WICKER SMITH O HARA MCCOY & FORD P.A. Insurance Crossclaim Bad Faith. Construction Accident Non-delegable Duty Inherent Dangerous Activity

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1 WICKER SMITH O HARA MCCOY & FORD P.A. JANUARY/FEBRUARY/ MARCH 2013 Insurance Crossclaim Bad Faith Construction Accident Non-delegable Duty Inherent Dangerous Activity Wrongful Death Medical Malpractice Civil Procedure No Abuse of Discretion in Bifurcating Claims of Medical Malpractice and Negligent Hiring and Retention of Primary Surgeon from Claims of Negligent Hiring and Retention of Assistant Surgeon, Who Had Extensive Malpractice History Wrongful Death Arbitration Nursing Homes Defamation Immunity Litigation Privilege Torts - Discovery Attorney Fees Proposals for Settlement Torts Medical Malpractice Presuit Requirements

2 Facts: The estate s decedent died when his motorcycle was hit from the rear by defendant/driver Harvey. Harvey was insured by GEICO for $100,000. A jury awarded the estate a verdict against Harvey of $8 million. Geico General Insurance Co. v. James M. Harvey, 38 Fla. L. Weekly D178a (Fla. 4 th DCA January 23, 2013) Thereafter the estate added GEICO as a defendant pursuant to Florida s nonjoinder statute, FS (4). Harvey then crossclaimed against GEICO for bad faith. GEICO attempted to remove the bad faith action to federal court. This was found to be untimely and the case was remanded. GEICO then moved to dismiss or sever the bad faith claim, which the trial court denied and GEICO petitioned for writ of certiorari of the non-final order denying the motion to dismiss. Issue: Whether the trial court departed from the essential requirements of law by denying GEICO s motion to dismiss Defendant Harvey s crossclaim for bad faith. Rule: Yes. Bad faith actions against insurers are separate causes of action from the underlying tort action. The denial of the motion to dismiss the crossclaim had the practical effect of preventing GEICO from removing the action to federal court based on diversity jurisdiction, which departed from the essential requirements of law. Analysis: FRCP 1.170(g) provides that a party may state a crossclaim against a co-party if it arises out of the transaction or occurrence that is the subject matter of either the original action or a counterclaim therein, or related to any property that is the subject matter of the original action. The crossclaim did not satisfy these requirements. The wrongful death action which arose from the automobile accident sounded in tort. A bad faith claim against an insurer arises from breach of the insurer s duty to act in good faith toward its insured. A bad faith claim is premature until the issues of liability and the extent of coverage are resolved. Thus, the crossclaim did not arise out of the same transaction or occurrence and accrued at a later time well after the tort action accrued. Facts: Kenneth Price was injured in a construction accident. There were disputed issues of fact regarding the actual identity of the employer of the worker who allegedly caused Price s injury, causation of the accident, and foreseeability. The trial court denied the Prices motion to amend their complaint to include a claim that Southern breached a non-delegable duty by failing to safely supervise its subcontractor, Tight Line Masonry, Inc. The court denied the motion to amend and granted summary judgment in favor of Southern State Masonry. Kenneth Price and Diane Price v. Miller & Soloman General Contractors, Inc., 38 Fla. L. Weekly D179a (Fla. 4th DCA January 23, 2013) Page 2 of 11

3 Issue: Whether there were issues of material fact precluding summary judgment and whether the court abused its discretion in refusing to allow the Prices to amend their complaint. Rule: Yes. Amendments should be freely granted unless the privilege has been abused or the amendment would be futile. Neither applied here. The record needed to be developed further so that Price could determine if the construction involved an inherently dangerous activity. Further, there were genuine issues of material fact which precluded summary judgment. Analysis: If an activity is inherently dangerous, then a contractor has a non-delegable duty to safely supervise its subcontractors performing the activity. Whether an activity is inherently dangerous is generally a question for the fact finder unless the record is sufficiently developed on the issue, which was not the case here. The Prices motion to amend should have been allowed to develop more facts on this issue. Yvette Johansen v. Philip S. Vuocolo, M.D. and Heart & Family Institute of Port Lucie, Inc., 38 Fla. L. Weekly D253 (Fla. 2 nd DCA January 31, 2013) Facts: Dr. Vuocolo, a general and vascular surgeon employed by the Heart and Family Institute of Port St. Lucie, surgically removed a part of seventy-eight year old George Johansen's lung after finding a suspicious lesion on his left lung. Dr. Norton, a general surgeon also employed by the Institute, assisted in the surgery and post-surgical care of Mr. Johansen. Mr. Johansen developed post-surgical complications, requiring additional procedures after he experienced excessive blood loss. He died twenty-eight days later. The Estate filed a claim for medical malpractice against Dr. Vuocolo and claims against the Institute for vicarious liability, as well as negligent hiring and retention of Dr. Vuocolo. After filing the complaint and after the statute of limitations period had run, the Estate discovered that Dr. Norton, the assistant surgeon, had an extensive history of medical malpractice. Although they could not file a claim against Dr. Norton individually, the court found that their negligent hiring and retention claim against the Institute was sufficiently pled to include any negligent acts Dr. Norton may have committed. Concerned that Dr. Norton's extensive malpractice history would have a prejudicial effect on the jury, the defendants filed multiple motions to bifurcate the medical malpractice claims from the negligent hiring and retention claims. The trial court agreed and ultimately ordered two separate trials. The order stated: Page 3 of 11

