Case Law Update IN THIS ISSUE WICKER, SMITH, O HARA, MCCOY & FORD, P.A.

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1 WICKER, SMITH, O HARA, MCCOY & FORD, P.A. SEPTEMBER / OCTOBER 2010 IN THIS ISSUE Summary Judgment on Health Care Quality Improvement Act in Florida State Court. A Process Server s Failure to Note the Time of Service Renders the Service Defective. Pursuant to Amendment 7, a Hospital Cannot Preclude Discovery of an Incident Report Based on Its Own Investigation That the Incident Did Not Involve Negligence. Communication Between Physicians and the Hospital Does Not Trigger Physician-Patient Privilege. Insurer Who Made Unqualified Assignment of PIP Benefits to Medical Provider and No Re-Assignment of Benefits, Had No Standing to Sue Insurer for Benefits. Plaintiff s Compliance with Pre-suit Requirements of Florida Statute 766 Does Not Constitute a Waiver of a Previously Agreed Upon Arbitration Clause Whether Parties Intended to Include a Personal Injury Claim in the Property Damage Release Precludes Summary Judgment. Accident Videos Are Discoverable Evidence, Not Protected Work Product. Failure to Establish Justifiable Reliance Is Not a Bar to Recovery Based on Fraudulent Misrepresentation.

2 SUMMARY JUDGMENT ON HEALTH CARE QUALITY IMPROVEMENT ACT IN FLORIDA STATE COURT In the case of DeMarta v. Lawnwood Regional Medical Center, the trial judge entered an Order granting Summary Judgment to our hospital client, Recent Court Decision for Wicker Smith citing to the federal Health Care Quality Improvement Act [HCQIA] summary judgment immunity standard, which, upon information and belief, has never previously been applied in Florida State Courts. The underlying facts of the case involve a plaintiff-physician who was suspended and did not receive renewed privileges. The HCQIA federal statute, which has been predominantly interpreted in federal courts, explains that, peer review has become an integral component of the health care system in the United States. Congress enacted the Health Care Quality Improvement Act to encourage such peer review activities, to improve the quality of medical care. In the furtherance of this goal, HCQIA grants limited immunity... from liability for money damages to those who participate in professional peer review activities. Bryan v. James E. Holmes Regional Medical Center, 33 F. 3d 1318 (11 th Cir. 1994) (citations omitted). Importantly, HCQIA also creates a rebuttable presumption of immunity. As such, the burden of proof shifts to the Plaintiff in this unique HCQIA summary judgment scenario. In the DeMarta case, the trial court granted the Defendant s summary judgment motion because the Plaintiff failed to show by a preponderance of the evidence that the professional review action did not meet the standards set forth in 42 U.S.C (a). We find this new HCQIA Immunity precedent extremely useful in our representation of hospitals and we will continue to update this newsletter upon any further appellate decisions. A PROCESS SERVER S FAILURE TO NOTE THE TIME OF SERVICE RENDERS THE SERVICE DEFECTIVE. Vidal v. Suntrust Bank, 35 Fla. L. Weekly D1724 (Fla. 4th DCA August 4, 2010) Jose Vidal appeals from a non-final order denying his motion to quash service of process. He claims that service was defective because the process server failed to note the time of service on the copy of the complaint served. A process server s failure to note the time of service renders the service defective. The requirement to note the time on a copy of the complaint is a statutory requirement of service (see Fla. Stat (5)), and strict compliance with statutory requirements of service is mandated. See Schupak v. Sutton Hill Assocs., 710 So. 2d 707, 708 (Fla. 4th DCA 1998); Sierra Holding, Inc. v. Inn Keepers Supply Co., 464 So. 2d 652, 654 (Fla. 4th DCA 1985); Baraban v. Sussman, 439 So. 2d 1046, 1047 (Fla. 4th DCA 1983). Such a requirement may be intended to assure the integrity of service of process; and some statutes require that process be served within certain hours of the day or within normal business hours. Page 2 of 10

