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STATE OF NORTH CAROLINA

COUNTY OF PITT
IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
FILE NO. 01 CVS 728

NEIL R. ANTHONY,
Plaintiff,
vs.
DAVID H. DEATON, M.D.,
Defendant.
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STATE OF NORTH CAROLINA

COUNTY OF PITT
IN THE GENERAL COURT OF JUSTICE 
SUPERIOR COURT DIVISION 
FILE NO. 01 CVS 728

NEIL R. ANTHONY
Plaintiff,
vs.
GREGORY F. MURPHY, M.D. and
GREENVILLE UROLOGY CLINIC, P.A
Defendant.
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)
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)

 

PLAINTIFF'S MEMORANDUM IN OPPOSITION TO DEFENDANTS' MOTIONS TO COMPEL DISCOVERY
I. INTRODUCTION
            Plaintiff is opposing defendants' motions to compel disclosure of settlement amounts with other parties for the following reasons: (1) the parties that have settled, Pitt County Memorial Hospital and one of its resident physicians, have instructed plaintiff not to divulge the amounts of settlement to anyone, including these remaining defendants; (2) informing these parties of the amounts of the settlements would discourage settlements by rewarding joint-tortfeasors who refuse to contribute their fair share to a settlement at mediation in hopes of being able to take tactical advantage of learning the amount of the credit afforded by their co-defendants; and (3) by law, the amounts of settlements are not relevant or discoverable. 
            This is a medical negligence action against two physicians because they left a large green operating room towel (measuring approximately a foot by a foot and a half) inside the plaintiff's abdomen during surgery they performed on him at Pitt County Memorial Hospital. The presence of the towel was discovered five days later, when Mr. Anthony underwent emergency surgery at the hospital after becoming violently ill. As a result of this retained towel, Mr. Anthony has undergone two additional surgical procedures (including the emergency procedure) and has suffered serious injuries including a very large permanent incisional hernia of his abdomen.
            This is a medical negligence action against two physicians because they left a large green operating room towel (measuring approximately a foot by a foot and a half) inside the plaintiff's abdomen during surgery they performed on him at Pitt County Memorial Hospital. The presence of the towel was discovered five days later, when Mr. Anthony underwent emergency surgery at the hospital after becoming violently ill. As a result of this retained towel, Mr. Anthony has undergone two additional surgical procedures (including the emergency procedure) and has suffered serious injuries including a very large permanent incisional hernia of his abdomen.
             Originally, plaintiff filed suit against Pit County Memorial Hospital, Dr. Deaton, and Dr. Tor M. Ljung, an ECU resident surgeon who assisted in the surgery. After Dr. Deaton and Dr. Ljung denied in their answers that they had placed the towel or failed to remove it before closure of the surgical wound, plaintiff filed a separate suit against Dr. Murphy and his practice, as Dr. Murphy was the only other physician who participated in the surgery.
            Discovery has revealed that Dr. Deaton placed the towel inside Mr. Anthony with the knowledge and approval of Dr. Murphy. Both Dr. Deaton and Dr. Murphy were attending surgeons at Pitt County Memorial Hospital. The operative notes state that Dr. Deaton closed Mr. Anthony's abdomen at the completion of the surgery. Dr. Ljung, the assisting ECU resident, testified at deposition that he performed the closure of Mr. Anthony's abdomen but that Dr. Murphy helped him begin the closure. Dr. Deaton testified that a search and "sweep" of the abdomen prior to closure should have detected the presence of the towel.
            The mediation settlement conference for these companion cases was held on February 21, 2001. Plaintiff settled with the hospital and Dr. Ljung. The settlement agreements entered into at mediation contain confidentiality clauses forbidding the parties from disclosing the amounts of the settlements. The settling defendants expressly admonished plaintiff's counsel that the amounts of the settlements were not to be disclosed to the remaining defendants in these cases.
At the mediation, defendants Dr. Deaton and Dr. Murphy (who are insured by the same insurer) refused to negotiate with plaintiff despite the fact that North Carolina law provides that a surgeon is responsible for removing all harmful and unnecessary objects from a patient's body at the completion of surgery. Dr. Deaton and Dr. Murphy apparently take the position that the nurses were solely responsible for failing to conduct the sponge count properly, and that Dr. Ljung was solely negligent in failing to remove the towel before the plaintiff's abdomen was closed.

