T o r t R e f o r m Missouri s Tort Reform Legislatio What I-House Cousel Needs to Kow By Jim Stockberger, Jeffery McPherso ad Bria Kaveey Missouri has passed oe of the most comprehesive legal reform packages i the coutry, icludig legislatio that keeps people from shoppig aroud the state for the friedliest courts i which to sue. See http://www.semissouria.com/story/1145720.html. Tom Doohue, Presidet of the U.S. Chamber of Commerce. I-house cousel for compaies who do busiess atioally or who have had the ufortuate experiece of beig sued i Missouri should be aware of the extesive reform recetly eacted i Missouri. The reform respods to the cotroversy surroudig tort litigatio by chagig the laws o joit ad several liability, the collateral source rule, puitive damages, discovery of defedats assets ad may other topics. The ew law adds ew sectios ad modifies existig sectios of statutes that relate to tort actios i Missouri. I tort cases, the most sigificat chages iclude: 1) limitig veue for a lawsuit to the plaitiff s place of first ijury; 2) raisig to 51 percet the required percetage of fault for joit ad several liability; 3) limitig puitive damages to $500,000 or five times the amout of actual damages, whichever is greater; 4) reducig the impact of the collateral source rule; ad 5) chagig the maer i which pre- ad post-judgmet iterest is calculated. The ew ad revised statutes directly affect those cases that allege at least oe tort, such as egligece, fraud, wrogful death or product liability. If your compay has bee sued i Missouri or works with third parties located i Missouri, you should be aware of the Jim Stockberger is a parter at the law firm of Armstrog Teasdale LLP. He is the cochairma of the firm s Tort Litigatio Practice Group ad the chairperso of the Product Liability Practice Group. Jeffery McPherso is a parter at the law firm of Armstrog Teasdale LLP. Mr. McPherso is a member of the Appellate Practice Group as well as the Public Law & Fiace Group. He has represeted cliets i scores of appeals i the appellate courts of Missouri ad Illiois. Bria Kaveey is a associate attorey i the litigatio departmet of Armstrog Teasdale LLP where he focuses his practice i tort ad busiess litigatio, icludig coveats ot to compete ad ufair competitio. 38 I-House Defese Quarterly Sprig 2007 2007 DRI. All rights reserved.
wide-ragig ad beeficial chages that occurred i Missouri. Veue Where is veue proper if the petitio cotais at least oe cout allegig a tort that occurred i Missouri? A large compoet of the tort reform law was the veue legislatio. The law used to leave a compay vulerable to suit i various ufavorable couties. That has bee fixed. Veue refers to the [locatio] i which a court of competet jurisdictio may adjudicate a actio. State ex rel. Elso v. Koehr, 856 S.W.2d 57, 59 (Mo. bac 1993). Formerly, the veue statutes provided various special rules for proper veue based o the defedat s status as a motor carrier, a corporatio, ot-for-profit corporatio, or railroad compay or o the defedat s residecy. Uder those rules, veue was proper eve if the court was located i a couty that had little cotact with the plaitiff or the plaitiff s ijury, ad the veue rule could vary based o the idetity of the defedat. The ameded veue statute arrows the veue rules for tort causes of actio i which the plaitiff s first ijury occurred i Missouri. Sectio 508.010.4, RSMo 2006. If the plaitiff was first ijured i Missouri, veue is proper oly i the couty where the plaitiff was first ijured. Id. The statute defies the plaitiff s place of first ijury for certai specified torts, ad the defiitio varies accordig to the type of tort ivolved. I latet-ijury cases, the place of first ijury is the place where the trauma or exposure [actually] occurred rather tha where symptoms [of ijury were] first maifested. Sectio 508.010.14, RSMo 2006. I wrogful death actios, veue lies where the decedet suffered his or her first ijury because of the alleged wrogful acts or egliget coduct of the defedat, rather tha where the decedet died. Sectio 508.010.11, RSMo 2006. Likewise, i loss of cosortium actios, the place of first ijury is the place where the physically ijured spouse was first ijured by the wrogful acts or egliget coduct alleged i the actio, regardless of the locatio of the spouse brigig the cosortium claim. Sectio 508.010.11, RSMo 2006. I medical malpractice cases for persoal ijury or death arisig out of health