N.E.2d 181. In Belt, we held that the order of a trial
court directing a witness opposing a request for discovery in an R.C. 1343.03(C)
prejudgment interest hearing to summit materials to an in camera inspection
is not a final appealable order. This court in Bell also, however, indicated
that an order in an R.C. 1343.03(C) proceeding permitting discovery after
submission of alleged privileged materials for an in camera inspection is
an order affecting a substantial right made in a special proceeding. Id.
at 64, 616 N.E.2d at 184-185. Thus, according to Belt, such an order is
a final order subject to immediate appeal.*fn9
We now find this statement in Bell to be incorrect. The statement was based
upon the assumption that prejudgment interest was not known at common law
and thus a prejudgment interest proceeding was a special proceeding. As
pointed out above, prejudgment interest was known at common law and, thus,
any order made in a prejudgment interest proceeding is not one made in a
special proceeding. |
|
| [66] | Accordingly, we further modify Bell to correct our error. In doing so,
we hold that an order compelling or denying discovery in an R.C. 1343.03(C)
proceeding for prejudgment interest does not meet the definition of "final
order" set forth in R.C. 2505.02. Such an order does not determine
the action or prevent a judgment, nor is it rendered in a special proceeding.
Thus, an appeal from such an order must await final judgment in the prejudgment
interest proceeding. |
|
| [67] | The court of appeals' majority, citing Kalain, supra, 25 Ohio St.3d 157,
25 OBR 201, 495 N.E.2d 572, affirmed the judgment of the trial court denying
appellant's motion for prejudgment interest. Specifically, the court of
appeals' majority found that Figgie was not obligated to make a monetary
settlement offer because Figgie possessed a good faith, objectively reasonable
belief that he was not liable to appellant. We find that determination to
be untenable on the facts of this case. |
|
| [68] | Figgie never made any offer to settle. If Figgie ever had a good faith,
objectively reasonable belief that he had no liability, the fact that the
"arbitration" panel unanimously found against Figgie should have
apprised him that a finding of liability at trial was possible, if not probable.
Given the substantial amount of conflicting evidence in this case, the fact
that medical records disappeared and were altered and the unanimous determination
of the panel of "arbitrators," the inescapable conclusion is that
Figgie failed to rationally evaluate his potential liability. Appellant
made monetary settlement offers within the limits of Figgie's malpractice
insurance coverage. One such offer was for approximately $4.3 million the
value placed upon this case by the "arbitration" panel, which
did not consider the issue of punitive damages. Figgie refused to engage
in any settlement negotiations. |
|
| [69] | We find that, as a matter of law, prejudgment interest should have been
awarded on the facts of this case. The trial court's failure to award prejudgment
interest was an abuse of discretion.*fn10
We further find that the accrual date of Moskovitz's survival cause of action
was January 1, 1988,*fn11 and prejudgment
interest at the statutory rate is to be computed from and including that
date up to and including the date the judgment is paid. As to the wrongful
death portion of the judgment, interest is to be calculated from and including
the date of deathsDecember 5, 1988, up to and including the date the judgment
is paid. The amount of interest is to be computed by the trial court upon
remand. |
|
| IV | ||
| Sanctions | ||
| [70] | The final issue presented for our consideration is whether it was proper
for the trial court to have sanctioned appellant's attorney, Charles Kampinski,
under Civ.R. 11. Sanctions were awarded in favor of Dr. Makley in the amount
of $4,000. This award was based upon the fact that Kampinski did not present
expert testimony against Makley at trial to establish that Makley's treatment
of Moskovitz deviated from accepted standards of care. The trial court concluded
that Kampinski did not have good and reasonable grounds to pursue the action
against Makley, particularly after the "arbitration" panel found
in favor of Makley on the issue of liability. The trial judge who decided
this issue was not the same judge who had presided over the case at trial. |
|
| [71] | As a preliminary matter, we note that Kampinski, in his individual capacity,
did not file a notice of appeal from the judgment of the court of appeals
affirming the $4,000 award in favor of Makley. That is, Kampinski currently
