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Naccache v. Taylor

Court of Appeals of The District of Columbia

December 21, 2018

Maurice F. Naccache, ET AL., Appellants,
Angela M. Taylor, Appellee.

          Argued September 20, 2017

          Appeal from the Superior Court of the District of Columbia (CAM-8012-07) (Hon. John Ramsey Johnson, Trial Judge)

          Carl J. Schifferle, Assistant Attorney General, with whom Karl A. Racine, Attorney General, Todd S. Kim, Solicitor General at the time the brief was filed, and Loren L. AliKhan, Deputy Solicitor General at the time the brief was filed, were on the brief, for appellants.

          Keith W. Donahoe, with whom Frank R. Kearney was on the brief, for appellee.

          Before Fisher and Beckwith, Associate Judges, and Steadman, Senior Judge.

          Beckwith, Associate Judge.

         A Superior Court jury awarded appellee Angela Taylor $6.5 million in damages following a trial at which she alleged that appellant Maurice Naccache, an obstetrician employed by the District of Columbia, had provided negligent prenatal care that led to her son's premature birth and his severe and permanent developmental injuries. The District of Columbia, which participated in the trial on Dr. Naccache's behalf and continues to participate here, challenges two of the trial court's orders pertaining to the jury award. At issue in this appeal is the meaning of the statute providing for interest on judgments against the District of Columbia "at the rate of not exceeding 4% per annum," D.C. Code § 28-3302 (b) (2018 Repl.), and the validity of a lien the District imposed upon Ms. Taylor's jury award in order to secure reimbursement for all Medicaid expenses incurred by Ms. Taylor's son following the entry of judgment.

         The jury's award included damages "with interest, thereon at the statutory rate and their costs of action." Of the $6.5 million awarded, the jury allocated $3.3 million to future care costs, but did not allocate any portion of the judgment for past Medicaid expenses.[1] Two weeks after the October 2010 verdict, the District filed a Health Care Reimbursement Lien-or Medicaid lien-on Ms. Taylor's judgment in the amount of $764, 277.46 for Medicaid payments the District made for Ms. Taylor's son's medical care prior to the entry of judgment. The District also filed a motion for a remittitur of $1.8 million in the award of "future care costs." After the trial court denied the District's request to reduce the amount of the jury award, the District twice amended the lien, first to $779, 928.81 in August 2013 and then again to $851, 233.07 in January 2015-figures that for the first time included Medicaid expenses incurred after the verdict.[2]

         In March 2015, more than four years after the verdict and almost two years after this court affirmed the judgment on appeal, [3] the court entered a consent order establishing that the jury award would be "placed in a Special Needs Trust for the sole benefit" of Ms. Taylor's son, [4] but that the amount the District asserted as a Medicaid lien for pre- and post-judgment expenses-at that time, some $850, 000-would be placed into the court registry pending a final order on the validity of the lien. At oral argument, counsel for Ms. Taylor represented that prior to this time, she had not received any portion of the judgment because the judgment was automatically stayed when the District filed its first appeal, and that as a result, in the interim, she had qualified for and collected Medicaid payments.

         In the months following the issuance of the consent order, the trial court issued two additional orders granting motions filed by Ms. Taylor: the first, in July 2015, approved costs and interest on the judgment at 4% per year pursuant to D.C. Code § 28-3302 (b), [5] and the second, in December 2015, granted declaratory and injunctive relief striking as invalid the Medicaid lien the District had imposed on the judgment. Dr. Naccache and the District now appeal from these orders. For the reasons explained below, we affirm the trial court's decision to strike the Medicaid lien for all future care costs after the creation of the supplemental needs trust, but reverse the order striking the District's lien for medical care costs covered between the entry of the judgment in 2010 and the establishment of the trust in 2015. We also reverse the order awarding interest at 4% per year and remand for clarification as to whether the trial court exercised its discretion in making that award.

         I. The Post-Judgment Interest Order

         D.C. Code § 28-3302 (b) provides that "[i]nterest, when authorized by law, on judgments or decrees against the District of Columbia, or its officers, or its employees acting within the scope of their employment, is at the rate of not exceeding 4% per annum." At issue here is whether "not exceeding 4% per annum" means that a trial court may award up to 4% interest or that it must award exactly 4%. The District argues that the trial court erred by awarding Ms. Taylor interest at a fixed rate of 4%, and that the court instead should have awarded interest at the lower rate applicable in suits against private parties. Ms. Taylor argues that § 28-3302 (b) required the court to award interest at 4% or, alternatively, that it permitted the court to award interest at 4%, and so the trial court did not abuse its discretion by doing so.

         We review questions of statutory interpretation de novo. E.g., District of Columbia v. Place, 892 A.2d 1108, 1110-11 (D.C. 2006); District of Columbia v. Cato Inst., 829 A.2d 237, 239 (D.C. 2003). To interpret the language of a statute, we start with "the plain meaning if the words are clear and unambiguous." Place, 892 A.2d at 1111. "[T]he words of the statute should be construed according to their ordinary sense and with the meaning commonly attributed to them." Id. (quoting Peoples Drug Stores, Inc. v. District of Columbia, 470 A.2d 751, 753 (D.C. 1983) (en banc)). Likewise, rather than reading statutory words in isolation, we "consider not only the bare meaning of the word but also its placement and purpose in the statutory scheme." Tippett v. Daly, 10 A.3d 1123, 1127 (D.C. 2010) (en banc) (quoting Bailey v. United States, 516 U.S. 137, 145 (1995)).

