M.O. v. Ind. Dep't of Ins.

Decision Date03 May 2012
Docket NumberNo. 53A05–1112–PL–682.,53A05–1112–PL–682.
Citation968 N.E.2d 254
PartiesM.O., Appellant–Plaintiff, v. INDIANA DEPARTMENT OF INSURANCE, Indiana PATIENT'S COMPENSATION FUND, Appellee–Defendant.
CourtIndiana Appellate Court

OPINION TEXT STARTS HERE

Neal F. Eggeson, Jr., Eggeson Appellate Services, Indianapolis, IN, Attorney for Appellant.

A. Richard M. Blaiklock, Charles R Whybrew, Lewis Wagner, LLP, Indianapolis, IN, Attorneys for Appellee.

OPINION

SHARPNACK, Senior Judge.

STATEMENT OF THE CASE

This case presents issues of which of two statutes sets the interest rate on payments by the Indiana Department of Insurance Patient's Compensation Fund (“the Fund”) to successful malpractice claimants and of when interest begins to accrue on payments due.1 The trial court concluded that Indiana Code section 24–4.6–1–101 (1993), with its eight percent rate, applied and that interest began to accrue on the fifteenth day of the month following the end of the claim period in which the claim was filed with the Fund. We agree and affirm.

ISSUE

M.O. raises two issues, which we consolidate and restate as: whether the trial court erred in determining the date upon which postjudgment interest began to accrue and the applicable rate of interest.

FACTS AND PROCEDURAL HISTORY

M.O. sued IMA, Inc. (“IMA”), a qualified health care provider as defined by Indiana's Medical Malpractice Act (the Act), claiming medical malpractice. On July 1, 2010, a jury returned a verdict in favor of M.O. in the amount of $1.25 million. On September 27, 2010, the trial court entered a final judgment in favor of M.O. in the same amount. IMA paid M.O. $250,000, the maximum amount for which it was liable under the Act, and filed a partial satisfaction of judgment on October 5, 2010.

M.O. sent a certified copy of the final judgment to the Fund. The Fund received the judgment on October 12, 2010, and initially rejected M.O.'s request to pay the unpaid portion of the judgment. Consequently, M.O. returned to the trial court and requested that the Fund be added as a party. The trial court granted M.O.'s request on November 17, 2010.2 On May 9, 2011, M.O. filed a motion asking the trial court to order the Fund to pay M.O. one million dollars plus postjudgment interest. On June 21, 2011, the trial court ordered the Fund to pay M.O. one million dollars and determined that the question of postjudgment interest would be decided by separate motion. Next, the Fund filed a Notice of Appeal. However, the Fund subsequently ended its opposition to M.O.'s claim for the unpaid portion of the judgment and dismissed its appeal, which had proceeded under Cause Number 53A05–1107–PL–352. On September 8, 2011, the Fund paid M.O. one million dollars.

Meanwhile, M.O. had filed a motion for postjudgment interest. After further proceedings, the trial court granted M.O.'s motion and held: [M.O.] is entitled to post-judgment interest to be paid by [the Fund] and the post-judgment interest shall accrue pursuant to statute at the annual rate of 8% and shall begin accruing as of January 15, 2011.” Appellant's App. p. 26. This appeal followed.

DISCUSSION AND DECISION

The parties agree that there are no factual disputes and that the appeal presents a pure issue of law. We review questions of law under a de novo standard and owe no deference to a trial court's legal conclusions. 600 Land, Inc. v. Metro. Bd. of Zoning Appeals of Marion Cnty., 889 N.E.2d 305, 309 (Ind.2008).

We first address whether the trial court established the correct postjudgment interest rate. The parties agree that the applicable interest rate is set by statute, but they disagree as to which statute applies. M.O. contends that Indiana Code section 34–13–3–18 (1998) provides the appropriate rate. That statute provides:

(a) A claim or suit settled by, or a judgment rendered against, a governmental entity shall be paid by the governmental entity not later than one hundred eighty (180) days after the date of settlement or judgment, unless there is an appeal, in which case not later than one hundred eighty (180) days after a final decision is rendered.

(b) If payment is not made within one hundred eighty (180) days after the date of settlement or judgment, the governmental entity is liable for interest from the date of settlement or judgment at an annual rate of six percent (6%). The governmental entity is liable for interest at that rate and from that date even if the case is appealed, provided the original judgment is upheld.

Id. The Fund argues that Indiana Code section 24–4.6–1–101 sets forth the proper rate. That provision states:

Except as otherwise provided by statute, interest on judgments for money whenever rendered shall be from the date of the return of the verdict or finding of the court until satisfaction at:

(1) the rate agreed upon in the original contract sued upon, which shall not exceedan annual rate of eight percent (8%) even though a higher rate of interest may properly have been charged according to the contract prior to judgment; or

(2) an annual rate of eight percent (8%) if there was no contract by the parties.