represents the appellant in this case, and he properly filed a notice of
appeal for appellant without indicating that he himself was appealing from
the sanctions imposed upon him personally. To complicate matters, the attorneys
who represented both Makley and Figgie do not claim to represent Makley
before this court. However, as attorneys for Dr. Figgie, they have briefed
the issue of sanctions and seek to uphold the award that was granted in
Makley. The conclusion we draw is that the issue of sanctions, which affects
Kampinski individually, has become an integral part of all other matters
at issue in this case. We find that the notice of appeal filed by Kampinski
on behalf of his client was sufficient to encompass the issue of sanctions
and that Kampinski may properly be considered an appellant in his individual
capacity. |
|
| [72] | Turning our attention to the merits of the issue, we believe that Kampinski
should not have been sanctioned for pursuing the action against Dr. Makley
for medical malpractice. The thrust of the allegations against Makley in
the final amended complaint was that he unnecessarily amputated Moskovitz's
leg and informed her that the amputation was to cure the cancer, rather
than to ease her pain. However, in the absence of competent expert medical
testimony against Dr. Makley, a prima facie case of medical malpractice
could not be maintained. |
|
| [73] | In his deposition, Dr. Engleberg, plaintiff's medical expert, testified
as follows: |
|
| [74] | "Q Are you going to state at the trial of this matter [that] * *
* Dr. Makley in his care and treatment of Mrs. Moskovitz deviated from the
accepted standards of medical care? |
|
| [75] | "A I will state that if, in fact, the patient was told that the procedure
[amputation] was done in order to cure her or if, in fact, the patient was
not shown to have had a lot of suffering and pain in that leg, then I would
say Dr. Makley deviated from the standard of care. |
|
| [76] | "Q Okay. I want to be very clear that if share you talking about
informed consent * * *[?] |
|
| [77] | "A No, no. Not necessarily written informed consent. If the patient
understood that there was no chance of cure by having her leg amputated
and wanted it done anyway because she had severe intractable pain and that
can be demonstrated, then I would not say his care deviated from the standard
of care. |
|
| [78] | "If, on the other hand, it cannot be demonstrated that she was having
severe and intractable pain in that leg and the patient did not fly understand
that the procedure was not of a curative intent, then I will say he deviated
from the standard of care. |
|
| [79] | "I think the jury should be able to determine which of those sets
of facts, which of those scenarios would most closely reflect reality." |
|
| [80] | Engieberg further testified in his deposition that he had found no evidence
of informed consent or of intractable pain. |
|
| [81] | Engleberg's deposition testimony established a reasonable basis for Kampinski
to fashion a complaint against Makley for medical malpractice. The deposition
testimony of Aaron Moskovitz indicated that Mrs. Moskovitz was told that
the amputation was for curative rather than palliative purposes. Thus, the
factual predicate for the expert medical testimony that Makley had deviated
from accepted standards of care was established by Kampinski prior to trial.
In addition, even though the "arbitration" panel found in favor
of Makley on the issue of liability, the panel noted that there was some
question as to whether Moskovitz had been properly informed of the purpose
of the amputation. Moreover, given the convoluted machinations of this case,
where records were altered, lost and/or not appropriately maintained and
where relevant portions of Makley's teaching file had come up missing, it
might very well have been legal malpractice for Kampinski not to have Makley
available as a defendant at trial. |
|
| [82] | Kampinski chose not to present the evidence against Makley at trial. Why
that is, we will never know. However, the purpose of Civ.R. 11 is to prohibit
the filing of groundless complaints and the evidence establishes that the
allegations asserted against Makley were asserted in good faith. Accordingly,
we reverssthe judgment of the court of appeals on this issue and vacate
the $4,000 award in favor of Makley. |
|
| V | ||
| Conclusion | ||
| [83] | For the foregoing reasons, the judgment of the court of appeals is reversed
and the award of compensatory damages is reinstated. Appellant is entitled
to prejudgment interest and we remand this cause to the trial court to calculate
the amount of prejudgment interest due and to enter judgment accordingly.
