Cahoon v. Cummings

ATTORNEYS FOR APPELLANTS

Kevin C. Schiferl

Robert W. Wright

Julia Blackwell Gelinas

Indianapolis, Indiana

Steven J. Cohen

Kathryn A. Elias

Indianapolis, Indiana

AMICUS CURIAE

ATTORNEY FOR APPELLEE

Terry Kaiser Park

Indianapolis, Indiana

AMICUS CURIAE

Indiana Trial Lawyer Association

Jerry Garau

Mary A. Findling

Indianapolis, Indiana

Defense Trial Counsel

Ross E. Rudolph

James D. Johnson

Evansville, Indiana

__________________________________________________________________

IN THE

SUPREME COURT OF INDIANA

__________________________________________________________________

JEFFREY S. CAHOON, M.D. and )

SHARI A. KOHNE AND EDWARD )

L. KENNEDY, CO-EXECUTORS OF )

THE ESTATE OF ROBERT W. )

KOHNE, M.D., )

) Indiana Supreme Court

Appellants (Defendants Below), ) Cause No. 79S05-0009-CV-513

)

v. ) Indiana Court of Appeals

) Cause No. 79A05-9801-CV-026

GLESSIE JOANN CUMMINGS, )

wife of the deceased, William T. )

Cummings, )

)

Appellee (Plaintiff Below). )

__________________________________________________________________

APPEAL FROM THE TIPPECANOE SUPERIOR COURT

The Honorable Donald C. Johnson, Judge

Cause No. 79D01-9502-CP-38

__________________________________________________________________

ON PETITION TO TRANSFER

__________________________________________________________________

September 1, 2000

Boehm, Justice.

Mayhue v. Sparkman, 653 N.E.2d 1384, 1388-89 (Ind. 1995), held that

where a patient’s likelihood of recovery was less than fifty percent, but

negligent treatment increased the risk of loss, a claim may be asserted for

that increased risk. We grant transfer and hold that damages for such a

claim are to be measured in proportion to the increased risk, and not by

the full extent of the ultimate injury.

Factual and Procedural Background

In December of 1991, William T. Cummings sought the treatment of his

family doctor, Dr. Robert W. Kohne, for heartburn-like symptoms. Kohne

ordered x-rays of Cummings’ esophagus, stomach, and small bowel. The x-

rays were interpreted by Dr. Jeffrey S. Cahoon, who diagnosed Cummings with

a hiatal hernia and reflux esophagitis. Cummings asked Kohne whether

surgery would correct the problem, but Kohne told him he could not have

surgery “at [his] weight.” Instead, Kohne directed Cummings to lose

weight, refrain from eating greasy foods, and sleep sitting up. In July

1992, after Cummings had lost about eighty pounds, he returned to Kohne.

Cummings’ insurance carrier had changed, so Kohne arranged for further

consultation and treatment at the V.A. hospital in Danville, Illinois.

Before Cummings could obtain treatment, however, he admitted himself to the

emergency room of St. Elizabeth’s Hospital in Lafayette, Indiana with a

perforated esophagus that had hemorrhaged. Cummings was then diagnosed as

suffering from esophageal cancer. Surgery and subsequent chemotherapy were

tried, but the cancer had already spread to Cummings’ lymph nodes and

liver. He died in August of 1993.

Cummings filed a proposed complaint with the Indiana Department of

Insurance in March of 1993. The complaint as amended charged Kohne with

negligent failure to diagnose and Cahoon with negligent misdiagnosis of

Cummings’ condition. The Medical Review Panel concluded that the doctors

had failed to follow the appropriate standard of care, but that their

conduct “was not a factor of the resultant damages.” After Cummings’

death, his wife, Joann, brought suit alleging damages in the form of

medical expenses, lost income, loss of substantial chance of survival,

death, and loss of consortium.

Kohne died in March of 1996, prior to trial. Both he and Cahoon

admitted breach of his duty of care to Cummings, but each denied that his

breach proximately caused Cummings’ damages. After a three-day trial in

late September and early October of 1997, a jury found in favor of Joann,

and awarded her $194,000 from Kohne’s estate and $75,000 from Cahoon.

Joann filed a post-trial motion for prejudgment interest, which was denied

as to Kohne, but granted as to Cahoon in the amount of $18,443.84.

All parties appealed. Joann challenged the trial court’s denial of

prejudgment interest with respect to Kohne. The defendants challenged the

trial court’s jury instructions, arguing that: (1) the jury was incorrectly

instructed that causation should be evaluated under the Mayhue standard;

(2) the jury was incorrectly instructed that full damages could be awarded

if the defendants’ conduct was found to be a substantial factor in bringing

about Cummings’ death; (3) the trial court erroneously gave instructions on

both wrongful death and survival; and (4) the survival instruction

contained an incorrect statement of law in that it referenced “loss of

chance” approvingly. Kohne also contended that the trial court had

erroneously admitted evidence that he had altered Cummings’ medical

records.

