The Supreme Court changes the law on the effect of dismissal.

Plaintiffs sued a doctor and a hospital for malpractice; against the hospital they alleged both respondeat superior and independent negligence in hiring and supervision. They settled with the doctor and dismissed him with prejudice. The hospital then moved for summary judgment, arguing that the claims against it were derivative. The trial court granted the motion; the Court of Appeals affirmed.

The Supreme Court reverses.

“Derivative liability is no broader than vicarious liability.” Even though the claims of independent negligence against the hospital depend on proving the doctor negligent they are not vicarious.

But, the hospital also argued, dismissal of the doctor was an adjudication on the merits against him so he can’t be proved negligent. The lower courts had followed Torres (App. 1971), holding that allegations against the hospital don’t survive dismissal of the doctor if proving the doctor’s negligence is an element of those allegations. The Supreme Court cites Chaney Building (1986) to the effect that collateral estoppel applies only to facts or issues actually litigated. Stipulated judgments aren’t litigated and bind others only if the settlement agreement said so. The court recognizes that the law since DeGraff (1945) has been otherwise; “we disavow our holding in DeGraff insofar as that case and its progeny conclude that a stipulated dismissal with prejudice ‘operate[s] as an adjudication that [the dismissed party] was not negligent.'”

At least the court acknowledges DeGraff. In all other respects it follows the script written years ago by one of the people involved in this case: this opinion isn’t radically changing existing law, you understand, that was really done years ago by another case (Chaney Building in this performance of the play) so this one is simply following the precedent, never mind that the supposed precedent had never before been read that way.

(Opinion: Kopp v. Physician Group)