Caps, More or Less

WDC Journal Edition: Summer 2005
By: Mark E. Larson - Gutglass, Erickson, Bonville, Seibel & Falkner, S.C.

In the past year, the Wisconsin Supreme Court issued two significant decisions on damage caps in medical malpractice cases but the most important decision is yet to come.

While Justice Sykes was still on the bench of the supreme court, the court decided the issue of whether one or two damage caps were available to plaintiffs in wrongful death cases arising out of medical malpractice in Maurin v. Hall.-1 In an extremely long decision with multiple opinions, the majority opinion held that both survivorship and wrongful death damage claims are subject to a single limit. -2 Furthermore, the amount of the limit is the dollar limit set forth in s. 895.04(4). In cases accruing after May 25, 1995 and prior to April 28, 1998, the limit would be $150,000, but per claimant, rather than per occurrence.

Interestingly, the majority also held that each parent was entitled to the maximum limit separately for a total of $300,000. -3 However, that was result of interpretations by the supreme court in Rineck v. Johnson -4, and Jelinek v. St. Paul Fire & Cas. Ins. Co-5. The legislature amended the provision effective April 28, 1998 to clarify that the limit was to be applied “per occurrence.” -6

In reaching its decision, the supreme court rejected an argument that the wrongful death damage limit was itself unconstitutional.-7 The plaintiffs had argued that, contrary to longstanding Wisconsin case law, a common law right to wrongful death damages had actually existed and therefore the right was not purely statutory in origin. The court did not find this argument persuasive.

A fair amount of intrigue occurred after the decision was originally issued. In their “concurring” opinion, Chief Justice Abrahamson and Justice Crooks had questioned the majority’s decision to adopt a different statutory interpretation than had been advocated by either side without asking for additional argument. The plaintiffs used this argument as a basis for a motion for reconsideration that was filed after Justice Sykes had left the state supreme court bench. The motion for reconsideration specifically requested that the motion be considered by the full court, i.e., including Justice Sykes’ replacement. The defense objected to a justice who did not participate in the original oral argument and decision conference being involved in the motion for reconsideration.

Additionally, prior to filing the motion for reconsideration, plaintiffs’ counsel contacted the Appellate and Litigation Sections of the State Bar asking that they consider filing an amicus brief in support of the motion for reconsideration. While the Appellate Section declined, the Litigation Section board voted to do so prior to the motion for reconsideration being filed. However, the Litigation Section waited until after the defense had filed its response to the motion for reconsideration. Furthermore, the Litigation Section delayed for approximately two months before submitting a request for permission to the Executive Committee (rather than the full Board of Governors) to file an amicus brief. Supreme Court Rule Chapter 10, Section 7, outlines that such a request should generally be submitted to the full board and that input from the membership of the bar should be sought, and only when it is not feasible or practical for the full board to hear the request can the Executive Committee act. The late request was also the first notice that defense counsel had of the amicus brief issue and the defense was afforded less than a week to object before the request was heard by the Executive Committee. One of the objections raised was that the chair of the Litigation Section had also signed a motion by WATL to file an amicus brief in the same case.

The Executive Committee granted permission, but instructed that the brief be filed on behalf of the section only and not the full Bar, and that the brief be limited to procedural issues, not addressing the merits of the underlying appeal. The supreme court did receive the amicus brief, but voted 5-1 not to reconsider its original decision. Chief Justice Abrahamson dissented and newly appointed Justice Butler did not participate.