             1 "Uniformly, in this and other courts, res ipsa loquitur has been applied to instances where foreign bodies, such as sponges, towels, needles, glass, etc., are introduced into the patient=s body during surgical procedures and left there." Mitchell v. Saunders, 219 N.C. 178, 182, 13 S.E2d 242 (1941) (Emphasis added)

               However, the Director of the hospital's operating room testified that the surgeons and the nurses are jointly responsible for following the hospital's sponge count policy, and that the policy was not followed during Mr. Anthony's surgery. Further, although Dr. Deaton testified that the low annual test scores of Dr. Ljung during his residency were a matter of "concern" at the hospital, and that Dr. Ljung was not one of the more "conscientious" residents, Dr. Deaton did not directly supervise Dr. Ljung during the closure. In addition, Dr. Murphy denies that he was present in the operating room when Dr. Ljung closed Mr. Anthony, and Dr. Murphy also denies that he was responsible for supervising Dr. Ljung during the closure. This testimony is in conflict with the testimony of Dr. Ljung that he was initially assisted in the closure by Dr. Murphy. In addition, Dr. Ljung testified that he was acting under the supervision of both Dr. Deaton and Dr. Murphy when he closed the plaintiff. Discovery has established that both Dr. Deaton and Dr. Murphy had the right to control Dr. Ljung's performance of his duties. 3

              2 North Carolina law, as well as the policies of Pitt County Memorial Hospital, holds the surgeon responsible under the circumstances of this case. See Tice v. Hall, 310 N.C. 589, 592, 313 S.E.2d 565, 567 (1983) ("When a surgeon relies upon nurses or other attendants for accuracy in the removal of sponges from the body of his patient, he does so at his peril.") (Emphasis added)

              The fact that Dr. Deaton and Dr. Murphy had the right to control Dr. Ljung's manner of performance of his duties is hardly surprising given the holdings of our appellate courts on the issue of the vicarious liability of attending surgeons at Pitt County Memorial Hospital for the negligence of ECU residents. See, i.e., Brown v. Flowe, 128 N.C.App. 668, 496 S.E.2d 830 (1998) ( Directed verdict for plaintiff affirmed on the issue of vicarious liability of an attending surgeon at Pitt Memorial for acts of an ECU resident surgeon, because the hospital and medical staff bylaws and the Affiliation Agreement between ECU and the hospital established that the attending surgeons have the right to control the residents.) See also, Rouse v. Pitt County Memorial Hospital, 343 N.C. 186, 470 S.E.2d 44 (1996) (There was evidence in the record that ECU had exclusively delegated to attending physicians the right to control the residents' manner of performance of the provision of medical services to patients, "thereby allowing the resident physicians' negligence to be imputed to the attending physicians.") (Emphasis added)

             Since the date of the mediation, there has been no further activity in these cases other than the efforts of these defendants to discover the amounts of the settlements and some discussion among counsel regarding the terms of a discovery scheduling order to be entered.

             Having refused to accept any responsibility or accountability for Mr. Anthony's injuries, despite the law and the facts, and having refused to participate in the negotiations with the other parties at mediation in an effort to settle this foreign object case, the remaining defendants should not now be permitted to benefit from their tactic by learning the amounts paid by parties who expressly bargained for confidentiality as against these defendants. The negotiating defendants expressly bargained for confidentiality and instructed plaintiff not to divulge the terms of settlement to the remaining defendants who are bringing on this motion.

