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Cassiday Schade Obtains Substantial Post-Trial Reduction of Damages for Medical Expenses

November 18, 2013Tami Reding-BrubakerRelated Practice Areas: Civil Rights Litigation & Correctional Healthcare and Medical Liability
Tami J. Reding-Brubaker

Cassiday Schade LLP is one of the first defense firms to have an appellate decision reducing a medical malpractice verdict by nearly 33%, pursuant to 735 ILCS 5/2-1205. This is an important ruling for medical malpractice defendants with respect to a statute that is rarely used. The decision in Perkey v. Portes, 2013 IL App (2d) 120470 is now final as the Illinois Supreme Court recently rejected plaintiff’s Petition for Leave to Appeal. The Appellate Court found that 735 ILCS 5/2-1205 restricts the collateral source rule in medical malpractice cases and specifically allows hospitals and physicians to seek a reduction of a judgment for amounts paid by third parties for medical expenses and lost wages that do not have to be reimbursed to that third party. The reduction cannot exceed 50% of the judgment. The purpose of this statute is to prevent a double recovery to the plaintiff and to reduce the cost of malpractice actions.

In Perkey, plaintiff filed a wrongful death case alleging that the defendant physician failed to diagnose and treat pancreatic cancer. At trial, the parties stipulated that the medical expenses totaled $310,000. The plaintiff obtained a judgment for $600,000 including a line item of $310,000 for medical expenses. During discovery the plaintiff had answered interrogatories that all of the medical expenses had been paid by Blue Cross/Blue Shield (BCBS). BCBS had not asserted a lien to any amount before the verdict was rendered. The day after the judgment was entered, the defendant filed a motion to reduce the judgment by $300,000, pursuant to 2-1205.

Section 2-1205 provides in relevant part that: “100% of the benefits provided for medical charges . . . which have been paid, or which have become payable to the injured person by any other person, corporation, insurance company or fund in relation to a particular injury, shall be deducted from any judgment in an action to recover for that injury based on an allegation of negligence, or other wrongful act, not including intentional torts, on the part of a licensed hospital or physician, provided, however, that: . . . such reduction shall not apply to the extent that there is a right of recoupment through subrogation, trust agreement, lien or otherwise; and the reduction shall not reduce the judgment by more that 50% of the total amount of the judgment entered on the verdict.”

After the motion was filed, plaintiff disclosed that BCBS had asserted a right of reimbursement to approximately $135,000 of the $310,000 paid in medical expenses. Therefore, defendant amended his request and sought a reduction of $175,000 of the judgment (100% of the medical bills paid not subject to reimbursement). The plaintiff argued that because BCBS had “a right of recoupment,” it didn’t matter how much it sought to recoup, the defendant was not entitled to any reduction. Quite simply, plaintiff argued that “to the extent there is right of recoupment” should be read as “if there is a right of recoupment.” The trial court agreed and denied defendant’s motion.

The Appellate Court reversed, finding that the plaintiff’s interpretation ignored the “to the extent that” language of the statute, and such an interpretation would disallow any reduction even if the insurer’s right of recoupment was limited to one cent which ran counter to the purpose of the statute. The Appellate Court found that “the plain language of the statute advances the goal of reducing the costs of medical malpractice actions by eliminating duplicative recoveries while not subjecting the plaintiff to an uncompensated loss for medical expenses if an insurer exercises its right to recover medical payments.” The Appellate Court concluded that the trial court erred in denying defendant’s motion to reduce the judgment and found that it should be reduced by $175,000, i.e., the extent to which there was no right of recoupment.

