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Staffer v. Bouchard Transportation Co.

decided: June 30, 1989.

JAMES STAFFER, PLAINTIFF-APPELLEE,
v.
BOUCHARD TRANSPORTATION CO., INC., AND FREDERICK E. BOUCHARD, INC., DEFENDANTS. BOUCHARD TRANSPORTATION CO., INC. AND FREDERICK E. BOUCHARD, INC., THIRD-PARTY PLAINTIFFS-APPELLEES, CROSS-APPELLANTS, V. THE STATEN ISLAND HOSPITAL AND JOSEPH A. SUAREZ, THIRD-PARTY DEFENDANTS-APPELLANTS, JOSEPH A. SUAREZ, THIRD-PARTY DEFENDANT-APPELLANT, CROSS-APPELLEE



Appeal from judgment in third-party action entered in the United States District Court for the Southern District of New York (Sprizzo, J.) that awards damages against impleaded physician for malpractice and from order denying amendment of judgment to enjoin action by plaintiff-appellee against third-party defendants-appellants in state court. Cross-appeal from judgment to the extent that it denies attorney's fees to third-party plaintiffs. Affirmed.

Meskill, Minor and Mahoney, Circuit Judges.

Author: Miner

MINER, Circuit Judge

Following a jury trial, judgment was entered in the United States District Court for the Southern District of New York (Sprizzo, J.) in favor of plaintiff James Staffer for $480,650.38 plus costs and interest against Bouchard Transportation, Inc. and Frederick E. Bouchard, Inc. (collectively "Bouchard"), his employers, for injuries he suffered while working as a deckhand. Following a second jury trial in the same court, judgment was entered against third-party defendant Joseph Suarez, M.D. in favor of Bouchard for contribution in the sum of $462,489.98 plus costs and interest as a result of the malpractice of Suarez in the treatment of Staffer. The judgment incorporated a finding of no liability on the part of third-party defendant Staten Island Hospital. After entry of a consolidated judgment, Staffer sued the hospital and Suarez in state court for medical malpractice. A motion in federal court by the hospital and Suarez to enjoin the state court proceedings on the ground of res judicata was denied.

The hospital and Suarez appeal the denial of their motion to enjoin. Suarez also appeals the award in favor of Bouchard, arguing that he should be entitled to set off from it any monies Staffer has received in maintenance and cure from Bouchard and any social security disability benefits that Staffer has received and will receive. Additionally, Bouchard appeals the denial of its motion for reimbursement from Suarez of attorney's fees incurred in prosecuting its third-party claim.

Because an injunction to prevent Staffer's malpractice claim against the hospital and Suarez in state court is unwarranted under the Anti-Injunction Act, 28 U.S.C. § 2283 (1982), we hold that the district court's refusal to enjoin the state proceedings does not require reversal. We perceive no basis in New York law to set off from Suarez' obligation to Bouchard any collateral source income Staffer may have received. Finally, we decline to award attorney's fees to Bouchard.

BACKGROUND

On July 3, 1985, James Staffer injured his right shoulder while releasing the towing machine brake aboard the tugboat FREDERICK E. BOUCHARD. At the time of the accident Staffer was employed as a deckhand by Bouchard. Staffer has not been able to work as a deckhand since the mishap. Pursuant to procedures established by a collective bargaining agreement, Bouchard paid Staffer a total of $68,403.35 in maintenance and cure. As of December 1986, Staffer had received an additional $8034 in social security disability benefits. Since then, he has received in such benefits $773 monthly; the monthly payments will continue for the rest of his life.

On July 7, 1986, Staffer initiated a personal injury action against Bouchard, pursuant to the Jones Act, 46 U.S.C. § 688 (1982), in the United States District Court for the Southern District of New York (Sprizzo, J.). By a third-party complaint filed on March 20, 1987, Bouchard impleaded the Staten Island Hospital and Dr. Joseph A. Suarez, see Fed.R.Civ.P. 14, alleging medical malpractice that aggravated Staffer's injuries. Staffer did not amend his complaint to assert a claim against the hospital or Suarez. Judge Sprizzo ordered a severance, and the two claims were tried by separate juries.