The award of punitive damages is reinstated, but we order a remittitur of
$2 million on the punitive damage award. On remand, appellant may accept
the remittitur and a judgment of $1 million in punitive damages, or appellant
may refuse the remittitur, in which case a new trial should be conducted
only on the issue of punitive damages. The award of sanctions is vacated. |
|
| [84] | Judgment reversed and cause remanded. |
|
| [85] | ||
| [86] | ||
| [87] | WRIGHT, J., dissenting. I must respectfully dissent, as I would affirm
in large measure the decision of the court of appeals. |
|
| I | ||
| [88] | In Part I of the majority's opinion there is found a scholarly discussion
of the criteria for punitive damages and an excellent discourse on the concept
underlying the tort of spoliation of evidence. I agree that any professional,
whether doctor, lawyer, or accountant, found to have committed spoliation
with the intent to defraud or otherwise injure a patient or client may be
subject to a claim for compensatory or nominal damages coupled with a claim
for punitive damages. Further, I see no problem combining a traditional
malpractice suit with a cause of action alleging spoliation of evidence.
However, I do not agree with the majority's decision to permit punitive
damages in a negligence action, because the subsequent spoliation of records
does not make the original act of negligence malicious. |
|
| [89] | My major concern with the majority's opinion is its treatment of the facts
surrounding the alleged spoliation. I agree with the suggestion in the majority's
opinion that if "records were altered, destroyed or concealed by Dr.
Figgie in an effort to conceal his medical negligence," an award of
punitive damages may be justified in a separate cause of action. However,
the question whether Dr. Figgis"altered certain records to conceal
the fact that malpractice occurred" was a hotly disputed issue at trial,
an issue vigorously rebutted with lengthy testimony by Dr. Figgie and his
nurse. As is true with the determination of any significant fact, it was
the province of the jury to make a finding and return a verdict on the issue
of the alleged spoliation of evidence. Such a determination is not our task.
What the majority overlooked, presumably, is that the trial judge did not
include in his charge to the jury one single word concerning this hotly
disputed issue of spoliation. Indeed, the entire jury charge dealt strictly
with medical malpractice. The plaintiff neither pleaded a cause of action
for spoliation nor asked for instructions on spoliation. |
|
| [90] | I also do not agree with the majority that "[i]f appellant were constrained
to bring a separate cause of action for spoliation of evidence, that claim
would inevitably fail since there is no damage flowing directly from the
alteration of records." Some measure of damages will flow inevitably
from the alteration of records when the alteration is done to avoid liability
for the physician's medical negligence. At the very least, the plaintiff
may have to expend additional time and effort to reconstruct the original
records. Since the purpose of the spoliation is to avoid liability, the
plaintiff's ability to succeed in the negligence action may be made more
difficult because of the spoliated records. This harm can be seen in the
present case. Dr. Figgie relied on his version of the records to claim that
he was not negligent because he had advised appellant to have a biopsy but
she refused his advice. The inclusion of this statement in his records may
have made appellant's claim more difficult to prove. When a physician commits
spoliation of evidence to avoid liability for his or her medical negligence,
the patient is automatically entitled to at least nominal damages. In some
cases, for example where the spoliation impairs the future course of treatment
of the patient, more than nominal damages may also results.*fn12 |
|
| [91] | Therefore, I would hold that a party must plead a separate cause of action
for the tort of spoliation of evidence. The jury should be instructed that
if it finds the defendant altered or destroyed records with the purpose
of avoiding liability for his or her negligence, the jury must award at
least nominal damages. Thsjury may then proceed to the question of punitive
damages. In such a situation, the test of Preston v. Murty (1987), 32 Ohio
St.3d 334, 512 N.E.2d 1174, can be met as the jury can properly find that
actual malice occurred due to the defendant's "conscious disregard
for the rights and safety of other persons that has a great probability
of causing substantial harm." The great probability of substantial
harm to the plaintiff is that an otherwise meritorious action for negligence
will be defeated due to the tortious conduct of the defendant. |
|
| [92] | Suffice it to say, contrary to the conclusion reached by the majority
following its review of the record, the jury did not make a finding that
Dr. Figgie was involved in spoliation.*fn13
Without such a finding and verdict, which would be tantamount to a finding
of malicious intent or reckless disregard, there exists no basis for punitive
damages. Thus, the court of appeals correctly found that punitive damages
were inappropriate in this case, as this was a cause premised on negligence. |
|
| [93] | In addition to the foregoing, I note that the trial judge was well aware
that the jury's total award of $3 million in punitive damages at best equaled
and probably far exceeded Dr. Figgie's net worth. I believe the punitive
damage award in this case violates the Due Process Clause of the Fourteenth
Amendment to the United States Constitution. See TXO Production Corp. v.
