Opinion ID: 2372532
Heading Depth: 1
Heading Rank: 6

Heading: Schedule of Payment of the Judgment

Text: Plaintiff and defendant disagree about: the rate of interest to be used in determining future payments, the time-period for compounding, the portion payable at the time of judgment, and the term of future payments. On the question of the rate of interest, plaintiffs cite to § 408.040.1 RSMo. Supp.1991, which establishes the post-judgment interest rate on damages at 9%. Plaintiffs note that § 538.300 RSMo. Supp. 1991 exempts medical malpractice cases only from the prejudgment interest provisions of § 408.040.2 RSMo. Supp.1991, instead of exempting medical malpractice cases from all interest provisions (as the previous version of § 538.300 did). The problem with this argument is that it ignores the language of both subparts of § 408.040. Medical malpractice cases are exempted from § 408.040.2, which allows prejudgment interest in cases where one party rejects a settlement. This relatively new provision of law spurs defendants to settle tort cases. The exemption of medical malpractice cases from § 408.040.2 logically indicates that the General Assembly believed that such an incentive is inappropriate in medical malpractice cases. While medical malpractice cases are not exempt from § 408.040.1, the provisions of § 408.040.1 deal with interest on money due on judgments. The language of § 408.040.1 establishes a set rate of interest on defendants who delay in paying judgments that are due. As such, the only part of a medical malpractice award covered by § 408.040.1 is the amount to be paid immediately, not the part payable in installments. On the installment payments, the provisions of § 538.220.2 indicate the way to set the interest rate, which differs from § 408.040.1 RSMo. Supp.1991. The general rule of statutory construction is that the plain language of specific statutes prevails over the language of general statutes. See, e.g., O'Flaherty v. State Tax Commission 680 S.W.2d 153, 154 (Mo. banc 1984). The provisions of § 538.220.2 thus govern the installment payments. The provisions of § 538.220 give the circuit court, in the absence of a court-approved agreement between the parties, discretion in establishing the plan for future paymentswith two exceptions. First, all past damages must be paid in a lump sum at the time of judgment. § 538.220.1. Second, it is presumed that, absent the attorney's agreement, attorney's contingent fees will be paid at the time of judgment. § 538.220.4. The statute does not require any other amounts to be apportioned to future payments. The language of § 538.220.2 is a general grant of equity powers to the circuit court. The circuit court is, thus, entitled to fashion relief in the best interests of the parties, subject to review only on the basis of its arbitrariness. The statute does not require but authorizes an evidentiary hearing at the request of either party or sua sponte and does not give any guidance on how such future payments are to be structured. The record before this Court is incomplete with regard to whether there was a true evidentiary hearing or merely an offer of proof regarding the appropriate plan for payments on the judgment in this case. Absent such a hearing (or some alternative form for submitting evidence, like stipulations or affidavits), any schedule established by the court without the complete agreement of the parties is arbitrary. There are indications from the record that, at some point between a conference in chambers on November 26, 1990, and a proceeding in open court on January 23, 1991, the circuit court had reached a decisionapparently over the objection of the defendantas to the interest rate on the amount to be paid in installments, the time-period for compounding, the amount to be paid up front, and the timing of the installment payments. Absent agreement by the parties, fixing all components of the plan is the court's duty. The court can only do its duty after a hearing. Given the apparent irregularities in the record and the alterations in the total amount of the judgment discussed in Part III, all determinations of payment schedule will be reversed and remanded to the circuit court for an evidentiary hearing. In this hearing, several factors should be taken into account. First, in general, parents are responsible for providing the necessities for their children. Cf. State ex rel. Div. of Fam. Services v. Standridge, 676 S.W.2d 513, 515 (Mo. banc 1984); Roberts v. Roberts, 592 S.W.2d 860, 862 (Mo.App.1979). In this case, the parents' claims against NME Hospitals and Dr. Johnson were based on the parents' responsibility for Rita M. Vincent's medical bills until she reaches age 18, including her past and current medical expenses. While the parents will not be receiving any money from Dr. Johnson, they are receiving money from their part of the settlement with NME Hospitals. Thus, current and past medical bills and the parents' part of the attorney fees should be paid out of this money and not out of Rita M. Vincent's judgment. Second, in addition to the lump-sum amount Rita M. Vincent receives from this judgment, the lump-sum payment from the settlement with NME Hospitals is also available to pay Rita M. Vincent's portion of attorney fees. Third, any sum paid to Rita M. Vincent in the present or in the future will be managed by her parents as conservators, and thus in accordance with the statutes governing conservators. See, e.g., §§ 475.130, 475.190. Fourth, the general purpose of chapter 538 is to reduce the cost of medical malpractice; and the specific purpose of § 538.220 is to spread that cost over time and to guard against squandering of the judgment while reducing future burdens on government social services. Fifth, in determining the appropriate rate of interest, the court should consider what would constitute prudent investment, beginning with the rate of return on equivalent long-term investments, in light of the security provided for future payments. [7] The verdict is correct with respect to all parties. The judgment with respect to Rita K. Vincent and Robert A. Vincent is affirmed. The judgment with respect to Rita M. Vincent is affirmed in part and reversed in part; the case is remanded for further proceedings in accordance with this opinion. ROBERTSON, C.J., COVINGTON, HOLSTEIN and THOMAS, JJ., and BLACKMAR, Senior Judge, concur. RENDLEN, Senior Judge, dissents. PRICE, J., not sitting because not a member of the Court when case was submitted.