Lee v. United States

• Decision Date: 28 August 2014
• Docket Number: No. 13–50905.,13–50905.
• Citation: 765 F.3d 521
• Parties: Clarence LEE, Sr., Individually and as Next Friend of C.L., a Minor; Angelia Lee, Individually and as Next Friend of C.L., a Minor, Plaintiffs–Appellees, v. UNITED STATES of America, Defendant–Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

765 F.3d 521

Clarence LEE, Sr., Individually and as Next Friend of C.L., a Minor; Angelia Lee, Individually and as Next Friend of C.L., a Minor, Plaintiffs–Appellees,

v.UNITED STATES of America, Defendant–Appellant.

No. 13–50905.

United States Court of Appeals, Fifth Circuit.

Aug. 28, 2014.

Jamal K. Alsaffar, Tom Jacob (argued), Archuleta Law Firm, Austin, TX, Rudy A. Garza, Hornberger, Sheehan, Fuller, Beiter, Wittenber & Garza, San Antonio, TX, Kirk Louis Pittard, Esq., Kelly, Durham & Pittard, L.L.P., Dallas, TX, for Plaintiffs–Appellees.

James Francis Gilligan, Jr., Esq., Assistant U.S. Attorney, U.S. Attorney's Office, San Antonio, TX, Mark William Pennak (argued), Matthew Miles Collette, U.S. Department of Justice, Washington, DC, for Defendant–Appellant.

Appeal from the United States District Court for the Western District of Texas.

Before STEWART, Chief Judge, and WIENER and COSTA, Circuit Judges.

CARL E. STEWART, Chief Judge:

The government appeals the district court's award of damages in a medical malpractice suit under the Federal Tort Claims Act (FTCA). The government does not challenge the district court's finding that it was liable; rather, it contends that the district court should have applied the Texas periodic payment statutory scheme, Texas Civil Practice & Remedies Code §§ 74.501–507, and that the district court erred in its order of post-judgment interest. For the following reasons, we VACATE the district court's judgment insofar as it failed to fashion a damages award similar to that contemplated by the Texas periodic payment statutory scheme and awarded post-judgment interest not in compliance with 31 U.S.C. § 1304(b)(1)(A). We REMAND to the district court for further proceedings in accordance with this opinion.

I.

A.

Angelia Lee took her son, C.L., to the pediatric clinic at Randolph Air Force Base (clinic) for his “well-baby” appointments. During these appointments, C.L. should have received his required immunizations and vaccinations. However, the clinic failed to give C.L. the required doses of the Prevnar vaccine, which is designed to prevent invasive pneumonia. C.L. only received two of the required four doses for the Prevnar vaccine.

On December 14, 2004, Angelia took C.L. to the Brooke Army Medical Center emergency clinic (emergency clinic); he had breathing problems, a fever, and other cold symptoms. The emergency clinic diagnosed C.L. with an upper respiratory infection but then proceeded to send him home. Two days later, Angelia took C.L. to the clinic because, in addition to his previous symptoms, he was not eating or sleeping properly. An x-ray was done, which showed that C.L. had pneumonia; nonetheless, the nurse practitioner treating C.L. sent him home. On December 17, 2004, Angelia again took C.L. to the clinic. C.L. now had an increased heart rate and had lost weight. The nurse practitioner again sent C.L. home and instructed Angelia to bring him back in three days. The next day Angelia called the clinic because C.L. had greenish yellow eyes. The nurse practitioner assured Angelia that C.L.'s eye color was merely a side effect of the medication and that there was no need to bring C.L. to the clinic before his appointment. Angelia disregarded this advice and took C.L. to the emergency room. After waiting three hours to be seen, C.L. was given antibiotics. C.L. was transferred the next day to Christus Santa Rosa Children's Hospital and was diagnosed with bilateral pneumonia. C.L. was placed into a coma and had to begin dialysis treatment. Ultimately, C.L. had to receive a kidney transplant from his father.

B.

The Lees filed suit against the government under the FTCA, alleging medical malpractice. The Lees moved for partial summary judgment, which the district court granted. The district court found that the government breached the applicable standard of care in its treatment of C.L. A bench trial was held on the remaining issues, and the district court ruled in favor of the Lees. The district court awarded $4,863,523 for “future medical and healthcare needs” and $250,000 for “past and future physical pain and suffering, past and future mental anguish, past and future physical impairment, and past and future physical disfigurement.” The government timely appealed. Thereafter, the government filed a motion for an indicative ruling with the district court, raising the issues now presented on appeal. The district court denied the motion, reasoning that the issues raised by the government “are now before the Fifth Circuit for consideration.”

