Graff v. Children's Care Hospital and School

#28644, #28657-a-MES
2020 S.D. 26

IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA

****

NEIL H. GRAFF and DEBRA A. GRAFF,
as Parents and Guardians of
BENJAMIN B. GRAFF, disabled, Plaintiffs and Appellants,

v.

CHILDREN’S CARE HOSPITAL
AND SCHOOL, a South Dakota
Corporation, Defendant and Appellee.

****
APPEAL FROM THE CIRCUIT COURT OF
THE SECOND JUDICIAL CIRCUIT
MINNEHAHA COUNTY, SOUTH DAKOTA
****
THE HONORABLE LAWRENCE E. LONG
Retired Judge
****

MICHAEL L. LUCE
DANA VAN BEEK PALMER of
Lynn, Jackson, Shultz & Lebrun, P.C.
Sioux Falls, South Dakota

VINCENT A. PURTELL of
Heidepriem, Purtell & Siegel, LLP
Sioux Falls, South Dakota Attorneys for plaintiffs and
appellants.

MARK W. HAIGH
EDWIN E. EVANS
TYLER W. HAIGH of
Evans, Haigh & Hinton, LLP
Sioux Falls, South Dakota Attorneys for defendant
and appellee.
****
ARGUED
OCTOBER 1, 2019
OPINION FILED 05/06/20
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SALTER, Justice

[¶1.] With his parents acting as guardians ad litem, Benjamin Graff (Ben)

sued Children’s Care Hospital and School (CCHS), alleging it was negligent and

inflicted emotional distress by using physical restraints on him when he received

services at CCHS. 1 A jury found in favor of CCHS. Ben appeals, asserting the

circuit court abused its discretion by excluding various Department of Health

surveys and by taxing partial disbursements against his parents. By notice of

review, CCHS contends the circuit court erred by not dismissing the action as

untimely and by determining the standard of care as it did. CCHS also argues the

court abused its discretion by declining to tax full disbursements against Ben’s

parents. Because the lack of a trial transcript precludes meaningful appellate

review, we affirm the circuit court’s decision to exclude the Department of Health

surveys and its decision taxing disbursements, making it unnecessary to address

CCHS’s claims relating to timeliness and the standard of care.

1. Specifically, Ben alleged in his complaint that CCHS breached its duty to:

exercise reasonable care in the implementation and
development of plans for Ben; to make sure plans, policies and
standards were followed; to properly monitor Ben’s services,
including any implementation of restraints, to make sure such
restraints adhered to legal and professional standards; to
properly train, supervise and monitor staff; and to correct any
violations by staff as to plans and standards before additional
harm or damage would be sustained by Ben.

However, the parties’ submissions on appeal have focused solely on CCHS’s
use of physical restraints on Ben. We will confine our review accordingly.

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Background

[¶2.] Ben was born prematurely and started exhibiting signs of

developmental delays when he was approximately one and one-half years old. Since

then, he has been diagnosed with a variety of conditions related to his physical,

mental, and intellectual abilities. His full-scale IQ is between 30 and 42 placing

him in the moderately to severely impaired range of intellectual ability. Ben’s

cognitive and expressive communication skills are significantly limited, and he

functions at the level of a three- to four-year-old child. Ben’s parents, Neil and

Debra Graff, are supportive of him, and records describe them as “very strong

advocates for [Ben].”

[¶3.] Ben has required professional assistance throughout his life. He

started receiving services through CCHS in 1995. In 2007, as a teenager, he began

acting out aggressively and refusing to attend classes at the public middle school

where he was in a mainstream classroom. During the 2008-2009 school year, he

began receiving day-student services from CCHS, but he was also still enrolled at

the public school, “going to both places.” Ben’s struggles continued into high school

when, during the 2009-2010 school year, he was suspended for becoming aggressive

with a staff member at the public school. In March 2010, at the recommendation of

his individualized-education-program team, Ben enrolled in CCHS’s residential

treatment program. By that time, he was 16 years old.

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[¶4.] While Ben was in CCHS’s residential care in 2010, CCHS employees

used physical restraints on him, including prone, or face-down, restraints. 2 CCHS’s

documentation indicated it used physical restraints on Ben when he was either

hitting, kicking, biting, pulling hair, grabbing/pinching, or throwing objects. When

Ben exhibited these behaviors, CCHS employees considered Ben a danger to himself

or others. Ben was physically restrained over 140 times during his seven-month

residential stay at CCHS.

