Opinion ID: 1350186
Heading Depth: 2
Heading Rank: 2

Heading: Whether the cap and annuity provisions of H.B. 2661 violate Section 18 of the Bill of Rights of the Kansas Constitution.

Text: Section 18 of the Kansas Bill of Rights provides that all persons shall have a remedy by due course of law. The term remedy was defined in Hanson v. Krehbiel, 68 Kan. 670, Syl. ¶ 2, 75 Pac. 1041 (1904), as follows: `Remedy by due course of law,' as used in section 18 of the bill of rights, means the reparation for injury, ordered by a tribunal having jurisdiction, in due course of procedure and after a fair hearing. Just as the rights secured by Section 5 are not absolute, neither are the rights secured by Section 18. Over the years, the court has allowed the legislature to modify remedies when required by public policy. See Manzanares v. Bell, 214 Kan. at 599. However, as with Section 5, the court looks to insure that due process requirements are met and, when a common-law remedy is modified or abolished, an adequate substitute remedy must be provided to replace it. Hanson involved a statute that limited the right of a person libeled to recover damages for injuries to his reputation. The statute required a prospective plaintiff to give three days' notice to the libeling newspaper prior to filing his suit. The newspaper could then run a full retraction and avoid liability for any damage to the plaintiff's reputation. The newspaper would remain liable only for any actual damages (expressed in dollars and cents). Plaintiff Hanson argued that the statute violated Section 18 and the court agreed. The court stated: It requires no argument to demonstrate that the act in question denies a remedy for some of these injuries. Unless the one libeled has suffered in the particular manner pointed out in the statute, he is without remedy. For that large class of persons and still larger class of injuries not falling within the provisions of this statute, no remedy is found.... .... It is not an easy matter to deduce, either from reason or the authorities, a satisfactory definition of `law of the land' or `due course of law.' However, from either standpoint, we feel safe in saying that these terms do not mean any act that the legislature may have passed, if such act does not give to one an opportunity to be heard before being deprived of property, liberty, or reputation, or, having been deprived of either, does not afford a like opportunity to show the extent of his injury and gives no adequate remedy to recover therefor. Whatever more than this these terms may mean, they do mean due and orderly procedure of courts in the ascertainment of damages for injury, to the end that the injured one `shall have remedy'; that is, proper and adequate remedy, thus to be ascertained. To refuse hearing and remedy for injury after its infliction is a principle little removed from that of the infliction of penalty before and without hearing. 68 Kan. at 673-74. The remedy provided by the statute was inadequate, according to the court, because it treated every injury identically, irrespective of a court's findings. The right to a remedy by due course of law is not satisfied by the requirement contained in a statute to make specific reparation for the injury done, which reparation is the same in all cases, bears no relation to the injury suffered, and has not been decreed by a tribunal after ascertainment of the extent of such injury. 68 Kan. 670, Syl. ¶ 3. Intervenors the Kansas Hospital Association and the Kansas Medical Society contend that Hanson was overruled by Coleman v. MacLennan, 78 Kan. 711, 98 Pac. 281 (1908). There, the court held that a defendant newspaper's right to freedom of the press exceeded the political candidate's right to remedy for libel. 78 Kan. at 715-723. The real issue was the balancing of constitutional rights, freedom of speech for the media, and the political candidate's right to a remedy for libel. No legislation was involved, so there could be no issue of quid pro quo. At no place in the opinion does the court mention the subject of damages or refer to Hanson. Coleman has no applicability to the issues raised in this case. The next important case is Noel v. Menninger Foundation, 175 Kan. 751, 267 P.2d 934 (1954), where the court struck down the judicially created concept of charitable immunity. The court ruled that such immunity denied the right to a remedy by due course of law under Section 18. The court said: To exempt charitable and nonprofit corporations from liability for their torts is plainly contrary to our constitutional guaranties (Bill of Rights, § 18). It gives to certain favored ones, selected arbitrarily, immunity from that equal liability for civil wrongs which is a sign of equality between citizens. It undertakes to clothe charitable and nonprofit organizations with special privileges denied to other corporations, and society. It takes from individuals the right to assert in the courts claims against all who tortiously assail their person and property and to recover judgment for the injuries done. It prevents all persons from having recourse to law for vindication of rights or reparation for wrongs against the privileged charitable, nonprofit organization. It frees one set of corporations from obligations to which their competitors, and individuals, are subjected. In short, it destroys equality and creates special privilege. ( In re Opinion of The Justices, 211 Mass. 618, 98 N.E. 337.) 