COA affirms when interest on payments from state fund begins to accrue

The Indiana Court of Appeals affirmed the trial court ruling in a dispute over what interest rate is charged and when it begins to accrue on payments due from the Indiana Patient’s Compensation Fund to successful medical malpractice claimants.

M.O. won a medical malpractice lawsuit and was awarded $1.25 million by the jury. The health care provider paid $250,000, so M.O. added the Indiana Patient’s Compensation Fund as a party to recover the remaining judgment. In June 2011, the trial court ordered the fund to pay M.O. $1 million, which it did in September 2011. Then M.O. filed a motion for postjudgment interest; the trial court held M.O. is entitled to interest at an 8 percent rate to be paid by the fund and it began accruing as of Jan. 15, 2011.

M.O. and the fund believe different statutes apply regarding the correct postjudgment interest rate. M.O. argued that Indiana Code 34-13-3-18 (1998) is appropriate; the fund claimed that I.C. 24-4.6-1-101 (1993), the statute the trial court relied on, is the correct statute.

In M.O. v. Indiana Dept. of Insurance, Indiana Patient's Compensation Fund, No. 53A05-1112-PL-682, the COA relied on Poehlman v. Feferman, 717 N.E.2d 578 (Ind. 1999), to affirm the trial court ruling. I.C. 24-4.6-1-101 applies to M.O.’s case, Senior Judge John Sharpnack wrote, and that statute dictates that 8 percent is the correct postjudgment interest. The judges also cited Poehlman to support the trial court’s finding that Jan. 15, 2011, is the correct date for interest to begin accruing. In Poehlman, the Supreme Court concluded that postjudgment interest accrues upon the fund’s liability for damages “beginning on the first biannual payment date applicable to the claim.”

A patient that seeks payment from the fund must send a certified copy of the final judgment to the fund. Once the fund agrees to or is ordered to pay a patient’s claims for damages, the commissioner of the Department of Insurance submits a voucher to the auditor of the state, who issues payments from the fund biannually.

M.O. submitted a certified copy of the jury verdict against the health care provider to the fund on Oct. 12, 2010. The next payment date under Indiana Code 34-18-6-4 was Jan. 15, 2011.