The Effect of Tort Reform on Medical Malpractice
Paul J. Passanante1 |
Dawn Mefford1 |
I. Introduction
On March 29, 2005, Governor Matt Blunt signed HB393 into law. Each provision of the act, except for § 512.099 relating to appeal bonds, applies to all causes of action filed after August 28, 2005. This legislation has brought about broad and significant changes to tort law in Missouri, and this article will examine the effect of the act on the litigation of medical malpractice cases.
II. Health Care Providers
Section 538.205 defines various terms that are used throughout Chapter 538, the law governing medical malpractice actions. The Missouri General Assembly has amended § 538.205 to define "health care provider" in a way that now includes nursing homes and long-term care facilities organized pursuant to Chapter 198. Although the prior legislation did not specifically reference health care facilities organized pursuant to Chapter 198, this revision is in accord with Missouri cases, which have consistently held that such entities fall within the definition of "health care provider" under the statute.2
The newly enacted § 538.228 creates a limited or qualified immunity for physicians who provide medical treatment "to a patient at a city or county health department . . . a non-profit community health center, or other non-profit entity that solely provides free health care services"3 and enjoys tax exempt status. The immunity does not apply to physicians who have liability insurance coverage, but physicians who are covered under the state legal expense fund are deemed to be uninsured for purposes of determining whether the immunity applies and are granted immunity for all but gross negligence or willful or wanton acts. This represents a significant change in the law, as these physicians did not enjoy such immunity prior to the enactment of this law.4 There is no immunity for negligence for any such physician while performing an abortion.
III. Statute of Limitations
Section 516.105 is the statute of limitations applicable to medical malpractice cases. Prior law mandated that all actions against health care providers "for damages for malpractice, negligence, error or mistake related to health care [must] be brought within two years from the date of occurrence of the act of neglect."5 There were three exceptions:
(1) In cases in which the act of neglect complained of is introducing and negligently permitting any foreign object to remain within the body of a living person, the action shall be brought within two years from the date of the discovery of such alleged negligence, or from the date on which the patient in the exercise of ordinary care should have discovered such alleged negligence, whichever date first occurs; and
(2) In cases in which the act of neglect complained of is the negligent failure to inform the patient of the results of medical tests, the action for failure to inform shall be brought within two years from the date of the discovery of such alleged negligent failure to inform, or from the date on which the patient in the exercise of ordinary care should have discovered such alleged negligent failure to inform, whichever date first occurs; except that, no such action shall be brought for any negligent failure to inform about the results of medical tests performed more than two years before August 28, 1999 . . .; and
(3) In cases in which the person bringing the action is a minor less than eighteen years of age, such minor shall have until his or her twentieth birthday to bring such action.6
The statute further provided that even if the claim fell within one of the exceptions, "no action for damages" for medical malpractice could be commenced more than 10 years after "the date of the act of neglect."
7 The legislature has amended this statute of limitations in two respects.
First, the negligent failure to inform a patient of test results exception to the two-year limitations period has been clarified. It appears that if a physician completely fails to inform a patient of test results, the statute of limitations is still extended by a "discovery rule;" but if the physician informs the patient of the results of a test that was negligently performed or provides the patient with erroneous test results, the "discovery rule" does not extend the statute of limitations.8 Second, the tolling of the statute for minors has been shortened. The statute has been amended to provide that a claim cannot be brought more than 10 years after the date of the act of neglect, or two years from a minor's eighteenth birthday, whichever is later, regardless of when the negligence was discovered.
IV. Venue
Prior to the adoption of the new tort reform law, venue in medical malpractice cases was generally determined under one of three statutes: § 508.010, the general venue statute; § 508.040, the corporations-only venue statute; and § 355.176,9 the non-profit corporations venue statute.
Under the new tort reform act, there are major changes in the way venue is established in all tort cases, including medical malpractice cases. Both the corporations-only venue statute, § 508.040, and the non-profits venue statute, § 355.176, have been repealed. Venue in all medical malpractice cases will now be determined pursuant to § 508.010, which has been amended in several respects.
A. The General Rule
Under the tort reform legislation, in any tort action "in which the plaintiff was first injured in . . . Missouri, venue shall be in the county where the plaintiff was first injured by the wrongful acts or negligent conduct."10 In any tort action "in which the plaintiff was first injured outside of . . . Missouri . . . [i]f the defendant is a corporation, then venue shall be in [the] county [of the] corporation's registered agent . . . or, if the plaintiff's principal place of residence was in . . . Missouri on the date" of first injury, then in the county of such "principal place of residence on the date" of first injury.11 In any tort action "in which the plaintiff was first injured outside the state of Missouri . . . [and] the defendant is an individual, then venue shall be in [the] county of the . . . defendant's principal place of residence in . . . Missouri or, if the plaintiff's principal place of residence was in . . . Missouri on the date" of first injury, "then venue may be in the county" of the "plaintiff's principal place of residence on the date" of first injury.12
B. Time of Determination
Under prior law, venue was determined as of the date suit was filed or when an amended petition was filed.13 After tort reform, venue is determined based on the situation on the date the plaintiff was first injured.
