Code Details

Code of Civil Procedure – CCP
PART 2. OF CIVIL ACTIONS [307 – 1062.34] ( Part 2 enacted 1872. )
TITLE 8. OF THE TRIAL AND JUDGMENT IN CIVIL ACTIONS [577 – 674] ( Title 8 enacted 1872. )

CHAPTER 8. The Manner of Giving and Entering Judgment [664 – 674] ( Chapter 8 enacted 1872. )

Exact Statute Text

(a) In any action for injury or damages against a provider of health care services, a superior court shall, at the request of either party, enter a judgment ordering that money damages or its equivalent for future damages of the judgment creditor be paid in whole or in part by periodic payments rather than by a lump-sum payment if the award equals or exceeds two hundred fifty thousand dollars ($250,000) in future damages. In entering a judgment ordering the payment of future damages by periodic payments, the court shall make a specific finding as to the dollar amount of periodic payments which will compensate the judgment creditor for such future damages. As a condition to authorizing periodic payments of future damages, the court shall require the judgment debtor who is not adequately insured to post security adequate to assure full payment of such damages awarded by the judgment. Upon termination of periodic payments of future damages, the court shall order the return of this security, or so much as remains, to the judgment debtor.

(b) (1) The judgment ordering the payment of future damages by periodic payments shall specify the recipient or recipients of the payments, the dollar amount of the payments, the interval between payments, and the number of payments or the period of time over which payments shall be made. Such payments shall only be subject to modification in the event of the death of the judgment creditor.

(2) In the event that the court finds that the judgment debtor has exhibited a continuing pattern of failing to make the payments, as specified in paragraph (1), the court shall find the judgment debtor in contempt of court and, in addition to the required periodic payments, shall order the judgment debtor to pay the judgment creditor all damages caused by the failure to make such periodic payments, including court costs and attorney’s fees.

(c) However, money damages awarded for loss of future earnings shall not be reduced or payments terminated by reason of the death of the judgment creditor, but shall be paid to persons to whom the judgment creditor owed a duty of support, as provided by law, immediately prior to their death. In such cases the court which rendered the original judgment, may, upon petition of any party in interest, modify the judgment to award and apportion the unpaid future damages in accordance with this subdivision.

(d) Following the occurrence or expiration of all obligations specified in the periodic payment judgment, any obligation of the judgment debtor to make further payments shall cease and any security given, pursuant to subdivision (a) shall revert to the judgment debtor.

(e) As used in this section:

(1) “Future damages” includes damages for future medical treatment, care or custody, loss of future earnings, loss of bodily function, or future pain and suffering of the judgment creditor.

(2) “Periodic payments” means the payment of money or delivery of other property to the judgment creditor at regular intervals.

(3) “Health care provider” means any person licensed or certified pursuant to Division 2 (commencing with Section 500) of the Business and Professions Code, or licensed pursuant to the Osteopathic Initiative Act, or the Chiropractic Initiative Act, or licensed pursuant to Chapter 2.5 (commencing with Section 1440) of Division 2 of the Health and Safety Code; and any clinic, health dispensary, or health facility, licensed pursuant to Division 2 (commencing with Section 1200) of the Health and Safety Code. “Health care provider” includes the legal representatives of a health care provider.

(4) “Professional negligence” means a negligent act or omission to act by a health care provider in the rendering of professional services, which act or omission is the proximate cause of a personal injury or wrongful death, provided that such services are within the scope of services for which the provider is licensed and which are not within any restriction imposed by the licensing agency or licensed hospital.

(f) It is the intent of the Legislature in enacting this section to authorize the entry of judgments in malpractice actions against health care providers which provide for the payment of future damages through periodic payments rather than lump-sum payments. By authorizing periodic payment judgments, it is the further intent of the Legislature that the courts will utilize such judgments to provide compensation sufficient to meet the needs of an injured plaintiff and those persons who are dependent on the plaintiff for whatever period is necessary while eliminating the potential windfall from a lump-sum recovery which was intended to provide for the care of an injured plaintiff over an extended period who then dies shortly after the judgment is paid, leaving the balance of the judgment award to persons and purposes for which it was not intended. It is also the intent of the Legislature that all elements of the periodic payment program be specified with certainty in the judgment ordering such payments and that the judgment not be subject to modification at some future time which might alter the specifications of the original judgment.

(Amended by Stats. 2022, Ch. 17, Sec. 4. (AB 35) Effective January 1, 2023.)

