CLIENT ALERT, September 26, 2012

Washington Supreme Court issues two decisions adverse to providers; (1) evidence of prior settlements inadmissible; (2) physician's initial credentialing applications and reasons for limiting privileges discoverable.

Continuing a pattern, the Washington Supreme Court issued two decisions on Thursday, September 20, 2012 that limit statutory protections available to health care providers in malpratice litigation. In Diaz v. State of Washington, it held that it was error to allow a non-settling defendant to introduce evidence of the amount paid by other defendants, who had settled before trial. The ruling interpreted Washington's statutory modification of the collateral source rule–RCW 7.70.080–to permit evidence of pre-trial settlements only if the settling defendant offered it; e.g., in a case where a defendant paid medical bills or other compensation but did not completely resolve the case.

In the other case, Fellows v. Moynihan, the Court held that the quality improvement and peer review privileges under RCW 70.41.200 and RCW 4.24.250 do not prevent discovery of physicians' initial credentialing and privileging records or the fact of and reasons for terminating or limiting their privileges. Consistent with the tone set in its recent Lowy v. PeaceHealth decision, the Court stated that these privileges will be narrowly–extremely narrowly–construed.

Both decisions were unanimous; Chief Justice Madsen authored Fellows and Justice Wiggins authored Diaz. For further detail, please see below.

Fellows v. Moynihan

  • Reversed trial court's determination that credentialing, privileging and personnel records of health care providers were protected from disclosure under either RCW 70.41.200(e) or RCW 4.24.250.
  • Court narrowly applied the two-factor test set forth in Anderson v Breda in determining whether records could be protected: (1) records sought must be generated in a regularly constituted committee or board of the hospital whose duty it is to review and evaluate the quality of patient care or the competency and qualifications of members of the profession; and (2) records sought are proceedings, reports and written records of such committee. Initial credentialing, privileging or personnel records would not fall under this definition.
  • Hospital ordered to produce any initial credentialing, privileging and personnel records of defendant physicians for in camera review by trial court.
  • Hospital ordered to disclose for in camera review documents related to the reasons for restriction of defendant physician's privileges.

Diaz v. State of Washington

  • Trial court erred in interpreting RCW 7.70.080 to permit jury to hear evidence of plaintiff's settlement with other defendants. Only a settling defendant may offer evidence of the amounts it paid.
  • To interpret RCW 7.70.080 as permitting evidence of settlement at trial would conflict with RCW 4.22.060 (delegating to the trial judge the task of deducting prior settlements from any damage award) and RCW 4.22.070 (requiring the trier of fact to allocate fault to each at-fault party and allocate liability and damages based on such allocation).
  • Permitting evidence of settlements through RCW 7.70.080 would conflict with ER 408, which bars admission of settlement for purposes of proving liability for, or invalidity of, a claim or its amount. This holding seemingly sends a message intended to dissuade the Legislature from amending RCW 7.70.080 to allow non-settling defendants to introduce evidence of compensation paid by other parties.
  • Trial court's error deemed harmless where there was limited evidence of settlement introduced at trial, jury received a curative instruction regarding proper use of settlement evidence, and jury is presumed to have followed such instruction.

If you have any questions regarding these decisions, please contact any of the following attorneys:

Amy T. Forbis

Michael Madden

Elizabeth A. Leedom

Jennifer Gannon Crisera


601 Union Street,
Suite 1500
Seattle, WA 98101-1363
T 206.622.5511
F 206.622.8986