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138952 - Velez v Tuma

Myriam Velez,
 
Mark Granzotto
 
Plaintiff-Appellee,
 
v
(Appeal from Ct of Appeals)
 
 
(Wayne – Stephens, C.)
 
Martin Tuma, M.D.,
 
Noreen L. Slank
 
Defendant-Appellant.
 

Summary

​Myriam Velez, the plaintiff in this medical malpractice case, settled before trial with some of the defendants for $195,000. She then proceeded to trial against defendant Martin Tuma, M.D. The jury returned a verdict for Velez of $124,831.86 for past and present economic damages (although this amount was reduced to zero when collateral source payments were considered), and $1,400,000 for past and present non-economic damages, for a total award of $1,524,831.86.

The dispute in this case is how to calculate the judgment against Tuma, taking into consideration the jury’s award of damages and the pre-trial settlement that Velez reached with the other defendants. Liability in this case is joint and several, meaning that each defendant can be held liable for the full amount of Velez’s damages; see MCL 600.6304(6)(a). Under MCL 600.1483, non-economic damages are capped, using a statutory formula based on the consumer price index and subject to certain exceptions. In Velez’s case, non-economic damages are capped at $394,200. The parties agree that the settlement that Velez obtained from the other defendants is to be set off against her recovery at trial, because a plaintiff is entitled to only one recovery for her injury.

But the parties disagree as to whether the setoff should be deducted from the full amount of the jury verdict, or from the verdict after the noneconomic damage cap has been applied. Although MCL 600.6306 provides a sequence for calculating a judgment entered after a verdict, the statute is silent as to when to apply the cap on non-economic damages. Velez argued that the $195,000 settlement should be deducted from the jury’s award of non-economic damages before the cap is applied. The trial court agreed, applying the $195,000 setoff to the unadjusted jury verdict, and then made other adjustments, including applying the cap on non-economic damages. The jury’s verdict was reduced to a judgment of $394,200 (the noneconomic damages cap).

Tuma appealed, arguing that the setoff should be taken after the non-economic damages cap was applied. In other words, Tuma argued, the judgment should be calculated by beginning with the capped award of non-economic damages, $394,200, and subtracting the $195,000 settlement. The Court of Appeals rejected this argument and affirmed the trial court’s ruling in a published opinion. The Court of Appeals held that the setoff rule applies to the “trier of fact’s determination of damages, and does not apply to, and directly reduce, the amount of the final judgment.” Tuma appeals.