Laureen Olson v. Paul M. Toce, Jr.

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

17-36

LAUREEN OLSON

VERSUS

PAUL M. TOCE, JR., ET AL.

**********

ON APPLICATION FOR SUPERVISORY WRITS FROM THE
FIFTEENTH JUDICIAL DISTRICT COURT
PARISH OF LAFAYETTE, NO. 2011-0898
HONORABLE PATRICK MICHOT, DISTRICT JUDGE

**********

SHANNON J. GREMILLION
JUDGE

**********

Court composed of Syvia R. Cooks, Billy Howard Ezell, and Shannon J.
Gremillion, Judges.

WRIT GRANTED;
REVERSED, RENDERED IN PART, AND REMANDED.

Nadia de la Houssaye
Donald W. Washington
Jones Walker LLP
600 Jefferson Street, suite 1600
Lafayette, Louisiana 70502
(337) 593-7600
COUNSEL FOR OTHER RESPONDENT:
Louisiana Patient’s Compensation Fund Oversight Board

J. Lomax Jordan Jr.
Victor A. Ashy
1817 West University Avenue
Lafayette, Louisiana 70506
(337) 233-9984
COUNSEL FOR PLAINTIFF/APPLICANT:
Laureen Olson

Michael W. Adley
Adam Gulotta
Judice & Adley, APLC
926 Coolidge Boulevard
Lafayette, Louisiana 70503
(337) 235-2405
COUNSEL FOR DEFENDANTS/RESPONDENTS:
Paul M. Toce, Jr.
Paul M. Toce, Jr., A Professional Medical Corporation

Thomas S. Schneidau
Norma F. Pizza
Milling Benson Woodward LLP
68031 Capital Trace Row
Mandeville, LA 70471
(985) 871-3924
COUNSEL FOR DEFENDANT/RESPONDENT:
LAMMICO

GREMILLION, Judge.

The plaintiff-applicant, Laureen Olson, applied for supervisory writs with

this court following the trial court’s grant of the exceptions of vagueness,

ambiguity, and prematurity filed by the Louisiana Patient Compensation Fund

Oversight Board (the PCF) in response to her Petition for Approval of Settlement

of Medical Malpractice Claim pursuant to La.R.S. 40:1231.4.1 We called up the

writ and requested supplemental briefing and argument. For the following reasons,

the writ is granted, and the ruling of the trial court is reversed. The matter is

remanded for proceedings consistent with this opinion.

FACTUAL AND PROCEDURAL BACKGROUND

The basic facts of this case are not disputed. A medical review panel found

that Dr. Paul M. Toce, Jr.,2 defendant-respondent, committed medical malpractice

in his treatment of Olson and, further, engaged in an inappropriate sexual

relationship with her. Over the years, extensive litigation and procedural matters

have arisen. Olson first filed two lawsuits in February 2011 prior to the convening

of the panel: one for medical malpractice and one for general tort claims not

considered medical malpractice. After the panel rendered its opinion in December

2012, and following appeals to this court, the general tort suit was amended to

include the medical malpractice claims. In Olson v. Louisiana Medical Mutual

Insurance Co., 13-1182 (La.App. 3 Cir. 3/5/14), 134 So.3d 1276, writ denied, 14-

1053 (La. 10/24/14), 151 So.3d 601, we reversed the trial court’s ruling which

sustained the exception of lis pendens, thereby reviving the original medical

1
Louisiana Revised Statutes 40:1231.4 was redesignated from La.R.S. 40:1299.44
effective June 2, 2015, by House Concurrent Resolution No. 84.
2
Dr. Paul M. Toce, Jr., A Professional Medical Corporation, is also a defendant in this
action.

malpractice claim. Thereafter, the two suits were consolidated in September 2016.

These suits asserted claims for medical malpractice and non-medical-malpractice

claims arising from a sexual relationship between Toce and Olson.

