Galayda v. Lake Hospital Systems, Inc.

1994 Ohio 64, 71 Ohio St. 3d 421
CourtOhio Supreme Court
DecidedDecember 30, 1994
Docket1993-2276
StatusPublished
Cited by79 cases

This text of 1994 Ohio 64 (Galayda v. Lake Hospital Systems, Inc.) is published on Counsel Stack Legal Research, covering Ohio Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Galayda v. Lake Hospital Systems, Inc., 1994 Ohio 64, 71 Ohio St. 3d 421 (Ohio 1994).

Opinion

A. William Sweeney, J.

R.C. 2323.57 2 mandates that, upon timely motion of a party, awards of future damages in excess of $200,000 be paid periodically rather than in a lump sum in medical malpractice claims. R.C. 1343.03(C), 3 Ohio’s prejudgment interest statute, provides for an award of interest to be granted in favor of successful tort plaintiffs, when the trial court finds that the defendant failed to act in good faith to achieve pretrial settlement of the dispute. We are called upon in this case to determine the constitutionality of each of these statutes. We affirm the findings of the lower courts that R.C. 1343.03(C) survives a constitutional challenge, while R.C. 2323.57 does not.

I

Constitutionality of Ohio’s Periodic Payment of Future Damages Statute

Both lower courts found that R.C. 2323.57 violates the Right to Jury Trial Clause of Section 5, Article I and the Due Process Clause of Section 16, Article I of the Ohio Constitution. For the reasons which follow, we affirm.

*425 Section 5, Article I of the Ohio Constitution provides that:

“The right of trial by jury shall be inviolate, except that, in civil cases, laws may be passed to authorize the rendering of a verdict by the concurrence of not less than three-fourths of the jury.”

It is well established that the right of trial by jury in this state is a fundamental and substantial right guaranteed by the Ohio Constitution. Sorrell v. Thevenir (1994), 69 Ohio St.3d 415, 421, 633 N.E.2d 504, 510; Kneisley v. Lattimer-Stevens Co. (1988), 40 Ohio St.3d 354, 356, 533 N.E.2d 743, 746; and Cleveland Ry. Co. v. Holliday (1933), 127 Ohio St. 278, 284, 188 N.E. 1, 3. This court has held there is a fundamental constitutional right to a trial by jury in negligence actions. Sorrell, supra, 69 Ohio St.3d at 422, 633 N.E.2d at 510; Kneisley, supra, 40 Ohio St.3d at 357, 533 N.E.2d at 746. Included in that right is the right to have a jury determine all questions of fact, including the amount of damages to which the plaintiff is entitled. Sorrell, supra, 69 Ohio St.3d at 422, 633 N.E.2d at 510.

R.C. 2323.57(C) requires a trial judge, upon timely motion of any party, to order that any future damages award which exceeds $200,000 be paid in periodic installments rather than in a lump sum upon entry of judgment. Moreover, R.C. 2323.57(E)(2) provides, in pertinent part, that “[t]he total amount paid under this division and the periodic payments plan shall not exceed the amount of the judgment.” R.C. 2323.57(F)(1) further mandates that, if a plaintiff dies prior to the receipt of all of the periodic payments, all payments for future medical expenses and for noneconomic loss, such as pain and suffering, loss of consortium, disfigurement, mental anguish and any other intangible loss, shall cease.

In Ohio, a plaintiff is entitled to an award of damages to compensate him for losses which he is reasonably certain to incur in the future. Pennsylvania Co. v. Files (1901), 65 Ohio St. 403, 407, 62 N.E. 1047, 1047; Roberts v. Mut. Mfg. & Supply Co. (1984), 16 Ohio App.3d 324, 16 OBR 355, 475 N.E.2d 797. Under the common law of Ohio, future damages must be reduced to present value, and a defendant is entitled to a jury instruction to that effect. Maus v. New York, Chicago & St. Louis RR. Co. (1956), 165 Ohio St. 281, 59 O.O. 366, 135 N.E.2d 253, paragraph one of the syllabus. Thus in Ohio, a jury is to return a verdict not in an amount reflecting the actual damages it deems to be reasonably certain to occur in the future, but rather in a reduced amount representing the present value of those actual damages.

It is evident that application of R.C. 2323.57 to a jury verdict does not merely mandate the manner in which a judgment shall be paid; rather, it requires the trial court to further reduce the jury’s award of damages already once reduced to present value. Application of the statute quite simply results in a successful *426 plaintiffs receiving less than the jury awarded, and deprives the most severely injured victims of the benefits of investment.

That R.C. 2323.57 regulates more than merely the manner in which a judgment is paid and instead reduces the actual value of the verdict can be illustrated by comparing two hypothetical plaintiffs, both of whom receive future damages awards of $1,000,000. Assume the first plaintiff receives his entire judgment in a lump sum, but determines to use the proceeds to purchase an annuity. Assume the second plaintiff is subjected to application of R.C. 2323.57. Obviously the stream of income produced by investment in an annuity by the first plaintiff of the entire $1,000,000 will exceed the payout generated in the second case, where the entirety of the judgment (except the first $200,000) will be received in the future with no regard for the effect of inflation and no interest or other investment appreciation. This is assured by application of R.C. 2323.57(E)(2), which specifically provides that “[t]he total [lump sum] amount paid under this division and the periodic payments plan shall not exceed the amount of the judgment.” It is readily apparent that R.C. 2323.57 effectively reduces a jury’s award without the consent of the plaintiff. 4

For the foregoing reason, we find that R.C. 2323.57(C) invades the jury’s province to determine damages, and that the statute violates a plaintiffs right to trial by jury as guaranteed by Section 5, Article I of the Ohio Constitution.

Nor is R.C. 2323.57 consistent with the Due Process Clause of the Ohio Constitution. Section 16, Article I of the Ohio Constitution guarantees that every person who suffers a legally compensable injury “shall have remedy by due course of law.” This provision is the equivalent of the Due Process Clause of the Fourteenth Amendment to the United States Constitution. Direct Plumbing Supply Co. v. Dayton (1941), 138 Ohio St. 540, 544, 21 O.O. 422, 424, 38 N.E.2d 70, 72.

The trial court found R.C. 2323.57 to be “unreasonable, arbitrary, and [to have] no reasonable relationship to any good which may have been perceived by the Legislature to benefit the public health and welfare.” The court of appeals concurred that R.C. 2323.35 is unconstitutional based upon due process grounds. We agree with the lower courts that R.C. 2323.57 violates the Due Process Clause of the Ohio Constitution for the reasons set forth in Sorrell, supra. There is insufficient evidence of a relationship between tort reform legislation and the availability or affordability of medical malpractice insurance. Id., 69 Ohio St.3d at 423, 633 N.E.2d at 511.

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Bluebook (online)
1994 Ohio 64, 71 Ohio St. 3d 421, Counsel Stack Legal Research, https://law.counselstack.com/opinion/galayda-v-lake-hospital-systems-inc-ohio-1994.