Opinion ID: 2315895
Heading Depth: 2
Heading Rank: 2

Heading: The Effect of the Arbitration Award

Text: While the Court of Special Appeals agreed that the trial judge erred in placing the burden of proof on Newell to prove that the statute of limitations had not run, that court decided that: [T]he presumption of correctness of the panel opinion changed the burden of production at the trial level. At trial, appellant [Newell] had to prove, by a preponderance of the evidence that the panel opinion was wrong. Thus, the instruction given to the jury was, de facto, correct. The error, if any, was harmless. Newell v. Richards, 83 Md. App. 371, 383, 574 A.2d 370, 376 (1990). The Court of Special Appeals reasoned that, because Ms. Newell lost before the arbitration panel, the ultimate burden of proof shifted to her. The intermediate appellate court, following a line of cases that we shall discuss, and drawing an analogy to workers' compensation cases, reasoned that there is no difference between instructing the jury that plaintiff must prove by a preponderance of the evidence that limitations have not run and instructing the jury that defendant must prove by a preponderance of the evidence that limitations have run, but they may rely on the health claims panel finding which is presumed correct. Equating the two instructions has the virtue of simplicity but the vice of inaccuracy. For reasons which we will explain, we hold that a health claims award is admissible in evidence and is presumed correct, but that the award does not have the additional effect of shifting the common law burden of proof. The jury must be correctly instructed on the burden of proof but also told that the award is presumed correct and the burden is on the party rejecting the award to show that it is not correct. An erroneous instruction on the burden of proof can constitute reversible error. Md.Code (1974, 1989 Repl.Vol.), Cts. & Jud.Proc. Art., § 3-2A-06(d) describes the effect of the arbitration award on the circuit court proceeding: Admissibility of award; presumption of correctness.  Unless vacated by the court pursuant to subsection (c), the unmodified arbitration award is admissible as evidence in the judicial proceeding. The award shall be presumed to be correct, and the burden is on the party rejecting it to prove that it is not correct. We first considered the effect of this provision in Attorney General v. Johnson, 282 Md. 274, 385 A.2d 57, appeal dismissed, 439 U.S. 805, 99 S.Ct. 60, 58 L.Ed.2d 97 (1978). We held that the presumption is simply a rule of evidence and does not violate the right to trial by jury. Id. at 290-94, 385 A.2d at 67-69. Writing for the Court in Attorney General v. Johnson , Judge Digges observed that: The effect of this provision is precisely the same as occurs under the Workmen's Compensation Act, which provides that the Commission's decision is `prima facie correct and [that] the burden of proof shall be upon the party attacking the same.' Md.Code (1957, 1964 Repl. Vol.), Art. 101, § 56(c). We long ago said that the latter provision means that the Commission's solution of the conflict ` is presumed to be correct, and the burden of proof is upon the party attacking it to show that it was erroneous.' `[I]t simply puts the burden of proof upon the party taking the appeal, whether he be plaintiff or defendant. In other words it establishes no new rule when the plaintiff happens to be the party appealing, as the burden was always upon the plaintiff to prove his case. (Citations omitted) (emphasis in original). Id. at 293, 385 A.2d at 68. We also added in a footnote: Except in the comparatively rare situation in medical malpractice cases where contributory negligence or assumption of the risk is an issue, the only change in the burden of proof at trial will thus occur when the health care provider appeals an award against him by the arbitration panel  there, essentially, the defendant must prove that the award finding him liable and assessing damages was not correct  i.e., that he was not negligent. While we think it clear that the legislature may alter the burden of proof, the appellees as plaintiffs below would not in any event be able to demonstrate prejudice in this regard. See McBriety v. Baltimore City, 219 Md. 223, 233, 148 A.2d 408, 415 (1959). In Comment, The Constitutionality of Medical Malpractice Mediation Panels: A Maryland Perspective, 9 U.Balt. L.Rev. 75 (1979), the author compared the effect of an arbitration panel's decision under Maryland's medical malpractice statute as interpreted by Attorney