Columbia Valley Healthcare System L.P. D/B/A Valley Regional Medical Center v. A.M.A., a Minor, by and Through His Mother, Ana Ramirez, as Next Friend and Ana Ramirez, Individually ( 2022 )

Supreme Court of Texas
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No. 20-0681
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Columbia Valley Healthcare System, L.P. d/b/a Valley Regional
Medical Center,
Petitioner,
v.
A.M.A., A Minor, by and through his mother, Ana Ramirez, as
next friend and Ana Ramirez, Individually,
Respondents
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On Petition for Review from the
Court of Appeals for the Thirteenth District of Texas
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Argued February 23, 2022
JUSTICE YOUNG delivered the opinion of the Court.
Before respondent A.M.A. was born, nurses had observed his
heartrate dropping to dangerous and even nondetectable levels for
extended periods before they summoned the obstetrician. A.M.A. was
deprived of oxygen for these periods because, as became apparent upon
his delivery, the umbilical cord had become tightly wrapped around his
neck. A.M.A. survived but was soon diagnosed with cerebral palsy.
Following trial, a jury awarded a substantial amount for A.M.A.’s future
healthcare expenses. At petitioner’s request, the district court applied
the periodic-payments statute in the Texas Civil Practice and Remedies
Code to the award of future medical expenses. We recently addressed
that statute in Regent Care of San Antonio, L.P. v. Detrick, 610 S.W.3d
830 (Tex. 2020). But because we decided that case after the district court
rendered judgment, neither the court nor the parties had the benefit of
its guidance. We conclude that the district court erred in how it
structured the periodic payments and remand to that court for further
proceedings that will allow it, in light of Regent Care and today’s
decision, to render a judgment that complies with the periodic-payments
statute.
I
Ana Ramirez, A.M.A.’s mother, went to Valley Regional Medical
Center for premature labor—she was 33-weeks pregnant—after her
water broke on a Friday evening.1 Her obstetrician, Dr. Martinez,
instructed the nurses to monitor the baby’s heartbeat, then went home
for the night, leaving the mother and her unborn baby in the nurses’
hands over the weekend. A.M.A.’s heartbeat in utero dropped for about
two minutes shortly after midnight on Sunday. Twenty minutes later,
his heartbeat dropped for seven minutes. Finally, after another twenty
minutes, the baby’s heartbeat dropped to the point where the nurses
could not detect it. Even then, the nurses did not call Dr. Martinez—
they waited for another twenty minutes.
1 The petitioner is Columbia Valley Healthcare System, L.P. d/b/a
Valley Regional Medical Center. We refer to it as “Valley Regional.”
2
After the nurses called the doctor, it took him about nineteen
minutes to arrive at Valley Regional. His ability to act was impeded
because no ultrasound had been done, even though he had ordered a
“stat” ultrasound when the nurses called him. The ultrasound
technician arrived only after Dr. Martinez did. Once the ultrasound was
started, the doctor saw that there was minimal heart activity, ordered
an emergency c-section, and proceeded immediately to the operating
room. After further logistical delays, including obtaining Ramirez’s
signature on additional forms, A.M.A. was finally delivered. The
umbilical cord had become tightly wrapped around his neck. Because of
the lack of oxygen to his brain, A.M.A. was later diagnosed with cerebral
palsy.
Ramirez sued Valley Regional on behalf of A.M.A., alleging that
the nurses’ delay caused A.M.A.’s cerebral palsy. At the close of
evidence, Valley Regional’s proposed jury charge asked the court to
question the jury about A.M.A.’s life expectancy and about the annual
amount of any future healthcare expenses. The trial court denied Valley
Regional’s proposed charge and Valley Regional objected to the denial.
The jury found for A.M.A. and awarded $10,330,000, divided as follows:
$62,000 for past healthcare expenses, $9,060,000 for future healthcare
expenses until A.M.A. turns 18, and $1,208,000 for future healthcare
expenses after he turns 18.
Before trial, Valley Regional had moved the trial court to
structure any jury award of future medical expenses as periodic
payments under the periodic-payments statute, which is codified as
Texas Civil Practice and Remedies Code Chapter 74, Subchapter K.
3
When properly invoked, the periodic-payments statute requires the trial
judge to order that the award for future healthcare expenses be paid “in
whole or in part in periodic payments rather than by a lump sum
payment.” Tex. Civ. Prac. & Rem. Code § 74.503(a).
