Wednesday, October 02, 2013

Law in Effect When Claims Filed Determines How to Calculate Pre-Judgment Interest

 The Ohio Supreme Court’s news service last week discussed an opinion by the Court which held that “the current law governing the award of pre-judgment interest in civil suits applies to causes of action accruing before but filed on or after the 2004 effective date of the statute,” resolving a conflict among Ohio’s courts of appeals as it reversed a Twelfth District decision, returning the case to the trial court for further consideration.

  Case in point was Longbottom, et al. v. Mercy Hospital Clermont et al., 2012-1260, in which 9-year-old Kyle Smith struck his head on a coffee table, was taken to the emergency room at Mercy Hospital Clermont in Batavia that same day, and was examined & discharged after the attending physician told the parents he didn’t think Kyle had a serious head injury because he had remained conscious, hadn’t lost hearing, was behaving normally, and had no significant head pressure.

  The Court’s case summary proceeded to relate, however, that “The next morning when Kyle began gasping for breath, his parents called 911 and transported him to a Cincinnati hospital, where he was diagnosed with an epidural hematoma and underwent surgery, but suffered serious and permanent injuries.

  “Kyle’s parents sued the Mercy Hospital doctor for malpractice but voluntarily dismissed the action in March 2003,  later re-filing their suit in March 2008, at which time a jury found the doctor had acted negligently and awarded more than $2.4 million in damages to Kyle’s family.

   The summary went on to explain that “in tort actions, trial courts can also award ‘pre-judgment interest,’ which is additional compensation given when the party required to pay money did not make a good faith effort to settle a case. In this case, the court ordered nearly $831,000 in pre-judgment interest (PJI), calculated by using the version of R.C. 1343.03(C) in effect when Longbottom and Smith filed their initial complaint in 2003.

  “Both parties appealed to the Twelfth District Court of Appeals, which affirmed the trial court’s decision and PJI award, holding that amendments made to R.C. 1343.03(C), effective in 2004, applied prospectively only, and it noted that their interpretation aligned with decisions in the First, Third, and Seventh District Courts of Appeals. The Twelfth District then certified to the Ohio Supreme Court that its ruling conflicted with the Eighth District Court of Appeal’s decision in Barnes v. Univ. Hosps. of Cleveland, 8th Dist. Cuyahoga Nos. 87247, 87285, 87710, 87903, and 87946, 2006-Ohio-6266   regarding PJI awards.”

“Justice Terrence O'Donnell,” the news service summarized, “first examined the General Assembly’s intent when it amended R.C. 1343.03 in H.B. 212 in 2004, citing the 2008 Ohio Supreme Court case, Maynard v. Eaton Corp.,119 Ohio St.3d 443, 2008-Ohio-4542, in which the court considered whether a new interest rate on judgments, also enacted in H.B. 212, applied to actions still pending on appeal when the amendments went into effect. After looking at uncodified language in the bill, the court in Maynard determined that the legislature intended the new interest rate to apply on the act’s effective date to all pending actions, including those still on appeal.

  “In Longbottom, however, Justice O’Donnell wrote: ‘… H.B. 212 contains no codified or uncodified language providing that the modified procedures for calculating prejudgment interest enacted by R.C. 1343.03(C) should apply to all pending cases. … We therefore conclude that the legislature intended that the amendments to R.C. 1343.03(C) should apply only to cases filed on or after June 2, 2004, the effective date of that statute.’”

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