It is important to note that 2-1205 also provides for a reduction of a medical malpractice judgment for benefits paid by a third party for lost wages. This was not an element of damages in the Perkey case so it was not addressed. However, the same analysis would apply. The reduction however is limited to 50% of the benefits paid that are not subject to reimbursement. Importantly, such a motion must be filed within 30 days of the judgment, and the reduction cannot reduce the judgment by more than 50%. Additionally, it is the defendant’s burden to establish that the judgment should be reduced and the amount by which it should be reduced. Early discovery, during the pendency of the case, to seek information with respect to collateral benefits and amounts not subject to reimbursement can elicit the necessary information. This information will be crucial not only to efforts to reduce a judgment, but also to any settlement negotiations.

About Us

Cassiday Schade is a litigation law firm headquartered in Chicago, with a presence throughout the Midwest. We focus on providing our clients with exceptional and efficient representation and act as national or regional counsel for clients facing nationwide exposures.

With experience in virtually all areas of civil litigation, we have a diverse client base and our attorneys provide companies of various sizes with extensive trial experience and case preparation acumen. Throughout our history, we have represented individuals and companies in a variety of industries, including long-term care, insurance, financial services, manufacturing, construction, professional services and transportation. In addition to trial and appellate work, we provide both organizations and individuals with the tools to analyze and prevent risk before litigation arises.

We take pride in working with our clients and not just for them. Every case is different, and determining the best possible outcome is what our attorneys deliver. Sometimes this means aggressive preparation for trial, other times it may involve seeking an early resolution through alternative means, such as mediation or arbitration. Ultimately, our clients receive the benefit of having their matters handled with maximum efficiency and skill.

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Cassiday Schade’s Admiralty & Maritime practice group represents clients in a wide range of maritime matters and understands the legal complexities that are an integral part of the marine industry.

At Cassiday Schade, we recognize the important distinction between trial and appellate work and the need for appellate specialists. Our attorneys have outstanding research, writing and oral advocacy skills and bring an original perspective and tailored strategy to each appeal. A significant portion of our strategy includes analyzing whether or not an appeal is the best course of action for our clients. Our practice group provides an appellate perspective when issues arise at trial, including the introduction of prejudicial evidence by an opponent, an opponent's efforts to limit the introduction of evidence favorable to the defense and jury instructions. We also become involved after litigation concludes, and offer guidance on post-trial motions and responses.

Cassiday Schade’s Civil Rights & Correctional Healthcare practice is dedicated to providing expert, cost-effective legal defense to correctional healthcare employers, as well as the doctors, nurses and other healthcare providers they employ. Our attorneys aren’t just excellent litigators, we are also industry experts and are intimately acquainted with trends, changes and legal developments that may impact our clients.

Cassiday Schade’s Commercial attorneys serve as advocates and business advisors to clients from a wide range of industries including banking, real estate financing and investment, health care, automobile sales and finance, financial services, insurance, manufacturing, and construction.

The representation of contractors, developers and design professionals has been a focus of Cassiday Schade since the inception of the firm. The depth of our experience covers the broad spectrum of all points where construction and the law intersect. Our list of clients includes the largest general contractors in Illinois as well as owners, architects, engineers and specialty subcontractors. We routinely represent these companies in their biggest and most problematic cases. While we have the ability to staff large accounts, we keep our client teams small so that our attorneys remain familiar with the client’s background and needs. This ensures efficiency and consistency in our representation of our clients.

Cassiday Schade’s Employment practice group represents organizations in a wide range of employment related disputes. As part of our litigation strategy, our attorneys provide an early assessment of each case to determine the best avenue toward resolution, considering both the nature and potential exposure of the claim and the needs of the client.

Cassiday Schade’s Environmental and Toxic Injury practice group serves clients who are, or may be, exposed to claims arising from the manufacture, sale or use of potentially toxic and hazardous substances, and to the threat of litigation arising from environmental claims attendant to land, air and water pollution. Our firm is often retained to handle not only the litigation of active lawsuits, but to monitor litigation for nationwide corporations, advise corporations on risk reduction and coordinate the nationwide defense strategy for corporations facing toxic tort, product liability and other commercial issues. Our success is determined by a skilled team of attorneys with industry acumen and access to a large network of experts and consultants. No matter the issue, our overarching goal is the same: to bring our clients the best possible result through proactive and individualized service.