Alliance Resources Corp;. (1993), 509 U.S. ____, 113 S.Ct. 2711, 125 L.Ed.2d
366; Pacific Mut. Life Ins. Co. v. Haslip (1991), 499 U.S. 1, 111 S.Ct.
1032, 113 L.Ed.2d 1; Boning-Ferris Industries of Vermont, Inc. v. Kelco
Disposal, Inc. (1989), 492 U.S. 257, 109 S.Ct. 2909, 106 L.Ed.2d 219. |
|
| II | ||
| [94] | The jury award of punitive damages having been determined to be without
basis, it is perfectly clear that, as stated by the court of appeals, the
compensatory damage award was excessive and the product of passion and prejudice.
I am convinced that, as the court of appeals pointed out, "the jury's
survivorship award [of $2 million] was impermissibly influenced by the jury's
erroneous consideration of punitive damages." I also agree fully with
the court of appeals that the jury's wrongful death award of $1.25 million
was "manifestly excessive." |
|
| [95] | This court consistently has ruled that where an excessive verdict is the
product of passion and prejudice, a new trial must be granted. Larrissey
v. Norwalk Truck Lines (1951), 155 Ohio St. 207, 44 O.O. 238, 98 N.E.2d
419, paragraph four of the syllabus. We have emphasized, for example, that
"[i]n a trial of a negligence action * * * deliberate and persistent
appeals to the sympathy of thsjury, either directly or indirectly, are improper,
as tending to induce either excessive or inadequate verdicts as a result
of such appeal to the passion or prejudice of the jury." Book v. Erskine
& Sons, Inc. (1951), 154 Ohio St. 391, 43 O.O: 334, 96 N.E.2d 289, paragraph
one of the syllabus. Thus, "where the damages awarded are excessive
and appear to have been given under the influence of passion or prejudice,
the resulting prejudice cannot be corrected by remittitur; the only recourse
is the granting of a new trial." (Emphasis added.) Id. at paragraph
two of the syllabus. See, also, Guccione v. Hustler Magazine, Inc. (Oct.
8, 1981), Franklin App. No. 80AP-375, unreported, at 33, 1981 WL 3516. |
|
| [96] | Even a cursory review of the record reveals that counsel for Moskovitz
leveled "deliberate and persistent appeals to the sympathy of the jury,"
referring repeatedly, for instance, to Mrs. Moskovitz's confinement in a
Nazi concentration camp during the Second World War. The record also indicates
that plaintiff's counsel made the spoliation claim, not the malpractice
claim, the primary focus of the trial. Moskovitz's counsel devoted most
of his cross-examination of Dr. Figgie, ninety pages of testimony, to the
alteration of Moskovitz's medical records. In opening statements and again
in closing arguments, counsel for Moskovitz emphasized and reemphasized
the issue of spoliation, alluding many times to Dr. Figgie's cover-up and
the "smoking gun." Throughout the trial, counsel for Moskovitz
repeatedly attempted to direct the jury's attention to the allegation that
Dr. Figgie had tried to conceal his negligent treatment of Moskovitz by
subsequently altering the medical records. But despite this pattern of conduct,
as previously stated, the trial court never instructed the jury on the matter
of spoliation or gave a limiting instruction thereon. Not even a suggestion
of the spoliation issue exists in the trial court's charge to the jury. |
|
| [97] | In light of the foregoing, I believe the court of appeals correctly found
that the jury was wrongfully influenced and that both the compensatory damage
award and the award of punitive damages were excessive and the result of
passion and prejudice. Therefore, I feel the court of appeals properly remanded
the case to the trial court for a new trial on the issue of compensatory
damages. |
|
| III | ||
| [98] | I must also address the majority's position on prejudgment interest and
the majority's treatment of Bell v. Mt. Sinai Meg Ctr. (1993), 67 Ohio St.3d
60, 616 N.E.2d 181. |
|
| [99] | The majority begins its discussion of this issue by declaring that a common-law
right to prejudgment interest existed in Ohio and, therefore, contrary to
a recent decision of this court, a prejudgment interest proceeding is not
considered a "special proceeding" for purposes of R.C. 2505.02.