Moreover, § 538.300, as amended, provides that if, at any time before trial a plaintiff or defendant is either added or dismissed that would alter the determination of venue, "then the judge shall upon application [by] any party transfer the case to a proper forum."14 This approach is vastly different from prior law, in which venue was determined as of the date suit was filed and the dismissal of a defendant at any time after the petition was filed generally had no effect on the determination of venue.15
C. Place of "First Injury"
Pursuant to the newly enacted venue provisions of § 538.232, a plaintiff in a medical negligence case is "considered injured . . . only in the county where the plaintiff first received treatment by [that] defendant for a medical condition at issue in the case."16 The amended § 508.010(14) additionally provides that a plaintiff is considered first injured where the trauma or exposure occurred, rather than where the symptoms first manifested. In wrongful death actions, § 508.010(11) provides that the plaintiff is "considered first injured where the decedent was first injured by the wrongful acts or negligent conduct."17 Under § 508.010(11), a plaintiff making a loss of consortium claim is "considered first injured where the other spouse was first injured by the wrongful acts or negligent conduct."18
D. Motions to Transfer Venue
The amended § 508.010 provides that "[a]ll motions to dismiss or transfer based upon . . . improper venue shall be deemed granted if not denied within ninety days of filing the motion unless . . . waived in writing by all parties," thereby shifting the burden of obtaining a ruling to the plaintiff.19 Furthermore, "if all parties agree . . . to a change in venue, [then] the court shall transfer venue" to the venue chosen by the parties.20 This provision in the statute seems to be in accord with the present Missouri Rules of Civil Procedure, Rule 51.02.
V. Affidavits of Merit
In 1986, the legislature enacted laws designed to protect health care providers from the filing of frivolous lawsuits. Section 538.225 required that attorneys file an affidavit certifying that, prior to filing suit, the attorney had obtained a written opinion from a qualified health care provider indicating that the plaintiff had been injured due to medical negligence.21 This requirement was based on the principle of law "that expert medical testimony is required to prove the acceptable standard of . . . care; and [that] without expert opinion" a breach of the standard of care cannot be proven.22 The statute further required that the affidavit set forth the qualifications of the health care provider who had provided the opinion, and required a separate affidavit for each defendant. The statute mandated that the affidavit be filed within 90 days of the filing of the petition unless, for good cause shown, the court ordered that the time be extended. If the plaintiff failed to file the affidavit, then the trial court could dismiss the action.
The legislature has now amended this statute to require the inclusion of additional information. In addition to the qualifications of the health care provider, the affidavit must now also reveal the health care provider's name and address. Furthermore, the statute now defines the term "legally qualified health care provider" as "a health care provider licensed in [Missouri] or any other state in the same profession as the defendant and either actively practicing or within five years of retirement from actively practicing substantially the same specialty as the defendant."23 Under the prior law, a physician was deemed competent to render such an opinion if that individual "ha[d] acquired, by technical training and practical experience, special knowledge not shared by men in general."24 The new definition of a "legally qualified health care provider" is certainly much narrower than the previous one.25
The amended statute also imposes new requirements relating to the failure of the plaintiff to timely file the affidavit. If the plaintiff fails to file the affidavit, upon motion of any party, the court must dismiss the action against that party without prejudice. Moreover, although the trial court is still permitted to extend the period of filing the affidavit upon a showing of good cause, that time period is now limited to 45 days.
The amended statute also provides an additional procedure whereby a defendant may challenge the merit of the claim. Within 180 days of the filing of the petition, a defendant may now "file a motion to have the court examine" the physician's written opinion itself, as opposed to the attorney's affidavit, "and if the court determines that the opinion fails to meet the requirements of this section, then the court shall conduct a hearing within thirty days to determine whether there is probable cause to believe that one or more qualified . . . health care providers will testify that the plaintiff was injured due to medical negligence."26 "If the trial court finds that there is no such probable cause, [then] the court [must] dismiss" the case and hold the plaintiff responsible for attorneys' fees and costs.27
VI. Peer Review Privilege
Section 537.035 sets forth the statutory privilege known as the peer review privilege. The Supreme Court of Missouri has stated that the purpose of the privilege is to encourage candid and critical analyses of peers' performance by shielding the communications made during the peer review process from disclosure or compulsion.28 The statute provides that certain materials that fall within its protection are immune from discovery and are inadmissible in medical malpractice actions. The privilege was previously set forth in subsection (4) of the statute, and provided:
[T]he proceedings, findings, deliberations, reports, and minutes of peer review committees concerning the health care provided any patient are privileged and shall not be subject to discovery, subpoena, or other means of legal compulsion for their release to any person or entity or be admissible into evidence in any judicial or administrative action for failure to provide appropriate care.29
Under the new law, "interviews" and "memoranda" and evidence of the existence of the privileged documents have been added to the protected class of peer review committee materials.
30
The former statute defined a "peer review committee" as a "committee of health care professionals with the responsibility to evaluate, maintain, or monitor the quality and utilization of health care services or to exercise any combination of such responsibilities."
31 It further provided that a peer review committee may be:
(1) Comprised of, and appointed by, a state, county or local society of health care professionals;
(2) Comprised of, and appointed by, the partners, shareholders, or employed health care professionals of a partnership or professional corporation of health care professionals;
(3) Appointed by the board of trustees, chief executive officer, or the organized medical staff of a licensed hospital, or other health facility operating under constitutional or statutory authority, or an administrative entity of the department of mental health recognized pursuant to the provisions of subdivision (3) of subsection 1 of section 630.407, RSMo;
(4) Any other organization formed pursuant to state or federal law authorized to exercise the responsibilities of a peer review committee and acting within the scope of such authorization;
(5) Appointed by the board of directors, chief executive officer or the medical director of the licensed health maintenance organization.32
The new tort reform act's amendment of § 537.035 expands the scope of the peer review privilege. First, subsection (2) of section 2 of the statute now provides that a peer review committee may also be comprised of "employed health care professionals of a university or an entity affiliated with a university operating under chapter 172, 174, 352, or 355, RSMo."
