In its opinion issued on January 15, 2019, the Supreme Court of Missouri (“Missouri Supreme Court”) affirmed the $28,911,000 jury verdict in favor of the Missouri medical malpractice plaintiff but reversed the trial court’s determination of the interest rate to be applied to the portion of the verdict that represented future medical damages subject to periodic payments in accordance with section 538.220.2.
The Missouri medical malpractice jury had awarded the 19-year-old plaintiff $511,000 for her past medical and wage loss, $1 million for her past non-economic damages, $21 million for future medical damages, $3.2 million for future wage loss, and $3.2 million for future non-economic damages. The trial judge had ordered that the future medical damages be paid at the statutorily required interest rate (1.2%) in accordance with section 538.220.2. The plaintiff argued that section 538.220.2 is unconstitutional as applied to her because payment of future medical damages at the statutorily required interest rate, when the jury had discounted the award to present value using a higher interest rate, effectively deprives her of the full value of the jury’s award and violates due process.
The Missouri Supreme Court held: “The application of section 538.220.2 is unconstitutional as applied to [the plaintiff] because payment of future medical damages at a different interest rate than the interest rate used to compute the present value of the jury’s award deprives [the plaintiff] of the full value of the award and violates her due process rights … [the] future medical damage award to be paid periodically was effectively discounted twice – once by the jury when it reduced the entirety of the future medical damage award to present value and again when the $10 million in future periodic payments was subjected to the arbitrarily low statutory interest rate.”
Section 538.220.2 provides, in part: “At the request of any party to such action made prior to the entry of judgment, the court shall include in the judgment a requirement that future damages be paid in whole or in part in periodic or installment payments if the total award of damages in the action exceeds one hundred thousand dollars. . . . The court shall apply interest on such future periodic payments at a per annum interest rate 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. The judgment shall state the applicable interest rate.”
Prior to the circuit court’s consideration of the applicability of allocating periodic payments pursuant to section 538.220.2, the trier of fact is required to discount the future medical damages to present value pursuant to section 538.215. While section 538.220.2 designates a maximum interest rate for future periodic payments, section 538.215 does not provide a specific interest rate but provides such rate is determined by the trier of fact.
The Missouri Supreme Court stated that “the general purpose of chapter 538 is to reduce the cost of medical malpractice, and the specific purposes of section 538.220 are to spread that cost over time, to guard against squandering the judgment, and to reduce future burdens on government social services … [b]ut the application of section 538.220.2 in this case is not rationally related to these interests. Applying section 538.220.2 here, after the jury discounted the award to present value, deprived [the plaintiff] of the full value of the jury’s award.”
Source Williams v. Mercy Clinic Springfield Communities f/k/a St. John’s Clinic, Inc., No. SC96547.
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