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Malmberg v. United States

United States District Court, N.D. New York

August 21, 2014


HANCOCK ESTABROOK, LLP, ALAN J. PIERCE, ESQ., Syracuse, New York, Attorneys for Plaintiff.

OFFICE OF ROBERT B. NICHOLS, ROBERT B. NICHOLS, ESQ., Buffalo, New York, Attorneys for Plaintiff.



FREDERICK J. SCULIN, Jr., Senior District Judge.


Currently before the Court are the parties' proposed post-bench trial findings of fact and conclusions of law regarding damages. See Dkt. Nos. 143, 144.


On August 28, 2006, Charles Malmberg ("Plaintiff") filed a complaint pursuant to the Federal Tort Claims Act ("FTCA"), 28 U.S.C. §§ 1346(b) and 2671 et. seq., against the United States of America ("Defendant") for injuries sustained during a surgery he underwent on November 4, 2004, at Syracuse Veterans Administration Medical Center ("SVAMC"), in Syracuse, New York. See Dkt. No. 1 at ¶ 4. The operation was an anterior cervical discectomy with fusion ("ACDF").[1] See Dkt. No. 85 at 1. After the surgery, Plaintiff was diagnosed with C7 incomplete quadriplegia, neurogenic bladder and bowel. See Dkt. No. 143 at ¶ 10. In his complaint, Plaintiff asserted two causes of action. First, during Plaintiff's operation at SVAMC, Defendant "carelessly and negligently rendered medical and care and treatment to the plaintiff" that was "not in accordance with good and accepted medical practice." See Dkt. No. 1 at ¶ 10. Plaintiff alleged that Defendant's negligence was the direct and proximate cause of his permanent injury. See id. at ¶ 11. Second, prior to the operation, Defendant "failed to obtain the informed consent of the plaintiff to perform the surgery." See id. at ¶ 15.

The Court held a bench trial on April 12-14 and April 26, 2010, to determine the issue of liability. See Dkt. No. 100. At the conclusion of that trial, the Court held that Plaintiff had established, by preponderance of the evidence, that Defendant's actions caused his injury and that those actions were a deviation from the accepted standards of medical practice. See Dkt. No. 85 at 10. Subsequently, the Court held a three-day bench trial on December 3, 2012, December 4, 2012, and December 13, 2012, to determine the amount of damages.

Prior to Plaintiff's surgery, Dr. Hunsinger was Plaintiff's primary care physician.[2] See Dkt. No. 138 at 80. During the damages trial, Dr. Hunsinger testified that Plaintiff's status had "significantly deteriorated" since 2010.[3] See id. at 81. Plaintiff hired Dr. Kenneth Reagles to develop a Life Care Plan ("LCP").[4] Defendant hired Dr. Peter Stickney to develop a LCP. See Dkt. No. 144 at 20. Plaintiff hired Dr. Daniel McGowan as a forensic economist to forecast future medical costs.[5] See Dkt. No. 139 at 81. Dr. McGowan used a life expectancy of 26 years. Defendant hired Dr. Spizman as a forensic economist to forecast future medical costs. Dr. Spizman used a life expectancy of 27 years. Both Dr. Reagles and Dr. Stickney provided two scenarios. See Dkt. No. 143 at 6. Each scenario was given a present value based on the assigned economist. Scenario #1 of Dr. Reagles' Life Care Plan cost $6, 159, 425.[6] Scenario #2 of Dr. Reagles' Life Care Plan cost $4, 156, 537.[7] Scenario #1 of Dr. Stickney's Life Care Plan cost $4, 628, 647. Scenario #2 of Dr. Stickney's Life Care Plan cost $3, 504, 161. See Dkt. No. 128. During the damages trial, Dr. Stickney compared both of Dr. Reagles' scenarios. See Exhibits "SS" and "TT."

On May 6, 2013, Plaintiff submitted his proposed post-trial findings of fact and conclusions of law. See Dkt. No. 143. On the same day, Defendant submitted its proposed posttrial findings of fact and conclusions of law. See Dkt. No. 144.


A. Federal Tort Claims Act

This action arises under the FTCA, which waives the United States' sovereign immunity from suits for personal injury damages caused by the "negligent or wrongful act or omission" of its employees "under circumstances where the United States, if a private person, would be liable to the claimant in accordance with the law of the place where the act or omission occurred." 28 U.S.C. § 1346(b); see also Guccione v. United States, 847 F.2d 1031, 1033 (2d Cir. 1988); Hurwitz v. United States, 884 F.2d 684, 686 (2d Cir. 1989); Avakian v. United States, 739 F.Supp. 724, 730 (N.D.N.Y. 1990). The Government's liability pursuant to the FTCA is determined under New York law. See 28 U.S.C. § 1346(b).

