Punitive damages continue to bite the dust

FLORIDA LAW WEEKLY

VOLUME 48, NUMBER 48

CASES FROM THE WEEK OF December 1, 2023

ANOTHER CASE CONCLUDING THAT THE EGREGIOUS CONDUCT INVOLVED DID NOT RISE TO THE LEVEL TO STATE A CLAIM FOR PUNITIVE DAMAGES

Hospitalist Specialists v. Deen, 48 Fla. L. Weekly D2214 (Fla. 5^th DCA Nov. 21, 2023):

A man had a colonoscopy. He later went to the emergency room complaining of abdominal pain.  A CT scan revealed that his colon had been perforated.  The decedent was admitted for surgery to repair his colon. 

That same evening, the nurses on duty noted that he was hypotensive and drowsy.  The nurses contacted the hospitalist group after hours answering service to get information about the patient’s condition. The Group’s advanced nurse practitioner called the nurses back.

At approximately 5:45 the next morning, hospital nurses again notified the nurse practitioner that the patient was hypotensive and had a critically elevated troponin. An EKG then showed he had suffered an acute myocardial infarction. He died the next day. 

The plaintiff sued the hospitalist provider for its vicarious responsibility for the nurse practitioner’s negligence.  She later moved for punitive damages, asserting that the president of the group committed acts of intentional or gross negligence by assigning a nurse practitioner to handle the after hours care to a patient with complex problems beyond the nurse practitioner’s permissible scope of practice.

The Plaintiff alleged that by doing so, the defendant violated its written practice protocol, limiting the nurse practitioners care to patients with “common health problems” and that the president had condoned, ratified, or consented to the allegedly gross negligent care. 

Before punitive damages may be imposed against an employer, principal, corporation, or other legal entity for the conduct of one of its employees or agents, the employee or agent’s behavior must be of a nature to constitute “intentional misconduct” or “gross negligence.” 

“Intentional misconduct” means that the defendant had actual knowledge of the wrongful conduct, and a high probability that injury or damage to the claimant would result; yet despite that knowledge, the defendant intentionally pursued a course of conduct resulting in injury or damage. 

Gross negligence is separately defined as conduct that is “so reckless or wanting in care that it constituted a conscious disregard or indifference to the life, safety, or right to persons exposed to such conduct.”

If the conduct of the employer or agent meets either threshold, then the employer, principal or corporation may be subject to punitive damages, if it has actively or knowingly participated in such conduct, its officers, directors, or managers knowingly condoned ratified or consented to such conduct, or the officer directors or managers engaged in conduct that constituted gross negligence and contributed to the loss or injury.

Punitive damages are not compensation, but rather private fines levied by civil juries to punish reprehensible conduct and deter future occurrences.  They are reserved for conduct that is so outrageous in character, and so extreme in degree, that it would lead an average member of the community to exclaim “that’s outrageous!”

In that vein, the Florida Supreme Court has analogized the level of negligence to the one necessary for conviction for criminal manslaughter (NOTE: That is not the current statutory standard, but still, the case law is replete with that standard and it gets erroneously repeated often). 

The plaintiff’s argument for punitive damages was not predicated on whether the nurse practitioner could administer care for hypotension, but rather on whether knowing the complexity of the patient’s medical problems, the nurse practitioner should have consulted with the physician; a violation of the Defendant’s protocol. 

The dispositive question was whether assigning the nurse practitioner to take after hours call for the physicians’ patients was so outrageous in character as to expose the defendant to a claim for punitive damages. The court said no.

A finding of intentional misconduct under the statute would have required the doctor to have had actual knowledge that under the circumstances, showed a high probability that additional injury or damage would result to the patient, by permitting the nurse practitioner to take the after-hours call.

There was not sufficient proffered evidence that the physician either knew or intended for the nurse practitioner to independently order medical treatment outside the scope of the nurse practitioner’s practice without consulting the doctor.

Even if there were sufficient evidence, the doctor would have had to have known there was a high probability of additional injury. There was not sufficient record evidence to demonstrate that the doctor was not available or refused to consult, undermining the plaintiff’s ability to demonstrate a reasonable basis for intentional misconduct. 