Id.

Our Supreme Court's opinion in Poehlman v. Feferman, 717 N.E.2d 578 (Ind.1999), provides guidance as to which statute applies. In that case, Poehlman obtained a judgment against a doctor for medical malpractice. The doctor paid Poehlman the maximum amount that he owed under the Act. Next, the Fund paid Poehlman the unpaid balance of her judgment, excluding postjudgment interest. As a result, Poehlman filed a separate complaint for declaratory judgment against the doctor, the doctor's insurer, and the Fund, seeking postjudgment interest. The trial court concluded that Poehlman was not entitled to postjudgment interest from any of the three defendants. On appeal, a panel of this Court concluded that the Fund was obligated to pay all amounts in excess of the health care provider's statutory limit, including postjudgment interest.

On transfer, our Supreme Court noted that the parties disagreed “over whether [the 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.” Id. at 579. The Court concluded that the Act's recovery limitations are intended to limit only the amount of damages, “not collateral litigation expenses,” including postjudgment interest. Id. at 581. Thus, Poehlman was entitled to collect postjudgment interest.

Next, the Court recognized that health care providers and the Fund are both potentially responsible for paying medical malpractice judgments, but they may have separate litigation strategies that may delay payment and independently generate collateral litigation expenses. For this reason, our Supreme Court rejected the Court of Appeals' determination that the Fund must pay all amounts in excess of the health care provider's statutory limit. The Court determined that if the health care provider is not held responsible for its share of collateral litigation expenses, the provider would have an incentive “to run up collateral litigation expenses to be subsidized with the monies of the [Fund.] Id. at 583. Consequently, our Supreme Court concluded that the health care provider and the Fund are individually responsible for their collateral litigation expenses. Furthermore, the Court held that Indiana Code section 24–4.6–1–101 “fully applies to medical malpractice judgments.” Id. at 584. Thus, Indiana Code section 24–4.6–1–101 sets the applicable rate for calculating postjudgment interest in medical malpractice cases.

In this case, we are bound by our Supreme Court's holding in Poehlman, and we conclude that Indiana Code section 24–4.6–1–101 sets the rate for postjudgment interest. M.O. argues that Indiana Code section 34–13–3–18 applies to postjudgment interest claims against the Fund, regardless of the holding in Poehlman, because that statute supersedes Poehlman. We disagree. Our Supreme Court handed down its opinion in Poehlman on October 7, 1999. Indiana Code section 34–13–3–18 took effect on July 1, 1998. 1998 Ind. Acts p. 51. Thus, Poehlman was issued well after Indiana Code section 34–13–3–18 took effect.

M.O. also argues that Indiana Code section 34–13–3–18 must apply instead of Indiana Code section 24–4.6–1–101 because Indiana Code section 34–13–3–18 is more specific in application. It is true that specific statutory language should control over more general language when there is a conflict between the two. Nat'l Cable & Telecomms. Ass'n, Inc. v. Gulf Power Co., 534 U.S. 327, 335, 122 S.Ct. 782, 151 L.Ed.2d 794 (2002). However, the specific statute controls only within its self-described scope. Id. at 336, 122 S.Ct. 782.

Here, we cannot conclude that Indiana Code section 34–13–3–18 conflicts with, much less controls over, Indiana Code section 24–4.6–1–101. Indiana Code section 34–13–3–1 (1998) provides, “This chapter [which includes Indiana Code section 34–13–3–18] applies only to a claim or suit in tort.” A claim against the Fund for unpaid damages is not a tort claim. The Fund is a creation of the Act, which was designed to curtail liability for medical malpractice. Chamberlain v. Walpole, 822 N.E.2d 959, 963 (Ind.2005). The Act does not create substantive rights or new causes of action. Atterholt v. Robinson, 872 N.E.2d 633, 639–40 (Ind.Ct.App.2007). Instead, the Act designated the Fund as a source for [r]ecovery of excess damages” after a health care provider or its insurer has paid a portion of the damages owed for medical malpractice. Atterholt v. Herbst, 902 N.E.2d 220, 222 (Ind.2009), clarified on reh'g,907 N.E.2d 528 (2009). Allowing claims against the Fund for excess damages is not based on tort principles of compensating patients for any purported wrongdoing by the Fund, but rather serves a purpose of “limit[ing] providers' financial exposure, thereby allowing them to acquire affordable malpractice insurance.” Ind. Patient's Comp. Fund v. Butcher, 863 N.E.2d 11, 20 (Ind.C...

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