Day on Torts

Tennessee law has an unusual rule concerning expert witnesses in health care liability cases – the "contiguous state rule."  Usually, the rule hurts patients because it limits the pool of expert witnesses available to testify on their behalf.  Sometimes, however, it comes back to bit health care providers.

An ophthalmologist in a medical negligence case requested that the trial court waive the expert competency requirement known as the contiguous state rule  under Tenn. Code Ann. § 29-26-115(b).  Under this rule, in order for an expert to testify in a Tennessee medical malpractice case, the expert must have been licensed to practice and did practice in a relevant specialty in Tennessee or a contiguous bordering state within the year preceding the date of the alleged malpractice. This requirement can be waived by a court when the court “determines that the appropriate witness otherwise would not be available.” Tenn. Code Ann. § 29-26-115(b).

In Gilbert v. Wessels, E2013- 00255-COA-R10-CV (Tenn. Ct. App. Nov. 18, 2013), the defendant ophthalmologist’s attorney spent approximately 35 hours searching for an expert and contacted 13 doctors in Tennessee and contiguous states before finding an expert in Florida. The defendant argued that this was sufficient to warrant a waiver of the contiguous state rule and also argued that the Florida expert had actual experience performing the procedure at issue and therefore was more qualified to testify than an expert who might meet the contiguous state requirements but had no experience with the procedure. 

The Tennessee Department of Commerce and Insurance has released the 2013 Health Care Liability Report.  Unfortunately, the report bears the date on which it is issued rather than the year the data used to generate the report is based.  

In any event, the data confirms what most of us know about the state of health care liability litigation in Tennessee.  Medical malpractice claims have dropped substantially since 2008 when the notice and certificate of good faith statutes went into effect.

Here is data on the number of paid claims for the period from 2010 through 2012:

The number of claims closed without payment is about 80% of closed claims.  Stated differently, for every five claims that are opened four are later closed with no payment to the patient.

So, if there are 3927 pending claims at the end of 2012 and historically payments have been made to patients in 20% of claims, that means that a payment to a patient will be made in about 800 of the pending claims.

Notice that in the last three years the number of closed claims and end-of-year totals has dropped substantially.  This is consistent with complaints we are hearing from the defense bar – they have seen that their case inventory is dropping because the number of new case filings has dropped.

Remember that "claims" are different than lawsuits.  Not every claim results in a lawsuit, and multiple claims can result in one lawsuit.  Here is the data on filings of health care liability cases for the last few fiscal years ending on June 30.

So we are seeing some increase in filings, although they are still down about 30% from where they were six years ago.  What is going on?

I am not sure.  There has been an increase in population and that would impact the number of patients and thus the number of possibilities for malpractice to occur.  Financial pressure on the health care industry may be impacting quality of care.  Several defense lawyers have told me that they are seeing an increase claims brought by inexperienced lawyers.  Of course, the defense bar secretly loves these cases – these lawyers are unlikely to have the savvy or money to bring even a good case across the finish line, much less actually win the case.  If inexperienced lawyers are bringing more cases we should see the results of that in an increase in unpaid claims.

The total damages paid on health care liability cases in 2012 was $90,520,000.  Since we know that there were 436 claims paid in 2012, the average payment per claim was $208,000. 

In 2011, the total amount paid was $114,000,000, so the total payments dropped over 20%.  

I will share more data in my next post "2012 Tennessee Medical Malpractice (Health Care Liability Statistics – Part 2."

These days, almost all Tennessee nursing homes and rehabilitation centers include arbitration agreements in their admission documents. In this case, enforceability became an issue because the arbitration agreement was signed by the patient’s sister who did not have a power of attorney. Moreover, it was undisputed the patient did not have any mental competency issues. However, the nursing home argued sister had implied and apparent authority to bind the patient. 

Marie Farmer was a 36 year old woman with multiple health issues including diabetes and end-stage renal disease. Over the course of several years, she had been in and out of various hospitals and medical facilities and her sister, Angelica Massey, had typically accompanied her and completed the necessary paperwork and Farmer’s admission to defendant’s nursing home was no different. While a patient at the nursing home, Farmer died allegedly from complications of hypoglycemia and her husband and minor children brought a wrongful death action. The nursing home then sought to enforce the arbitration agreement.