Code of Civil Procedure § 667.7 Summary

California Code of Civil Procedure (CCP) § 667.7 is a pivotal statute within California’s Medical Injury Compensation Reform Act (MICRA) that applies specifically to medical malpractice lawsuits. It allows, at the request of either party, a superior court to order that future damages awarded in a medical malpractice case be paid out over time in periodic payments, rather than as a single lump sum. This provision comes into play when the award for future damages – which includes things like future medical care, lost earnings, and pain and suffering – equals or exceeds $250,000.

The court must make specific findings about the dollar amount and schedule of these payments. To protect the injured party, the court must also require uninsured or inadequately insured judgment debtors (the at-fault health care providers) to post security to guarantee these future payments. The judgment must clearly specify who receives the payments, their amounts, intervals, and the total duration. While generally not modifiable, an exception exists if the judgment creditor (the injured patient) dies; however, future earnings payments continue for dependents. If a judgment debtor fails to make payments consistently, they can be held in contempt of court and ordered to pay additional damages, court costs, and attorney’s fees.

Purpose of Code of Civil Procedure § 667.7

The primary purpose of Code of Civil Procedure § 667.7, as explicitly stated by the California Legislature, is to address specific challenges associated with large lump-sum damage awards in medical malpractice cases. Before this statute, a substantial lump sum for future medical care or lost wages could be paid to a severely injured plaintiff, but if that plaintiff died shortly after, the remaining funds might go to heirs for purposes unrelated to the plaintiff’s ongoing care. This was viewed as a “windfall.”

By authorizing periodic payments, the Legislature intended to ensure that compensation for an injured plaintiff and their dependents directly matches their ongoing needs for the necessary duration. This structured approach aims to provide a consistent, reliable income stream for long-term care, support, and other future damages, rather than a potentially mismanaged or prematurely exhausted lump sum. Furthermore, the statute seeks to establish certainty, mandating that the periodic payment schedule and terms be clearly defined in the judgment and generally not subject to future modification, ensuring predictability for both the plaintiff and the health care provider.

Real-World Example of Code of Civil Procedure § 667.7

Imagine a scenario where 45-year-old Sarah undergoes a routine surgical procedure, but due to a surgeon’s severe negligence, she suffers catastrophic brain damage. As a result, Sarah requires lifelong skilled nursing care, extensive physical therapy, specialized medical equipment, and can no longer work, losing all future earning capacity.

Sarah files a medical malpractice lawsuit against the hospital and the negligent surgeon. After a lengthy trial, the jury awards Sarah $5 million in total damages, with $3 million specifically designated for “future damages” (including future medical treatment, care, and lost earnings). Since this amount far exceeds the $250,000 threshold, the defense attorney for the hospital requests that the court implement periodic payments for the future damages portion of the award, as permitted by CCP § 667.7.

The court grants the request. Instead of receiving a lump sum of $3 million, Sarah’s judgment is structured. The judge specifies that Sarah will receive monthly payments of $12,500 for the next 20 years, adjusted for inflation, to cover her ongoing medical care, living expenses, and lost income. The hospital, as the judgment debtor, is required to post security (e.g., an annuity or bond) to guarantee these payments, ensuring Sarah’s financial stability even if the hospital faces future financial difficulties.

If, after 10 years, Sarah unfortunately passes away, the payments designated for her personal medical care and pain and suffering would cease. However, the portion of the periodic payments intended for “loss of future earnings” would continue to be paid to her children, whom she supported, as specified in subdivision (c) of the statute, until the end of the original 20-year period. This system ensures Sarah receives consistent care throughout her life, avoids the “windfall” issue, and provides for her dependents if she passes prematurely.

Related Statutes

Code of Civil Procedure § 667.7 is a critical component of California’s Medical Injury Compensation Reform Act (MICRA) of 1975. As such, it is closely related to several other statutes within MICRA that collectively aim to control costs and liabilities in medical malpractice cases.

• Civil Code § 3333.2 – Limitation on Non-economic Damages: This statute caps non-economic damages (such as pain and suffering) in medical malpractice cases at $250,000 (though this cap has been adjusted and will continue to be adjusted under recent amendments to MICRA). While CCP § 667.7 deals with *how* damages are paid, CC § 3333.2 limits *how much* can be awarded for certain categories.
• Civil Code § 3333.1 – Collateral Source Rule: This section modifies the traditional collateral source rule in medical malpractice cases, allowing evidence of benefits received by the plaintiff from other sources (like insurance) to be introduced to potentially reduce the defendant’s liability.
• Code of Civil Procedure § 377.60 et seq. – Wrongful Death: This set of statutes defines who can bring a wrongful death action and the types of damages recoverable. Subdivision (c) of CCP § 667.7 directly references support duties in the event of a judgment creditor’s death, tying into the framework of wrongful death beneficiaries.
• Business and Professions Code Division 2 (commencing with Section 500) and Health and Safety Code Division 2 (commencing with Section 1200): These codes, specifically referenced in subdivision (e)(3) of CCP § 667.7, define “health care provider” by referencing licensing and certification requirements for various medical professionals and facilities in California.