care services, the place of first ijury is the place where the plaitiff first received treatmet from a defedat for the medical coditio at issue i the case. Sectio 538.232, RSMo 2006. I actio[s] for defamatio or for ivasio of privacy, the locatio of first ijury is i the couty i which the alleged defamatory statemet was first published. Sectio 508.010.8, RSMo 2006. Courts are required to assess the propriety of a chose veue each time a defedat is joied i a lawsuit. Uder the former veue statutes, the Missouri appellate court determied that a ewspaper is first published i the couty where the ewspaper is prepared, edited, ad dissemiated. Carey v. Pulitzer Pub. Co., 859 S.W.2d 851, 854 (Mo. App. E.D. 1993). Thus, it is ulikely that there will be multiple places of first publicatio, eve for widely distributed publicatios. Where is veue proper if the petitio cotais at least oe cout allegig a tort that occurred outside Missouri? If the plaitiff was first ijured outside Missouri, veue depeds o the ature of the defedat. If the defedat is a idividual ad the locatio of first ijury is outside Missouri, veue is proper either (i) i the couty of the idividual defedat s pricipal place of residece i Missouri, or [(ii)] if the plaitiff s pricipal place of residece was i Missouri at the time of the first ijury, i the couty of the plaitiff s pricipal place of residece. Sectio 508.010.5(2), RSMo 2006. A idividual s pricipal place of residece [is] the couty which is the mai place where a idividual resides i the state of Missouri. Sectio 508.010.1, RSMo 2006. A idividual may oly [have] oe pricipal place of residece. Id. A idividual s pricipal place of residece is presumed to be the couty of voter registratio at the time of ijury. Id. If the plaitiff was first ijured outside Missouri ad the defedat is a corporatio, veue is proper (i) i ay couty where a defedat[ s] registered aget is located, or [(ii)] if the plaitiff s pricipal place of residece was i Missouri at the time of the first ijury, i the couty of the plaitiff s pricipal place of residece. Sectio 508.010.5(1), RSMo 2006. For example, assume the plaitiff is a Missouri residet whose residece is i Cole Couty, ad the plaitiff alleges a persoal ijury tort where the first ijury occurred i Arkasas. The defedat is a corporatio with a office i Warre Couty ad its registered aget i St. Louis Couty. The plaitiff may sue the defedat i oe of two places: 1) St. Louis Couty, where the defedat s registered aget is located (locatio of the office does ot affect the veue), or 2) Cole Couty, where the plaitiff had his residece at the time the first ijury occurred. If the petitio cotais couts allegig multiple torts, some of which ivolve first ijuries occurrig withi Missouri ad some of which ivolve first ijuries occurrig outside of Missouri, it appears that the cout allegig the earliest-occurrig ijury determies veue. Sectio 508.010.4 govers i all actios i which there is ay cout allegig a tort ad i which the plaitiff was first ijured i the state of Missouri (emphasis added). Likewise, Sectio 508.010.5 govers i all actios i which there is ay cout allegig a tort ad i which the plaitiff was first ijured outside the State of Missouri (emphasis added). For example, if the petitio alleges two urelated tort couts agaist the same defedat oe i which the ijury first occurred iside Missouri i May 2006 ad oe i which the ijury first occurred outside Missouri i Jue 2006 the the petitio should qualify as a actio i which the plaitiff was first ijured i the State of Missouri i May 2006 ad Sectio 508.010.4 govers. May a corporate plaitiff who was first ijured outside Missouri brig oe actio agaist both a corporate ad a idividual defedat i Missouri? The ameded veue statute does ot resolve a potetial coflict that arises i cases where a corporate plaitiff alleges I-House Defese Quarterly Sprig 2007 39