33 Additionally, subsection (3) of section 2 specifically includes nursing homes.
Furthermore, the legislature has added the following provision regarding waiver of the privilege:
The disclosure of any interview, memoranda, proceedings, findings, deliberations, reports, or minutes to any person or entity, including but not limited to governmental agencies, prof-essional accrediting agencies, or other health care providers, whether proper or improper, shall not waive or have any effect upon its confidentiality, non-discoverability, or non-admissibility.34
The inclusion of this provision is most likely in response to the Southern District's recent opinion in
State ex rel St. John's Regional Medical Ctr. v. Dally,
35 in which the court held that, as with all other privileges, the peer review privilege can be waived in certain instances. In a case of first impression, the court began its analysis of the privilege by first examining in whose favor the privilege exists, as it is generally the case that a privilege "can only be waived by the person or entity in whose favor it exists."
36 The court determined that if the privilege can be waived, "it should be the entity capable of neutrally balancing the interests at stake, such as the entity responsible for general oversight of medical care."
37 The court next examined "the general principles that govern the [waiver of other] privileges," and ultimately concluded that the peer privilege can be waived in at least two contexts.
38 First, the "'at issue' waiver" occurs "when the privilege holder makes assertions in a litigation context that put its otherwise privileged communications in issue."
39 Secondly, the "fairness doctrine waiver" holds that the privilege may be waived when invoked in some fundamentally unfair way, and is based on the principle that "it is unfair to permit a party to make use of privileged information as a sword when it is advantageous for the privilege holder to do so, and then as a shield when the party opponent seeks to use privileged information that might be harmful to the privilege holder."
40
Obviously, since the new tort reform act has become effective, the law set forth in Dally has been superseded by the amendments to § 537.035, and it will now be much more difficult to prove that the privilege has been waived.
VII. Benevolent Gestures
The legislature has also enacted an entirely new provision relating to the admissibility of "benevolent gestures expressing sympathy."41 Section 538.229 provides that "portions of statements, writings, or benevolent gestures expressing sympathy or . . . benevolence relating to the pain, suffering or death of a person and made to that person or" his family, are inadmissible.42 The statute cautions, however, that the admission into evidence of a statement of fault is not prohibited by the statute. "Benevolent gestures" are defined as those "actions which convey a sense of compassion or commiseration emanating from humane impulses."43
This new statute is in accord with existing law. In Dister v. Ludwig,44 for instance, the Supreme Court held that evidence of the defendant's statements and actions towards the plaintiff were inadmissible because they were based "upon an impulse of benevolence or sympathy" and therefore could not be considered as an admission of culpability or causation.45 The Court further stated that such evidence should only be admitted when it is "accompanied by circumstances tending to show an admission of liability."46
In order to be admissible as an admission, a statement of fault must be:
1) a conscious or voluntary acknowledgment by a party-opponent of the existence of certain facts; 2) the matter acknowledged must be relevant to the cause of the party offering the admission; and, 3) the matter acknowledged must be unfavorable to, or inconsistent with, the position now taken by the party-opponent.47
VIII. Joint and Several Liability
For many years Missouri applied the traditional concept of joint and several liability in tort actions, which provides that an apportionment of relative fault between defendants has no effect on a plaintiff's right to collect the full amount from any one of the defendants, that each defendant is liable for the entire judgment amount, and that if one defendant is required to pay more than its proportionate share, it may seek contribution from the other defendants up to the amount representing their respective percentages of fault.48 In 1986, however, the Legislature enacted § 538.230 to limit joint and several liability in medical malpractice cases by requiring that the jury be allowed to allocate fault to parties who had been released from liability pursuant to settlement or otherwise.49 The statute further provided that "any defendant against whom an award of damages [had been] made [was] jointly liable only with those defendants whose apportioned percentage of fault [was] equal to or less than such defendant."50 This modification of joint and several liability in medical malpractice cases essentially limited the potential financial exposure of a defendant to the amount of that defendant's own responsibility for the plaintiff's injury.51
The new tort reform act repeals § 538.230, and § 537.067 has been rewritten to implement an entirely new analysis of joint and several liability in Missouri. Under the amended § 537.067, in all tort actions (including medical malpractice actions), "if a defendant is found fifty-one percent or more [at] fault, then such defendant [will] be jointly and severally liable for . . . the judgment. . . . If a defendant is found to [be] less than fifty-one percent at fault, then the defendant [will] only be responsible for the percentage of the judgment for which that defendant is" found responsible, unless (1) the other defendant is an employee or (2) the party's liability arises out of the Federal Employer's Liability Act.52
In addition, the legislature has added a new statutory provision relating to joint and several liability in cases in which punitive damages are awarded. Pursuant to the revised § 537.067, a defendant is "only severally liable for the percentage of punitive damages for which fault is attributed to" it.53 Under prior case law, "defendants had the right to have their conduct considered separately" by the trier of fact "for the purpose of determining whether or not punitive damages should be awarded;"54 although joint and several liability for actual damages was permissible, separate punitive damages claims against each defendant could be submitted to permit the jury to consider the different degrees of culpability of the defendants.55
IX. Damages
In Missouri, there are three types of damages that may be awarded to a plaintiff in a medical malpractice case - economic damages, non-economic damages and punitive damages. Economic damages have been defined as those damages that arise from a pecuniary loss suffered by the plaintiff, and include past and future medical damages and damages "from lost wages and lost earning capacity."56 Non-economic damages have been defined as those damages that arise "from nonpecuniary harm, including . . . pain, suffering, mental anguish, inconvenience, physical impairment, disfigurement, loss of capacity to enjoy life, and loss of consortium."57 Punitive damages are "intended to punish or deter [the defendant from engaging in] willful, wanton or malicious misconduct."58
The tort reform act imposes changes on each of these elements of damage categories in medical malpractice cases, and will result in a substantial decrease in the amount of compensation to which a plaintiff injured by medical negligence will be entitled under Missouri law.
