Longbottom v. Mercy Hospital Clermont

[Cite as Longbottom v. Mercy Hosp. Clermont, 137 Ohio St.3d 103, 2013-Ohio-4068.]

LONGBOTTOM ET AL., APPELLEES, v. MERCY HOSPITAL CLERMONT;

HUBER ET AL., APPELLANTS.

[Cite as Longbottom v. Mercy Hosp. Clermont, 137 Ohio St.3d 103,

2013-Ohio-4068.]

Prejudgment interest—R.C. 1343.03—Retroactivity.

(No. 2012-1260—Submitted May 8, 2013—Decided September 24, 2013.)

CERTIFIED by the Court of Appeals for Clermont County,

Nos. CA2011-01-005 and CA2011-01-006, 2012-Ohio-2148.

____________________

O’DONNELL, J.

{¶ 1} The appellate court certified that its decision in this case conflicts

with Barnes v. Univ. Hosps. of Cleveland, 8th Dist. Cuyahoga Nos. 87247, 87285,

87710, 87903, and 87946, 2006-Ohio-6266, on the following question:

“ ‘Whether the version of the prejudgment interest statute, R.C. 1343.03(C), as

amended effective June 2, 2004, can be applied retroactively to claims accruing

before June 2, 2004?’ ” We agreed to review this matter.

{¶ 2} The General Assembly amended R.C. 1343.03(C) on June 2, 2004,

to preclude the award of prejudgment interest on future damages. It did not,

however, preclude the right to collect prejudgment interest on other damage

awards. Thus, we answer the certified question in the affirmative, because the

statute does not eliminate a right or a remedy, and it applies to causes of action

accruing before but commenced on or after June 2, 2004.

Facts and Procedural History

{¶ 3} On March 22, 2002, nine-year-old Kyle Smith struck his head on a

coffee table at the home of a family friend in Hamersville, Ohio. His father, Jesse

Smith, heard a thud from the next room, and Kyle came to him crying and

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bleeding from his ear. Smith decided to take his son to the emergency room and

en route stopped home so Kyle’s mother, Kristi Longbottom, could go with them.

While there, Kyle began to vomit and continued to complain that his head hurt.

{¶ 4} At Mercy Hospital Clermont, Dr. Gary Huber initially examined

Kyle but left the examination room. At that point, Kyle again vomited and began

to complain of pain in his jaw. Huber returned to the room, stitched Kyle’s ear,

and explained that he did not believe that Kyle had suffered a serious head injury

because the child did not lose consciousness or hearing, behaved normally, and

had no significant pressure in his head. Huber did not order a CT scan and

discharged Kyle with a pamphlet on head trauma. According to Kyle’s parents,

Huber told them to take him home and let him sleep but never advised them to

check on their son during the night.

{¶ 5} Early the next morning, Kyle began gasping for breath, and

Longbottom saw that he had again vomited while sleeping. Smith called 9-1-1,

and an air ambulance transported Kyle to Cincinnati Children’s Hospital, where

doctors diagnosed an epidural hematoma. His fall had torn his middle meningeal

artery, causing pressure on his brain, a midline shift, and herniation. Dr. Kerry R.

Crone performed emergency surgery; Kyle survived, but he sustained serious and

permanent injuries.

{¶ 6} On March 14, 2003, Longbottom and Smith, individually and on

behalf of Kyle, sued Huber and Qualified Emergency Specialists, Inc., for

malpractice. Prior to trial, however, they voluntarily filed a notice of dismissal

pursuant to Civ.R. 41(A).

{¶ 7} They refiled the action on March 3, 2008, and eventually added

Kyle as a party when he turned 18, and this case proceeded to trial. A jury found

that Huber had negligently failed to “instruct the parents about the possibility of

significant head injury or how to observe and monitor Kyle for such injuries,” and

it awarded $2,412,899 in damages, $1,616,899 of which represented future

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damages for Kyle’s anticipated medical expenses, pain and suffering, loss of

ability to perform usual functions, and loss of future earning capacity. The court

ordered a $500,000 set-off as a result of a prior settlement with Mercy Hospital

Clermont and also denied Huber’s motions for judgment notwithstanding the

verdict and for a new trial.