B. Amount of damages

"In New York, [a] plaintiff who has been injured by another's negligence is entitled to a sum of money that will justly and fairly' compensate [him] for all losses proximately caused by the wrongdoing, to restore [him], to the extent possible, to the position [he] would have been in had the wrong not occurred. NYPJI 2:277.'" Dockery v. United States, 663 F.Supp.2d 111, 121-22 (N.D.N.Y. 2009) (quoting Kane v. U.S., 189 F.Supp.2d 40, 52 (S.D.N.Y. 2002)); Delano v. United States, 859 F.Supp.2d 487, 507 (W.D.N.Y. 2012) (citation omitted).

C. Whether Plaintiff's total FTCA damages award is offset by prior VA Benefits ("§ 1151 payments")

Plaintiff argues that there should not be any offset based on his VA benefits. Plaintiff also asserts that "[a]ny award for future medical care should not be limited on the ground that because plaintiff is a veteran, he is entitled to free VA Medical care, hospitalization and institutionalization." See Dkt. No. 143 at 8. (citing Ulrich v. Veterans Administration Hospital, 853 F.2d 1078, 1084 (2d Cir. 1988)). To the contrary, Defendant contends that Plaintiff has the ability to gain special grants or receive free medications and, therefore, does not have the right to select a doctor or private hospital of his own choice for future medical needs. See id.

First, Defendant argues that New York CPLR § 4545(a) applies. See Dkt. No. 144 at 6. It states,

In any action to recover damages for personal injury... where plaintiff seeks to recover for the cost of medical care, dental care, custodial care or rehabilitation services, loss of earning or other economic loss, evidence shall be admissible for consideration by the court to establish that any such past or future cost or expense was, or will, with reasonable certainty, be replaced or indemnified in whole or in part from any collateral sources such as insurance... social security... or... employee benefit programs...

See id.

Defendant states that, through April 30, 2013, Plaintiff has received $382, 617.00 in 38 U.S.C. § 1151 benefits from the VA. See id. at 7 n.1. Defendant contends that this case is analogous to Morgan v. United States, 968 F.2d 200, 206-08 (2d Cir. 1992), rather than Ulrich v. United States, 853 F.2d 1078, 1082-83 (2d Cir. 1988). Defendant asserts that the Second Circuit in Morgan "held that the entire amount of a personal injury award under the Federal Tort Claims Act must be reduced by the entire amount of any VA benefits awarded to a plaintiff under Title 38 U.S.C. § 351 (now § 1151) for the same injury." See Dkt. No. 144 at 7. Therefore, "the total amount awarded to [Plaintiff] must be reduced by the total amount of § 1151 benefits paid to him by the VA up to the date of the award." See id. Additionally, Defendant states that an offset of future benefits against any award of damages is unnecessary "because Title 38 U.S.C. § 1151(b) requires that... [Plaintiff's] future 1151 benefits will cease until such time as the amount he would have been paid in such benefits equals the dollar amount recovered in this lawsuit." See id. at 8.

38 U.S.C. § 1151(a) provides compensation provided to a disabled person where [t]he disability or death was caused by hospital care, medical or surgical treatment, or examination furnished the veteran under any law administered by the Secretary, either by a Department employee or in a Department facility as defined in section 1701(3)(A) of this title, and the proximate cause of the disability or death was -
(A) carelessness, negligence, lack of proper skill, error in judgment, or similar instance of fault on the part of the Department in furnishing the hospital care, medical or surgical treatment, or examination....

38 U.S.C. § 1151(a)(1)(A) (emphasis added).

Here, Plaintiff wishes to rely upon the four-part holding in Ulrich. In Ulrich, plaintiff was a 100% disabled veteran with service-related catatonic schizophrenia, who was later rendered a paraplegic after a fall from a smoke stack while under psychiatric care at a VA Hospital. See Ulrich, 853 F.2d at 1079. First, with regard to the pain and suffering, in Ulrich, the rationale was that the plaintiff's prior wartime benefits were not equivalent to a pain and suffering award. See id. at 1082. Second, with regard to the future medical expenses, the Ulrich court stated that the plaintiff "was not obligated to seek medical care from the party whose negligence created his need for such care simply because that party offers it without charge." Id. at 1084.

Similar to this case, in Ulrich, there was a bifurcated non-jury trial. The Ulrich court found defendants liable for failure to supervise the plaintiff following admission to the Psychiatric Service of VA Buffalo. See id at 1079. However, in Ulrich, the set-off was improperly calculated with the pain and suffering award because the plaintiff had been receiving disability benefits under § 314 rather than under 38 U.S.C. § 351. See id. at 1082. The Ulrich court stated that "plaintiff's increased § 314 benefits are not the equivalent' of pain and suffering damages, a circumstance which might justify a set-off."[8] Id.

