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Jones v. Metrohealth Medical Center

Court of Appeals of Ohio, Eighth District, Cuyahoga

August 24, 2017


         [Please See Vacated Opinion at 2016-Ohio-4858.]

         Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-11-757131

          ATTORNEYS FOR APPELLANTS/CROSS-APPELLEES Michael F. Becker The Becker Law Firm Co., L.P.A. Paul W. Flowers Paul W. Flowers Co., L.P.A. Pamela E. Pantages Nurenberg Paris Heller & McCarthy.

          ATTORNEYS FOR APPELLEES/CROSS-APPELLANTS For MetroHealth Medical Center, et al. Leslie Moore Jenny Jason P. Ferrante Marshall, Dennehey, Warner, Coleman & GogginSusan M. Audey Irene Keyse-Walker Tucker Ellis L.L.P.

          For Ohio Hospital Association, et al. Anne Marie Sferra Bricker & Eckler L.L.P.

          BEFORE: Stewart, J., Kilbane, P.J., and Boyle, J.



         {¶1} A jury awarded plaintiff-appellant Stephanie Stewart, as mother and next friend of her son, plaintiff-child Alijah Jones, a combination of past and future economic damages, and non-economic damages in the amount of $14.5 million on their medical malpractice action against defendants-appellees MetroHealth Medical Center and Steven Weight, M.D. In post-trial proceedings, and over Stewart's objections, the trial court ordered statutory offsets of collateral sources for political subdivisions as required by R.C. 2744.05(B)(1) and damage caps on non-economic damages as required by R.C. 2744.05(C)(1). The court's offsets reduced the total award to $3.451 million.

         {¶2} In this appeal, Stewart argues that MetroHealth did not prove its political subdivision status as a predicate for asserting its right to statutory offsets. She also argues that because there were no interrogatories submitted to the jury from which it could be determined what amount of the damages award was an amount for lost wages as opposed to loss of services, the court had to speculate on the composition of the award and could not have determined MetroHealth's right to an offset to a reasonable degree of certainty. Stewart also maintains that the court misconstrued the evidence relating to both past and future economic damages and speculated on the jury's intent to award damages only on a life care plan to the exclusion of all other future damages components. Finally, Stewart raises an as-applied constitutional challenge to the enforcement of the collateral source setoffs, as well as constitutional challenges based on due process, equal protection, separation of powers, and the right to a trial by jury.

         {¶3} MetroHealth raises a conditional cross-appeal, to be considered only in the event our disposition of Stewart's appeal reverses or modifies the court's order offsetting economic damages or limiting non-economic damages.

         {¶4} We conclude that R.C. 2744.05 is constitutional in all respects. We also conclude that the court did not err by conducting a post-trial hearing to determine MetroHealth's right to a statutory offset. We do, however, conclude that the offset ordered by the court was error. We reject in whole MetroHealth's cross-appeal.

         I. The Appeal

         {¶5} The jury's verdict and the damages it awarded resulted from a finding that Dr. Weight and MetroHealth failed to adhere to the applicable standard of care when managing Stewart's pregnancy and supervising the birth of her son. Those failures resulted in the child being born at 25 weeks by way of Caesarean section. The child suffers from cerebral palsy, developmental delays, and visual impairment. The medical experts agreed that Stewart's son will need 24-hour attendant care for the remainder of his life. The jury specified the damages award as follows: to the child - $500, 000 for past economic damages, $5 million in non-economic damages, and $8 million for future economic damages; to Stewart - $1 million for non-economic damages.

         {¶6} Before trial concluded, MetroHealth filed a motion asking the court to conduct a post-verdict hearing to determine the amount of any collateral benefits to be offset from a jury award against it as required by R.C. 2744.05(B)(1) . In post-trial motions, MetroHealth asked the court to enforce the $250, 000 cap on non-economic damages pursuant to R.C. 2744.05(C)(1) and Stewart raised a constitutional challenge to both R.C. 2744.05(B)(1) and 2744.05(C)(1).