About a month after the jury trial concluded, the trial judge held
a hearing to determine how to form the court’s judgment, including how
to structure periodic payments and how to ensure that any required
periodic payments would be made. Valley Regional’s principal position
was that, under the statute and the Constitution, separate questions
about life expectancy or annual medical expenses should have been
submitted to the jury. Despite the lack of separate questions, however,
evidence presented at the trial had addressed these topics. A.M.A.’s
expert, Dr. Willingham, testified that A.M.A.’s life expectancy was
thirty-two years. Valley Regional’s experts testified that A.M.A.’s life
expectancy was likely up to age seven or eight, but that he was “highly
unlikely” to live past age ten. Each party presented annual healthcare
costs that tracked their different life-expectancy evidence. Valley
Regional presented evidence of annual healthcare costs of $604,000 per
year and for its expert’s opinion that A.M.A. had five years of life
remaining. A.M.A.’s expert submitted life-care plans that included
annual medical costs to age eighteen, and from that age to “end of life”
at age thirty-two.
A.M.A. noted some of this evidence at the hearing and in
subsequent briefing about the structure of the periodic payments. The
district court found A.M.A.’s first proposed judgment insufficiently clear
and directed A.M.A. to revise it. The district court repeatedly offered
4
Valley Regional the chance to provide its own proposed judgment,
including how it would structure the periodic payments, but Valley
Regional agreed only to offer objections to A.M.A.’s proposed judgment,
which it did. About three weeks later, the trial court held a hearing on
A.M.A.’s second proposed judgment, which included modifications and
clarifications to the proposed structure for periodic payments.
A.M.A. then submitted its third proposed judgment and Valley
Regional submitted its objections. The trial court signed A.M.A.’s
proposal as its final judgment, which ordered the award structured as
follows: (1) five periodic payments of $604,000 from a funded bank
account, to begin on A.M.A.’s “fourth birthday, which will be on October
27, 2018, and the payments shall continue on his birthday each year
through his 8th birthday on October 27, 2022,” and (2) 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. In the event of A.M.A.’s death, the
special-needs trust mandates that any remaining principal and income
in the trust revert to his heirs, which would be his father and mother.
The district court also awarded prejudgment and postjudgment interest.
After the trial court signed the judgment, Valley Regional
requested findings of fact and conclusions of law concerning the periodic
payments. The district court denied that request. Valley Regional also
challenged the judgment through a series of other motions, each of
which the trial court denied.
Valley Regional perfected a timely notice of appeal and brought
its case to the Thirteenth Court of Appeals. In multiple issues, it raised
5
three main challenges to the district court’s judgment. First, it
challenged the legal and factual sufficiency of the evidence for medical
liability, again predicated on causation. Second, it claimed that it had
been denied its right to a jury trial, on the ground that life expectancy
and annual medical expenses should have been submitted to the jury,
as Valley Regional repeatedly asked. Finally, it contended that the
periodic-payments statute is ambiguous and that the trial court had
improperly applied that statute in several respects.
The court of appeals overruled each of Valley Regional’s issues
and affirmed the judgment of the district court.2 We granted Valley
Regional’s subsequent petition for review.
II
We granted this case to further address the complications that
inhere in a trial court’s duty under the periodic-payments statute. We
addressed the statute most recently in Regent Care. Notably, the trial
in this case predated that decision, and we believe that proceedings in
the district court would have been different had our opinion been
available, which informs our decision to remand the case to that court.
Regent Care does not resolve every issue presented here, however, so we
begin by laying out the statute and how we addressed it in Regent Care,
and then turn to the issues presented here.
A
The heart of the periodic-payments statute is Texas Civil Practice
and Remedies Code § 74.503, which provides that “[a]t the request of a
2 640 S.W.3d 867 (Tex. App.—Corpus Christi–Edinburg 2020).
6
defendant physician or health care provider or claimant, the court shall
order that medical, health care, or custodial services awarded in a health
care liability claim be paid in whole or in part in periodic payments
rather than by a lump-sum payment.” Id. § 74.503(a) (emphasis added).
“At the request of a defendant physician or health care provider or
claimant,” moreover, “the court may order that future damages other
than medical, health care, or custodial services . . . be paid in whole or
in part in periodic payments rather than by a lump sum payment.” Id.
§ 74.503(b) (emphasis added). The statute further provides that:
(c) The court shall make a specific finding of the dollar
amount of periodic payments that will compensate the
claimant for future damages.