T o r t R e f o r m a out-of-state tort agaist both idividual ad corporate defedats. For example, assume a corporate plaitiff brigs a actio for misappropriatio of trade secrets agaist its former employee. Assume the first ijury to the plaitiff occurred outside Missouri, where the employee took or misappropriated the employer s trade secrets. Because the plaitiff is a corporatio, veue would oly be proper i the couty of the idividual [employee] defedat s pricipal place of residece i Missouri. Sectio 508.010.5(2), RSMo 2006. However, if the plaitiff subsequetly adds the former employee s ew corporatio to the lawsuit, veue would oly be proper i the couty where that corporatio s registered aget is located. Sectio 505.010.5(1), RSMo 2006. The ameded veue statute does ot explai how this tie is to be broke. This coflict does ot arise i cases ivolvig plaitiffs who are idividuals rather tha corporatios, ad who were residet i Missouri o the date of first ijury, because veue is proper i the couty of the plaitiff s residece regardless of the ature of the defedat. Sectio 508.010.5(1) (2), RSMo 2006. However, if a plaitiff is ot a idividual Missouri residet o the date of the first ijury, the the plaitiff might ot be able to joi all defedats i oe actio i Missouri. Additioally, if the plaitiff is a corporate etity rather tha a idividual, the ew law leaves some ambiguity about the proper veue if the defedat is a foreig corporate etity without a registered aget located i Missouri or a idividual without a pricipal place of residece i Missouri. See State ex rel. Harper Idus., Ic. v. Sweeey, 190 S.W.3d 541, 544 (Mo. App. S.D. 2006) (fidig that the specific corporatio veue statute ( 508.040) trumps the geeral veue statute ( 508.010) whe the oly defedat is a o-residet corporatio that was ot registered to do busiess i Missouri). If a actio was filed before the effective date of the ew law, should the court grat a motio to trasfer for improper veue if a party is added to the case after that date? Assume the followig facts: a plaitiff filed her petitio before August 28, 2005. A few moths later, the plaitiff jois a ew party by amedmet. The ewly added defedat moves to trasfer for improper veue, arguig that the proper veue is the place of first ijury pursuat to the ameded veue statutes uder the ew law. The court s decisio of this issue will deped o iterpretatio of the word filed as used i the ew law. The provisios of the tort reform legislatio, except for 512.099, shall apply to all Does the ew law dey a party the right to chage veue from a couty with populatios of 75,000 people or less i cases i which the petitio alleges a tort? Uder a logstadig rule i Missouri, Rule 51.03, a party i a tort case triable by a jury may move for a automatic chage of veue from a couty with 75,000 or fewer ihabitats. Rule 51.03(a). The movat eed ot allege ay cause for the chage. Id. The ew law purports to chage this rule by providig, i 508.011, that [t]o the extet that Rule 51.03 of the Missouri rules of civil procedure cotradicts ay provisio of this chapter, the provisios of this chapter shall prevail regardig ay tort claim. Sectio 508.011, RSMo 2006. However, the Missouri Costitutio likely reders 508.011 ieffective so that parties i tort actios should still be able to move for automatic chage of veue uder Rule 51.03. As oted, the Missouri Costitutio provides, that [a]y rule may be aulled or ameded i whole or i part by a law limited to the purpose. Mo. Cost. art. V, 5. Sice 508.011 specifically auls or ameds Rule 51.03, but ot i a law limited to the purpose as required by the Missouri Costitutio, par New veue provisios prevet the use of a defedat with remote coectios to the forum to establish veue. causes of actio filed after August 28, 2005. H.B. 393, 93rd Ge. Assem., 1st Reg. Sess. (Mo. 2005) (codified at 538.305, RSMo 2006) (emphasis added). It is likely that the additio of a ew party by amedmet costitutes a filig of the plaitiff s cause of actio. Uder State ex rel. Lithicum v. Calvi, Missouri courts are required to assess the propriety of a chose veue each time a defedat is joied i a lawsuit, whether by origial or ameded petitio. Ideed, H.B. 393 codifies the Lithicum holdig by requirig courts to re-determie veue wheever a defedat is added or removed prior to trial ad a motio to trasfer for improper veue is filed. See H.B. 393, 93rd Ge. Assem., 1st Reg. Sess. (Mo. 2005) (codified at 508.012, RSMo 2006). As the court stated i Lithicum, re-determiig veue at the time each party is brought ito a case protects all parties equally ad gives effect to the legislature s itet i eactig the veue statutes. Lithicum, 57 S.W.3d at 858. Further, 508.010.13 provides that [i]f ay parties are added to the cause of actio after the date of said trasfer who do ot coset to said trasfer the the cause of actio shall be trasferred to such couty i which veue is appropriate uder this sectio, based upo the ameded pleadigs. Sectio 508.010.13, RSMo 2006. Therefore, eve though the plaitiff s petitio