The Week in Torts – Cases from the Week of May 25, 2018

A woman who was trapped and injured in an elevator sued the building owner as well as Schindler, alleging that the property owner had breached a common law duty to use reasonable care in the inspection and maintenance of the elevator and that Schindler too had failed to perform its duty.

Most of the case involves issues of indemnity (although there was an argument about Highwoods having a non-delegable duty under chapter 399 to ensure safe and proper maintenance, which you may wish to take note of for an elevator case).

The case proceeded to a jury trial in a bifurcated fashion. In the first phase, the jury determined that neither the property owner nor Schindler was negligent in the inspection, maintenance, service or repair of the elevator. However, it did find each of them 50% negligent in their response to the elevator malfunction.

During phase two on causation and damages, the property owner, Highwoods, and the plaintiffs reached a secret settlement agreement that Highwoods characterized as a “high-low” agreement, between $490,000 and $510,000. Highwoods remained in the trial, but did not appear on the verdict form. Highwoods’ settlement agreement with the plaintiffs was not disclosed to the jury and was not disclosed to Schindler or the trial court until later on.

While the jury was deliberating, Schindler and the plaintiffs reached a settlement which was disclosed to the court. The jury returned a verdict for $13,000,000, which was in excess of Schindler’s settlement amount. The plaintiffs eventually dismissed the action against both parties.

The trial court ruled that the agreement between Highwoods and the plaintiff was a prohibited agreement.

The appellate court explained however, that a Mary Carter style agreement is one in which a defendant in a multi-defendant case secretly agrees with the plaintiff to work together to the detriment of the other defendant. The hallmarks of a typical Mary Carter agreement include (a) secrecy; (b) that the agreeing defendants remain as party defendants in the lawsuit; (c) that the agreeing defendants’ liability is decreased in direct proportion to the non-agreeing defendants’ increase in liability; and (d) the agreeing defendant guarantees the plaintiff a certain amount of money if plaintiff does not receive a judgment against any of the defendants or if the judgment is less than a specified sum.

“Mary Carter” style agreements are not allowed in Florida because they are antithetical to the trial process, create a charade of adversity, and prejudice the non-settling defendant.

The court observed that while the $510,000 settlement payment by Highwoods was done in secret and depended on the jury’s verdict, the payment was made during the damages phase of the trial well after liability had been determined. Thus, there was no incentive to decrease the defendant’s liability or increase Schindler’s liability because it had already been determined.

Therefore, because that settlement agreement lacked two key features of a Mary Carter agreement (Highwoods elected to remain in the case but was not required to do so, and Highwoods could not and did not, inflict any harm by remaining in the case), this was not a prohibited agreement. Simply put, the settlement here did not raise red flags of deceit, collusion or fraud that were of concern, and thus, because the settlement was not a prohibited Mary Carter agreement, indemnification was improperly denied by the trial court.

NEGLIGENCE AND VICARIOUS LIABILITY CLAIMS AGAINST PARENTS AND EMPLOYER OF ALLEGED ABUSER IN CHILD SEX ABUSE CASE BARRED BY FOUR-YEAR STATUTE OF LIMITATIONS–CONFLICT CERTIFIED.

R.R. and S.B. v. New Life Community Church of CMA, 43 Fla. L. Weekly D1140 (Fla. 5^th DCA May 18, 2018):

Looking at section 95.11(3)(a), and (p), the court affirmed the trial judge’s ruling that the four-year statute of limitations barred the claims of negligence and respondeat superior against the parents and the employer of the alleged abuser in a child sexual abuse case. The court aligned itself with the Second District in the D.H. v. Adept Community Services, 217 So.3d 1072, 1077-80 (Fla. 2^nd DCA 2017) case, and certified conflict with the Fourth District’s decision in Doe v. Nur-Ul-Islam Academy, 217 So.3d 85, 90 (Fla. 4^th DCA 2017) and Drake v. Island Community Church, 462 So.2d 1142, 1144 (Fla. 3^rd DCA 1984). The supreme court has already accepted jurisdiction of this case to review the conflict, but the court further set forth in a footnote, that even if it were to adopt the plaintiff’s argument as to section 95.051(1)(i), Florida Statutes (2011), the plaintiff’s negligence and respondeat superior claims were filed beyond the seven-year repose period provided for in the statute, which fatally undermined plaintiff’s alternative argument based on section 95.11(9) (because the case would have been time barred on or before July 1, 2010).

TRIAL COURT PROPERLY DISMISSED MEDICAL MALPRACTICE CASE AGAINST OPHTHALMOLOGIST, BASED ON AFFIDAVIT FILED BY AN INFECTIOUS DISEASE SPECIALIST–TRIAL COURT ALSO PROPERLY FOUND THERE WAS AN INSUFFICIENT LEGAL RELATIONSHIP BETWEEN THE DEFENDANT AND CO-DEFENDANT TO IMPUTE NOTICE TO THE CO-DEFENDANT.

Rodriguez v. Nicolitz, 43 Fla. L. Weekly D1141 (Fla. 1^st DCA May 18, 2018):

A woman had a procedure done on her upper and lower eyelids to repair the droopiness and remove excess tissue. Following the surgery, the plaintiff developed an infection in her left eye. Following the procedure, she had several post-operative examinations and the infection left her with serious visual impairments, dizziness and other problems.

