F. Boyd Hovde
Regina M. Poore
Indianapolis, IndianaAttorney for Amicus Curiae
Indiana Trial Lawyer Association
Indianapolis, IndianaAttorney for Appellee Commissioner of Insurance of the State of Indiana
Matthew W. Conner
Attorney for Appellees
Martin E. Feferman, M.D., and
Physicians Insurance Company
Robert J. Palmer
South Bend, Indiana
James F. Bleeke
HELEN M. POEHLMAN, )
Appellant (Plaintiff below), )
MARTIN E. FEFERMAN, M.D. )
Appellee (Defendant below). )
The plaintiff in this medical malpractice case was awarded $345,263 in damages plus
post-judgment interest and court costs. The parties disagree over whether the malpractice
act's liability limits apply to damages only or also to the interest and costs and over how to
allocate those expenses between the doctor and patient's compensation fund. We hold that
the interest and costs are recoverable from the doctor and the fund irrespective of the
malpractice act's limits.
On April 4, 1996, Plaintiff Helen M. Poehlman received a judgment from the St. Joseph Superior Court in the amount of $345,263 plus court costs against Defendant, Martin E. Feferman, M.D., for medical malpractice. Dr. Feferman is a health care provider qualified under the Indiana Medical Malpractice Act, Ind. Code § 27-12-1-1 et seq. (Act) and was covered by a policy of professional liability insurance with Physicians Insurance Company of Indiana (PICI). On August 30, 1996, PICI paid $103,733.09 to the St. Joseph County Clerk to satisfy the portion of the judgment that Feferman owed pursuant to the Act. This sum represented the $100,000 that Feferman owed as a qualified health care provider
under the Act's recovery limitation section,See footnote
Ind. Code § 27-12-14-3(b), together with
$3,331.84 in post-judgment interest and $401.25 in court costs.
On September 5, 1996, Poehlman filed a petition for payment of damages from the
Patient's Compensation Fund (Fund) and a declaration as to the interest liability of
Feferman, PICI, and the Fund. On September 11, 1998, Feferman demanded that Poehlman
release the judgment against him on the basis of his payment to the clerk. When Poehlman
did not respond to this demand, Feferman filed a petition to release the judgment.
Poehlman filed suit against Feferman, PICI, and the Insurance Commissioner who manages the Fund on October 15, 1996. Poehlman sought a declaratory judgment stating
that interest was due pursuant to Indiana's Post-Judgment Interest Statute, Ind. Code §
24-4.6-1-101. The trial court eventually consolidated Poehlman's declaratory action with
Feferman's petition to release the judgment. On December 4, 1996, by a stipulation of the
parties, the St. Joseph County Clerk released $100,000 of the money paid by PICI, on behalf
of Feferman, to Poehlman. The stipulation did not resolve, however, the amount of
post-judgment interest, if any, that Feferman owed on the judgment. On or about January
15, 1997, the Insurance Commissioner paid $245,263 to Poehlman, which represented the
unpaid balance of Poehlman's judgment against Feferman, exclusive of any post-judgment
interest or court costs.
The parties submitted written briefs to the trial court on the issue of post-judgment
interest. On May 21, 1997, the court ruled that: (1) Poehlman was not entitled to
post-judgment interest from any of the three defendants; (2) Poehlman was entitled to
$401.25 in court costs from Feferman; and the Insurance Commissioner was not required to
pay any additional amount. The trial court deferred ruling on Feferman's petition to release
the judgment, believing that its ruling on the other matters had resolved the issue.
Poehlman appealed the trial court's declaration as to the various interest obligations. Feferman and PICI cross-appealed the assessment of the $401.25 in court costs and the trial court's failure to rule on Feferman's petition. The Court of Appeals affirmed the trial court's decision to defer ruling on Feferman's petition, but reversed the trial court on the
payment of interests and costs, concluding that the Insurance Commissioner (i.e., the Fund)
was responsible for the payment of post-judgment interest on the entire amount of the
judgment, as well as the payment of court costs. Poehlman v. Feferman, 693 N.E.2d 1355
(Ind. Ct. App. 1998).