With regard to future medical expenses, the Ulrich court said that "any award for future medical expenses should not be limited on the ground that, as a veteran, plaintiff is entitled to free VA medical care, hospitalization, and institutionalization." Id. at 1084. The Ulrich court further stated that the plaintiff "ha[d] a right to select a doctor or private hospital of his own life choice for his future medical needs." Id. (citing Feeley v. United States, 337 F.2d 924, 934-35 (3d Cir. 1964); Powers, 589 F.Supp. at 1108-09; Christopher, 237 F.Supp. at 798-99).

Contrarily, in Morgan, an x-ray taken found a mass in the plaintiff's chest area. See Morgan, 968 F.2d at 201. Subsequently, the VA's hospital staff failed to perform a CAT scan. See id. This failure resulted in a delay of diagnosing the plaintiff with Hodgkin's disease. See id. During this delay, the plaintiff's tumor quadrupled in size. See id. Thus, the plaintiff had to undergo eight months of chemotherapy, during which he suffered debilitating side-effects. See id. First, the Morgan court explained that 38 U.S.C. § 351 was renumbered to § 1151 by Department of Veterans Affairs Codification Act, Pub. L. No. 102-83, § 5(a) (1991) ("1991 DVA Act"). Those "§ 351 payments" (now "§ 1151 payments") apply to veterans who are injured, or whose injuries are aggravated, through the fault of VA hospital staff.

Second, the Morgan court "remanded to the magistrate judge to permit recalculation of the damage award with a setoff of the statutory benefits against the total amount of the FTCA damages award." Id. at 202. The Morgan court found that the setoff provision of § 351 affected all elements of damages - meaning, the entire award that a court grants. See id. at 203. The Morgan court explained that § 351 was fundamentally different from § 314 in that § 351 does not grant special benefits.[9] Further, the Morgan court stated that, "[o]n its face, § 351's requirement that the statutory payments be offset against the total amount included in [the FTCA] judgment' seems a relatively straightforward way of referring to the total amount of damages awarded pursuant to the FTCA claim for all components of the veteran's injury as a result of VA hospital malpractice." Id. at 206. Lastly, the Morgan court distinguished the Ulrich ruling:

In sum, we read "the total amount included in such judgment" in § 351 to refer to the total amount of FTCA damages included in the judgment for any type of injury resulting from VA medical treatment. Our interpretation is consistent with prior dicta of this Court and the Supreme Court interpreting § 351. See United States v. Kubrick, 444 U.S. 111, 116 n.5, 100 S.Ct. 352, 356 n.5, 62 L.Ed.2d 259 (1979) ("[u]nder 38 U.S.C. § 351, the benefits payments must be set off against the damages awarded in tort; and the increment in future monthly benefits is not paid until the aggregate amount of the benefits withheld equals the damages awarded" (emphasis added)); Ulrich v. Veterans Administration Hospital, 853 F.2d 1078, 1082 (2d Cir. 1988) (construing 38 U.S.C. § 314 as not authorizing setoff against plaintiff's pain and suffering award, "unlike § 351" (emphasis added)).

Id. at 206-07.

Therefore, because the Morgan court distinguished the Ulrich holding regarding the set off of § 351 ("§ 1151") benefits from the total FTCA damages award, the Court will offset any award in this case by prior VA benefits, § 1151 payments, that Plaintiff has received up to the date of judgment.

D. Whether Defendant's alternative LCP and corresponding economic analysis should be precluded

Plaintiff states that on December 10, 2012, his counsel received an email from defense counsel which included what defense counsel referred to as "Spizman's revised report updated 12/6/12." See Dkt. No. 143 at 9. Plaintiff contends that Stickney's amended life plan was introduced into evidence over his objection. See id. Further, Plaintiff asserts that Defendant "ignored the Court's discovery deadline of August 1, 2012 but also had this alternative report' dated December 5, 2012 but didn't attempt to provide it to plaintiff's counsel until December 12, 2012[.]" See id. at 10. Plaintiff avers that he was prejudiced since he was prevented from deposing experts on the subject matter of their testimony. See id. at 11. Lastly, Plaintiff states "there can be no justification but for the late disclosure, and certainly if the Court were to even consider as relevant that certain services would be provided free by the VA, that would clearly be harmful to the plaintiff." See id.

To the contrary, Defendant argues that Dr. Stickney's revised report does not prejudice Plaintiff. See Dkt. No. 144 at 16-20.

Federal Rule of Civil Procedure 37(c)(1) provides that [i]f a party fails to provide information... as required by Rule 26(a) or (e), the party is not allowed to use that information... to supply evidence on a motion, at a hearing, or at a trial, unless the failure was substantially justified or is harmless....

