The Week In Torts – Cases from October 22, 2021
First party bad faith settlement not a party for a co-defendant.
FLORIDA LAW WEEKLY
VOLUME 46, NUMBER 42
CASES FROM THE WEEK OCTOBER 22, 2021
ON REHEARING, THE SECOND DISTRICT AFFIRMS DECISION THAT SETTLEMENT WITH FIRST PARTY UM INSURER IN AN AMOUNT THAT FAR EXCEEDS THE POLICY LIMITS IS NEITHER A SETTLEMENT NOR A COLLATERAL SOURCE THAT CAN BE SETOFF FROM THE JURY’S VERDICT AGAINST ANOTHER DEFENDANT
Ellison v. Willoughby, 46 Fla. L. Weekly D221 (Fla. 2nd DCA October 13, 2021):
In this case previously decided in June, the Second District granted rehearing, reaffirming its prior rulings, specifically that:
(1) The bad faith settlement the plaintiff reached with his UM carrier amounting to $3.999 million dollars in excess of the policy limits, could not constitute a “setoff” under §768.041(2) against plaintiff’s excess verdict against a co-defendant. Section 768.041(2) presupposes the existence of multiple defendants jointly and severally liable for the same damages, and the plaintiff’s settlement funds from the UM carrier applied only to the claims he asserted for breach of contact for failure to pay UM benefits not asserted against the co-defendant.
(2) There was also no setoff under §768.76(1), because the bad faith settlement proceeds did not fall within the statutory definition of “collateral source,” as set forth in the statute, because a subrogation or reimbursement right still existed and UM payments are not collateral sources to be deducted from jury verdicts.
(3) The settlement agreement recited that $1.735 million was payable to the plaintiff for his damages of personal injury or sickness within the meaning of §104(a)(2) of the Internal Revenue Code. To the extent that those payments were viewed as compensation for past medical expenses and not future medical expenses, they also could not be collateral sources as defined by §768.76(2)(a).
Likewise, the $2.265 million payment to the trust account of plaintiff’s counsel did not fall within that definition either. Where there may have been some portion of the proceeds in an amount less than the amount attributed to past medical expenses, that amount fell within the definitional ambit of §409.910(6) (involving Medicaid liens), and had no bearing on whether the proceeds met the definitional criteria of §768.76(2)(a) (which provides a narrower more specific definition of benefits and sources then §409.910(6)).
The court did note that the case presented a question of first impression and certified a question of great public importance, asking the Florida Supreme Court to answer the questions about whether the settlement payment made by an uninsured motorist insurer to settle a first party bad faith claim can be subject to a setoff under §768.041(2), or is a collateral source within the meaning of §768.76.
TRIAL COURT ERRED IN DENYING DEFENDANT’S MOTION TO COMPEL ARBITRATION BASED ON UNCONSCIONABILITY – PROVISION IMPOSING A ONE YEAR STATUTE OF LIMITATIONS FOR CLAIMS WAS INCONSISTENT WITH THE STATUTE OF LIMITATIONS AND THEREFORE VOID, BUT BECAUSE THE UNENFORCEABLE PROVISION DID NOT GO TO THE AGREEMENT’S “ESSENCE” IT WAS SEVERABLE FROM THE REST OF THE ABRITRATION AGREEMENT
Osprey Health Care Center v. Pascazi, 46 Fla. L. Weekly D2224 (Fla. 2nd DCA October 13, 2021):
A year after a woman was admitted to Osprey Health Care Center, she sued, alleging claims for negligence, breach of fiduciary duty, and violation of §415.111, Florida Statutes.
Defendant moved to compel arbitration, which plaintiff opposed, maintaining that the agreement was:
(1) Invalid because it lacked specific terms regarding arbitration rules and procedures;
(2) Void against public policy because it contained a provision impermissibly shortening the statute of limitations; and
(3) Procedurally and substantively unconscionable.
Unconscionability is a defense to enforcement of an arbitration agreement based on a common law concept that a court may refuse to enforce a contract where it would be inequitable to do so. Because the plaintiff sought to avoid arbitration on unconscionability grounds, she was burdened to establish that the arbitration agreement was both procedurally and substantively unconscionable.
Procedural unconscionability relates to the manner in which the contract was entered into, and is described as the “absence of meaningful choice” when entering into the contract. Substantive unconscionability requires assessment of the contract’s terms to determine whether they are so outrageously unfair as to shock the judicial conscience.