The Court of Appeals concluded that these jury instructions were

proper in every respect, save that the survival instruction erroneously

recited “loss of chance” as the law in Indiana. See Cahoon v. Cummings,

715 N.E.2d 1, 9 (Ind. Ct. App. 1999). The Court of Appeals also concluded

that the trial court erred in admitting evidence that Kohne had altered

Cummings’ medical records. See id. at 17. With regard to prejudgment

interest, the Court of Appeals reversed the trial court’s award of

prejudgment interest with respect to Cahoon, and affirmed its denial of

prejudgment interest with respect to Kohne. See id. at 17-18.

All parties seek transfer. We conclude: (1) the trial court

correctly applied the causation standard of Mayhue in the wrongful death

context; (2) it was reversible error to instruct the jury that it should

award full damages if it found that defendants’ negligence was a

substantial factor in Cummings’ death; (3) the doctrine of election of

remedies does not preclude Joann from pursuing both a wrongful death and

survivorship action; (4) the instruction regarding Cummings’ survival

action did not contain a misstatement of law requiring reversal; (5) the

trial court did not abuse its discretion in admitting evidence that Kohne

had altered Cummings’ medical records; and (6) the trial court erroneously

concluded that Joann was not entitled to prejudgment interest as against

Kohne.

I. The Application of Mayhue to a Wrongful Death Suit

In Mayhue v. Sparkman, 653 N.E.2d 1384, 1388-89 (1995), this Court

held that a plaintiff is not precluded from bringing a medical malpractice

claim against a negligent doctor merely because the plaintiff is unable to

prove by a preponderance of the evidence that the doctor’s conduct was the

proximate cause of the resulting injury. We adopted Section 323 of the

Restatement of Torts, which reads:

One who undertakes, gratuitously or for consideration, to render

services to another which he should recognize as necessary for the

protection of the other’s person or things, is subject to liability to

the other for physical harm resulting from his failure to exercise

reasonable care to perform his undertaking, if:

(a) his failure to exercise such care increases the risk of such

harm, or;

(b) the harm is suffered because of the other’s reliance upon

the undertaking.

This doctrine permits recovery from a defendant whose negligence

significantly increases the probability of the ultimate harm, even if the

likelihood of incurring that injury was greater than fifty percent in the

absence of the defendant’s negligence. Here, as in Mayhue, all experts

agreed that Cummings would probably not have survived even if he had been

properly diagnosed and treated in December of 1991. However, Cummings’

expert testified that Cummings would have had a statistically significant

chance, perhaps twenty-five to thirty percent, of surviving his esophageal

cancer if it had been diagnosed at Cummings’ first visit to Kohne. The

defendants maintain that the relaxed causation standard of Mayhue is

inapplicable in a wrongful death case because the wrongful death statute,

by its terms, demands that the defendant’s actions be the proximate cause

of the death of the victim. The relevant provision reads:

When the death of one is caused by the wrongful act or omission of

another, the personal representative of the former may maintain an

action therefor against the latter, if the former might have

maintained an action had he or she . . . lived, against the latter for

an injury for the same act or omission.

Ind. Code § 34-23-1-1 (1998).[1] The Court of Appeals held that the

causation standard of Mayhue applied in the context of the wrongful death

action, concluding that: “[T]he intent of the wrongful death statute was to

allow an action to be brought by the decedent’s personal representative

against a defendant who may be held legally liable for the death,

regardless of the mechanism of liability.” Cahoon, 715 N.E.2d at 7. We

agree with the Court of Appeals that the statute is consistent with the

Mayhue standard of causation. The wrongful death statute requires

causation, but it does not spell out what is meant by that term and does

not specify that a plaintiff must establish proximate causation. The trial

court instructed the jury on the causation standard of Mayhue as follows:

“In this case you must first determine if the Defendant’s negligence

increased the risk of harm to Ted Cummings, and whether the increased risk

was a substantial factor in his death on August 15, 1993.” This is an

accurate recitation of the causation standard of Mayhue. Mayhue identified

the reasons to permit recovery in a loss of consortium case for increased

risk of the ultimate injury—in that case death. Principally, to deny

recovery is to encourage disregard for the proper care of more seriously

ill patients. Those with serious problems but also a significant chance of

recovery are entitled to the same level of care as less threatened

patients, and their caregivers should be held to the same standard.

Accordingly, this instruction was properly given.