{¶ 8} The trial court also awarded prejudgment interest in the amount of

$830,774.66, which included prejudgment interest on the portion of the award

representing future damages, after finding that Huber had failed to make a good-

faith settlement attempt prior to trial. In calculating prejudgment interest, the

court applied the version of R.C. 1343.03(C) that existed at the time of the filing

of the initial complaint, and it found that the subsequent amendments to this

statute applied prospectively only. The court ordered prejudgment interest from

the date the cause of action arose until the date of the voluntary dismissal and

from the date of the refiling of the complaint until the date on which the judgment

was paid.

{¶ 9} Both parties appealed. The Twelfth District Court of Appeals

affirmed the judgment and the award of prejudgment interest, and in accord with

decisions of the First, Third, and Seventh Appellate Districts, held that the

amendments to R.C. 1343.03(C) applied prospectively only. However, the

appellate court did reverse the trial court’s decision to suspend the accrual of

prejudgment interest from the date of the voluntary dismissal to the refiling of the

complaint, concluding that the trial court lacked discretion to adjust the period

during which prejudgment interest accrued.

{¶ 10} The court of appeals further certified the conflict question to this

court, and after determining that a conflict existed, we agreed to hear the matter.

{¶ 11} On appeal to this court, Huber urges that R.C. 1343.03(C), as

amended, applies to all actions pending on or after June 2, 2004, the effective date

of the amendments, and thus prejudgment interest is not available for the award of

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future damages in this case. He notes that in Maynard v. Eaton Corp., 119 Ohio

St.3d 443, 2008-Ohio-4542, 895 N.E.2d 145, this court applied the 2004

amendment to R.C. 1343.03(A) adjusting the rate of postjudgment interest to

cases in which judgment has not yet been paid if the case was pending on appeal.

He maintains that applying the current version of R.C. 1343.03(C) retroactively

does not affect any vested right to prejudgment interest, because as of the

effective date of the amendments, the requirements for seeking prejudgment

interest had not been met and therefore no claim could be pursued. Further, he

asserts that the amended statute is not a substantive law, because it only

substitutes a new remedy for the enforcement of an existing right. And he

contends that the second complaint filed after the effective date of the statute is

the only pleading upon which prejudgment interest could be awarded.

{¶ 12} Longbottom and Smith contend that because Huber never argued

that the voluntary dismissal of the initial complaint affected accrual of

prejudgment interest, he has forfeited that argument. And they argue that R.C.

1343.03(C) contains no language showing that the General Assembly intended it

to apply retroactively to causes of action that had accrued prior to its effective

date. Finally, they contend that as applied in this case, the amendment would be

unconstitutional if applied retroactively, because the 2004 amendment to R.C.

1343.03(C) changed the accrual date for prejudgment interest, eliminated a vested

right to it on the award of future damages, and imposed new statutory duties on a

claimant by conditioning prejudgment interest on filing a pleading and giving

written notice to the tortfeasor’s insurer—requirements imposed more than two

years after the right to prejudgment interest had accrued.

{¶ 13} Accordingly, we are asked to decide whether the amended version

of R.C. 1343.03(C) applies to the award of prejudgment interest on a claim that

had accrued prior to the effective date of the statute.

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Law and Analysis

{¶ 14} Ohio courts allowed prejudgment interest on damage awards at

common law, Hogg v. Zanesville Canal & Mfg. Co., 5 Ohio 410, 424 (1832), but

in 1982 the General Assembly codified the common law rule and enacted R.C.

1343.03(C), the prejudgment interest statute, “ ‘to promote settlement efforts, to

prevent parties who have engaged in tortious conduct from frivolously delaying

the ultimate resolution of cases, and to encourage good faith efforts to settle

controversies outside a trial setting.’ ” Moskovitz v. Mt. Sinai Med. Ctr., 69 Ohio

St.3d 638, 657-658, 635 N.E.2d 331 (1994), quoting Kalain v. Smith, 25 Ohio

St.3d 157, 159, 495 N.E.2d 572 (1986).

