Article 50-A. Periodic Payment of Judgments in Medical and Dental Malpractice Actions

MEDICAL AND DENTAL MALPRACTICE ACTIONS

The Sections of Article 50-a. of the CPLR of New York:

CPLR Article 50-a medical dental malpractice dentist

NY CPLR § 5031. BASIS FOR DETERMINING JUDGMENT TO BE ENTERED

In order to determine what judgment is to be entered on a verdict in an action to recover damages for medical, dental, or pediatric malpractice, or damages for wrongful death as a result of medical, dental, or pediatric malpractice, the court shall proceed as follows:

(a) The court shall apply to the findings of past and future damages any applicable rules of law regarding additurs and/or remittiturs, and adjust the verdict accordingly.

(b) Awards for all past damages, all damages for future loss of services, all damages for future loss of consortium, all damages in wrongful death actions, and damages for future pain and suffering of five hundred thousand dollars or less shall be paid in a lump sum.  In any case in which all damages are to be paid in lump sums, the judgment shall be entered on the total of the lump sums, without further regard to this section.

(c) As to any award of damages for future pain and suffering in excess of five hundred thousand dollars, the court shall determine the greater of thirty-five percent of such damages or five hundred thousand dollars and such amount shall be paid in a lump sum.  The remaining amount of the award for damages for future pain and suffering shall be paid in a stream of payments over the period of time determined by the trier of fact or eight years, whichever is less.  The stream of payments for future pain and suffering shall be calculated by dividing the remaining amount of damages for future pain and suffering by the number of years over which such payments shall be made to determine the first year’s payment and the payment due in each succeeding year shall be computed by adding four percent to the previous year’s payment.  The court shall determine the present value of the stream of payments by applying a discount rate to the stream of payments.

(d) The findings of future economic and pecuniary damages except in wrongful death actions, shall be used to determine a stream of payments for each such item of damages by applying (i) the growth rate, to the (ii) annual amount in current dollars, for the (iii) period of years, all of such items as determined by the finder of fact for each such item of damages.  The court shall determine the present value of the stream of payments for each such item of damages by applying a discount rate to the stream of payments.  After determining the present value of the stream of payments for future economic and pecuniary damages, thirty-five percent of that present value shall be paid in a lump sum, and the stream of payments for future economic and pecuniary damages shall be adjusted accordingly by proportionately reducing each item of the remaining stream of payments for future economic and pecuniary damages and paying those amounts over time in the form of an annuity in accordance with the provisions set forth in subdivision (g) of this section, subject to the adjustments and deductions specified in subdivision (f) of this section.

(e) The discount rate to be used in determining the present value of all streams of payments for periods of up to twenty years shall be the rate in effect for the ten-year United States Treasury Bond on the date of the verdict.  As to any streams of payments for which the period of years exceeds twenty years, the discount rate to be used in determining the present value shall be calculated by averaging, on an annual basis, the rate in effect for the ten-year United States Treasury Bond on the date of the verdict for the first twenty years and two percentage points above the rate in effect for the ten-year United States Treasury Bond on the date of the verdict for the years after twenty years.

(f) After making the applicable calculations set forth above:

  1. The court shall apply any set-offs for comparative negligence and settlements by deducting them proportionately from each item of the damages awards, including the lump sum payments specified in subdivisions (b), (c), and (d) of this section, and the present value of the streams of payments specified in such subdivisions (c) and (d).  After such deductions, the streams of payments specified in such subdivisions (c) and (d) and their present value shall be adjusted accordingly.
  2. The court shall then deduct the litigation expenses of the plaintiff’s attorney proportionately from each remaining item of the damages awards, including the remaining lump sum payments specified in such subdivisions (b), (c), and (d), and the present value of the remaining streams of payments specified in such subdivisions (c) and (d), and such expenses shall be paid in a lump sum.  After said deductions, the streams of payments specified in such subdivisions (c) and (d) and their present value shall be adjusted accordingly.
  3. The court shall then determine the attorney’s fees based upon the remaining damages awards, including the remaining lump sum payments specified in such subdivisions (b), (c), and (d), and the present value of the remaining streams of payments specified in such subdivisions (c) and (d).  The attorney’s fees shall be deducted proportionately from each item of the remaining damages awards, including the remaining lump sum payments specified in such subdivisions (b), (c), and (d), and the present value of the remaining streams of payments specified in such subdivisions (c) and (d), and such fees shall be paid in a lump sum.  After said deductions, the stream of payments specified in such subdivisions (c) and (d) and their present value shall be adjusted accordingly.
  4. Any liens which are not the subject of a separate award by the finder of fact shall then be deducted proportionately from each item of the remaining damages awards, including the remaining lump sum payments specified in such subdivisions (b), (c), and (d), and the present value of the remaining streams of payments specified in such subdivisions (c) and (d), and such liens shall be paid in a lump sum.  After said deductions, the stream of payments specified in such subdivisions (c) and (d) and their present value shall be adjusted accordingly.

(g) The defendants and their insurance carriers shall be required to offer and to guarantee the purchase and payment of an annuity contract to make annual payments in equal monthly installments of the remaining streams of payments specified in such subdivisions (c) and (d), after making the deductions and adjustments prescribed in subdivision (f) of this section.  The annuity contract shall provide that the payments shall run from the date of the verdict (unless some other date is specified in the verdict) for the period of years determined by the finder of fact (except the stream of payments for future pain and suffering, which shall not exceed eight years) or the life of the plaintiff, whichever is shorter, except that:

  1. awards for lost earnings shall be paid for the full term of the award determined by the finder of fact;  and
  2. awards for any item of economic or pecuniary damages as to which the finder of fact found that the loss or item of damage is permanent, the payments for that item shall continue to run for the entire life of the plaintiff, increasing each year beyond the period of years determined by the finder of fact at the same growth rate as determined by the finder of fact.