Finally, the defendants note that Mayhue presented a loss of

consortium claim and urge this Court to limit Mayhue to its facts.

Although it is true that Mayhue involved a loss of consortium claim, the

policy underlying Mayhue is equally compelling here. We see no basis to

allow a relaxed standard of causation in the loss of consortium context,

but not the wrongful death context. The wrongful death statute is intended

to provide economic support to survivors, and a loss of consortium claim

compensates the plaintiff for loss of companionship of the decedent. The

issue addressed in Mayhue is the level of causation required, not the type

of claim brought. This is the same because the event giving rise to each

injury—the death—is the same. Consistent with other jurisdictions, we hold

that Section 323 applies in the wrongful death context.[2] See, e.g.,

McKellips v. Saint Francis Hosp., Inc., 741 P.2d 467, 469-70 (Okla. 1987);

Perez v. Las Vegas Med. Ctr., 805 P.2d 589, 591 (Nev. 1991) (following

McKellips).

II. Damages

The trial court instructed that the defendants would be liable for

full wrongful death damages if the jury determined that their actions were

a substantial factor in Cummings’ death. The Court of Appeals majority

agreed, concluding that once causation is established under Mayhue, full

damages for the underlying injury follow. The majority reasoned that this

Court, citing McKellips v. Saint Francis Hospital, Inc., 741 P.2d 467

(Okla. 1987), intended that full damages follow because a proportional

damages scheme would have required significant further discussion by this

Court. The Court of Appeals also concluded that Section 323, by its

express language, provides for liability for the harm, not for the “portion

of the risk which was increased.” Cahoon, 715 N.E.2d at 8. Judge Sullivan

dissented as to this issue. The Court of Appeals majority correctly

pointed out that Mayhue did not discuss the issue of damages. However,

Mayhue relied on McKellips, which viewed Section 323 as indistinguishable

from “loss of chance” and awarded damages in proportion to the increased

risk attributable to the defendant’s actions. See 741 P.2d at 475-76. In

McKellips, the decedent was misdiagnosed in the emergency room as suffering

from gastritis. Although an expert testified that the heart attack from

which he subsequently died was probably “well under way” by the time he

checked into the emergency room, the Supreme Court of Oklahoma nevertheless

concluded that a relaxed causation standard should apply, and that

proportional damages should be awarded if a jury concluded that the

defendant’s negligence contributed to the patient’s death. In order to

determine proportional damages, after liability is established, statistical

evidence is admissible to determine the “net reduced figure.” McKellips,

741 P.2d at 476-77. This, the court explained, is determined by

subtracting the decedent’s postnegligence chance of survival from the

prenegligence chance of survival. Then, “[t]he amount of damages

recoverable is equal to the percent of chance lost multiplied by the total

amount of damages which are ordinarily allowed in a wrongful death action.”

Id. McKellips is one of many cases that award damages proportional to

the defendant’s contribution to the underlying injury. See Delaney v.

Cade, 873 P.2d 175, 186 (Kan. 1994); Roberts v. Ohio Permanente Med. Group,

Inc., 668 N.E.2d 480, 484-85 (Ohio 1996); Gray v. Ford Motor Co., 914

S.W.2d 464, 466-67 (Tenn. 1996) (applying comparative fault principles to

medical malpractice action); see also Soper v. Bopp, 990 S.W.2d 147, 150-51

(Mo. Ct. App. 1999) (“‘[I]n the end, damages can only be expressed by

multiplying the value of a lost life or limb by the chance of recovery

lost.’”) (citations omitted).

Holding the defendant liable for the full value of the wrongful death

claim is inconsistent with the statutory requirement that the loss be

caused by the defendant who only increased the risk of an already likely

result. In effect, it would hold doctors liable not only for their own

negligence, but also for their patients’ illnesses which are not the

product of the doctors’ actions. To be sure, this rule might encourage

doctors to be more vigilant, but compensation for injuries caused, not

deterrence of future actions, is the basis of recovery the legislature has

chosen for a wrongful death.

There is little support in other jurisdictions for the practice of

awarding damages measured by the full value of the injury in a Section 323

or “loss of chance” case. See Weymers v. Khera, 563 N.W.2d 647, 653 n.17

(Mich. 1997) (noting that “only five states follow this extreme approach”).

We conclude that the better approach is that followed in McKellips and

other proportional damages jurisdictions. See 741 P.2d at 476-77; see also

Herskovits v. Group Health Coop., 664 P.2d 474, 479 (Wash. 1983) (“Causing

reduction of the opportunity to recover (loss of chance) by one’s

negligence, however, does not necessitate a total recovery against the

negligent party for all damages caused by the victim’s death.”). This rule

is also consistent with the legislative policy underlying Indiana law of

apportionment of damages for tort liability generally. Under Indiana’s

comparative fault scheme, a defendant is liable only to the degree he or

she is responsible for the claimant’s injury or damages. See Ind. Code §

34-51-2-1 to 19 (1998).

