CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
JABES SALGADO, etc., et al., B085845
Plaintiffs and Appellants, (Super. Ct. No. SCC 22624)
COUNTY OF LOS ANGELES et al.,
Defendants and Appellants.
APPEAL from a judgment of the Los Angeles Superior Court, Philip H.
Hickok, Judge. Affirmed in part, reversed in part with directions.
Tanke & Willemsen, Tony J. Tanke, Manuel Hidalgo and Rolando Hidalgo
for Plaintiffs and Appellants.
Bonne, Bridges, Mueller, O’Keefe & Nichols, N. Denise Taylor, Greines,
Martin, Stein & Richland, Martin Stein and Feris M. Greenberger for Defendants
Jabes Salgado, a minor, and his mother and guardian ad litem, Paulina
Salgado brought an action for medical malpractice and negligent infliction of
emotional distress against County of Los Angeles (County) and Dr. Harold Henry,
arising out of injuries sustained by both plaintiffs during Jabes’ birth.
Plaintiffs argue the trial court erred in granting judgment notwithstanding
the verdict on Mrs. Salgado’s claim for negligent infliction of emotional distress;
in granting Dr. Henry’s motion for nonsuit; in imposing costs on plaintiffs under
Code of Civil Procedure section 998; in making the award in favor of Jabes
against County in the form of periodic payments; and in directing plaintiffs to
acknowledge satisfaction of the judgment before all payments were made.
In its cross-appeal, County argues the trial court erred in ordering it to pay
Jabes’ attorney’s fees and certain costs.
We reverse the judgment notwithstanding the verdict on Mrs. Salgado’s
cause of action for negligent infliction of emotional distress and reinstate the
judgment in her favor. Based on that conclusion, we hold that the trial court erred
in granting County its costs under Code of Civil Procedure section 998. We
affirm the nonsuit in favor of Dr. Henry. We find no abuse of the trial court’s
discretion in fashioning a periodic payment schedule. The trial court erred in
requiring plaintiffs to acknowledge satisfaction of judgment and in awarding Jabes
his attorney’s fees and certain costs.
FACTUAL AND PROCEDURAL SUMMARY
We review the evidence in accord with the established standard of appellate
practice: all evidence must be viewed in the light most favorable to the prevailing
party, and all conflicts in evidence or inferences must be resolved in favor of
upholding the judgment. (Schwartzman v. Wilshinsky (1996) 50 Cal.App.4th 619,
Mrs. Salgado sought prenatal care in 1988 from a County clinic. When she
was diagnosed with diabetes, she was transferred to Harbor UCLA Medical Center
and admitted for five days of insulin treatment. Tests indicated that the baby was
unusually heavy for that stage of a pregnancy, a common complication of diabetic
pregnancies, suggesting that the baby would be very large when born.
During a subsequent visit to the Medical Center’s clinic for high risk
pregnancies, Dr. Henry, an obstetrics specialist, was consulted. Although he did
not review Mrs. Salgado’s medical records and did not inquire about her diabetes
or any possible complications, Dr. Henry recommended that she give birth by
vaginal delivery. Dr. Henry later acknowledged in writing that the procedure he
recommended should not have been performed and, had he been aware of Mrs.
Salgado’s diabetes, he would not have made the recommendation.
The next morning, Mrs. Salgado returned to the clinic in advanced labor.
She told the junior family practice resident, Dr. Lloyd Davies, who was handling
the delivery, that she had been told by another physician at the clinic that she was
supposed to have a Caesarean section. Dr. Davies refused, telling Mrs. Salgado
that she could deliver the baby vaginally. As the delivery process failed to
progress, Mrs. Salgado repeatedly asked Dr. Davies to perform a Caesarean. Dr.
Davies performed several severely painful vaginal examinations on Mrs. Salgado
Mrs. Salgado’s labor became obstructed, and the supervising resident
obstetrician, Dr. Karen Koe, ordered the administration of a drug which expedites
contraction and dilation. Labor then progressed, but Jabes’ shoulder became
impacted on Mrs. Salgado’s pelvic bone, a serious obstetrical complication known
as “shoulder dystocia.” Dr. Davies then cut a fourth degree episiotomy, a large
incision employed during delivery of large babies.
Three nurses applied pressure to Mrs. Salgado’s abdomen to force the baby
through the vaginal canal. Mrs. Salgado fainted and was unconscious when Jabes
was finally delivered. He had suffered a brachial plexus injury to his right
shoulder, resulting in a permanent condition known as Erb’s palsy. Mrs. Salgado
first saw Jabes the following day. He was bandaged and bruised. She was so
distressed that she and her husband refused to sign Jabes’ birth certificate. Mrs.