Thus the majority concludessin paragraph four of the syllabus, that "[a]n
order compeling or denying discovery in an R.C. 1343.03(C) proceeding for
prejudgment interest does not meet the definition of 'final order' set forth
in R.C. 2505.02." |
|
| [100] | This statement by the majority attempts to modify a decision issued by
this court just last term. In Bell we were faced squarely with the question
of whether an order for discovery in a prejudgment interest hearing was
a final appealable order. |
|
| [101] | The issue we addressed in Bell, however, is not an issue before this court
today. Rather, the question we must answer today is whether the award of
prejudgment interest was appropriate in this case. We have not been asked
to consider the appealability of an order issued during a prejudgment interest
hearing. Hence, the lengthy discussion engaged in by this court concerning
the appealability of an order issued during a prejudgment interest hearing
is nothing more than dicta. Given the recent issuance of the Bell decision,
the present case is not the proper forum for such a discussion. Members
of this court had ample opportunity to express any reservations concerning
that issue during our consideration of Belt, which was decided by six members
of this court with the seventh member concurring in judgment only. At a
minimum, because it does not address an issue before this court, the dicta
should be removed from the syllabus. |
|
| [102] | I also take issue with the majority's decision of the relevant prejudgment
interest question. |
|
| [103] | It is well-settled law that the decision to award prejudgment interest
lies within the sound discretion of the trial court. Huffman v. Hair Surgeon,
Inc. (1985), 19 Ohio St.3d 83, 19 OBR 123, 482 N.E.2d 1248. That decision
will not be reversed by a court of appeals unless the record reflects an
abuse of discretion by the trial court. Kalain v. Smith (1986), 25 Ohio
St.3d 157, 25 OBR 201, 495 N.E.2d 572. The phrase "abuse of discretion"
is a term of art defined long ago to mean "more than an error of law
or of judgment; it implies an unreasonable, arbitrary or unconscionable
attitude on the part of the court." Steiner v. Custer (1940), 137 Ohio
St. 448, 19 O.O. 148, 31 N.E.2d 855, paragraph two of the syllabus. Clearly
then, the decision of the trial court in this case should remain undisturbed
unless that decision was tainted by an unreasonable, arbitrary, or unconscionable
attitude. |
|
| [104] | In my judgment there is no evidence of any abuse of discretion here. The
trial court denied Moskovitz's motion for prejudgment interest only after
conducting a lengthy hearing on the matter. During the hearing both sides
had adequate opportunity to present their evidence and arguments. Considering
the strong disagreement between the parties with respect to several significant
facts as well as the lengthy testimony and evidence presented by Dr. Figgie
in rebuttal to Moskovitz's charges, plainly the trial court did not abuse
its discretion isconcluding that Dr. Figgie had a good faith, objectively
reasonable belief that he was not liable. Based on this conclusion I believe
the trial court properly held that Dr. Figgie was not obligated, pursuant
to Kalain, to offer Moskovitz a monetary settlement offer, and that the
failure to do so did not reflect a failure of good faith and, of course,
did not warrant an award of prejudgment interest. |
|
| IV | ||
| [105] | I strongly believe that the court of appeals correctly reversed and vacated
the punitive damage award, reversed the compensatory damage award and remanded
the compensatory damage issue for a new trial, and affirmed the denial of
the motion for prejudgment interest. Thus, for the foregoing reasons I would
affirm the judgment of the court of appeals in part but remand for a new
trial on the issue of compensatory damages and the issue of spoliation. |
|
| [106] | MOYER, C.J., and A.W. SWEENEY, J., concur in the foregoing dissenting
opinion. |
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| Opinion Footnotes | ||
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| [107] | *fn1. The record reveals that in November
1986, the mass measured approximately one centimeter by one centimeter in
size. The tumor had doubled in size by September 1987 and continued to grow
until it was finally removed in November 1987. |
|
| [108] | *fn2. We surmise from the information
before us that the copy of page seven Makley produced at his deposition
was made from the copy in the radiology department records at University
Hospitals. |
|
| [109] | *fn3. An August 10, 1987 entry in the
reconstructed chart states: |
|
| [110] | "Mrs. Moskovitz returns today. She has had some increase in that
swelling and that mass behind her ankle. She is not particularly tender
and it appears to be calcific. She did not want to proceed with radiographs
or work-up today. We did discuss the possibility of needle or incisional
biopsy but she deferred on this." |
|
| [111] | *fn4. In Shaefer v. Allstate Ins. Co.