The newly comprised supreme court, however, did issue a subsequent decision distinguishing Maurin and permitting two caps to be applied in a very unusual factual situation. In Pierce v.Physicians Ins. Co. of Wis., Inc., -8 the supreme court created a narrow distinction from a “bystander” case such as Finnegan v. Patients Comp. Fund-9, permitting a mother of a stillborn child to recover for negligent emotional distress. The court stated several times that its holding was based on the “unusual circumstances” of this particular case. -10 In Pierce, a nurse told the delivering mother that the baby’s heart tones were declining because the umbilical cord was wrapped around its neck. -11 The nurse repositioned the mother in effort to alleviate the situation.-12 Subsequently the heart tones stopped and the child was stillborn. -13

In reaching its decision, the supreme court held that the mother was a participant rather than a bystander, and that the court of appeals erred in applying Finnegan. -14 The supreme court held that the mother could pursue a negligent infliction of emotional distress claim in addition to the wrongful death claim which had been settled prior to appeal-15. However, the court than went on to state that it could not separate the mother’s own suffering from that suffered “in experiencing the stillbirth,”-16 but, despite being unable to segregate the damage from the two claims, more than one non-economic damage cap should be applied. -17

As pointed out by the concurring opinion, the majority opinion gave no direction on what the mother will need to prove at trial.-18 The concurrence stated that a claimant for negligent infliction of emotional distress must meet the same burden of demonstrating a severe response that is required of a person making a claim for the intentional infliction of emotional distress. -19 The concurrence also raised questions as to the lack of direction by the majority on preventing an “overlap” of wrongful death and emotional distress damages, and therefore a double recovery for the same injuries. -20

Although this would appear to open the door to claims for two non-economic caps being applied in obstetrical cases, the actual application may prove more difficult and will certainly require additional appellate “refinement.”

Perhaps the most significant decision is yet to come. The supreme court heard oral arguments on April 26, 2005, in the matter of Ferdon v. Wis. Pat. Comp. Fund -21, as to whether the non-economic damage cap under Wis. Stat. §§ 655.017 and 893.55(4) is constitutional and whether the Fund holding future medical expenses awarded by verdict until the expenses are actually incurred under Wis. Stat. § 655.015 is constitutional. The constitutionality of the non-economic cap had been decided by the court of appeals in Guzman v. St. Francis Hosp., Inc. -22 Interestingly, the supreme court had previously accepted the Guzman appeal on bypass but the supreme court deadlocked 3-3 on the constitutional question with Justice Prosser abstaining, and the order accepting bypass was vacated and the appeal remanded to the court of appeals. -23 The supreme court also rejected a petition for review of the court of appeals’ decision finding the cap constitutional-24.

The fact that a differently constituted supreme court agreed to hear a case that had only recently been before it but upon which it deadlocked, would logically indicate the supreme court is interested in reaching a different conclusion current law established by the published court of appeals decision.

i 2004 WI 100.
ii ¶ 88.
iii ¶¶ 6, 75-79.
iv155 Wis. 2d 659, 456 N.W.2d 336 (1990) rev’d on other grounds, Chang v. State Farm Mut. Auto. Ins. Co., 182 Wis. 2d 549, 514 N.W.2d 399 (1994).
v182 Wis. 2d 1, 512 N.W.2d 764 (1994) of Wis. Stat. s. 655.007.
vi 1997 Wis. Act 89.
vii ¶¶ 95-112.
viii 2005 WI 14.
ix 2003 WI 98.
x ¶¶ 1, 34.
xi ¶ 3.
xii Id.
xiii ¶ 4.
xiv ¶¶ 13-15.
xv ¶¶ 23-24.
xvi ¶27.
xvii ¶ 28.
xviii ¶ 42.
xix ¶ 54.
xx ¶ 55
xxi Appeal No. 03-0988.
xxii 2001 WI App. 21, 240 Wis.2d 559, 623 N.W.2d 776.
xxiii 2000 WI 34, 234 Wis. 2d 170, 609 N.W.2d 160.
2001 WI 43, 242 Wis.2d 543, 629 N.W.2d 783.

Mark E. Larson is a shareholder in the insurance defense firm of Gutglass, Erickson, Bonville, Seibel & Falkner, S.C. He is currently chairperson of the CTCW Professional Liability Committee. He has practiced primarily in the area of insurance defense since graduating in 1986 from Marquette Law School, with a focus on defending health care providers and other providers of professional services.