Salgado was so sore in her vaginal area and legs after the delivery that she could
not walk. She remained hospitalized for eight days. Jabes was released a week
Jabes has permanent weakness in his right arm and hand, resulting from the
injury to his nerves during delivery. He cannot raise his arm above his shoulder,
has no reflexes in the right arm, and cannot turn his right arm to the supine
Mrs. Salgado was appointed guardian ad litem for Jabes. An action was
filed on behalf of Jabes for medical malpractice, and on behalf of Mrs. Salgado for
negligent infliction of emotional distress. The defendants were County, Dr.
Henry, and Dr. Koe. The case was tried to a jury. The trial court granted Dr.
Henry’s motion for nonsuit, and Dr. Koe’s motion for nonsuit on Mrs. Salgado’s
negligent infliction of emotional distress claim, but denied County’s motion as to
Mrs. Salgado. The trial court also denied a defense motion for a directed verdict.
The jury returned a special verdict, finding Dr. Koe not negligent, but
finding County negligent. The jury found that County’s negligence caused injury
to Jabes and emotional distress to Mrs. Salgado.
Jabes was awarded $10,000 in past noneconomic damages, $550,000 in
future noneconomic damages, and $125,000 for future medical care (with a
present value of $50,000). Mrs. Salgado was awarded $75,000 for emotional
County brought several post-trial motions. Under the Medical Injury
Compensation Reform Act of 1975 (Stats. 1975, chs. 1, 2, pp. 3949-4007)
(“MICRA”) it sought to reduce Jabes’ noneconomic damages to $250,000 under
Civil Code section 3333.2. It also sought entry of a judgment providing for
periodic payment of all of Jabes’ future damages pursuant to Code of Civil
Procedure section 667.7. County moved to tax plaintiffs’ costs and for an award
of costs pursuant to Code of Civil Procedure section 998. Finally County moved
for judgment notwithstanding the verdict, or in the alternative, for new trial, as to
Mrs. Salgado’s cause of action for negligent infliction of emotional distress.
The trial court granted the judgment notwithstanding the verdict as to Mrs.
Salgado, reduced plaintiffs’ costs, awarded County its costs pursuant to Code of
Civil Procedure section 998, reduced Jabes’ noneconomic damages to $250,000,
and granted the motion for periodic payments. Judgment was entered in
accordance with these rulings. The judgment also directs Mrs. Salgado to provide
a full satisfaction of judgment to County.
Both plaintiffs and defendants appeal from the judgment.
Negligent Infliction of Emotional Distress
Mrs. Salgado argues the trial court erred in granting County’s motion for
judgment notwithstanding the verdict on her cause of action for negligent
infliction of emotional distress. We agree.
“‘The trial court’s discretion in granting a motion for judgment
notwithstanding the verdict is severely limited.’ (Teitel v. First Los Angeles Bank
(1991) 231 Cal.App.3d 1593, 1603 [282 Cal.Rptr. 916].) ‘“The trial judge’s
power to grant a judgment notwithstanding the verdict is identical to his power to
grant a directed verdict [citations]. The trial judge cannot reweigh the evidence
[citation], or judge the credibility of witnesses. [Citation.] If the evidence is
conflicting or if several reasonable inferences may be drawn, the motion for
judgment notwithstanding the verdict should be denied. [Citations.] ‘A motion
for judgment notwithstanding the verdict of a jury may properly be granted only if
it appears from the evidence, viewed in the light most favorable to the party
securing the verdict, that there is no substantial evidence to support the verdict. If
there is any substantial evidence, or reasonable inferences to be drawn therefrom,
in support of the verdict, the motion should be denied.’ [Citation.]”’ . . . . The
trial court cannot consider witness credibility. [Citation.] [¶] On review of an
order granting JNOV, we ‘“must resolve any conflict in the evidence and draw all
reasonable inferences therefrom in favor of the jury’s verdict. [Citation.]”’ (Teitel
v. First Los Angeles Bank, supra, 231 Cal.App.3d at p. 1603.)” (Hansen v.
Sunnyside Products Inc. (1997) 55 Cal.App.4th 1497, 1510.)
This case is controlled by Burgess v. Superior Court (1992) 2 Cal.4th 1064.
In Burgess, the Supreme Court ruled that a mother was entitled to compensation
for negligent infliction of emotional distress when her child was injured during the
course of delivery. In the unique setting of childbirth, the mother is a “direct
victim” rather than a “bystander.” The Burgess court explained that direct victim
cases are those in which “damages for serious emotional distress are sought as a
result of a breach of duty owed the plaintiff that is ‘assumed by the defendant or
imposed on the defendant as a matter of law, or that arises out of a relationship
between the two.’ [Citation.] In these cases, the limits set forth in Thing [v. La
Chusa], supra, 48 Cal.3d 644, have no direct application. [Citations.] Rather,
well-settled principles of negligence are invoked to determine whether all
elements of a cause of action, including duty, are present in a given case.” (Id. at
The Burgess court held that a physician owes a duty of care to both a
woman and her fetus arising from their physician-patient relationship. (Id. at
p. 1075.) “It cannot be gainsaid that both parties understand that the physician
owes a duty to the pregnant woman with respect to the medical treatment provided
to her fetus. Any negligence during delivery which causes injury to the fetus and
resultant emotional anguish to the mother, therefore, breaches a duty owed directly
to the mother.” (Id. at p. 1076.)