             If the Court were to order the plaintiff to disclose the settlement terms in violation of the confidentiality clauses of the settlement agreements, the Court would be discouraging the favored public policy of encouraging prompt settlements (See Matthews v. Hill, 2 N.C.App. 350, 163 S.E.2d 7 (1968). Such a result would encourage parties who share responsibility in the context of multiple defendants, to step back and watch their co-defendants negotiate and enter into settlements, then litigate to learn the amounts that have been paid in confidence, and decide whether or not to try the case. These defendants want to discover, in essence, whether in their judgment the settling parties have paid enough, at a mediation these defendants chose not to negotiate at, to cover their exposure. This is a practice that should not be encouraged by this Court.

II. THE SETTLEMENT AGREEMENTS ARE NOT RELEVANT TO THE ISSUES IN THIS ACTION AND CANNOT LEAD TO THE DISCOVERY OF ADMISSIBLE EVIDENCE

              Defendants Dr. Deaton and Dr. Murphy have filed motions to compel the plaintiff to answer interrogatories requesting information pertaining to the mediated settlements, and to produce copies of settlement agreements and other documents relating to the settlements. 
              The standard defendants must meet to prevail on their motions is set forth in Rule 26 of the Rules of Civil Procedure. Defendants must establish that the information sought by their discovery requests is relevant to the subject matter of the actions or reasonably calculated to lead to the discovery of admissible evidence.
              Defendants cannot show relevancy or discoverability of the terms of plaintiff's settlements with the hospital and Dr. Ljung. First of all, Our Court of Appeals has held that evidence of a settlement with another party is not relevant to the issues of a case arising out of the same facts. Cates v. Wilson, 83 N.C.App. 448, 350 S.E.2d 898 (1986), modified, 321 N.C. 1, 361 S.E.2d 734 (1987). In Cates, our Court of Appeals stated as follows:

We hold that evidence of plaintiffs' separate lawsuit against Dr. Wein was irrelevant under N.C.Gen.Stat. ' 8C?1, Rule 402 of the North Carolina Rules of Evidence, and that its admission contravenes the strong public policy favoring settlement of controversies out of court. See Commentary to N.C.Gen.Stat. ' 8C?1, Rule 408; Ramsey v. Camp, 254 N.C. 443, 119 S.E.2d 209 (1961); Dixie Lines v. Grannick, 238 N.C. 552, 78 S.E.2d 410 (1953). Defendants have not asserted, nor do we see, any grounds for admitting this evidence.

                In addition, Rule 408 of the Rules of Evidence expressly prohibits admissibility of settlement agreements and amounts of settlements:

Evidence of (1) furnishing or offering or promising to furnish, or (2) accepting or offering or promising to accept, a valuable consideration in compromising or attempting to compromise a claim which was disputed as to either validity or amount, is not admissible to prove liability for or invalidity of the claim or its amount. Evidence of conduct or evidence of statements made in compromise negotiations is likewise not admissible. This rule does not require the exclusion of any evidence otherwise discoverable merely because it is presented in the course of compromise negotiations. This rule also does not require exclusion when the evidence is offered for another purpose, such as proving bias or prejudice of a witness, negativing a contention of undue delay, or proving an effort to obstruct a criminal investigation or prosecution. (Emphasis Added).

             Because the terms of settlement are expressly inadmissible by virtue of Rule 408, discovery of such terms cannot lead to the discovery of admissible evidence.
             Therefore, defendants' discovery requests are outside the scope of discovery as defined by Rule 26(b)(1) of the Rules of Civil Procedure.
              North Carolina's Rule 408 is identical to Rule 408 of the Federal Rules of Evidence, with the exception of minor clarifying language. See Commentary, Rule 408, North Carolina Rules of Evidence. Because the Federal Rules of Civil Procedure are the source of the North Carolina Rules of Civil Procedure, North Carolina courts look to federal case law for "enlightenment and guidance" when interpreting our rules of civil procedure. Sutton v. Duke, 277 N.C. 94, 176 S.E.2d 161, 165 (1970). The case of Bottaro v. Hatton Associates, 96 F.R.D. 158 (E.D.N.Y. 1982) (copy attached as Exhibit 1) is instructive in discussing the reasons defendants' motions should fail. In that case the plaintiff settled with one defendant during pretrial proceedings. The settling parties agreed in their settlement documents on confidentiality. Two of the remaining defendants moved to compel disclosure of the agreement pursuant to Rule 37. The Court denied the motion to compel, stating that "..it is clear that the object of the inquiry must have some evidentiary value before an order to compel disclosure of otherwise inadmissible material will issue." Id. at 159.