         {¶7} R.C. 2744.05(B)(1) states that if a claimant is entitled to receive or does receive benefits for injury or loss from insurance or other sources, "the amount of the benefits shall be deducted from any award against a political subdivision recovered by that claimant." R.C. 2744.05(C)(1) states that "damages that arise from the same cause of action, transaction or occurrence, or series of transactions or occurrences and that do not represent the actual loss of the person who is awarded the damages shall not exceed two hundred fifty thousand dollars in favor of any one person."

         {¶8} After conducting a post-trial hearing on MetroHealth's motion, the court issued a written decision granting the motion. Under authority of R.C. 2744.05(C)(1), the court capped the child's $5 million non-economic damages award at $250, 000 and likewise capped Stewart's $1 million non-economic damages award at $250, 000.

         {¶9} The court considered two separate offsets for collateral sources as required by R.C. 2744.05(B)(1): one for the child's $500, 000 award for past economic damages; the other for his $8 million award for future economic damages. The court found, over Stewart's objection, that all of the child's past medical bills were included in the award for past economic damages. It reached this conclusion based on uncontradicted testimony from an expert who testified that neither Stewart nor the child had any out-of-pocket expenses because the medical bills had been paid in full by Medicaid and Social Security.

         {¶10} The court ordered an offset of future economic damages for all medical expenses that the child would incur after his 20th birthday. It found it undisputed that the child would qualify for Medicare on his 20th birthday because of his father's disability, and that Medicare would pay all future medical expenses from that point in time forward. Looking only at the eight-year period between the child's age at the time of the post-trial hearing (12 years old) and his eligibility for Medicaid at age 20, the court concluded that the child could obtain medical insurance under the Affordable Care Act until he became eligible for Medicare. The court determined that the child's maximum expenses for the eight-year period would be $116, 000: a maximum $8, 000 per year premium for medical insurance and a yearly, maximum out-of-pocket expense of $6, 500. The court concluded that expenses allocated in the life care plan should be offset in their entirety (excepting costs for transportation, home care, and housing) and that the remaining amount should be offset by 80 percent to account for what Medicare would cover. After making these deductions, the court reduced the child's award for future economic damages to $2, 951, 291.

         A. Statutory Offset

         {¶11} In her first assignment of error, Stewart complains that the court erred by applying the damages cap and offset provisions of R.C. 2744.05 to MetroHealth because no immunity was available to attach to a political subdivision. Stewart argues that sovereign immunity - the concept that the state cannot commit a legal wrong and is immune from civil suit or criminal prosecution - applies only to the state of Ohio and not to political subdivisions. Noting that Section 16, Article I, of the Ohio Constitution states that, "[s]uits may be brought against the state, in such courts and in such manner, as may be provided by law, " Stewart maintains that the state waived immunity, but that waiver does not apply to political subdivisions due to R.C. 2743.01(B), which defines "political subdivisions" as municipal corporations and bodies politic "to which the sovereign immunity of the state attaches." By Stewart's reckoning, if the state has waived immunity from suit, political subdivisions can have no immunity of their own because their immunity is based on the state's immunity.

         {¶12} Stewart's argument is essentially taken from dicta in the lead opinion in Butler v. Jordan, 92 Ohio St.3d 354, 750 N.E.2d 554 (2001). The proposition on which she relies is not law.

         {¶13} In O'Brien v. Olmsted Falls, 8th Dist. Cuyahoga Nos. 89966 and 90336, 2008-Ohio-2658, we reached this same conclusion and noted the many appellate districts that have "refused to declare R.C. [Chapter] 2744 unconstitutional despite the plurality's pronouncement in Butler." Id. at ¶ 26 (collecting cases). Stewart has provided no compelling reason for us to depart from our precedent and that of other appellate districts.