(1992), 63 Ohio St.3d 708, 711, 590 N.E.d 1242, 1245, the plurality opinion
stated that: "'Non-binding arbitration' is a contradiction in terms.
For a dispute resolution procedure to be classified as 'arbitration,' the
decision rendered must be final, binding and without any qualification or
condition as to the finality of an award * * *." |
|
| [112] | *fn5. Although no party has raised the
issue, R.C. 2711.21 was amended, effective October 20, 1987, to provide
that a decision rendered in an "arbitration" proceeding authorized
by that statute is not admissible into evidence at trial. See Am.Sub.H.B.
No. 327, 142 Ohio Laws, Part II, 3338-3339. Note that R.C. 2711.21 as it
appears in Page's Ohio Rev.Code Ann. (1992) contains a misprint. Specifically,
the final paragraph of R.C. 2711.21 should be designated subsection (D). |
|
| [113] | *fn6. Since Shaffer v. Maier (1994),
68 Ohio St.3d 416, 627 N.E.2d 986, questions have arisen concerning the
authority of an appellate court to order a remittitur. Where a verdict is
found to be excessive but not the result of passion or prejudice, an appellate
court may order a remittitur with the consent of the prevailing party. In
Chester Park Co. v. Schulte (1929), 120 Ohio St 273, 166 N.E. 186, paragraphs
five and six of the syllabus, this court held that: |
|
| [114] | "5. The Court of Appeals has the same unlimited power and control
of verdicts and judgments as the trial court and may weigh the evidence
and exercise an independent judgment upon questions of excessive damages
and when no passion or prejudice is apparent may modify and affirm the judgment
by ordering a remittitur with the consent of the prevailing party. |
|
| [115] | "6. If the Court of Appeals in an error proceeding in an action for
unliquidated damages finds that the verdict was rendered under the influence
of passion or prejudice it has no alternative except to reverse and remand
for a new trial." (Emphasis sic) |
|
| [116] | In Duracote Corp. v. Goodyear Tire & Rubber Co. (1983), 2 Ohio St.3d
160, 162-163, 2 OBR 704, 706, 443 N.E.2d 184, 186, we reaffirmed the principles
set forth in the fifth paragraph of the syllabus of Schulte. See, also,
Shoemake, supra, 78 Ohio App.3d 53, 603 N.E.2d 1114. |
|
| [117] | Civ.R. 59(A) sets forth the grounds upon which a new trial may be granted.
One ground for the granting of a new trial is that the damages awarded are
inadequate or excessive, appearing to have been given under the influence
of passion or prejudice. Civ.R. 59(A)(4). Thus, if an award is excessive
and appears to be the product of passion or prejudice, a new trial is proper
and should be ordered by a reviewing court. However, where the award is
found to be excessive but not the product of passion or prejudice, a remittitur
may he ordered by the appellate court with the consent of the prevailing
party. See Schulte, Duracote and Skoemaker, supra. |
|
| [118] | *fn7. We make no determination as to
the applicability or constitutionality of R.C. 2315.18 and 2315.21(C)(2). |
|
| [119] | *fn8. R.C. 2317.02(A) sets forth a testimonial
privilege respecting communications made between an attorney and a client.
