Bigler-Engler v. Breg, Inc.

7 Cal.App.5th 276

213 Cal.Rptr.3d 82

Virginia BIGLER-ENGLER, as Administrator, etc., Plaintiff and Appellant,

v.BREG, INC. et al., Defendants and Appellants.

D063556

Court of Appeal, Fourth District, Division 1, California.

Filed January 6, 2017

Certified for Partial Publication.^*

Law Office of Marc O. Stern and Marc O. Stern, La Jolla; Boudreau Williams and Jon R. Williams, San Diego; Williams Iagmin and Jon R. Williams, San Diego, for Plaintiff and Appellant Virginia Bigler-Engler, as Administrator, etc.

Bowman & Brooke and Michael J. Hurvitz, San Diego; Gibson, Dunn & Crutcher, Theodore J. Boutrous, Jr., Los Angeles, Daniel J. Thomasch, and Blaine H. Evanson, Los Angeles, for Defendant and Appellant Breg, Inc.

Cole Pedroza, Kenneth R. Pedroza, Matthew S. Levinson and Joshua C. Traver, San Marino; Neil, Dymott, Frank, McFall & Trexler, Clark Hudson and Jonathan R. Ehtessabian, San Diego, for Defendant and Appellant David J. Chao, M.D.

Law Offices of Adrienne D. Cohen, Adrienne D. Cohen, Danielle M. Dalton and Julie R. Ursic, Santa Ana, for Defendant and Appellant Oasis MSO, Inc.

OPINION ON REHEARING

HALLER, J.

This matter arises from Whitney Engler's use of a medical device, the Polar Care 500, that was manufactured by Breg, Inc. (Breg) and prescribed by David Chao, a medical doctor. Engler suffered injuries as a result of her use of the Polar Care 500, and she brought various tort claims against Chao, his medical group Oasis MSO, Inc. (Oasis), and Breg, among others.

At trial, the jury considered Engler's claims for medical malpractice, design defect (under theories of negligence and strict liability), failure to warn (also under theories of negligence and strict liability), breach of fiduciary duty, intentional misrepresentation, and intentional concealment. With a few exceptions, the jury generally found in favor of Engler, and against the defendants, on these claims. The jury awarded $68,270.38 in economic compensatory damages and $5,127,950 in noneconomic compensatory damages to Engler. It allocated responsibility for Engler's harm as follows: 50 percent to Chao, 10 percent to Oasis, and 40 percent to Breg.

The jury made findings of malice, oppression, or fraud as to each defendant on at least one claim. In the punitive damages phase of trial, the jury awarded $500,000 against Chao and $7 million against Breg. The jury declined to award any punitive damages against Oasis.

Breg, Chao, Oasis, and Virginia Bigler-Engler, as administrator of Engler's estate, appeal.¹ They raise numerous challenges to the judgment. In the published portions of this opinion, we consider the following issues: (1) whether Engler's counsel committed prejudicial misconduct during trial; (2) whether the jury's awards of noneconomic compensatory damages and punitive damages are excessive; (3) whether the evidence supported the jury's verdict against Breg for intentional concealment in the absence of a transactional relationship between Breg and Engler (or her parents); (4) whether Oasis falls within the medical provider exception to the doctrine of strict products liability; (5) whether Breg was entitled to an instruction on the learned intermediary doctrine; (6) whether the Medical Injury Compensation Reform Act of 1975 (MICRA) (Civ. Code, § 3333.2 ) and Proposition 51 (Civ. Code, § 1431 et seq. ) apply to the jury's verdict; and (7) whether Engler's pretrial settlement offer under Code of Civil Procedure section 998 complied with the statute. In the unpublished portions of the opinion, we consider additional challenges to the sufficiency of the evidence, the trial court's jury instructions, and the trial court's evidentiary rulings.

For reasons we will explain, we reverse the judgment in part. We conclude the jury's verdict as to several claims was not supported by the evidence, including Engler's intentional concealment claim against Breg and her strict products liability claim against Oasis. In light of our reversal of Engler's intentional concealment claim against Breg, the jury's punitive damages award against Breg must be reversed as well.