[¶5.] Ben’s parents removed him from CCHS’s residential treatment

program on September 21, 2010. One week later, on September 28, 2010, CCHS

discharged him from all other services. Ben turned 18 on January 12, 2012, and

through his parents acting as guardians ad litem, he commenced this action. In his

complaint, Ben alleged CCHS was negligent in its use of physical restraints on him;

failed to provide his parents with adequate information regarding physical

restraints, resulting in a lack of informed consent; and intentionally and negligently

inflicted emotional distress upon him and his parents by its use of physical

restraints. Ben maintained both he and his parents suffered damages resulting

from CCHS’s conduct.

[¶6.] CCHS moved for summary judgment, arguing Ben’s claims actually

asserted medical malpractice and were time-barred by the applicable statute of

2. CCHS no longer uses prone restraints.

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repose. 3 CCHS further argued Ben’s parents’ claims for emotional distress should

be dismissed because South Dakota law does not recognize a parent’s claim for

emotional distress based on a child’s injury. The circuit court determined Ben’s

claims were not grounded in medical malpractice and denied CCHS’s motion for

summary judgment. Ben voluntarily withdrew his parents’ claims for emotional

distress approximately two months before the trial began. He also withdrew his

claim for lack of informed consent, leaving only claims for negligence and Ben’s

emotional distress for the jury to decide.

[¶7.] Before the trial, CCHS filed a motion in limine to exclude any

reference to certain surveys conducted by the South Dakota Department of Health.

The surveys were performed to assess CCHS’s compliance with Medicaid and

Medicare requirements. Ben was not a resident at CCHS when most of the surveys

at issue were completed. And for the one survey completed while he was a resident,

there were no deficiencies noted specifically pertaining to Ben or the use of physical

restraints. Following an in-camera review, the circuit court found the surveys

merely reflected “deficiencies in record-keeping.” The circuit court granted the

motion in limine and excluded the surveys, concluding they did not provide the

3. SDCL 15-2-14.1 provides, in part:

An action against a physician, surgeon, dentist, hospital,
sanitarium, registered nurse, licensed practical nurse,
chiropractor, or other practitioner of the healing arts for
malpractice, error, mistake, or failure to cure, whether based
upon contract or tort, can be commenced only within two years
after the alleged malpractice, error, mistake, or failure to cure
shall have occurred . . . .

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proper standard of care regarding the use of physical restraints and, as such, were

of “limited relevance.”

[¶8.] Initially, the circuit court determined, sua sponte, that certain statutes

relating to corporal punishment provided the standard of care for the use of physical

restraints in this case. 4 However, during a pretrial conference held immediately

before jury selection, Ben objected to the application of the corporal punishment

statutes. The circuit court ultimately concluded the corporal punishment statutes

were not applicable and, instead, instructed the jury on certain statutes relating to

persons with developmental disabilities over CCHS’s objection. 5 After a three-week

trial, the jury returned a verdict in favor of CCHS on all of Ben’s claims.

4. The circuit court determined SDCL 22-18-5 and 13-32-2 provided the proper
standard of care. SDCL 22-18-5 provides:

To use or attempt to use or offer to use force upon or toward the
person of another is not unlawful if committed by a parent or the
authorized agent of any parent, or by any guardian, teacher, or
other school official, in the exercise of a lawful authority to
restrain or correct the child, pupil, or ward and if restraint or
correction has been rendered necessary by the misconduct of the
child, pupil, or ward, or by the child’s refusal to obey the lawful
command of such parent, or authorized agent, guardian, teacher,
or other school official, and the force used is reasonable in
manner and moderate in degree.

SDCL 13-32-2 provides, in part:

Superintendents, principals, supervisors, and teachers and their
aids and assistants, have the authority, to use the physical force
that is reasonable and necessary for supervisory control over
students.

5. Specifically, the circuit court instructed the jury on various statutes
contained in Title 27B, which relate to developmentally delayed persons.

