SB-1115, As Passed House, December 13, 2012

SENATE BILL No. 1115

(As amended November 29, 2012)

May 3, 2012, Introduced by Senators KAHN, MEEKHOF, MOOLENAAR and SMITH and referred to the Committee on Insurance.

A bill to amend 1961 PA 236, entitled

"Revised judicature act of 1961,"

by amending sections 1483, 2959, 6306, and 6307 (MCL 600.1483,

600.2959, 600.6306, and 600.6307), section 1483 as amended by 1993

PA 78, section 2959 as added and section 6306 as amended by 1995 PA

161, and section 6307 as added by 1986 PA 178, and by adding

section 6306a.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 1483. (1) In <<~~an action~~ A CLAIM>> for damages alleging

medical

malpractice by or against a person or party, the total amount of

damages for noneconomic loss recoverable by all plaintiffs,

resulting from the <<~~negligence~~ MEDICAL MALPRACTICE>> of all defendants,

shall not exceed

$280,000.00 unless, as the result of the negligence of 1 or more of

the defendants, 1 or more of the following exceptions apply as

determined by the court pursuant to section 6304, in which case

Senate Bill No. 1115 as amended November 29, 2012

damages for noneconomic loss shall not exceed $500,000.00:

(a) The plaintiff is hemiplegic, paraplegic, or quadriplegic

resulting in a total permanent functional loss of 1 or more limbs

caused by 1 or more of the following:

(i) Injury to the brain.

(ii) Injury to the spinal cord.

(b) The plaintiff has permanently impaired cognitive capacity

rendering him or her incapable of making independent, responsible

life decisions and permanently incapable of independently

performing the activities of normal, daily living.

reproductive organ resulting in the inability to procreate.

(2) In awarding damages in an action alleging medical

malpractice, the trier of fact shall itemize damages into damages

for economic loss and damages for noneconomic loss.

(3) As used in this section, "noneconomic loss" means damages

or loss due to pain, suffering, inconvenience, physical impairment,

or physical disfigurement, << >>

loss of society and companionship, whether claimed under section

2922 or otherwise, loss of consortium, or other noneconomic loss.

(4) <<~~The~~ BEGINNING APRIL 1, 1994, THE>> state treasurer

shall adjust the ~~limitation~~

limitations on damages for noneconomic loss set forth in subsection

(1) by ~~an amount~~ amounts determined by the state treasurer at the

end of each calendar year to reflect the cumulative annual

percentage change in the consumer price index. As used in this

subsection, "consumer price index" means the most comprehensive

index of consumer prices available for this state from the bureau

of labor statistics of the United States department of labor.

Sec. 2959. In an action based on tort or another legal theory

seeking damages for personal injury, property damage, or wrongful

death, the court shall reduce the damages by the percentage of

comparative fault of the person upon whose injury or death the

damages are based as provided in section 6306 or 6306a, as

applicable. If that person's percentage of fault is greater than

the aggregate fault of the other person or persons, whether or not

parties to the action, the court shall reduce economic damages by

the percentage of comparative fault of the person upon whose injury

or death the damages are based as provided in section 6306 or

6306a, as applicable, and noneconomic damages shall not be awarded.

Sec. 6306. (1) After a verdict is rendered by a trier of fact

in favor of a plaintiff in a personal injury action other than an

action for medical malpractice, an order of judgment shall be

entered by the court. Subject to section 2959, the order of

judgment shall be entered against each defendant, including a

third-party defendant, in the following order and in the following

judgment amounts:

(a) All past economic damages, less collateral source payments

as provided for in section 6303.

(b) All past noneconomic damages.

care costs, and less collateral source payments determined to be

collectible under section 6303(5), reduced to gross present cash

value.

(d) All future medical and other health care costs reduced to

gross present cash value.

(e) All future noneconomic damages reduced to gross present

cash value.

(f) All taxable and allowable costs, including interest as

permitted by section 6013 or 6455 on the judgment amounts.

(2) As used in this section, "gross present cash value" means

the total amount of future damages reduced to present value at a

rate of 5% per year, compounded annually, for each year in which

those damages will accrue, as found by the trier of fact as

~~provided in~~ under section 6305(1)(b).

(3) If the plaintiff was assigned a percentage of fault under

section 6304, the total judgment amount shall be reduced, subject

to section 2959, by an amount equal to the percentage of

plaintiff's fault. When reducing the judgment amount as provided in

this subsection, the court shall determine the ratio of total past

damages to total future damages and shall allocate the amounts to

be deducted proportionally between the past and future damages.

