Defense Digest 12/08: The Delaware Rule For Prejudgment Interest Not Affected By Apportionment Of Fault
By Lorenza Wolhar, Esq.*
Delaware - Health Care Liability
On July 1, 2008, in Christiana Care Health Services, Inc. v. Crist, the Delaware Supreme Court issued a decision determining that where defendants shared a common liability for a jury verdict that was in excess of the plaintiffs' settlement demand to the individual defendants, but less than the total of the plaintiffs' demand to all the defendants, the plaintiffs were still entitled to prejudgment interest on the entirety of the jury verdict.
The plaintiffs brought a wrongful death and survival action founded in medical negligence in the Superior Court, alleging that the defendants, Mary Ann Connor, D.O., her professional association, Van Buren Medical Associates P.A. ("Dr. Connor"), and Christiana Care Health Services, Inc. ("CCHS"), were negligent during the CCHS hospitalization of the decedent, Matthew Harris. The plaintiffs alleged that the defendants were joint tortfeasors, and, as a result, the defendants asserted cross claims against each other so that, assuming liability, the jury could apportion liability among the defendants. In the event a party pays more of its pro rata share of the common liability, it may recover contribution from another joint tortfeasor. See 10 Del. C. § 6302. Prior to trial, the plaintiffs made a settlement demand to Dr. Connor and CCHS for $1.25 million each, totaling $2.5 million, which was rejected by both parties.
The Superior Court jury found that both Dr. Connor and CCHS were directly and jointly negligent, that their negligence was a proximate cause of the plaintiff's death, and awarded damages of $2 million in favor of the plaintiffs. As a result of the cross claims asserted by the defendants, the jury apportioned fault between Dr. Connor and CCHS as follows: 40 percent of the fault to Dr. Connor and 60 percent of the fault to CCHS. Therefore, according to the apportionment, Dr. Connor had to pay $800,000 of the verdict while CCCS had to pay $1.2 million. Both of these damages amounts are less than the $1.25 million individual settlement demands made by the plaintiffs to each defendant.
Following trial, as the winning party, the plaintiffs filed a motion for prejudgment interest in the amount of $469,477.44. According to 6 Del. C. § 2301 (d), "Interest shall be added to any final judgment entered for damages awarded as a result of bodily injury, death or property damage, beginning from the date of injury...." In order to take advantage of this prejudgment interest provision, however, the plaintiff must extend "a written settlement demand valid for a minimum of thirty days in an amount less than the amount of damages upon which judgment was entered." In other words, if the settlement demand on a defendant is less than the amount of damages awarded by the jury against that defendant, then the plaintiffs can recover prejudgment interest.
Both defendants asserted that the plaintiffs were not entitled to prejudgment interest since the jury award, as apportioned to each defendant, was less than the individual settlement offers made to each defendant. In applying 6 Del. C. § 2301 (d), the trial court agreed with the defendants and denied the plaintiffs' request for prejudgment interest. The trial court noted that 6 Del. C. § 2301 (d ) does not explicitly address the circumstance where the final judgment includes the liability of a co-defendant. The trial court found that the combined settlement demand of $2.5 million, in fact, exceeded the jury verdict. Although the trial court acknowledged that, as joint tortfeasors, the plaintiffs could collect the entire amount of the $2 million verdict from either defendant, it determined that the apportionment demonstrated that each individual defendant's liability did not exceed the individual settlement demands. Therefore, because the apportionment of the jury verdict was less than the settlement demands as to the individual tortfeasors, the plaintiffs were not entitled to prejudgment interest.
Both the plaintiffs and the defendants appealed the jury verdict. On cross-appeal, the plaintiffs argued that the trial court erred as a matter of law in denying their request for prejudgment interest. The Delaware Supreme Court focused on the plain language of 6 Del. C. § 2301 (d), specifically, that "interest shall be added to any final judgment entered for damages awarded as a result of bodily injury, death or property damage, beginning from the date of injury... ." The court determined that the plaintiffs' written settlement demand, as required by 6 Del. C. § 2301 (d ), of $1.25 million to each defendant, was for less than the $2 million verdict. Acknowledging that the jury apportionment of fault affects contribution among joint tortfeasors, the Supreme Court pointed out that jury apportionment does not change the common liability of each tortfeasor to the plaintiffs for the entire amount of the judgment. Regardless of the apportionment of fault, the final judgment against the defendants was $2 million. Therefore, it was error for the trial court to deny the request for prejudgment interest.
The implications of this ruling are significant since prejudgment interest can considerably increase the damages awarded a plaintiff, thereby increasing the risk to the insured.
*Lori is an associate in our Wilmington, Delaware, office and can be reached at lawolhar@mdwcg.com or (302) 552-4318.
