California Court of Appeals Rules that Statute of Limitations is Tolled Upon Payment in Medical Malpractice Action

The California Court of Appeal recently held that the one-year statute of limitations is tolled when a payment is made for medical malpractice actions. Statutes of limitations determine the time period within which a legal claim is to be filed. After the specified period has passed, those legal claims cannot be filed.

In this case, Coastal Surgical Institute appealed from the jury’s verdict and entry of judgment in favor of Charles Blevins. The company alleges that it was error for the trial court to determine that Insurance Code section 11583 tolled the statute of limitations. They also argued that the trial court should not have denied their motion to bifurcate the jury trial on the affirmative defense of the statute of limitations, and that they should have instructed the jury on the issue of who was at fault.

The facts demonstrate that Mr. Blevins received knee surgery at Coastal Surgical Institute (Coastal). Mr. Blevins suffered a knee infection following the surgery, caused by a bacteria found on a sponge used to clean surgical equipment. Coastal paid Mr. Blevins for his medical expenses for treating the knee infection, totaling $4,118.23. Coastal acknowledges that at the time of the payment, Mr. Blevins was not represented by legal counsel, and Coastal did not provide written notice of the statute of limitations for bringing a medical malpractice action.

More than 15 months after receiving payment from Coastal, Mr. Blevins filed the current lawsuit against Coastal. He amended his complaint and added Ruhof as a defendant. Mr. Blevins and Ruhof, the manufacturer of the sponge, settled for $100,000.

Relying on section 11583 of the Insurance Code, the trial court ruled that the statute of limitations set forth in Code of Civil Procedure section 340.5 was tolled by Coastal’s payment of Mr. Blevin’s medical expenses. The trial court denied Coastal’s motion to bifurcate, or separate the trial concerning the statute of limitations issue.

The jury found, in a special verdict, that Coastal had been negligent and that this negligence was a substantial factor in causing Mr. Blevin’s harm. The jury awarded Mr. Blevins $543,034 in damages, and the trial court reduced the damages to $285,114.

The appellate court first turned to the language of section 11583 of the Insurance Code. This section holds that advance payment of damages is not to be construed as an admission of liability. The person who makes a payment is to notify the recipient, in writing, of the statute of limitations applicable to the cause of action that the recipient may bring. Failing to provide this written notice tolls the applicable statute of limitations. This notification, however, is not required if the recipient is represented by an attorney.

The court also stated that the purpose of section 11583 is to encourage early payment of damages, without the fear of admitting liability. The written notice requirement serves to prevent victims from feeling they do not need to sue, since they have received advance or partial payment.

Coastal argues that section 11583 of the Insurance Code does not apply and that Code of Civil Procedure sections 340.5 and 364 set forth the statute of limitations for medical malpractice actions.

These sections, 340.5 and 364, are part of the Medical Injury Compensation Reform Act (MICRA).  Section 340.5 provides for the three-year deadline for filing a medical malpractice action, or the one-year deadline after discovery of the injury. Section 364 states that the defendant must be given 90 days prior notice of the intention to commence the action.

The court stated that case law has held the tolling provision set forth in section 11583 applies to the one-year limitation in section 340.5.   The tolling provision of section 11583 can extend the one-year period of section 340.5 to a maximum of three years from the date of the injury.

The court rejected Coastal’s argument that if section 11583 applied, they were required to advise Mr. Blevin when the statute of limitations expires. This, Coastal argued, “would open up ‘a can of worms,’” according to the appeals court. In fact, the court stated that section 11583 requires that upon payment, the payee be notified in writing of the applicable statue of limitations, and not the actual expiration date. Contrary to Coastal’s argument, this notification requirement does not forever expose doctors to potential suit, since the maximum three-year limitations period has not changed.

Next, the court turned to Coastal’s argument that Code of Civil Procedure section 597.5 requires a jury to decide the statute of limitations affirmative defense. The issue, according to Coastal, is whether the payment of Mr. Blevin’s medical expenses was a partial or advance payment, or a final payment. Coastal contends that both parties viewed the payment as a final payment.

The court stated that section 11583 does not contain a scienter requirement. Therefore, Coastal’s intention for the payment does not determine whether it is an advance or partial payment. In support of this rule, the court stated that a defendant’s voluntary assumption of the cost of treatment is the advance payment of damages, according to section 11583.

Legislative purpose supports the finding that partial payment was made, since the intent of section 11583 is to prevent victims from feeling complacent about the need to sue simply because payment was made.  There is no need to show intent to lull a potential plaintiff into not filing a complaint.

Finally, the court rejected Coastal’s argument regarding the apportionment of fault. In this case, Coastal argued that the jury should have been instructed that if it found Ruhof was at fault, and this fault was a substantial factor in causing Mr. Blevin’s harm, they should assign a percentage of responsibility to both Coastal and Ruhof. The burden is on the defendant, Coastal, to prove that a nonparty tortfeasor was at fault.

Here, the trial court had not found sufficient evidence of a breach of the standard of care by Ruhof in this case. There had not been a showing of negligence.   Coastal claimed that a product liability theory might persist, making Ruhof strictly liable for a defect in the sponge.   Coastal contended that the amount of preservative in place on the sponge was insufficient. In support, Coastal relied on the deposition testimony of a chemist who worked for Ruhof. As a preventative measure, it was made clear that Ruhof doubled the amount of the preservative in the plastic bag enclosing the sponges. But the court stated this does not mean the original amount had been insufficient.

The court affirmed the judgment of the trial court, awarding Mr. Blevin costs on appeal.

This case demonstrates the importance of abiding by the statute of limitations, especially in medical malpractice actions. At Sharifi Firm, we represent individuals in personal injury claims against responsible parties. Contact us at 866-422-7222 for a free consultation.

More Blog Posts:

California Court of Appeals Sides with Doctor in Malpractice Action, Southern California Injury Lawyer  Blog, July 2, 2015

California Court of Appeals Clarifies Foreign Body Language for Medical Malpractice Claims, Southern California Injury Lawyer  Blog, June 19, 2015

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