A. Economic Damages
1. The Collateral Source Rule
In Missouri, the collateral source rule provides that "a wrongdoer is not entitled to have the damages to which he is liable reduced by proving that plaintiff has received or will receive compensation or indemnity for the loss from a collateral source, wholly independent of him, or, stated more succinctly, the wrongdoer may not be benefited by collateral payments made to the person he has wronged."59 Missouri courts have stated that "the collateral source rule is not a single rule but rather, a combination of rationales applied to a number of different circumstances to determine whether evidence of mitigation of damages should be precluded from admission."60
In 1987, the Missouri legislature modified the collateral source rule set forth in § 490.715. The modification provided that "[i]f prior to trial a defendant or his insurer or [his] authorized representative" had paid "any part of a plaintiff's special damages, the defendant [could] introduce evidence that some other person than the plaintiff has paid those amounts," but "not identify [the] person having made such payments."61
The new tort reform legislation further modifies the collateral source rule in Missouri. Section 490.715 provides that "parties may introduce evidence of the value of medical treatment rendered . . . that was reasonable, necessary, and a proximate result of the negligence of any party."62 Under the new law, "[i]n determining the value of the medical treatment rendered, there [is now] a rebuttable presumption that the . . . amount" paid "to satisfy the financial obligation to the health care provider represents the value of the medical treatment rendered. Upon motion of [a] party, the court may determine . . . the value of . . . treatment rendered based upon additional evidence, including . . . medical bills incurred . . . [t]he amount actually paid," and the amount of "bills not paid which [the] party is obligated to pay . . . in the event of a recovery."63
2. Pecuniary Damages Sustained in Wrongful Death Cases
Missouri's Wrongful Death Statute has been amended to include new provisions relating to the calculation of economic damages sustained as a result of the decedent's death. Prior to the adoption of tort reform, § 537.090 set forth the factors to be considered by a jury in awarding economic damages in a wrongful death action, and provided that a plaintiff may be awarded:
such damages as the trier of the facts may deem fair and just for the death and loss thus occasioned, having regard to the pecuniary losses suffered by reason of the death, funeral expenses, and the reasonable value of the services, consortium, companionship, comfort, instruction, guidance, counsel, training, and support of which those on whose behalf suit may be brought have been deprived by reason of such death and without limiting such damages to those which would be sustained prior to attaining the age of majority by the deceased or by the person suffering any such loss. In addition, the trier of the facts may award such damages as the deceased may have suffered between the time of injury and the time of death and for the recovery of which the deceased might have maintained an action had death not ensued. The mitigating or aggravating circumstances attending the death may be considered by the trier of the facts, but damages for grief and bereavement by reason of the death shall not be recoverable.64
That statute has now been amended to include a formula to determine the value of the care that was provided by the decedent. Under the amended statute, if the decedent "was not employed full time [at the time of his death] and was at least fifty percent responsible for the care of . . . minors, . . . there [is a] rebuttable presumption that the value of the care provided, regardless of the number of persons cared for, is . . . one hundred and ten percent of the state average weekly wage."
65
A second new provision relates to minor decedents. Under the amended statute, if the decedent was a minor, there is a rebuttable presumption that the annual pecuniary losses will be calculated based on the annual income of the decedent's parents. If there was only one income-earning parent, then the losses are to be calculated based on the income of that parent; if there were two income-earning parents, then the losses are to be calculated based on the average of those two incomes.
3. Future Damages
Section 538.220.2 formerly provided that in any medical malpractice action, if future damages were awarded in an amount greater than $100,000, at the request of a defendant the award could be paid over time pursuant to a periodic payment schedule.
This section has been amended and now provides further guidelines for trial courts to determine future payments. The law now requires "[t]he duration of the future medical payment[s] schedule" to be for the life expectancy of the plaintiff, with the life expectancy determined "based solely on the evidence of . . . life expectancy presented by the plaintiff at trial."66 Further, the amount of each payment will "be determined by dividing the total amount of future medical damages by the number of future . . . payments."67 Additionally, the judgment shall set forth the applicable interest rate to such future payments, which is capped under the statute.68
B. Caps on Non-Economic Damages
In 1986, the Missouri legislature established caps on non-economic damages in medical negligence cases. As enacted in 1986, § 538.210 provided that "no plaintiff shall recover more than three hundred fifty thousand dollars per occurrence for noneconomic damages from any one defendant."69 The statute further provided for an annual inflation adjustment to the amount of the cap. Presently, in those cases that were filed prior to August 28, 2005, the cap on non-economic damages is set at $579,000.
Under the new tort reform act, the legislature has amended § 538.210 to read as follows: "In any action against a health care provider for damages for personal injury or death arising out of the rendering or failure to render health care services, no plaintiff shall recover more than three hundred fifty thousand dollars for noneconomic damages irrespective of the number of defendants."70
In addition to deleting the "per defendant" and "per occurrence" language, the provision for a yearly inflation adjustment has been repealed and the amount of the non-economic damages cap will remain at $350,000 indefinitely. The amendments to § 538.210, taken together, severely limit the non-economic damages available to a plaintiff in a medical malpractice case.
Under prior law, a plaintiff could be awarded one cap for each defendant who was found liable.71 Under the amended statute, it is no longer of any consequence how many defendants are responsible for a plaintiff's injuries. If there is one culpable defendant or five, the result will be the same: only one cap is available to the plaintiff.
