Unpublished Disposition, 883 F.2d 1023 (9th Cir. 1982)

MEMORANDUM^* 

The United States appeals the district court's award of $3.4 million to Lisa DeSart under the Federal Tort Claims Act (FTCA), 28 U.S.C. § 2671 et seq., for the negligence of government medical personnel in treating her for meningitis as an infant. The government contends that the action was time-barred. The government also contends that the damage award should have been reduced by expected insurance benefits, and that the district court erred in using a zero percent discount rate to calculate the present value of the damages. Lisa DeSart, by her guardian ad litem, Katherine DeSart, cross-appeals the court's award of a limited amount of attendant care and the court's application of California's $250,000 limitation of noneconomic damages in medical malpractice suits. We affirm the district court's rulings on all issues except the discount rate and the award of attendant care, which we remand.

A tort claim against the United States must be filed within two years. 28 U.S.C. § 2401(b). Mr. and Mrs. DeSart filed an administrative claim against the government on January 6, 1982. Accordingly, the issue is whether the statute of limitations began to run before January 6, 1980.

The general rule in medical malpractice cases is that the statutory period begins to run when the plaintiff discovers, or reasonably should have discovered, the injury and its cause. Colleen v. United States, 843 F.2d 329, 331 (9th Cir. 1987); Kubrick v. United States, 444 U.S. 111 (1979). The standard is an objective one. Herrera-Diaz v. United States, 845 F.2d 1534, 1537 (9th Cir.), cert. denied, 109 S. Ct. 306 (1988). The government stipulated that Mr. and Mrs. DeSart would testify that they had no actual knowledge of malpractice until 1980. The government did not dispute that stipulated testimony. Accordingly, the government's statute of limitations defense ultimately turns on whether the DeSarts failed to exercise reasonable diligence in discovering the malpractice. See In re Swine Flu Products Liability Litigation, 764 F.2d 637, 640 (9th Cir. 1985). The date the DeSarts reasonably should have discovered the existence and cause of Lisa's injuries is a mixed question of fact and law which, like negligence, requires a court to determine whether an individual acted reasonably by community standards. Colleen, 843 F.2d at 331. This question is reviewed under the clearly erroneous standard. Id.

In cases where the injury was caused by the government's failure to diagnose and treat, rather than by affirmative government action,

the injury is not the mere undetected existence of the medical problem at the time the physician failed to diagnose or treat the patient or the mere continuance of the same undiagnosed problem in substantially the same state. Rather, the injury is the development of the problem into a more serious condition which poses greater danger to the patient or which requires more extensive treatment. In this type of case, it is only when the patient becomes aware or through the exercise of reasonable diligence should have become aware of the development of a pre-existing problem into a more serious condition that his cause of action can be said to have accrued for purposes of section 2401(b).

Augustine v. United States, 704 F.2d 1074, 1078 (9th Cir. 1983). A patient may reasonably rely on doctor's assurances that symptoms are a normal consequence of a condition that does not require treatment. Raddatz v. United States, 750 F.2d 791, 796 (9th Cir. 1984). FTCA claimants given a credible explanations of their condition not pointing to malpractice may not be found to have failed to exercise reasonable diligence for failure to earlier pursue their claims. See Swine Flu Products, 764 F.2d at 641.

The Oak Knoll doctors told Mrs. DeSart that Lisa's infection was treated early. In response to her inquiries, they told her that the cause of the meningitis was unknown. Doctors Willgress and Rorick, who treated Lisa at Oak Knoll, testified in deposition that it was not their practice to tell parents of any negligence or malpractice that had occurred. Mrs. DeSart took Lisa to many different medical facilities, but no one indicated that any factors other than natural causes were implicated in Lisa's meningitis. Mrs. DeSart was entitled to rely on her doctors' assurances and was not unreasonable in failing to make further inquiries.

In Fernandez v. United States, 673 F.2d 269 (9th Cir. 1982), and Herrera-Diaz, 845 F.2d at 1537, we upheld the dismissal as time-barred of FTCA medical malpractice claims where the plaintiffs' impairments were caused by the government's delay in diagnosing and treating problems in infancy. These cases are factually distinguishable from the case on appeal because the parents, unlike Mrs. DeSart, did not make inquiries of their doctors and receive responses implying that treatment had been adequate.