(d) The court shall specify in its judgment ordering the
payment of future damages by periodic payments the:
(1) recipient of the payments;
(2) dollar amount of the payments;
(3) interval between payments; and
(4) number of payments or the period of time over
which payments must be made.
Id. § 74.503(c)–(d).
The periodic payments are to be made “to the recipient of future
damages at defined intervals.” Id. § 74.501(3). Such “[p]eriodic
payments, other than future loss of earnings, terminate on the death of
the recipient.” Id. § 74.506(b). Finally, “[f]or purposes of computing the
award of attorney’s fees,” the court must reduce the periodic payments
7
to present value “based on the claimant’s projected life expectancy,” id.
§ 74.507.
We first interpreted and applied the periodic-payments statute in
Regent Care. We held that the “court may order that an award of future
medical expenses be paid periodically either in whole or in part,” but
emphasized that the total amount awarded must be the amount that the
evidence shows will compensate the claimant for future damages. 610
S.W.3d at 837. Further, when the trial court orders periodic payments,
it “shall specify the amount, number, timing, and recipient of those
[periodic] payments in its judgment.” Id.
To support such a judgment, the party requesting the periodic-
payments order must identify “for the trial court evidence regarding
each of the findings required by section 74.503 . . . .” Id. Because these
findings are not indispensable to the claim itself—that is, the underlying
medical-liability claim—the trial court may need to receive additional
evidence if the record does not already contain sufficient evidence to
justify a decision under the statute. Id. Any such evidence that the trial
court receives, of course, may not contradict what the jury found. Id. at
837–38. After all, the statute “gives the trial court no discretion to craft
its own award of damages inconsistent with the jury’s verdict.” Id. at
838. In structuring the award, the trial court must also identify
evidence to support the amount it divided between any lump-sum and
periodic payments. Id. at 837.
8
B
We now turn to the issues that Valley Regional brings to this
Court.3 Valley Regional repeatedly asked the district court to submit
life expectancy and annual medical expenses as specific questions to the
jury. The district court repeatedly declined to do so. Valley Regional
properly preserved its objections to each denial, and now contends that
these denials violated both the Texas Constitution and the periodic-
payments statute.
We reject Valley Regional’s constitutional challenge. Like any
litigant, Valley Regional certainly had a right under the Texas
Constitution to a jury determination of every fact essential to the
resolution of the claims brought against it. See, e.g., Oncor Elec. Delivery
Co. LLC v. Chaparral Energy, LLC, 546 S.W.3d 133, 144 (Tex. 2018).
But A.M.A.’s claim remains one for medical malpractice, and Valley
Regional received a jury trial on that underlying claim: whether its
negligence proximately caused A.M.A.’s injuries.
Additionally, as we detailed above, the jury heard evidence on the
requested questions from experts. Both parties’ experts testified
3 Before presenting its periodic-payments challenges, Valley Regional’s
briefing also challenged the legal sufficiency of the evidence to sustain the
jury’s liability findings. A.M.A.’s burden was to put on evidence sufficient to
show that Valley Regional’s negligence proximately caused A.M.A.’s injuries.
We have reviewed the record and find no reversible error in the lower courts’
refusal to sustain Valley Regional’s challenge to the verdict. See, e.g., Gunn v.
McCoy, 554 S.W.3d 645, 658 (Tex. 2018) (evidence in a medical-malpractice
case is legally sufficient when it “rises to a level that would enable reasonable
and fair-minded people to differ in their conclusions”) (citation omitted).
“[F]urther discussion of the[se] issues would not add to the jurisprudence of
the State. In reaching this conclusion, we express no opinion on the court of
appeals’ reasoning.” Regent Care, 610 S.W.3d at 839.
9
concerning life expectancy and annual healthcare expenses. That
evidence necessarily formed part of the jury’s assessment of damages.
The judge, in turn, was required to base her orders concerning the award
structure on the evidence presented at trial.4 The Constitution does not
require a jury to go further and allocate how or when its award will be
paid, which are the points that form the basis of Valley Regional’s
objection. Finally, the periodic-payments statute does not implement a
constitutional guarantee. It instead represents a legislative choice to
provide healthcare providers an option, subject to the statute’s
provisions, to pay damages awards periodically rather than in a lump
sum. Absent the statute, the entire damages award would be due upon
judgment.