County cites selected passages from Burgess in arguing “that only the
mother’s distress over the baby’s welfare--not, by contrast, the pain inherent in
childbirth--is compensable in these cases.” It contends that the court allows no
compensation for the mother’s distress for herself, but only for her distress over
her baby’s welfare. We disagree with this interpretation of Burgess.
It is true that the Burgess court reiterated that a mother may not recover
damages for loss of filial consortium. (2 Cal.4th at p. 1084.) But emotional
distress damages are still available: “[T]o the extent, however, that Burgess’s
emotional distress arose from the ‘abnormal event’ of participating in a negligent
delivery and reacting to the unexpected outcome of her pregnancy with resulting
‘“fright, nervousness, grief, anxiety, worry, mortification, shock, humiliation and
indignity, as well as physical pain”’ (Thing, supra, 48 Cal.3d at pp. 648-649,
quoting Deevy v. Tassi (1942) 21 Cal.2d 109, 120 [130 P.2d 389]) resulting from
defendant’s breach of duty, then Burgess’s emotional distress is of the type for
which we have previously recognized recovery should be provided and is
distinguishable from the type of emotional distress for which recovery is
prohibited by virtue of the policy considerations underlying the prohibition of
filial consortium claims. [¶] We trust the ability of the trial courts to stringently
enforce the limitation on damages in cases of this type through appropriate
evidentiary rulings and jury instructions.” (Id. at pp. 1084-1085, emphasis added.)
The reference to physical pain emphasized in the preceding passage would
make no sense if the Supreme Court intended to limit a mother’s emotional
distress damages to her concern for her baby, to the exclusion of her concern for
herself. The Supreme Court expressly rejected the defendant physician’s
argument that Mrs. Burgess was “completely barred from recovering damages for
her emotional distress because those damages are essentially coextensive with
damages that are properly asserted in a claim for loss of filial consortium.” (Id. at
p. 1084.) The Burgess court emphasized the impact of the birth process on the
mother in her own right: “Burgess established a physician-patient relationship
with Gupta for medical care which was directed not only to her, but also to her
fetus. The end purpose of this medical care may fairly be said to have been to
provide treatment consistent with the applicable standard of care in order to
maximize the possibility that Burgess’s baby would be delivered in the condition
in which he had been created and nurtured without avoidable injury to the baby or
to Burgess.” (2 Cal.4th at p. 1076, emphasis added.)
We therefore reject County’s argument that Burgess limits a mother’s
recovery to distress resulting from her concern for her child, and excludes
recovery for distress over her own condition.
County’s related argument that Mrs. Salgado did not present substantial
evidence of her concern for Jabes during the delivery is not borne out by the
record. The evidence established that Mrs. Salgado experienced extreme pain
from the physician’s repeated vaginal examinations as her labor failed to progress,
and that she eventually fainted from the pain. She testified that the delivery was
different from her experience in giving birth to her other children: “It was
different because with the other children immediately, as I got there, I would give
birth to the babies.” She was then asked: “And what happened in this case?”
Mrs. Salgado replied: “I couldn’t.” Physicians performed an extensive incision in
Mrs. Salgado’s vaginal area in an effort to deliver her very large baby. Mrs.
Salgado was hospitalized for 8 days following the delivery.
The expert witness for plaintiffs, Dr. Peter R. Forbes, a board certified
obstetrician, reviewed an entry in Mrs. Salgado’s medical records dated June 21,
1988 made by Dr. Henry: “‘The details of this case were not presented to me.
Hence, the recommendation for a trial of vaginal delivery. [¶] It was not made
known to me that this patient was an elderly grand multiparous, insulin dependent
diabetic, who delivered an 11-pound infant over 20 years ago. [¶] Had these facts
been known, as well as her stature and previous scans, that is, ultrasound, a trial of
labor would have been proscribed’--that is forbidden.” The evidence established
that Mrs. Salgado is 4’ 10” tall and weighed 150 pounds at the time of Jabes’ birth.
She was 38 years old at the time.