General v. Johnson with the panel decisions in other states and noted: The impact of the panels' decisions vary widely. A majority of states allow the decision of the panel into evidence at subsequent court proceedings. Nearly all of these states allow the jury to determine the weight to be attached to the finding of the panel. The sole exception is Maryland which provides that the panel decision is presumptively correct.... The Maryland plan, with its presumption, encroaches further on the constitutional rights of the parties than the plan of any other state. (Footnotes omitted). Id. at 80. In Hahn v. Suburban Hospital Ass'n., 54 Md. App. 685, 461 A.2d 7 (1983), the Court of Special Appeals was called upon for the first time to determine the effect of the statute where the claimant prevailed before a Health Claims Arbitration Panel. The Court of Special Appeals based its decision on language from Attorney General v. Johnson and stated: Similar to a Workmen's Compensation appeal, sub-section (d) of § 3-2A-06 places the burden of proof upon the party rejecting the award, whether he be plaintiff or defendant. It establishes no new rule when the plaintiff happens to be the party rejecting the award, as the burden was always upon the plaintiff to prove his case by a preponderance of the evidence. But the statute shifts the burden from the plaintiff to the defendant where the defendant, in effect, loses before the Health Claims Arbitration Panel and rejects the award, requiring the defendant in such a case to satisfy a jury by a preponderance of evidence that the plaintiff is not entitled to the award made by the Panel. (Citation omitted). Hahn v. Suburban, 54 Md. App. at 693, 461 A.2d at 12. The cases of Attorney General v. Johnson and Hahn v. Suburban have opined that the arbitration award at trial is precisely analogous to a decision of the Worker's Compensation Commission. But this comparison overlooks significant differences between the two statutes. The two agencies were created to serve different purposes. The Health Care Malpractice Claims statute created the Health Claims Arbitration (HCA) Office as a unit in the Executive Department. The health claims arbitration panels are independent from the HCA office altogether. Panel members are selected by the arbitration participants and disband as soon as they make an award. Attorney General v. Johnson, 282 Md. at 286, 385 A.2d at 64. The legislature's purpose in enacting the Health Care Malpractice Claims statute was to reduce the number of medical malpractice court suits by screening out frivolous claims at the arbitration level. Id. at 277, 385 A.2d 59; Wyndham v. Haines, 305 Md. 269, 274, 503 A.2d 714, 721-22 (1986). In contrast, the Workmen's Compensation Act was designed to provide workers with compensation for loss of earning capacity resulting from accidental injury, disease or death arising out of and in the course of employment.... Queen v. Agger, 287 Md. 342, 343, 412 A.2d 733, 734 (1980). Unlike the HCA office, the Workmen's Compensation Commission is an administrative agency and was created specifically to develop an expertise in its field. The Commission forms part of a comprehensive scheme of liability set up by the Workmen's Compensation Act, which largely abrogates the common law. See Attorney General v. Johnson, 282 Md. at 285, 385 A.2d at 63; See generally, M. Pressman, Workmen's Compensation in Maryland, §§ 1-2 (1977). Workers' compensation is a statutory remedy. The legislation that establishes the burden of proof on appeal was written on a clean slate. There were no burdens and presumptions; indeed, there was no cause of action for workers' compensation prior to the workers' compensation statute. A medical malpractice action is a common law tort action. The burden of proof, as in all negligence actions, has always been on the claimant. In workers' compensation cases, whoever takes the appeal, whether claimant or employer/insurer, stands in the position of plaintiff with the appellee as defendant. Frazier v. Leas, 127 Md. 572, 96 A. 764 (1916); American Ice Co. v. Fitzhugh, 128 Md. 382, 97 A. 999 (1916); Jewel Tea Co. v. Weber, 132 Md. 178, 103 A. 476 (1918); Aetna Life Ins. Co. v. Bittinger, 159 Md. 262, 150 A. 713 (1930). The right to open and close follows this burden of proof. Aetna, 159 Md. at 269, 150 A. at 716-17, Jewel Tea Co., 132 Md. at 181, 103 A. at 477. In medical malpractice cases, the party making the claim against the health care provider is always the plaintiff, even if he or she is not seeking to overturn the award. Md.Rule