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Smith v. Superior Court12/31/1991
KLEINSCHMIDT, Judge
In this case we hold that the statute which allows for the periodic payment of any judgment for loss of future economic benefits in medical malpractice cases is constitutional. The case arises out of the death of the plaintiffs' decedent as the result of alleged malpractice by one of the defendants. The trial court ruled that the statute allowing for periodic payments for loss of future economic benefits, as opposed to a lump sum payment, was unconstitutional. The defendants filed this special action, and we accepted jurisdiction. We now grant the relief requested.
The periodic payment statute, Ariz. Rev. Stat. Ann. ("A.R.S.") §§ 12-581 through 12-591, was enacted in 1989. Before then, damages for future economic loss were awarded in a lump sum. The trial court concluded that a lump sum award is more valuable than the same amount paid in installments over a period of time. The court ruled that the statute was a limitation on damages and the right to pursue a cause of action in violation of art. II, § 31 and art. XVIII, § 6 of the Arizona Constitution. It also ruled that the statute was a forbidden special law within the meaning of art. IV, part 2, § 19 of the Arizona Constitution. Finally, the court also held that the statute violates the equal protection clauses of the United States Constitution and of the Arizona Constitution.
THE STATUTORY SCHEME
We will paraphrase the pertinent parts of the statute in the context of an action for wrongful death. The full text of the statute is found in the appendix which follows this opinion. A discussion of the purpose of the statute and how it is intended to operate may be found in Roger C. Henderson, Designing a Responsible Periodic Payment System for Tort Awards; Arizona Enacts a Prototype, 32 Ariz. L. Rev. 21 (1990).
The periodic payment statute applies only to medical malpractice suits. A.R.S. § 12-582. Only future medical expenses and lost earnings are subject to payment in monthly installments. All damages already accrued, and future non-economic damages like pain and suffering, are to be paid in a lump sum. A.R.S. § 12-584.
Either party to an action may invoke the provisions of the periodic payment statute. A party opposing periodic payments must show by clear and convincing evidence that good cause exists to allow a lump sum award for loss of future earnings. A.R.S. § 12-583. In considering whether good cause exists, the court may take into account the likelihood that those to whom a lump sum might be paid may dissipate the award, whether the amount of future damages and the period of time over which they will be paid is too insignificant to warrant the application of the statute, whether the party responsible for payment of future damages is able to fund the judgment, and any other consideration the court deems relevant. Id.
The statute requires the trier of fact to determine future economic damages by considering how long the deceased would have lived but for the defendant's wrongful act, changes in the deceased's earning potential, and changes in the purchasing power of the dollar. Because the damages are to be paid in installments, the total is not discounted to present value. A.R.S. § 12-585.
The plaintiffs are to receive installment payments over the period the deceased would have lived had his death not resulted from the defendant's wrongful act. A.R.S. § 12-584. If one or more but fewer than all of the plaintiffs die, the payments are reallocated to the surviving plaint
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