Dr. Forbes testified that in his opinion, Mrs. Salgado should have had a
Caesarean section. He explained she was having her thirteenth baby, she was
small of stature, she was insulin dependent, and her course of labor indicated an
obstruction. If the baby had been small enough for vaginal delivery, Dr. Forbes
said she should have “popped this child out on the cart going up to the delivery
room.” Dr. Forbes was also asked whether he thought that Dr. Davies, who was in
charge of the delivery, reacted appropriately. He responded: “I don’t think
anybody who was managing the patient at this point reacted appropriately to the
labor. They didn’t convey the information to their attending person. They didn’t
convey the information to their immediate superior resident.” He went on to say
that once it was established that the labor was obstructed, they should have
performed a Caesarean section.
So long as substantial evidence established that Mrs. Salgado’s distress was
the result of negligence by the defendants, and we conclude that it does, there is
nothing in Burgess to indicate that these injuries are not compensable as damages
for negligent infliction of emotional distress. The Supreme Court said: “While
some portion of Burgess’ emotional distress may have arisen from her loss of
Joseph’s consortium, other portions of her emotional distress may have separate,
distinct origins that would not subject damages for these portions of her emotional
distress to a bar mandated by the policy concerns underlying the prohibition of
the loss of filial consortium claim.” (2 Cal.4th at p. 1084, emphasis added.) This
conclusion also disposes of County’s argument that Mrs. Salgado’s recovery may
violate the prohibition against recovery for the loss of a child’s consortium. There
was substantial evidence that Mrs. Salgado suffered severe emotional distress
independent from the loss of consortium.
County also argues that Burgess requires the mother to establish that she
realized that the delivery has gone wrong. We think this reading of Burgess is too
County relies on references in Burgess to “Any negligence during delivery”
(2 Cal.4th at p. 1076) and to the “‘abnormal event’” of a negligent delivery (2
Cal.4th at pp. 1084-1085) to support this interpretation. An examination of the
passages from which these excerpts are taken establishes that the Supreme Court
intended no such limitation.
The first reference quoted by County appears in the following paragraph:
“It is in light of both these physical and emotional realities that the obstetrician
and the pregnant woman enter into a physician-patient relationship. It cannot be
gainsaid that both parties understand that the physician owes a duty to the
pregnant woman with respect to the medical treatment provided to her fetus. Any
negligence during delivery which causes injury to the fetus and resultant
emotional anguish to the mother, therefore, breaches a duty owed directly to the
mother.” (Burgess v. Superior Court, supra, 2 Cal.4th at p. 1076.) We find
nothing in this passage to indicate the mother must have realized that she was
being subjected to negligence at the time.
The next excerpt quoted by County reads in full: “We further hold to the
extent, however, that Burgess’s emotional distress arose from the ‘abnormal event’
of participating in a negligent delivery and reacting to the unexpected outcome of
her pregnancy with resulting ‘“fright, nervousness, grief, anxiety, worry,
mortification, shock, humiliation and indignity, as well as physical pain”’
[citations] resulting from defendant’s breach of duty, then Burgess’s emotional
distress is of the type for which we have previously recognized recovery should be
provided and is distinguishable from the type of emotional distress for which
recovery is prohibited by virtue of the policy considerations underlying the
prohibition of filial consortium claims.” (Burgess v. Superior Court, supra, 2
Cal.4th at pp. 1084-1085.) Again, there is nothing in this passage requiring the
mother to establish her contemporaneous realization that she was subjected to
Finally, we find no such limitation in the last excerpt quoted by County,
which appears in the disposition: “For the reasons set forth herein, we hold that
Burgess is not required to satisfy the criteria for recovery as a bystander and may
state a claim for damages for serious emotional distress arising from the negligent
delivery of her child. Burgess’s recovery, however, may not include damages for
emotional distress arising from loss of Joseph’s affection, society, companionship,
love, and disruption of the ‘normal’ routine of life to care for Joseph, but rather is
limited to damages for her emotional distress arising from the ‘abnormal event’ of
participating in a negligent delivery and reacting to the tragic outcome with fright,
nervousness, grief, anxiety, worry, mortification, shock, humiliation and indignity,
physical pain, or other similar distress.” (Id. at p. 1085.)
Plaintiffs argue the trial court erred in ordering them to pay costs under
Code of Civil Procedure section 998 on the ground that they failed to obtain a
judgment greater than the $175,000 settlement offer made by County. Code of
Civil Procedure section 998, subdivision (c) provides in pertinent part: “If an
offer made by a defendant is not accepted and the plaintiff fails to obtain a more
favorable judgment, the plaintiff shall not recover his or her costs and shall pay the
defendant’s costs from the time of the offer. For purposes of this section, a
plaintiff in a cause of action not based on tort shall not be deemed to have
obtained a more favorable judgment unless the judgment obtained by the plaintiff,
exclusive of attorney’s fees and costs, exceeds the offer made by the defendant
pursuant to this section.”
