Craig v. Magee Memorial Rehabilitation Center

OPINION

McDERMOTT, Justice.

This is a medical malpractice action in which a jury returned a verdict in favor of appellees against defendant Magee Memorial Rehabilitation Center, appellant herein, in the amount of $50,000. The jury also found against appellees and in favor of defendant Marjorie Hosfeld, M.D., on allegations of joint liability. The trial court thereafter added damages for delay pursuant to Pennsylvania Rule of Civil Procedure 238. On appeal, the Superior Court affirmed, per curiam. We granted review to consider appellant’s claim concerning Rule 238.¹

The facts of the instant action are as follows. The wife-plaintiff was originally injured in an automobile accident, resulting in the loss of motor function in both legs. After four months of treatment at other facilities, she was transferred to Magee Memorial Rehabilitation Center, under the care of Dr. Marjorie Hosfeld. While receiving treatment there, Mrs. Craig suffered injuries when she sustained a burn as the result of coming into contact with an air blower which was being utilized in the treatment of a decubitis ulcer. This occurred in May of 1974.

In April, 1976, plaintiffs instituted suit against the Magee Center and Dr. Hosfeld. However, it was not until December, 1980, that the case came to trial. A mistrial was occasioned at that time, and it was not until January, 1983, that the case was tried to conclusion before a jury in the Court of Common Pleas of Philadelphia. The pre-trial record of the litigation reveals frequent and lengthy postponements, delays and requests for continuances, many attributable to appellees, plaintiffs below. The trial ended in the vindication of Dr. Hosfeld. However, the jury found the Magee Center liable and awarded the above mentioned verdict. Since the jury’s verdict exceeded the defendants’ last offer of settlement by more than 25%,² delay damages of $16,450 were imposed pursuant to Rule 238.

Appellant filed post-trial motions asserting, among other things, the unconstitutionality of Rule 238. These motions were denied and the verdict was affirmed on appeal. Both lower courts dismissed appellant’s Rule 238 arguments, relying on the decision of this Court in Laudenberger v. Port Authority of Allegheny County, 496 Pa. 52, 436 A.2d 147 (1981). Upon petition we granted allocatur to reexamine Laudenberger, id., and Rule 238.³

Rule 238 was promulgated as an exercise of this Court’s rule-making authority. It was a bold experiment that seemed reasonable, salutary and equitable. It was reasonable because it sought to clear dockets cluttered by unreasonable refusals to pay what was owed. It was salutary in that it provided a penalty for profiting by denying what was due. It was equitable because it compensated for loss caused by an unreasonable refusal to correct a tortious injury.

It was an experiment. The Laudenberger Court faced a challenge shortly after the promulgation of the Rule. They faced, as we face now again, an attack on the Rule upon grounds of Equal Protection, Due Process and the contention that this Court slipped, under procedural cover, into definitive substantive law.

The Laudenberger Court accepted as an underlying reason for the Rule that there was deliberate, profitable delay on the part of tortfeasors. If one accepts that a refusal to settle is always prompted by such motives, then no wrong is done a wrongdoer, and the rationale of Laudenberger would have settled the argument presented for then and always.

Now seven years after the Rule’s promulgation, we face not only the previous challenges, but a different set of facts, viewed from a different perspective. The facts here are the obverse of the coin: the defendant below argues that there was delay, but not his; that the delay was the fault of the plaintiffs below. Appellant does not argue that the sanctions of Rule 238 may not be reasonable, salutary, and equitable.

There is no point in contending that a procedural rule may exist that punishes without fault, and is yet consistent with Due Process. Neither is there point in arguing that a procedural rule that punishes a defendant qua defendant does not smack of a substantive enlargement of duties owed. We do not overrule the rationales of Laudenberger, for they have vitality of their own in the context of the ends sought. We today suspend the Rule because experience shows that the ends sought run too tight a gauntlet through Due Process, by denial of a forum to assess fault for the delay sought to be avoided. In short, Rule 238 has become an uncontestable presumption that all fault lies with a defendant. There are too many reasons why such is not always the case; and what is not always so may not be irrebuttable when a penalty follows.

Having had now the opportunity for observation of the workings of Rule 238,⁴ and being presented herein with a factual context which frames in sharp relief the Rule’s inequitable operation, we direct that those mandatory provisions of Rule 238 which assess delay damages against defendants without regard to fault are suspended as of this date for all cases now pending in the courts of this Commonwealth, and for any cases instituted hereafter.