4 The medical malpractice action against PHILIP S. VUOCOLO, MD and HEART AND FAMILY INSTITUTE OF PORT ST. LUCIE, INC. shall be tried first. Under no circumstances in the medical malpractice action against PHILIP S. VUOCOLO, MD and HEART AND FAMILY INSTITUTE OF PORT ST. LUCIE, INC., can the Plaintiff introduce evidence concerning Dr. Norton's alleged malpractice claim history. Then, only if the trier of fact determines that PHILIP S. VUOCOLO, MD and HEART AND FAMILY INSTITUTE OF PORT ST. LUCIE, INC are not negligent in the first trial, can a second trial proceed against HEART AND FAMILY INSTITUTE OF PORT ST. LUCIE, INC., for medical malpractice based upon vicarious liability for, non-party, Dr. Norton's actions. The case proceeded to trial and the jury entered a defense verdict. Because the jury found that Dr. Vuocolo did not breach the standard of medical care and that his actions were not the proximate cause of Mr. Johansen's death, they were not required to determine whether the Institute had negligently hired Dr. Vuocolo. Issue: Did the trial court abuse its discretion in bifurcating the issues at trial? Rule: Granting a motion to bifurcate, in order to avoid prejudice, is not an abuse of discretion. Analysis: Florida Rule of Civil Procedure 1.270(b) governs the bifurcation of trials and permits [t]he court in furtherance of convenience or to avoid prejudice [to] order a separate trial of any claim... or of any separate issue or of any number of claims... or issues. Fla. R. Civ. P (b). However and ordinarily, claims or issues that are interrelated and intertwined should not be bifurcated. See, e.g., Rooss v. Mayberry, 866 So. 2d 174, 176 (Fla. 5th DCA 2004). The law is well settled that bifurcation is subject to the sound discretion of the trial court and bifurcation is generally proper absent a specific threat of inconsistent verdicts or prejudice to a party. Roseman v. Town Square Ass'n, Inc., 810 So. 2d 516, 520 (Fla. 4th DCA 2002). In this matter, the trial court expressed concern about the possibility of prejudice to the defendants resulting from evidence of Dr. Norton's prior medical malpractice. The trial court properly exercised its discretion when it found that this evidence (relevant on the issue of whether Dr. Norton was negligently hired and retained) could irreparably damage the jury's ability to fairly decide the issue of whether Dr. Vuocolo acted within the applicable standard of care in treating Mr. Johansen. See, e.g., Beavis ex rel. Beavis v. Campbell Cnty. Mem'l Hosp., 20 P.3d 508, (Wyo. 2001). Conclusion: Affirmed. Page 4 of 11