Fed. R. Civ. P. 37(c)(1).

This rule is designed "to avoid surprise' or trial by ambush.'" Am. Stock Exch., LLC v. Mopex, Inc., 215 F.R.D. 87, 93 (S.D.N.Y. 2002) (quoting Transclean Corp. v. Bridgewood Servs., Inc., 77 F.Supp.2d 1045, 1061 (D. Minn. 1999) (Rule 26(e)(2) "has a simple but important purpose; namely, to prevent [t]rial by ambush"), aff'd in relevant part, 290 F.3d 1364 (Fed. Cir. 2002)) (other citation omitted).

The sanction of preclusion under Rule 37(c)(1) is "automatic' absent a determination of either substantial justification' or harmlessness.'" Id. (citations omitted). "Substantial justification means "justification to a degree that could satisfy a reasonable person that parties could differ as to whether the party was required to comply with the disclosure request."'" Id. (quoting Henrietta D. v. Giuliani, No. 95 Civ. 0641, 2001 WL 1602114 at *5 (E.D.N.Y. Dec. 11, 2001)). The burden of proving substantial justification rests with the party that has failed to disclose information. See id. (citing Wright v. Aargo Sec. Servs., Inc., 99 Civ. 9115, 2001 WL 1035139, at *2 (S.D.N.Y. Sept. 7, 2001)).

Despite the "automatic" nature of Rule 37(c)(1), "the imposition of sanctions under the rule is a matter within the trial court's discretion." Id. (quoting Jockey Int'l, Inc. v. M/V "Leverkusen Express", 217 F.Supp.2d 447, 452 (S.D.N.Y. 2002)). Further, "[p]reclusion of evidence is generally a disfavored action." Id. (citation omitted). The preclusion of evidence not disclosed in discovery is "a drastic remedy and will apply only in situations where the failure to disclose represents... flagrant bad faith and callous disregard of the rules." Johnson Elec. N. Am. Inc. v. Mabuchi Motor Am. Corp., 77 F.Supp.2d 446, 458 (S.D.N.Y. 1999) (citations omitted).

Here, the Court has discretion to determine whether Defendant's late submission was harmless. See Jockey Int'l, Inc., 217 F.Supp.2d at 452. It cannot be said that Defendant exercised "flagrant bad faith" or a "callous disregard of the rules." Johnson Elec. N. Am., Inc., 77 F.Supp. at 458. There is nothing in the record to show that Plaintiff was in any way prejudiced by the amended report of Defendant's economist, Dr. Spizman, over Dr. Stickney's two options. Further, it cannot be said that the Court's determination of whether to offset those services that the VA rendered free is harmful to Plaintiff. If the law dictates that there is an offset, or subtraction, of a certain amount that the VA has already provided to Plaintiff, then this is not harmful. Rather, it is what the Court is required to do in determining the overall FTCA damages award.

Therefore, to the extent that Plaintiff argues for preclusion of evidence under Rule 37 regarding Dr. Spizman's economic amendment to Dr. Stickney's LCP, the Court denies Plaintiff's claim and finds that the admission of this evidence causes no harm to Plaintiff.

E. Whether Plaintiff should have to use the VA for medical care and services in the future

Plaintiff contends that, "even if the [Defendant] were to provide some service free of charge to the veteran, the veteran is not obligated in any way to limit himself to whatever the VA System has to offer." See Dkt. No. 143 at 12. Additionally, Plaintiff argues that, "were the Court to deduct a setoff for possible prospective medical benefits, that setoff would, as a practical matter, unduly limit and virtually predetermine not only the kind of medical care necessary for the treatment of plaintiff's condition, but also the source of such medical care." See id. Lastly, Plaintiff "has not been satisfied with some of the subsequent care he has received by the VA" and has "expressed his desire to obtain care from the private sector." See id. at 13.

Although Defendant does not directly address Plaintiff's issue, Defendant asserts that, although Dr. Reagles, Plaintiff's Life Care Planner, provided an objectively reasonable itemized list outlining costs of future medical services and needs, Dr. Reagles' report "contains many items that are either not necessary or covered by grants and/or provided free of charge by the Department of Veterans Affairs." See Dkt. No. 144 at 19.

Here, the record clearly demonstrates that Dr. Hunsinger stated with a reasonable degree of medical certainty the nature of Plaintiff's future medical needs. Furthermore, Defendant made no objections regarding Dr. Hunsinger's testimony on the reasonableness of Dr. Reagles' LCP.

Q Doctor, did there come a time on March the 9th of this year that you met with Dr. Reagles to review a life care plan, sir, for Mr. Malmberg?
A Yes.
Q And as a result of that meeting, did you give Dr. Reagles certain suggestions or changes that you ...

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