         {¶14} Stewart next argues that MetroHealth failed to offer evidence at trial that it is a qualifying hospital under R.C. 2744.05. She maintains that not every hospital owned by the government is entitled to political subdivision status - that status attaches only if the county hospital commission is appointed pursuant to R.C. 339.14. According to Stewart, this was a fact that MetroHealth had the burden of establishing at trial and the court erred by accepting evidence from MetroHealth on the issue in a post-trial hearing.[2]

         {¶15} R.C. 2744.05 applies to actions against "a political subdivision" to recover damages for injury, death, or loss to person or property caused by an act or omission in connection with a governmental or proprietary function. A "political subdivision" is defined as, among other things, "a county hospital commission appointed under section 339.14 of the Revised Code[.]" R.C. 2744.01(F). R.C. 339.14(A) allows a board of county commissioners to appoint a hospital commission preparatory to establishing a general hospital or hospital facility.

         {¶16} The question of whether a political subdivision is immune from civil liability is a question of law. Conley v. Shearer, 64 Ohio St.3d 284, 292, 595 N.E.2d 862 (1992); Sampson v. Cuyahoga Metro. Hous. Auth., 188 Ohio App.3d 250, 2010-Ohio-3415, 935 N.E.2d 98, ¶ 21 (8th Dist).

         {¶17} MetroHealth did not offer any evidence at trial in support of its status as a political subdivision; however, we agree with MetroHealth that it was not required to offer that evidence during trial. The statutory deduction for collateral benefits and application of damages caps is to be made by the trial court in post-trial proceedings. This conclusion follows from Buchman v. Bd. of Edn., 73 Ohio St.3d 260, 652 N.E.2d 952 (1995), where the third paragraph of the syllabus states: "[p]ursuant to R.C. 2744.05(B), future collateral benefits, to the extent they can be determined with a reasonable degree of certainty, are deductible from the jury's verdict against a political subdivision." The court's "determination" cannot occur until the jury has rendered a verdict including damages, so it is necessarily conducted post-trial.

         {¶18} What is more, although non-binding, the lead opinion in Buchman[3]understood that R.C. 2744.05 contemplated a post-trial proceeding in which evidence was presented "both at trial and during the post-verdict collateral benefits hearing * * *." Id. at 275. Buchman did so by noting that R.C. 2744.05(B) does not "abrogate that aspect of the collateral source rule which provides that the 'receipt of [collateral] benefits is not to be admitted in evidence, or otherwise disclosed to the jury.'" Id. at 270, quoting Pryor v. Webber, 23 Ohio St.2d 104, 109, 263 N.E.2d 235 (1970).

         {¶19} We are persuaded that R.C. 2744.05(B) requires a post-trial hearing in which the trial judge is authorized to hear additional evidence. The text of R.C. 2744.05(B)(1) states that if a claimant receives or is entitled to receive benefits for injuries or loss, those benefits "shall be disclosed to the court[.]" Although the statute does not explicitly state who has the duty to disclose a claimant's receipt of benefits, the claimant, as the party in receipt of the benefits that might be subject to offset, would be in the best position to make disclosure to the court.

         {¶20} We also believe that R.C. 2744.05(B)(1) requires a post-trial proceeding because mandatory offset implicates the collateral source rule - the jury's knowledge that a political subdivision might be entitled to a statutory damages deduction could improperly affect its determination of damages. What is more, evidence going to a political subdivision's status at trial would be irrelevant to the underlying action. For these reasons, we hold that R.C. 2744.05(B) sanctions a bifurcated proceeding where the court, not the jury, decides the amount that must be offset from a damage award against a political subdivision for any benefits a claimant has received, or is entitled to receive, for a loss or injury. The nature of this statutory process is such that we reject Stewart's contention that the court erred by hearing "new" evidence when ruling on MetroHealth's motion for judgment notwithstanding the verdict in which it raised for post-trial hearing its entitlement to the R.C. 2744.05(B) offsets.