              In Bottaro, the moving defendants contended that the settlement agreement was discoverable because it might produce admissible evidence on the question of damages. However, the Court traced the legislative history of Federal Rule 408, which revealed that the exception contended for by the defendants to allow discovery of a settlement agreement on the issue of damages, had been rejected by the Senate Committee on the Judiciary as "constitut[ing] an unjustifiable restraint upon efforts to negotiate settlementsBthe encouragement of which is the purpose of the rule." S.Rep. No. 1277, 93d Cong. 2d Sess. 10 (1974)." Bottaro, supra at 160.

              Because the United States Senate specifically rejected the contention of the defendants, and elected instead to promote "...the strong public policy of favoring settlements and the Congressional intent to further that policy by insulating the bargaining table from unnecessary intrusions..." Id. at 160, the Court denied defendants' motion. The Court pointed out the obvious fact that the settlement terms were not reasonably calculated to lead to discovery of admissible evidence.

              Defendants also argued in Bottaro that discovery of the amount of settlement was relevant to determine whether the settling party may be liable to the moving defendants for contribution despite the settlement with the plaintiff. However, the Court observed that the amount of the total liability in the case would not be known until a final judgment had been rendered. Even at that point the settlement terms would be irrelevant:

Even then, the settlement would not be evidence relevant to any issue in this case other than the ministerial apportionment of damages, a mathematical computation which the Court rather than the jury will perform. Hence, the amount of the settlement is not relevant to any issue in this case at this time.

Id.
              The same principle applies to this case. The issues before the jury will be whether the defendants were negligent, whether defendants' negligence caused the plaintiff's injuries and damages, and what are the total amount of damages the plaintiff suffered because of defendants' negligence.

              The amount of damages that must be paid by the defendants in this action, in relation to what amounts other parties have already paid, is not a relevant issue in this case. If a verdict is returned for the plaintiff establishing the total amount of his damages, and the status of the defendants as joint tort-feasors, the Court would then perform the ministerial act of determining the proper amounts owed by the defendants pursuant to the provisions of Chapter 1B. See also Ryals v.Hall-Lane Moving and Storage Co., 122 N.C. App. 134, 468 S.E.2d 69 (1996)
              (held that defendants were not prejudiced by going through trial without information about a secret settlement with two co-defendants; the settlement terms were not admissible evidence, and after the jury verdict in the amount of $25,000 was rendered, the Court gave the defendants a credit of $10,000, the amount of the secret settlement).

III. CONCLUSION

             Based on the foregoing reasoning and authorities, the plaintiff respectfully requests the Court to enter an order denying the defendants' motions to compel discovery. 
             This the ______ day of July, 2001.

BENTLEY LAW OFFICES, P.A.

____________________________ 
Charles A. Bentley, Jr. 
Post Office Box 52089 
Durham, North Carolina 27717-2089 
Telephone: (919) 682-3700



CERTIFICATE OF SERVICE

I do hereby certify that on this the ____ day of July, 2001, I served copies of the foregoing PLAINTIFF'S MEMORANDUM IN OPPOSITION TO DEFENDANTS' MOTION TO COMPEL DISCOVERY on counsel for the defendants by hand delivery at the Pitt County courthouse as follows:

John W. Minier 
Patrick Neighbors 
Yates, McLamb, & Weyher, L.L.P. 
Post Office Box 2889 
Raleigh, NC 27602-2889

William P. Daniell 
Newsom, Graham, Hedrick & Kennon, P.A. 
PO Box 51579 
Durham, North Carolina 27717-1579

______________________
Charles A. Bentley, Jr

 


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