In sum, we agree with Judge Sullivan’s dissent, and hold that upon a

showing of causation under Mayhue, damages are proportional to the

increased risk attributable to the defendant’s negligent act or omission.

The jury was properly instructed that damages could not be awarded under

both the survival and wrongful death claims. However, the jury did not

identify the theory of recovery under which damages were awarded against

either defendant. As a result, we cannot assign the award to either the

wrongful death claim or the survivor count. And because the jury was

instructed to award full wrongful death damages if a defendant’s conduct

was a “substantial factor” in Cummings’ death, the degree of increased risk

was not quantified and we have no basis to conclude that any specific

dollar award is proper under that theory. In sum, the amount of any award

for wrongful death is unknowable and it is equally unknowable whether the

survivor theory supported the jury’s award. As a result, remand for a new

trial is required.

III. Election of Remedies

The defendants assert that it was error for the trial judge to allow

jury instructions as to both wrongful death and survival actions. They

argue that a plaintiff must elect between a survival action and a wrongful

death action prior to trial because they are inconsistent and mutually

exclusive theories of recovery. According to defendants, it is prejudicial

to them to allow evidence of Cummings’ pain and suffering under the

survival claim because this evidence could inflate a damage award on the

wrongful death action. They argue that the trial court’s jury instruction

informing jurors that they could not award damages for both wrongful death

and a survival action was insufficient to cure the harm resulting from

allowing pain and suffering evidence. The Court of Appeals concluded, in a

thoughtful analysis of the doctrine of election of remedies, that Joann was

not required to elect a remedy prior to trial. We agree.

The election of remedies doctrine requires that a party who has two co-

existing but inconsistent remedies and elects to pursue one remedy to a

conclusion may not sue on the other remedy. Hoover v. Hearth & Home Design

Ctr., Inc., 654 N.E.2d 744, 745 (Ind. 1995). The doctrine ordinarily

applies only when a party has elected to pursue one remedy to its

conclusion and then attempts to pursue a subsequent claim on a second

inconsistent theory. See Parke v. First Nat’l Bank, 571 N.E.2d 1317, 1319

(Ind. Ct. App. 1991).

Trial Rule 8(E)(2) allows a party to plead alternative and even

inconsistent theories of recovery: “A pleading may . . . state as many

separate claims or defenses as the pleader has regardless of consistency

and whether based on legal or equitable grounds.” Under this Rule, a party

is not required to adopt a theory of the case at the outset. See Palacios

v. Kline, 566 N.E.2d 573, 576 (Ind. Ct. App. 1991). Rather, it is

sufficient to plead the operative facts of the case so the defendant is put

on notice as to the evidence that will be presented at trial. See id.

Thus, although defendants must receive notice as to what evidence will be

presented against them, there is no procedural bar to pursuing both a

wrongful death and survival action.[3] Cf. Olympia Hotels Corp. v. Johnson

Wax Dev. Corp., 908 F.2d 1363, 1371 (7th Cir. 1990) (concluding that, in

contract case, the adoption of Rule 8(E) has abolished the requirement for

election of remedies at the pleading stage in the federal courts).

Defendants nevertheless urge that a plaintiff should in some instances

be required to elect a remedy before trial to avoid prejudice to the

defendant. Although this Court is mindful of the practical difficulties of

defending on two separate theories, there is scant precedential support for

the proposition that it may not be attempted. The Court of Appeals has

held that, under some circumstances, concurrent pursuit of two or more

remedies may be barred. See, e.g., City of Hammond v. Beiriger, 164 Ind.

Ct. App. 275, 280, 328 N.E.2d 466, 469 (1975) (“[W]hen the remedies

available to a prospective litigant are inconsistent or mutually exclusive

. . . the election of one remedy will operate as a bar to concurrent or

subsequent remedies.”). None of the cited cases had occasion to address

the issue of “concurrent remedies” in light of Rule 8(E), and defendants

point to no case in which a party has been forced to elect a remedy prior

to trial to avoid prejudice to the defendants in having to defend against

inconsistent theories of recovery.

Defendants rely heavily on American International Adjustment Co. v.