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[¶9.] CCHS filed an application for taxation of disbursements in the amount

of $24,519.63 following the jury verdict. Ben objected, contending it would be

inequitable, unjust, and contrary to the interests of justice to tax disbursements

against him directly, though he also argued that any taxation of disbursements

should not be entered against his parents who were not the real parties in interest.

At the hearing on the application, CCHS clarified it was seeking disbursements

against Ben’s parents, and not Ben. The circuit court determined there were “three

causes of action” in the case and “one of those causes of action was by [Ben’s

parents] in their own right rather than in their guardianship capacity . . . .”

Accordingly, the circuit court “reduce[d] the requested award by two-thirds” and

taxed disbursements against Ben’s parents in the amount of $7,606.54.

[¶10.] Ben filed an appeal from the final judgment. As part of his appeal, he

ordered transcripts of two discussions that occurred outside of the presence of the

jury, but he declined to order the full trial transcript or any other transcripts from

prior hearings. CCHS filed a notice of review and, shortly thereafter, filed a motion

to compel Ben to order the full trial transcript. CCHS eventually abandoned its

motion and, instead, ordered various transcripts of matters that occurred outside of

the presence of the jury, as well as the transcript of the hearing on its motion for

summary judgment. As a result, the record on appeal does not contain a transcript

of the jury trial.

[¶11.] Ben raises the following issues for our review, which we restate as

follows:

1. Whether the circuit court abused its discretion when it excluded the
Department of Health surveys.

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2. Whether the circuit court abused its discretion by ordering the
partial taxation of disbursements against Ben’s parents.

[¶12.] By notice of review, CCHS raises these additional issues, restated as

follows:

1. Whether the circuit court erred in denying CCHS’s motion for
summary judgment based upon the statute of repose.

2. Whether the circuit court abused its discretion by instructing the
jury about the essential elements of Ben’s claims, including the
duty owed based upon its application of Title 27B.

3. Whether the circuit court abused its discretion by not taxing the
full amount of disbursements CCHS requested.

Analysis

Exclusion of Department of Health Surveys from Evidence

[¶13.] “The [circuit] court’s evidentiary rulings . . . will not be overturned

absent a clear abuse of discretion.” St. John v. Peterson, 2011 S.D. 58, ¶ 10, 804

N.W.2d 71, 74. “An abuse of discretion ‘is a fundamental error of judgment, a choice

outside the range of permissible choices, a decision, which, on full consideration, is

arbitrary and unreasonable.’” State v. Birdshead, 2015 S.D. 77, ¶ 51, 871 N.W.2d

62, 79 (quoting Kaberna v. Brown, 2015 S.D. 34, ¶ 13, 864 N.W.2d 497, 501). “When

a [circuit] court misapplies a rule of evidence, as opposed to merely allowing or

refusing questionable evidence, it abuses its discretion.” State v. Guthrie, 2001 S.D.

61, ¶ 30, 627 N.W.2d 401, 415.

[¶14.] Our rules of evidence state that evidence is relevant if “[i]t has any

tendency to make a fact more or less probable than it would be without the

evidence” and it is consequential in determining an action. SDCL 19-19-401. “Once

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the evidence is found to be relevant, it is admissible unless it is specifically

excluded.” St. John, 2011 S.D. 58, ¶ 12, 804 N.W.2d at 75 (quoting Supreme Pork,

Inc. v. Master Blaster, Inc., 2009 S.D. 20, ¶ 30, 764 N.W.2d 474, 484). Relevant

evidence may be excluded “if its probative value is substantially outweighed by a

danger of one or more of the following: unfair prejudice, confusing the issues,

misleading the jury, undue delay, wasting time, or needlessly presenting

cumulative evidence.” SDCL 19-19-403 (Rule 403).

[¶15.] However, our cases make clear that we will not reverse a final

judgment solely on the basis of an improvident evidentiary ruling. A different rule

would overlook the importance of assessing whether the error caused prejudice that

impacted the result. We have expressed this principle in the following terms:

The party alleging error must show prejudicial error. To show
such prejudicial error an appellant must establish affirmatively
from the record that under the evidence the jury might and
probably would have returned a different verdict if the alleged
error had not occurred.