The recovery limitation section of the Act sets forth specific amounts which
medical malpractice recoveries may not exceed. The Court of Appeals held that these
amount limitations were solid liability caps that limited not only damages for
malpractice but limited post-judgment interest and court costs as well. We are required to
determine the meaning of the phrase amount recoverable for an injury or death of a patient
as it appears in the Act's recovery limitation section.
In regulating medical malpractice judgments, the legislature first capped the total amount recoverable for an injury or death at $750,000. Ind. Code § 27-12-14-3(a). Next, the legislature apportioned this liability by assigning the first $100,000 amount to the qualified health care provider, id. § 27-12-14-3(b), with the remaining amount due from a judgment or settlement to be paid from the Patient's Compensation Fund, id. § 27-12-14-
The Court of Appeals reasoned that because the Recovery Limitation Section does
not qualify the term 'amount' to include only certain types of damages, costs, fees, or
interest . . . [, t]he plain language of the section sets a solid liability cap without any
qualification on (1) the liability potentially owed by qualified health care provider, and (2)
the $750,000 total limit on the Fund's liability. Poehlman, 693 N.E.2d at 1359-60.
When a statute is clear and unambiguous, we need not apply any rules of
construction other than to require that words and phrases be taken in their plain, ordinary,
and usual sense. State Bd. of Tax Comm'rs v. Jewell Grain Co., 556 N.E.2d 920, 921 (Ind.
1990). Clear and unambiguous statutory meaning leaves no room for judicial construction.
Community Hosp. of Anderson & Madison County v. McKnight, 493 N.E.2d 775, 777 (Ind.
1986) (refusing to construe the Medical Malpractice Act as requiring the appointment of a
special representative under the Wrongful Death Act because [t]he Medical Malpractice
Act is plain and unambiguous in designating who qualifies as a representative and in
designating those who are eligible to pursue derivative claims).
We disagree with the Court of Appeals's determination that these limits on amounts recoverable for an injury or death of a patient also constitute limits on collateral financial obligations associated with litigation generally such as post-judgment interest and court
costs. These collateral litigation expenses arise separately by operation of law and are
regulated under distinct statutes,See footnote
which guide parties' decisions in nearly every stage of
either pursuing or defending medical malpractice claims under the Act. To conclude that
the statute establishes solid liability caps is to create a separate set of rules for the
allocation of these expenses in litigating what remain essentially tort suits notwithstanding
the passage of the Act.
We find that the plain, ordinary, and usual meaning of the phrase amount
recoverable for an injury or death of a patient as it appears in the Act's recovery limitation
section unambiguously establishes that the legislature intended to only limit the amount of
damages, not collateral litigation expenses.See footnote
Even if we were not to conclude that the plain, ordinary and usual meaning of the phrase amount recoverable for an injury or death of a patient refers only to damages and not collateral litigation expenses, another canon of statutory construction supports this result
as we attempt to determine, effect and implement the intent of the legislature. Melrose v.
Capitol City Motor Lodge, Inc., 705 N.E.2d 985, 989 (Ind. 1998) (collecting cases).
We have long embraced the rule that if a statute is susceptible to more than one
interpretation, this Court may consider the consequences of a particular construction.
Superior Constr. Co. v. Carr, 564 N.E.2d 281, 284 (Ind. 1990); Economy Oil Corp. v.
Indiana Dep't of State Revenue, 162 Ind. App. 658, 664, 321 N.E.2d 215, 218 (1974)
(collecting cases). In applying this rule, we recognize a strong presumption that when the
legislature enacted a particular piece of legislation, it was aware of existing statutes relating
to the same subject. Glick v. Department of Commerce, 180 Ind. App. 12, 18, 387 N.E.2d
74, 78 (1979).