{¶ 15} When originally enacted, R.C. 1343.03(C) provided:

Interest on a judgment, decree, or order for the payment of

money rendered in a civil action based on tortious conduct and not

settled by agreement of the parties, shall be computed from the

date the cause of action accrued to the date on which the money is

paid, if, upon motion of any party to the action, the court

determines at a hearing held subsequent to the verdict or decision

in the action that the party required to pay the money failed to

make a good faith effort to settle the case and that the party to

whom the money is to be paid did not fail to make a good faith

effort to settle the case.

Am.Sub.H.B. No. 189, 139 Ohio Laws, Part I, 2034, 2035.

{¶ 16} In Huffman v. Hair Surgeon, Inc., 19 Ohio St.3d 83, 482 N.E.2d

1248 (1985), we considered whether the original version of R.C. 1343.03(C)

applied when the cause of action had accrued prior to the enactment of the statute.

We observed that former R.C. 1343.03(C) “is remedial in nature to the extent it

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provides procedures to remedy wrongs and abuses,” id. at 88, fn. 7; however, we

also recognized that “[t]his statute not only provides the method by which the

interest shall be computed, it also creates the right to have the unliquidated claim

made subject to interest if the reasons for the assessment as stated in the statute

can be met,” id. Distinguishing in this way the substantive right to prejudgment

interest from the statute’s procedures to remedy such misconduct, we concluded

that former R.C. 1343.03(C) created a new “substantive benefit,” and therefore

“[a losing party’s] lack of good faith occurring prior to the effective date of the

statute cannot be constitutionally penalized. Section 28, Article II of the Ohio

Constitution.” Huffman at 88, fn. 7. We therefore decided that “interest could not

be awarded for the period prior to the effective date of the statute,” id. at 87, but

that “it is appropriate to allow interest to be calculated from the effective date of

the statute until ‘the money is paid,’ ” id. at 88, fn. 7.

Amendment to R.C. 1343.03(C)

{¶ 17} Effective June 2, 2004, the legislature amended R.C. 1343.03(C).

Sub.H.B. No. 212 (“H.B. 212”), 150 Ohio Laws, Part III, 3417, 3418-3419. The

amended statute allows a claimant to receive prejudgment interest from the date

the cause of action accrues only when the party required to pay the money has

admitted liability or when that party engaged in conduct resulting in liability with

the deliberate purpose of causing harm to the party to whom the money is to be

paid. In addition, R.C. 1343.03(C)(1)(c) specifies that for actions other than those

in which the party has admitted liability or engaged in conduct resulting in

liability with the deliberate purpose of causing harm to the party to whom the

money is to be paid, prejudgment interest accrues for the longer of the following

periods:

(i) From the date on which the party to whom the money is

to be paid gave the first notice described in division (C)(1)(c)(i) of

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this section to the date on which the judgment, order, or decree was

rendered. The period described in division (C)(1)(c)(i) of this

section shall apply only if the party to whom the money is to be

paid made a reasonable attempt to determine if the party required

to pay had insurance coverage for liability for the tortious conduct

and gave to the party required to pay and to any identified insurer,

as nearly simultaneously as practicable, written notice in person or

by certified mail that the cause of action had accrued.

(ii) From the date on which the party to whom the money is

to be paid filed the pleading on which the judgment, decree, or

order was based to the date on which the judgment, decree, or

order was rendered.

And R.C. 1343.03(C)(2) states, “No court shall award interest under division

(C)(1) of this section on future damages, as defined in section 2323.56 of the

Revised Code, that are found by the trier of fact.”