         In common usage, the word "exceed" means "to extend outside of" or "to go beyond a limit set by." Webster's Third New International Dictionary 791 (2002). To "not exceed," then, means that the rate of interest shall not "extend outside of" or "go beyond the limit set by." The statute is not ambiguous. The text of the statute reflects that the D.C. Council's intent was to set a cap on the rate of interest on judgments against the District and its officers at 4%, and neither party offers a competing interpretation of the plain language. The two other subsections in § 28-3302 reinforce this understanding. Had the D.C. Council intended to set an interest rate on judgments against government officials at 4%-no more no less-the Council could have stated, as it did in subsection (a), that the rate "is" 4%, or stated, as it did in subsection (c), that the rate "shall be" 4%.[6] Instead, the D.C. Council instructed in § 28-3302 (b) that the interest imposed against government officials "is at the rate of not exceeding 4% per annum," and we are bound to adhere to that language absent a compelling reason to the contrary.

         The legislative history does not provide such a reason. Section 28-3302 (b) originated from a subsection of an 1890 appropriations Act of Congress addressing payments of judgments against the District of Columbia, which provided "[t]hat hereafter interest, when authorized by law, on judgments against the District, in suits begun after the passage of this act, shall be at the rate of not exceeding four per centum per annum." Act of Sept. 30, 1890, ch. 1126, 26 Stat. 504, 514. In 1901, Congress established a code of law for the District, which, among other things, enacted the rate of interest to be allowed in judgments, setting it at 6%. See Act of Mar. 3, 1901, ch. 854 § 1178, 31 Stat. 1377. The following year, Congress clarified that its 1901 codification of a rate of interest in the District "shall not be construed to amend, alter or repeal the rate of interest fixed at four per centum per annum on judgments against [the District] by the Act approved September [30, 1890]." Act of July 1, 1902 ch. 1352, 32 Stat. 590, 610.

         In Ms. Taylor's view, this characterization of the 1890 act as having "fixed" the interest rate at 4% demonstrates that Congress agreed the interest rate on judgments against the District was required to be 4%. Based on the plainness of the "not exceeding" language and the lack of any indication that Congress perceived itself as clarifying an ambiguity in the 1890 act, however, we agree with the government that the language from the 1902 act did not intend to dramatically alter its meaning but simply described the prior law imprecisely. The subsequent history of the law supports this. In 1964, Congress enacted D.C. Code § 28-3302, which provided that "[i]nterest, when authorized by law, on judgments against the District of Columbia, is at the rate of not exceeding [4%] per annum." Act of Aug. 30, 1964, Pub. L. No. 88-509, 78 Stat. 667, 675. In the committee reports Congress indicated that this codification was "not intended to make any substantive change in existing law." H.R. Rep. No. 88-1556 at 2, 11 (1964); S. Rep. No. 88-1323 at 2, 10 (1964). And despite subsequent amendments to § 28-3302[7] by the D.C. Council, the Council has maintained the "not exceeding" language and done nothing to resurrect the counterintuitive notion suggested by Congress's 1902 interpretation that an interest rate "not exceeding" 4% is a rate that is or shall be 4% and no less. Even if we accepted Ms. Taylor's understanding of the 1902 act, we are not persuaded that a legislative statement made decades prior to the most recently amended language by a different legislative body from the one that passed the current law can thwart the plain language of this unambiguously worded statute. See, e.g., Tippett, 10 A.3d at 1131; United States Parole Comm'n v. Noble, 693 A.2d 1084, 1103 (D.C. 1997).

         Ms. Taylor highlights our case law in contending that the statute should be interpreted as a fixed rate and not a cap. But our case law does not necessitate this conclusion. In Burke v. Groover, Christie & Merritt, P.C., 26 A.3d 292 (D.C. 2011), which addressed whether the rate of post-judgment interest under § 28-3302 (c) was variable or fixed, we held that it was "not fixed as of the date of judgment but continues to fluctuate with the market during the period between entry of judgment and satisfaction of the judgment." Id. at 300. In reaching this conclusion, we found it "significant that judgments against the government are set at a fixed rate, while at the same time, 'where the judgment or decree is not against the District of Columbia' . . . the rate of interest is variable." Id. at 297 (quoting § 28-3302 (c)).

         Focusing on the words "fixed rate," Ms. Taylor argues that in Burke, we specifically held that the interest rate on judgments against the District must be set at 4%. As the District notes, however, this line in Burke may be read to say either that the rate on judgments is "fixed" at 4% or that it is "fixed" at the time of judgment. Given the court's focus upon the fluctuation in interest rates on judgments against private parties under § 28-3302 (c) between the time such judgments are entered and the time they are satisfied, the better reading of the line Ms. Taylor emphasizes is that the rate of interest against the District under § 28-3302 (b)-in contrast to § 28-3302 (c)-is "fixed" at the time of entry and therefore does not fluctuate before satisfaction of judgment. See also District of Columbia Office of Human Rights v. District of Columbia Dep't of Corr., 40 A.3d 917, 929 n.11 (D.C. 2012) (citing to Burke and referring to the 4% rate under § 28-3302 (b) as a "cap").[8]

         The trial court in this case granted Ms. Taylor's request for interest at 4% per year, but it was not clear whether, in doing so, the court interpreted § 28-3302 (b) as a cap or as a fixed rate.[9] We therefore remand to allow the court to explain how it arrived, in its discretion, at the rate of 4% or, if it viewed itself as having no discretion, to ...

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