Additionally, prior to the consolidation, Defendants filed various exceptions

to the amended suit, arguing that Olson needed to specify which acts were medical

malpractice and which were general tort claims. Olson filed writs with this court

following the trial court’s ruling that the lawsuit needed to be amended to specify

which acts constituted medical malpractice and which constituted a breach of

general tort law. The PCF participated in the arguments to the trial court. We

granted the writ and reversed the trial court, finding that Olson’s third amended

supplemental and restated petition was “sufficient to inform the defendants of the

claims asserted and to allow them to prepare a defense.” See Writ Application, pg.

167, Olson v. ABC Insurance Co., 15-339 (La.App. 3 Cir. 5/27/15) (an unpublished

writ opinion).

Thereafter, in December 2016, Olson and Defendants agreed to settle her

claims for the sum of $140,000, reserving all rights against the PCF. Olson filed

her Petition for Approval of Settlement of Medical Malpractice Claim Pursuant to

La.R.S. 40:1231.4.

In October 2016, the PCF filed an amended peremptory exception of no

cause of action, dilatory exception of vagueness and ambiguity, answer and

objections to the petition for approval of settlement of medical malpractice claim

pursuant to La.R.S. 40:1231.4. The PCF’s main argument was that the settlement

does not assign dollar values distinguishing between medical malpractice and non-

medical-malpractice claims being settled.

2

Following a November 2016 hearing, the trial court agreed and granted the

PCF’s exception of vagueness and ambiguity, thereby denying the petition for

approval of the settlement. The trial court’s judgment on the exceptions noted the

granting of the exceptions were without prejudice to Olson’s “right to amend,

supplement or re-state the petition for approval of the settlement.” In its written

reasons for judgment, the trial court noted:

Ultimately, the Court sustained the PCF’s Dilatory Exception of
Vagueness and Ambiguity, in order to allow the PCF to adequately
prepare its defense for trial. The PCF must defend itself against
claims of medical malpractice; however, the PCF does not need to
defend itself against claims of non-medical malpractice.

....

The Court sustained the PCF’s Dilatory Exception of
Prematurity, finding that it would be premature for this Court to
approve Plaintiff’s settlement with the underlying providers because
the settlement clearly includes settlement of claims involving sexual
misconduct, which are not covered by the Louisiana MMA.

Olson filed this writ application seeking reversal of the trial court’s ruling

and assigns as error:

1. The trial court erred in sustaining the dilatory exceptions of
ambiguity and prematurity as the PCFOB an intervenor takes the
proceedings as he finds them under La.C.C.P. Article 1094.

2. The trial court erred in sustaining the Dilatory Exception of
Vagueness/Ambiguity relating to the petition to approve the
settlement between plaintiff Olson and Defendants Toce APMC and
Toce, Jr. and their insurer LAMMICO, as law of the case precludes
reconsideration of the issue of vagueness.

3. The trial court erred in sustaining the Dilatory Exception of
Prematurity relating to the petition to approve the settlement between
plaintiff Olson and Defendants Toce APMC and Toce, Jr. and their
insurer LAMMICO as there was full compliance with the statutory
procedures mandated by LSA-RS 40-1231.4.

4. The trial court erred in failing to approve a global settlement of all
claims by plaintiff Olson and against Defendants Toce APMC and
Toce, Jr. and their insurer LAMMICO, since –

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A) the settling parties are competent to enter into the settlement;

B) there is a basis for the plaintiff’s claims in law and in fact;

C) the medical review panel found the defendant healthcare
providers to be in breach of the standard of care; and,

D) the medical review panel found the defendant healthcare
providers to have caused damage to the plaintiff and procedures
mandated by LSA-R.S. 40;1231.4C were followed.

DISCUSSION

Louisiana Revised Statutes 40:1231.4(C) (emphasis added) provides:
If the insurer of a health care provider or a self-insured health
care provider has agreed to settle its liability on a claim against its
insured and claimant is demanding an amount in excess thereof from
the patient’s compensation fund for a complete and final release, then
the following procedure must be followed:

(1) A petition shall be filed by the claimant with
the court in which the action is pending against the health
care provider, if none is pending in the parish where
plaintiff or defendant is domiciled seeking (a) approval
of an agreed settlement, if any, and/or (b) demanding
payment of damages from the patient’s compensation
fund.