The 1978 letter from a social worker stating that Mrs. DeSart had questions about the care Lisa received at Oak Knoll is ambiguous as to what Mrs. DeSart's concerns were, and does not necessarily show that she suspected or had reason to suspect malpractice. Considered with the evidence of the DeSart's inquiries to Lisa's Oak Knoll doctors and the doctors' assurances that the meningitis was treated early, the letter is not sufficient to render the trial court's finding of reasonableness clearly erroneous.

II. Reduction of Damage Award for Insurance Benefits

The district court ruled that it could "consider collateral sources of assistance for plaintiff's future medical needs" and allowed evidence of insurance coverage, but declined to reduce the damages awarded by the amount of that coverage. The DeSarts contend that California's Civil Code Sec. 3333.1, which allows evidence of collateral benefits in malpractice cases, does not apply to an FTCA action. The government contends that the statute does apply and that the district court abused its discretion by failing to reduce the award for the amount of benefits expected from Lisa's insurance coverage.

The legislature's intent in enacting section 3333.1 was to "prevent a double recovery by plaintiffs of medical expenses ... received from other sources." Brown v. Stewart, 129 Cal. App. 3d 331, 334, 181 Cal. Rptr. 112, 116 (1982). The goal of preventing double recoveries was to be "accomplished not by prohibiting recovery of such sums by plaintiff, but by allowing the fact-finder to receive and consider such evidence with the hopefully predictable result that such fact-finder would exclude these payments in computing damages." Id.

Brown's interpretation of the statute makes it clear that the trial court has discretion as to reduction of damage awards for collateral sources. Here, the trial court allowed introduction of evidence as to the insurance benefits the DeSarts have received and will continue to receive for Lisa's care. Mrs. DeSart testified that 80% of Lisa's medical expenses have been covered by insurance since Mrs. DeSart's discharge from the Navy in 1980. However, as the DeSarts point out in their brief, the continued existence of coverage is uncertain, and many elements of the damage award, such as noneconomic losses of pain and suffering and the costs of attendant care, are not covered by insurance. We affirm the district court on the basis that, should the California statute apply, it was not an abuse of discretion to decline to reduce the award. See Siverson v. United States, 710 F.2d 557, 559 (9th Cir. 1983).

The government contends that the court erred in accepting a discount rate based upon securities with maturities of no more than three years. The Supreme Court in Jones & Laughlin Steel Corp. v. Pfeifer, 462 U.S. 523, 537 (1983), held that a plaintiff is entitled to a choice of discount rates based upon "the best and safest investments available." However, in Colleen, decided after the district court's decision, we remanded a damage award and instructed that the trial court "rely on credible expert testimony to determine the rate of interest that would be earned on a mix of short, medium, and possibly long-term investments." 843 F.2d at 332.

Here the plaintiff was awarded long term damages. The income from investments over such a term should be greater than the rate of inflation. We remand this issue so that the district court may recalculate the award based on evidence on "the rate of interest that would be earned on a mix of short, medium, and possibly long-term investments." Colleen, 843 F.2d at 332.

The plaintiff appeals the government's award of attendant care for five hours per day, 51 weeks per year for life, and twenty-four hours per day one week per year for life. A district court's assessment of damages under the FTCA is reviewed for abuse of discretion. Johnson v. United States, 704 F.2d 1431, 1441 (9th Cir. 1983), abrogated on other grounds, see Major v. United States, 835 F.2d 641 (6th Cir. 1987), cert. denied, 108 S. Ct. 2871 (1988).

It is undisputed that the plaintiff requires twenty-four hour a day attendant care for the rest of her life, which will be of close to a normal span. With the present award, the plaintiff's parents will have the burden of caring for her for the majority of the time. In Johnson, 704 F.2d at 1442, we held that an award of twelve hours a day of attendant care was inadequate when the trial court had found that twenty-four hour home nursing care was needed. We ordered that damages be based on the cost of twenty-four hour home nursing care. We reasoned that the plaintiff's wife "should not be obligated to provide her husband with 12 hours of nursing care each day for as long as he lives." Id. We remand the damages with instructions that the award should reflect the cost of twenty-four hour a day professional attendant care.

The plaintiff contends that the district court erred in limiting general damages to $250,000 pursuant to California Civil Code Sec. 3333.2, which limits the award of non-economic damages against health care providers to $250,000. This contention lacks merit. In Taylor v. United States, 821 F.2d 1428, 1430 (9th Cir. 1987), cert. denied, 108 S. Ct. 1300 (1988), we held that Cal.Civ.Code Sec. 3333.2 applies to actions under the FTCA.

CONCLUSION: The district court is affirmed on all issues except the discount rate and the award of damages for attendant care, which are remanded.