County calculated the present value of Jabes’ total judgment as $103,964.
In light of our conclusion that Mrs. Salgado is entitled to the jury’s award of
$75,000, the total judgment for plaintiffs is $178,964. This is more than the
$175,000 settlement offer made by County. The trial court erred in awarding costs
to County under Code of Civil Procedure section 998. Since we reverse the award
of costs to County on this ground, we need not address the other arguments made
by plaintiffs challenging the order.
Plaintiffs argue the trial court erred in granting Dr. Henry’s motion for
“‘The granting of a motion for nonsuit is warranted when, disregarding
conflicting evidence, giving plaintiff's evidence all the value to which it is legally
entitled, and indulging in every legitimate inference that may be drawn from the
evidence, the trial court determines that there is no evidence of sufficient
substantiality to support a verdict in favor of plaintiff.’ [Citations.]” (Kidron v.
Movie Acquisition Corp. (1995) 40 Cal.App.4th 1571, 1580.) Our “review must be
based on the whole record, not just the excerpts chosen by the appellant. ‘[I]n all
cases, the determination whether there was substantial evidence to support a
finding or judgment must be based on the whole record. The reviewing court may
not consider only supporting evidence in isolation, disregarding all contradictory
evidence.’ [Citation.]” (Id. at p. 1581.)
Plaintiffs rely on Dr. Henry’s admission, contained in his note to the chart,
that he would not have recommended vaginal delivery for Jabes if he had been
aware that Mrs. Salgado had born many children, was an insulin dependent
diabetic, was 38 years old, was small in stature, and had ultrasounds that indicated
Jabes was large for his size earlier in the pregnancy. County argues that this
evidence does not constitute the expert testimony required to establish medical
malpractice, because Dr. Henry did not testify at the trial.
We reject County’s argument on this point. It is established that the
testimony of a defendant physician may be sufficient to establish medical
malpractice. (See County of Los Angeles v. Superior Court (1990) 224
Cal.App.3d 1446, 1455; Robinson v. Pediatric Affiliates Medical Group, Inc.
(1979) 98 Cal.App.3d 907, 910.) The California Supreme Court expressly rejected
the fine distinction between trial testimony and an out-of-court admission by a
defendant physician in Lashley v. Koerber (1945) 26 Cal.2d 83, 89: “The expert
testimony which establishes plaintiff’s prima facie case in a malpractice action
may be that of defendant. [Citations.] We can presume that defendant in testifying
will state his case as favorably to himself as possible. [Citation.] And
extrajudicial admissions of defendant have the same legal competency as direct
expert testimony to establish the critical averments of the complaint. [Citation.]”
But, as County points out, plaintiffs failed to present substantial evidence of
causation as to Dr. Henry. There is no evidence establishing that the choice to
deliver Jabes vaginally was based on Dr. Henry’s recommendation to Dr. Cote.
Dr. Davies, the physician charged with Mrs. Salgado’s care during the delivery,
did not testify. Dr. Henry testified that he did not see Mrs. Salgado during labor
and delivery on June 15, 1988. Dr. Koe, who was called in to assist by Dr. Davies,
testified that she felt that Mrs. Salgado would have a vaginal delivery. She was
not asked, and did not say, that this conclusion was based on reading Dr. Henry’s
note in Mrs. Salgado’s medical record.
Based on this record, the trial court did not err in granting Dr. Henry’s
motion for nonsuit.
Counsel for Jabes raise a number of issues regarding the application of
MICRA.1 Defendants challenge the court’s award of attorney’s fees to Jabes. We
address each argument in turn.
A. Periodic Payments
Counsel for Jabes argue the trial court spread the periodic payments over
too great a period (Jabes’ 66-year life expectancy) and that the judgment deprived
Jabes of his constitutional rights to jury trial and to due process.
Code of Civil Procedure section 667.7 provides that upon the timely request
of a party, the trial court must enter a judgment providing periodic payment of
damages where the plaintiff in a medical malpractice action is awarded future
damages of $50,000 or more.2 (Hrimnak v. Watkins (1995) 38 Cal.App.4th 964,
1 In light of the trial court’s order granting judgment notwithstanding the verdict on Mrs.
Salgado’s cause of action for negligent infliction of emotional distress, she did not
receive a judgment in her favor, and there are no issues raised on appeal regarding the
application of MICRA to her cause of action.