In its stead we direct that claims for delay damages are to be presented by petition within five days of a jury verdict or arbitration award. Within five days thereafter the respondent’s answer shall be due. If the plaintiff’s recovery resulted from a jury verdict, the judge who presided over the trial is to consider the petition and answer. Prior to reaching a decision, the judge may hold a hearing to resolve any factual disputes. If the plaintiff’s recovery resulted from an arbitration proceeding, the parties’ petition and answer shall be submitted to the next available arbitration panel, and a hearing shall be conducted to resolve any factual disputes. Thereafter a decision shall be rendered, awarding or denying delay damages consistent with Pa.R. Civ.P. 238(a)(1).

In making a decision on a plaintiffs entitlement to delay damages the mere length of time between the starting date⁵ and the verdict is not to be the sole criterion. The fact finder shall consider: the parties’ respective responsibilities in requesting continuances, the parties’ compliance with rules of discovery; the respective responsibilities for delay necessitated by the joinder of additional parties; and other pertinent factors.

As we have indicated above, the suspension of the mandatory provisions of Rule 238 is to be given prospective effect only. Those parties whose cases are now in the appellate or post-trial process, who have not asserted attacks on the Rule 238 aspect of the damage award, may not now assert such challenges. However, in those cases where the issue has been preserved, the court before whom the case resides on or after this date is to resolve the issue in a manner consistent with this opinion.

Our directive in this matter is to remain in effect until a new Rule on delay damages can be promulgated. The issue will be immediately brought to the attention of the Civil Procedural Rules Committee for their consideration.

Accordingly, the order of the Superior Court is reversed, and the matter is remanded to the Court of Common Pleas of Philadelphia for proceedings consistent with this opinion.

HUTCHINSON, J., concurs in the result and files a separate concurring opinion. LARSEN, J., files a dissenting opinion in which PAPADAKOS, J., joins.

1 . Pennsylvania Rule of Civil Procedure 238 provides:

(a) Except as provided in subdivision (e), in an action seeking monetary relief for bodily injury, death or property damage, or any combination thereof, the court or the arbitrators appointed under the Arbitration Act of June 16, 1836, P.L. 715, as amended, 5 P.S. § 30 et seq., or the Health Care Services Malpractice Act of October 15, 1975, P.L. 390, 40 P.S. § 1301.101 et seq., shall

(1) add to the amount of compensatory damages in the award of the arbitrators, in the verdict of a jury, or in the court’s decision of a nonjury trial, damages for delay at ten (10) percent per annum, not compounded, which shall become part of the award, verdict or decision;

(2) compute the damages for delay from the date the plaintiff filed the initial complaint in the action or from a date one year after the accrual of the cause of action, whichever is later, up to the date of the award, verdict or decision.

(b) In arbitration under the Act of 1836, the amount of damages for delay shall not be included in determining whether the amount in controversy is within the jurisdiction of the arbitrators.

(c) Except as provided in subdivision (e), damages for delay shall be added to the award, verdict or decision against all defendants found liable, no matter when joined in the action.

(d) The court may, and on request of a party shall, charge the jury that if it finds for the plaintiff, it shall not award the plaintiff any damages for delay because this is a matter for the court.

(e) If a defendant at any time prior to trial makes a written offer of settlement in a specified sum with prompt cash payment to the plaintiff, and continues that offer in effect until commencement of trial, but the offer is not accepted and the plaintiff does not recover by award, verdict or decision exclusive of damages for delay, more than 125 percent of the offer, the court or the arbitrators shall not award damages for delay for the period after the date the offer was made.

(f) If an action is pending on the effective date of this rule, or if an action is brought after the effective date on a cause of action which accrued prior to the effective date, damages for delay shall be computed from the date plaintiff files the initial complaint or from a date one year after the accrual of the cause of action, or from a date six (6) months after the effective date of this rule, whichever date is later.

(g) This rule shall not apply to

(1) eminent domain proceedings;

(2) pending actions in which damages for delay are allowable in the absence of this rule.

2 . The defense offer of settlement was $25,000.

3 . In Colodonato v. Consolidated Rail Corp., 504 Pa. 80, 470 A.2d 475 (1983), a case also involving Rule 238, we rejected the argument that punitive damages were to be included in the amount of compensatory damages upon which Rule 238 damages are calculated.

4 . The Explanatory Comment to Pa.R.C.P. 238 states in part as follows: Experience under the Rule will indicate whether it will serve the intended purpose of stimulating early settlement of claims and reducing congestion in the courts.

5 . See Pa.R.Civ.P. 238(a)(2).