The new legislation not only deletes the "per defendant" language, it adds three entirely new provisions to the statute relating to defendants. The cap on non-economic damages applies to "any individual or entity, or their employees or agents that provide, refer, coordinate, consult upon, or arrange for the delivery of health care services. . . ."72 The concept of "defendant," for purposes of caps, has been expanded to include an individual or entity "[w]ho is a defendant in a lawsuit brought against a health care provider under [the medical malpractice] chapter, or who is a defendant in any lawsuit that arises out of the rendering of or the failure to render health care services."73 This seems to indicate that only one cap is available to a plaintiff even if there are multiple lawsuits that arise out of the malpractice. Lastly, the amended statute provides that no entity whose liability is limited under Chapter 538 "shall be liable to any plaintiff based on the actions or omissions of any other entity or person who is not an employee of such individual or entity whose liability is limited" under Chapter 538.74 This provision represents a dramatic change in medical malpractice litigation. Under the prior law, a plaintiff could bring suit against an entity based on the negligence of that entity's agents or employees.75 Under the new law, a plaintiff is not allowed to bring suit against an entity based on the acts or omissions of that entity's agents unless the agent is also an employee of the entity. In other words, traditional notions of respondeat superior, which are based on principles of agency rather than employment, no longer apply in medical negligence cases.
Furthermore, under the amended statute, it no longer matters how many times the defendant was negligent in rendering health care services to the plaintiff. Whether a defendant is negligent one time or three, the result will be the same: only one cap is available to the plaintiff. This is a marked difference from the prior law, which had provided that a plaintiff could be awarded one cap for each separate and distinct occurrence of medical malpractice that contributed to cause the plaintiff's injuries.76
The statute has further been amended to provide that, in wrongful death cases based on medical negligence, all individuals asserting a wrongful death claim shall be considered one plaintiff. This language seems to comport with the Western District's interpretation of how the previous statute should be interpreted in wrongful death cases as set forth in Cook v. Newman.77
The statute has also been amended to clarify who is considered a "plaintiff" under the statute: "any spouse claiming damages for loss of consortium of their spouse shall be considered to be the same plaintiff as their spouse."78 This, too, represents a change in the law. Under prior law, a spouse who asserted a loss of consortium claim in a medical malpractice case was considered a separate plaintiff from his or her injured spouse, and thus was entitled to a separate cap for non-economic damages.79
C. Punitive Damages in Medical Negligence Cases
1. Procedural Changes
a. Bifurcated Trial
Section 510.263 previously provided that all cases "tried before a jury involving punitive damages shall be conducted in a bifurcated trial" if so requested by any party.80 This statute has been amended to specifically include all medical malpractice actions involving a claim for punitive damages.81
b. Discovery of a Defendant's Financial Status
Under prior law, it was well settled that evidence of a defendant's financial status or net worth was discoverable when a plaintiff made a claim for punitive damages.82 Missouri courts consistently held that a plaintiff who was seeking punitive damages was entitled to conduct discovery of the defendant's financial status, and that such discovery could not be precluded by a trial court until after the plaintiff had made a submissible case for punitive damages at trial.83 In Newman v. O'Malley, the Western District reasoned that to preclude such discovery until a submissible case had been made would deprive the party of a meaningful attempt to review that information and investigate its veracity.84
However, § 510.263 has now been amended to permit "[d]iscovery [of] a defendant's assets . . . only after a finding by the trial court that it is more likely than not that the plaintiff will be able to present a submissible case to the trier of fact on the plaintiff's claim of punitive damages."85 Thus, plaintiffs now need to demonstrate to the court that they have a submissible case for punitive damages prior to propounding discovery relating to a defendant's assets. This will require the plaintiff's attorney to first conduct discovery to demonstrate the willful and wanton conduct of the defendant. Only upon a showing that it is more likely than not that a submissible case for punitive damages exists will the plaintiff be permitted to conduct further discovery relating to the defendant's assets and wealth.
2. Substantive Changes
a. Limits on the Amount of the Award
Under prior law, punitive damages in medical malpractice cases could be awarded "only upon a showing by a plaintiff that the health care provider demonstrated willful, wanton or malicious misconduct with respect to his actions which are found to have injured or caused or contributed to cause the damages claimed in the petition."86 There were, however, no limits on the amount of a punitive damages award in medical malpractice cases in Missouri; a punitive damages award needed only to meet the constitutional requirements of due process.87 The U.S. Supreme Court has held in BMW of North America, Inc. v. Gore that grossly excessive punitive damages awards violate a defendant's 14th Amendment due process rights, and has set forth the following guideposts for determining the constitutionality of a punitive damages award: (1) "the degree of reprehensibility of the defendant's misconduct;" (2) "the disparity between the [actual] or potential harm suffered by [the plaintiff and the] punitive damages award;" and (3) "the difference between [the punitive damages awarded by the jury] and the civil penalties authorized or imposed in comparable cases."88
Under the new tort reform act, punitive damage awards in medical malpractice cases are now subject to a statutory cap. Section 510.265 limits "punitive damages [awards] against any defendant" to "the greater of: (1) [f]ive hundred thousand dollars; or (2) five times the net amount of judgment awarded to the plaintiff against the defendant."89 However, unlike the cap on non-economic damages, it appears that the cap on punitive damages is a "per defendant" cap; that is, each defendant who is found to have engaged in conduct warranting an award of punitive damages will be subject to a separate cap.
There are, however, two exceptions to the cap on punitive damages under the new law. In cases in which the state is the plaintiff, an award of punitive damages is not subject to the cap. Additionally, the cap is also not applicable in cases in which the defendant pleads guilty to or is convicted of a felony arising out of the acts or omissions pled by the plaintiff. In these instances, although punitive damages awards are not capped pursuant to Missouri statutory law, such awards will still have to pass constitutional muster under the test set forth by the Supreme Court in Gore.
