Ming-Ho Leung v. Verdugo Hills Hospital

Aidan Ming-Ho Leung (plaintiff) was born on March 24, 2003, at Verdugo Hills Hospital (the hospital) (defendant) and sent home the same day. After three days, Aidan’s eyes appeared yellow. When Aidan’s parents called his pediatrician, Dr. Steven Wayne Nishibayashi (defendant), and reported Aidan’s condition, they were told there was no need to bring Aidan in prior to his scheduled appointment four days later. Aidan’s condition worsened, and by the time his parents took him to an emergency room, excess bilirubin in Aidan’s blood had caused severe brain damage. Aidan’s mother, Nancy Leung, filed a negligence suit on his behalf against Nishibayashi and the hospital. Nishibayashi entered into a settlement agreement with the plaintiff for one million dollars and asked a court to determine that the settlement was made in good faith. A good-faith determination would limit Nishibayashi’s liability to the settlement amount under California law. The trial declined to find the settlement in good faith, considering that the settlement was exceedingly lower than a reasonable estimate of what Aidan might receive at trial. Despite this, Nancy entered into the agreement with Nishibayashi. At trial, a jury awarded Aidan around 15 million dollars in economic damages, apportioning 55 percent of the fault for Aidan’s brain damage to Nishibayashi, 40 percent to the hospital, and 5 percent to Aidan’s parents. Because of the one-million-dollar settlement with Nishibayashi, the hospital was responsible for 95 percent of the judgment. The hospital appealed, arguing that pursuant to the common-law release rule, the settlement that Aidan made with Nishibayashi, releasing him from liability, meant that the hospital, which had not settled, was also released from liability for economic damages. Because of such harsh results, California had modified the common-law release rule, providing that a plaintiff’s release of and good-faith settlement with one joint tortfeasor would not automatically mean that all other joint tortfeasors were released. The plaintiff could still recover from the joint tortfeasors who did not settle, but those tortfeasors would have their damage awards reduced by the amount of any settlement and would not be able to seek contribution from the tortfeasor who settled. However, because the trial court determined that the settlement was not in good faith, the statute was not applicable. An appellate court reluctantly agreed with the hospital. The California Supreme Court granted review.