By Eric Berkman
BridgeTower Media Newswires
DETROIT — A Michigan Court of Appeals panel affirmed a Wayne County Circuit Court ruling granting summary disposition to the defendants in a medical malpractice case stemming from a hip replacement.
In Scanland v. Beaumont Hospital, plaintiff Joann Scanland executed a “release of all claims” when she joined a mass tort settlement with Stryker Orthopaedics, the manufacturer of her defective hip implant.
The COA determined that the release applied not only to her design-defect claims against the manufacturer but also her medical negligence claims against the implanting surgeon and hospital.
“Our review of the plain language of the release and settlement agreement and the intent as expressed in the release demonstrates that it included defendants in light of the language addressing ‘any physicians, healthcare professionals, or hospitals connected with the prescription, implantation, use or removal of the Affected Products that a Settlement Program Claimant allegedly used or uses,’” the opinion stated.
The COA also determined, however, that the trial court properly denied the defendants’ request for sanctions against the plaintiff for submitting frivolous filings.
Judges Michael J. Riordan, Kirsten Frank Kelly and Thomas C. Cameron ruled unanimously in the unpublished opinion.
The plaintiff underwent a total hip replacement surgery at Beaumont Dearborn, then known as Oakwood Main in Dearborn, in November 2007.
Defendant Dr. Joseph Finch performed the surgery, implanting a Stryker Rejuvenate hip implant.
Scanland suffered from complications due to defects in the implant, which Stryker recalled in June 2012.
In January 2017, the plaintiff sued Finch and the hospital in Wayne County Circuit Court, alleging that Finch failed to properly diagnose her medical condition, provided “misinformation” regarding the hip implant and failed to monitor her progress, resulting in her suffering injuries as a result of the hip implant defects.
The plaintiff also engaged in litigation with Stryker and its subsidiary, Howmedica Osteonics Corporation, over the implant’s defects. In February 2017, the plaintiff assented to a “Master Settlement Agreement” the companies had negotiated with a plaintiffs’ settlement committee to resolve the thousands of claims pending against them.
In conjunction with the Stryker settlement, Scanland was presented with a “blue release form” under which all claims “arising from, related to, or in any way connected with” the implantation, use or removal of the Rejuvenate were to be released.
The Master Settlement Agreement itself defined “released parties” as Howmedica, Stryker and “physicians, healthcare professionals, or hospitals” connected with the Rejuvenate’s implantation or use.
The release further provided that it was to be construed “as broadly as possible.”
Scanland signed the release form, as did her trial counsel, who certified that he informed the plaintiff of its terms and legal effect and that neither he nor the plaintiff objected to its terms.
Counsel for Howmedica subsequently learned about the plaintiff’s lawsuit against Finch and Beaumont and sent the plaintiff a letter reminding her that her claims against the defendants fell within the scope of the release.
Howmedica also told the plaintiff that if she did not dismiss her lawsuit, it would move to intervene in the litigation and enforce the settlement.
At that point, Finch moved for summary disposition based on the release, which Beaumont joined.
The plaintiff argued in response that the release did not apply to her claims because the defendants had failed to provide notice of the recall, they were not parties to the release and they were not intended third-party beneficiaries.
The trial court ruled that the language of the release did indeed apply to Finch and the hospital and granted their motions, stating that it was “clear the intent of Stryker was to put the entire issue to bed forever.”
The judge also, however, denied the defendants’ requests for sanctions for filing a frivolous claim.
The plaintiff appealed the summary disposition order while the defendants cross-appealed the denial of sanctions.
On appeal, the plaintiff argued that the trial court improperly failed to consider whether the release contained any latent ambiguities.
In making these arguments, the plaintiff highlighted an affidavit in which she stated she only intended to release Stryker and Howmedica from future claims, not the defendants.
Additionally, the plaintiff contended that before executing the release, her counsel told Stryker’s claims specialist in writing that she had a suit pending against Finch and the hospital. According to the affidavit, the specialist — identified only as “Jamie” — never responded, which allegedly caused the plaintiff and her counsel to believe that signing the release would not impact that action.
The COA was unpersuaded by either of these arguments.
“Plaintiff’s subjective interpretation of the terms of the contract as relayed in her affidavit does not demonstrate that there was a latent ambiguity in the contract, and it is unclear how plaintiff’s trial counsel sending a ‘Late Registration’ e-mail to ‘Jamie’ with an attached copy of his retainer agreement with plaintiff containing handwritten alterations constituted a ‘negotiation’ with Stryker such that the release did not apply to these defendants,” the opinion stated.
Regarding the plaintiff’s contention that the defendants were not intended third-party beneficiaries of the release, the COA said in a footnote that the plaintiff “fails to articulate any cognizable argument” to support it.
“Moreover, the trial court’s ruling appeared to conclude that defendants were encompassed in the clear broad language of the release and did not obtain relief through a third-party beneficiary theory,” the opinion stated.
Notwithstanding the COA’s determination that the release clearly covered the defendants, the COA found no grounds for sanctions against the plaintiff for bringing her claim.
“A reiteration of the weakness of plaintiff’s arguments does not intrinsically show that the trial court clearly erred when it determined that plaintiff’s filings were not frivolous,” the court concluded. “The court may have found that plaintiff’s claims were at a minimum supported by arguments that had at least some arguable legal merit even if those arguments failed.”
Defense counsel Michael J. Cook of Collins Einhorn Farrell PC in Southfield said the decision simply applies established law concerning releases.
“It’s common for releases to include people and entities who don’t sign it,” he said. “The parties are putting the matter to rest for good. Here, for example, Howmedica effectively bought peace from any potential future contribution or indemnity claims that cases like Scanland’s could generate. It was a broadly written release and the court appropriately applied it that way.”
If the court applied the release any differently, Cook added, “it wouldn’t have been applying the release according to its plain terms.”
Plaintiff’s counsel Jerard M. Scanland of Mussin & Scanland PLLC in Southgate said his client plans to seek further review.
“I believe the time has come for the Supreme Court of Michigan to finally address the issue of third-party beneficiary rights for a party not specifically named in a contract,” Scanland said. “To me, that’s what the case was mainly about. The fact that you have these individuals who claimed rights under the agreement but weren’t party to the agreement and didn’t even know the release existed.”
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