(2) A copy of the petition shall be served on the
board, the health care provider and his insurer, at least
ten days before filing and shall contain sufficient
information to inform the other parties about the nature
of the claim and the additional amount demanded.

(3) The board and the insurer of the health care
provider or the self-insured health care provider as the
case may be, may agree to a settlement with the
claimant from the patient’s compensation fund, or the
board and the insurer of the health care provider or the
self-insured health care provider as the case may be, may
file written objections to the payment of the amount
demanded. The agreement or objections to the payment
demanded shall be filed within twenty days after the
petition is filed.

(4) As soon as practicable after the petition is filed
in the court the judge shall fix the date on which the

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petition seeking approval of the agreed settlement and/or
demanding payment of damages from the fund shall be
heard, and shall notify the claimant, the insurer of the
health care provider or the self-insured health care
provider as the case may be, and the board thereof as
provided by law.

(5)(a) At the hearing the board, the claimant, and
the insurer of the health care provider or the self-insured
health care provider, as the case may be, may introduce
relevant evidence to enable the court to determine
whether or not the petition should be approved if it is
submitted on agreement without objections. If the
board, the insurer of the health care provider or the self-
insured health care provider, as the case may be, and the
claimant cannot agree on the amount, if any, to be
paid out of the patient’s compensation fund, then the
trier of fact shall determine at a subsequent trial
which shall take place only after the board shall have
been given an adequate opportunity to conduct discovery,
identify and retain expert witnesses, and prepare a
defense, the amount of claimant’s damages, if any, in
excess of the amount already paid by the insurer of
the health care provider or self-insured health care
provider. The trier of fact shall determine the amount
for which the fund is liable and render a finding and
judgment accordingly. The board shall have a right to
request trial by jury whether or not a jury trial has been
requested by the claimant or by any health care provider.

(b) The board shall not be entitled to file a suit or
otherwise assert a claim against any qualified health care
provider as defined in R.S. 40:1231.1(A) on the basis that
the qualified health care provider failed to comply with
the appropriate standard of care in treating or failing to
treat any patient.

(c) The board may apply the provisions of Civil
Code Article 2323 or 2324, or both, to assert a credit or
offset for the allocated percentage of negligence or fault
of a qualified health care provider provided at least one
of the following conditions is met:

(i) A payment has been made to the claimant
by, in the name of, or on behalf of the
qualified health care provider whose
percentage of fault the board seeks to
allocate.

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(ii) A payment has been made to the
claimant by, in the name of, or on behalf of
another qualified health care provider in
order to obtain a dismissal or release of
liability of the qualified health care provider
whose percentage of fault the board seeks to
allocate, provided that there shall be no
separate credit or offset for the fault of an
employer or other vicariously liable entity
who was not independently negligent or
otherwise at fault and who makes a payment
in order to obtain a dismissal or release of
liability of a single qualified health care
provider for whom the payor is vicariously
liable.

(iii) All or a portion of a payment made by
another qualified health care provider, by
the insurer of another qualified health care
provider, or by the employer of another
qualified health care provider has been
attributed to or allocated to the qualified
health care provider whose percentage of
fault the board seeks to allocate, provided
that there shall be no separate credit or offset
for the fault of an employer or other
vicariously liable entity who was not
independently negligent or otherwise at fault
and who makes a payment in order to obtain
a dismissal or release of liability of a single
qualified health care provider for whom the
payor is vicariously liable.

(iv) A medical review panel has determined
that the qualified health care provider whose
percentage of fault the board seeks to
allocate failed to comply with the
appropriate standard of care and that the
failure was a cause of the damage or injury
suffered by the patient, or a medical review
panel has determined that there is a material
issue of fact, not requiring expert opinion,
bearing on liability of the qualified health
care provider whose percentage of fault the
board seeks to allocate for consideration by
the trier of fact.