2 Section 667.7 provides: (a) In any action for injury or damages against a provider of
health care services, a superior court shall, at the request of either party, enter a judgment
ordering that money damages or its equivalent for future damages of the judgment
creditor be paid in whole or in part by periodic payments rather than by a lump-sum
payment if the award equals or exceeds fifty thousand dollars ($50,000) in future
damages. In entering a judgment ordering the payment of future damages by periodic
payments, the court shall make a specific finding as to the dollar amount of periodic
payments which will compensate the judgment creditor for such future damages. As a
condition to authorizing periodic payments of future damages, the court shall require the
judgment debtor who is not adequately insured to post security adequate to assure full
payment of such damages awarded by the judgment. Upon termination of periodic
payments of future damages, the court shall order the return of this security, or so much as
remains, to the judgment debtor. [¶] (b)(1) The judgment ordering the payment of future
damages by periodic payments shall specify the recipient or recipients of the payments,
the dollar amount of the payments, the interval between payments, and the number of
payments or the period of time over which payments shall be made. Such payments shall
only be subject to modification in the event of the death of the judgment creditor. [¶] (2)
In the event that the court finds that the judgment debtor has exhibited a continuing
pattern of failing to make the payments, as specified in paragraph (1), the court shall find
the judgment debtor in contempt of court and, in addition to the required periodic
payments, shall order the judgment debtor to pay the judgment creditor all damages
caused by the failure to make such periodic payments, including court costs and
attorney’s fees. [¶] (c) However, money damages awarded for loss of future earnings
shall not be reduced or payments terminated by reason of the death of the judgment
creditor, but shall be paid to persons to whom the judgment creditor owed a duty of
support, as provided by law, immediately prior to his death. In such cases the court which
rendered the original judgment, may, upon petition of any party in interest, modify the
judgment to award and apportion the unpaid future damages in accordance with this
subdivision. [¶] (d) Following the occurrence or expiration of all obligations specified in
the periodic payment judgment, any obligation of the judgment debtor to make further
payments shall cease and any security given, pursuant to subdivision (a) shall revert to the
judgment debtor. [¶] (e) As used in this section: [¶] (1) ‘Future damages’ includes
damages for future medical treatment, care or custody, loss of future earnings, loss of
bodily function, or future pain and suffering of the judgment creditor. [¶] (2) ‘Periodic
payments’ means the payment of money or delivery of other property to the judgment
creditor at regular intervals. [¶] (3) ‘Health care provider’ means any person licensed or
certified pursuant to Division 2 (commencing with Section 500) of the Business and
Professions Code, or licensed pursuant to the Osteopathic Initiative Act, or the
Chiropractic Initiative Act, or licensed pursuant to Chapter 2.5 (commencing with Section
1440) of Division 2 of the Health and Safety Code; and any clinic, health dispensary, or
health facility, licensed pursuant to Division 2 (commencing with Section 1200) of the
Health and Safety Code. ‘Health care provider’ includes the legal representatives of a
health care provider. [¶] (4) ‘Professional negligence’ means a negligent act or omission
to act by a health care provider in the rendering of professional services, which act or
omission is the proximate cause of a personal injury or wrongful death, provided that such
services are within the scope of services for which the provider is licensed and which are
not within any restriction imposed by the licensing agency or licensed hospital. [¶] (f) It
is the intent of the Legislature in enacting this section to authorize the entry of judgments
in malpractice actions against health care providers which provide for the payment of
972-973.) Subdivision (f) of section 667.7, which we have set out in the margin
(fn. 2) is an express statement of legislative intent. The court in Hrimnak
observed: “Essentially, the Legislature expressed its intent ‘to provide
compensation sufficient to meet the needs of an injured plaintiff and those
[dependent on the plaintiff] for whatever period is necessary while eliminating the
potential windfall from a lump-sum recovery . . . .’” (Id. at p. 973.)
Section 667.7, subdivision (b)(1) requires that the judgment ordering
periodic payment of future damages specify “the recipient or recipients of the
payments, the dollar amount of the payments, the interval between payments, and
the number of payments or the period of time over which payments shall be
made.” We review the trial court’s periodic payment schedule for abuse of
discretion. (Hrimnak v. Watkins, supra, 38 Cal.App.4th at p. 975.) “In structuring
a periodic-payment schedule under section 667.7, a trial court is ‘guided by the
evidence of future damages’ introduced at trial. [Citations.] The fundamental goal
in this respect is to attempt to match losses with compensation ‘to ensure that
money paid to an injured plaintiff will in fact be available when the plaintiff incurs
the anticipated expenses or losses in the future.’ [Citations.] The target is ‘a fair
future damages through periodic payments rather than lump-sum payments. By
authorizing periodic payment judgments, it is the further intent of the Legislature that the
courts will utilize such judgments to provide compensation sufficient to meet the needs of
an injured plaintiff and those persons who are dependent on the plaintiff for whatever
period is necessary while eliminating the potential windfall from a lump-sum recovery
which was intended to provide for the care of an injured plaintiff over an extended period
who then dies shortly after the judgment is paid, leaving the balance of the judgment
award to persons and purposes for which it was not intended. It is also the intent of the
Legislature that all elements of the periodic payment program be specified with certainty
in the judgment ordering such payments and that the judgment not be subject to
modification at some future time which might alter the specifications of the original
correlation between the sustaining of losses and the payment of damages.’