Supreme Pork, 2009 S.D. 20, ¶ 58, 764 N.W.2d at 491 (quoting Sander v. Geib,

Elston, Frost Prof’l Ass’n, 506 N.W.2d 107, 113 (S.D. 1993)). We have synthesized

this statement into a “two-step process.” Id. ¶ 59. First, we “determine whether the

trial court abused its discretion in making an evidentiary ruling; and second, [we

consider] whether this error was a prejudicial error that ‘in all probability’ affected

the jury’s conclusion.” Id.

[¶16.] As the excerpt above suggests, the trial record plays a critical role in

determining the existence of prejudice. A basic tenet of appellate procedure assigns

to the appellant “the ultimate responsibility for presenting an adequate record on

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appeal . . . .” Baltodano v. N. Cent. Health Servs., Inc., 508 N.W.2d 892, 894 (S.D.

1993) (quoting Pearson v. Adams, 279 N.W.2d 674, 676 (S.D. 1979)). Although

appellate review in the absence of a transcript is not categorically precluded in all

cases, the lack of a transcript may well be fatal to an appeal if it prevents complete

and meaningful review of an issue. Our rule, therefore, provides that we will

review the trial court record insofar as it exists. See id. (“Where the record contains

no transcript, the record on appeal is confined to those pleadings and papers

transmitted from the circuit court.”). Where the trial court record is incomplete and

not adequate to the task, “our presumption is that the circuit court acted properly.”

Id. at 895 (quoting In re C.M., 417 N.W.2d 887, 889 (S.D. 1988)).

[¶17.] Here, the existing record is too spare to allow us to review Ben’s

evidentiary claim relating to the exclusion of the Department of Health surveys.

We have the parties’ submissions to the circuit court and a transcript of the motion

in limine hearing, but these relate only legal arguments—essentially the same ones

made by the parties on appeal. We also have the circuit court’s one-page order

declaring the surveys to be of “limited relevance” and Ben’s written offer of proof,

drawing comparisons between the use of restraints upon him and deficiencies noted

in the surveys. Missing, however, is a transcript from the fifteen-day trial, itself.

The transcript would provide us with far more than additional context. It

constitutes an essential resource for determining the merits of Ben’s evidentiary

challenge.

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[¶18.] Even if we were convinced that the circuit court abused its discretion,

either in its assessment of the survey’s relevance 6 or in its failure to balance its

probative force against the considerations listed in Rule 403, we would still be

unable to move to the next step of our analysis—“whether this error was a

prejudicial error that ‘in all probability’ affected the jury’s conclusion.” 7 Supreme

Pork, 2009 S.D. 20, ¶ 59, 764 N.W.2d at 491. The parties’ arguments on appeal

illustrate this point.

[¶19.] Ben claims that the Department of Health surveys were necessary to

“show CCHS’s knowledge that the use of the prone restraints was impermissible, to

show the absence of any claimed mistake as to whether the prone restraints were

allowed, and to show it was CCHS’s habit and routine in impermissibly using the

prone restraint.” CCHS has a different view and argues in its brief that the trial

transcript would have demonstrated that the admission of the surveys did not

6. Ben submits the surveys were both relevant and admissible as other acts
evidence under SDCL 19-19-404(b), or evidence of habit or routine practice
under SDCL 19-19-406.

7. Ben suggests we altered our description of the essential prejudice test in St.
John when we concluded that, under the facts of the case, “[i]t is possible
that the exclusion of the evidence ‘in all probability affected the outcome of
the jury’s verdict and thereby constitutes prejudicial error.’” St. John, 2011
S.D. 58, ¶ 18, 804 N.W.2d at 77. It was certainly not our intent to displace
the “probability” test with a “possibility of a probability” standard. However,
to the extent our statement has created confusion, we reaffirm that the
proper test for determining prejudice is whether the error “‘in all probability’
affected the jury’s conclusion.” Supreme Pork, 2009 S.D. 20, ¶ 59, 764
N.W.2d at 491; see also Carpenter v. City of Belle Fourche, 2000 S.D. 55, ¶ 23,
609 N.W.2d 751, 761 (citation omitted) (“Prejudicial error is error which in all
probability produced some effect upon the jury’s verdict and is harmful to the
substantial rights of the party assigning it.”).