In Staffer's trial against Bouchard, the jury returned a verdict of $739,462, but found that Staffer had been 35% contributorily negligent. Accordingly, judgment of $480,650.38 plus costs and interest was entered in favor of Staffer against Bouchard on January 5, 1988. In Bouchard's third-party action against the hospital and Suarez, the jury found that Suarez had been negligent and that his negligence contributed 100% to Staffer's pain and suffering and 90% to his physical injury. Judgment of $462,489.98*fn1 plus costs and interest was entered in favor of Bouchard against Suarez on May 31, 1988. The claim against the hospital was dismissed and the hospital was awarded costs against Bouchard. Suarez' motion for an offset of his contribution pursuant to New York's collateral source statute, N.Y.Civ.Prac.L. & R. § 4545(a) & (c) (McKinney 1989) [hereafter CPLR], which generally forbids in certain malpractice and tort actions recovery of damages that plaintiff already has recovered or will recover from collateral sources, was denied. The court denied also Bouchard's motion for attorney's fees against Suarez. With this second judgment, Judge Sprizzo vacated the earlier judgment resolving the Staffer-Bouchard conflict and incorporated all verdicts and assessments into one final judgment.

Shortly after the verdict on Bouchard's third-party action, Staffer brought a malpractice action against the hospital and Suarez in New York State Supreme Court. The hospital and Suarez removed the action to the United States District Court for the Eastern District of New York (McLaughlin, J.), see 28 U.S.C. § 1441(a) (1982), on the ground of federal question jurisdiction, claiming they were pendent parties to the earlier action in the Southern District of New York. They then moved to transfer the action to the Southern District of New York, see 28 U.S.C. § 1404(a) (1982), to consolidate it with the earlier action, see Fed.R.Civ.P. 18, in which Judge Sprizzo had not yet entered his revised judgment. Judge McLaughlin, however, granted Staffer's cross-motion to remand the case to state court, holding that the removal to federal court had been improvident and without jurisdiction. See 28 U.S.C. § 1447(c) (1982) (since amended by the Judicial Improvements and Access to Justice Act of 1988, 28 U.S.C.A. § 1447(c) (West Supp. 1989)).

Thereafter, the hospital and Suarez moved in the Southern District of New York (Sprizzo, J.) to alter or amend the federal court judgment, see Fed.R.Civ. P. 59(e), to enjoin further action by Staffer in state court on the ground of res judicata. Judge Sprizzo denied the motion, holding that Staffer had been under no obligation to assert a direct claim against the hospital and Suarez in his initial federal action.

Staffer then moved in state court for summary judgment. He sought damages of $222,022.96, approximately what he had been unable to recover in his action against Bouchard because of contributory negligence. Staffer argued that his contributory negligence was not available to the defendants as a defense in the malpractice action and that Suarez' liability already had been determined in Bouchard's third-party action. The hospital and Suarez cross-moved in state court for (i) a stay until this appeal could be decided, (ii) summary judgment dismissing the complaint on the ground of res judicata because Staffer could have raised his malpractice claim in his original federal action but did not, or (iii) denial of the portion of Staffer's motion for summary judgment that sought to recover lost wages and other special damages subject to CPLR § 4545.

The state court, agreeing that the issue of malpractice had already been decided, granted Staffer's motion and entered an order in his favor, awarding him damages, less any amount determined by further discovery to be subject to the exclusion of CPLR § 4545. Similarly, the cross-motion to limit the amount of Staffer's judgment was granted to the extent that the damages award should be reduced by operation of section 4545. The state court declined to stay its proceedings but granted the cross-motion for summary judgment as to the hospital, dismissing the complaint against it with prejudice; Staffer consented to this dismissal. The state court denied the cross-motion for summary judgment as to Suarez. Later, on March 13, ...


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