Galvin, 86 F.3d 1455, 1458 (7th Cir. 1996), in which the Seventh Circuit

noted that the admission of a tape of the last moments of the decedent’s

life—admissible as evidence of pain and suffering for the survival

action—had likely inflated the wrongful death award. Galvin, however, does

not hold that a plaintiff may not concurrently pursue both a survival cause

of action and a wrongful death claim. Rather, in Galvin, the court noted

that defense counsel’s motion in limine seeking to require election of

remedies, which had been denied, ran counter to the abolition of the theory

pleading requirement. 86 F.3d at 1460. What Galvin does suggest is that

evidence as to damages on a theory unsupported by the evidence is

inadmissible. See id. at 1458-59. This is simply another way of saying

that irrelevant evidence is inadmissible, regardless of how the claim is

pleaded. Thus, if it is clear that the decedent’s death was caused by the

defendant’s actions, only damages for wrongful death, and not those for a

survival action, could be shown. Here, however, there was evidence to

support both theories. Galvin also observes that under Indiana law damages

cannot be awarded for both a wrongful death claim and a survival claim.

See id. at 1457-58. In Galvin, however, unlike here, there was no jury

instruction given to that effect.

The defendants also rely on Osborne v. Wenger, 572 N.E.2d 1343, 1346

(Ind. Ct. App. 1991), in which the Court of Appeals held that the trial

court had not erred in requiring the plaintiff to choose between pursuing

treble damages and punitive damages. The recovery of both treble damages

and punitive damages is prohibited by statute in a civil action by a crime

victim. See Ind. Code 34-24-3-3 (1998).[4] Osborne made no mention of

Rule 8(E). Whether or not it was correct to affirm the trial court’s

requirement that the plaintiff specify the remedy sought for a single

wrong, it is not reversible error to permit the plaintiff to proceed on

alternative inconsistent theories under instructions that preclude recovery

on both.[5]

In sum, Trial Rule 8(E) is designed to avoid the problem that a

plaintiff may recover nothing on a valid claim if forced to speculate as to

which theory a jury will ultimately find credible. What remains of the

election of remedies doctrine after the adoption of Trial Rule 8(E) is

substantive law that acts as a bar to double recovery. See Olympia Hotels,

908 F.2d at 1371 (“In its substantive aspect, however, the doctrine of

election of remedies is not affected by the federal rules of procedure. . .

. It seeks to prevent double recovery.”). The wrongful death statute

requires proof that the defendant caused the death of the plaintiff. Under

the survival statute, “[W]hen a person receives personal injuries caused by

the wrongful act or omission of another and subsequently dies from causes

other than those personal injuries, the personal representative . . . may

maintain an action.” Ind. Code § 34-9-3-4 (1998).[6] If there is no

dispute regarding the cause of the decedent’s death, it is obvious that

only one theory of recovery may be pursued. Here, in contrast, defendants

admitted that they had breached a duty to Cummings, and causation was the

primary issue for the jury. The trial court’s instruction informing the

jury that it could not grant damages on both theories was sufficient to

ensure that double recovery would be avoided. The trial court was correct

to allow Joann to pursue both theories to verdict.

IV. Survival Instruction

Defendants assert that the trial court instruction regarding survival

actions misstated the law. The instruction read:

If you determine that the Defendant’s negligence was not a

substantial factor in Mr. Cummings’ death, but the Defendant’s

negligence increased the risk of harm to Mr. Cummings by reducing his

opportunity for a better result, and that increased risk was a

substantial factor in that harm, then you should award such damages as

will fairly compensate the Plaintiff for the harm sustained. Harm may

be the loss of opportunity for cure, decreased short-term survival, or

unnecessary physical pain and mental suffering. [Joann] Cummings is

also entitled to be compensated for her loss of consortium . . . .

The most striking aspect of this jury instruction is its inclusion of

damages for “loss of chance” in the survival action. Plaintiff’s counsel

argued, over the objection of defense counsel, that the loss of chance

itself was compensable, and the trial court allowed the instruction.

This Court recently had occasion to address the “loss of chance,” or

increased risk of harm doctrine, in Alexander v. Scheid, 726 N.E.2d 272

(Ind. 2000). Scheid involved a plaintiff whose chances of long-term

survival were allegedly substantially decreased by the defendant’s

negligence, but whose cancer was in remission at the time of suit. In

Scheid, this Court reviewed the “loss of chance” doctrine as it has been

applied in other jurisdictions and concluded that a plaintiff may recover

in Indiana for the increased risk of harm caused by the defendant’s act or

omission in certain circumstances. We distinguished between Section 323,

which was adopted in Mayhue to deal with claims for increased risk for an

injury that has been incurred, and the situation presented in Scheid,

where, although the risk had been increased, the plaintiff’s ultimate

injury was uncertain. In the face of that uncertainty, we held that the

plaintiff may recover for her decreased chance of long-term survival, and

is not required to wait until the ultimate injury comes to pass. See id.

at 277-78.