was iitially filed before August 28, 2005, the cause of actio agaist the ewly added defedat was filed after the effective date of the ew law, ad thus the ameded veue statute govers the plaitiff s ameded petitio. I Burs v. Chemisphere Corp., the Supreme Court of Missouri recetly issued a prelimiary writ regardig the defiitio of cause of actio as used i 538.305, RSMo 2005. I that case, the plaitiffs, a husbad ad wife, filed tort claims i the Circuit Court of the City of St. Louis o August 22, 2005, prior to the effective date of the ew law, allegig that the husbad suffered ijuries i St. Louis Couty. The husbad died ad the wife ameded the petitio to drop the tort claims ad set forth a statutory claim for wrogful death, based o the same theories of egligece ad strict products liability. The defedats filed a motio to trasfer to St. Louis Couty, arguig that the ameded petitio set forth a ew cause of actio ad that, uder 538.305, veue should be recosidered. The trial court grated the motio to trasfer. As of the date of this article, this writ petitio is uresolved. 40 I-House Defese Quarterly Sprig 2007
ties will probably cotiue to have the right to a automatic chage of veue to aother couty i a tort actio triable by a jury i a couty with 75,000 or less ihabitats. Id. What will be the effect of the ew provisios o veue? The ew veue provisios should provide more certaity regardig the proper forum for actios with at least oe cout allegig a tort. The ew veue provisios prevet the use of a defedat with remote coectios to the forum to establish veue. Istead, the ameded veue statutes should limit veue shoppig. Couties perceived as plaitifffriedly, such as the city of St. Louis, have already experieced sigificat reductios i the umber of suits filed. For istace, i May of 2005, 602 tort cases were filed i the city of St. Louis. However, i May of 2006, ie moths after the effective date of the ew law, 255 tort cases were filed i the city of St. Louis. Likewise, i Jackso Couty, plaitiffs filed 277 tort cases i May of 2005, but plaitiffs filed oly 186 tort cases i May 2006. I cotrast, the umber of civil cases filed i St. Louis Couty, which has o particular repute as a plaitiff-friedly veue, has oly slightly decreased. For example, i May of 2005, plaitiffs filed 345 civil cases i St. Louis Couty, while i May of 2006, plaitiffs filed 302 civil cases i St. Louis Couty. Similarly, i St. Louis Couty i Jue of 2005, plaitiffs filed 306 civil cases compared to 271 civil cases filed i Jue of 2006. Therefore, the ew law appears to have caused o sigificat chage i the umber of cases filed i St. Louis Couty, while it has bee atteded by a oticeable drop i the umber of cases filed i the City of St. Louis ad Jackso Couty. Joit ad Several Liability Prior to the eactmet of the ew law, a plaitiff could recover all or part of his or her damages from ay defedat, regardless of the defedat s proportio of fault. Capell v. Abbick, 123 S.W.3d 193, 195 (Mo. App. W.D. 2003). The apportiomet of fault betwee defedats had o effect o a plaitiff s right to collect the full amout of a judgmet from ay oe of the defedats. Id. See also Hollis v. Blevis, 927 S.W.2d 558, (Mo. App. S.D. 1996) (holdig that the plaitiff ca collect the full amout of the judgmet agaist a defedat who is 2 percet at fault). The ew law provides that joit ad several liability applies to a defedat oly if that defedat is at least 51 percet at fault. Sectio 537.067.1, RSMo 2006. I such circumstaces, the defedat is joitly ad severally liable for the amout of the judgmet redered agaist [all] defedats. Id. The ew law elimiates joit ad several liability for a defedat foud by the trier of fact to be less tha fifty-oe percet at fault uless the other defedat is a employee or the party s liability arises out of the Federal Employer s Liability Act. Sectio 537.067.1(1) (2), RSMo 2006. Thus, if a defedat is foud to be less tha fifty-oe percet at fault, the that defedat is oly required to pay his proportioate share of liability. Sectio 537.067.1, RSMo 2006. The ew joit ad several liability provisios will sigificatly impact cases i which a plaitiff or co-defedat is attributed fault. For example, if a defedat is foud twety-five percet at fault, ad others, icludig the plaitiff, are foud sevety-five percet at fault, the that defedat is resposible for oly twety-five percet of the judgmet. The joit ad several liability provisios of the ew law protect deeppocketed