3 PURSUANT TO AMENDMENT 7, A HOSPTIAL CANNOT PRECLUDE DISCOVERY OF AN INICIDENT REPORT BASED ON ITS OWN INVESTIGATION THAT THE INCIDENT DID NOT INVOLVE NEGLIGENCE Mr. Baldwin suffered a perforation of his throat during intubation for anesthesia in preparation for an emergency appendectomy. He sued Shands for medical negligence. Shands conceded that the injury occurred during his intubation. Subsequently, Mr. Baldwin moved to compel Shands to produce its risk management incident report and peer review record, both identified in its privilege log. Shands opposed the motion on the basis that its own investigation concluded that the incident did not involve negligence, and was not, therefore, an adverse medical incident requiring disclosure under Amendment 7. The trial court agreed with Shands and denied Mr. Baldwins motion. Baldwin v. Shands Teaching Hosp., 2010 WL (Fla. 1st DCA September 23, 2010) On certiorari review, the court determined that the circuit court departed from the essential requirements of the law and quashed the order. Amendment 7, Article X, section 25(a) of the Florida Constitution, states that in addition to any other similar rights provided herein or by general law, patients have a right to have access to any records made or received in the course of business by a health care facility or provider relating to any adverse medical incident. Amendment 7 defines adverse medical incident as medical negligence, intentional misconduct, and any other act, neglect, or default of a health care facility or health care provider that caused or could have caused injury to or death of a patient, including, but not limited to, those incidents that are required by state or federal law to be reported to any governmental agency or body, and incidents that are reported to or reviewed by any health care facility peer review, risk management, quality assurance, credentials, or similar committee, or any representative of any such committees. Art. X, section 25(c)(3). The parties agreed that Mr. Baldwin suffered an injury while at Shands. If this injury constituted an adverse medical incident, then Mr. Baldwin was entitled to have access to any records made or received in the course of the hospital s business relating to the incident. Mr. Baldwin argued that the records were the only accurate account of the injury, cannot be substituted, and thus are material to his negligence claim. Shands argued that the incident had not been adverse for purposes of Amendment 7 disclosure, basing this conclusion on its own internal investigation. Shands did not provide the court with any documentation regarding its method for determining which incidents are subject to peer review and risk management and which are not. The court determined that Mr. Baldwin made a showing that acts of a health care provider or facility caused or could have caused his injury and that it had been reported and reviewed under Shands peer review and risk management procedures. REMAND with instructions to the trial court to order Shands to produce all records of adverse medical incidents. Page 3 of 10

4 COMMUNICATION BETWEEN PHYSICIANS AND THE HOSPTIAL DOES NOT TRIGGER PHYSICIAN-PATIENT PRIVILEGE Lee Mem l Health Sys. v. Smith, 35 Fla. L. Weekly D1601 (Fla. 2nd DCA July 16, 2010) The Smiths filed a medical malpractice action against Lee Memorial Health System (LMHS), alleging negligent treatment of their infant daughter resulting in permanent injuries. In its answer, LMHS admitted that, by and through its employees, its treatment fell below the standard of care but denied that its failures caused the infant s injuries. The Smiths daughter received follow up care with several LMHS doctors after the date of the injury. LMHS sought certiorari review of a trial court order granting the Smiths pretrial motion for protective order and prohibiting LMHS from ex parte communications with its employees who are the child s current treating physicians. The trial court granted the motion based on the physicianpatient privilege in Fla. Stat (8), despite LMHS s argument that, pursuant to Estate of Stephens ex rel. Clark v. Galen Health Care, Inc., communication among the hospital representative, its lawyers and its employees is not a violation of physician-patient privilege. The Second DCA granted the petition and quashed the order, concluding that the physician patient privilege does not apply to communications between a hospital and its employee doctors because such communications are not disclosures that trigger the privilege. Section (8) states that information disclosed to a health care practitioner by a patient in the course of the care and treatment of such patient is confidential. The trial court distinguished Stephens because in that case, the doctors being sued were involved in the treatment that formed the basis of the medical malpractice suit, whereas here, the doctors were involved in post-injury follow-up care. The Second DCA found this analysis faulty because the basis of the Stephens holding was the relationship between the employee physicians and the hospital, not the fact that the information sought related to the underlying lawsuit. Communications to LMHS from its employee physicians regarding information obtained by the physicians in the course of employment are not disclosures that trigger the physician patient privilege... The fact that the information related to [the Smiths daughter s] post-incident treatment does not alter our conclusion... Page 4 of 10