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impact the verdict given the court’s rulings and the way the testimony came into

evidence:

The trial transcript would have shown the court gave Plaintiffs
free rein to discuss the restraint policies and Plaintiffs focused
their case on their allegations of CCHS policy violations. The
transcript would have shown that CCHS staff explained to the
jury why, in most cases, Ben’s safety required that he be
restrained even though such restraint might technically violate
a policy, and on other occasions why it was impossible to comply
with the policy due to Ben’s aggressive behaviors.

[¶20.] Without a transcript, we have no effective means of determining which

of these partisan arguments better captures the potential impact of the Department

of Health surveys. The trial in this case lasted fifteen days. Though we do not

know how many witnesses were ultimately called, the parties had listed a combined

eighty-two witnesses prior to trial. The clerk’s record contains nearly 600 exhibits,

including roughly 17,000 pages of Ben’s records. It is certainly conceivable that the

impact of any error resulting from the exclusion of the surveys was rendered non-

prejudicial over the course of the lengthy and involved trial, or perhaps not.

Without the ability to read what occurred, we simply do not know.

[¶21.] To a large extent, however, the parties’ prejudice arguments are

perceptibly unsynchronized and reflect divergent views of the governing legal

principles. While CCHS states and applies our rules for assessing prejudice

resulting from an erroneous evidentiary ruling, Ben’s arguments are trained almost

exclusively on his claim that the circuit court incorrectly determined the question of

admissibility with little or no analysis of the impact of any error on the jury’s

verdict.

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[¶22.] To the extent he addresses prejudice, Ben does so in the context of a

claim that the circuit court’s Rule 403 balancing, had it been performed on the

record, would have led to admissibility of the surveys because their probative force

was not substantially outweighed by the danger of unfair prejudice. See SDCL 19-

19-403. However, this argument “confuses Rule 403 ‘prejudicial evidence’ with the

second step of our review, ‘prejudicial error.’” Supreme Pork, 2009 S.D. 20, ¶ 60,

764 N.W.2d at 491. Because the complete absence of a trial transcript looms large

in this appeal, we assumed at the outset, without deciding, that Ben could satisfy

the first of our two-step analysis, bringing into focus the necessity of assessing any

prejudice from the error based upon the entire record.

[¶23.] Here, the impact of the circuit court’s decision to exclude the

Department of Health surveys is not self-evident, and we cannot presume prejudice

even if the court abused its discretion. Indeed, we specifically rejected a similar

notion of “inherent prejudice” in our Supreme Pork decision. See id. Adopting such

a rule, we reasoned, would hold the circuit court to a standard of “absolute

perfection” and require a retrial in cases based upon “the error of admission of

prejudicial evidence alone” without regard to “a showing of prejudicial effect . . . .”

Id. We adhere to this precedent now and hold that the failure to provide a trial

transcript from this lengthy trial preempts any effort to assess prejudice. The jury’s

verdict is, therefore, affirmed, making it unnecessary to address CCHS’s notice of

review issues concerning whether the circuit court erred when it denied CCHS’s

motion for summary judgment and whether it instructed the jury on the wrong

standard of care relating to the use of restraints.

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Taxation of Disbursements

[¶24.] We review a circuit court’s decision to award or deny disbursements for

an abuse of discretion. McLaren v. Sufficool, 2015 S.D. 19, ¶ 4, 862 N.W.2d 557,

558. “[D]isbursements are creatures of statute and cannot be allowed in the

absence of statutory authority.” DeHaven v. Hall, 2008 S.D. 57, ¶ 41, 753 N.W.2d

429, 441 (quoting Elfring v. New Birdsall Co., 17 S.D. 350, 351, 96 N.W. 703, 704

(1903)). The provisions of SDCL 15-17-37 authorize “[t]he prevailing party in a civil

action or special proceeding” to recover certain “expenditures necessarily incurred

in gathering and procuring evidence or bringing the matter to trial.” Authorized

disbursements “shall be allowed as of course to the prevailing party unless the court

otherwise directs.” SDCL 15-6-54(d)(1). As this language somewhat paradoxically

suggests, “[t]he court may limit the taxation of disbursements in the interests of

justice.” SDCL 15-17-52; see also Harvieux v. Progressive N. Ins. Co., 2018 S.D. 52,

¶ 33, 915 N.W.2d 697, 706.