175 Kan. at 763. The court reasoned that a denial of recovery from a charitable tortfeasor forces the victim to make an unreasonable contribution to charity against his will, and a rule of law imposing such burdens cannot be regarded as socially desirable nor consistent with sound policy. 175 Kan. at 762. The concept of charitable immunity was thus held to deny plaintiff his right to a remedy and did not provide any adequate substitute remedy. After Noel was handed down, the Kansas Legislature passed legislation designed to curtail the liability of charitable institutions by immunizing their assets from garnishment. Neely v. St. Francis Hospital & School of Nursing, 192 Kan. 716, 391 P.2d 155 (1964), involved a medical malpractice action where the plaintiff had recovered part of her damages (up to the limits of the hospital's insurance coverage), but was denied full recovery because the statute involved (G.S. 1949, 17-1725 [1959 Supp.]) prevented her from obtaining a garnishment on the hospital's bank account. The court, relying heavily on Noel, refused to allow the legislature to do indirectly what could not be done directly. The court stated that the provisions in Section 18 of the Bill of Rights of the Kansas Constitution guaranteeing to persons a remedy by due course of law cannot be watered down by diluting the definition of remedy. The court used language which is equally apropos to the facts in the present case: The appellees contend a distinction must be made between `remedy' and `recovery.' They argue the statute in question in no way denies the appellant a remedy by due course of law. To support this contention they call our attention to the fact that the appellant has already been paid in excess of $58,000 on the judgment, and by reason thereof it is apparent she had a remedy. This argument overlooks the fact that if the appellee hospital had carried no insurance, the appellant would not have recovered one dime, assuming the validity of 17-1725, supra, is upheld. Furthermore, there would be no necessity for such hospitals to carry insurance in the future. The appellees further argue there is no section of the Constitution of this state or of the United States that guarantees full recovery to the prevailing party; that to provide a remedy is not to guarantee a right, or indemnify against wrong. Obviously, the extent of the assets of a judgment debtor are not guaranteed by any Constitution. This argument evades the issue. 192 Kan. at 721. The court, in the words of Justice Schroeder, emphatically stated that Section 18 provides the right to a remedy for all injuries, not just a few. We adhere to the construction of Section 18 of the Bill of Rights of the Kansas Constitution placed upon it in Noel v. Menninger Foundation, supra , where it was said: `... It is the primary duty of the courts to safeguard the declaration of right and remedy guaranteed by the constitutional provision insuring a remedy for all injuries. ...' (p. 763.) (Emphasis added.) 192 Kan. at 722-23. This court later upheld legislation under the quid pro quo analysis in Manzanares v. Bell, 214 Kan. 589, discussed earlier in this opinion. While recognizing that the no-fault insurance act limits the right to recover for losses due to pain, suffering, or mental anguish, the court upheld it because the act assures all motor vehicle accident victims of prompt, efficient payment of certain economic losses. To the extent there is a limitation on a person's ability to recover nonpecuniary damages, the rights received in exchange are no less adequate. 214 Kan. at 599. The most recent case reviewing Section 18 is Ernest v. Faler, 237 Kan. 125. There, the court struck down a notice of claim statute which effectively cut off the right to recover damages for negligent pesticide application. The court reviewed Hanson, Noel, and Neely, and restated that the right of a person injured by the tortious act of another to a remedy for his injuries is one of the basic constitutional rights guaranteed protection by the Kansas courts. 237 Kan. at 132. The court held the statute unconstitutional as a violation of due process because it was unfair, unreasonable, and did not have a real or substantial relation to the objective sought. 