II.

A.

We will first address the government's contention that the district court erred by failing to apply the periodic payment scheme. Before we reach the merits of that issue, however, we must determine whether the government waived this argument. Lastly, we will examine the district court's post-judgment interest award.

B.

In FTCA suits, state substantive law applies; however, the Federal Rules of Civil Procedure (FRCP) govern “the manner and time in which defenses are raised and when waiver occurs.” Simon v. United States, 891 F.2d 1154, 1156 (5th Cir.1990) (citation and internal quotation marks omitted). Whether the Texas periodic payment scheme constitutes an affirmative defense under FRCP 8(c) “is determined by looking to the substantive law of Texas.” Lucas v. United States, 807 F.2d 414, 417 (5th Cir.1986). FRCP 8(c)(1) mandates that parties “affirmatively state any avoidance or affirmative defense” in their responsive pleadings. An avoidance “is an allegation or statement of new matter, in opposition to a former pleading, which, admitting the facts alleged in such former pleading, shows cause why they should not have their ordinary legal effect.” Simon, 891 F.2d at 1157 (citation and internal quotation marks omitted).

Generally, failure to comply with FRCP 8(c) results in waiver of the avoidanceor affirmative defense. Simon, 891 F.2d at 1157. However, if “a defendant raises the issue at a pragmatically sufficient time, and if the plaintiff is not prejudiced in its ability to respond, there is no waiver of the defense.” Vanhoy v. United States, 514 F.3d 447, 450 (5th Cir.2008) (citation and internal quotation marks omitted).

Vanhoy involved a situation similar to the case sub judice. In Vanhoy, the plaintiffs sued the government under the FTCA, alleging medical malpractice. Id. at 449. On appeal, the government argued that the district court erred by refusing to adjust the judgment so that it resembled § 40:1299.43 of the Louisiana Medical Malpractice Act (MMA). Id. at 449–50. The plaintiffs claimed that the government's argument was an affirmative defense that the government waived because it failed to produce supporting evidence at trial. Id. at 450. We assumed without deciding that the government's argument was an affirmative defense. Id. However, we concluded that the defense was not waived. Id. at 451. First, we reasoned that the defense raised a legal question that did not need any factual development. Id. at 450. Second, although the defense was not raised in the government's answer, the government argued the defense in multiple motions and its pretrial order. Id. at 450–51. Therefore, there was no waiver because it was “raised at a pragmatically sufficient time” and the plaintiffs “were not prejudiced in their ability to respond.” Id. at 451; see also Lucas, 807 F.2d at 418 (holding that the government did not waive a defense it did not plead under similar circumstances). Conversely, we have held that the government waived a defense it did not plead when the defense entailed more than a legal issue. Simon, 891 F.2d at 1159. For example, in Simon, the government failed to plead a defense which would have dictated the parties' trial strategy. Id.

C.

The government argues that it did not waive the application of the Texas periodic payment statutory scheme because it is not an affirmative defense. However, even assuming that the statutory scheme is an affirmative defense, the government contends that the argument is not waived because it raised the issue at a pragmatically sufficient time and Appellees were not prejudiced in responding to the request. The government also claims that this request cannot be waived because it implicates sovereign immunity. We refrain from deciding whether a request to apply the periodic payment statutory scheme is an affirmative defense because, even assuming that it is, we hold that the government did not waive the argument.

Before we delve into our analysis, we briefly detail the Texas periodic payment statutory scheme. Under Texas Civil Practice & Remedies Code § 74.503(a), “[a]t the request of a defendant physician or health care provider or claimant, the court shall order that” medical damages “be paid in whole or in part in periodic payments rather than by a lump-sum payment.” For future non-medical damages, however, the district court “may order” periodic payments. Id. § 74.503(b). The district court is required to “make a specific finding” of the amount necessary to “compensate the claimant for the future damages” and specify the payment recipient, payment amount, payment intervals, and the “number of payments or the period of time over which payments must be made.” Id. § 74.503(c), (d). Upon the death of the payment recipient, periodic payments terminate for all damages “other than future loss of earnings” and “any security given reverts to the defendant.” Id. § 74.506(b), (d).

Unlike the situation in Vanhoy, the government failed to properly raise this issue until after the trial concluded.¹ Nonetheless, the government requested that the periodic payment scheme be applied “at a pragmatically sufficient time and the [Appellees] were not prejudiced in their ability to respond.” See Vanhoy, 514 F.3d at 451. As we stated in Rogers v. McDorman, “the prejudice inquiry considers whether the plaintiff had sufficient notice to prepare for and contest the defense.” 521 F.3d 381, 387...