defedats whose proportioate fault is relatively small ad reduces the icetive to joi such defedats. Puitive Damages Uder prior law, i order to gai discovery of a defedat s assets, a plaitiff eeded oly to pray for puitive damages for such amout as is fair ad reasoable without statig a specific dollar amout. Rule 55.19. The ew law adds a additioal hurdle for a plaitiff seekig puitive damages by requirig, prior to ay discovery of a defedat s assets, a prelimiary fidig by the court that it is more likely tha ot that the plaitiff will be able to preset a submissible case to the trier of fact o the plaitiff s claim of puitive damages. Sectio 510.263.8, RSMo 2006. Additioally, the ew law limits puitive damages to $500,000 or five times the compesatory damages, whichever is greater except i certai circumstaces. Sectio 510.265.1, RSMo 2006. A defedat is ow oly liable for the percetage of puitive damages based o its percetage of fault. Sectios 537.067.2, 510.265.1, RSMo 2006. Whe ca a plaitiff discover the defedat s assets? Formerly, a plaitiff could obtai discovery of a defedat s assets by simply pleadig a claim for puitive damages. Uder the ew law, a plaitiff may ot discover a defedat s assets util the trial court has made a fidig that it is more likely tha ot that the plaitiff will be able to preset a submissible case to the trier of fact o the plaitiff s claim of puitive damages. Sectio 510.263.8, RSMo 2006. I practice, after coductig discovery for a period of time, a plaitiff seekig puitive damages must move for such a fidig. Id. Like a similar statute i Illiois related to puitive damages, the ew Missouri statute is uclear about the type of fidig that the trial court must make. 735 Ill. Comp. Stat. 5/2-604.1 (2006); See Stojkovich v. Moadock Bldg., 666 N.E.2d 704, 710 12 (Ill. App. Ct. 1996) (holdig that applicatio of abuse of discretio stadard would be appropriate i a review of [a] deial of a pretrial motio to amed a complait to add claim for puitive damages whe the trial court coducts a evidetiary hearig at which witesses testify ad their credibility is a factor i the court s determiatio ; but also holdig that whe the trial court makes its determiatio based upo documetary submissios oly, credibility is ot a factor ad, o review, the appellate court will apply de ovo stadard). Defedats may argue that the fidig requires a evidetiary hearig i which witesses testify ad their credibility is a factor i the court s fidig, rather tha a fidig based oly upo documet submissios. The effect of this provisio i practice is ot clear, but because the trial court must determie that it is more likely tha ot that the plaitiff will be able to preset a submissible case, eligible plaitiffs will likely be able to discover a defedat s assets before trial. H.B. 393, 93rd Ge. Assem., 1st Reg. Sess. (Mo. 2005). What is the limit o puitive damages? As i the case of actual damages, a defedat shall oly be liable for the percetage of puitive damages that correspods to the percetage of its fault. Sectio 537.067.2, RSMo 2006. The ew law limits puitive damages to $500,000 or five times the et amout of the compesatory dam- I-House Defese Quarterly Sprig 2007 41
T o r t R e f o r m ages awarded to the plaitiff, whichever is greater. Sectio 510.265.1, RSMo 2006. There are three exceptios: 1) the cap o puitive damages does ot apply to cases ivolvig housig discrimiatio; 2) the cap o puitive damages does ot apply to a case i which the state of Missouri is the plaitiff requestig the award of puitive damages ; ad 3) the cap o puitive damages does ot apply to cases i which the defedat pled guilty to or was covicted of a feloy arisig out of the acts or omissios pled by the plaitiff. Sectio 510.265.1 2, RSMo 2006. The third exceptio to the cap may provide a powerful icetive for a victim to persuade the prosecutor to pursue a feloy covictio or guilty plea. The prosecutor s decisio may be vulerable to ievitable pressures of local politics or other factors urelated to the merits, yet is wholly immue from review. Kilmer v. Mu, 17 S.W.3d 545, 552 (Mo. bac 2000). Accordigly, cousel for defedats must be cautious durig depositios, particularly i persoal ijury cases, where the defedat might be covicted of a feloy arisig out of the acts or omissios pled by the plaitiff. Sectio 510.265.1, RSMo 2006. The exceptio to the puitive damages cap for torts that give rise to feloy covictios raises questios uder the ope courts provisio of Article I, 14 of the Missouri Costitutio. I Kilmer v. Mu, a widow ad the childre of a ma killed i a druk drivig accidet brought a wrogful death actio agaist the restaurat that served beer to the driver after he was obviously itoxicated. 