It is important to note that even those punitive damages awards that will be capped under the new law could conceivably still be subject to constitutional due process challenges. Under the new law, punitive damages awards in medical malpractice cases are limited to an amount that is no more than five times the compensatory damages award. Although the Supreme Court has indicated that such single digit ratios most likely comport with due process requirements, such ratios may indeed cross the line into excessiveness in some instances. In State Farm v. Campbell, the Court made the following comments with respect to such 'bright-line ratios':
We decline again to impose a bright-line ratio which a punitive damages award cannot exceed.in practice, [few awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process.] . . . While these ratios are not binding, they are instructive. They demonstrate what should be obvious: Single-digit multipliers are more likely to comport with due process. . . . [Nonetheless, because there are no rigid benchmarks that a punitive damages award may not surpass, ratios greater than those we have previously upheld may comport with due process. . . . The converse is also true, however. When compensatory damages are substantial, then a lesser ratio, perhaps only equal to compensatory damages, can reach the outermost limit of the due process guarantee.]90
b. Damages for Aggravating Circumstances in Wrongful Death Cases Arising out of Medical Negligence
Section 538.210 governs the award of punitive damages in medical malpractice actions, and it provides that "an award of punitive damages against a health care provider . . . shall be made only upon a showing . . . that the health care provider demonstrated willful, wanton or malicious misconduct with respect to his actions which are found to have injured or caused or contributed to cause the damages claimed in the petition."91 Damages awarded in wrongful death cases, however, are controlled by § 537.090, which provides in part that "[t]he mitigating or aggravating circumstances attending the death may be considered by the trier of the facts."92 Unlike the standard for punitive damages in medical negligence cases, the standard for an award of additional damages for aggravating circumstances in wrongful death cases was previously not set forth in Missouri statutes. This discrepancy led to some confusion as to the exact nature of damages for aggravating circumstances and when such damages might properly be awarded. Over time, however, Missouri courts resolved these issues and adopted certain guidelines that determine when an award of damages for aggravating circumstances in a wrongful death case was appropriate, and ultimately determined that an award of damages would be "permissible only if the decedent had been entitled to punitive damages had he lived."93 Further, such damages required "proof of 'willful misconduct, wantonness, recklessness, or want of care indicative of indifference to consequences,'" the same standard imposed on punitive damages in negligence cases.94
In the new tort reform legislation, the Missouri legislature has amended both § 510.263 and § 538.205 in an effort to codify the standards set forth by Missouri courts. Revised § 510.263 now provides: "'[P]unitive damage award' means an award for punitive or exemplary damages or an award for aggravating circumstances."95 Section 538.205.10 has also been amended to include damages for aggravating circumstances in the definition of punitive damages, as that term is used in Chapter 538, governing medical malpractice cases. The intent of the legislature is clear: aggravating circumstances damages are synonymous with punitive damages.
It therefore appears that an award of damages for aggravating circumstances is subject to the cap on punitive damages awards. Thus, in a wrongful death action based on medical negligence, a damages award for aggravating circumstances against any defendant will be limited to the greater of $500,000 or five times the amount of judgment awarded to the plaintiff against the defendant.
X. Pre- and Post-Judgment Interest
Missouri law previously allowed pre-judgment interest in tort actions generally, but medical malpractice actions were specifically exempted from the allowance of pre-judgment interest.96 Under the tort reform act, this prohibition remains. With respect to post-judgment interest, Missouri law previously provided that interest on judgments was to be allowed from the day judgment was rendered until the day the judgment was satisfied.97 In medical malpractice actions, the amount of allowable interest was fixed at nine percent per annum.98 The legislature has amended § 408.040, governing post-judgment interest, in several respects. In all tort actions, post-judgment interest will be calculated from the date judgment is entered until the date of satisfaction. The applicable interest rate has also changed under the revised statute. The interest rate on judgments will now be equal to the Federal Funds Rate established by the Federal Reserve Board plus 5%. The interest rate shall be stated in the judgment, and the rate can not vary once entered.
XI. Appeal Bonds
Under prior law, when a defendant appealed a judgment in favor of the plaintiff, it was required to post a supersedeas bond in an amount sufficient to satisfy in full the amount of the judgment, "together with costs, interest, and damages for delay" in the event the appeal was dismissed or the judgment affirmed.99 The legislature has now enacted a new statute relating to appeal bonds in tort actions. Section 512.099 limits the amount of the required supersedeas bond to no more than 50 million dollars in any tort action. In the rare case in which that provision will come into play, the party appealing the judgment will be required to provide the court and the respondent with a statement of assets and liabilities and a quarterly update of its statement of assets and liabilities. That party must also agree in writing "that it will not dissipate or divert assets [out of] the ordinary course of . . . business for the purpose of avoiding ultimate payment of the judgment."100 The statute further allows a party to petition the court for any order necessary to prevent the dissipation or diversion of assets by any defendant whose bond is reduced, including rescinding the limitation on the amount of the bond, if that party can demonstrate by a preponderance of evidence that the party appealing the judgment "is purposefully dissipating or diverting assets . . . for the purpose of avoiding ultimate payment of the judgment."101 The provisions of § 512.099 apply to all judgments entered on or after August 28, 2005.
Footnotes
1 Paul J. Passanante is a principal with Simon Passanante, P.C. He received his J.D. from Saint Louis University School of Law in 1976, and is licensed to practice in Missouri, Arkansas, Florida and the District of Columbia. Dawn M. Mefford is an associate at the law firm of Simon Passanante, P.C. She received her J.D. from Saint Louis University School of Law in 2003, and is licensed to practice in Missouri and Illinois.