         {¶21} After the jury's verdict, MetroHealth asked the court to grant it judgment notwithstanding the verdict under Civ.R. 50(B). A Civ.R. 50(B) motion for judgment notwithstanding the verdict tests the legal adequacy of the evidence, O'Day v. Webb, 29 Ohio St.2d 215, 280 N.E.2d 896 (1972), paragraph two of the syllabus, so it is based solely on the evidence produced at trial. MetroHealth did, in fact, raise substantive arguments in support of a judgment notwithstanding the verdict, but in addition to those arguments, it sought to invoke the court's post-trial jurisdiction to commence the proceeding envisioned by R.C. 2744.05(B). It stated its intention to do so prior to trial. We express no opinion on whether using a Civ.R. 50 motion for judgment notwithstanding the verdict is the most appropriate vehicle for seeking a statutory offset, but we acknowledge that the motion invoked the court's post-trial jurisdiction. And given that MetroHealth gave notice prior to trial that it intended to seek an offset of damages and the application of caps on non-economic damages, Stewart cannot complain that she was surprised by MetroHealth's motion.

         {¶22} Regarding Stewart's argument against the court's ruling that MetroHealth was a political subdivision for purposes of R.C. Chapter 2744 immunity, the United States Court of Appeals for the Sixth Circuit has recognized that MetroHealth is a political subdivision. See Johnson v. Ohio Supreme Court, 156 Fed.Appx. 779, 779 (6th Cir.2005). And other county hospitals have been recognized as political subdivisions. See, e.g., Hall v. Mem. Hosp. of Union Cty., 3d Dist. Union No. 14-06-03, 2006-Ohio-4552, ¶ 12 (noting that parties did not dispute that Memorial Hospital of Union County was a political subdivision). Stewart's argument rests on the technicality that MetroHealth did not prove its political subdivision status at trial, not on any assertion that MetroHealth is not actually a county hospital recognized as a political subdivision. Having concluded that the court can hear additional evidence at a R.C. 2744.05 post-trial hearing, the court did not err by concluding, post-trial, that MetroHealth is a county hospital and a political subdivision for purposes of R.C. 2744.05.

         {¶23} Stewart next argues that the court failed to adhere to the strict Buchman standard of a "reasonable degree of certainty" when determining the extent to which future collateral benefits were deductible from the jury's verdict. She concedes that the court stated its findings in terms of a reasonable degree of certainty, but claims that it could not possibly have done so within the spirit of the law because the jury's award of future economic damages was not tested by interrogatories that apportioned specific categories of loss like lost wages or lost services. In other words, Stewart argues that in the absence of the jury breaking down how the damages were apportioned, the court could only guess at what amount of the general verdict was made up of damages covered by a collateral source, belying the court's assertion that those amounts subject to offset were proven to a reasonable degree of certainty.

         {¶24} When a political subdivision is found liable to pay damages caused by any injury resulting from an act or omission in connection with a governmental or proprietary function, R.C. 2744.05(B)(1) permits the court to offset from those damages future collateral benefits received by the claimant:

If a claimant receives or is entitled to receive benefits for injuries or loss allegedly incurred from a policy or policies of insurance or any other source, the benefits shall be disclosed to the court, and the amount of the benefits shall be deducted from any award against a political subdivision recovered by that claimant. No insurer or other person is entitled to bring an action under a subrogation provision in an insurance or other contract against a political subdivision with respect to those benefits.

         "It is the political subdivision's burden to prove the extent to which it is entitled to an offset under R.C. 2744.05(B), " but "only to the extent that the loss for which it compensates is actually included in the jury's award." Buchman, 73 Ohio St.3d 260, 652 N.E.2d 952 (1995), at paragraphs four and five of the syllabus. Jury interrogatories are not required to quantify the categories of damages that make up the general verdict, although they are typically the "most efficient and effective method" of doing so. Id. at 270.

         B. Past Economic Loss

         {¶25} The court completely offset the $500, 000 award for past economic damages under R.C. 2744.05(B)(1) because testimony heard at the post-trial hearing showed that Stewart paid nothing out-of-pocket for the child's medical bills. Stewart argues that the court erred by relying on evidence not heard by the jury when deciding that the $500, 000 award of past economic damages must be offset in full because they consisted of medical expenses that had been paid. She claims that MetroHealth should not have been allowed to present a registered nurse in the post-trial hearing to testify regarding the amount of the medical bills and that those bills were paid in full by Medicaid.