{¶ 18} H.B. 212 further amended R.C. 1343.03(A), changing the statutory

rate of interest on judgments from a fixed rate of ten percent to a variable rate tied

to the federal short-term rate. In Maynard, 119 Ohio St.3d 443, 2008-Ohio-4542,

895 N.E.2d 145, we considered whether this amendment applied to judgments

entered before the effective date of H.B. 212 but still pending on appeal after that

date. Notably, uncodified language in H.B. 212 addressed pending litigation and

provided:

In the calculation of interest due under section 1343.03 of the

Revised Code, in actions pending on the effective date of this act,

the interest rate provided for in section 1343.03 of the Revised

Code prior to the amendment of that section by this act shall apply

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up to the effective date of this act, and the interest rate provided for

in section 1343.03 of the Revised Code as amended by this act

shall apply on and after that effective date.

(Emphasis added.) Section 3, H.B. 212, 150 Ohio Laws, Part III, 3421.

{¶ 19} Writing for a unanimous court in Maynard, Justice Cupp explained

that the General Assembly intended the new statutory interest rate to apply in all

pending actions and that a case remains pending while on appeal. Accordingly,

we held that “the amendment to R.C. 1343.03(A) applies to cases in which the

trial court has entered final judgment prior to June 2, 2004, the effective date of

the amendment, but the judgment is not yet paid in full and the case was pending

on appeal as of that date.” Maynard at ¶ 15.

{¶ 20} Significantly, and in contrast to the imposition of a statutory

interest rate established in R.C. 1343.03(A), H.B. 212 contains no codified or

uncodified language providing that the modified procedures for calculating

prejudgment interest enacted by R.C. 1343.03(C) should apply to all pending

cases. The legislature could have chosen to make these new procedures apply in

all cases pending on or after the effective date of H.B. 212, as it did with the

changes made to R.C. 1343.03(A), but it chose not to do so. We therefore

conclude that the legislature intended that the amendments to R.C. 1343.03(C)

should apply only to cases filed on or after June 2, 2004, the effective date of that

statute.

The Retroactivity Clause

{¶ 21} As we explained in Smith v. Smith, 109 Ohio St.3d 285, 2006-

Ohio-2419, 847 N.E.2d 414, the Retroactivity Clause contained in Article II,

Section 28, Ohio Constitution, “ ‘prohibits the General Assembly from passing

retroactive laws and protects vested rights from new legislative encroachments,’ ”

and it “ ‘nullifies those new laws that ‘reach back and create new burdens, new

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duties, new obligations, or new liabilities not existing at the time [the statute

becomes effective].” (Bracketed material sic.)’ ” Id. at ¶ 6, quoting Bielat v.

Bielat, 87 Ohio St.3d 350, 352–353, 721 N.E.2d 28 (2000), quoting Miller v.

Hixson, 64 Ohio St. 39, 51, 59 N.E. 749 (1901).

{¶ 22} Determining whether a law violates the Retroactivity Clause

involves a two-step test:

[W]e must first “determine whether the General Assembly

expressly intended the statute to apply retroactively.” [Bielat, 87

Ohio St.3d] at 353, 721 N.E.2d 28. If so, we must determine

whether “the statute is substantive, rendering it unconstitutionally

retroactive, as opposed to merely remedial.” (Emphasis sic.) Id. A

substantive statute is one that “impairs vested rights, affects an

accrued substantive right, or imposes new or additional burdens,

duties, obligations, or liabilities as to a past transaction.” Id. at

354, 721 N.E.2d 28; Van Fossen v. Babcock & Wilcox Co. (1988),

36 Ohio St.3d 100, 106–107, 522 N.E.2d 489.

Id. Thus, a statute that applies retroactively and that is substantive violates

Article II, Section 28, Ohio Constitution. Id.

{¶ 23} Pursuant to R.C. 1.48, “[a] statute is presumed to be prospective in

its operation unless expressly made retrospective.” And in Estate of Johnson v.