5 Spring Lake Rehabilitation Center v. Tony Holloway, 38 Fla. L. Weekly (Fla. 2nd DCA February 1, 2013) Facts: The Decedent, Ms. Holloway was a resident at the Spring Lake Rehabilitation Center from August 20, 2010, to January 4, Upon admission to the facility, she executed a standard resident admission and financial agreement, with a separate arbitration agreement. At the time, she was 92 years old with a fourth-grade education, requiring her to her sound out words while reading, as she could not spell well. Like many rehab residents, she had memory problems and was increasingly confused. There is no evidence that the admissions staff at Spring Lake used any improper methods to obtain Ms. Holloway's signature or that she was misled in any fashion. The trial court declined to find that Ms. Holloway was incompetent or incapacitated to enter into a contract at the time of her admittance. However, the trial court was persuaded by Plaintiff s counsel s argument that the contracts were so complex that she could not possibly have understood what she was signing and ruled that there was no "meeting of the minds" between the parties; therefore, the arbitration clause was unenforceable. Issue: May an arbitration agreement be unenforceable on the grounds that the issues within the contract are so complex that a 92-year old woman with a 4 th grade education could not understand them? Rule: The limited abilities of a party are not a basis for preventing the enforcement of a contract. Analysis: As a general rule when one party signs a contract and the other accepts and signs, a binding contracts results. D.L. Peoples Group, Inc. v. Hawley, 804 So. 2d 561, 563 (Fla. 1st DCA 2002). A party is bound by a contract that is signed unless they can demonstrate that he or she was prevented from reading it. Consol. Res. Healthcare Fund I, Ltd. v. Fenelus, 853 So. 2d 500, 504 (Fla. 4th DCA 2003). This is true whether a party is physically unable to read the agreement, see Estate of Etting ex rel. Etting v. Regents Park at Aventura, Inc., 891 So. 2d 558, 558 (Fla. 3d DCA 2004), or simply chooses not to read the agreement, see Fenelus, 853 So. 2d at 504. The court stated that as a practical matter, a significant percentage of the people who enter nursing homes and rehabilitation centers have mental or physical limitations that make it difficult for them to understand the admission agreements they sign. These agreements are sufficiently complex that many able-bodied adults would not fully understand them. The same is probably true for most of the contracts that we sign today in the consumer services context. At one time, most contracts were individually negotiated and handwritten. Perhaps then could the law adequately describe such an agreement as a meeting of the minds between the parties. But a literal meeting of the minds, requiring both parties to have a comparable, subjective understanding of their agreement is clearly not what the courts intend by the use of this phrase. Our modern economy simply could not function if a meeting of the minds required individualized understanding of all aspects of the typical standardized contract that is now signed without any expectation that the terms will actually be negotiated between the parties. Page 5 of 11

6 Conclusion: Reversed and remanded. Facts: Traynor is hired by Donovan Marine, Inc. to defend defamation claim brought by business competitor, Daniel Delmonico. Underlying claim alleged that sales agent of Donovan Marine told a number of Delmonico s clients that Delmonico lured customers away from Donovan Marine by supplying prostitutes to company owners doing business with Donovan Marine. Daniel Delmonico v. Arthur Rodgers Traynor, Jr., 38 Fla. L. Weekly S106a (Fla. 38 DCA February 15, 2013) Traynor then makes multiple contacts with Delmonico s ex-wives, company owners, former sales personnel and informs them Delmonico is being prosecuted for prostitution or procuring prostitutes for purchasing agents. Delmonico sues Traynor for malicious and false statements. Issue: Whether Florida's absolute privilege extends to alleged defamatory ex-parte, out-of-court statements made by an attorney to potential, nonparty witnesses in the course of that attorney's investigation of a pending lawsuit. Rule: Florida's absolute privilege does not extend to statements made by an attorney during exparte, out-of-court questioning of a potential, nonparty witness in the course of investigating a pending lawsuit. In this narrow scenario, a qualified privilege instead applies so long as the defamatory statements are related to or connected with the subject of inquiry in the underlying lawsuit. A qualified privilege requires the plaintiff to prove express malice. Holding: Internal cost structure information of facility is discoverable by a third party (i.e. not a patient) to establish reasonableness of charges in tort action. Trial court should do an in camera review and balancing test of privacy v. need for discovery in ruling on discovery motions involving records such as these. Gulf Coast Surgery Center, Inc. v. Fisher, 38 Fla. L. Weekly D341 (Fla. 38 DCA February 22, 2013) Gulf Coast Surgery Center sought a petition for writ of cert directed to the trial courts order compelling it to produce financial documents and the Court granted the petition. The Plaintiff in the underlying matter was treated by Dr. Scott Katzman and had procedures performed at Gulf Coast. The Defendant, Fisher submitted a notice of Subpoena Duces Tecum seeking production of financial documents related to the underlying Plaintiff s care including: Admission information Letters of protection Statements Billing records Page 6 of 11

