Matthew Fruge v. Lynn E. Foret, M.D.

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

13-1071

MATTHEW FRUGE

VERSUS

DR. LYNN FORET

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APPEAL FROM THE
FOURTEENTH JUDICIAL DISTRICT COURT,
PARISH OF CALCASIEU, NO. 2009-5950
HONORABLE RONALD F. WARE, DISTRICT JUDGE

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J. DAVID PAINTER
JUDGE

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Court composed of J. David Painter, Phyllis M. Keaty, John E. Conery, Judges.

AFFIRMED.

Conery, J., Concurs.

J. Gregory Bergstedt
Elizabeth F. Shea
Fraser, Wheeler & Bergstedt
P.O. Box 4886
Lake Charles, LA 70606-4886
(337)478-8595
COUNSEL FOR DEFENDANT-APPELLANT:
Dr. Lynn Foret

John L. Hammons
Cornell R. Flournoy
Nelson & Hammons
705 Milam Street
Shreveport, LA 71101
COUNSEL FOR PLAINTIFF-APPELLEE:
Matthew Fruge

PAINTER, Judge.

This appeal presents the limited issue of whether a pre-trial settlement with

the Patients’ Compensation Fund (the Fund) should be applied as a credit to the

damages awarded at trial against a non-settling healthcare provider. In this case,

the trial court rendered judgment in favor of the plaintiff in excess of the statutory

limit, then reduced the amount to the cap as provided by law and cast the defendant

healthcare provider in judgment for the statutorily limited amount of $100,000.00

plus legal interest and costs. There was no credit or reduction given for amounts

received by the plaintiff from his settlement with the Fund. The healthcare

provider does not appeal the judgment against him insofar as it finds him liable for

damages or as to the amount of damages awarded. He appeals only the trial

court’s refusal to apply the payment by the Fund as a credit to reduce the amount

owed by him under the judgment. For the following reasons, we affirm the trial

court’s judgment.

FACTS AND PROCEDURAL HISTORY

Matthew Fruge began treating with Dr. Lynn Foret for various complaints,

but his major problem was with recurrent dislocation of his shoulder. Dr. Foret

performed surgery on Mr. Fruge’s right shoulder, which involved the insertion of a

screw. Following the surgery, Mr. Fruge developed an infection at the incision site.

Another doctor performed a surgical procedure to drain the wound. Mr. Fruge

continued to have problems with infection. The screw was removed in a third

surgical procedure on January 29, 2002. His shoulder continued to dislocate. He

eventually had to have a fourth surgery which fused the joint. After a Medical

Review Panel rendered a decision in which one panelist found in favor of Dr. Foret

and two panelists found in favor of Mr. Fruge, he filed this suit against Dr. Foret.

Prior to trial, the Fund reached a settlement agreement with Mr. Fruge and

paid him a total of $600,000.00 in full settlement of his claims against it. The case

against Dr. Foret proceeded to bench trial. The trial court found that Dr. Foret

committed malpractice and that Mr. Fruge was entitled to damages in the amount

of $700,000.00 for physical pain and suffering, mental anguish and distress,

residual disability, loss of the quality of life, interference with daily activities, and

loss of earning capacity and $65,936.48 in future medical care and related benefits

incurred after the date of injury. The judgment reduced the amount to $500,000.00

pursuant to La.R.S. 40:1299.42(B)(1) and ordered that Dr. Foret’s liability was

limited to $100,000.00 plus legal interest from September 20, 2002 until paid plus

costs of the proceedings pursuant to La.R.S. 40:1299.42(B)(2). The judgment also

found Mr. Fruge to be in need of future medical care. The judgment made no

mention of the settlement with the Fund and gave Dr. Foret no credit therefor.

Dr. Foret appeals, contending only that the trial court miscalculated the

damage award because it did not first reduce the amount awarded to the statutory

cap and then further reduce the amount awarded by the $600,000.00 received by

Mr. Fruge from the Fund prior to trial. As such, Dr. Foret contends that he owes

nothing under the judgment. To the contrary, Mr. Fruge contends that the trial

court correctly ruled that Dr. Foret must pay the $100,000.00 limit of his liability

and that the settlement with the Fund prior to trial has no effect on the financial

liability imposed by the judgment on Dr. Foret.

Mr. Fruge filed a motion to supplement the record with a copy of the receipt

and release evidencing his settlement with the Fund. “Appellate courts are courts

of record and may not review evidence that is not in the appellate record, or

receive new evidence.” Denoux v. Vessel Mgmt. Servs., Inc., 07-2143, p. 6 (La.

5/21/08), 983 So.2d 84, 88. The receipt and release document was not part of the
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trial court record. Counsel for Mr. Fruge contends that the trial court did not rule

on their motion to hold the record open for the receipt and release and admits that

the document was never offered into evidence. Therefore, we deny the motion to

supplement. However, for the reasons that follow, we affirm the judgment of the

trial court finding that Dr. Foret must pay $100,000.00 plus legal interest and costs.

