December 28, 2009
NANCY REICHENBACH, PLAINTIFF-APPELLANT,
LOURDES MEDICAL CENTER OF BURLINGTON COUNTY, LOURDES HEALTH SYSTEM, DEFENDANTS, AND KENNETH H. CHEN, D.O., RANCOCAS OB/GYN ASSOCIATES, LLC, KARYN LEWIS, D.O., GARY MIRONE, D.O., DEFENDANTS-RESPONDENTS.
On appeal from Superior Court of New Jersey, Law Division, Burlington County, Docket No. L-503-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued October 15, 2009
Before Judges Cuff, Payne and Waugh.
Plaintiff Nancy Reichenbach appeals the dismissal of her claim for emotional distress arising from the birth of her son, D.P., at defendant Lourdes Medical Center of Burlington County (Lourdes). Defendants Kenneth H. Chen, D.O., Rancocas Ob/Gyn Associates (Rancocas), Karyn Lewis, D.O., and Gary Mirone, D.O., were providers of medical services in connection with the pregnancy and delivery. We affirm.
We discern the following factual and procedural background from the record.
D.P. was born on February 27, 2003. According to Reichenbach, the delivery was difficult and required the use of forceps and vacuum extraction. Shortly after D.P.'s birth, there were some signs of trauma from the delivery and also signs of possible brain abnormalities. There appears to be no dispute that D.P. has continuing neurological impairments, although there is disagreement about their etiology and whether there is any causal relationship to the events surrounding his delivery. Reichenbach contends that she suffered severe emotional distress as a result of witnessing, audibly and visually, the injuries to her son during and after his delivery.
Reichenbach filed a two-count complaint on February 18, 2005, suing as her son's guardian ad litem and individually.*fn1
The first count asserted personal injury claims on behalf of D.P. The second count asserted claims on behalf of Reichenbach personally. However, the second count, as drafted, does not specifically articulate a claim arising out of personal injury to Reichenbach. Instead, it alleges that Reichenbach (1) "was forced to incur substantial medical expenses and other losses as a result of her child's condition;" and (2) "has incurred and will in the future incur loss of services as well as other derivative damages and losses."
An affidavit of merit, as required by N.J.S.A. 2A:53A-27, was apparently filed in February 2005. Lourdes, Rancocas and Chen filed answers in March 2005. Lewis and Mirone, who were employed by the University of Medicine and Dentistry of New Jersey (UMDNJ) at the time of D.P.'s birth, filed their answer in March 2006.
The parties engaged in discovery. Reichenbach's undated answer to question eighteen of the Form A(1) interrogatories, which requires that a plaintiff describe "the injuries  sustained as a result of the negligence claimed in this lawsuit," was as follows: "See medical records attached with regard to [D.P.'s] injuries. I am very emotionally distressed about this life altering situation." Although the answers to interrogatories are undated, it appears that they were forwarded to defense counsel in July 2005.
Reichenbach was deposed on March 28, 2006. She gave two answers in which she made reference to being upset about the birth and related injuries to D.P.:
Q: Did you ask any questions about what was wrong or why something was wrong?
Q: What about [D.P.'s father], did he ask any questions?
A: Yes. He wanted to know why the baby wasn't crying, why the baby was blue, how come we can't see him.
Q: Who did he ask these questions of?
A: The staff members.
Q: What answers did he get?
A: I don't really specifically remember the answers but they were treating [D.P.], and at that time it was supposed to be impossible to see him. I mean like they said that he seizured at one hour of life. One hour of life. I was wondering what was going on. I started to get panicky. I was freaking out, I'm like get the IVs out. I was very, very, very distressed, worried.
Q: You still had an I.V. in an hour after?
A: I think I did. I had all my IVs in up until 10 o'clock. I had them take them out so I could leave the hospital.
Q: And when did you learn that he was going to be transferred to [Children's Hospital of Philadelphia]?
