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Salgado v. County of Los Angeles12/7/1998
This matter involves the application of Code of Civil Procedure section 667.7 and Civil Code section 3333.2, both of which were enacted as part of the Medical Injury Compensation Reform Act (MICRA). The former provision allows the superior court, at the request of either party, to order that an award for future damages exceeding $50,000 in an action against a health care provider be paid on a periodic basis rather than in a lump sum. The latter provision places a cap of $250,000 on the liability of a health care provider, in an action based on professional negligence, for an injured plaintiff's non-economic losses.
Through his guardian ad litem, Jabes Salgado (hereafter plaintiff) brought this action for medical malpractice against, among others, the County of Los Angeles (hereafter County) for permanent injuries sustained at Harbor General Hospital during his birth. For his non-economic injuries, the jury awarded plaintiff $10,000 for past and $550,000 for future pain and suffering. The superior court applied the statutory cap of $250,000 and, subtracting the $10,000 award, reduced the award for future pain and suffering to $240,000. It ordered that sum to be paid on a periodic basis in equal installments over the course of plaintiff's life expectancy of 66.8 years, funded by a $61,785 annuity purchased by defendant. For his economic injuries, the jury awarded $125,000 for future medical costs and found that the present value of that award was $50,000. The superior court ordered that the $125,000 award also be paid on a periodic basis in equal installments over the course of plaintiff's life expectancy of 66.8 years, funded by a $32,179 annuity purchased by defendant.
For the reasons stated below, we conclude that, although the superior court not unreasonably required payment of non-economic damages over a period of 66.8 years, it erred in reducing the sum used to fund the stream of future periodic payments from $240,000 to $61,785. As will appear, plaintiff was entitled to periodic payment of future non-economic damages totaling, over time, the equivalent of an immediate lump-sum award of $240,000 at the time of judgment, i.e., what the sum of $240,000 would have yielded if invested prudently at the time of judgment. The superior court also erred in disregarding the jury's present value calculation of future economic damages. Accordingly, we reverse the judgment of the Court of Appeal and remand for recalculation of the awards.
I.
On June 15, 1988, plaintiff was born at Harbor General Hospital, owned by County. During a difficult vaginal delivery, physicians fractured plaintiff's left arm and damaged the brachial plexus nerves in his right arm, resulting in a permanent disability to his upper arm known as Erb's Palsy. As a consequence of his injuries, plaintiff has no reflexes and a 30 percent loss of strength in his right arm; he holds it in an unusual position, with the shoulder turned inward, and is unable to rotate it; nor can he raise the arm above shoulder height.
On January 26, 1989, plaintiff filed a medical malpractice action against County.
At trial, the jury was instructed regarding the measure of damages for pain and suffering. The instruction explained: "No definite standard or method of calculation is prescribed by law by which to fix reasonable compensation for pain and suffering. Nor is the opinion of any witness required as to the amount of such reasonable compensation. Furthermore, the argument of counsel as to the amount of damages is not evidence of reasonable compensation. In making an award for pain and suffering you shall exercise your authority with calm and reasonable judgment and the damages you fix shall be ju
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