17 S.W.3d at 545. At the time, uder Missouri s dram shop law, a plaitiff could ot pursue such a civil claim agaist a liquor licesee uless the licesee had bee covicted for servig the visibly druk patro i violatio of 311.310, RSMo. Id. at 545 46. Although the decedet s family members requested a crimial charge agaist the restaurat, the prosecutor declied to charge the restaurat. Id. at 546. The Supreme Court of Missouri held that the statutory restrictio requirig a covictio or suspeded impositio of setece violated the ope courts provisio of the Missouri Costitutio, which protected the widow ad childre s right to pursue a remedy for a legally recogized ijury. Id. at 546. The Missouri Costitutio provides that the courts of justice shall be ope to every perso, ad certai remedy afforded for every ijury to perso, property or character, ad that right ad justice shall be admiistered without sale, deial or delay. Mo. Cost. art. I, 14. The court applied the test of whether access to [a] court for a recogized ijury is subject to a arbitrary or ureasoable barrier. Id. at 553. The court determied that the requiremet of a crimial covictio as a procedural requiremet for a plaitiff to proceed with a civil actio [was] arbitrary ad ureasoable. Id. Therefore, the court foud this requiremet ucostitutioal sice a perso has a costitutioal right to a certai remedy. Id. at 554. A procedural barrier that subjects a recogized ijury to the discretio of the prosecutig attorey violates the ope courts provisio of the Missouri Costitutio. Id. I Adams v. Childre s Mercy Hospital, by cotrast, the Supreme Court upheld a statutory cap o o-ecoomic damages uder the ope courts provisio of the Missouri Costitutio. 832 S.W.2d 898, 905 (Mo. bac 1992). However, i that case, the court relied o a distictio betwee statutes that make a substative chage to the commo law ad those that erect a coditio precedet or ay other procedural barrier to access to the courts. Id. Limitig the amout of recoverable damages is a permissible substative chage to the law uder Adams, but imposig the requiremet of a covictio as coditio precedet to recovery of damages is a impermissible procedural barrier uder Kilmer. However, it is questioable whether eve a procedural barrier to the recovery of puitive damages, as opposed to compesatory damages, implicates the ope courts provisio of the costitutio at all. Sectio 14 of article I of the costitutio provides that the courts of justice shall be ope to every perso, ad certai remedy afforded for every ijury to perso, property or character (emphasis added). It is well established that the purpose of puitive damages is ot to compesate a plaitiff for a ijury, but to protect society at large by puishig ad deterrig flagrat tortfeasors. See, e.g., Vaugha v. Taft Broad. Co., 708 S.W.2d 656, 660 (Mo. bac 1986) ( Puitive damages are ever allowable as a matter of right ad their award lies wholly withi the discretio of the trier of fact. The purpose of puitive damages is to iflict puishmet ad to serve as a example ad deterret to similar coduct ). Id. The plaitiff who receives puitive damages i additio to compesatory damages thus receives ot a remedy for [his or her] ijury, Mo. Cost., art. I, 14, but a widfall o behalf of society. I short, puitive damages are exemplary rather tha compesatory ad they are ot ecessarily part of the certai remedy for every ijury that the ope courts provisio guaratees. Id. (Emphasis added). Moreover, eve a successful ope courts challege to the puitive damages cap might ot beefit plaitiffs. I Missouri, the doctrie of severability for statutes is codified at 1.140, RSMo 2006, which provides that: [i]f ay provisio of a statute is foud by a court of competet jurisdictio to be ucostitutioal, the remaiig provisios of the statute are valid uless the court fids the valid provisios of the statute are so essetially ad iseparably coected with, ad so depedet upo, the void provisio that it caot be presumed that the legislature would have eacted the valid provisios without the void oe (emphasis added). O this stadard, the exceptio to the puitive damages cap for torts ivolvig a feloy covictio is almost certaily severable from the