7 Payments by Gulf Coast to anyone involved in the Plaintiff s care and for equipment used in the Plaintiff s care Correspondence Contracts between Gulf Coast and other services Documents regarding the sale of the underlying Plaintiff s accounts to medical funding companies The definition of CPT codes Credentials of Dr. Katzman to perform surgery Preference cards of Dr. Katzman related to equipment and supplies Documents as to the basis upon which Gulf Coast calculated statements for services to the underlying claimant. Gulf Coast objected and filed a Motion for Protective Order. Gulf Coast contends the trial court deviated from the essential requirements of the law because the requested documents were not relevant and it failed to balance the underlying Defendant s need for the document with Gulf Coast privacy interest. Gulf Coast also called for in-camera review because the documents contained trade secrets. The Court noted that hospital internal cost structuring information was previously found relevant and critical to establish any Defendant s claim of unreasonable charges so the Court rejected Gulf Coast s argument that the same principal should not be applied to Gulf Coast s situation merely because it is a surgery center and Fisher is a third party disputing reasonableness of the charges. At the trial court level, Gulf Coast conceded that the information which bore on that topic was discoverable. The court did not express an opinion on whether all of the requested documents meet that definition and left that decision to the trial court. The trial court did not perform an in-camera review or perform a balancing test. The appellate court noted that previous holdings held that internal cost structure information did constitute a trade secret. The underlying Defendant was willing to stipulate to the requested documents constitute a trade secrets and the issue before the appellate court was the trial court s failure to require any sort of protective measure in relation to the documents. Holding: Make sure your Proposal for Settlement terms match up with any attached documents such as a Notice of Voluntary Dismissal. Tran v. Anvil Iron Works, Inc., 38 Fla. L. Weekly D366 (Fla. 2nd DCA February 22, 2013) The appellate case was about reversal of an order denying a motion for costs and attorney fees but the 2d DCA determined that the proposals were ambiguous. Essentially the trial court determined that the body of the Proposal for Settlement did not indicate that both Defendants would be dismissed. For the purpose of the particularity requirement of the relevant statute and rules and ambiguity defined as the condition of admitting more than one meeting. Although the proposed notice of voluntary dismissal stated that any and all claims against both defendants would be dismissed the language contained in the body of each proposal stated only that any and all claims against the named Defendant would be dismissed. The proposals themselves were Page 7 of 11

8 silent as to the unnamed defendant. Thus the documents are ambiguous. If a proposal for settlement had been accepted would Tran only be obligated only to dismiss the claims against the Defendant named in the settlement proposal or would Tran be obligated to dismiss the claims against both defendants as indicated in the proposed notice of voluntary dismissal? This discrepancy between each proposal and the attached notice of voluntary dismissal could reasonably affect the offeree decision. The Trial Court found that although the 2 proposed notices of voluntary dismissal with prejudice indicated both defendant s would be dismissed, the body of the Proposals for Settlement did not indicate that both Defendants would be dismissed but only the named Defendants. In short, each proposal for settlement stated that if the proposal were accepted Tran would dismiss all claims against one named Defendant but the attached notices of voluntary dismissal reflected that Tran would dismiss all claims against both Defendants one of which was not named in the proposal. Lakeland Regional Medical Center, 38 Fla. L. Weekly D362 (Fla. 2nd DCA February 22, 2013) Facts: Mrs. Pilgrim had an endoscopic procedure at Lakeland Regional Medical Center, Inc. ( Lakeland Regional ). During her endoscopic procedure, a piece of a cytology brush broke off and got stuck in her pancreatic duct. As a consequence, she had to have more medical treatment. She also suffered bodily injury and pain and suffering. The Pilgrims sued Lakeland Regional and Wilson-Cook Medical, Inc. (allegedly the one who manufactured and designed the brush that broke). In the complaint against Lakeland Regional, the Pilgrims alleged a theory of simple negligence. However, the facts in the complaint suggest that the claim might actually be for medical negligence under Chapter 766 of the Florida Statutes. The Pilgrims state in their complaint that she was injured by a breach of Lakeland Regional s duty to procure, inspect, and maintain the cytology brush. The record evidence does not include various facts like who in Lakeland Regional would be the one responsible for that duty, who was the one who used the brush, and whether the maintaining and inspecting of the brush occurred before or during the procedure in question. The Pilgrims also do not name any doctors in its lawsuit and the plaintiffs complaint does not allege that the procedure involved a doctor. Lakeland Regional filed a motion to dismiss, stating that the Pilgrims had to meet the presuit requirements under Chapter 766 of the Florida Statutes. The trial court denied Lakeland Regional s motion to dismiss and it petitioned the Second District Court of Appeal for certiorari review. Issue: Whether a claim involving injuries caused by a cytology brush in surgery is a medical negligence claim that the plaintiff must follow presuit requirements or whether it is a claim for simple negligence. Page 8 of 11