Here there was testimony by plaintiffs’ expert, Dr. John H. Menkes, a
pediatric neurologist, that Jabes will require annual orthopedic evaluations for life;
physical therapy evaluations for the first 12 years; occupational therapy until he is
25 years old; and physical therapy two to three times a week for the rest of his life.
Edward Lee Bennett, a vocational rehabilitation counselor, developed a life care
plan for Jabes in consultation with Dr. Menkes. Among his recommendations
were annual physical examinations for life and an annual orthopedic or
neurological evaluation for life.
Counsel for Jabes argues that more of the award should have been made
payable in his early years, based on the recommendations that he receive physical
therapy evaluations for the first 12 years, occupational therapy until he is 25 years
old, recreational therapy, and vocational therapy. While payment of the judgment
over a period of 66 years results in small monthly payments, as counsel for Jabes
points out, we find no abuse of the trial court’s discretion in light of the evidence
of Jabes’ continuing need for services throughout his lifetime. Since Jabes was
born in 1988, he will benefit most from the vocational training when he is older, a
fact that is consistent with periodic payment of the judgment.
Counsel for Jabes also argues that the trial court ignored the possibility that
Jabes will require surgery at some point in the future. As County points out,
Jabes’ own expert, Dr. Menkes, cast doubt on the efficacy of such a procedure. In
his view, further surgery holds little prospect for improving the function of Jabes’
injured arm. The trial court was within its discretion in declining to make a
specific lump-sum provision for surgery under these circumstances.
In addition, counsel for Jabes argues that the periodic payments fail to
correlate with the fact that Jabes will suffer his greatest pain and suffering early in
his life. Counsel cites no psychological evidence to support this argument. The
testimony cited in support of this argument establishes only Jabes’ limitations and
need for services, not that his pain and suffering will be greater when he is young.
The trial court did not abuse its discretion in scheduling periodic payments.
Counsel for Jabes also argues that Jabes’ right to jury trial was violated:
“[I]t is apparent there are numerous factual questions that arise in periodicizing a
medical malpractice award. The court must identify and weigh evidence presented
to the jury for purposes other than establishing periodic payments. Although that
evidence was submitted in jury trial directed to other issues, and the jury was
given no authority over the payment schedule of its award, the court nonetheless is
permitted to assess, apparently based on any factors it chooses, how the award
should be paid.” He argues that Jabes did not have a jury determination of the
amount to be paid to Jabes in judgment of this case.
The Supreme Court upheld the trial court’s right to fashion a periodic
payment schedule under section 667.7 in American Bank & Trust Co. v.
Community Hospital (1984) 36 Cal.3d 359. It held: “Once the jury has designated
the amount of future damages--and has thus identified the amount of damages
subject to periodic payment--we believe that the court’s authority under section
667.7, subdivision (b)(1), to fashion the details of a periodic payment schedule
does not infringe the constitutional right to jury trial. As defendant notes, the
court’s function in this regard is similar to the authority long exercised by courts
in the disbursement of the proceeds of a judgment under a number of well-
established statutory schemes. . . . Plaintiff cites no decision to support the
contention that the exercise of such limited judicial authority is incompatible with
the jury trial guarantee, and the additur procedure--upheld in Jehl [v. Southern
Pac. Co. (1967)] 66 Cal.2d 821--affords a court considerably greater latitude in
fixing the plaintiff’s ultimate damage recovery.” (Id. at pp. 376-377.) We find no
violation of Jabes’ right to jury trial.
Jabes’ counsel also contends that the procedure employed here constituted a
violation of his right to due process: “A post-trial determination on a cold record,
without evidentiary hearing of complex factual issues dealing with when pain and
suffering occurs and when medical expenses are incurred, deprived plaintiff of his
opportunity to present evidence directed solely to those issues.” He fails to
provide citations to the record which establish that counsel for Jabes requested an
opportunity to present such evidence, and that his request was denied. On this
record, we cannot say that he was deprived of his right to due process.
B. Future Pain and Suffering Damages
Jabes’ counsel argues that the trial court erred in providing for periodic
payment of the award for future pain and suffering because this works a double
reduction: first, as required by Civil Code section 3333.2, the award was reduced
to the statutory limit of $250,000 for noneconomic damages. The jury instructions
on economic damages required the jury to find the present (commuted) value of its
award. No similar instructions was given with respect to noneconomic damages.
The jury was simply instructed to find the total lifetime amount of such damages.