R.C. 2317.02 provides, in permanent part: |
|
| [120] | "The following persons shall not testify in certain respects: |
|
| [121] | "(A) An attorney, concerning a communication made to him by his client
in that relation or his advice to his client * * *. |
|
| [122] | "(B)(1) A physician or a dentist, concerning a communication made
to him by his patient in that relation or his advice to his patient * *
*." |
|
| [123] | Although R.C. 2317.02 grants a privilege respecting attorney-client communications,
the statute does not define what is meant by the term "communication"
in that content. R.C. 2317.02(B)(g) does define "communication"
in the content of the physician/dentist and patient relationship to mean
"acquiring, recording, or transmitting any information, in any manner,
concerning any facts, opinions, or statements necessary to enable a physician
or dentist to diagnose, treat, prescribe, or act for a patient." (Emphasis
added.) Thus, R.C. 2317.02 provides only minimal guidance on the question
concerning privileged attorney-client communications that may be contained
in an insurer's claims file. However, given the definition of "communication"
in R.C. 2317.02(B)(3) concerning a physician or dentist, it could be argued
that, by analogy, a "privileged communication" between an attorney
and a client found in an insurer's claims file should be limited to those
matters going directly to the theory of defense of the underlying lawsuit. |
|
| [124] | *fn9. R.C. 2505.02 reads: |
|
| [125] | "An order that affects a substantial right in an action which in
effect determines the action and prevents a judgment, an order that affects
a substantial right made in a special proceeding or upon a summary application
in an action after judgment, or an order that vacates or sets aside a judgment
or grants a new trial is a final order that may be reviewed, affirmed, modified,
or reversed, with or without retrial. |
|
| [126] | "When a court issues an order that vacates or sets aside a judgment
or grants a new trial, the court, upon the request of either party, shall
state in the order the grounds upon which the new trial is granted or the
judgment vacated or set aside." |
|
| [127] | *fn10. The prejudgment interest proceeding
concluded after a hearing over two days and produced a transcript of three
hundred thirty-eight pages. The trial court, without explanation, denied
prejudgment interest |
|
| [128] | *fn11. For purposes of determining
the accrual date of the survival action, several events that occurred between
November 1957 and the end of January 1955 are significant. These events
include the removal of the tumor and the diagnosis of malignancy on November
10, 1957, the identification of the type of tumor on November 13, 1957,
Moskovitz's apparent knowledge on November 11, 1957 that the tumor was malignant,
and Figgie's receipt of the medical records in December 1957 and the disappearance
of those records possibly in January 1955 (see Frysinger v. Leech [1957],
32 Ohio St.3d 85, 512 N.E.2d 387, paragraph one of the syllabus). Although
it is difficult to determine the precise accrual date of the survival cause
of action given the state of the record before us, we find that January
1, 1955 is the appropriate date of accrual to be used in the calculation
of prejudgment interest. |
|
| [129] | *fn12. To presume damages arise from
the intentional tort of spoliation of evidence is consistent with the long-standing
presumption for other intentional torts such as assault, battery and defamation.
"[E]very injury imports a damage, though it does not cost the party
one farthing, and it is impossible to prove the contrary; for a damage is
not merely pecuniary, but an injury imports a damage, when a man is thereby
hindered of his right. As in an action for slanderous words, though a man
does not lose a penny by reason of the spoiling them, yet he shall have
an action. So if a man gives another a cuff on the ear, though it cost him
nothing, no not so much as a little diachylon, yet he shall have his action,
for it is a personal injury." Ashby v. White (King's Bench 1703), 2
Ld.Raym. 938, 955 (Holt, C.J., dissenting). Holt's position prevailed, as
the majority was reversed by the House of Lords (1703), id. at 958. |
|
| [130] | *fn13. In its first paragraph, the
majority asserts that Dr. Figgie "altered certain records to conceal
the fact that malpractice had occurred," as if the jury made a specific
finding on this issue. |
|
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