5 INSURER WHO MADE UNQUALIFIED ASSIGNMENT OF PIP BENEFITS TO MEDICAL PROVIDER AND NO RE-ASSIGNMENT OF BENEFITS, HAD NO STANDING TO SUE INSURER FOR BENEFITS United Automobile Insurance Company [ UA ] sought a writ of certiorari to review a decision of the Miami-Dade Circuit Court, Eleventh Circuit, sitting in its appellate capacity, affirming final judgment in favor of the Respondent, Angel Otero. United Auto Ins. Co. v. Otero, 35 Fla. L. Weekly D1683 (Fla. 3rd DCA July 28, 2010) The insured, Angel Otero, was injured in a car accident in Otero filed for personal injury protection [ PIP ] benefits with his insurance company, UA. Otero sought medical treatment from Neurology Associates Group [ NAG ], and executed an assignment of benefits to NAG listing UA as the insurer. The assignment stated in pertinent part as follows: I hereby assign to Neurology Associates Group any and all rights and causes of action I may have under any insurance policy or collateral source agreement including but not limited to the above referenced collateral source provider... I as patient have agreed to remain personally liable for the amounts billed by the healthcare provider regardless of the amount paid by the insurance company unless ordered otherwise by a court of law. Otero filed suit against UA for nonpayment of all medical bills, claiming breach of contract and seeking declaratory judgment in the amount of $10,733. UA responded that the bills were not reasonable, related or necessary and alleged as an affirmative defense that Otero lacked standing to sue as he had assigned all of his rights to NAG and the assignment had never been revoked. Otero argued that the assignment was qualified, ambiguous and only partial as he agreed in the assignment to remain responsible for the medical bills and therefore he did have standing to sue. The only issue raised in the petition was whether Otero had standing to bring this claim. Based on the record and case law interpreting the exact provisions of the assignment in question, the Court found that Otero did not have standing to sue his insurer. After almost five years of litigation, several hearings, and a bench trial, the issue of standing was brought before the trial court. The trial court entered judgment for Otero, determining that he had standing to sue and that he did not intend to assign all of his rights to NAG. The court concluded that the assignment was qualified as Otero, pursuant to the assignment, remained responsible for the medical bills and, therefore, retained the right to make a claim against UA for payment because NAG did not seek to timely enforce its rights under the assignment. The Eleventh Circuit appellate panel affirmed without opinion. Continued on page 6 Page 5 of 10

6 Continued from page 6 The 3rd DCA held that the circuit court appellate division departed from the essential requirements of law by affirming final judgment in favor of the respondent, who did not have standing to sue UA. The record showed and there is case law interpreting the exact provisions in question holding that Otero made an unqualified assignment of his PIP insurance benefits to a medical provider, and never obtained a re-assignment of benefits or revocation of assignment from NAG. See Oglesby v. State Farm Mut. Ins. Co., 781 So. 2d 469 (Fla. 5th DCA 2001) (holding that where an insured unqualifiedly assigns PIP benefits to the medical provider, the insured has no standing to bring a direct action against the insured, even though the assignment states that he remains liable for any medical bills not paid by the insurer); Livingston v. State Farm Mut. Ins. Co., 774 So. 2d 716 (Fla. 2d DCA 2000) (holding that if an insured has assigned his right to receive PIP benefits to a health care provider, the insured has no standing to file a lawsuit to collect the assigned benefits). The fact that NAG failed to bring a claim for the bills does not serve as a revocation of the assignment. See Hartford Ins. Co. of Midwest v. O'Connor, 855 So. 2d 189 (Fla. 5th DCA 2003) (holding that an assignment is like any other contract which can be revoked by the mutual agreement of the parties thereto); Livingston, 774 So. 2d at 716 (holding that an unqualified assignment transfers to the assignee all the interest of the assignor under the assigned contract, and that the assignor has no right to make any claim on the contract once the assignment is complete, unless authorized to do so by the assignee). PLAINTIFF S COMPLIANCE WITH PRE-SUIT REQUIREMENTS OF FLORIDA STATUTE 766 DOES NOT CONSTITUTE A WAIVER OF A PREVIOUSLY AGREED UPON ARBITRATION CLAUSE Ms. Shield went to Strax Rejuvenation and Aesthetics Institute for an abdominoplasty and lipectomy, which were performed by Dr. Gordon. A year later, she sent Strax and Gordon a notice of intent to sue for medical negligence pursuant to Fla. Stat Strax Gordon v. Shield, 35 Fla. L. Weekly D1570 (Fla. 4th DCA July 14, 2010) and Gordon requested information relating to Shield s claim and a request for production. Unsworn statements were taken. Subsequently, Strax and Gordon sent Sheild a letter stating that they did not believe there had been a departure from the standard of care. Shield filed suit, and Strax moved to dismiss and compel arbitration pursuant to a general consent signed by Shield before her procedures. Shield argued that Defendants waived their right to arbitrate by participating in the pre-suit requirements and waiting to assert the right to arbitrate. The trial court agreed with Shield, finding such pre-suit participation a knowing waiver of the arbitration clause. The Florida Supreme Court has found that the right to arbitrate can be waived by actions inconsistent with that right. However, in this case, all of the actions of Gordon and Strax were compelled as a result of Shield sending a notice of intent to sue. Further, there is no duty to make a pre-suit demand for arbitration, and pre-suit negotiation has been found not to constitute waiver of the right of arbitration. The appeals court reversed and remanded with instructions to order arbitration. Page 6 of 10

