December 2, 2019

Mandamus and the Patient’s Compensation Fund; Garau Germano, P.C. v Robertson

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It appears that there is a serious dispute brewing in Indiana’s medical malpractice community regarding when claimants can obtain access to the Patient’s Compensation Fund. Plaintiffs claim that they should be able to access the Fund once they have an agreement that a medical provider pay the provider’s maximum liability. The PCF maintains that plaintiffs are only eligible to access the Fund once the provider’s maximum liability is paid. Garau Germano tried cutting through this issue by seeking a declaratory judgment. But the Court did not allow that line of attack.

Garau Germano represents over 100 clients with medical malpractice claims, one of whom is Fenner. Garau Germano’s fees are based on its clients’ recovery from the medical provider and the PCF.
A medical provider’s liability is capped, and once that cap is reached, a plaintiff may recover against the PCF. Such a settlement can occur in two ways: (1) the provider can pay its maximum liability in a lump sum or (2) it can enter into a periodic payments agreement. Access to the PCF is triggered under a periodic payments agreement if the total cost of the present payment to the patient plus the cost of procuring a periodic payments agreement must exceed $187,000.

Garau Germano and Fenner argued that the PCF imposed an additional non-statutory requirement—that a periodic payments agreement pay out the provider’s maximum liability before allowing a claimant to access the PCF.

Garau Germano and Fenner filed a verified complaint for mandate and declaratory judgment, which sought to prevent the PCF from imposing this additional requirement. The defendants argued that Garau Germano lacked standing and that the claims were not ripe. The trial court granted that motion and that decision was appealed.

The Court addressed the ripeness issues on appeal first. The Declaratory Judgment act requires that a person’s “rights, status, or other legal relations” must be affected. Plaintiffs argued that this applied to Fenner, since she did not know whether she could accept a period payment agreement (given her age) if she was required to obtain all payments before proceeding against the PCF. But this argument missed something important:

Our problem with this argument is that it presupposes that Fenner has a valid claim for medical malpractice, will eventually enter into a settlement agreement with the providers who she claims have committed malpractice, and that this settlement will include a periodic payments agreement that costs at least $187,000. Yet the Plaintiffs have not alleged that Fenner has even been offered a settlement, much less entered into a settlement agreement. Because Fenner has not yet received an offer of settlement from any of the providers, the Plaintiffs have no “rights, status, or other legal relations” to be determined under the Declaratory Judgment Act.

Put simply, the Court found that an issue is not ripe for a declaratory judgment if the dispute “rests on a future contingency that might not occur as anticipated, or might not occur at all” because such an issue is “purely hypothetical.”

The Court next addressed the standing issues. Defendants argued that Plaintiffs failed to allege that they had an affirmative duty to perform a ministerial act or function, and the Court agreed. It found that the PCF does not perform a “ministerial act” when it grants access to the Fund.

Indeed, the PCF is not required to approve petitions for access to the PCF simply if they meet certain statutory requirements. That is, even if the claimant enters into a settlement agreement that meets the statutory requirements for access to the PCF, this does not guarantee that he or she will be awarded damages from the PCF.

After describing the process for recovering from the Fund, the Court found that Fenner “still may not be granted damages from the PCF.” This lack of a duty to perform a ministerial act meant that mandamus was inappropriate for Fenner.

This also applied to Garau Germano. But the Court found that the firm’s status as a representative of its clients provided an additional barrier to standing.

Garau Germano is a law firm that represents clients in medical malpractice cases. It seeks a judicial mandate that the Fund Defendants follow what Garau Germano believes to be the correct interpretation of the periodic payments plan statute. Garau Germano claims that, given the number of clients it represents, many of these clients will eventually enter into settlement agreements, and that it is unable to advise its clients on how to proceed. But the validity of these clients’ claims, like Fenner’s, has yet to be determined at this stage. Garau Germano … presents hypothetical situations in which its clients may be denied access to the PCF, but has not shown that it will suffer from any direct injury if mandate is denied.

Thus, the Court did not address the central dispute over whether the PCF is improperly imposing a non-statutory requirement for accessing the Fund. It is safe to predict that medical malpractice plaintiffs will raise this issue in subsequent proceedings.

Lessons:

1. Legal disputes that rest on a future contingency that might not occur as anticipated, or might not occur at all, are not ripe for adjudication in a declaratory judgment action.
2. If a government actor must take something other than a ministerial act, then a litigant does not have standing to pursue a mandamus action against that government actor.