2 See, e.g., Guffey v. Integrated Health Services, 1 S.W.3d 509 (Mo. App. W.D. 1999); Brickey v. Concerned Care of the Midwest, 988 S.W.2d 592 (Mo. App. E.D. 1999).
3 H.B. 393, 93rd Gen. Assem., 1st Reg. Sess. (Mo. 2005).
4 See, e.g. State ex rel. Eli Lilly & Co. v. Gaertner, 619 S.W.2d 761 (Mo. App. E.D. 1981) (holding that treating physicians employed at a government-owned mental health facility did not enjoy immunity from civil liability arising out of treatment they rendered to a patient); cf., State ex rel. Howenstine v. Roper, 155 S.W.3d 747, 751-52 (Mo. banc 2005) (holding that the medical director of a public health clinic, however, enjoyed immunity from suit under both the official immunity and public duty immunity doctrines).
5 H.B. 393, 93rd Gen. Assem., 1st Reg. Sess. (Mo. 2005).
6 Id.
7 Id.
8 Following the Supreme Court's decision in Weiss v. Rojanasathit, 975 S.W.2d 113 (Mo. banc 1998), § 516.105 was modified in 1999 with the inclusion of subsection (2) of the statute to extend the statutory period from within two years from the date of the act of neglect to within two years from the date of discovery of the neglect in cases in which the defendant is negligent in failing to inform a patient of medical tests results. Montgomery v. South County Radiologists, Inc., E.D. 84410, 2000 WL 1846432, 6 n. 8 (Mo. App. E.D. 2005). No appellate court has rendered a decision concerning the scope of this exception since its enactment.
9 In 1996, the Legislature amended § 355.176, deleting subsection (4) which provided that in suits against non-profit corporations, venue shall be in either "(1) The county in which the nonprofit corporation maintains its principal place of business; (2) The county where the cause of action accrued; or (3) The county in which the office of the registered agent for the nonprofit corporation is maintained." Section 355.176.4, RSMo 1994. In St. Louis Health Care Network v. State, 968 S.W. 2d 145 (Mo. banc 1998), the Supreme Court held that the amendment was unconstitutional, and thus § 355.176(4) still controlled venue determinations in cases against non-profit corporations.
10 H.B. 393, 93rd Gen. Assem., 1st Reg. Sess. (Mo. 2005).
11 Id. "Principal place of residence" is defined as "the county which is the main place where an individual resides in the State of Missouri. [Furthermore,] there [will] be a rebuttable presumption that the county of voter registration at the time of injury is the principal place of residence. There shall be only one principal place of residence." Id.
12 H.B. 393, 93rd Gen. Assem., 1st Reg. Sess. (Mo. 2005).
13 See, State ex rel. DePaul Health Center v. Mummert, 870 S.W.2d 820 (Mo. banc 1994) (holding that venue is determined at the time the action is brought); State ex rel. Linthicum v Calvin, 57 S.W.3d 855 (Mo. banc 2001).
14 H.B. 393, 93rd Gen. Assem., 1st Reg. Sess. (Mo. 2005).
15 Bottger v. Cheek, 815 S.W.2d 76, 79 (Mo. App. E.D. 1991).
16 H.B. 393, 93rd Gen. Assem., 1st Reg. Sess. (Mo. 2005).
17 Id.
18 Id.
19 Id.
20 Id. If a party is later added to the case following transfer and does not consent to the transfer, then the case "shall be transferred to [the] county in which venue is appropriate." Id.
21 Morrison v. St. Luke's Health Corp., 929 S.W.2d 898, 905 (Mo. App. E.D. 1996).
22 Id.
23 H.B. 393, 93rd Gen. Assem., 1st Reg. Sess. (Mo. 2005).
24 See Fields v. Curators of University of Mo., 848 S.W.2d 589,590 (Mo. App. W.D. 1993).
25 Compare, e.g., Cebula v. Benoit, 652 S.W.2d 304, 308 (Mo. App. W.D. 1983) (indicating that in some instances even a non-physician may have been so qualified to render an opinion under the previous definition).
26 H.B. 393, 93rd Gen. Assem., 1st Reg. Sess. (Mo. 2005).
27 Id.
28 State ex rel. Cox Medical Centers v. Darnold, 944 S.W.2d 213, 215 (Mo. banc 1997).
29 Section 537.035.4, RSMo 2000.
30 H.B. 393, 93rd Gen. Assem., 1st Reg. Sess. (Mo. 2005).
31 Section 537.035, RSMo 2000.
32 Id.
33 H.B. 393, 93rd Gen. Assem., 1st Reg. Sess. (Mo. 2005).
34 Id.
35 90 S.W.3d 209 (Mo. App. S.D. 2002).
36 Id. at 214.
37 Id. at 215.
38 Id.
39 Id.
40 Id. at 216.
41 H.B. 393, 93rd Gen. Assem., 1st Reg. Sess. (Mo. 2005).
42 Id.
43 Id.
44 240 S.W.2d 694, 701 (Mo. banc 1951).
45 Id.
46 Id.
47 Around the World Importing, Inc. v. Mercantile Trust Co., 795 S.W.2d 85, 89 (Mo. App. E.D. 1990).
48 Section 538.230, RSMo 2000. See, Elfrink v. Burlington Northern R.R. Co., 845 S.W.2d 607 (Mo. App. E.D. 1992); § 537.067, RSMo 2000 (providing an exception to the traditional concept of joint and several liability in cases in which the plaintiff is assessed a percentage of fault; the exception provided that the percentage deemed "uncollectible" could be reallocated as provided for under the statute).