The survival statute precludes recovery on both a wrongful death claim

and a survival claim. See Ind. Code § 34-9-3-4 (1998) (the Survival of

Cause of Action statute applies only if the person “receives personal

injuries caused by the wrongful act or omission of another and . . .

subsequently dies from causes other than those personal injuries”).

Accordingly, a plaintiff cannot recover on both a wrongful death claim and

a claim of an increased risk of harm caused by the same wrong. If the

alleged result of the defendant’s acts that increase the risk of harm is

death itself, this converts the patient’s claim into a wrongful death or

related action, as in Mayhue. That is the circumstance here. It is

possible, however, for a representative to bring a survival action on an

increased risk of harm claim even where the plaintiff has died, if the

death resulted from another cause. In the case before us, assuming the

jury found that the defendant’s negligence was not a substantial factor in

bringing about Cummings’ death, for example, because that risk was already

100%, the jury might still conclude that the delay in the diagnosis

resulted in an accelerated death, or a decreased life expectancy. Whether

that claim is of sufficient value to pursue is a decision for the

plaintiff. A valuation of this injury as outlined in Scheid would then be

appropriate. See 726 N.E.2d at 282-83. Thus, the instruction on the

survival action, albeit unclear, did not contain an erroneous statement of

law. On remand, if the theory remains in the case, the parties should

attempt to clarify this instruction sufficiently for the jury.

V. Alteration of Medical Records

After arguments from both parties concerning the admissibility of

evidence that Kohne altered Cummings’ medical records, the trial court

determined that evidence of “spoliation” was admissible against Kohne on

the issue of proximate causation. According to the trial court, because

“Dr. Kohne was a medical doctor with knowledge of the stages of cancer and

the increased risks to the patient when cancer is not timely diagnosed and

treated. A reasonable inference is that Dr. Kohne was conscious that he

increased the risk of harm to Mr. Cummings giving rise to falsification of

his testimony and his records.” The Court of Appeals concluded that the

spoliation rule, as it exists in Indiana, does not apply where the evidence

has not been destroyed and no jury instruction is required to cure its

unavailability. See Cahoon, 715 N.E.2d at 16. Under normal relevancy

restrictions, the court further concluded, the trial court had abused its

discretion in admitting this evidence because, once Kohne had conceded

breach of duty, this evidence was no longer relevant. See id. at 16-17.

Spoliation consists of “[t]he intentional destruction, mutilation,

alteration, or concealment of evidence, usually a document. If proved,

spoliation may be used to establish that the evidence was unfavorable to

the party responsible.” Black’s Law Dictionary 1409 (7th ed. 1999). “In

Indiana, the exclusive possession of facts or evidence by a party, coupled

with the suppression of the facts or evidence by that party, may result in

an inference that the production of the evidence would be against the

interest of the party which suppresses it.” Porter v. Irvin’s Interstate

Brick & Block Co., 691 N.E.2d 1363, 1364-65 (Ind. Ct. App. 1998); see also

Great Am. Tea Co. v. Van Buren, 218 Ind. 462, 467, 33 N.E.2d 580, 581

(1941) (“While this rule will not be carried to the extent of relieving a

party of the burden of proving the case, it may be considered as a

circumstance in drawing reasonable inferences from the facts

established.”). Spoliation evidence arises more commonly in the criminal

context, but is also relevant in civil cases. 12 Robert Lowell Miller,

Jr., Indiana Practice § 401.112 (2d ed. 1995). Spoliation evidence is

ordinarily admissible not as to a single issue only, but rather bears on

the strength of the case in general and the defendant’s consciousness of

guilt. See 2 John Henry Wigmore, Evidence in Trials at Common Law § 278

(1979), revised by James H. Chadbourn.

The primary alteration alleged here is the addition of the words

“Cline scope” to Cummings’ December 1991 x-ray report. Kohne originally

maintained that he had recommended to Cummings that he have an endoscopy,

but that Cummings had not done so. Cline was a doctor to whom Kohne would

have referred Cummings had Kohne recommended an endoscopy. The endoscopy,

in turn, would have likely revealed esophageal cancer. Copies of medical

records sent to plaintiff’s counsel before litigation was commenced did not

bear this notation.[7]

Although it is true that the few Indiana cases on point have involved

situations in which evidence has been destroyed or is made unavailable,

see, e.g., Porter, 691 N.E.2d at 1363, we see no reason to restrict the

application of this rule to that context. Spoliation, according to its

dictionary definition, includes the alteration of documentary evidence as

well as its destruction. Thus, we hold that the evidence of the addition

of “Cline scope” to Cummings’ x-ray report qualifies under the spoliation

rule in Indiana.

