Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-94-01434/USCOURTS-ca10-94-01434-0/pdf.json

Nature of Suit Code: 362
Nature of Suit: Medical Malpractice
Cause of Action: 

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Patrick Fisher 

Clerk 

UNITED STATES COURT OF APPEALS 

Office of the Clerk 

Byron White united states courthouse 

1823 Stout Street 

Denver, co 80257 

April 4, 1995 

Elisabeth Shumaker 

Chief Deputy Clerk 

TO: ALL RECIPIENTS OF THE CAPTIONED OPINION 

RE: 94-1434, Hill v. USA 

Filed February 5, 1996 by Judge McKay 

Please be advised that the court has granted a motion 

to publish the captioned decision. Attached is a published 

version. 

Attachment 

Very truly yours, 

Patrick Fisher, 

Clerk 

Barbara Schermerhorn 

Deputy Clerk 

Appellate Case: 94-1434 Document: 01019276481 Date Filed: 02/05/1996 Page: 1 
PUBLISH 

UNITED STATES COURT OF APPEALS United~!~ ED 

FOR THE TENTH CIRCUIT 

ROBERT E. HILL, individually and ) 

as parent and next friend of ) 

Tasha R. Hill, a minor; CYNTHIA G. ) 

HILL, individually, and as parent ) 

and next friend of Tasha R. Hill, ) 

a minor, ) 

) 

Plaintiffs-Appellees, ) 

) 

v. ) 

) 

UNITED STATES OF AMERICA, ) 

) 

Defendant-Appellant. ) 

,... ourt of Appc::·~ .. enth Circuit ""' 

F E3 0 5 1996 

PATR!CK FISi?-:-.!J CI~r!• • c.. ... , 

Nos. 94-1434 

94-1594 

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLORADO 

(D.C. No. 90-B-1071) 

William G. Cole (Roberts. Greenspan with him on the briefs), 

Appellate Staff, Civil Division, Department of Justice, 

Washington, D. c., for Defendant-Appellant. 

Shelley B. Don (David L. Hiller with him on the brief) of Don, 

Hiller & Galleher, P.C., Denver, Colorado, for PlaintiffsAppellees. 

Before ANDERSON and McKAY, circuit Judges, and COOK,* Senior 

District Judge. 

McKAY, Circuit Judge. 

* Honorable H. Dale Cook, Senior United States District Judge 

for the Northern District of Oklahoma, sitting by designation. 

Appellate Case: 94-1434 Document: 01019276481 Date Filed: 02/05/1996 Page: 2 
The United States appeals certain aspects of a judgment 

entered against it in this Federal Tort Claims action. We have 

jurisdiction under 28 U.S.C. § 1291. This case was brought on 

behalf of Tasha Hill, a minor, by her parents. Tasha was seriously injured as a result of the government's negligence at an 

Army medical facility in Colorado. The government conceded 

liability and the district court awarded substantial damages to 

Tasha and her parents, with the damages awarded to Tasha to be 

placed in a trust for Tasha's benefit. The government has raised 

two issues on appeal. First, the government challenges one aspect 

of the damage award to Mr. and Mrs. Hill. Second, the government 

objects to the district court's refusal to grant the United States 

a reversionary interest in Tasha's trust. We affirm in part and 

reverse in part. 

The district court awarded $1,017,500 to Tasha's parents for 

services rendered to her over the past few years when they were 

unable to afford professional medical care. The award was based 

on the estimated cost of providing twenty-four-hour nursing care, 

and the government does not challenge the cost estimate for such 

care. Rather, the government claims that the parents were merely 

providing largely unskilled parental care and should not be compensated for a level of care that they did not provide. The district court found that the Hills' care was equivalent both in kind 

and quality to the care that would have been rendered by a 

Licensed Practical Nurse. The government has not demonstrated 

that this finding was clearly erroneous. We therefore affirm. 

