from the Marion Superior Court The Honorable James A. Joven,
Judge Trial Court Cause No. 49D13-1710-CT-37220
Attorneys for Appellants Jerry Garau Barbara J. Germano Garau
Germano, P.C. Indianapolis, Indiana
Attorneys for Appellees Curtis T. Hill, Jr. Attorney General
of Indiana Thomas M. Fisher Solicitor General, Bryan R.
Findley Julia C. Payne Mollie A. Slinker Kian J. Hudson
Deputy Attorneys General Indianapolis, Indiana, A. Richard M.
Blaiklock Charles R. Whybrew Lewis Wagner, LLP Indianapolis,
The law firm of Garau Germano, P.C., ("Garau
Germano") and its client Faith Fenner
("Fenner") (collectively "the
Plaintiffs") filed a complaint for declaratory judgment
and mandate against the Indiana Patient's Compensation
Fund ("PCF"), the Indiana Department of Insurance
("IDOI"), and Stephen W. Robertson, the
Commissioner of the IDOI and the Administrator of the PCF
("the Commissioner") (collectively "the Fund
Defendants"). In their complaint, the Plaintiffs sought
to prevent the Fund Defendants from requiring that a
claimant's periodic payments agreement with a qualified
health care provider pay out the provider's maximum
liability under the Indiana Medical Malpractice Act
("MMA") before the claimant can gain access to the
PCF. The Plaintiffs appeal the trial court's order
granting the Fund Defendant's motion to dismiss and
present three issues for our review, which we reorder and
I. Whether the Plaintiffs' claim for declaratory judgment
is ripe for review;
II. Whether the Plaintiffs' claim is justiciable under
the Declaratory Judgments Act; and
III. Whether Fenner, individually, and Garau Germano, on its
own behalf, have standing to bring a complaint for mandate
against the Fund Defendants seeking to force them to comply
with what they contend to be the requirements of the MMA.
Garau Germano is a law firm that represents over one hundred
clients with medical malpractice claims, one of whom is
Fenner. Garau Germano's fees are based on the amount its
clients recover from the health care providers and the PCF.
At the time of the Plaintiffs' complaint in the instant
case, Fenner was seventy-three years old. Represented by
Garau Germano, Fenner is pursuing a claim for medical
malpractice under the MMA, alleging that her husband's
death in February 2016 was caused by the negligence of
various qualified health care providers.
The MMA, codified at Title 34, Article 18 of the Indiana
Code, allows a patient or the representative of a patient to
bring a malpractice claim for bodily injury or death.
Atterholt v. Robinson, 872 N.E.2d 633, 639
(Ind.Ct.App. 2007) (citing Ind. Code § 34-18-8-1;
Goleski v. Fritz, 768 N.E.2d 889, 891 (Ind. 2002)).
The MMA was designed to curtail liability for medical
malpractice. Id. (citing Chamberlain v.
Walpole, 822 N.E.2d 959, 963 (Ind. 2005)).
For an act of malpractice that occurs after June 30, 1999 and
before July 1, 2017,  such as the malpractice alleged by Fenner,
the MMA provides that the total amount recoverable for an
injury or death of a patient may not exceed $1, 250, 000.
Ind. Code § 34-18-14-3(a)(3). A qualified health care
provider is liable for the initial $250, 000 of damages,
the remainder of the judgment or settlement amount is paid
from the PCF. Id. § 34-18-14-3(b)(1), (c);
Robinson, 872 N.E.2d at 639. Thus, if a plaintiff
obtains a judgment against a health care provider in excess
of this $250, 000 limit, the remainder of the judgment, up to
$1, 000, 000 (for a total recovery of $1, 250, 000), is paid
from the PCF. See M.O. v. Ind. Dep't of Ins.
Patient's Comp. Fund, 968 N.E.2d 254, 259
(Ind.Ct.App. 2012) (citing Atterholt v. Herbst, 902
N.E.2d 220, 222 (Ind. 2009), clarified on reh'g,
907 N.E.2d 528 (2009)), trans. denied.
If a health care provider decides to settle a claim with a
plaintiff, there are two ways in which that plaintiff may be
eligible to recover additional damages from the PCF. The
provider may simply pay the first $250, 000. Green v.