DISCUSSION

The Louisiana Medical Malpractice Act (the Act), at La.R.S. 40:1299.42,

provides in relevant part as follows:

B. (1) The total amount recoverable for all malpractice claims
for injuries to or death of a patient, exclusive of future medical care
and related benefits as provided in R.S. 40:1299.43, shall not exceed
five hundred thousand dollars plus interest and cost.

....

D. (1) Evidence of an advance payment is not admissible until
there is a final judgment in favor of the plaintiff, in which event the
court shall reduce the judgment to the plaintiff to the extent of the
advance payment.

(2) The advance payment shall inure to the exclusive benefit
of the defendant or his insurer making the payment.

(3) In the event the advance payment exceeds the liability of
the defendant or the insurer making it, the court shall order any
adjustment necessary to equalize the amount which each defendant is
obligated to pay, exclusive of costs.

(4) In no case shall an advance payment in excess of an
award be repayable by the person receiving it.

(5) In the event that a partial settlement is executed between
the defendant and/or his insurer with a plaintiff for the sum of one
hundred thousand dollars or less, written notice of such settlement
shall be sent to the board. Such settlement shall not bar the
continuation of the action against the patient's compensation fund for
excess sums in which event the court shall reduce any judgment to the
plaintiff in the amount of malpractice liability insurance in force as
provided for in R.S. 40:1299.42(B)(2).

Dr. Foret argues that the amount received in settlement from the Fund by

Mr. Fruge was an “advance payment” under the Act and that a credit for the
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payment must be given in the judgment to reduce his liability. He reasons that “A

plaintiff is not entitled to recover damages from the [Fund] before an admission of

liability has been made by the defendant [healthcare] provider, then recover again

after a judgment has been rendered against the defendant [healthcare] provider.”

Mr. Fruge, on the other hand, argues that the settlement between him and the

Fund “has no legal effect whatsoever on the financial liability imposed by the

judgment on Dr. Foret.”

Whether or not the trial court correctly applied the provisions of the Act in

rendering judgment against Dr. Foret poses a question of law. “Appellate review

of a question of law is simply a decision as to whether the lower court’s decision is

legally correct or incorrect.” Jim Walter Homes, Inc. v. Jessen, 98-1685, p. 5

(La.App. 3 Cir. 3/31/99), 732 So.2d 699, 702 (citing Ducote v. City of Alexandria,

95-1269 (La.App. 3 Cir. 7/17/96), 677 So.2d 1118). Then, if we find that a

reversible error of law was made, we review the facts de novo. Lasha v. Olin

Corp., 625 So.2d 1002 (La.1993).

In written reasons for judgment, the trial court stated:

The Louisiana Medical Malpractice Act, specifically [La.R.S.]
40:1299.42(C) Limitation of Recovery, provides that any advanced
payment made by the defendant [healthcare] provider or his insurer to
or for the plaintiff or any other person, may not be construed as an
admission of liability for injuries or damages suffered by the plaintiff
or anyone else in action brought for medical malpractice. This statute
in the Medical Malpractice Act in 40:1299.42(D)(2) further states that
the advanced payments shall inure to the exclusive benefit of the
defendant or his insurer making the payment.

In reading these two provisions of the [M]edical [M]alpractice
[A]ct together, the court determined that credit for any advanced
payments is only given if the payment was made by a defendant
healthcare provider or his insurer. In this instance[,] the [Fund]
settled with the [p]laintiff before trial, making an advanced payment.
However[,] the [Fund] is neither a defendant healthcare provider[] nor
his insurer. . . .

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After a trial on the merits, the Court found Dr. Foret liable for
the plaintiff’s injuries. . . The [Fund] settled with [plaintiff] prior to
the trial to protect its own interest. Section 40:1299.42(D)(2) of the
Louisiana Medical Malpractice Act is unambiguous in stating that any
advanced payments shall inure to the exclusive benefit of the
defendant or his insurer making the payment. Dr. Foret has not paid
anything; therefore[,] he cannot receive any credit. The settlement
before trial between the plaintiff and the [Fund] does not constitute an
advanced payment in the context of the [M]edical [M]alpractice
[A]ct[;] therefore[,] it is not considered a credit in favor of Dr. Foret
to be applied to the judgment rendered by this court.

We find that the trial court was legally correctly in its application of the

relevant provisions of the Act to the judgment against Dr. Foret, and we agree with

the trial court’s reasoning. The Act is clear in its pronouncement that: “[t]he

advance payment shall inure to the exclusive benefit of the defendant or his insurer

making the payment.”

DECREE

Finding that the judgment correctly reduced the award to the statutory

limitation and made no adjustment for amounts received in settlement by Mr.

Fruge from the Fund prior to trial, we affirm the trial court’s judgment. Costs of

this appeal are assessed to Defendant-Appellant, Dr. Lynn Foret.

AFFIRMED.

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