Cassiday Schade’s Hospitality and Retail practice represents a wide-range of clients in complex litigation matters, including hotels and hotel chains, hotel management companies, hotel property owners, franchisees, restaurants, bars, shopping malls, and event production companies. In addition, our skilled team of attorneys is committed to providing our clients with guidance and risk-management strategies to avoid future litigation. This includes but is not limited to, legal counseling, alternative dispute resolution and pre suit negotiations.

Cassiday Schade’s Insurance practice group provides full-service litigation, transactional and alternative dispute resolution capabilities to insurance carriers and other commercial entities. Our expert team of attorneys is focused on providing clients with prompt, direct advice regarding the risks presented in any given situation, both preventively and when litigation arises. Our team also frequently utilizes litigation alternatives such as contractual resolutions, standstill agreements and mediation, all of which can be of great assistance in complex insurance matters.

We represent some of the nation’s top hospitals and other healthcare providers in the successful defense of malpractice litigation. The actions we defend are approached with the highest level of professional consideration and we have tried hundreds of cases to verdict in over 50 counties nationally. Our industry expertise and innovative use of technology to create demonstrative evidence during trial provides clients with the most successful defense possible. We also have access to a network of the most qualified consultants and experts who provide guidance and work closely with our team of attorneys on these lawsuits.

Cassiday Schade’s Nursing Home & Long-Term Care practice group represents nursing homes, assisted living facilities, hospices, home health care agencies and rehabilitation centers. At the core of our practice is an understanding of the difficulty inherent in effectively addressing the quality of care provided to individuals whose health is compromised. Our attorneys are a dedicated group of litigators with extensive industry knowledge of OBRA Regulations, the Illinois Administrative Code and the Nursing Home Care Act. We are committed to partnering with our clients in the investigation, planning, direction and defense of a case to determine the most efficient and practical resolution.

Cassiday Schade’s Products Liability practice group has extensive knowledge of state and federal product liability laws and the applicable standards governing the design, manufacture and distribution of products. Our attorneys’ first step is product identification, specifically to examine our clients’ involvement in the design, manufacture, and/or distribution. This includes following paper trails and pursuing investigation to locate and preserve evidence. We also immediately analyze whether any legal defenses, such as statutes of limitations or repose, can be asserted. Our experience in the industry provides us with access to the most sophisticated experts. We act quickly to retain the best consultants, provide them with all applicable materials and obtain their input in order to present the best legal and technical defense.

Professional liability cases are often complex, both factually and procedurally. Cassiday Schade’s Professional Liability practice group services a wide range of clients including accountants, architects and engineers, attorneys, nursing homes, officers and directors, paramedics and psychologists. Our attorneys realize the importance of understanding burdens of proof, standards of care and the need to promptly identify the right consultants and experts. We stay abreast of case law and developments in the profession so that we can bring the highest level of knowledge and understanding to a given case. Our practice team involves our clients in all aspects of litigation, keeping them informed and seeking their input.

Cassiday Schade’s Transportation practice group represents motor carriers, owners, operators, trucking companies and insurance carriers in what are often catastrophic accidents involving trucks, trains, buses, vans, automobiles and other modes of transportation. Our rapid response team of attorneys, accident reconstructionists and transportation investigators is on-call 24 hours a day and can be immediately dispatched to preserve and document physical evidence, inspect vehicles and perform a download of the electronic control module. We also frequently defend cases where the first notice is the lawsuit. Our attorneys perform early assessments of both the liability and damage aspects of each case. This analysis often leads to an early resolution by way of alternative dispute methods including mediation.

Cassiday Schade's Veterinary Medicine practice group represents Doctors of Veterinary Medicine (D.V.M.) Registered Veterinary Technicians (R.V.T.) and veterinary assistants and their practices in malpractice claims, state licensing and disciplinary board actions, and appeals.

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