A: We were transferred from where we stayed to down the hall and we were with my family and my friends and it was one minute to 10 o'clock and a neurologist came in. And he said that he needed everybody to leave but the parents and he said he had bad news, [D.P.] was not doing good, that he had poor perfusion and the CAT scan read cerebral edema and he feared brain damage.
[PLAINTIFFS' COUNSEL]: The CAT scan read cerebral edema?
THE WITNESS: Yes.
BY [DEFENSE COUNSEL]:
Q: Did you ask any questions about what all this meant or did you already know what these words meant when you were there?
A: I knew brain damage and I almost threw up. I absolutely spaced out. I think I stopped breathing and I was just very, very upset. And I asked where Dr. Chen was and they told me he left, and I said you better get him the hell back here because I want to ask him what happened, and he came back in 15 minutes and he came into the room and I said what did you do and why did you deliver him so fast. I'm like my baby could be retarded, and he stood with his hands in his pockets and he absolutely refused to say anything. At the end he said we did everything we could. They actually wanted me to be prepped in my bed and I said I'm going to be with my son. And that's the end of the story.
Reichenbach's attorney moved to be relieved as counsel on June 26, 2006, citing disagreements about how to proceed with the case. It appears that, at about the same time, defendants had filed a motion to dismiss based upon Reichenbach's failure to file expert reports. The motion to be relieved was granted on August 8, 2006, but the motion to dismiss was adjourned.
New counsel appeared for plaintiffs in October, at which time there was a case management conference.*fn2 The conference resulted in an order requiring that plaintiffs' expert reports on liability be filed by the end of March 2007. The motion to dismiss was denied.
On November 16, 2006, counsel for Reichenbach sent defense counsel a letter "to make the point that the emotional distress experienced by Ms. Reichenbach was so severe that it resulted in physical manifestations to her and it destroyed her basic emotional security." See Carey v. Lovett, 132 N.J. 44, 62 (1993) ("In sum, to prove a claim for emotional distress arising out of the injury or death of a fetus, the mother must prove that she suffered emotional distress so severe that it resulted in physical manifestations or that it destroyed her basic emotional security.").
In December 2006, Chen and Rancocas filed a motion to dismiss the purported claim for emotional distress, arguing that it had not been pled and that the statute of limitations had expired. The other defendants joined in the motion. Reichenbach opposed the motion, arguing that the complaint should be read broadly to include the claim and pointing to the interrogatory response from 2005, as well as the deposition testimony from March 2006. Reichenbach did not move for leave to amend the complaint.
The motion was argued on February 2, 2007. The motion judge granted the motion, stating his reasons, briefly, as follows:
I'm really on the fence on this one because I don't think there's any case right on point....
We all know the law, we all know the language, it's just a matter of whether this is enough to put the defendants on notice that a claim is being made for emotional damage. And, Mr. Paarz, I mean I just don't see it. Maybe if the word derivative wasn't between other and damages, maybe that might have opened the door a little wider, but they specifically just talk about derivative damages in paragraph three. And I think that term is a term of art, not meaning as the result of the child's problem. And I think a fair reading, even a broad reading of the second count really is just saying my damages are based on what I have to do to take care of my son, is it a son or -- my son, as opposed to my damages are my emotional response to my son's condition, so I'm going to grant the application.
The order of dismissal was filed the same day.
The parties subsequently agreed to mediation, which resulted in a settlement.*fn3 A "friendly hearing" was held on September 12, 2008, as required by Rule 4:44-3 for settlements involving the claims of a minor. The motion judge approved the settlement at the hearing.
The settlement order, which was prepared by Reichenbach's counsel, refers to the trial court's approval of "a settlement of the plaintiffs' claims" against the remaining defendants.