The trial court did not abuse its discretion in admitting the

evidence as probative of Kohne’s belief on the issue of proximate

causation. As we have already noted, spoliation evidence is admissible to

show the defendant’s consciousness of guilt and the strength of his or her

case generally. Here, Kohne conceded that he breached his duty to

Cummings. By trial, the only remaining issue for the jury to resolve was

causation. Therefore, the trial court concluded that this evidence was

admissible as to the only remaining issue—proximate causation.

The Court of Appeals concluded that instructing the jury regarding the

defendant’s perspective on causation had the effect of converting Kohne

into an expert witness. The instruction read: “[I]f you find that there

are unexplained or intentional alterations of medical records by Dr. Kohne,

you can presume that the evidence would have been unfavorable to Dr. Kohne

on the issue of proximate causation.” Allowing evidence to be presented as

to Kohne’s perspective regarding proximate cause was proper to demonstrate

that Kohne himself believed his inaction to have been significant in the

treatment of Cummings. A jury could easily find this evidence significant

as to both duty and proximate cause, necessary elements of a tort claim.

Thus, it was not error to instruct the jury that they could infer from the

alteration of Cummings’ records that Kohne believed he had caused harm to

Cummings.[8]

VI. Prejudgment Interest

The trial court awarded prejudgment interest in the amount of

$18,443.84 against Cahoon, but not against the Kohne estate, reasoning that

the then $100,000 cap on medical malpractice liability of a health care

provider limited Kohne’s liability on the $194,000 jury verdict against his

estate, but that prejudgment interest could be awarded on the $75,000

verdict against Cahoon. The Court of Appeals took the view that the offers

of settlement Joann made did not qualify under the prejudgment statute, so

prejudgment interest could not be awarded against either defendant. This

ruling rendered moot the question whether the health care provider’s

liability applied to prejudgment interest.

The threshold question is whether prejudgment interest is awardable

at all under the prejudgment interest statute. That statute permits the

trial court to award prejudgment interest, but includes several

disqualifying circumstances. Because the defendants made no offer to

settle, the only provision relevant here is found in Indiana Code § 34-51-4-

6, which requires that the plaintiff have made a written offer “to the

party or parties against whom the claim is filed” to settle for an amount

that turns out to be more than seventy-five percent of the judgment

ultimately awarded.[9] Subsection 6(2) of that section provides that the

terms of the offer must “provide for payment of the settlement offer within

sixty (60) days after the offer is accepted.”

In July 1994, and a few times thereafter, Joann’s counsel sent to

counsel for the common insurer of both Cahoon and Kohne a letter that

stated Joann was “offering to settle this claim now for $75,001.” The

Court of Appeals held that the offer did not meet the requirement of

subsection 6(2) because the offer did not provide that the defendants must

pay the $75,001 within sixty days. At the time the offer was made, in

order for a plaintiff to access the Patient’s Compensation Fund and thereby

recover more than the $100,000 available from the health care provider, the

Medical Malpractice Act required a current settlement payment of at least

$75,000 or a structured settlement meeting the requirements of the statute.

See Ind. Code § 34-18-14-4 (1998) (version effective until July 1,

1999).[10] In that context, we think an offer to “settle this claim now

for $75,001” clearly conveys a demand for a lump sum payable forthwith, and

that there was no doubt in the defendants’ insurer’s mind that the case

could be disposed of as to both doctors for that amount immediately. The

requirement of sixty days in the cited provision parallels the same

language found in section 5(2) and 5(3) of the Prejudgment Interest Act

that permits a defendant to avoid the act by making an offer that turns out

to be at least two-thirds of the ultimate judgment. See Ind. Code § 34-51-

4-5 (1998). It seems obvious that this language is intended to deal with

the point that an offer to settle on some structured basis by periodic or

long distant lump payments is worth less in present dollars. The whole

point of the statute is to address the cost of delay in payment.

Accordingly, an offer to settle “now” is an offer to settle by payment

within sixty days. The delay is solely for the benefit of the defendants,

and the defendants had the power to accept Joann’s offer immediately.

Cahoon argues that the offer was unclear as to how much was

attributable to which defendant. That may be correct, but the statute

requires only that the offer be made to the “party or parties” who have

been sued. Either defendant, by ponying up the full $75,000 could have

terminated the case as to himself and the other doctor. Each ended up with

a judgment that was independently sufficient to trigger prejudgment

interest even if the other had been found not liable. Under those

circumstances, there is no reason why both should not compensate the

plaintiff for the use of her funds over the time it took to resolve this

dispute for more than the plaintiff would have accepted in 1994.

There remains the question of the interplay between the Prejudgment

Interest Act and the Medical Malpractice Act. The legislature has spoken

on that point. Section 2 of the Prejudgment Interest Act provides that the

Act “does not apply to a claim against the patient’s compensation fund.”