(v) The qualified health care provider does
not object within thirty days after notice of

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the board’s intention to allocate the health
care provider’s percentage of fault is
delivered via certified mail to the plaintiff,
the qualified health care provider, and the
qualified health care provider’s professional
liability insurer or to their attorneys.

(vi) The court determines, after a hearing in
which the qualified health care provider
whose percentage of fault the board seeks to
allocate shall be given an opportunity to
appear and participate, that there has been
collusion or other improper conduct between
the defendant health care providers to the
detriment of the interests of the fund.

(d) Except where the sum of one hundred thousand
dollars has been paid by, in the name of, or on behalf of
the qualified health care provider whose percentage of
fault the board seeks to allocate, in any case in which the
board is entitled pursuant to the provisions of Civil Code
Article 2323 or 2324, or both, to assert a credit or offset
for the allocated percentage of negligence or fault of a
qualified health care provider, the board shall have the
burden of proving the negligence or fault of the qualified
health care provider whose percentage of fault the board
seeks to allocate.

(e) In approving a settlement or determining
the amount, if any, to be paid from the patient’s
compensation fund, the trier of fact shall consider the
liability of the health care provider as admitted and
established where the insurer has paid its policy limits
of one hundred thousand dollars, or where the self-
insured health care provider has paid one hundred
thousand dollars.

In her petition for approval of settlement claim, Olson avers:

11.

Olson specifically demands in excess of the settlement amount
of One Hundred Forty Thousand and No/100 ($140,000) Dollars,
specifically the additional amount of FOUR HUNDRED
THOUSAND DOLLARS AND NO/100 ($400,000). In addition to
the amount of FOUR HUNDRED THOUSAND DOLLARS AND
NO/100 ($400,000) general damages demanded, Olson further
demands:

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a. judicial interest from date of judicial demand, or February 16,
2011, whichever is deemed earlier, which such amount of interest
should exceed the sum of $89,000 at the time of approval of the
settlement;

b. all court costs and litigation expenses, including the costs of
the Clerk of Court in the above captioned causes, costs of appeal
and/or taking of writs to the Louisiana Court of Appeal, Third Circuit,
and the Louisiana Supreme Court, preparation of transcripts for trial
or appeal; and, including but not limited to costs and expenses which
may be awarded pursuant to Louisiana Code of Civil Procedure Art.
1920, LSA-R.S. 13;4533, and/or LSA-R.S. 13:3666; and/or which
may be awarded pursuant to the rules off any applicable court of this
state, or any of such courts’ decisions, which said costs will exceed
the sum of $45,000.00 at the time of approval of the settlement;

c. all past medical expenses which exceed the sum of $100,000
through the present time;

d. all expenses for future medical and/or psychiatric care of
Olson which is the result of the medical malpractice of Toce and/or
Toce APMC, which amounts are indeterminable at the present time.

Olson does make demand against the Louisiana Patient’s
Compensation Fund Board Oversight Board in the amount of
$534,000.00, plus the cost of future medical expenses.

The proposed settlement agreement makes no mention of malpractice versus

non-malpractice claims, except to say that Defendants are released from “any and

all claims, demands, actions, causes of action, rights, obligations and liabilities of

any kind or nature whatsoever, whether known or unknown, suspected or

unsuspected, developed or undeveloped, pleaded or not pleaded . . . .”

THE PCF’S STANDING AS AN INTERVENOR

Olson’s Right To Settle With Defendants

The PCF, as an intervenor, has no standing to object to the health care

provider/insurer and a patient’s agreement to settle, which is personal to the parties.

See La.Code Civ.P. art. 1094; Hanks v. Seale, 04-1485 (La. 6/17/05), 904 So.2d

662. It is not the function of the PCF to determine liability as between the qualified

8

health care provider and the malpractice victim; rather, liability is determined by

settlement or a trial. Williams v. Kushner, 549 So.2d 294 (La.1989); Payne v. N.O.

Gen. Hosp., 611 So.2d 777 (La.App. 4 Cir 1988). As noted by the court in Reed v.

St. Charles General Hospital, 08-430, 08-431, 08-570-573, p.6 (La.App. 4 Cir.