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The government has also urged that the district court erred 

in failing to place the award to pay for Tasha's future damages in 

a reversionary trust.1 Tasha's award is based on a projected life 

expectancy of a normal healthy girl of her age. However, there 

remains a possibility that she may die prematurely, or that, for 

other reasons, there may be funds remaining in her trust when she 

dies. The government argues that Tasha's heirs would be· unjustly 

enriched if these funds become part of her estate. Since the 

funds are intended to fully compensate Tasha for her medical costs 

and other expenses, it would be a windfall to her heirs if the 

funds were not fully exhausted. Thus, the government argues that 

any funds remaining in the trust should revert back to the U. S. 

Treasury. 

The government's legal argument that such an approach is 

authorized, or indeed required, is two-pronged. In support of its 

position, the government cites the Colorado Health Care Availability Act, Colo. Rev. Stat. § 13-64-201 to -212 ("HCAA"). Under 

the HCAA, health care providers who are found liable for medical 

torts make payments of future damages in the form of periodic 

payments. These payments are generally funded by the purchase of 

an annuity. Upon the death of the "judgment creditor" (the tort 

victim), these payments cease, except for that portion of the 

1 Appellees argue that the government waived this issue by 

failing to raise it before the district court. While the 

government's counsel did not clearly present the issue, we hold 

that under the circumstances of -the case, it was sufficiently 

presented to the district court to warrant our review. 

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Appellate Case: 94-1434 Document: 01019276481 Date Filed: 02/05/1996 Page: 4 
payments awarded for loss of future earnings. Id. 13-64-

206(c) (3). This provision is designed to provide increased precision in the speculative area of future losses by allowing the 

payment of damages as the losses are found to accrue. The HCAA 

eliminates, to the extent possible, the likelihood that health 

care providers will pay out large sums of money for losses that 

will never actually be sustained by the tort victim. Without the 

periodic payment scheme, were the tort victim to die prematurely, 

the unspent medical and related damages would accrue to the estate 

of the victim and thus represent a windfall to the victim's heirs. 

We note, however, that money damages awarded for loss of future 

earnings are exempted from this provision and become part of the 

victim's estate "to be paid to the heirs and devisees of the 

judgment creditor," id. § 13-64-206(c), just as if the victim had 

actually earned the wages herself. 

The government does not claim that they are specifically 

subject to the HCAA, and indeed, it is clear that the federal 

government may not be ordered to make periodic payments in the 

manner in which the HCAA provides. Hull v. United States, 971 

F.2d 1499, 1505 (lOth Cir. 1992) (quoting Frankel v. Heym, 466 

F.2d 1226, 1228-29 (3d Cir. 1972)). However, under the FTCA, the 

government is to be treated "in the same manner and to the same 

extent as a private individual under like circumstances" depending 

on the law of the state where the tort occurred. 28 U.S.C. § 2674 

(1988). The government interprets this provision as requiring a 

court to fashion a remedy that will further the intent and 

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Appellate Case: 94-1434 Document: 01019276481 Date Filed: 02/05/1996 Page: 5 
approximate the outcome of a statute such as the HCAA--even where, 

as here, the statute does not itself apply to the government. 

Thus, if an alternative exists that would promote the purpose of 

the state statute and yield a practically similar result, such an 

alternative should be required. The government argues that, in 

this case, the creation of a reversionary trust would accomplish 

the same net result mandated by the HCAA, in that it would ensure 

full compensation of the victim while preventing unjust enrichment 

of the victim's heirs. 

The government cites several cases to support its argument. 

See Carter v. United States, 982 F.2d 1141, 1144 (7th Cir. 1992); 

Lozada v. United States, 974 F.2d 986, 987-89 (8th Cir. 1992); 

Owen v. United States, 935 F.2d 734, 737 (5th Cir.), reh'g denied, 

943 F.2d 1315 (5th Cir. 1991), cert. denied, 502 U.S. 1031 (1992); 

Starns v. United States, 923 F.2d 34, 37 (4th Cir.), cert. denied, 

502 U.S. 809 (1991); Taylor v. United States, 821 F.2d 1428, 1431 

(9th Cir. 1987), cert. denied, 485 U.S. 992 (1988); Lucas v. 