         {¶26} We reject Stewart's contention for the reasons previously stated in our discussion of the scope of a R.C. 2744.05 hearing - the court had the ability to hear, post-trial, additional evidence on the question of whether benefits received by the plaintiff should be offset from any award against a political subdivision.

         {¶27} In addition, we find no basis for questioning the amount of past economic damages that were subject to offset. During trial, Stewart offered into evidence an itemized statement of medical bills for past care totaling $518, 633.75. Stewart testified at trial that her son's total medical bills were "a little over $500, 000" and in closing argument, her counsel told the jury that past medical bills were "somewhere around half a million dollars." The jury awarded $500, 000. Although that amount did not match exactly with the itemized medical bills, the award was consistent with both Stewart's testimony and the amount trial counsel asked the jury to award. Tellingly, Stewart made no argument post-trial that the jury erred by failing to award her past economic damages consistent with her itemized medical bills, nor has she separately raised the issue on appeal.

         {¶28} Stewart now argues, however, that the court's decision to offset the entire $500, 000 award for past economic damages fails to take into account that some aspect of the award might have included compensation for expenses incurred by Stewart and two relatives for the transportation and care of her son when taking him to out-of-town medical appointments.

         {¶29} Stewart offered no evidence to document transportation and care expenses for her son and did not ask the jury to award damages for expenditures she and other family members incurred. The closing argument on the value of past economic damages consisted of this: "[The child's] past medical bills. [Stewart] told you they're somewhere around half a million dollars." The court instructed the jury that it could award damages based on, among things, "expenditures" incurred as a result of the child's injury and loss. Based on the evidence presented, the court could be reasonably certain that the $500, 000 award encompassed all of the child's past economic damages requested by Stewart.

         {¶30} Stewart also argues that MetroHealth waived its right to offsets under R.C. 2744.05(B)(1) by failing to offer evidence of what her son's medical providers accepted in full payment of what they billed. Conceding that "the amount of paid medical expenses versus the amount billed is irrelevant to the set-off issue before this Court, " appellant's brief at 16, Stewart nonetheless cites Robinson v. Bates, 112 Ohio St.3d 17, 2006-Ohio-6362, 857 N.E.2d 1195, for the proposition that MetroHealth had to challenge the cost of past medical care or else waive its entitlement to offset.

         {¶31} In Robinson, the Supreme Court held that "the collateral-source rule does not apply to bar evidence of the amount accepted by a medical care provider from an insurer as full payment for medical or hospital treatment." Id. at ¶ 1. Stewart implies that MetroHealth had the obligation to minimize the child's past economic damages at trial, but Robinson says nothing about that - it discussed what a jury "may" consider in evaluating the reasonable value of medical expenses. In other words, both the amount charged by medical providers and the amount accepted by those providers are admissible into evidence. Id. at paragraph one of the syllabus. The question of what constitutes the reasonable value of medical care provided is left to the jury. Id. at ¶ 18.

         {¶32} Nothing in Robinson places the obligation on a defendant to offer evidence of the amount accepted in payment of medical care. In the typical medical malpractice action, the plaintiff will want to introduce evidence of the amount actually charged (usually the higher amount) while the defendant will seek to introduce evidence of the amount accepted by the medical care provider (usually the lower amount). That Stewart is now claiming that MetroHealth had the obligation to offer evidence of the amount accepted in full payment by the child's medical providers underscores her failure to offer that evidence herself at trial. In fact, her current argument is one that could have lowered the past economic damages award.

         {¶33} The court correctly determined that the entire $500, 000 award for past economic damages consisted solely of medical expenses. Stewart does not deny that those medical expenses were paid in full by other sources. There is no question that those payments were benefits for injuries or loss from "any other source" under R.C. 2744.05(B)(1). See Buchman, 73 Ohio St.3d 260, 652 N.E.2d 952 (1995), at paragraph two of the syllabus ("Social Security and Medicare benefits are the type of collateral source benefits contemplated by R.C. 2744.05(B).") MetroHealth was entitled to a complete offset of the entire $500, 000 award for past economic damages under R.C. 2744.05(B)(1).

