Velez v. Tuma
492 Mich. 1
| Mich. | 2012Background
- Plaintiff Myriam Velez sued Dr. Tuma and two hospitals for medical malpractice after a leg amputation resulted from alleged delayed surgery.
- Codefendants (hospitals) settled with plaintiff for $195,000 before trial; Tuma remained in suit.
- Jury awarded $1,524,831.86 total: $1,400,000 noneconomic and $124,831.86 economic.
- Collateral source payments eliminated all economic damages before final judgment; noneconomic damages capped at $394,200.
- Lower courts applied the settlement setoff to the jury verdict before the cap, producing overcompensation; the Supreme Court reversed.
- Judgment remanded to reduce final judgment by $195,000 after applying the cap and collateral source adjustments.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the common-law setoff remains after tort reform. | Velez argues legislature abrogated setoff. | Tuma argues common-law setoff remains within joint and several liability. | Common-law setoff remains in joint and several medical malpractice cases. |
| What is the correct order to apply the noneconomic cap and the setoff? | Setoff should subtract from the jury verdict. | Cap should be applied after verdict before setoff. | Apply cap first, then collateral source adjustments, then setoff from final judgment. |
| Does the cap interaction with setoff require a specific sequencing to avoid overcompensation? | Sequencing as applied by lower courts risks overcompensation. | Sequencing should respect statutory cap and setoff purposes. | Sequencing must ensure noneconomic cap limits total recoverable and setoff acts on final judgment. |
Key Cases Cited
- Markley v Oak Health Care Investors of Coldwater, Inc, 255 Mich App 245 (2003) (upheld common-law setoff in joint and several medical malpractice cases when statute silent on modern reforms)
- Kaiser v Allen, 480 Mich 31 (2008) (recognizes continued setoff in vehicle-owner vicarious-liability; supports preserved setoff when joint and several liability retained)
- Fairfax Hosp Sys, Inc v Nevitt, 249 Va 591 (1995) (cap applied to verdict before settlements to prevent excess recovery)
- Lockshin v Semsker, 412 Md 257 (2010) (cap applied before settling credits to avoid overrecovery)
- Rittenhouse v Erhart, 424 Mich 166 (1985) (discusses one recovery principle; relevance to damages interaction)