Randall Smith, Inc., 135 Ohio St.3d 440, 2013-Ohio-1507, 989 N.E.2d 35, we

stated that “ ‘[l]aws of a remedial nature providing rules of practice, courses of

procedure, or methods of review are applicable to any proceedings conducted

after the adoption of such laws.’ ” Id. at ¶ 20, quoting Kilbreath v. Rudy, 16 Ohio

St.2d 70, 242 N.E.2d 658 (1968), paragraph two of the syllabus. Here, the 2004

amendment to R.C. 1343.03(C) does not alter the established statutory right to

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prejudgment interest, but by changing the date from which interest accrues in

some causes of action and by precluding prejudgment interest on future damages,

it alters the procedure for calculating prejudgment interest. Because this

amendment is not expressly made retrospective, R.C. 1343.03(C) applies

prospectively from the date of enactment.

{¶ 24} Generally, our determination that the statute applies prospectively

would end the inquiry required by Van Fossen. However, a statute that applies

prospectively may nonetheless implicate the Retroactivity Clause. As we noted in

Tobacco Use Prevention & Control Found. Bd. of Trustees v. Boyce, 127 Ohio

St.3d 511, 2010-Ohio-6207, 941 N.E.2d 745,

the constitutional limitation against retroactive laws “ ‘include[s] a

prohibition against laws which commenced on the date of

enactment and which operated in futuro, but which, in doing so,

divested rights, particularly property rights, which had been vested

anterior to the time of enactment of the laws.’ ” [Van Fossen,] 36

Ohio St.3d at 105, 522 N.E.2d 489, quoting Smead, The Rule

Against Retroactive Legislation: A Basic Principle of

Jurisprudence (1936), 20 Minn.L.Rev. 775, 781–782.

(Emphasis added.) Id. at ¶ 14.

{¶ 25} Although the Retroactivity Clause bars statutes that extinguish

preexisting legal rights, id., it does not prohibit legislation that “merely affect[s]

‘the methods and procedure by which rights are recognized, protected and

enforced, [and] not * * * the rights themselves.’ (Emphasis added.)” Bielat, 87

Ohio St.3d at 354, 721 N.E.2d 28, quoting Weil v. Taxicabs of Cincinnati, Inc.,

139 Ohio St. 198, 205, 39 N.E.2d 148 (1942). And as we observed in Morgan v.

W. Elec. Co., Inc., 69 Ohio St.2d 278, 432 N.E.2d 157 (1982):

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“ ‘The legislature has complete control over the remedies

afforded to parties in the courts of Ohio, and it is a fundamental

principle of law that an individual may not acquire a vested right in

a remedy or any part of it, that is, there is no right in a particular

remedy. * * * A party has no vested right in the forms of

administering justice that precludes the Legislature from altering or

modifying them and better adapting them to effect their end and

objects.’ ”

Id. at 281, fn. 5, quoting State ex rel. Michaels v. Morse, 165 Ohio St. 599, 605-

606, 138 N.E.2d 660 (1956), quoting State ex rel. Michaels v. Morse, 10th Dist.

Franklin No. 5372, 1956 WL 10344, 8 (Feb. 7, 1956).

{¶ 26} The 2004 amendment to R.C. 1343.03(C) neither destroys nor

eliminates the right to prejudgment interest nor relieves a party of the duty to

make a good faith effort to settle a claim; rather, the amended statute affects only

the method by which prejudgment interest is calculated. For this reason, Huffman

is distinguishable on its facts, because in that case, this court considered whether a

new substantive right to prejudgment interest could be applied retroactively to

misconduct occurring before the effective date of the statute. In contrast, this case

concerns only a change in the method of calculating the preexisting substantive

right to prejudgment interest. Because the amended statute does not eliminate the

right to prejudgment interest but only modifies the remedy available, it applies to

causes of action accruing before but filed on or after June 2, 2004, the effective

date of the statute.

{¶ 27} We recognize that here the cause of action accrued before the

legislature amended R.C. 1343.03(C) and that a complaint had been timely filed

before the legislature amended the statute. But Longbottom and Smith voluntarily

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dismissed that case and thereafter the legislature amended the prejudgment

interest statute. Thus, at the time of refiling, the law then in effect precluded

recovery of prejudgment interest on future damages. Because R.C. 1343.03(C)

applies to causes of action accruing before but filed on or after June 2, 2004, it

applies to the refiled complaint and governs the award of prejudgment interest in

this case.

