Hill v. U.S., s. 94-1434

• Decision Date: 05 February 1996
• Docket Number: 94-1594,Nos. 94-1434,s. 94-1434
• Citation: 81 F.3d 118
• Parties: Robert E. HILL, individually and as parent and next friend of Tasha R. Hill, a minor; Cynthia G. Hill, individually, and as parent and next friend of Tasha R. Hill, a minor, Plaintiffs-Appellees, v. UNITED STATES of America, Defendant-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 118

81 F.3d 118

Robert E. HILL, individually and as parent and next friend

of Tasha R. Hill, a minor; Cynthia G. Hill,

individually, and as parent and next

friend of Tasha R. Hill, a minor, Plaintiffs-Appellees, v. UNITED STATES of America, Defendant-Appellant.

Nos. 94-1434, 94-1594.

United States Court of Appeals,

Tenth Circuit.

Feb. 5, 1996.

Appeal from the United States District Court for the District of Colorado (D.C. No. 90-B-1071); Lewis T. Babcock, Judge.

William G. Cole (Robert S. Greenspan, with him, on the briefs), Appellate Staff, Civil Division, Department of Justice, Washington, D. C., for Defendant-Appellant.

Shelley B. Don (David L. Hiller, with him, on the brief) of Don, Hiller & Galleher, P.C., Denver, Colorado, for Plaintiffs-Appellees.

Before ANDERSON and McKAY, Circuit Judges, and COOK, ^* Senior District Judge.

McKAY, Circuit Judge.

The United States appeals certain aspects of a judgment entered against it in this Federal Tort Claims action. We have jurisdiction under 28 U.S.C. 1291. This case was brought on behalf of Tasha Hill, a minor, by her parents. Tasha was seriously injured as a result of the government's negligence at an Army medical facility in Colorado. The government conceded liability and the district court awarded substantial damages to Tasha and her parents, with the damages awarded to Tasha to be placed in a trust for Tasha's benefit. The government has raised two issues on appeal. First, the government challenges one aspect of the damage award to Mr. and Mrs. Hill. Second, the government objects to the district court's refusal to grant the United States a reversionary interest in Tasha's trust. We affirm in part and reverse in part.

The district court awarded $1,017,500 to Tasha's parents for services rendered to her over the past few years when they were unable to afford professional medical care. The award was based on the estimated cost of providing twenty-four-hour nursing care, and the government does not challenge the cost estimate for such care. Rather, the government claims that the parents were merely providing largely unskilled parental care and should not be compensated for a level of care that they did not provide. The district court found that the Hills' care was equivalent both in kind and quality to the care that would have been rendered by a Licensed Practical Nurse. The government has not demonstrated that this finding was clearly erroneous. We therefore affirm.

The government has also urged that the district court erred in failing to place the award to pay for Tasha's future damages in a reversionary trust. ¹ Tasha's award is based on a projected life expectancy of a normal healthy girl of her age. However, there remains a possibility that she may die prematurely, or that, for other reasons, there may be funds remaining in her trust when she dies. The government argues that Tasha's heirs would be unjustly enriched if these funds become part of her estate. Since the funds are intended to fully compensate Tasha for her medical costs and other expenses, it would be a windfall to her heirs if the funds were not fully exhausted. Thus, the government argues that any funds remaining in the trust should revert back to the U.S. Treasury.

The government's legal argument that such an approach is authorized, or indeed required, is two-pronged. In support of its position, the government cites the Colorado Health Care Availability Act, Colo.Rev.Stat. §§ 13-64-201 to -212 ("HCAA"). Under the HCAA, health care providers who are found liable for medical torts make payments of future damages in the form of periodic payments. These payments are generally funded by the purchase of an annuity. Upon the death of the "judgment creditor" (the tort victim), these payments cease, except for that portion of the payments awarded for loss of future earnings. Id. § 13-64-206(3). This provision is designed to provide increased precision in the speculative area of future losses by allowing the payment of damages as the losses are found to accrue. The HCAA eliminates, to the extent possible, the likelihood that health care providers will pay out large sums of money for losses that will never actually be sustained by the tort victim. Without the periodic payment scheme, were the tort victim to die prematurely, the unspent medical and related damages would accrue to the estate of the victim and thus represent a windfall to the victim's heirs. We note, however, that money damages awarded for loss of future earnings are exempted from this provision and become part of the victim's estate "to be paid to the heirs and devisees of the judgment creditor," id. § 13-64-206(3), just as if the victim had actually earned the wages herself.

The government does not claim that they are specifically subject to the HCAA, and indeed, it is clear that the federal government may not be ordered to make periodic payments in the manner in which the HCAA provides. Hull v. United States, 971 F.2d 1499, 1505 (10th Cir.1992) (quoting Frankel v. Heym, 466 F.2d 1226, 1228-29 (3d Cir.1972)). However, under the FTCA, the government is to be treated "in the same manner and to the same extent as a private individual under like circumstances" depending on the law of the state where the tort occurred. 28 U.S.C. § 2674 (1988). The government interprets this provision as requiring a court to fashion a remedy that will further the intent and approximate the outcome of a statute such as the HCAA--even where, as here, the statute does not itself apply to the government. Thus, if an alternative exists that would promote the purpose of the state statute and yield a practically similar result, such an alternative should be required. The government argues that, in this case, the creation of a reversionary trust would accomplish the same net result mandated by the HCAA, in that it would ensure full compensation of the victim while preventing unjust enrichment of the victim's heirs.

The government cites several cases to support its argument. See Carter v. United States, 982 F.2d 1141, 1144 (7th Cir.1992); Lozada v. United States, 974 F.2d 986, 987-89 (8th Cir.1992); Owen v. United States, 935 F.2d 734, 737 (5th Cir.), reh'g denied, 943 F.2d 1315 (5th Cir.1991), cert. denied, 502 U.S....