Aves v. Todd ( 1997 )

F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
SEP 24 1997
TENTH CIRCUIT
PATRICK FISHER
Clerk
DARCY M. AVES, a minor, by and
through Dan J. Aves and Faye E.
Aves, her mother and father, natural
guardians and next friends; DARCY No. 96-3063
M. AVES, individually; and, DAN J. (D.C. No. 88-1669)
AVES and FAYE E. AVES, (D. Kan.)
individually,
Plaintiffs - Appellants,
vs.
NASREEN B. SHAH, M.D.,
Defendant - Appellant,
and
RON TODD, Commissioner of
Insurance of the State of Kansas, as
Administrator of the Health Care
Stabilization Fund,
Garnishee - Appellee.
ORDER AND JUDGMENT *
Before EBEL, LOGAN, and KELLY, Circuit Judges.
*
This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. This court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
After a jury verdict of over $21 million in a medical malpractice claim
against Dr. Nasreen Shah was upheld on appeal, Plaintiffs Darcy Aves and her
parents, Dan and Faye Aves, brought a garnishment action to collect on the
judgment against Defendant Ron Todd, in his capacity as the Commissioner of
Insurance of the State of Kansas and Administrator of the Kansas Health Care
Stabilization Fund (the Fund). During the relevant period, Dr. Shah carried
primary and excess medical malpractice insurance through the Fund. Pursuant to
the judgment, the Fund paid the Plaintiffs up to the statutory limit established for
primary and excess coverage. The Plaintiffs claim that the Fund is liable to them
for bad faith, for failure to settle their claim against Dr. Shah in good faith, and
for negligent failure to settle.
The district court certified several questions of state law to the Supreme
Court of Kansas, which ruled that the Fund was not liable for bad faith claims.
Aves v. Shah, 906 P.2d 642 (Kan. 1995). The Supreme Court of Kansas held that
Kan. Stat. Ann. § 40-3403(e), 1 which took effect on July 1, 1984, and § 40-
3412(c), 2 which was enacted in 1976, abolished the causes of action under which
1
Kan. Stat. Ann. § 40-3403(e) (1996) provides: “In no event shall the
fund be liable to pay in excess of $3,000,000 pursuant to any one judgment or
settlement against any one health care provider relating to any injury or death
arising out of the rendering of or the failure to render professional services on and
after July 1, 1984, and before July 1, 1989 . . . .”
2
Kan. Stat. Ann. § 40-3412(c) (1993) provides: “Nothing herein shall
be construed to impose any liability in the fund in excess of that specifically
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the Plaintiffs now seek relief. Following the State Supreme Court’s ruling, the
district court granted the Fund’s motion to dismiss. The Plaintiffs appeal from
that judgment, and argue that the Kansas statutes relied upon by the Supreme
Court of Kansas violate the Contract, Due Process, and Equal Protection Clauses
of the United States Constitution.
Because we find the Plaintiffs’ claims under the Federal Constitution to be
without merit, we do not reach the issue of whether the Eleventh Amendment bars
their claims. We may assume jurisdiction in case where the jurisdictional issues
are difficult and the merits clearly and obviously run against the party seeking
jurisdiction. Norton v. Matthews, 427 U.S. 524, 532 (1976); Secretary of the
Navy v. Avrech, 418 U.S. 676, 677-78 (1974). Thus, we assume jurisdiction
under 28 U.S.C. § 1291, and affirm. Our review of a dismissal for failure to state
a claim is de novo. Kidd v. Taos Ski Valley, 88 F.3d 848, 854 (10th Cir. 1996).
In order to establish a violation of the Contract Clause, the Plaintiffs must
demonstrate as an initial matter that a contractual relationship existed at the time
of the challenged enactment. General Motors Corp. v. Romein, 503 U.S. 181, 186
(1992); see National R.R. Passenger Corp. v. Atchison, Topeka & Santa Fe Ry.
Co., 470 U.S. 451, 472 (1985). Assuming that the relationship between Dr. Shah
provided for herein for negligent failure to settle a claim or for failure to settle a
claim in good faith.”
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and the Fund can be construed as a contract, that contract was not in existence at
the time the statutes at issue were enacted. As a result, the Plaintiffs cannot
establish a violation of the Contract Clause.
The Plaintiffs’ Due Process challenge is also unavailing. A State may
abolish a common-law cause of action without violating the Constitution, even
though “otherwise settled expectations may be upset thereby.” Duke Power Co. v.
Carolina Envtl. Study Group, 438 U.S. 59, 88 n.32 (1978) (quotations omitted);
see Munn v. Illinois, 94 U.S. 113, 134 (1877) (“A person has no property, no
vested interest, in any rule of the common law.”); see also Silver v. Silver, 280
U.S. 117, 122 (1929), and cases cited therein. The underlying lawsuit was filed in
November 1988, long after the statutes which abolished the asserted causes of
action took effect. Absent a protected interest, the Plaintiffs had no entitlement
to any sort of process. Board of Regents v. Roth, 408 U.S. 564, 569 (1972). The
Plaintiffs have also failed to establish a violation of the Equal Protection Clause.
AFFIRMED.
Entered for the Court
Paul J. Kelly, Jr.
Circuit Judge
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