49 Section 538.230.2, RSMo 2000. Adams v. Children's Mercy Hospital, 832 S.W.2d 898, 904 (Mo. banc 1992).
50 Section 538.230.2, RSMo 2000.
51 Id.
52 H.B. 393, 93rd Gen. Assem., 1st Reg. Sess. (Mo. 2005).
53 Id. Note that pursuant to Menaugh v. Resler Optometry, Inc., 799 S.W.2d 71 (Mo. banc 1990), punitive damages assessed against a defendant are not to be reduced by any percentage of fault assessed to the plaintiff in a comparative fault case.
54 Annbar Assocs. v. American Express Co., 565 S.W.2d 701, 710 (Mo. App. W.D. 1978).
55 State ex rel Hall v. Cook, 400 S.W.2d 39, 41-42 (Mo. banc 1966).
56 Section 538.205.1, RSMo 2000.
57 Section 538.205.7,RSMo 2000.
58 Section 538.205.10, RSMo 2000.
59 Washington v. Barnes Hospital, 897 S.W.2d 611, 619 (Mo. banc 1995).
60 Id.
61 Section 490.715, RSMo 2000.
62 H.B. 393, 93rd Gen. Assem., 1st Reg. Sess. (Mo. 2005). See, e.g. Wise v. Towse, 366 S.W.2d 506 (Mo. App. W.D. 1963).
63 H.B. 393, 93rd Gen. Assem., 1st Reg. Sess. (Mo. 2005).
64 Section 537.090, RSMo 2000.
65 H.B. 393, 93rd Gen. Assem., 1st Reg. Sess. (Mo. 2005).
66 Id.
67 Id.
68 Id. Section 538.220 will cap interest rates at an amount "no greater than the coupon issue yield equivalent, as determined by the Federal Reserve Board, of the average accepted auction price for the last auction of fifty-two week United States Treasury bills settled immediately prior to the date of the judgment." Id.
69 Section 538.210.1, RSMo 2000. The statute further defined the term "defendant," but this language has been omitted under the new tort reform act.
70 H.B. 393, 93rd Gen. Assem., 1st Reg. Sess. (Mo. 2005).
71 Section 538.210, RSMo 2000; Adams, 832 S.W.2d 898; Vincent by Vincent v. Johnson, 833 S.W.2d 859 (Mo. banc. 1992).
72 H.B. 393, 93rd Gen. Assem., 1st Reg. Sess. (Mo. 2005).
73 Id. Emphasis added.
74 Id.
75 See, e.g., Bost v. Clark, 116 S.W.3d 667 (Mo. App. W.D. 2003).
76 See, Scott v. SSM Healthcare St. Louis, 70 S.W.3d 560 (Mo. App. E.D. 2002); Cook v. Newman, 142 S.W.3d 880 (Mo. App. W.D. 2004).
77 See, Cook, 142 S.W.3d 880 (holding that all of the named plaintiffs in a wrongful death action constitute one plaintiff for the purposes of determining the number of applicable caps under the statute).
78 H.B. 393, 93rd Gen. Assem., 1st Reg. Sess. (Mo. 2005).
79 LaRose v. Washington University, 154 S.W.3d 365 (Mo. App. E.D. 2005) (holding that a spouse making a claim for loss of consortium is not subject to the same cap as the injured spouse); Wright v. Barr, 62 S.W.3d 509 (Mo. App. W.D. 2001).
80 Section 510.263.1, RSMo 2000.
81 This new revision has no practical effect on medical malpractice cases, as medical malpractice cases involving punitive damages claims have been subject to a bifurcated trial upon request. See, e.g., Schroeder v. Lester E. Cox Medical Ctr., Inc., 833 S.W.2d 411(Mo. App. S.D. 1992).
82 State ex rel. Newman v. O'Malley, 54 S.W.3d 695, 697 (Mo. App. W.D. 2001).
83 Id. at 698 (holding that the trial court abused its discretion in denying a party's access to the opposing party's financial records until a submissible case on the punitive damages claim was made).
84 Id.; see also, State ex rel. Kubatsky v. Holt, 483 S.W.2d 799 (Mo. App. E.D. 1972).
85 H.B. 393, 93rd Gen. Assem., 1st Reg. Sess. (Mo. 2005).
86 Section 538.210.5, RSMo 2000.
87 See, Cooper Industries, Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424 (2001) (holding due process prohibits the imposition of "grossly excessive" or arbitrary punishments on a tortfeasor).
88 BMW of North America v. Gore, 517 U.S. 559, 575 (1996).
89 H.B. 393, 93rd Gen. Assem., 1st Reg. Sess. (Mo. 2005) (emphasis added).
90 State Farm Mut. Auto. Ins. v. Campbell, 538 U.S. 408, 425 (2003).
91 H.B. 393, 93rd Gen. Assem., 1st Reg. Sess. (Mo. 2005).
92 Id.
93 See, e.g., Schroeder, 833 S.W.2d 411, 420.
94 Id.
95 H.B. 393, 93rd Gen. Assem., 1st Reg. Sess. (Mo. 2005). (Emphasis added.)
96 Section 538.300, RSMo 2000; Vincent, 833 S.W.2d at 866.
97 Section 408.040, RSMo 2000.
98 Id.
99 Section 512.080, RSMo 2000.
100 H.B. 393, 93rd Gen. Assem., 1st Reg. Sess. (Mo. 2005).
101 Id.
JOURNAL OF THE MISSOURI BAR
Volume 61 - No. 5 - September-October 2005