Sec. 6306a. (1) After a verdict is rendered by a trier of fact

in favor of a plaintiff in a medical malpractice action, an order

of judgment shall be entered by the court. Subject to section 2959,

the order of judgment shall be entered against each defendant,

including a third-party defendant, in the following order and in

the following amounts:

(a) All past economic damages, less collateral source payments

as provided in section 6303.

(b) All past noneconomic damages, reduced subject to the

limitations in section 1483. When reducing past noneconomic damages

Senate Bill No. 1115 as amended November 29, 2012

as required by section 1483, the court shall calculate the ratio of

past noneconomic damages to future noneconomic damages and shall

allocate the amounts to be deducted proportionally between the past

and future noneconomic damages.

care costs, and less collateral source payments determined to be

collectible under section 6303, reduced to gross present cash

value.

(d) All future medical and other health care costs, <<

>> reduced to gross present cash value.

(e) All future noneconomic damages reduced to gross present

cash value and reduced subject to the limitations in section 1483.

When reducing future noneconomic damages as required by section

1483, the court shall calculate the ratio of past noneconomic

damages to future noneconomic damages and shall allocate the

amounts to be deducted proportionally between the past and future

noneconomic damages.

(f) All taxable and allowable costs, including interest as

permitted by section 6013 or 6455 on the judgment amounts.

(2) If the plaintiff was assigned a percentage of fault under

section 6304, the total judgment amount as determined under this

section shall be reduced, subject to section 2959, by the

percentage of plaintiff's fault. When reducing a judgment amount

under this subsection, the court shall determine the ratio of total

past damages to total future damages and allocate the amounts to be

deducted proportionally between the past and future damages.

Senate Bill No. 1115 as amended November 29, 2012

(3) <<IF LIABILITY IS DETERMINED TO BE JOINT AND SEVERAL, THE>>

total judgment amount determined under this section

shall be reduced by the amount of all settlements paid by all joint

tortfeasors, including joint tortfeasors who were not parties to

the action and joint tortfeasors who are not persons described in

section 5838a(1). When reducing a judgment amount under this

subsection, the court shall calculate the ratio of total past

damages to total future damages awarded by the trier of fact and

shall allocate the amounts to be deducted proportionally between

the past and future damages. When reducing a judgment amount under

this subsection, the court shall perform the reduction before

awarding any interest permitted by law, but after making all other

required adjustments to the verdict, including those required by

this section and by section 1483.

(4) As used in this section, "gross present cash value" means

the total amount of future damages reduced to present value at a

rate of 5% per year, compounded annually, for each year in which

the damages will accrue, as found by the trier of fact under

section 6305(1)(b).

Sec. 6307. In an action alleging personal injury, if the

amount of future damages, as described in section 6306(1)(c) and

(e) or 6306a(1)(c) and (e), as applicable, in the judgment exceeds

$250,000.00 gross present cash value, as determined under section

~~6306(2),~~ 6306 or 6306a, as applicable, the court shall enter an

order that the defendant or the defendant's liability insurance

carrier shall satisfy that amount of the judgment, less all costs

and attorney fees the plaintiff is obligated to pay, by the

purchase of an annuity contract, if all of the following

Senate Bill No. 1115 as amended November 29, 2012

requirements are met:

(a) The purchase price of the annuity contract ~~shall be~~ is

equal to 100% of the future damages subject to this section, less

an amount determined by multiplying the amount of those damages by

a percentage equal to the rate of prejudgment interest as

calculated under section ~~6013(5)~~ 6013(8) or section 6455(2) on the

date the trial was commenced.

(b) The annuity contract is purchased from a life insurer

authorized to issue annuity contracts under the insurance code of

1956, ~~Act No. 218 of the Public Acts of 1956, being sections~~

~~500.100 to 500.8302 of the Michigan Compiled Laws.~~1956 PA 218, MCL

500.100 to 500.8302.

<<Enacting section 1. Sections 1483, 2959, 6306, and 6307 of the revised judicature act of 1961, 1961 PA 236, MCL 600.1483, 600.2959, 600.6306, and 600.6307, as amended by this amendatory act and section 6306a of the revised judicature act of 1961, 1961 PA 236, MCL 600.6306a, as added by this amendatory act apply only to actions in which the cause of action arose on or after the effective date of this amendatory act.>>