The Medical Malpractice Act is silent as to any direct effect on the post-judgment interest statute and other statutes regulating similar collateral litigation expenses. If the legislature had intended for the Medical Malpractice Act to trump the effect of these various statutes, it could have done so explicitly. For example, it chose to exempt only the Fund, not the health care provider, from the provisions of Indiana's Pre-Judgment Interest Statute. Ind. Code § 34-4-37-4 (1993) (This chapter does not apply to a claim against the patient's compensation fund . . . .) (current version at Ind. Code § 34-51-4-2 (1998)); cf. id. § 24- 4.6-1-101 (1993) (Regulating post-judgment interest except as otherwise provided by statute.); id. § 34-1-32-1 (1993) (Regulating the assignment of costs in civil actions
[e]xcept in those cases in which a different provision is made by law.).
Having determined that the Act limits only damage amounts, we must next decide who is responsible for paying the interest, costs and other expenses which we have been referring to as collateral litigation expenses.
When this Court was initially called upon to decide the constitutionality of various provisions of the Indiana Medical Malpractice Act, we recognized that the legislature had been undoubtedly moved . . . [by] its appraisal that the services of health care providers were being threatened and curtailed contrary to the health interests of the community. Johnson v. St. Vincent Hosp., Inc., 404 N.E.2d 585, 594 (Ind. 1980). We noted that the [l]egislature responded with [the] Act in an effort to preserve those services and thereby to protect the public health and well[-]being of the community. Id. at 590. The result was that various provisions of the Act modified the nature and extent of the common law legal duty as it previously existed between a health care provider and patient Id. at 594. One of the more substantial modifications of this traditional health care provider-patient relationship came about as a result of legislature's efforts to limit the potential medical malpractice liability. This was accomplished in two ways: First, the legislature set an outer limit on liability for damages, and second, it apportioned this liability between the health
care provider and the newly created Patient's Compensation Fund.
In apportioning this potential liability, however, the legislature created the possibility
for two distinct and independent judgment debtors in any case involving a medical
malpractice settlement or judgment greater than $100,000: (1) the health care provider (or
its insurer) and (2) the Insurance Commissioner who administers the Patient's Compensation
Fund. A victim of medical malpractice who has been injured to an extent greater than
$100,000 would henceforth be required to seek payment from two separate entities in order
to achieve full compensation.
In any particular case, the health care provider or the Insurance Commissioner may develop an entirely different litigation strategy from the other, including a different strategy as to such matters as pre-judgment settlement and post-judgment debt payment. As a result, a plaintiff with a meritorious claim may nevertheless have to wait years between payments from the qualified health care provider and the Fund as one or the other may, on the one hand, settle, or, on the other, appeal. Indeed, two of our recent cases illustrate the bifurcated nature of the process. See, e.g., Wisniewski v. Bennett, 1999 WL 756920, No. 45S05-9909- CV-00497 (Ind. Sept. 24, 1999) (holding that an agreement to settle by payment with a health care provider who has not paid into the Fund and is not an insurer as defined by the Act does not meet the requirements for access to the fund); Smith v. Pancner, 679 N.E.2d 893, 896 (Ind. 1997) (holding that the payment by the insurer of a non-qualified health care
provider who agreed to settle was insufficient to access the fund). Delays resulting from
appeals or other procedural maneuvers will generate collateral litigation expenses in
differing amounts for the health care provider or the Insurance Commissioner depending
upon which litigation strategy each pursues.
In deciding which entity is responsible for the payment of these collateral litigation
expenses, the Court of Appeals held that a qualified health care provider under the Act is
not liable for any amount in excess of $100,000. Poehlman, 693 N.E.2d at 1359 (emphasis
in original). This interpretation, as the Court of Appeals acknowledged, results in the
Insurance Commissioner paying the health care provider's collateral litigation expenses in
the event that a medical malpractice victim obtains a settlement or judgment near to, even
with, or greater than the $100,000 limit.See footnote
We believe this approach gives the health care
provider a blank check to run up collateral litigation expenses to be subsidized with the
monies of the Patient's Compensation Fund. The legislature could have never intended such
Insofar as the Act creates the potential for distinct and independent judgment debtors generating collateral litigation expenses in differing amounts dependant upon the procedural
course of action they pursue, we find that each judgment debtor is individually responsible
for its collateral litigation expenses. We find this to be the case even when these collateral
litigation expenses are added to a settlement or judgment figure and the resultant total
exceeds the Act's statutory damage limits.