puitive damages cap as a whole. It is overwhelmigly likely that, if it had bee aware that the exceptio was ucostitutioal, the legislature would have eacted the cap without the relatively mior exceptio, rather tha o cap at all. Uder Adams, of course, there is o ope courts difficulty with a straightforward substative limit o puitive damages. Therefore, eve if the exceptio for felos is declared ucostitutioal, the likely proper result is that all plaitiffs will be subject to the puitive damages cap. The New Law Modifies the Collateral Source Rule to Allow the Actual Amout of Paid Medical Expeses to Be Itroduced ito Evidece, While Excludig the Amout Billed but Upaid Missouri adheres to the commo law collateral source rule whereby a defedat is ot etitled to a reductio i the claimat s 42 I-House Defese Quarterly Sprig 2007
damages by provig [the claimat] has received or will receive compesatio for the loss from a source idepedet of the defedat such as isurace coverage. Isemiger v. Holde, 544 S.W.2d 550 (Mo. bac 1976). The ew law retais the collateral source rule, but sigificatly modifies it. The ew law provides that a rebuttable presumptio [exists] that the dollar amout ecessary to satisfy the [plaitiff s] fiacial obligatio to the health care provider represets the value of the medical treatmet redered. Sectio 490.715.5(2), RSMo 2006. To rebut the presumptio, the court may still hear evidece o a issue raised about the value of the medical treatmet redered. Id. Thus, upo motio, the presumptio may be overcome by evidece such as (a) [t]he medical bills icurred by a party; (b) [t]he amout actually paid for medical treatmet to a party; or (c) a estimate of the upaid medical bills that a party remais obligated to pay i the evet of a recovery. Id. With respect to the evidece that the jury may hear, [p]arties may itroduce evidece of the value of the medical treatmet redered to a party that was reasoable, ecessary, ad a proximate result of the egligece of ay party. Sectio 490.715.5(1), RSMo 2006. However, defedats will likely argue that the jury may oly hear the presumptive amout or the amout determied by the court outside the hearig of the jury pursuat to 490.175.5(2), RSMo 2006. Therefore, a defedat may be able to reduce the value of medical bills by the amout actually paid rather tha the full cost of care to the plaitiff before ay egotiated health care isurace discouts. Sectio 490.715.5(2)(b), RSMo 2006. The ew provisio requires the trial judge to determie the value of the medical treatmet, but leaves ope the questio of whe the judge should make the determiatio. Id. Cousel for both plaitiffs ad defedats must ow be especially aware of the medical treatmet provided, the actual amouts billed, ay discouts egotiated by a isurace compay, ad the amout a party is obligated to pay to ay etity i the evet of a recovery. Expressios of Sympathy or Beevolece Are Iadmissible as a Admissio of Liability Uder a provisio of the ew law, statemets, writigs, or beevolet gestures expressig sympathy or a geeral sese of beevolece relatig to the pai, sufferig, or death of a perso ad made to that perso or [his or her] family are iadmissible as evidece of a admissio of liability i a civil actio. Sectio 538.229.1, RSMo 2006. Beevolet gestures are defied as actios which covey a sese of compassio The exceptio to the puitive damages cap for torts ivolvig a feloy covictio is almost certaily severable from the puitive damages cap as a whole. or commiseratio emaatig from humae impulses. Sectio 538.229.2(1), RSMo 2006 Family is defied as the spouse, paret, gradparet, stepmother, stepfather, child, gradchild, brother, sister, half brother, half sister, adopted childre of a paret, or spouse s parets of a ijured party. Sectio 538.229.2(2), RSMo 2006. This provisio also remids practitioers that othig i this sectio shall prohibit admissio of a statemet of a fault. Sectio 538.229.1, RSMo 2006. To get a statemet ito evidece as a party admissio, the offerig party must establish: 1) a coscious or volutary ackowledgmet by a party-oppoet of the existece of certai facts; 2) the matter ackowledged must be relevat to the cause of the party offerig the admissio; ad 3) the matter ackowledged must be ufavorable to, or icosistet with, the positio ow take by the party-oppoet. Aroud the World Importig v. Mercatile Trust Co., 795 S.W.2d 85, 89 (Mo. App. E.D. 1990). What Are the Requiremets for Prejudgmet Iterest i Tort