Case Law Interpreting Code of Civil Procedure § 667.7

Case law has been instrumental in shaping the application and understanding of Code of Civil Procedure § 667.7. Here are some key cases:

• [American Bank & Trust Co. v. Community Hospital](https://scholar.google.com/scholar_case?case=9459529243750824040&q=California+Code+of+Civil+Procedure+667.7&hl=en&as_sdt=4,5), 36 Cal.3d 379 (1984): This landmark California Supreme Court case largely upheld the constitutionality of the periodic payment provisions of MICRA, including CCP § 667.7. The court addressed arguments that the statute violated due process, equal protection, and the right to a jury trial, ultimately finding it to be a valid exercise of legislative power aimed at reducing medical malpractice insurance costs and ensuring long-term care for injured plaintiffs.
• [Hurlbut v. Sonora Community Hospital](https://scholar.google.com/scholar_case?case=17822453621404172421&q=California+Code+of+Civil+Procedure+667.7&hl=en&as_sdt=4,5), 207 Cal.App.3d 340 (1989): This appellate court decision clarified the trial court’s responsibilities under CCP § 667.7. It emphasized that when a court orders periodic payments, it must make specific findings regarding the exact dollar amounts of such payments to compensate the judgment creditor for future damages. This case underscores the statute’s requirement for certainty and specificity in the periodic payment judgment.
• [Scalice v. Performance Cleaning Systems](https://scholar.google.com/scholar_case?case=6047385473639455117&q=California+Code+of+Civil+Procedure+667.7&hl=en&as_sdt=4,5), 50 Cal.App.4th 221 (1996): While not a medical malpractice case, this case discussed the general principles of periodic payment judgments and referenced CCP § 667.7 as the statutory basis for such judgments in the medical malpractice context, illustrating its influence on the broader legal landscape concerning structured settlements.

These cases, among others, have provided crucial interpretations and applications of CCP § 667.7, guiding both legal professionals and courts in implementing its provisions.

Why Code of Civil Procedure § 667.7 Matters in Personal Injury Litigation

Code of Civil Procedure § 667.7 is incredibly important in California personal injury litigation, particularly for medical malpractice claims, because it fundamentally alters how substantial damage awards for future needs are handled. Its existence has significant implications for both plaintiffs and defendants, as well as their legal representation.

For plaintiffs, this statute can be a double-edged sword. On one hand, periodic payments provide a stable, long-term financial safety net, ensuring funds are available for continuous medical care, therapy, and living expenses throughout their lifetime, or for as long as needed. This prevents the risk of a lump sum being mismanaged, depleted too quickly, or falling into the wrong hands if the plaintiff succumbs to their injuries earlier than expected. For severely injured individuals, this guaranteed income stream can be invaluable for peace of mind. On the other hand, some plaintiffs may prefer the immediate control and flexibility of a lump sum, which this statute restricts when future damages exceed $250,000.

For defense attorneys and health care providers, CCP § 667.7 offers several advantages. It can mitigate the immediate financial burden of a large judgment, allowing payments to be spread out over time, often funded through annuities. This structured approach helps prevent the “windfall” scenario envisioned by the Legislature, where defendants might pay out a large sum only for the plaintiff to die soon after, with the remaining funds going to unintended beneficiaries. This can also make settlements more manageable and potentially reduce overall costs in some cases, especially when considering the time value of money.

Personal injury lawyers specializing in medical malpractice must be acutely aware of CCP § 667.7. They need to skillfully calculate future damages, understand the implications of periodic payments on their clients’ financial planning, and negotiate or litigate effectively within this framework. For plaintiffs’ attorneys, this involves ensuring adequate security is posted, and for defense attorneys, it means strategically proposing or challenging periodic payment structures. The statute also places a high emphasis on the specificity of the judgment, requiring lawyers to ensure all terms – payment amounts, intervals, and durations – are meticulously detailed to prevent future disputes, except in the specific instance of the judgment creditor’s death regarding future earnings. Its role in shaping structured settlements makes it a cornerstone of high-value medical malpractice claims.