Indiana Code § 24-4.6-1-101 (Post-Judgment Interest Statute) provides in relevant part that [e]xcept as otherwise provided by statute, interest on judgments for money whenever rendered shall be from the date of return of the verdict or finding of the court until satisfaction at [a specified interest rate]. Thus, it has been the intention of the law in this State for nearly 25 years that there should be an incentive on the part of judgment debtors to satisfy expeditiously their debt obligations to avoid this accrual of interest.See footnote 5 The incentive begins on the day that a money judgment is entered by the trial court as the interest immediately begins accruing. This obligation to pay post-judgment interest is part and parcel of the obligation to pay a money judgment, and those finding themselves on the wrong side of the law after trial must decide whether to limit their liability and pay up or risk incurring
further liability in the form of accruing interest if not successful on appeal.
If a qualified health care provider under the Act is not liable for any amount in
excess of $100,000, including post-judgment interest, Poehlman, 693 N.E.2d at 1359
(emphasis in original), the provider has no incentive to satisfy timely its debt obligations at,
near, or over the $100,000 limit. Similarly, if the Fund is not required to pay any amount
over the total liability limit of $750,000, id. at 1360, the Insurance Commissioner also has
no such incentive.
In the absence of express legislative intent to discount the payment of debts owed to medical malpractice victims, we find that the payment incentives undergirding Indiana's Post-Judgment Interest Statute are fully applicable to a judgment rendered in any amount under the Act, against both the qualified health care provider and the Fund.See footnote 6
We conclude that: (1) the limitations set forth in the recovery limitation section of the
Act are limitations on damage amounts, not collateral litigation expenses; (2) each judgment
debtor is individually responsible for its own collateral litigation expenses associated with
its settlement or judgment figure, irrespective of whether the total figure exceeds the Act's
statutory damage limits, and (3) Indiana's Post-Judgment Interest Statute fully applies to
medical malpractice judgments.
Having previously granted transfer, we now (1) adopt and incorporate by reference
Part II of the Court of Appeals's opinion addressing the issue of appointing a commissioner;
(2) vacate the remainder of the opinion of the Court of Appeals; and (3) remand to the trial
court for further proceedings consistent with this opinion to the effect that: (a) Defendant
Martin E. Feferman (or in the alternative, his insurer, PICI) is responsible for the payment
of post-judgment interest on $100,000 from date of judgment until tender of payment plus
$401.25 in court costs, and (b) the Fund is responsible for the payment of post-judgment
interest on the remainder of damages in the amount of $245,263 from the first biannual
payment date applicable to Poehlman's claim until the balance is paid.
SHEPARD, C.J., and DICKSON, SELBY, and BOEHM, JJ., concur.
(a) The total amount recoverable for an injury or death of a patient may not exceed
five hundred thousand dollars ($500,000) except that, as to an act of malpractice that
occurs on or after January 1, 1990, the total amount recovered for an injury or death may
not exceed seven hundred fifty thousand dollars ($750,000).
(b) A health care provider qualified under this article is not liable for an amount in
excess of one hundred thousand dollars ($100,000) for an occurrence of malpractice.
(c) Any amount due from a judgment or settlement that is in excess of the total
liability of all liable health care providers, subject to subsections (a), (b), and (d), shall be
paid from the patient's compensation fund under IC 27-12-15.
Ind. Code § 27-12-14-3(a)-(c) (1993) (repealed by P.L. 1-1998) (current version at Ind. Code § 34- 18-14-3 (1998)). See footnote We note that effective July 1, 1999, the legislature expanded the upper liability limit on damages to [o]ne million two hundred fifty thousand dollars ($1,250,000) for an act of malpractice that occurs after June 30, 1999. Ind. Code § 34-18-14-3 (1998).
Converted from WP6.1 by the Access Indiana Information Network