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How the settlement credit and non-economic damages cap are applied have a big impact on a plaintiff's judgment Contact Now

New Texas Supreme Court opinion is favorable to medical malpractice plaintiffs at trial

How the settlement credit and non-economic damages cap are applied have a big impact on a plaintiff's judgment

Experienced Texas medical malpractice lawyers know that most healthcare liability claims settle before trial. We’ve heard multiple mediators say that 85–90 percent of claims settle before trial, and that's in line with what we have seen.

Most of the time, in our experience, when a plaintiff settles the case it’s with all defendants. Medical malpractice lawsuits frequently have multiple defendants, which could include hospitals, doctors, or other healthcare providers.

Sometimes, though, plaintiffs settle a case with some defendants and try the case against the remaining healthcare providers. It really depends on the specific facts of the case as to whether this is a good idea. In some situations, though, it’s simply unavoidable.

That’s what happened in a significant recent case that the Texas Supreme Court decided on May 8, 2020. The case is styled Regent Care of San Antonio, L.P. v. Robert H. Detrick et al., No. 19-0117. You can read the court’s opinion here.

The underlying facts of the case are tragic. The patient was admitted to a skilled nursing facility (SNF) for short-term treatment of a rash before a planned hip replacement surgery. While he was a resident at the SNF, he began having problems with incontinence.

Incontinence is the inability to control urination. It’s an important clinical finding that any competent physician would want to know about because it’s a sign of a potential neurological problem. Unfortunately, according to the patient, the nursing home staff didn’t inform his doctors of this fact.

As is often the case when there is a neurological problem, this patient’s symptoms got progressively worse over the next few weeks. On top of his urinary incontinence, he stopped being able to feel or move his legs.

Finally, he was transferred to a hospital. An MRI scan identified a tumor in his spinal canal that was compressing his spinal cord. This was an immediate, clear explanation for his deteriorating neurological status. Anything that compresses the spinal cord, whether it’s a tumor, epidural abscess, or epidural hematoma, cuts off or diminishes the blood supply and oxygenation to the spinal cord and can cause permanent nerve injury.

The only cure for this condition is surgery to decompress the spinal cord. In terms of restoring function and preventing permanent neurological injury, the sooner the patient is taken to the operating room, the better. At trial, a medical expert witness said that surgery even a few days earlier would have allowed the patient to recover, including being able to walk again.

How a judgment is calculated when there’s a settling defendant

Facing permanent paralysis, the patient and his wife sued Regent Care of San Antonio (the skilled nursing facility), and his two physicians and their medical practices. Before trial, he settled with all of the defendants except the nursing home for a total of $1,850,000.

This is one of those cases where I believe it made sense for the patient to take the settlement offer of nearly $2 million. The opinion is unclear as to why the nursing home didn’t settle.

The case went to trial and the jury awarded a substantial verdict against Regent Care including:

• $3 million for future medical expenses

• $390,000 For past medical expenses

• $245,000 for loss of household services (the cost of the normal services that the patient could no longer do around the house because of his paralysis and injuries)

• $10,250,000 for non-economic damages, including things like pain, suffering, and mental anguish

By operation of Texas tort reform laws, the non-economic damages were capped at $250,000. The significant awards for past and future medical expenses and loss of household services, though, were not capped.

When a plaintiff proceeds to trial against one defendant after settling with other defendants, there are some special considerations. The jury will hear evidence about the entire care at issue and, when finding negligence, will determine the percentage responsibility of each defendant, whether settling or non-settling, for the plaintiff’s injuries.

The non-settling defendant has the opportunity to elect between a dollar-for-dollar settlement credit or percentage responsibility, as determined by the jury. In the event of a plaintiff’s verdict, the trial judge would make the appropriate adjustment.

In this case, the non-settling defendant elected a dollar-for-dollar settlement credit, which is not surprising given the pre-trial settlement of nearly $2 million on behalf of the other defendants.

It was up to the trial judge to apply the law to the jury verdict and enter a judgment.

This is where the case gets interesting.

First, the trial judge calculated the percentage of economic damages (that are not capped) and the percentage of non-economic damages (which are capped), which worked out to be 27 percent and 73 percent, respectively.

Second, the trial court applied the $1,850,000 settlement credit in a pro rata fashion. In other words, the judge deducted 27 percent of the $1,850,000 settlement from the economic damages, and 73 percent of the $1,850,000 settlement from the non-economic damages.

Third, the judge applied the non-economic damages required by Texas tort reform laws, which further reduced the non-economic damages award to a total of $250,000.

Handling the future medical expenses

Texas Civil Practice & Remedies Code Section 74.503(a) allows a defendant to request future medical care to be paid in periodic payments, rather than as a lump sum.

This rather ambiguous tort reform statute, though, leaves it to the discretion of the trial judge to determine how much of the future medical care is paid up front versus in periodic payments and the terms of those periodic payments.

Here, the judge ordered only $256,358 dollars to be paid over a 24-month period, which left over $2 million to be paid by the non-settling defendant in a lump sum.

The nursing home wasn’t happy

Needless to say, the skilled nursing facility that chose not to settle this serious medical malpractice case before trial wasn’t happy with the way the judge entered judgment after the jury’s verdict. Regent Care appealed.

In a surprise opinion, the Texas Supreme Court ruled in favor of the plaintiff, holding that:

• The trial court properly applied the settlement credit and damages separately.

• The amount of periodic payments awarded was not abuse of the trial judge’s discretion.

The ins and outs of this case illustrate the complexity of medical malpractice cases under Texas law, from intake through mediation and settlement to trial and appeal.

For competent representation in handling your potential claim, contact a top-rated experienced Houston, Texas medical malpractice lawyer.

Robert Painter is an award-winning medical malpractice attorney at Painter Law Firm PLLC, in Houston, Texas. He is a former hospital administrator who represents patients and family members in medical negligence and wrongful death lawsuits all over Texas. Contact him by calling 281-580-8800 or emailing him right now.


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