How Texas medical malpractice plaintiffs are paid for future medical expenses after winning at trialTexas Supreme Court provides further guidance on how tort reform periodic payment law applies
The Texas Supreme Court recently released a long-awaited opinion that addresses practical issues for the periodic payment statute that applies to any jury award of future medical expenses. The case is styled Virlar v. Puente; No. 20-092, and you can read the opinion here.
The big picture on future medical expenses
In catastrophic medical malpractice cases, the largest element of damages is typically future medical expenses. When a patient develops a brain injury because of health care negligence, for example, he or she can require around-the-clock care that can cost millions of dollars over the patient’s life expectancy.
The normal evidence for future medical expenses comes in the form of a life care plan. A life care plan will typically include an opinion on the patient’s life expectancy, as well as likely expenditures over each year of that life expectancy.
Under the Texas tort reform statute, a trial judge must structure a jury award for future medical expenses to be paid out over time when a defendant requests it and there’s evidence to support it, such as a life care plan. The trial court can consider additional evidence after the jury verdict, including expenses that are needed up front, such as attorney’s fees, case expenses, housing, and certain medical expenses.
If a case is resolved through settlement, instead of a jury trial, then the entire settlement can be paid in a lump sum or invested in a structured settlement, such as an annuity. In contrast, when a case is resolved by a jury verdict, any periodic payments due for future medical expenses terminate upon the patient’s death. If those future payments were to be funded by an annuity, then the remainder reverts back to the defendant, rather than the patient’s family.
How the Puente case started
The case arose from the care provided to a patient named Jo Ann Puente. Jo Ann had a Roux-en-Y gastric bypass surgery. As sometimes happens with bariatric weight loss surgeries, Jo Ann developed post-operative complications and was having difficulty keeping food down.
She was admitted to the intensive care unit at Metropolitan Methodist Hospital, where nurses noted that she had difficulty walking, dizziness, vomiting, and fixed gaze. These are symptoms of a thiamine dietary deficiency and a related brain condition known as Wernicke’s disease.
Without timely intervention for supplemental thiamine, the disease can progress into a devastating disorder called Korsakoff’s syndrome. That’s what the evidence showed happened to Jo Ann.
A medical malpractice lawsuit followed. At trial, the jury awarded over $14 million to the plaintiffs, including over $13 million for future medical expenses. That’s where we pick up the tort reform issue of periodic payments.
Periodic payments of future medical expenses
The 2003 Texas tort reform legislation allows a medical malpractice defendant to request that the court-ordered jury award of future medical expenses be paid through periodic payments rather than a lump-sum. The statute is codified at Texas Civil Practice & Remedies Code Section 74.503 et seq.
In a series of recent opinions, the Texas Supreme Court has noted that the statute requires trial courts to order periodic payments “in whole or in part” and that such orders must be based on evidence.
In the Puente decision, Justice Brett Busby provided additional guidance on how the periodic payments statute should be applied.
Defendants can request period payments after the verdict
The plaintiffs contended that the defendant’s request for periodic payments was not timely because it was not pled. The Texas Supreme Court rejected this position, holding that “a defendant may request periodic payments post-trial” and that the petitioner’s motion, in this case, was timely.
The court reiterated its recent decision that recognized the trial court’s discretion to receive additional evidence after a jury verdict related to when money will be needed for medical care over the course of the plaintiff’s life expectancy.
Proof of financial responsibility
The statute requires a defendant moving for periodic payments to produce evidence of financial responsibility. In other words, to benefit from periodic payments, the defendant must show the financial ability to pay those periodic payments over time.
In this opinion, the court addressed how proof of financial responsibility works when one defendant is vicariously liable for another defendant. Vicarious liability is a legal theory that makes a hospital, for example, legally responsible for the negligence of its employees.
In the Puente case, one institutional defendant was vicariously responsible for a physician defendant. The jury found both defendants responsible for the patient’s injuries. The plaintiff took the position that both the individual physician and the institutional defendant had to separately show financial responsibility.
The Texas Supreme Court rejected this argument, holding that “a defendant whose liability submitting to the jury and a defendant who is vicariously liable for the same damages awarded against the submitted defendant constitute single defendant for the purpose of applying” the financial responsibility statute.
The court approved the evidence provided by the institutional defendant for financial responsibility. The controller of the organization provided a balance sheet showing that he could pay a $14 million judgment.
Periodic payments “in whole or in part”
In Puente, the trial court declined to order periodic payments at all. The Texas Supreme Court ruled that this was an abuse of discretion. If the record shows that the trial court could reasonably craft a payment plan, then the trial court must do so.
Death on appeal
Unfortunately, Jo Ann Puente died during the pending appeal. Thus, the Texas Supreme Court remanded the case to the trial court to determine how much of the jury award of future medical expenses should have been paid in a lump-sum, versus how much she was projected to incur periodically between the time of trial and her death.
The reason for this ruling is Section 74.506, which provides that periodic payments of future medical expenses terminate upon the death of the recipient. Thus, Jo Ann’s estate wants to receive the amount of future medical expenses that should have been paid in a lump sum plus the medical expenses that would have been incurred periodically through the date of her death. All of this would have to be based on the evidence presented to the trial court.
Lump sum payments
The take-home message of the Puente opinion, and the other recent cases in which the Texas Supreme Court addressed medical malpractice periodic payments of future medical expenses, is the plaintiffs must be prepared to present detailed evidence of what expenses are needed and must be paid immediately as a lump-sum. Housing needs, life care plans, and other evidence can be helpful.
The court agreed that it would be appropriate for the trial court to award in a lump-sum the cost of attorneys fees and other expenditures to be incurred soon after trial.
If you’ve been seriously injured because of poor medical or hospital care in Texas, contact a top-rated, experienced Texas medical malpractice attorney for a free consultation about your potential case.
Robert Painter is an award-winning medical malpractice attorney at Painter Law Firm PLLC, in Houston, Texas. He is a former hospital administrator who represents patients and family members in medical negligence and wrongful death lawsuits all over Texas. Contact him by calling 281-580-8800 or emailing him right now.
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