The trial court made no specific findings on procedural unconscionability, finding it to exist based on the totality of the circumstances, which the court failed to identify. The court apparently accepted the plaintiff’s suggestion that her substantive unconscionability challenges were within the totality of the circumstances, and seemed to rule that that buttressed a finding of procedural unconscionability. The appellate court ruled that doing so was plainly erroneous.
The record showed that the plaintiff did not have a chance to fully review the documents because she had a plane to catch, but contained no evidence that the facility coerced or pressured her into signing them. The court concluded that these facts were legally insufficient to establish procedural unconscionability.
Because the plaintiff failed to establish procedural unconscionability, the court did not have to address substantive unconscionability (both prongs must be met to establish unconscionability).
The plaintiff also maintained that the agreement was impermissibly vague and lacked essential terms. The court found this argument was conflated with the public policy and unconscionability argument, further rejecting the argument that the governing law provision was impermissibly vague.
The one thing the court agreed with the plaintiff about, was that the shortened statute of limitations violated public policy. However, because the void statute of limitations did not go to the essence of the agreement, it was severable, and the court upheld the arbitration agreement notwithstanding that failing.
ERROR TO DENY MOTION FOR REMITTITUR WITHOUT CONSIDERING THE STATUTORY CRITERIA SET FORTH IN §768.74(5)
Baptist Health Medical Group Orthopedics v. Fernandez, 46 Fla. L. Weekly D2239 (Fla. 3rd DCA October 13, 2021):
Section 768.74 authorizes remittitur in cases where the trial court determines an award of damages is excessive in light of the facts and circumstances presented to the trier of fact. In determining whether such an award is inordinately high, the trial court is required to consider:
(1) Whether the amount awarded is indicative of prejudice, passion or corruption on the part of the trier of facts;
(2) Whether it appears the trier of fact ignored the evidence in reaching a verdict or misconceived the merits of the case relating to the amounts of damages recoverable;
(3) Whether the trier of fact took improper elements of damages into account, or arrived at the amount of damages by speculation and conjecture;
(4) Whether the amount bears a reasonable relation to the amount of damages proved and the injury suffered; and
(d) Whether the amount awarded is supported by the evidence and is such that it could be adduced in a logical manner by reasonable persons.
In this case, the trial court only considered the quality of the marriage between the decedent and her surviving spouse. While such a factor had some relevance to the injury suffered, the fact that the judge gave no consideration to the remaining statutory criteria constituted reversible error.
FAILURE OF ATTENDANT TO PROPERLY SECURE BRAKES OF WHEEL CHAIR CREATED A FACTUAL ISSUE ABOUT WHETHER THE COMPLAINT SOUNDED IN ORDINARY NEGLIGENCE OR MEDICAL MALPRACTICE
Torres v. Kendall Healthcare, 46 Fla. L. Weekly D2239 (Fla. 3rd DCA October 13, 2021):
In order to determine whether the plaintiff’s failure to comply with the statute of limitations for medical malpractice, and the pre-suit requirements set forth in Chapter 766, is fatal to his claim, the court must determine whether the suit sounds in medical malpractice or ordinary negligence. This is an intensively fact-based analysis.
At the motion to dismiss in the case stated, the trial court’s inquiry is limited to the factual allegations made within the four corners of the complaint, which the court must accept as true.
Because the plaintiff here had alleged sufficient facts to plead his action as one sounding in ordinary negligence, it was error to dismiss the case with prejudice at this stage of the proceedings.
A COURT’S DESIRE TO CONSERVE JUDICIAL AND JURY RESOURCES, OR TO REDUCE ITS OWN DOCKET, IS NOT A PROPER GROUND ON WHICH TO TRANSFER VENUE UNDER §47.122
Advanced Diagnostic Group v. Ocean Harbor Casualty Insurance Co., 46 Fla. L. Weekly D2260 (Fla. 4th DCA April 8, 2021):
The trial court dismissed a medical provider’s claim in a PIP suit, finding the accident happened in Palm Beach County, and had no realistic connection to Broward County. However, rather than focusing on the convenience of the parties and witnesses, the court based its decision to transfer venue solely on its desire to conserve judicial and jury resources, and to reduce its own docket for judicial convenience.
Because the medical provider’s choice of venue in Broward County was proper under §47.051, and there was no record evidence showing that venue in Broward County posed any inconvenience to the parties or witnesses, the court erred in sua sponte transferring the action for convenience.