         C. Future Economic Loss

         {¶34} At trial, Stewart's attorneys argued that her son's future economic damages consisted of two parts: (1) lost future income, and (2) expenses associated with a life care plan. An economist testified at trial that the amount of the child's lost income depended upon his level of education: if Stewart's son attended college but did not earn a four-year degree, he could have expected to earn between $2.3 million to $2.9 million over his statistical work life expectancy; if he only obtained a high school diploma, he could have expected to earn $1.7 million to $2.1 million over his work life expectancy.

         {¶35} The experts also proposed a "life plan" for the child's future care. The life plan was designed to predict the child's medical needs for the rest of his life specific to his brain injury and allocate the appropriate financial resources to address those needs. The plan considered the child's need for medical surveillance (health maintenance), spasticity management (to relieve tightness in his joints), therapeutic modalities, counseling, case management, transportation, housing, equipment and supplies, and attendant care. These needs were assessed based on alternative scenarios for at-home and facility care. The child's economist found the present value of at-home care to be $4.3 million and facility care to be $8.2 million. The jury awarded $8 million for future economic damages.

         {¶36} In its ruling on MetroHealth's motion to offset future economic damages, the court held that the $8 million in damages "correspond to the same categories of future care recommended by Plaintiff's expert, [so] this court will not be left to speculate as to the damages that must be set off." On that basis, the court found that the entire $8 million award for future damages was subject to offset under R.C. 2744.05(B)(1).

         {¶37} The court's findings are erroneous for two reasons. First, the court could not have concluded to a reasonable degree of certainty that the $8 million award for future economic damages was comprised of only the life care plan. The court failed to consider the possibility that at least some part of the $8 million award consisted of lost future wages. Secondly, the trial court accepted a setoff calculation in the life care plan that was incorrect.

         {¶38} Before addressing Stewart's arguments, we first address MetroHealth's assertion that Stewart cannot argue that the $8 million award may have contained a loss of future income component because she limited the scope of her claims for future economic damages "to what can be fixed or what can be replaced with services or equipment or medication." MetroHealth argues that loss of future income is not something that can be "fixed" or "replaced with services, equipment, or medication." We reject this assertion. During closing argument, counsel for the child asked the jury to award $8 million for the costs of future care and $2 million in lost income. In no sense did Stewart "limit" the request for damages to the cost of future care only.

         {¶39} The $8 million award for future economic damages closely corresponded to the dollar amount requested by Stewart under "the same categories of future care recommended by Plaintiffs expert[, ]" so we understand why the court would conclude that the award consisted solely of damages for the life care plan. But to accept the court's finding that the award consisted entirely of future care forces the conclusion that the jury completely ignored uncontradicted evidence concerning the child's lost future income and decided to award nothing for that loss. While that could have been a possible outcome, it is just as likely that the $8 million award consisted of an amount for the life care plan and lost future income. The two life care plan options presented to the jury valued at-home care at $4.3 million and facility care at $8.2 million. While counsel for Stewart asked the jury to award $8 million for the life care plan, the jury may have assigned a middle value to the life care plan consistent with testimony by one of the child's experts who testified that the child would not necessarily have to enter facility care immediately, but was of the firm opinion that the child would have to enter facility care at some future point in time. That the possibility exists that the jury could have determined the amount of damages in that fashion takes the court's finding out of the realm of what is reasonably certain for purposes of offset.

         {¶40} The uncertainty present in apportioning the $8 million award is the result of there being no interrogatories to determine the specific composition of the award for future economic damages. Of course, neither party was required to submit specific interrogatories, but a political subdivision like MetroHealth that makes it known it intends to seek a post-trial offset for collateral benefits chooses to forego offering specific interrogatories at its own peril. MetroHealth, as the party seeking an offset under R.C. ...

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