The County was allowed to purchase an annuity that will pay the $250,000.
Counsel for Jabes contends: “Rather than reducing a ‘very large’ pain and
suffering award, the periodic payments and damages cap work in tandem to
deprive Jabes of virtually all of his damage award’s value.” This result, he argues,
is contrary to the intent of the Legislature expressed in Code of Civil Procedure
section 667.7, subdivision (f). He contends that County realized a windfall,
because it was able to purchase the annuity for a present cost of $61,785, instead
of the total of $240,000 ordered to be paid by the court through the periodic
payments. Neither party has found authority directly on point. We have found no
cases addressing the issue.
Civil Code section 3333.2 was enacted as part of MICRA in 1975, as was
Code of Civil Procedure section 667.7. (Stats. 1975, Second Ex. Sess. 1975-1976,
chs. 1, 2, pp. 3949-4007). Section 3333.2 provides in part: “(a) In any action for
injury against a health care provider based on professional negligence, the injured
plaintiff shall be able to recover noneconomic losses to compensate for pain,
suffering, inconvenience, physical impairment, disfigurement and other
nonpecuniary damage. [¶] (b) In no action shall the amount of damages for
noneconomic losses exceed two hundred fifty thousand dollars ($250,000).”
As we have discussed, under Code of Civil Procedure section 667.7, the
trial court must fashion a schedule of periodic payments at the request of one of
the parties if future damages exceed $50,000. Civil Code section 3333.2 and Code
of Civil Procedure section 677.7 do not cross-reference each other. They fulfill
independent functions. Section 3333.2 sets a cap on noneconomic damages of
$250,000, and section 677.7 provides for periodic payment of the damages award.
We have reviewed the legislative history of MICRA, and find no discussion of the
interrelationship between sections 667.7 and 3333.2.
We find guidance, however, from the Supreme Court, in its opinion in
American Bank & Trust Co. v. Community Hospital, supra, 36 Cal.3d 359. The
court rejected the plaintiff’s claim that the change from a lump sum judgment to a
periodic payment procedure denied equal protection to persons injured by medical
malpractice, “withholding from this class the benefits of lump sum damage awards
that are available to those who suffer negligently inflicted injury outside of the
medical malpractice context.” (Id. at pp. 370.) The Supreme Court reasoned:
“Plaintiff does not--and could not--claim that section 667.7’s periodic payment
provisions are not rationally related to the objective of reducing insurance costs.
As the legislative history of MICRA indicates, one of the factors which
contributed to the high cost of malpractice insurance was the need for insurance
companies to retain large reserves to pay out sizeable lump sum awards. The
adoption of a periodic payment procedure permits insurers to retain fewer liquid
reserves and to increase investments, thereby reducing the costs to insurers and,
in turn, to insureds.” (Id. at pp. 372-373, emphasis added.)
From this, we infer that the Supreme Court understood MICRA to allow
insurers to purchase annuities to fund periodic payments at a smaller cost than
would be required to make a lump sum payment. We find nothing in the statutory
scheme which suggests that this procedure should not apply to future
noneconomic damages. Instead, the statutory scheme compels the conclusion we
reach. Section 667.7 subdivision (a) expressly makes periodic payment of “future
damages” mandatory on request of a party. “Future damages” are defined in
section 667.7 subdivision (e)(1) to include both economic and noneconomic
damages: “‘Future damages’ includes damages for future medical treatment, care
or custody, loss of future earnings, loss of bodily function, or future pain and
suffering of the judgment creditor.”
Through the periodic payments, Jabes will receive the amount he is allowed
by statute. We acknowledge this result is harsh as applied to Jabes. Nevertheless,
it is compelled by the express terms of Civil Code section 3333.2 and Code of
Civil Procedure section 667.7.
Satisfaction of Judgment
County concedes that the trial court erred in requiring plaintiffs to execute a
satisfaction of judgment. (See Hrimnak v. Watkins, supra, 38 Cal.App.4th at p.
In its cross-appeal, County challenges the trial court’s award of attorney’s
fees to Jabes. Jabes concedes the error, arguing that it was harmless because other
errors by the trial court resulted in a savings to County. We agree that the trial
court erred and will reverse that award.
The nonsuit in favor of Dr. Henry is affirmed. The judgment
notwithstanding the verdict on Mrs. Salgado’s cause of action for negligent
infliction of emotional distress is reversed and the judgment for Mrs. Salgado is
reinstated. The award of costs to County under section 998 is reversed. The
award of attorney’s fees and certain costs to Jabes is reversed. The periodic
payment schedule is affirmed. The case is remanded to the trial court with
directions to enter a new judgment consistent with this opinion. The parties are to
bear their own costs on appeal.
CERTIFIED FOR PUBLICATION.
VOGEL (C.S.), P.J.