9 Rule: The type of claim involved in this case depends upon the facts. If the complaint accurately and completely described the facts needed for a court to decide the issue, then the trial court could determine whether the presuit requirements apply by looking at the allegations in the complaint. However, if the complaint is vague, then the parties should be able to have an evidentiary hearing or present evidence by affidavit in order to determine the issue. Analysis: The Second District Court of Appeal contrasted Broadway v. Bay Hospital, Inc. and stated that whether a case must follow the presuit requirements cannot necessarily be resolved from the face of the complaint. Broadway v. Bay Hospital, Inc., 638 So. 2d 176, 177 (Fla. 1 st DCA 1994). The Court agreed with Lakeland Regional that the Plaintiffs complaint is written in such a way as to reduce the factual allegations which would determine whether the case is in fact one of simple negligence or one of medical negligence. The judges at both the appellate level and trial court level did not have experience with a cytology brush or who is responsible for maintaining or inspecting the brush. They do not know whether the brush is such a technical devise [that] is inspected and maintained by employees with medical expertise. This Court said it could guess that the brush was such a device, making the case similar to Corbo v. Garcia, 949 So. 2d 366 (Fla. 2d DCA 2007), but it was only guessing. In that case, the plaintiff was injured when she was burned by a physical therapy machine to which she was connected. That Court granted certiorari and stated that: Here, even though [respondent] asserts that the negligence occurred prior to her treatment, the gravamen of her claim is based on the petitioners' use of the equipment during [respondent's] physical therapy treatment. The basis for [respondent's] claim is that the petitioners negligently administered a treatment modality. Therefore, her injury occurred during medical treatment, and in order to prove her claim, she must prove that the petitioners did not properly maintain their electrical stimulation equipment, which falls within the standard of care involved in treating a patient with that equipment. Corbo, 949 So. 2d at 370. The Court noted that the trial court was only guessing when it found the case at issue to be similar to Broadway v. Bay Hospital, Inc. In that case, the plaintiff s hospital bed collapsed and she suffered injuries as a result. The plaintiff and her husband sued for a breach of its duty to use reasonable care in maintaining its premises and a breach of its duty to warn Mrs. Broadway of latent hazards. Id. at 177. The First District Court of Appeal reversed the order dismissing the case for not complying with presuit requirements, noting that the allegations are not for a breach of standard of care by any medical professionals but for not warning the plaintiff about a dangerous condition or properly maintaining the bed. The Second District Court of Appeal said that courts should not guess in determining the proper type of cause of action. The trial court should decide the issue by applying the law to the actual facts in the case. The Second District Court of Appeal found that the motion to dismiss should have been granted. However, there should have also been a leave to amend the complaint, so that the Pilgrims could determine whether it is a medical negligence case or a simple negligence case and proceed accordingly. Conclusion: Petition for certiorari is granted and the case is remanded. The Second District Court of Appeal instructs the trial court to make more determinations and developments of the record before it decides whether the case is subject to presuit requirements. If the Pilgrims decide again to file a simple negligence claim, then Lakeland Hospital can file another motion to dismiss. The trial Page 9 of 11

10 court may need to have a limited evidentiary hearing to determine whether the case falls within the presuit requirements if there is still dispute over the factual basis of the claim. Page 10 of 11

11 Founded in 1952, Wicker Smith O'Hara McCoy & Ford P.A., is a full-service trial firm deeply experienced in handling significant and complex litigation for a broad variety of clients, ranging from multinational corporations to individuals. Wicker Smith services its clients through a network of seven locations throughout the State of Florida in Miami, Fort Lauderdale, West Palm Beach, Orlando, Tampa, Naples and Jacksonville. Wicker Smith is a member of the USLAW NETWORK, an alliance of more than 60 AV-rated, independent law firms and over 4,000 attorneys across the U.S. and Mexico who are part of the Network by invitation only. The content of this publication does not constitute legal advice. It is intended to provide a summary of recent case law. Readers should consult with counsel before acting on the information. Please feel free to share this publication with your colleagues. To be added to the Wicker Smith mailing list, please visit our website at Page 11 of 11

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