5/6/09), 11 So.3d 1138, 1143, writ denied, 09-1252 (La. 9/18/09), 17 So.3d 979,

the statute regulating the PCF has provisions “which prevent the PCF from

challenging certain aspects of settlements entered into between the patient and the

health care provider.” Louisiana Revised Statutes 40:1231.4(e) states:

In approving a settlement or determining the amount, if any, to
be paid from the patient compensation fund, the trier of fact shall
consider the liability of the health care provider as admitted and
established where the insurer has paid its policy limits of one hundred
thousand dollars, or where the self-insured health care provider has
paid one hundred thousand dollars.

As noted in Reed, 11 So.3d at 1143,

Another . . . critical restriction on the PCF is set forth in La.R.S.
40:1231.4(C)(6):

Any settlement approved by the court shall not be
appealed. Any judgment of the court fixing damages
recoverable in any such contested proceeding shall be
appealable pursuant to the rules governing appeals in any
other civil court case tried by the court.

The PCF has standing to object when the integrity of the fund is jeopardized,

such as when a claim clearly does not fall under the MMA. Id. For example, in

Reed, the patient’s wife, who contracted the HIV virus from her husband, but was

never a patient at the hospital, was not covered under the MMA. Another instance

would be when the PCF challenges whether the physician-defendant is a qualified

health care provider under the MMA. See Bennet v. Krupkin, 01-209 (La.

10/16/01), 798 So.2d 940.

9

The situation here is not analogous. There is no doubt that Olson has

significant claims falling under the MMA, and in fact, there is a valid argument to

be made that even those claims Olson designated as non-MMA claims in her third

amended and supplemental petition are covered under the Act due to the

interrelated nature of the medical malpractice, particularly relating to Olson’s

mental health and the sexual relationship. See Doe v. Doe, 94-2284, 2285 (La.App.

1 Cir. 1995), 657 So.2d 628, writ denied, 95-1810 (La. 10/27/95), 661 So.2d

1353.3

The PCF’s Right To Defend Itself From Claims In Excess of $100,000

The settlement agreement between Olson and Defendants has no effect on

the rights provided for by law that inure to the benefit of the PCF. The language

contained in the settlement agreement is irrelevant insofar as it does not control the

PCF’s rights; the law does. The PCF’s remedy is to contest damages as

specifically provided for in La.R.S. 40:1231.4(C)(5)(a)(emphasis added) which

directs that if the PCF, insurer, and claimant cannot agree on the amount:

to be paid out of the patient’s compensation fund, then the trier of
fact shall determine at a subsequent trial which shall take place
only after the board shall have been given an adequate
opportunity to conduct discovery, identify and retain expert
witnesses, and prepare a defense, the amount of claimant’s
damages, if any, in excess of the amount already paid by the
insurer of the health care provider or self-insured health care
3
In Doe, the severely-depressed patient engaged in a sexual relationship with the
defendant clinical psychologist. The PCF challenged the inclusion of the sexual relationship as
“malpractice.” The Doe court stated:

Appellants’ challenge to the admissibility of evidence on the basis that the
misconduct is not “malpractice” as defined by the act and that some of the
misconduct occurred during a time when the provider’s liability was not covered
is nothing more than an attempt to contest the liability of Dr. Lichtenstein with
regard to his conduct with the plaintiffs. We need not address the merits of
appellants’ arguments regarding the admissibility of evidence; such evidence is
deemed irrelevant by the statutory scheme of the medical malpractice act.

Doe, 657 So.2d at 632.

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provider. The trier of fact shall determine the amount for which
the fund is liable and render a finding and judgment accordingly.

We want to be clear that Olson still bears the burden of proving causation of

her damages in excess of the $100,000 settlement. In Graham v. Willis-Knighton

Medical Center, 97-188, p.15 (La. 9/9/97), 699 So.2d 365, 372, the supreme court

stated:

We now conclude that the legislative intent of “liability” in Section
[40:1231.4(C)(5)] was that the payment of $100,000 in settlement
establishes proof of liability for the malpractice and for damages of at
least $100,000 resulting from the malpractice, which is a very
significant benefit to the medical malpractice victim. However, at the
trial against the Fund, the plaintiff has the burden of proving that the
admitted malpractice caused damages in excess of $100,000.