United States, 807 F.2d 414, 417 (5th Cir. 1986). These cases 

stand for the proposition that where there is a specific cap on 

tort liability, the United States government may benefit from this 

limit although it did not otherwise participate in the statutory 

scheme which provides the cap. While this proposition is 

undoubtedly true, in all of the above-cited cases the effect of 

the statutory scheme placed the tort victim in exactly the same 

position that would have resulted had the victim been injured by 

any other similarly-situated private party. Furthermore, the 

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Appellate Case: 94-1434 Document: 01019276481 Date Filed: 02/05/1996 Page: 6 
government, as tortfeasor, was treated in a precisely analogous 

fashion to a similarly-situated private tortfeasor. None of these 

cases offers direct support for the proposition that the United 

States may attempt to create a rough equivalent to a state statute 

when they are clearly ineligible for the precise remedy provided 

therein. However, even were we to endorse an imprecise equivalent 

to a state statutory provision in some situations (a question 

which we do not decide), the government's proposed alternative in 

this case is not sufficiently analogous to the HCAA to merit consideration because the government has failed to take into account 

the differential statutory treatment given to damages for loss of 

future earnings. 

The parties have agreed that Tasha's entire award would be 

placed in a trust for her care. Under the government's proposal, 

any funds remaining in Tasha's trust would revert to the U. S. 

Treasury upon her death. Thus, no funds from the trust would 

become part of Tasha's estate. As indicated earlier, under the 

HCAA, the portion of damages awarded for future earnings do become 

part of the estate upon the victim's death. In this case, over 

$500,000 of the damage award is for future loss of earning capacity. Under the government's proposed reversionary trust, not only 

would any unspent medical cost damages be returned, but any portion of Tasha's lifetime lost wages would revert to the government 

as well. Such a result is clearly not contemplated by the HCAA 

and would not result in "like treatment under like circumstances" 

as mandated by the FTCA. Indeed, it would run contrary to the 

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Appellate Case: 94-1434 Document: 01019276481 Date Filed: 02/05/1996 Page: 7 
statute because it could potentially result in unjust enrichment 

of the tortfeasor at the expense of Tasha's legitimate heirs. The 

government has simply failed to recognize the possible inequitable 

consequences of its proposal. 

Nevertheless, we believe that the district court can create a 

reversionary trust that would approximate the result contemplated 

by the HCAA. Under the HCAA, an award for future medical expenses 

would not accrue to the plaintiff's heirs upon his or her death. 

Thus, in this case, the government should receive a reversionary 

interest in that part of Tasha's award which covers future medical 

expenses. Specifically, the district court awarded Tasha 

$10,019,800 for life care costs. This award included an amount 

for home modification. Because the home modification award is not 

for future damages, it should be subtracted from the life care 

amount. The remaining amount of the life care award should be 

placed in a reversionary trust. We remand in order for the 

district court to create such a trust. 

The government also argues that the district court under Hull 

v. United States has the inherent authority to create a reversionary trust in FTCA cases. See 971 F.2d at 1504-05. As the 

district court recognized, while it does have the inherent power 

to create a reversionary trust u~der Hull, it may only do so if it 

is "in the best interests of the child." Id. The burden must be 

on the party proposing such a plan to demonstrate that it would be 

in the best interests of the child. The government has offered no 

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Appellate Case: 94-1434 Document: 01019276481 Date Filed: 02/05/1996 Page: 8 
reasons why a reversionary trust could possibly benefit Tasha, nor 

can we divine any. 

Accordingly, the judgment of the district court is AFFIRMED 

with respect to the award for future loss in earnings capacity, 

non-economic losses, physical impairment and disfigurement, and 

the parents' past care of Tasha. The judgment of the district 

court is REVERSED and REMANDED with respect to the life care award 

(excluding home modification costs) . 

AFFIRMED in part, REVERSED and REMANDED in part. 

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