We further conclude the jury's award of noneconomic compensatory damages and the jury's award of punitive damages as to Chao are excessive. Those awards will be reversed as well and remanded for a new trial unless Bigler-Engler accepts reductions in those awards to $1,300,000 and $150,000 respectively. In all other respects, the judgment is affirmed.²

FACTUAL AND PROCEDURAL BACKGROUND

"As required by the rules of appellate procedure, we state the facts in the light most favorable to the judgment." (Orthopedic Systems, Inc. v. Schlein (2011) 202 Cal.App.4th 529, 532, fn. 1, 135 Cal.Rptr.3d 200.) In this section we provide an overview of those facts necessary to understand the disputed issues in these appeals. Additional relevant facts will be discussed in the following sections.³

In 2003, Engler, a high school athlete, consulted Chao regarding possible surgery on her left knee. Engler had injured her knee while running hurdles and suffered from pain and weakness, especially during sports. Chao identified the presence of a loose body underneath her patella and diagnosed Engler with "patella alta" (misalignment of the patella). Chao also noted a possible tear in Engler's meniscus. Chao recommended arthroscopic surgery. He provided Engler and her parents with a written disclosure of the risks of surgery, which Engler's mother signed.

Chao recommended that Engler use a Polar Care 500 device after surgery. The Polar Care device, manufactured by Breg, is a Class II medical device under California law, available only by prescription. The Polar Care device is intended to deliver cold therapy to the site of surgery or injury, along the same general lines as an icepack or bag of frozen vegetables. The Polar Care device consists of a reservoir of ice water, a small pump, and a pad to be placed on the site of surgery or injury. The pump circulates cold water through the pad. A dial controls the amount of water that can flow through the pad. This dial is intended to affect the temperature of the pad, i.e., as the amount of water flowing through the pad decreases, the water flows more slowly through the pad and the patient's body has a greater opportunity to warm it. A thermometer displays the temperature of the water exiting the pad. The Polar Care device can operate continuously for up to 11 hours before the reservoir of ice must be refilled.

Chao told Engler and her parents that the Polar Care device was superior to traditional methods of cold therapy, such as an icepack, because it could be used "continuously" rather than intermittently. Chao said the Polar Care device would decrease her risk of infection and otherwise help Engler recover from her surgery. Chao did not disclose any risks of using the Polar Care device, even though he knew risks existed.

Chao gave Engler and her parents the choice of buying the Polar Care device from his medical group, Oasis, or renting it from Oasis for a period after Engler's surgery. Chao provided Engler and her parents with an Oasis form informing them of Chao's recommendation that Engler use the Polar Care device and describing the two options. The form stated, "Polar Care is a disposable cold therapy system that provides the advantages of early cold therapy at a cost effective price. [¶] ... [¶] Polar Care cold therapy has been prescribed by your doctor to maximize your return to full function." The form did not discuss any risks of using the Polar Care device.

Engler and her parents chose to rent the Polar Care device from Oasis. Although Oasis (and therefore Chao) profited from the sale and rental of the Polar Care device, Chao did not inform Engler or her parents of the financial interest he had in the transaction.⁴ Chao also did not inform Engler or her parents that the Polar Care device was available from sources other than Oasis.

Engler's surgery occurred in May 2003, and it proceeded without incident. When Engler awoke in a recovery room after surgery, her surgical wound had been dressed and a Polar Care 500 device was attached to her knee. Chao's written discharge instructions told Engler to use the device "at 45°F as much as possible for pain/swelling." Chao also provided Engler and her parents with Breg's instructions for use, which indicated that the "[d]esired temperature is typically between 45 to 55°F for continuous use and below 45°F for sessions of 20 minutes or less." When Engler's mother asked whether continuous use meant "24/7," Chao replied, "Yes, use it as much as possible." Similarly, when Engler's mother asked Chao whether Engler should use the Polar Care device even when she slept, Chao said yes. Neither Chao's written discharge instructions nor Breg's use instructions provided any warnings about injuries from the use of the Polar Care device or disclosed any risk of injury.⁵

Engler and her parents faithfully followed Chao's instructions. Engler wore the Polar Care device as much as possible, including at night. Engler removed it only when she showered, rode in the car, or attended physical therapy. Except for one instance when the thermometer on the device dipped below 45 degrees, Engler kept the temperature between 45 and 50 degrees.

A week after her surgery, Engler saw Chao for a postoperative appointment. Engler's knee was very swollen and painful. She "felt like it was going to explode." Chao aspirated Engler's knee, which involved draining fluid using a large needle. Engler's mother asked Chao whether Engler should continue to use the Polar Care device. He said Engler should use it for at least one week as long as she had pain and swelling. Engler scheduled a follow-up appointment for a month later.

Engler continued to use the Polar Care device as much as possible. After almost two weeks, Engler noticed increased redness and several small blisters on her knee. Engler's mother left a message at Chao's reception desk, but she did not receive a call...