[¶25.] Both parties assert that the circuit court abused its discretion by

taxing partial disbursements against Ben’s parents. Ben argues the award of

partial disbursements was not in the interest of justice because his parents should

not be held personally liable for bringing the case as his guardians and because the

circuit court apportioned the disbursements inequitably. CCHS, on the other hand,

argues the circuit court should have awarded the full $24,519.63 amount of

requested disbursements against Ben’s parents because they “were the ones who

maintained this cause of action and made all the critical strategy decisions on

behalf of Ben.”

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[¶26.] In our view, neither side has cited persuasive authority on the question

of whether a guardian ad litem should be held personally liable for disbursements

in relation to a case brought on behalf of a disabled individual, and we are not

convinced that the case is well-suited to adopt either of the opposing bright-line

rules the parties propose. 8 Therefore, we are not inclined to further examine these

polar positions and expand our decisional law, particularly where the circuit court

did not base its ruling on Ben’s status and, instead, apportioned the disbursements

based on the parents’ own personal claims. 9

[¶27.] We will, instead, review the issue under the existing authorities, which

contain no categorical exemption from liability for disbursements for guardians ad

litem. These authorities also place a premium upon the circuit court’s discretion in

determining an appropriate award. Furthermore, a precise formula for

apportioning an award of disbursements is not proscribed under our statutes or

8. Ben cites two unpublished decisions from federal district courts to support his
argument: M.D.B. ex rel. T.M.B. v. Walt Disney Parks & Resorts U.S., Inc.,
No. 6:14-cv-1942, 2017 WL 3065146 (M.D. Fla. July 19, 2017) and K.C. ex rel.
Calaway v. Schucker, No. 02-2715, 2014 WL 11537828 (W.D. Tenn. Feb. 25,
2014). CCHS cites two additional decisions from federal district courts, one is
unpublished and the other was decided in 1913: Gohl v. Livonia Pub. Sch.,
No. 12-cv-15199, 2018 WL 1128254 (E.D. Mich. Mar. 2, 2018) and Reynolds v.
Great N. Ry. Co., 206 F. 1003 (E.D. Wash. 1913). None of the cases discuss
the issue in sufficient depth, and only one of the authorities cited, Walt
Disney, pertained to a guardianship of a disabled person. The other cases
involved minors.

9. Moreover, when the dearth of authority on this issue is coupled with the
absence of any statutory restriction on the taxation of disbursements
regarding a guardian of a disabled person, it suggests this decision may best
be left to the Legislature. See, e.g., SDCL 15-17-48 (providing the guardian of
an infant is personally liable for disbursements taxed against the infant).

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rules, and we can perceive no reason why a trial court should not have the flexibility

to apportion an award in its sound discretion to achieve a result which is in the

interests of justice. See, e.g., Klinzing v. Gutterman, 85 N.W.2d 665, 668 (Minn.

1957) (providing “it would be within the discretion of the trial court . . . to determine

the fair proportion of the costs and disbursements to be taxed against [a certain

party in a multi-party suit].”). 10

[¶28.] Though the parties, for different reasons, believe the court’s method of

apportioning disbursements to be incorrect, we do not believe it was outside the

range of permissible choices. Ben’s parents did, at one point, claim damages

directly and dismissed those claims only after CCHS challenged them. The circuit

court was also uniquely situated, particularly given the lack of a complete trial

transcript, to assess the role that Ben’s parents played in the decision to move

forward with the action against CCHS. It appears from the complaint that Ben’s

claims and his parents’ claims were inextricably intertwined, and the circuit court

was the only court privy to what transpired during the trial. Under the

circumstances, we cannot conclude the circuit court abused its discretion when it

apportioned the disbursements.

Conclusion

[¶29.] Ben cannot demonstrate that the circuit court’s exclusion of the

Department of Health surveys in all probability affected the jury’s verdict. Even if

the circuit court abused its discretion by excluding the Department of Health

10. We see no difference between apportionment of disbursements between
parties in a multi-party suit or between parties for multiple claims.

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surveys, the lack of a trial transcript prevents our assessment of prejudice.

Further, the circuit court did not abuse its discretion when it apportioned

disbursements against Ben’s parents. We affirm.

[¶30.] GILBERTSON, Chief Justice, and KERN, JENSEN, and DEVANEY,

Justices, concur.

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