The plaintiffs attached a letter of a notice of intent to sue, and filed an affidavit of a physician whose stated specialty was ophthalmology. The letter indicated that no other defendants were known at the time. Afterwards, plaintiff sued the ophthalmologist, but not his professional association.

A month later, another physician (who treated the plaintiff’s infection) in the defendant’s group was also sued, but this doctor was not an officer, director or shareholder of the group. Attached to the notice of intent was an affidavit of a physician whose medical specialty was listed as infectious diseases.

The trial court dismissed the amended complaint plaintiffs filed against this subsequent treating ophthalmologist (who had treated for the infection) finding that the affidavit of the expert was not of someone in the same or similar specialty required by section 766.102(5)(a).

The plaintiffs argued that the presuit notice and affidavit of the first ophthalmologist filed with respect to the original doctor would also apply to the second doctor because they were in a legal relationship.

However, after conducting an evidentiary hearing, the trial court disagreed that the first presuit notice operated as to the second doctor. The court explained that the notice would have been effective as to the second doctor, but only if that second doctor was a prospective defendant and had a legal relationship. Because the presuit notice originally filed stated there were no other prospective defendants and the two doctors had no legal relationship, the trial court ruled correctly.

Similarly, the record does not support that the infectious disease doctor expert had evaluated, diagnosed or treated a post-blepharoplasty infection, or have any familiarity with the standard of care applicable to physicians who perform such procedures and thus, that doctor could not qualify as a specialist for presuit notification.

It is also worth noting that the purpose of presuit is to provide a means for prompt resolution of medical claims. These reviews were intended by the legislature to facilitate an expedient and “preferably amicable” resolution of medical malpractice claims.

While the injury was known within weeks of the plaintiff’s surgery, there was no attempt to bring the second doctor into the case until two years later–and a year after notice was given to the first doctor–which acknowledged that doctor as a medical provider. The court affirmed the trial judge’s ruling, noting that the record supported the judge’s findings.

POLICY CLEARLY AND UNAMBIGUOUSLY ELECTED TO LIMIT REIMBURSEMENT PAYMENTS TO THE 80% OF THE NO-FAULT “SCHEDULE OF MAXIMUM CHARGES”–NO MERIT TO PROVIDER’S CONTENTION THAT INSURER MUST EITHER ELECT REASONABLE CHARGE METHOD OF CALCULATION OR SCHEDULE OF MAXIMUM CHARGES METHOD–QUESTION CERTIFIED.

State Farm v. MRI Associates of Tampa d/b/a Park Place MRI, 43 Fla. L. Weekly D1149 (Fla. 2^nd DCA May 18, 2018):

The circuit court ruled that State Farm’s PIP policy failed to clearly and unambiguously elect to limit reimbursement payments to the schedule of maximum charges described in section 627.736(5)(a)(1)-(5). Because the appellate court found the express language of State Farm’s PIP policy did clearly and unambiguously elect to limit those payments for medical expenses, the court reversed.

There was no dispute as to the facts. There were 19 PIP claims involving State Farm insureds who received MRIs from Park Place and executed assignments of benefits to Park Place. When State Farm paid the bills, it did so based on language from its policy stating it would pay in accordance with the No-Fault Act properly billed and documenting reasonable charges for bodily injury and limiting payment to 80% of the billed reasonable charge and in no event pay more than 80% of the No-Fault schedule of maximum charges. The policy then defined reasonable charges.

Because the State Farm policy tracked the method of reimbursement calculation outlined in section 627.736(5)(a), it argued it was authorized under the 2013 PIP statute to limit its maximum payment to 80% of the schedule of maximum charges under that statute. The provider disagreed arguing that State Farm had to either elect the reasonable charge method of calculation under the statute, or the schedule of maximum charges method under a different part of the statute (627.736(5)(a)(1)). Because its policy included both, plaintiff asserted State Farm relied on an “unlawful hybrid method” of reimbursement calculation.

The court noted that neither the landmark cases in Virtual Imaging which applied to the 2008 amendments to the PIP statute nor Orthopedic Specialists, which applied to the 2009 version of the statute, applied to the 2012 amendment which this case involved.

In 2012, the legislature substantially amended section 627.736(5) and set forth the scheduled maximum charges limitation as a subsection of the reasonable charge calculation methodology. As a result of the amendment, the reasonable charge and schedule of maximum charges methodologies were not considered co-equal subsections of 627.736(5)(a) and the schedule of maximum charges limitation provided for in subsection (5)(a)(1). Based on the current construction of the PIP statute, the court concluded there are no longer two mutually exclusive methodologies for calculating a reimbursement payment owed by the insurer.

The court did reverse the trial court’s order granting summary judgment in favor of the provider, and certified the following question as one of great public importance:

DOES THE 2013 PIP STATUTE AS AMENDED PERMIT AN INSURER TO CONDUCT A FACT DEPENDENT CALCULATION OF REASONABLE CHARGES UNDER SECTION 627.736(5)(a) WHILE ALLOWING THE INSURER TO LIMIT ITS PAYMENT IN ACCORDANCE WITH THE SCHEDULE OF MAXIMUM CHARGES UNDER SECTION 627.736(5)(a)(1)?