Conclusion

{¶ 28} R.C. 1343.03(C) applies to tort actions filed on or after June 2,

2004, regardless of when the cause of action accrued. The refiled complaint

became subject to the amended prejudgment interest statute because it was filed

after the legislation had gone into effect, and therefore the amended version of

R.C. 1343.03(C) governs the award of prejudgment interest in this case.

Accordingly, the judgment of the court of appeals is reversed, and the matter is

remanded to the trial court for further proceedings consistent with this opinion.

Judgment reversed

and cause remanded.

O’CONNOR, C.J., and LANZINGER, KENNEDY, and FRENCH, JJ., concur.

PFEIFER and O’NEILL, JJ., dissent.

____________________

PFEIFER, J., dissenting.

{¶ 29} The majority opinion requires the parents of Kyle Smith to have

known in 2002 what the General Assembly would enact in 2004. Only if Kyle’s

parents were gifted with such prescience could they have known that they should

have sent notice—pursuant to a version of R.C. 1343.03 that did not yet exist—to

the tortfeasors and their insurers that a cause of action had accrued. Only with

that foreknowledge could Kyle Smith’s parents have known what to do to fully

protect their son’s future, to know that the prejudgment-interest clock could start

running only if they complied with a statute that was not yet a statute.

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{¶ 30} Instead, they relied on the statute that existed at the time Kyle was

injured. They relied on a statute that stated that prejudgment interest would be

calculated from the date that the cause of action accrued, a statute that did not

require notice to insurers and tortfeasors that a cause of action had accrued. That

additional burden required by R.C. 1343.03(C)(1)(c)(i) makes its application in

this case unconstitutionally retroactive. This court has held that the Retroactivity

Clause “ ‘nullifies those new laws that “reach back and create new burdens, new

duties, new obligations, or new liabilities not existing at the time [the statute

becomes effective].” Miller v. Hixson (1901), 64 Ohio St. 39, 51, 59 N.E. 749,

752.’ Bielat [v. Bielat], 87 Ohio St.3d [350,] 352-353, 721 N.E.2d 28 [(1999)].”

Tobacco Use Prevention & Control Found. Bd. of Trustees v. Boyce, 127 Ohio

St.3d 511, 2010-Ohio-6207, 941 N.E.2d 745, ¶ 14.

{¶ 31} Moreover, the version of R.C. 1343.03 in place at the time Kyle

was injured recognized that prejudgment interest could be awarded on future

damages. That fact is something the majority opinion skims over when it states

that “this case concerns only a change in the method of calculating the preexisting

substantive right to prejudgment interest.” Majority opinion at ¶ 26. No—R.C.

1343.03(C)(2) eliminates the preexisting substantive right to interest on future

damages. That right to the “substantive benefit” of prejudgment interest on future

damages was created by former R.C. 1343.03(C). Huffman v. Hair Surgeon, Inc.,

19 Ohio St.3d 83, 88, 482 N.E.2d 1248 (1985), fn. 7. A statute that takes away a

substantive right is not remedial.

{¶ 32} Finally, the majority admits that the 2004 amendment to R.C.

1343.03(C) was not expressly made retrospective. This court should not read into

the statute a retroactive application to causes of action that accrued before its

enactment. We have no reason to contemplate that the General Assembly

intended the unjust and inequitable interpretation this court imposes on Kyle

Smith and his family in this case. Only this court can take credit for that.

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O’NEILL, J., concurs in the foregoing opinion.

____________________

The Lawrence Firm, P.S.C., Jennifer L. Lawrence, and Richard D. Lawrence;

Ginger S. Bock Law Office, Inc., and Ginger S. Bock, for appellees.

Reminger Co., L.P.A., Martin T. Galvin, Stephen E. Walters, and Clifford

C. Masch; Lindhorst & Dreidame Co., L.P.A., Michael F. Lyon, and Bradley D.

McPeek, for appellants.

________________________

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