7 WHETHER PARTIES INTENDED TO INCLUDE A PERSONAL INJURY CLAIM IN THE PROPERTY DAMAGE RELEASE PRECLUDES SUMMARY JUDGMENT McKeever v. Rushing, 35 Fla. L. Weekly D1530 (Fla. 2d DCA July 9, 2010) On January 10, 2005, the automobile driven by Mr. McKeever was struck from the rear by an eighteen-wheel tractor-trailer owned by Coastal. Mr. McKeever's vehicle sustained property damage in the amount of $ On February 8, 2005, Coastal's insurer tendered a check for the exact amount shown on the repair estimate. At the time the check was submitted, Mr. McKeever was asked to execute a document entitled Property Damage Release. Mr. McKeever had several conversations with Coastal regarding his personal injury claim, but when no settlement was reached, the McKeevers filed suit on June 7, In its answer, Coastal raised twenty-five affirmative defenses, none of which mentioned the February 8, 2005, release. Nearly two years later, on January 22, 2009, Coastal filed a motion for summary judgment, arguing that Mr. McKeever had waived his personal injury claim by executing the February 8, 2005, release. In response, the McKeevers moved to reform the release, arguing that it was the intent of the parties to only release Coastal from claims regarding the property damage, not Mr. McKeever's personal injury or derivative claims. This motion was not scheduled for hearing prior to the summary judgment hearing but was indirectly considered at that hearing in which Coastal argued that the language of the release was clear and unambiguous, thus the trial court should simply look to the document itself. The trial court agreed with Coastal's argument and entered its order granting summary judgment, relying on the plain language of the document. On appeal, the Second DCA stated that this case presented an exception to the general rule that a trial court should rely on the plain meaning of a contractual document when its language is clear and unambiguous. Citing Edwards v. Norman, 780 So. 2d 162 (Fla. 2d DCA 2001) and Milford v. Metro. Dade County, 430 So. 2d 951 (Fla. 3d DCA 1983), the Second DCA stated that if it is alleged that the language did not reflect the actual intent of the parties, that a party executed the document by mistake, or that a party secured the execution of the document by fraud or misrepresentation, then the trial court may consider other facts related to the execution of the document in determining its scope and meaning. Consequently, the Second DCA looked to Mr. McKeever s affidavit, which stated that if the release was a general release, he signed it by mistake and never understood the purpose of the release to include foreclosing a personal injury claim, which raised an issue of fact that had to be resolved. The court found that the suggestion of mistake was supported by both the inconsistency between the title of the release and language of its body where the body of the release purported to release personal injury claims but the title read Property damage release and the fact that the check received upon execution of the release was for the exact amount of repairs to plaintiff's vehicle. The claim that there was mutual mistake was also supported by ongoing litigation of the personal injury claim by the defendant four years after the execution of the release. The Second DCA found the trial court erred in entering summary judgment for the defendant on basis of the release signed by one of plaintiffs where there was genuine issue of material fact as to whether release was a general release. Page 7 of 10