Ind. Code § 34-51-4-2 (1998). As we noted in Poehlman v. Feferman, 717

N.E.2d 578, 582 (Ind. 1999), there is no comparable provision immunizing

health care providers generally from prejudgment interest. In Emergency

Physicians v. Pettit, 718 N.E.2d 753, 755 (Ind. 1999), this Court held that

“a qualified health care provider is subject to the provisions of the pre-

judgment interest statute.” Thus, the trial court correctly concluded that

prejudgment interest was awardable as to Cahoon, whose judgment was under

the cap, even after adding the interest.

Kohne’s estate presents the question whether the cap operates to limit

the health care provider’s exposure to all items, including prejudgment

interest. This was the precise issue addressed in Pettit, where we held

that “a qualified health care provider is responsible for the payment of

the collateral litigation expense of pre-judgment interest” even if that

brings the provider’s total liability over the cap. 718 N.E.2d at 757.

However, each judgment debtor is responsible only for the interest

“attributable to [the provider’s] individual liability,” i.e., interest on

$100,000. Id.

Prejudgment interest addresses the same problem as postjudgment

interest. If a defendant has the option to terminate the dispute at a

known dollar cost, and chooses not to do so, that defendant and not the

plaintiff should bear the cost of the time value of money in the

intervening period if the ultimate result is within the parameters set by

the legislature. Accordingly, we have held that prejudgment interest is

recoverable from a health care provider on the amount of the judgment

against that provider. Because that judgment amount is subject to the

statutory cap, and prejudgment interest is not available from the fund,

this will not provide the plaintiff with full relief, but it is the balance

we conclude the legislature has struck between the competing interests of

fairness and encouragement to settle reflected in the prejudgment interest

statute and the Medical Malpractice Act’s concern for health care cost

containment.

Conclusion

We reverse the judgment of the trial court and remand for a new

trial.

SHEPARD, C.J., and DICKSON, SULLIVAN and RUCKER, JJ., concur.

-----------------------

[1] This section was formerly codified at Indiana Code § 34-1-1-2.

[2] The Court of Appeals also discussed whether Joann could maintain a

separate cause of action for loss of consortium in addition to a wrongful

death claim. See Cahoon, 715 N.E.2d at 10. Neither party addressed this

issue, so we do not.

[3] We note that neither the complaint nor the three amended versions of

the complaint contain more than the loosest reference to a survival action,

and no reference to damages for pain and suffering, an element commonly

sought in survival actions. We do not address whether Joann might have

been barred from pursuing a remedy not reflected in her complaint because

this issue has not been briefed by either party. Although the defendants

objected to the jury instruction referencing a survival action, they did

not do so on the basis that this theory was not articulated in the

complaint.

[4] This section was formerly codified at Indiana Code § 34-4-30-2.

[5] Rule 8(E) became effective as of September 16, 1987. Osborne concerned

an accident occurring on January 27, 1987. It is not clear whether Trial

Rule 8(E) was in force at the time the complaint was filed, or whether the

parties and the trial court were aware of it.

[6] This section was formerly codified at Indiana Code § 34-1-1-1.

[7] There were two other notations on Cummings’ records not present on the

initial records sent to plaintiff’s counsel: “Axid samples” and “Gene

Reiss.” Kohne claimed that he had prescribed Axid samples for Cummings.

Gene Reiss was a name of an insurance agent Kohne knew; Kohne claimed he

had made this notation after finding out that litigation was pending

against him.

[8] Kohne also argues that, if the admission of evidence of the alteration

of Cummings’ medical records is sustained, the trial court was required to

take judicial notice of its order granting summary judgment in favor of

Kohne on Joann’s punitive damages claim. The punitive damages claim was

based on the alteration of Cummings’ medical records. Kohne observes that

Indiana Evidence Rule 201(d) provides that a court must “take judicial

notice if requested by a party and supplied with the necessary

information.” Records in the same case, including the court’s own rulings,

fall within the purview of judicial notice. See Miller, Indiana Practice §

201.105, at 150, 150 n.1. That is not the only consideration, however.

Judicial notice presumes relevance and the balancing required by Rule 403.

The trial court was well within its discretion in concluding that

instructing on its ruling on a motion for partial summary judgment as to a

claim for punitive damages would be more confusing than enlightening to the

jury.

[9] This is hopefully a more easily understood description of the

statute’s mathematically equivalent disqualification of a plaintiff whose

“offer exceeds one and one-third (1 1/3) of the amount of the judgment

awarded.” Ind. Code § 34-51-4-6 (1998).

[10] The statute is the same today except the dollar amount was changed to

$187,000 effective July 1, 1999.