(Emphasis added). While the order made no mention of Reichenbach's claim for emotional distress, it allocated $7,644 of the settlement funds to Reichenbach "as reimbursement of out of pocket expenses." Such expenses were the basis of Reichenbach's claim for damages in the second count of the complaint. The remaining net settlement proceeds, slightly in excess of $650,000, were to be placed in a special needs trust for D.P.'s benefit. See N.J.S.A. 3B:11-37.
This appeal followed.
On appeal, Reichenbach argues that the motion judge failed to read her complaint as broadly as he was required to do under the applicable case law, and that he should, in any event, have permitted her to amend the complaint to remedy any defect in the pleading even though she had not sought leave to do so. Defendants argue to the contrary. In addition, they argue that, because the settlement also included Reichenbach's claim for expenses related to caring for D.P. without preserving the right to appeal the dismissal of the emotional distress claim, she is precluded from seeking to reinstate that claim.
In reviewing a dismissal based on Rule 4:6-2(e), we are bound by the same standard that governed the trial judge; that is, we are obligated to accept the allegations of the complaint as true and afford plaintiff all reasonable factual inferences. Indep. Dairy Workers Union v. Milk Drivers Local 680, 23 N.J. 85, 89 (1956). That standard requires that the complaint "be searched in depth and with liberality to determine whether a cause of action can be gleaned even from an obscure statement." Seidenberg v. Summit Bank, 348 N.J. Super. 243, 250 (App. Div. 2002) (citing Printing Mart-Morristown v. Sharp Elecs. Corp., 116 N.J. 739, 746 (1989)). Such motions should be granted "in only the rarest of instances." NCP Litig. Trust v. KPMG LLP, 187 N.J. 353, 365 (2006) (quoting Printing Mart, supra, 116 N.J. at 772). See also County of Warren v. State, 409 N.J. Super. 495, 503 (App. Div. 2009).
There is no question that, when a child is injured during the birth process through the negligence of a physician, the mother has a cause of action for negligent infliction of emotional distress, assuming that she can satisfy the requirement that "she suffered emotional distress so severe that it resulted in physical manifestations or that it destroyed her basic emotional security." Carey, supra, 132 N.J. at 62. Although defendants question whether Reichenbach can satisfy that requirement, the motion was not decided on that basis. See Printing Mart, supra, 116 N.J. at 746 ("At this preliminary stage of the litigation the Court is not concerned with the ability of plaintiffs to prove the allegation contained in the complaint.") (citation omitted).
Consequently, the issue before the motion judge was whether a cause of action for negligent infliction of emotional distress could "be gleaned even from an obscure statement" in Reichenbach's complaint. Seidenberg, supra, 348 N.J. Super. at 250. It is clear from the complaint that Reichenbach claimed that she was injured by the alleged malpractice involving the birth of her child. The problem encountered by the motion judge, and by us, is that the language of count two was drafted so narrowly that it appears to exclude a claim for all damages other than costs related to the injury inflicted on the child.
Nevertheless, we conclude that, under the Printing Mart standard of liberality, the motion judge should not have dismissed the claim, but should instead have permitted Reichenbach to amend the complaint. Printing Mart, supra, 116 N.J. at 746 ("[A] reviewing court 'searches the complaint in depth and with liberality to ascertain whether the fundament of a cause of action may be gleaned even from an obscure statement of claim, opportunity being given to amend if necessary.'" (emphasis added) (quoting Di Cristofaro v. Laurel Grove Memorial Park, 43 N.J. Super. 244, 252 (App. Div. 1957))). Although a cross-motion for leave to amend would have been appropriate, we do not read Printing Mart as requiring such a motion.*fn4
We now turn to defendants' argument that the settlement extinguished any claim Reichenbach may have had for negligent infliction of emotional distress and precludes her from appealing the earlier order dismissing the emotional distress claim.
When defendants' motion to dismiss was granted, count two of Reichenbach's complaint was not dismissed in its entirety. In fact, the essence of the motion judge's decision was that count two did not plead a claim for emotional distress, but that, to the extent it did, the emotional distress claim was dismissed with prejudice. That aspect of count two that sought reimbursement of Reichenbach's expenses remained a viable claim and survived the motion.