BY3. The general practice seems to be that the plaintiff opens and closes, even if the plaintiff prevailed in arbitration. We note also that there are far broader grounds to set aside an allegedly erroneous workers' compensation award than for vacating an allegedly erroneous health claims panel award. Compare Md.Code (1957, 1964 Repl.Vol.), Art. 101, § 56(a) with Md.Code (1974, 1989 Repl.Vol.), Cts. & Jud.Proc. Art., § 3-2A-06. Shifting the common law burden of proof based on the health claims panel award would penalize an unsuccessful health care provider far more than an unsuccessful claimant. If either the claimant or health care provider is unsuccessful at arbitration, the award is admissible and will have evidentiary impact on the trier of fact. If the claimant is unsuccessful at arbitration, the burden of proof was on the claimant before arbitration and will be on the claimant after arbitration. Thus, as far as the burden of proof is concerned, the unsuccessful claimant is in the same position as if arbitration had not occurred. On the other hand, if the health care provider is unsuccessful at arbitration, in addition to the evidentiary effect of the adverse award, the health care provider would be further penalized by a shifting of the usual burden of proof as the result of the arbitration award. For the reasons indicated, the workers' compensation appeal procedure is not to be utilized in medical malpractice trials. If the claimant is unsuccessful before the arbitration panel, the jury is instructed that the plaintiff has the burden of proof and that the award in favor of the health care provider is presumed correct. If the claimant is successful before the arbitration panel, the court should not instruct the jury that the burden of proof is on the defendant/health care provider; the court should instruct the jury that the claimant has the burden of proof and couple that with an instruction that there has been a health claims panel award in favor of the claimant which is presumed correct and that the burden is on the health care provider to show that the award is not correct. Thus, the health care provider's burden of proof relates only to an item of evidence, i.e., that the panel award is not, in fact, correct. An arbitration panel award in favor of a claimant is admissible and presumed correct, but it does not shift the common law burden of proof to the health care provider. We note that Maryland Civil Pattern Jury Instructions, § 27:2 at 595 (2d Ed. 1984) has a suggested instruction on the burden of proof for medical malpractice cases. It provides: A Maryland statute requires a medical malpractice claim to be submitted to arbitration before the matter may be tried by this court. Either party may appeal the arbitrator's decision to this court and if such appeal is made, the matter is tried all over. The claim in this case was submitted to arbitration and it was decided that (describe the arbitrator's decision) [injured party] [ (insert the identity of the health care provider) ] has appealed from that decision. You are not bound by the arbitrator's decision. However, under the law that decision is presumed to be correct and the [injured party] [ (insert the identity of the health care provider) ] has the burden of proving by a preponderance of the evidence that the decision is wrong. In meeting this burden, the [injured party] [ (insert the name of the health care provider) ] may rely on the same, less or more evidence than was presented to the arbitrator. This instruction is accurate, but on request, the court should precede it with a traditional instruction on plaintiff's burden of proof. To the extent that language in Attorney General v. Johnson and its progeny are inconsistent with this opinion, that language is expressly disapproved. In the instant case, Richards should have had the burden of proving that the statute of limitations had run. The trial judge's instruction that Newell must prove by a preponderance of the evidence that she did not know, or could not reasonably have known, that she had been wrongly harmed prior to July 25, 1981, was error, and was prejudicial despite the presumption of correctness of the health claims panel's determination in favor of Richards. JUDGMENT OF THE COURT OF SPECIAL APPEALS REVERSED. CASE REMANDED TO THAT COURT WITH INSTRUCTIONS TO VACATE THE JUDGMENT OF THE CIRCUIT COURT FOR BALTIMORE COUNTY AND REMAND THIS CASE TO THAT COURT FOR FURTHER PROCEEDINGS CONSISTENT WITH THIS OPINION. COSTS IN THIS COURT AND IN THE COURT OF SPECIAL APPEALS TO BE PAID BY RESPONDENT.