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Superior Court Holds that Separate Award for Counsel Fees Beyond Award Found by Jury Not Authorized by MCARE Act

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In a three-judge panel’s decision filed on February 6, 2012, the Superior Court of Pennsylvania, in Sayler v. Skutches, M.D., et al., 2012 WL 361400 (Pa.Super.2012), held that the Medical Care Availability and Reduction of Error (MCARE) Act did not statutorily authorize recovery of counsel fees beyond damages for future medical expenses awarded by a jury. Accordingly, counsel for plaintiff-appellant, who prevailed on behalf of their client at trial and received an award for future damages, was required to calculate their contingency fee according to the present value of the patient’s future damages at the time of the patient’s death, as opposed to the total amount of future damages awarded by the jury.

In the underlying medical malpractice suit, a trial was held over an alleged failure to diagnose breast cancer. Following trial, a jury awarded a verdict in favor of plaintiff-appellant. Taking contributory negligence into account, the final assessment of damages totaled approximately $2.5M.

During the course of several post-trial motions, plaintiff-appellant passed away. Thereafter, plaintiff-appellant raised the issue of payment of counsel fees by way of an amended petition for entry of judgment. Eventually, the trial court issued an order entering an award in favor of plaintiff-appellant, along with an opinion stating that, under Section 509, plaintiff-appellant would be entitled to the actual damages regarding future medical expenses which had accrued up to the time of her death. 40 P.S. 1303.509(b)(5). With regard to these damages, defendant-appellee would be authorized to satisfy the judgment through periodic payments, as opposed to a lump sum. 40 P.S. 1303.509(b)(3). However, as to the issue of counsel fees, the trial court specifically noted that pursuant to Section 509, all such fees were to be calculated before any payment was made by defendant-appellee, and that ultimately, this distribution “should be resolved between [a]ppellant and her attorneys in a separate action.”

During an appeal filed by plaintiff-appellant, the Superior Court considered whether payment of the proportionate share of counsel fees and costs should have been based upon the present value of the future medical damages under MCARE Section 509. While plaintiff-appellant argued that counsel was entitled to counsel fees based on the total amount of future medical expenses awarded by the jury, defendant-appellee took the position that such fees were to be calculated from the amount of the jury’s award which actually accrued before plaintiff-appellant’s death. The Superior Court agreed with defendant-appellee and affirmed the holding of the trial court.

As noted by the trial court, the Superior Court explained that Section 509 requires payments made for future medical damages to be paid as periodic payments, made after “payment of the proportionate share of counsel fees.” Notably, these payments are to be based upon the “present value of future damages awarded.” P.S. 1303.509(b)(5). Based upon the language of Section 509, the court concluded that “[a]ppellees’ liability to [a]ppellant terminated upon [appellant’s] death,” and that as a result, her counsel fees were to be calculated according to the amount of the future damages award which had accrued at that time. Beyond this amount, the court held that the plain language of Section 509 did not entitle plaintiff-appellant to an additional award of counsel fees.

In support of its conclusion, the court further explained that in order for a litigant to recover counsel fees from an outside source, “express statutory authorization, a clear agreement of the parties, or some other . . . exception” must be in place. Finding none of these in the matter at issue, it was determined by the court that an explicit provision regarding the award of counsel fees would have likely been included in Section 509 if the Pennsylvania Legislature had intended to provide for such an award. Looking further into the policy aims of MCARE Act, particularly the Legislature’s general intent to “limit jury awards in medical malpractice suits in order to ensure affordable health care premiums,” the court reaffirmed its position that Section 509 did not authorize an additional recovery of counsel fees beyond the accrued award.

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