8 ACCIDENT VIDEOS ARE DISCOVERABLE EVIDENCE, NOT PROTECTED WORK PRODUCT Target Corporation sought certiorari review of a circuit court's discovery order. The order compelled production, prior to the taking of the plaintiff's deposition, of four photographs of the Target Corp. v. Vogel, 35 Fla. L. Weekly D1686 (Fla. 4th DCA July 28, 2010) accident scene and a security video of the plaintiff's slip and fall. The Court denied the petition, finding no departure from the essential requirements of law. At a hearing on the plaintiff's motion to compel production, Target's counsel argued that the plaintiff should be deposed before she saw the video and the photographs; he contended that the plaintiff was not accurately portraying the incident, citing medical records indicating that the plaintiff told her doctor she fell flat on her back, a fact refuted by the video. The plaintiff said that she should be allowed to refresh her memory of the incident with the security video and accident scene photographs before being deposed. The trial court granted the plaintiff's motions to compel, requiring production of the photos and videos prior to her deposition. We distinguish Dodson v. Persell, 390 So. 2d 704 (Fla. 1980), upon which Target relies. That case involved surveillance films of a purportedly injured plaintiff, made after the accident at issue. Such films, usually taken by defense private investigators, were characterized by the Supreme Court as falling under the work product privilege, unless intended for use at trial. Id. at 707. The video in this case was not protected work product, prepared to aid counsel in trying the case. Id. Rather, it was a video of the accident itself, discoverable evidence under the Rules of Civil Procedure, which are designed to prevent the use of surprise, trickery, bluff and legal gymnastics. Surf Drugs, Inc. v. Vermette, 236 So. 2d 108, 111 (Fla. 1970). Even if the photographs of the accident scene are characterized as work product, given the circuit court's broad discretion in overseeing discovery, the Court found no abuse of discretion in the order requiring their production before Vogel's deposition. Target did not make any showing as to how production of the photographs violates Dodson's policy of timing the disclosure of discovery to prevent fraudulent and overstated claims. Page 8 of 10

9 FAILURE TO ESTABLISH JUSTIFIABLE RELIANCE IS NOT A BAR TO RECOVERY BASED ON FRAUDULENT MISREPRESENTATION Butler v. Yusem, 2010 WL (Fla. September 8, 2010) This lawsuit arises out of a dispute between the plaintiff, Robert Butler, and the defendants. The case involved an agreement to construct a commercial retail and office building. Butler filed a multi-count complaint against the defendants, alleging that the project was not being completed or leased as required by the partnership agreement. The case proceeded to a bench trial and the trial court granted relief to Butler on some of his claims and denied relief on others. The issue before the Florida Supreme Court concerned the trial court s denial of Butler s claims of fraudulent misrepresentation and negligent misrepresentation based on Butler s failure to exercise due diligence. The trial court determined that Butler s lack of due diligence included putting various protective provisions into the subject agreement, but failing to follow up on them. The Florida Supreme Court discussed the difference between fraudulent misrepresentation and negligent misrepresentation. The four elements of fraudulent misrepresentation are: (1) a false statement concerning a material fact; (2) the representor s knowledge that the representation is false; (3) an intention that the representation induced another to act on it; and (4) consequent injury by the party acting in reliance of the representation. The Court noted that, in an action for fraudulent misrepresentation, the plaintiff does not need to allege that he investigated the truth of the misrepresentations. The policy behind this is to prohibit one who purposely uses false information to induce another into a transaction from profiting from the wrongdoing. A party transmitting false information but being unaware of the falsehood gives rise to a negligent misrepresentation claim. Justifiable reliance on the misrepresentation is required as an element of negligent misrepresentation. However, justifiable reliance is not the same thing as failure to exercise due diligence. In this case, the trial court found that Butler did not exercise due diligence because he was a sophisticated businessman and an experienced lawyer and, although he undertook an investigation, he did not ask the right questions and did not obtain information that was available. The trial court erred in denying relief to the plaintiff based upon the lack of due diligence. The Court further noted that due diligence was not raised as an affirmative defense by the defendants. The 4 th District Court of Appeal had upheld the ruling of the trial court. The Florida Supreme Court quashed the 4 th DCA s decision and remanded the case to the 4 th DCA with instructions that it be returned to the trial court for further proceedings, including that the trial court should reconsider whether the plaintiff was entitled to relief based upon his claims for fraudulent misrepresentation and negligent misrepresentation. Page 9 of 10

10 WICKER, SMITH, O HARA, MCCOY & FORD, P.A. 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. Wicker Smith Office Locations: Miami: 2900 S.W. 28 th Terrace, 5 th Floor Miami, Florida / Fort Lauderdale: SunTrust Center 515 E. Las Olas Boulevard, Suite 1400 Fort Lauderdale, Florida / West Palm Beach: Northbridge Centre 515 North Flagler Drive, Suite 1600 West Palm Beach, Florida / Orlando: Bank of America Center 390 North Orange Avenue, Suite 1000 Orlando, Florida / Tampa: 100 North Tampa Street, Suite 3650 Tampa, Florida / Naples: Mercato 9128 Strada Place, Suite Naples, FL / Jacksonville: 50 North Laura Street, Suite 2700 Jacksonville, FL / 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 10 of 10