A jury may still be required, of course, if a statute so requires,
even if the Constitution does not. But as we indicated in Regent Care, it
is not incumbent upon the court to submit granular questions relating
to the proper structuring of periodic payments to the jury. See 610
S.W.3d at 837 (recognizing the court’s discretion to make decisions
regarding the award’s structure). The statute does not require the jury
to make findings of life expectancy or an annualized assessment of
medical expenses. See Tex. Civ. Prac. & Rem. Code § 74.503. Rather,
as we repeatedly noted, the statute expressly directs “the court,” under
specified conditions, to structure the award as periodic payments (or, if
4 As we explain below, the trial court’s judgment constituted an abuse
of discretion—but the error was not traceable to an improper failure to submit
questions to the jury.
10
appropriate, partly as periodic payments and partly as a lump sum paid
immediately). Id.; Regent Care, 610 S.W.3d at 837.5
Subsections 74.503(c) and (d) require the court to make specific
findings on the dollar amounts for “future damages.” Regent Care
interpreted these provisions as obligating the party that requests the
periodic payments to “identify for the trial court evidence regarding each
of the findings required by section 74.503.” 610 S.W.3d at 837 (emphasis
added). The trial court’s duty to structure the jury award into periodic
payments or a lump sum based on life expectancy and annual medical
expenses means that the statute, like the Constitution, does not require
the jury to make those specific determinations. At the same time, a trial
court retains the discretion, based on the circumstances of the case, to
present questions to a jury that may assist the court in its discharge of
its duty under the statute. As we discuss below, the court must have
evidence to structure any periodic-payments award; presenting
questions to the jury may eliminate doubts in some cases or protect a
resulting judgment from reversal in others. We hold only that a court’s
refusal to submit such questions, here or in other cases, is not in and of
itself error.6
5 Neither does Texas Rule of Civil Procedure 278 require that these
questions be submitted to the jury. We have interpreted this rule to require
submitting “controlling questions” to the jury. Triplex Commc’ns v. Riley, 900
S.W.2d 716, 718 (Tex. 1999). For the same reasons that the statute does not
require the jury to make these findings, neither does the rule.
6 We express no opinion about whether circumstances could ever make
it reversible error for a trial court to refuse a party’s request that it instruct
the jury to answer specific questions on these or related topics.
11
C
Although there is no general need for (or entitlement to) the
court’s submission of granular questions to the jury in the way that
Valley Regional contends, that does not mean that a trial court is
unconstrained in structuring a periodic-payment award. To the
contrary, the entire structure of the statute makes it essential that the
trial court rely on and point to probative evidence regarding its
disposition. See Regent Care, 610 S.W.3d at 837. In this case, such
evidence must support the court’s decision to have only five years of
periodic payments, to place the rest of the amount (some 70% of the
total) in a lump sum, and to place that lump sum in a special-needs trust
that is structured as this one was. See id. (“In other words, any division
between lump-sum payments and periodic payments of damages that
will be ‘incurred after the date of judgment’ must be founded in the
record.”).7
Particularly given the absence of any specific jury findings here,
we see nothing in the trial court’s or the court of appeals’ decisions—or
7 Valley Regional has not challenged the use of special-needs trusts as
tools to facilitate periodic payments of future damages awarded under Chapter
74. Accordingly, while we have no reason to doubt the general propriety and
importance of such trusts, this case provides no opportunity for us, or for the
lower courts on remand, to further opine. On remand in this case, therefore, a
special-needs trust remains an available tool for the district court’s
use. Whether it uses such a trust or anything else, the judgment on remand
must accord with the evidence and the verdict and comply with the statute’s
commands. Valley Regional may not challenge a proposed judgment on remand
simply for using a special-needs trust that otherwise satisfies the statutory
requirements, but it remains free to challenge any specific features of the
judgment—including the terms of a special-needs trust—that would violate or
evade the statute or our decision.
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A.M.A.’s briefs—that shows how the evidence justifies the way the trial
court ordered the periodic payments to be structured. We identify three
key and interrelated problems.