Actios? The ew law adds requiremets for prejudgmet iterest demad letters. If a [plaitiff] has made a demad for paymet of a claim or a offer of settlemet of a claim, to the party, parties, or their represetatives, ad to such party s liability isurer if kow to the claimat, the the plaitiff may receive prejudgmet iterest. Sectio 408.040.2, RSMo 2006. However, this oly applies if the amout of the judgmet or order exceeds the demad for paymet or offer of settlemet. Id. Moreover, the demad must 1) be writte; 2) be set by certified mail; 3) [b]e accompaied by a affidavit of the claimat describig the damages, icludig the ature of the claim, the ature of ay ijuries claimed ad a geeral computatio of ay category of damages sought by the claimat with supportig documetatio, if ay is reasoably available; 4) referece 408.040; ad 5) remai ope for at least 90 days. Sectio 408.040.2(2) RSMo 2006. Additioal requiremets apply for claims of wrogful death, persoal ijury, ad bodily ijury claims. Sectio 408.040.2(3), RSMo 2006. If the demad or offer is ot accepted, the the claimat must file a cause of actio i the circuit court withi 120 days after the demad or offer was received, uless the parties agree i writig to a loger period of time. Sectio 408.040.2(2), RSMo 2006. If the claimat fails to file a lawsuit withi 120 days after the demad was received by the respodet, the she caot receive prejudgmet iterest. Id. Uder the ew law, a plaitiff s cousel must ow provide far more iformatio to a potetial defedat. By givig a defedat 90 days to respod ad requirig the claimat to provide more detailed iformatio about damages, medical providers, employmet records ad medical records, the statute provides defedats additioal time ad material to evaluate a potetial claim ad the settlemet proposal. The ew law also chages the calculatio period ad, i tort cases, the rate for prejudgmet iterest. The court calculates prejudgmet iterest from a date 90 days after the demad or offer was received by certified mail retur receipt, or from the date the demad or offer was rejected without couter offer, whichever is earlier. Sectio 408.040.2, RSMo 2006. Sectio Tort Reform, cotiued o page 68 I-House Defese Quarterly Sprig 2007 43
Tort Reform, from page 43 408.040.2, RSMo 2006 is silet with regard to the commecemet of the time period if there is a couteroffer. The court calculates prejudgmet iterest i tort actios at a iterest rate equal to the Federal Fuds Rate, which is established by the Federal Reserve Board, plus three percet. Id. The judgmet shall state the applicable iterest rate, which shall ot vary oce etered. Id. The iteded Federal Fuds Rate as established by the Federal Reserve Board ca be foud at http://www.federalreserve.gov/ fomc/fudsrate.htm. [P]uitive damages do ot qualify uder Sectio 408.040.2 for prejudgmet iterest. Aderso v. Shelter Mut. Is. Co., 127 S.W.3d 698, 702 (Mo. App. E.D. 2004). I tort actios, post-judgmet iterest accrues from the date of the fial judgmet. Sectio 408.040.2, RSMo 2006. See Rule 81.05 (addressig how to calculate the fial judgmet date). Post-judgmet iterest shall be allowed o all moey due upo ay judgmet or order of ay court from the date of judgmet is etered by the trial court util [its] full satisfactio. Id. I such cases post-judgmet iterest will be at a rate equal to the Federal Fuds Rate plus five percet. Id. The judgmet shall state the applicable iterest rate, which shall ot vary oce etered [by the court]. Coclusio The effects of the ew tort reform law ca already be see i courtrooms whe attoreys submit jury istructios or argue motios to trasfer for improper veue. The legislatio has sigificatly chaged the additioal defeses that a party must assert i a defedat s aswer. Additioally, certai resposes to discovery requests are ow objectioable. For istace, if a plaitiff files a petitio without allegig puitive damages, the ew law may prevet the plaitiff from discoverig the defedat s assets, which is sigificat durig settlemet egotiatios. Missouri s tort reform demostrates the importace of relyig o local cousel familiar with the chages to veue, joit ad several liability, puitive damages, the collateral source rule ad pre- ad postjudgmet iterest awards. Outside cousel must apprise i-house cousel of the opportuities the ew legislatio presets ad how the chages affect strategy ad decisio-makig log before the settlemet offer is made or trial begis. 68 I-House Defese Quarterly Sprig 2007