(h) The judgment shall be entered on the lump sum payments and the present value of the streams of payments required to be made by the defendants under this section.

NY CPLR § 5032. FORM OF SECURITY

Security authorized or required for payment of a judgment for periodic installments entered in accordance with this article must be in the form of an annuity contract, executed by a qualified insurer and approved by the superintendent of financial services pursuant to section five thousand thirty-nine of this article, and approved by the court.

NY CPLR § 5033. POSTING AND MAINTAINING SECURITY

(a) If the court enters a judgment for periodic installments, each party liable for all or a portion of such judgment shall separately or jointly with one or more others post security in an amount necessary to secure payment for the amount of the judgment for future periodic installments within thirty days after the date the judgment is entered.  A liability insurer having a contractual obligation and any other person adjudged to have an obligation to pay all or part of a judgment for periodic installments on behalf of a judgment debtor is obligated to post security to the extent of its contractual or adjudged obligation if the judgment debtor has not done so.

(b) A judgment creditor or successor in interest and any party having rights may move that the court find that security has not been posted and maintained with regard to a judgment obligation owing to the moving party.  Upon so finding, the court shall order that security complying with this article be posted within thirty days.  If security is not posted within that time and subdivision (c) of this section does not apply, the court shall enter a judgment for the lump sum as such sum is determinable under the law without regard to this article.

(c) If a judgment debtor who is the only person liable for a portion of a judgment for periodic installments fails to post and maintain security, the right to lump sum payment described in subdivision (b) of this section applies only against that judgment debtor and the portion of the judgment so owed.

(d) If more than one party is liable for all or a portion of a judgment requiring security under this article and the required security is posted by one or more but fewer than all of the parties liable, the security requirements are satisfied and those posting security may proceed under subdivision (b) of this section to enforce rights for security or lump sum payment to satisfy or protect rights of reimbursement from a party not posting security.

New York Causes of Action

NY CPLR § 5034. FAILURE TO MAKE PAYMENT

If at any time following entry of judgment, a judgment debtor fails for any reason to make a payment in a timely fashion according to the terms of this article, the judgment creditor may petition the court which rendered the original judgment for an order requiring payment by the judgment debtor of the outstanding payments in a lump sum.  In calculating the amount of the lump sum judgment, the court shall total the remaining periodic payments due and owing to the judgment creditor, as calculated pursuant to subdivision (e) of section five thousand thirty-one of this article, and shall not convert these amounts to their present value.  The court may also require the payment of interest on the outstanding judgment.

NY CPLR § 5036. ADJUSTMENT OF PAYMENTS

(a) If, at any time after entry of judgment, a judgment creditor or successor in interest can establish that the continued payment of the judgment in periodic installments will impose a hardship, the court may, in its discretion, order that the remaining payments or a portion thereof shall be made to the judgment creditor in a lump sum.  The court shall, before entering such an order, find that:  (i) unanticipated and substantial medical, dental or other needs have arisen that warrant the payment of the remaining payments, or a portion thereof, in a lump sum;  (ii) ordering such a lump sum payment would not impose an unreasonable financial burden on the judgment debtor or debtors;  (iii) ordering such a lump sum payment will accommodate the future medical and other needs of the judgment creditor;  and (iv) ordering such a lump sum payment would further the interests of justice.

(b) If a lump sum payment is ordered by the court, such payment shall be made by the medical malpractice insurance association created pursuant to article fifty-five of the insurance law and shall not be the obligation of the insurer providing the initial annuity contract.  Such insurer shall thereafter make all future payments due under its annuity contract to the association, except that, if the lump sum payment ordered by the court is a portion of the remaining periodic payments, such insurer shall appropriately apportion future payments due under its annuity contract between the association and the judgment creditor or successor in interest.  Such lump sum payment to be paid to the judgment creditor or successor in interest by the association shall be calculated on the basis of the present value of the annuity contract, which shall be based on its cost at such time, for remaining periodic payments, or portions thereof, that are converted into a lump sum payment.  In no event shall such lump sum payment be greater than the present value of the annuity contract for the remaining periodic payments.

NY CPLR § 5037. SETTLEMENTS

Nothing in this article shall be construed to limit the right of a plaintiff, defendant or defendants and any insurer to settle dental, medical or pediatric malpractice claims as they consider appropriate and in their complete discretion.

NY CPLR § 5038. ASSIGNMENT OF PERIODIC INSTALLMENTS

An assignment of or an agreement to assign any right to periodic installments for future damages contained in a judgment entered under this article is enforceable only as to amounts:  (a) to secure payment of alimony, maintenance, or child support;  (b) for the cost of products, services, or accommodations provided or to be provided by the assignee for medical, dental or other health care;  or (c) for attorney’s fees and other expenses of litigation incurred in securing the judgment.

NY CPLR § 5039. DUTIES OF SUPERINTENDENT OF FINANCIAL SERVICES

The superintendent of financial services shall establish rules and procedures for determining which insurers, self-insurers, plans or arrangements are financially qualified to provide the security required under this article and to be designated as qualified insurers.

Updated: September 8, 2019.

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