Robertson, 56 N.E.3d 682, 691 (Ind.Ct.App. 2016) (citing
Ind. Code § 34-18-15-3(b)), trans. denied. The
provider may alternatively agree to a settlement involving
what is termed a periodic payments agreement. If a provider
opts to discharge its possible liability through such a
periodic payments agreement, then "the amount of the
patient's recovery from a health care provider in a case
under this subsection is the amount of any immediate payment
made by the health care provider or the health care
provider's insurer to the patient, plus the cost of the
periodic payments agreement to the health care provider or
the health care provider's insurer." Ind. Code
In cases, such as this one, where the act of malpractice
occurred after June 30, 1999 but before July 1, 2017, to
determine the limitations on recovery stated in Indiana Code
subsections 34-18-14-3(b) and -(3)(d):
the sum of the present payment of money to the patient (or
the patient's estate) by the health care provider (or the
health care provider's insurer) plus the cost of the
periodic payments agreement expended by the health care
provider (or the health care provider's insurer) must
(1) one hundred eighty-seven thousand dollars ($187, 000)[.]
I.C. § 34-18-14-4(b).
In other words, to determine whether a provider has reached
the limits on its liability, thereby triggering access to the
PCF, the total cost of the present payment to the patient
plus the cost of procuring a periodic payments agreement must
exceed $187, 000. See Herbst, 902 N.E.2d at 222
("Recovery of excess damages from the Fund is allowed
only after a health care provider or the provider's
insurer has paid the first $250, 000, or made a settlement in
which the sum of the present cash payment and cost of future
periodic payments exceeds $187, 000.") (citations
omitted); Green, 56 N.E.3d at 691 (noting that a
claimant may gain access to the PCF by agreeing to a
settlement in which the present payment of money and the cost
of future payments exceeds $187, 000) (citing Ind. Code
The Plaintiffs claim that the Fund Defendants do not follow
the language of the statute as explained in Herbst
and Green and impose an additional non-statutory
requirement before allowing a claimant access to the PCF.
Specifically, they allege that the Fund Defendants also
require that a periodic payments agreement pay out the
provider's maximum liability before allowing a claimant
to access the PCF. In other words, not only must the cost of
the present payment plus the cost to procure a periodic
payments agreement exceed $187, 000, but the amount of the
present payment plus total amount paid out over time must
also equal $250, 000.
The Plaintiffs assert that the MMA does not require a
periodic payments agreement to pay out the health care
provider's maximum liability and instead contend that a
claimant may gain access to the PCF merely by entering into a
settlement agreement where the present payment, plus the cost
to the provider to procure a period payments agreement, costs
more than $187, 000. See Herbst, 902 N.E.2d at 222;
Green, 56 N.E.3d at 691.
Such periodic payments are usually procured by the provider
purchasing an annuity. Interest rates are now very low. Thus, in
order to purchase an annuity where any present payment plus
the total amount paid out of the annuity over time amounts to
$250, 000 requires the future payments to be paid out over
decades. This is an issue with an elderly plaintiff such as
Fenner, who, in order to gain access to the PCF, might agree
to a settlement including an annuity that would not pay out
over her expected lifetime. This, the Plaintiffs contend,
"forces older claimants to forfeit a portion of a
recovery which is already limited by the terms of the
[MMA]," whereas "younger victims of medical
malpractice can structure their annuities in such a way that
they likely will receive the payments in their
lifetime[.]" Appellants' Br. at 10.
Garau Germano alleges that it often settles claims with
health care providers via periodic payments agreements that
grant its clients access to the PCF. Garau Germano represents
Fenner and many similarly situated clients "who face the
effective forfeiture of a portion of their already limited
settlements because of the Fund Defendants' requirement
that periodic payments agreements pay out the health care
provider's maximum liability." Id. at 11.
Because of the Fund Defendants' policy, Garau Germano
claims that it cannot advise its clients to accept a periodic
payments agreement that costs over $187, 000 but that does
not pay out the health care provider's maximum liability
Fenner claims she is therefore unable to evaluate any
potential settlement offers or options because of the Fund
Defendants' interpretation of the MMA. Fenner alleges
that if she were to purchase an annuity as part of a
settlement, she "may be required to essentially forfeit
a portion of any settlement she receives from the defendant
health care providers in her action." Appellants'
App. p. 35. She does not, however, allege that she has
received any actual settlement offers.
On October 3, 2017, Garau Germano filed a verified complaint
for mandate against the Fund Defendants, which sought a
mandate to prohibit them from requiring that a claimant's
periodic payments agreement pay out the health care
provider's maximum liability before granting that
claimant access to the PCF.
On January 12, 2018, the Fund Defendants filed a motion to
dismiss Garau Germano's complaint for lack of standing.
In response, on March 20, 2018, Garau Germano filed an
amended complaint, adding Fenner as a plaintiff and the
Commissioner as a defendant. The amended complaint also
included a request for ...