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FLORIDA LAW WEEKLY

VOLUME 48, NUMBER 44

CASES FROM THE WEEK OF NOVEMBER 3, 2023

A SETTLEMENT OF A BAD FAITH CASE DOES NOT MEET THE STATUTORY DEFINITION OF “COLLATERAL SOURCE” UNDER SECTION 768.76(2)(a)2

Ellison v. Willoughby, 48 Fla. L. Weekly S213 (Fla. Nov. 2, 2023):

A badly injured plaintiff sued the owner of the vehicle who hit him, along with his own UM carrier. His UM policy had $10,000.00 in benefits. 

The UM carrier ultimately settled the plaintiffs claim before trial for $4 million. Subsequently, a jury awarded the plaintiff $30 million in damages against the vehicle’s co-owner. That defendant sought to set off the $4 million under section 768.76 (the collateral source statute). The defendant did not seek a set off under section 768.041(2) (release or covenant not to sue.)

The supreme court found that the defendant failed to preserve the issue by failing to raise “the specific legal ground” in the trial court. While preservation is not a “magic words” test, the court explained that the argument presented must be sufficient to inform the trial judge of the issue. 

Here, the defendant filed a motion entitled “Motion to Determine Collateral Source Set-off,” stating it was making the motion pursuant to section 768.76. 

Though it refused to decide the issue, the supreme court explained that section 768.041(2) appears within the statutory section titled “release or covenant not to sue,” and that the original law was enacted so that a plaintiff could settle with one tortfeasor without releasing all the tortfeasors at the same time, and providing for a set-off in actions against other tortfeasors.

In looking at the collateral source statute, the court observed that the statute mandates damage award reductions for sums that the plaintiff has received from “collateral sources,” and then defines collateral sources in detail. 

The defendant maintained that the plaintiff’s insurance settlement qualified as a payment “pursuant to automobile accident insurance that provided health benefits or income disability coverage or other similar insurance benefits.”  The Second District rejected that argument, ruling that an extra contractual payment on a bad faith claim did not appear to meet the definition because it was not a payment of benefits.  First party bad faith claims are creatures of statute, not of the underlying insurance contract between the parties.

One court has characterized statutory bad faith damages as a penalty; they are extra contractual damages, meaning that they are incurred over and above the amount owed pursuant to the express terms and conditions of the policy. 

The court said it would not be reasonable to interpret the term “benefits” as encompassing a statutory penalty of this kind, and such a penalty did not fit within the ordinary meaning of the word benefit. 

The defendant argued that the court should apply a definition that accomplishes the purpose of the statute, which was to prevent windfalls to plaintiffs.  The court rejected that argument.

It found that statutory purpose — if it is knowable and capable of being defined with sufficient specificity – can be an important ingredient in statutory interpretation.  However, the goal of giving effect to a law’s purpose cannot justify a reading “that stretches the statute beyond its breaking point,” concluding that a settlement payment made by an uninsured motorist carrier to settle a first party bad faith claim is not collateral source under section 768.76(2)(a)2.

COURT DID NOT ABUSE DISCRETION IN AWARDING PLAINTIFF ATTORNEYS’ FEES AND COSTS BASED ON THE DEFENDANT’S FAILURE TO COMPLY WITH A COURT ORDER TO PROVIDE BETTER RESPONSES TO INTERROGATORIES, AS WELL AS THE CONDUCT OF DEFENSE COUNSEL AT THE DEFENDANT’S CORPORATE REPRESENTATIVE’S DEPOSITION

Costco Wholesale Corp., v. Vargas, 48 Fla. L. Weekly D2068 (Fla. 3^rd DCA Oct. 25, 2023):

Plaintiff sued Costco after falling on a slippery surface and suffering personal injuries.

During discovery, the plaintiff sent an interrogatory to Costco, relating to the condition of the location where the plaintiff fell.  Costco objected, and plaintiff moved to compel.  After the trial court overruled Costco’s objection, Costco decided to answer the interrogatory by stating “see objection previously filed.” 

The plaintiff moved to compel again and sought attorney’s fees.  In response, Costco filed the affidavit of a paralegal, stating that the inadequate answer was a result of her oversight.  Still, the trial court granted the plaintiffs motion for fees against Costco for failing to comply with the prior order.

The plaintiff also set the deposition of Costco’s corporate representative.  The notice initially designated seventy-seven separate topics, although the number was reduced after Costco filed a protective order. 

The deposition, which took place remotely, began with the plaintiff’s attorney asking the representative to identify the documents he had reviewed to prepare for the deposition.  Costco’s attorney instructed the representative to refrain from disclosing anything that the attorney had said to him, or anything that the witness and the attorney exchanged. The representative then answered that the only document he had reviewed was one of the trial courts orders. 

The plaintiff’s attorney then asked the representative to provide the factual basis for the affirmative defense that the plaintiff had solely caused her injuries. The witness answered by reading from a document.

When the plaintiff’s attorney interrupted to ask about the document, the witness had testified that Costco’s attorney had emailed him earlier that morning with a document that had not been previously identified.  The witness testified he intended to answer at least some of the questions by reading from the document.

The plaintiff’s attorney then asked the witness again to provide the factual basis for one of the affirmative defenses. The witness answered. Costco’s attorney then interjected to state that the witness had read the wrong answer.  Plaintiff’s counsel ultimately terminated the deposition then sought fees and costs. The trial court again awarded them. 

The court upheld the trial court’s rulings.  It found no abuse of discretion in the trial court declining to accept the explanation that the paralegal had mistakenly filed the same objections rather than the attorney. The court also found the failure of the corporate representative witness to disclose the document he was reading from during the deposition and Costco’s attorney’s coaching of the witness also justified the trial court’s award of attorney’s fees and costs.