It is clear from the order entered following the "friendly hearing" that Reichenbach received a part of the settlement proceeds to compensate her for the very expenses she sought to recover in count two. During the "friendly hearing," those expenses were explained as follows:
[PLAINTIFF'S COUNSEL]: And, we're asking Your Honor for Nancy Reichenbach to be reimbursed for $7,644 in personal expenses. And, those are for items like diaper expenses, hearing aid batteries, different medications that he needs that she's been supplying that -- that have added up over the years.
THE COURT: All right. Ms. Reichenbach, to the best of your recollection, do you believe it's $7,644 approximately is what you spent out of your own pocket for [D.P.]?
MS. REICHENBACH: Yes, I do.
THE COURT: Okay, no problem. I just wanted to make sure.
Consequently, both counts of the complaint were actually settled and the entire complaint was dismissed with prejudice.
No specific reservation with respect to an appeal of the earlier dismissal of the emotional distress claim was articulated in the settlement order or at the hearing. However, we note that Reichenbach was apparently never asked to sign a release with respect to her own claim, inasmuch as the release she signed, which is in the record, was signed solely in her capacity as guardian ad litem for her son.
Defendants rely on Cotton v. Travaline, 179 N.J. Super. 362 (App. Div. 1981) for the proposition that a "[v]oluntary settlement of an action renders moot the propriety of any interlocutory orders." In Cotton, the client of a deceased attorney sued the attorney's estate and his law partner, alleging legal malpractice. Id. at 366-68. The defendants filed a third-party action against the law firm's malpractice carrier. Id. at 368. After the entry of two interlocutory orders, one finding coverage and the other finding that there had been attorney malpractice, the carrier settled the plaintiff's claim and sought to appeal the two interlocutory orders. Id. at 369-70. We held that it could not do so, concluding that there was "nothing left... to be litigated." Id. at 371.
A settlement agreement is a contract, Pascarella v. Bruck, 190 N.J. Super. 118, 124 (App. Div.), certif. denied, 94 N.J. 600 (1983), and must be construed with reference to the entire agreement, not "selective reference to [its] individual clauses." In re Fairfield Gen. Corp., 75 N.J. 398, 413 (1978). See Grow Co. v. Chokshi, 403 N.J. Super. 443, 464 (App. Div. 2008). "The polestar... is the intention of the parties to the contract as revealed by the language used, taken as an entirety." Conway v. 287 Corp. Ctr. Assocs., 187 N.J. 259, 269 (2006) (internal quotations omitted). A court's role is to "discern and implement the common intention of the parties" considering "what is written in the context of the circumstances at the time of drafting" and "apply[ing] a rational meaning." McMahon v. City of Newark, 195 N.J. 526, 546 (2008) (internal quotations omitted).
Our review of the record convinces us that the settlement of Reichenbach's individual claim for damages, combined with the dismissal of "all claims" "with prejudice" in the resulting settlement order, precludes an appeal seeking to reinstate the claim for negligent infliction of emotional distress, because there was no specific reservation of that issue as part of the settlement. That result is consistent with our holding in Cotton and the strong public policy favoring enforcement of settlements. See Brundage v. Estate of Carambio, 195 N.J. 575, 601 (2008) ("Fundamental to our jurisprudence relating to settlements is the principle that '[t]he settlement of litigation ranks high in our public policy.'") (quoting Jannarone v. W.T. Co., 65 N.J. Super. 472, 476 (App. Div.), certif denied, 35 N.J. 61 (1961)).
In summary, we conclude that the motion judge erred in dismissing Reichenbach's claim for negligent infliction of emotional distress without allowing her to amend the complaint, but that her subsequent settlement of the remaining claims, including her own claim for derivative damages, without reserving the right to appeal as to the dismissed claim precludes the reinstatement of that claim through an appeal.