AUSTIN - On Friday, the Texas Supreme Court issued an opinion providing guidance on how courts should apply the periodic payments provision, a key element of the state’s 2003 landmark medical liability reforms, holding that the structure must in some way conform to the evidence presented to the jury at trial.
The petition for review was filed by the Columbia Valley Healthcare System and centered on a $10.3 million judgment against the hospital. Ana Ramirez, individually and as next friend of A.M.A., a minor, sued the Valley Regional Medical Center for medical negligence.
According to the high court’s opinion, before Ramirez’s child was born nurses had observed his heart rate dropping to dangerous and even undetectable levels for extended periods before summoning the obstetrician. A.M.A. was deprived of oxygen for those periods because the umbilical cord had become tightly wrapped around his neck. A.M.A. survived but was soon diagnosed with cerebral palsy.
Following a jury trial, the trial court signed a final judgment, ordering the award structured as follows:
- Five periodic payments of $604,000 from a funded bank account, to begin on the child’s fourth birthday and continuing each year through his eighth birthday; and
- A lump-sum payment of the remaining $7,310,000 to a special-needs trust, which allows funds to be used to maintain good health, safety, and well-being, in addition to medical expenses.
The periodic-payments statute falls under Section 74.503 of the Texas Civil Remedies & Procedures Code, and allows the parties in a health care liability claim to request that the court order that the award be paid in periodic payments, rather than by a lump-sum.
The Supreme Court affirmed the $10.3 million award but took issue with the $7,310,000 lump sum payment, remanding the case for further proceedings that will allow the trial court to render a judgment that complies with the periodic-payments statute.
The Justices concluded that the trial court abused its discretion in structuring future periodic payments in a way the contradicted the jury’s findings that the minor would likely live to 18 years. Additionally, should the minor die, any awarded but unpaid damages would revert back to the defendant, not the parents.
“As the award stands, the trial court pointed to no evidence in the record to justify why any amount should be extracted from the periodic-payment amounts and made payable as a lump sum,” the opinion states. “For this reason, too, therefore, the lump-sum award – diverted into a trust that will revert to plaintiffs, and not Valley Regional, if not used for the specified purposes – ignores the statute’s text and structure.”
Brent Cooper, an attorney for Texas Alliance Patient Access, says the high court’s decision will be useful for health care defendants going forward.
“This decision was a very useful decision for healthcare defendants,” Cooper said. “It puts parameters around the trial court’s decision. It requires the trial court to follow the dictates of the statute. More importantly, it makes the trial court’s decision reviewable by a higher court should the trial court fail to follow the statute.”
Case No. 20-0681