The supreme court later further explained its reasoning in Khammash v.

Clark, 13-1564, 13-1736, pp. 12-13 (La. 5/7/14), 145 So.3d 246, 255-56:

In Hall v. Brookshire Bros., Ltd., 02–2404 (La.6/27/03), 848
So.2d 559, we explained the rationale for this rule:

Liability implies some damage, but not specifically
which damage or how much. Moolekamp v. Rubin, 531
So.2d 1124, 1126–1127 (La.App. 4 Cir.1988). Having
proven that defendant’s fault caused damage, a plaintiff
must further prove what damage, by kind and seriousness,
was caused by defendant’s fault before the court can
render an appropriate award. Id.

A defendant is only liable for that damage caused
by his or her fault. Fault is a broad concept,
encompassing all conduct falling below a proper standard.
Weiland v. King, 281 So.2d 688, 690 (La.1973), citing
Langlois v. Allied Chemical Corporation, 258 La. 1067,
249 So.2d 133 (1971).

When a defendant stipulates to liability, that
defendant acknowledges that his or her fault (substandard
performance of a legal duty owed to plaintiff for the
protection from certain risks of harm) caused the plaintiff
to sustain some damage (in the case of the qualified
health care provider under the Medical Malpractice Act,
that defendant stipulates that the damage he or she caused
is at least $100,000).

11

However, there can be, and frequently is, more
than one cause of a plaintiff’s damages. Graves v. Page
96–2201 (La.11/7/97), 703 So.2d 566, 570; Syrie v.
Schilhab, 96–1027 (La.5/20/97), 693 So.2d 1173, 1179.
Because a defendant is liable only for that damage caused
by his or her fault, when a defendant stipulates to liability
for fault, he or she does not thereby necessarily concede
responsibility for 100% of the fault.

In the same vein, when a health care provider
tenders payment of $100,000.00, thereby admitting and
establishing “liability,” that admission of liability is an
admission of fault and causation of damages of at least
$100,000.00. It is not an admission of the percentage of
fault attributable to the health care provider; nor is it an
admission as to the extent of the claimant's damages
beyond $100,000.00. Louisiana Revised Statute
40:1299.44(C)(5) speaks directly and exclusively to the
liability of the health care provider; it is silent with
respect to the responsibility of any other actor.

Hall, 02–2404 at pp. 11–12, 848 So.2d at 567–68.

Clearly, when the PCF and claimant dispute the
remaining amount due, the PCF is entitled to full
discovery and a trial at which, under the statutory
provisions and in accord with our jurisprudence, the
claimant must prove his damages, if any, attributable to
the malpractice in excess of the amount already paid by
the defendant physician. Prior to the trial provided for in
La.Rev.Stat. § 40:1299.44(C)(5)(a), only the liability of
the defendant physician for the malpractice and damages
up to $100,000 is conclusively established by the
settlement in accordance with La.Rev.Stat. §
40:1299.44(C)(5)(e).

At the trial, the PCF has the opportunity to contest the amount of damages

Olson claims in excess of the amount already paid pursuant to the settlement

agreement. The settlement agreement does not alleviate Olson’s burden of proving

causation of damages for any amount in excess of the $100,000 settlement. While

Olson receives a great benefit from the settlement, it does not prevent the PCF

from exercising its right to fully defend itself from the claims of damages in excess

of $100,000.

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CONCLUSION

Olson’s writ application is granted. We reverse the trial court’s grant of the

PCF’s exceptions of ambiguity, vagueness, and prematurity and find that the health

care provider and patient’s settlement agreement is valid, and remand for further

proceedings consistent with La.R.S. 40:1231.4(C)(5)(a). Costs of this appeal are

assessed to the Louisiana Patient Compensation Fund Oversight Board.

WRIT GRANTED;

REVERSED; RENDERED IN PART; REMANDED.

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