The court drew the same conclusion on gross negligence.  Again, there was no evidence to show that the physician was unavailable to consult if an issue arose, and the facts did not rise to the level of showing that the defendant — through the nurse practitioner — evinced reckless disregard or indifference to human life, to meet the definition of gross negligence.  Allowing the nurse practitioner to take after hours call did not rise to a willful malicious level where the defendant could be found directly liable for punitive damages.

YET EVEN ANOTHER CASE WHERE THE TRIAL COURT ERRED IN GRANTING THE PLAINTIFF’S MOTION TO AMEND TO ADD A COUNT FOR PUNITIVE DAMAGES—THIS TIME IN A NEGLENT HIRING CASE

Ebsary Foundation Co., v. Servinsky, 48 Fla. L. Weekly D2225 (Fla. 4^th DCA Nov. 22, 2023):

The defendant hired the defendant driver as a superintendent and provided him with a company vehicle. While driving that vehicle, the defendant driver crashed into the plaintiff, totaling both vehicles and causing significant injuries. 

The plaintiffs sought to amend their complaint to assert punitive damages, alleging that the company was grossly negligent in hiring the driver without conducting an adequate pre-employment screening, in failing to obtain a driving and criminal history, and in failing to confirm that he had a valid driver’s license.

In support of their motion, the plaintiffs attached the driver’s job offer, the crash report, the screening pre-form, and the company’s president’s handwritten notes about his post-accident termination discussion with the driver. 

The court found that the plaintiff’s proffered evidence was not directly related to the allegation that the company was grossly negligent in hiring the driver. The crash report addressed the smell of alcohol on the driver after the driver was hired.  The plaintiff’s observation that he reeked of alcohol at the accident scene also occurred after he was hired.  The handwritten notes about the driver’s termination, including the presence of beer bottles in his company vehicle, also occurred after he was hired.

The plaintiff argued that the company was grossly negligent without determining if he had a valid driver’s license, and without a background report.  However, the company hired the driver before receiving the background report, doing so with a note stating that it was contingent upon a negative drug test and acceptable background check. The company’s president testified that the driver’s license was suspended for unpaid fees, and he was not allowed to drive the company vehicle until it was reinstated. 

Allegations of misfeasance or malfeasance, or breaches of a professional standard of care cannot without more be converted into a claim for punitive damages simply by labeling them grossly negligent.  As noted in the case cited above, the conduct reserved for punitive damages must be so outrageous in character and so extreme in degree that the facts of the case would have an average member of the community exclaim “outrageous!” in considering the behavior.

Because these allegations were not so outrageous as to allow the claim for punitive damages, the court reversed the order allowing this amendment too.

TRIAL COURT PROPERLY COMPELLED INSURER TO PRODUCE DOCUMENTS FROM ITS CLAIMS AND UNDERWRITING FILES – – THOSE DOCUMENTS ARE NOT AUTOMATICALLY WORK PRODUCT AND THE INSURER DID NOT PROVE THAT THE REQUESTED DOCUMENTS WERE PREPARED IN ANTICIPATION OF LITIGATION

Homeowners Choice Property and Cas. v. Thompson, 48 Fla. L. Weekly D2218 (Fla. 1^st DCA Nov. 22, 2023):

In this first party breach of contract lawsuit, the insurer argued that its underwriting files were categorically protected against discovery. The case arose out of damage sustained to the insureds’ home in hurricane Sally in 2020.

The insureds sued for breach of their insurance contract, and sought discovery of the insurer’s field adjuster notes, evaluations, inspections reports and photos kept in the ordinary course of business.  They also sought documents or evidence supporting the insurer’s denial of the claim or its defenses or its affirmative defenses. 

The insurer asserted a categorical work product privilege objection, and ultimately the trial court ordered it to file the disputed documents under seal with a privilege log. 

Once the trial court reviewed the documents in camera, it overruled part of the insurer’s objections to the production of some of the disputed documents, and sustained others. 

The court noted that documents in claims and underwriting files are not automatically work product. Also, the insurer did not argue or prove that the requested documents were prepared in anticipation of litigation, and to the contrary, the documents ordered produced were created just days after the hurricane and before any coverage determination had been made. 

The court also rejected the insurer’s broad confidentiality, proprietary and trade secret objections raised in its privilege log.