Since implied authority has been defined as "actual authority circumstantially proved, or evidenced by conduct, or inferred from a course of dealing between the alleged principal and the agent", defendant argued Massey had implied authority to sign the arbitration agreement since she routinely performed that function for her sister. The Court of Appeals disagreed. While Farmer knew Massey was signing admission documents for her, there was no evidence to establish Farmer knew an arbitration agreement was contained within those documents as even the nursing home’s representative testified it was not discussed in Farmer’s presence. Moreover, the undisputed testimony was the arbitration agreement was not mandatory. In other words, admission was not conditioned upon signing it. Given its optional nature, knowledge of its existence and an acquiescence to its terms was necessary, and evidence of that was absent in the record.

Tennessee medical malpractice (now called "health care liability") cases remained essentially flat for the fiscal year ending June 30, 2013, according to data recently released by the Administrative Office of the Courts.

For the twelve month period ending June 30, 2013, there were a total of 385 health care liability actions filed in Tennessee state courts.  This number compares with 369 cases filed for the twelve month period ending June 30, 2012 and 343 cases filed for the twelve month period ending June 30, 2011.

Medical malpractice filings took a big hit effective October 1, 2008, when the first round of legislation concerning pre-suit notice and certificates of good faith went into effect.     For the fiscal year ending June 30, 2008, there were 537 medical malpractice cases filed and for the prior year (ending June 30, 2007) there were 638 cases filed.  So, when one compares filings from the year ending June 30, 2007 with the year ending June 30, 2013, filings are down about 40%.

Pre-suit notice in Tennessee health care liability cases continues to be a huge problem for victims of medical malpractice. In this case, Plaintiff sent notice, included all of the necessary forms and paperwork, and attached it to the complaint – but it turned out to be sent to the wrong legal entity, one who had a business name extremely similar to the company who provided the care at issue in the case.

Plaintiff’s brother was a patient at a mental health facility who died allegedly due to substandard care.  Plaintiff sent pre-suit notice to Foundation, who she thought ran the facility, and filed suit against Foundation after waiting the requisite 60 days.  Foundation’s answer, however, said that it was a fund-raising company that provided no health care whatsoever.  Foundation’s answer stated that Cooperative, a related company, was actually who provided care to Plaintiff’s brother. 

Plaintiff moved and was granted leave to amend.  The Court of Appeals described it as a Tennessee Rule of Civil Procedure 15.03 motion to correct the misnomer.  However, it is unclear from the opinion if that is how Plaintiff herself described her motion.  It is also unclear if the motion was to add Cooperative as an additional defendant based on Foundation’s answer, or if the motion was to substitute Cooperative for Foundation.

The fights over the Tennessee health care liability pre-suit notice statute, T.C.A. Sec. 29-26-121, have steadily increased and now loom over virtually every Tennessee health care liability lawsuit.   In short, motions to dismiss cases are being filed because of the alleged failure of the plaintiff’s lawyer to perfectly comply the statute. In many of the cases, the defendant is not denying that notice was in fact received and, indeed, usually admits that the failure to strictly comply with the statute did not result in any prejudice whatsoever. Rather, the defendant argues that if every statutory "i" is not dotted and  "t" is not crossed,  the defendant has the absolute right to insist that the lawsuit be not only dismissed but that it be dismissed with prejudice i.e. any deviation, no matter how minor, requires the death penalty.

It is important to point out that the Tennessee Supreme Court has not addressed the issue to date. True, the court says giving pre-suit notice is mandatory but (a) expressly left open the question about what sanction, if any, is required when the notice statute is not complied with and (b) has not addressed the issue of imprecise compliance. Myers v. AMISUB (SFH), Inc., 382 S.W.3d 300, 307 (Tenn. 2012);   Aubrey E. Givens, Administrator of the Estate of Jessica E. Givens, Deceased, et al. v. The Vanderbilt University D/B/A Vanderbilt University Hospital, et. al.,   M2013-00266-COA-R3-CV  (Tenn. Ct. App. Oct. 15, 2013) and Foster v. Chiles, No. E2012-01780-COA-R3-CV, 2013 WL 3306594 (Tenn. Ct. App. June 27, 2013).  The latter issue is the subject of this post: how should our courts address the issue of a failure to strictly comply with the notice statute, especially in the absence of prejudice to the defendant?  

I submit that the answer to the question asked is relatively easy.  It is easy because our law has answered substantially similar questions dozens of times over the decades, albeit in different contexts, and thus one need only apply decades-old law to reach resolve these cases in a way that furthers both the cause of justice and the familiar, worthy goal of resolving cases on the merits.  Thus, I urge any lawyer who is confronting a notice issue to consider the following cases and argue for the trial and appellate courts to apply the "substantial compliance" test.