First, the trial court’s periodic-payments order contradicts the
jury’s verdict. The jury awarded an amount for the first eighteen years
of life and then went beyond that to award a smaller (but still
substantial) award for A.M.A.’s expenses after he turned eighteen. The
court, however, limited periodic payments to only five years (up through
A.M.A.’s eighth birthday). To calculate those five years of payments, the
court relied on the testimony of Valley Regional’s expert, who presented
evidence that A.M.A. would require $604,000 in annual medical
expenses. The rest of the award—everything except for those five years
of periodic payments—would be paid immediately to an irrevocable
special-needs trust. By only requiring Valley Regional to pay periodic
payments up to A.M.A.’s eighth birthday, the trial court contradicted the
jury findings, which awarded a far larger amount to last until his
eighteenth birthday (then proceeded to assume at least some expenses
beyond that time). The verdict contemplates the need to go beyond age
eight. The statute affords considerable discretion to the trial court in
structuring periodic-payments awards, but the court has no discretion
to “contradict the jury’s findings on any issues submitted to it.” Regent
Care, 610 S.W.3d at 837–38.
Second, the lump-sum requirement, with the remainder of the
award going to the special-needs trust, violates the statute’s
requirement that “[p]eriodic payments, other than future loss of
earnings, terminate on the death of the recipient.” Tex. Civ. Prac. &
13
Rem. Code § 74.506(b). For the five annual payments, the judgment
correctly recites that, “[i]n the event that [A.M.A.] dies during the five
year period in which the periodic payments are to be paid, [Valley
Regional’s] payment obligation terminates and [Valley Regional] is
entitled to withdraw the remaining funds in escrow.” But the rest of the
award, despite being for future medical expenses, is structured to evade
that requirement. Under the terms of the judgment, the balance of the
special-needs trust will not be restored to Valley Regional if it is not used
for A.M.A.’s medical expenses; instead, it goes to A.M.A.’s parents.
Beyond being an abuse of discretion to structure periodic payments in a
way that contravenes the jury’s verdict, it is an abuse of discretion to
impose a lump-sum payment without evidence supporting the need for
an immediate payment of a lump-sum payment.
Finally, even aside from the possible violation of § 74.506, the
trial court erred by pointing to no evidence that could justify the division
between periodic payments and a lump sum. It is true, and Regent Care
acknowledged, that the statute authorizes a trial court to order only part
of the award to be paid in periodic payments. But only a particular kind
of evidence unlocks that discretion, which is not unfettered. If, “for
example, the record shows a lump-sum payment is warranted to meet
expenses expected soon after trial,” 610 S.W.3d at 837, or if there is
evidence that specific amounts can be expected to occur but in irregular
patterns, then a court may—with caution—be justified in withdrawing
a set amount from periodic payments. The district court relied on no
such evidence of current expenses (including attorney’s fees due) or
immediate medical needs here. As the award stands, the trial court
14
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. 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.
D
The trial court’s order amounts to an abuse of discretion. But our
only decision addressing the periodic-payments statute was released
after the trial court made its decision. Neither the parties nor the court
had the benefit of our analysis in Regent Care, which makes the district
court’s order and the parties’ presentation of their arguments more
understandable.
We therefore remand the case to the district court, which should
have another chance to structure the award—and a first chance to do so
based on Regent Care and today’s decision. Both parties are entitled to
explain, and support with existing evidence, why a particular structure
is sensible. The parties should have the opportunity to address whether
the presentation of additional evidence that does not contravene the
jury’s verdict would be necessary or helpful to the trial court in
discharging its task of rendering a lawful judgment that complies with
the periodic-payments statute.8
8 Valley Regional also challenged the award of attorney’s fees. Tort
plaintiffs typically must pay their own attorney’s fees from the award. When
the periodic-payments statute applies, defendants may delay (and in the case
of an untimely death of the plaintiff, avoid) paying some portion of the
judgment. As we stated above, a defendant would have to pay the entire
judgment up front if the statute did not clearly require otherwise. We would
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III
The judgment below is reversed in part and the case is remanded
to the district court for further proceedings that will allow it to render a
judgment that complies with the periodic-payments statute, including
the statutory provision governing calculations necessary for the
payment of attorney’s fees. In all other respects, the judgment below is
affirmed.
Evan A. Young
Justice
OPINION DELIVERED: April 22, 2022
expect similar textual clarity if the legislature sought to displace or modify
how, when, or in what amount a client could or must pay his attorney’s fees.
Nothing in the statute points to such a change, and the only part of the statute
to mention fees confirms the expectation that they will be paid at the outset.
See Tex. Civ. Prac. & Rem. Code § 74.507. Respondents’ obligation to pay their
attorney’s fees, therefore, is one kind of evidence that the court should consider
on remand when determining how much of the total award should be paid as
a lump sum.
16