§ 6-5-543 — Damages Against Health Care Provider to Be Itemized; Future Damages Over $150,000 to Be Paid by Periodic Payments Over Period of Years; Judgment to Specify Payment Terms; Requirement to Post Security or Provide Evidence of Insurance; Future Damages Not to Be Reduced to Present Value; Attorney’s Fees; Termination of Periodic Payments; Contempt of Court Upon Continuing Pattern of Failure to Make Payments; Modification of Judgment; Legislative Intent

Alabama § 6-5-543

• Jurisdiction: Alabama
• Title 6: Civil Practice
• Ch. 5: Actions
• Art. 29: Medical Liability Act of 1987

Text

(a) In any action for injury or damages whether in contract or in tort against a health care provider based on a breach of the standard of care the damages assessed by the trier of fact shall be itemized as follows:
(1) Past damages,
(2) Future damages,
(3) Punitive damages.
The trier of fact shall not reduce any future damages to present value. If the trial court determines that any one or more of the above categories is not recoverable in the action, that category or categories shall be omitted from the itemization.
(b) Where the damages assessed against a defendant or defendants by the trier of fact include an award of future damages, the trial court shall comply with the following in rendering its judgment in the case:
(1) Judgment shall be entered against the defendants for all past damages and punitive damages assessed against the defendants by the trier of fact;
(2)a. If the award of future damages assessed by the trier of fact is $150,000 or less, the trial court shall enter judgment against the defendants for the amount of such future damages.
b. If the award of future damages assessed by the trier of fact is greater than $150,000, the trial court shall (i) enter judgment against the defendants for $150,000 of such future damages and (ii) enter judgment requiring the defendants to pay the balance of such future damages in excess of $150,000 by periodic payments over a period of years not to exceed such period of years as, according to the evidence offered during the trial of the case, such future damages may be incurred. In entering a judgment against the defendants ordering the payment of future damages by periodic payments the trial court shall make a specific finding as to the dollar amount of periodic payments which will compensate the judgment creditor for such future damages as the same may be incurred, as determined from the evidence offered during the trial of the case. If, or to the extent that, the evidence offered at trial did not indicate the approximate time or timeframe within which the future damages would be incurred, the trial court, for the purpose of determining the amount of periodic payments and the interval between such payments, shall conclusively presume that such damages will be incurred throughout the life expectancy of the judgment creditor on an equal monthly basis. The judgment ordering payment of future damages by periodic payments shall specify the recipient or recipients of the payments, the dollar amounts of the payments, the interval between payments, and the number of payments or the period of time over which payments shall be made. The total amount of all such periodic payments when added to the sum of $150,000 and when added to that portion of the future damages award utilized for the payment of a portion of the attorney’s fees owed by the judgment creditor shall not exceed the total amount of future damages contained in the verdict.
(c) As a condition to authorizing periodic payments for future damages the court shall require that the defendants either post security sufficient to assure full payment of such damages, or provide evidence the defendants have insurance sufficient to pay the periodic payments as the same become due and that the insurance company which is obligated to pay the judgment holds a certificate of authority in this state, or purchase an annuity of sufficient value to pay the future damages. Nothing contained herein shall be construed as limiting the authority of the trial court to order a new trial, enter a judgment notwithstanding the verdict or order a remittitur of damages. The provisions of this section shall also apply to any judgment entered following remittitur.
(d) The future damages shall not be reduced to present value and no interest is to be charged on said damages. No evidence shall be received by the trier of fact concerning the present value of such future damages except pursuant to this subsection. If, as part of the plaintiff’s contract with his attorney, the plaintiff is obligated to pay his attorney a fee based on that portion of the award of future damages which exceeds $150,000, the court shall determine what portion of the award of future damages in excess of $150,000 is owed to the attorney under the contract and shall enter judgment for the remainder of the award of future damages in excess of $150,000 as provided in subsection (b)(2)b. As to that portion of the award of future damages in excess of $150,000 which is owed to the plaintiff’s attorney, that portion shall be reduced to present value by the court, utilizing the life expectancy of the judgment creditor, and judgment shall be entered against the defendant for the reduced amount.
(e) Where a judgment is entered for the payment of future damages by periodic payments the following shall apply:
(1) If the judgment creditor dies before the termination of the period of years during which such payments are to be made, the liability of the judgment debtor and every entity or person who has assumed his obligations to pay the judgment creditor shall cease and the estate of the judgment creditor shall have no claim for such payments, except that damages awarded for loss of future earnings as determined by the court shall not be reduced or payments terminated by reason of the death of the judgment creditor but shall be paid to a spouse or children, or both, to whom the judgment creditor owed a duty of support, as provided by law, immediately before his death.
(2) Such duty of support shall be deemed to cease upon the death or remarriage of a spouse or the death or attainment of age 22 years by a child, provided, however, that upon the death of a spouse leaving children to whom the judgment creditor owed a duty of support as set out above, payments due the spouse shall be paid to the children until they attain the age 22 years. The death of a child under 22 years of age terminates all payments to him.
(3) In the event the court finds that the judgment debtor has exhibited a continuing pattern of failure to make payments as specified in this section, the court shall find the judgment debtor in contempt of court and, in addition to the required periodic payments, shall order the judgment debtor to pay the judgment creditor all damages caused by the failure to make such periodic payments, including court costs and reasonable attorney’s fees. In addition, where an installment payment is more than 20 days late, there shall be added to the amount due for that installment interest from the date payment was due at the rate of 20 percent per annum compounded daily, and attorney’s fee if necessary to collect the amount due.
(f) The court which rendered the original judgment may, upon petition of any party in interest, modify the judgment to award and apportion the unpaid future damages in accordance with subsection (e) of this section. Following the occurrence or expiration of all obligations specified in the periodic payment judgment, any obligation of the judgment debtor to make future payments shall cease and any security given shall revert to the judgment debtor.
(g) In the event periodic payments are ordered under this section, the court shall order the judgment marked satisfied when the judgment debtor satisfies the court that he is adequately insured or posts security sufficient to assure full payment of such damages or purchases an annuity of sufficient value as set out in subsection (c) of this section.
(h) It is the intent of the Legislature in enacting this section to require the entry of judgments in malpractice actions against health care providers which provide for the payment of future damages in excess of $150,000 through periodic payments rather than lump sum payments. By authorizing periodic payment of judgments as required herein it is the intent of the Legislature that the courts will utilize such judgments to provide compensation sufficient to meet the needs of an injured plaintiff and those persons who are dependent upon the plaintiff for the period of years during which said future damages may be incurred, and to eliminate the potential windfall from a lump sum recovery which was intended to provide for the care of an injured plaintiff over an extended period who then dies shortly after the judgment is paid, leaving the balance of the judgment award to persons and purposes for which it is not intended. It is also the intent of the Legislature that all elements of the periodic payment program be specified with certainty in the judgment ordering such payments.

Legislative History

(Acts 1987, No. 87-189, p. 261, §4.)