Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_13-cv-01012/USCOURTS-caed-2_13-cv-01012-14/pdf.json

Nature of Suit Code: 362
Nature of Suit: Medical Malpractice
Cause of Action: 28:2671 Federal Tort Claims Act

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

I.P., A MINOR, BY AND THROUGH 

HER GUARDIAN AD LITEM, FACUNDO 

PALACIO DIAZ; MICAELA PALACIO,

Plaintiff,

v.

UNITED STATES OF AMERICA,

Defendant.

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Case No. 2:13-CV-01012 JAM-CKD

ORDER APPLYING CALIFORNIA’S 

PERIODIC-PAYMENT STATUTE TO 

DAMAGES AWARDED TO PLAINTIFFS

In accordance with its Findings of Fact and Conclusions of Law 

(Dkt. 155), the Court hereby orders that the United States pay 

damages in accordance with those Findings and Conclusions as 

provided in this order.

The United States has invoked California’s periodic-payment 

statute, Cal. Code Civ. Proc. § 667.7, with regard to future 

medical expense damages awarded to Plaintiff I.P. for future 

attendant care (present cash value $7,753,349) and other future 

medical expenses (present cash value $544,139). See Dkt. 155 at 

23. California’s periodic-payment statute allows a party in a 

medical malpractice action to elect that future damages “be paid in 

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whole or in part by periodic payments rather than by a lump-sum 

payment if the award equals or exceeds fifty thousand dollars.” 

Cal. Civ. Proc. Code § 667.7(a). The statute seeks to provide 

adequate compensation to an injured plaintiff “while eliminating 

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 was not intended.” Cal. Civ. Proc. Code § 667.7(f). The 

statute thus seeks to prevent payment for future expenses that are 

never incurred.

The Federal Tort Claims Act (“FTCA”) makes the United States 

liable in this tort action “in the same manner and to the same 

extent as a private party under like circumstances” under 

California law. 28 U.S.C. § 2674; 28 U.S.C. § 1346(b). Though the 

FTCA prohibits imposing continuing obligations on the United States 

in the form of periodic payments, it authorizes courts to “craft 

remedies that approximate the results contemplated by state 

[periodic-payment] statutes.” Dutra v. United States, 478 F.3d 

1090, 1092 (9th Cir. 2007); see also Cibula v. United States, 664 

F.3d 428, 433 (4th Cir. 2012) (“due to the Government’s inability to 

shoulder continuing obligations, the FTCA permits courts to craft 

remedies that ‘approximate’ state periodic payment statutes, 

including reversionary trusts.”) (internal citation omitted). Such 

remedies involve the United States satisfying a judgment with a 

lump-sum present-value payment that complies with the FTCA while 

retaining a reversionary interest that returns funds to the United 

States Treasury upon the death of a plaintiff for whom future 

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expenses would otherwise have continued to be paid. See Dutra, 478 

F.3d at 1092; Cibula, 664 F.3d at 431-35.

In this order, the Court crafts a remedy providing Plaintiffs 

with damages as determined by the Court while also allowing the 

United States to retain a reversionary interest in a portion of the 

future medical-expense damages once another portion of those 

damages is paid up front (to allow Plaintiff I.P. to pay her 

attorney’s fees and retain some cash on hand prior to periodic 

payments beginning). This order requires the United States to 

purchase an annuity under the terms set forth in paragraph 7. If 

Plaintiffs do not agree to an annuity then they shall inform the 

Court within five days of this Order and the Court will issue an 

amended order which substitutes a revisionary trust for the 

annuity.

Accordingly, the Court orders as follows:

1. Once the period after entry of judgment during which a 

notice of appeal may be filed has elapsed, and after any appeal of 

that judgment has been resolved, the United States is ordered to 

make the payments outlined in this order.

2. The United States is ordered to pay Micaela Palacio 

$250,000 in non-economic damages.

3. The United States is ordered to pay I.P., $250,000 in 

non-economic damages.

4. The United States is ordered to pay I.P., $87,521 in past 

medical expenses.

5. The United States is ordered to pay I.P. $724,296 (the 

$967,796 present cash value of I.P.’s projected lost earnings as 

determined by the Court minus the $243,500 offset for I.P.’s prior 

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settlement with Banner Health).

6. Of the $8,297,488 present cash value of I.P.’s future 

medical expenses found by the Court (which includes present cash 

value of $7,753,349 for future attendant care and present cash 

value of $544,139 for other future medical expenses), the United 

States is ordered to pay $1,557,858 to I.P.

7. The United States is ordered to use the remaining 

$6,739,630 to purchase an annuity as described in Dkt. 165. That 

annuity shall provide for a stream of payments for 20 years with 

the amount increasing annually by 4% with payments certain (i.e., 

payable regardless of survivorship). Those payments shall be 

broken down into 12 equal monthly installments paid to I.P. (with 

payments reverting to the United States upon I.P.’s death).

8. Upon the death of Plaintiff I.P., the Plaintiffs, 

including the heirs and beneficiaries of Plaintiff I.P.’s estate, 

shall provide to the Clerk of this Court and the United States a 

certified death certificate within ten (10) days of the date of 

Plaintiff I.P.’s death. The certified death certificate shall be 

mailed to the United States at the following address, or upon 

written notice, any subsequent change of address: Director, Torts 

Branch (FTCA Staff), Civil Division, United States Department of 

Justice, P. O. Box 888, Benjamin Franklin Station, Washington, D.C. 

20044.

IT IS SO ORDERED.

Dated: December 7, 2015

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