237 Kan. at 138. Both plaintiffs and defendant agree that these cases result in one rule: The legislature can modify the common law so long as it provides an adequate substitute remedy for the right infringed or abolished. Intervenors Kansas Medical Society and Kansas Hospital Association stand alone in urging a different rule upon this court. They argue that Wright v. Pizel, 168 Kan. 493, 214 P.2d 328 (1950), overrules Hanson, supports Coleman, and stands for the rule that removal of a remedy can be justified any time by public need. However, the Wright court specifically noted that it did not reach the issues of whether the plaintiff had a common-law right to sue for injuries received while he was a guest in an automobile and whether the legislature had substituted some other remedy in return for denying that right. 168 Kan. at 505-06. Wright thus involved an entirely different analysis than we are concerned with here. It is also important to note that Hanson is cited and relied on in Ernest v. Faler, 237 Kan. at 131-32, as a basis for the decision. Having considered established Kansas law, we now turn to the case at hand. There can be little doubt that H.B. 2661 infringes on the right to a remedy by limiting recovery for noneconomic loss, overall loss, and by forcing successful plaintiffs to accept their award over a number of years by means of an annuity contract. Neely is clearly controlling on this point. In Neely, the practical effect of the statute was to limit a patient's recovery to the extent of the hospital's insurance coverage, an arbitrary limit. Here, H.B. 2661 by its caps cuts off recovery at $250,000 and $1,000,000, also arbitrary amounts. In Neely, the court found that the right to a remedy means the right to a full remedy, regardless of the likelihood of recovery. Neely v. St. Francis Hospital & School of Nursing, 192 Kan. at 722-23. This same flaw must also cut down the $3,000,000 pinhole provision, for it is simply another limit on recovery, albeit higher. The forced remedy of recovery of future damages by annuity also violates the common-law right to a remedy. The annuity provided for in the statute is a contract, owned and controlled by someone else. Plaintiffs traditionally receive lump-sum judgments that they control. While a plaintiff may certainly agree to accept his judgment in the form of an annuity (or in whatever form he chooses), the concept of forcing him to accept an annuity limits his remedy. His payout may take years and, as Judge Theis noted, there is always the risk of default, however slight. Lump-sum payments do not carry such risks. Annuities, therefore, modify the common law with regard to remedies. Assuming, then, that H.B. 2661 limits a plaintiff's right to a remedy under Section 18, we must then decide if the plaintiff has received a quid pro quo, or an adequate substitute remedy. Again, defendant and intervenors argue that the plaintiff receives a guaranteed recovery because doctors will have available, affordable insurance coverage. In a somewhat circular argument, they contend that H.B. 2661 lowers the cost of insurance, thereby encouraging doctors to continue their practices, increasing the number of doctors available, and guaranteeing the availability of quality health care to seriously injured malpractice victims. This is not a sound argument. If it were not for negligent health care providers, their victims would not need the continuing health care. The argument also ignores the fact that health care providers have been required to carry malpractice insurance since 1976. Thus a plaintiff's source of recovery is already provided by K.S.A. 40-3402 and K.S.A. 1987 Supp. 40-3404. The language in Neely points out that access to a source of recovery is vastly different from the right to a remedy. [T]o provide a remedy is not to guarantee a right, or indemnify against wrong. Obviously, the extent of the assets of a judgment debtor are not guaranteed by any Constitution. This argument evades the issue. 192 Kan. at 721. The answer is the same today: no medical malpractice victim is guaranteed the right to recover for all of his injuries. Thus, it is legally valid for the legislature to abolish the Fund or cap liability of the Fund at $1,000,000 or any other amount. However, the legislature cannot abolish the right to a remedy by capping a plaintiff's recovery at $250,000, $1,000,000, or even $3,000,000 without providing an adequate substitute remedy. The substitute they propose here is nothing new in the law. H.B. 2661 removes a substantial right of the plaintiff and gives him nothing in return. H.B. 2661, without question, eradicates the right to a remedy by due course of law for certain injuries. Just as in Noel, it eliminates the right to a remedy for those injured by a certain favored group of tortfeasors. Just as in Neely, it restricts the right to a remedy by redefining recovery. The effect of H.B. 2661 is to force every plaintiff to make a contribution, against his will, to the medical malpractice insurance industry. Yet it provides no adequate substitute remedy, and thus falls short of the requirements of Manzanares. The cap and annuity provisions of H.B. 2661 infringe upon a medical malpractice victim's constitutional right to a remedy by due course of law and no quid pro quo is provided in return. The trial court was correct in holding the caps and the annuity provisions unconstitutional as a violation of Section 18.