Medicare Services and Collateral Source Rule * Property Liability – Ownership vs. Possession * Negligent Security – Admission of Similar Incidents * Irreparable Harm – Pre-Accident Medical Records
June 10, 2014
TORT CASE LAW UPDATE
Dear Ladies and Gentlemen:
This month we would like to share with you some recent opinions from the Florida District Courts of Appeal that may be of interest to you.
In State Farm Mutual Automobile Insurance Company v. John Joerg, the Second District Court of Appeals held that admission of evidence of a disabled person’s receipt of medical services under Medicare program in determining future damages would not violate the collateral source rule.
In Tsafatinos v. Family Dollar Stores of Florida, Inc., the Second District Court of Appeals held that a third-party complaint for negligence is not barred by workers’ compensation immunity, and that a landlord and property owner, is not liable for injuries that result from dangerous conditions on the property because liability is not predicated on the ownership of the property, but on the failure of the possessor of the property to use due care.
In Bellevue v. Frenchy’s South Beach Cafe, Inc., the Second District Court of Appeal held that in a negligent security case evidence of foreseeability was not limited to evidence of similar incidents inside four walls of restaurant, and excluding such evidence is not harmless error.
In Poston v. Wiggins, the First District Court of Appeal held that the defendant failed to make required showing of irreparable harm with respect to production of pre-accident pharmacy records and hence was required to comply with court order to produce such records; but defendant’s post-accident medical records were irrelevant to pending automobile negligence action because the petitioner did not claim any injuries in the underlying case, hence her medical history was not at issue.
I. State Farm Mutual Automobile Insurance Company v. John Joerg, 2D11–6229, 38 Fla. L. Weekly D1378 (Fla. 2d DCA June 21, 2013).
FACTS AND PROCEDURAL HISTORY
The Plaintiff in this case, Luke Augustine Joerg (a developmentally disabled adult), initiated suit when he was injured while riding his bicycle and collided with a car driven by William Lazar. Joerg sued Lazar and Joerg’s father’s insurer, State Farm, for uninsured motorist benefits. Joerg settled his claim against Lazar. Therefore, the only issue at trial was between Joerg and State Farm. The trial court did not allow State Farm to introduce evidence that Joerg’s future medical expenses could be reduced under the Medicare program. As a result, Joerg received a verdict in the amount of $469,076.00. State Farm then appealed the judgment in favor of Joerg on a number of grounds including the award of $469,076.00 for future medical expenses calculated at full Medicare rates, rather than the lower reimbursement rate. The Second District Court of Appeals agreed with State Farm and reversed on the issue of damages.
APPELLATE COURT’S DECISION
The appellate court stated that the key issue in the case was whether Florida’s legislatively modified collateral source rule or any judicial decision undermined the continued viability of Florida Physician’s Insurance Reciprocal v. Stanley, 452 So. 2d 514 (Fla. 1984). State Farm argued that the policy announced in Stanley controls the case because Joerg’s benefits were not earned or purchased, but rather were and will continue to be provided under the Medicare program due to his disability. Therefore, evidence of medicare benefits should have been admissible under the rule of evidence announced in Stanley. Joerg argued that Stanley was inapplicable because it did not involve Medicare benefits, that reductions of future damages was impermissible because Joerg’s entitlement to those benefits was speculative, and that Florida law did not allow reduction of future damages for Medicare benefits.
Upon analysis, the appellate court held that Joerg’s case was unlike the case of Winston Towers 100 Ass’n v. De Carlo, where the Florida Third District Court of Appeals held that the collateral source rule was properly applied to exclude evidence of Medicare benefits, because the Plaintiff demonstrated that he had payments to the program via deductions in his monthly paychecks. 481 So. 2d 1261, 1262 (Fla. 3d DCA 1986). In this case, Joerg’s situation was unlike the Plaintiff in Winston because he never contributed to or paid for the Medicare benefits at issue. Therefore, the appellate court stated that in consideration of the Florida Supreme Court’s focus on earned versus unearned collateral sources in Stanley they agreed with State Farm and remanded the case back to the trial court.
II. Tsafatinos v. Family Dollar Stores of Florida, Inc., 116 So.3d 576 (Fla. 2nd DCA 2013)
FACTS AND PROCEDURAL HISTORY
The Plaintiffs, David Sugas (an employee of Family Dollar) and his wife, Barbara Sugas brought an action against Family Dollar’s landlord and the landlord’s property manager, Terry Tsafatinos and Sigma TAF Management, Inc., for negligent failure to maintain property. The landlord brought a third-party complaint against Family Dollar for indemnification and breach of contract. On December 26, 2008, David Sugas allegedly stepped on an uneven concrete floor in the backroom of a Family Dollar store, fell, and injured his knee. As a result, Family Dollar provided workers’ compensation benefits to Mr. Sugas. Mr. Tsafatinos filed a third-party complaint against Family Dollar for common law indemnification and for breach of contract. As to the indemnity claim, Mr. Tsafatinos alleged that there was a special relationship between the parties by virtue of the lease agreement. It was further alleged that although Mr. Tsafatinos was the property owner, Family Dollar leased and maintained possession of the property, making Mr. Tsafatinos’ liability, if any, solely vicarious, constructive, derivative, or technical in nature. Mr. Tsafatinos based his breach of contract claim on the pertinent insurance provision of the lease agreement that required Family Dollar to carry $1,000,000 in general liability coverage, but failing to name Mr. Tsafatino in such policy.
The Sugases objected to the filing of the third-party complaint, arguing that the workers’ compensation benefits paid by Family Dollar to Mr. Sugas acted as the exclusive remedy against Family Dollar, including any liability of Family Dollar to third parties. The Sugases further argued that their claims did not fall under Family Dollar’s insurance policy, but rather under Florida’s Workers’ Compensation Law. In its motion to dismiss the third-party complaint, Family Dollar argued that the indemnity count was improperly pleaded, and they asserted that because the right of contribution has effectively become obsolete due to the abolition of joint and several liability it necessarily follows that third-party claims for common law indemnity are no longer available in negligence cases. Family Dollar argued that since the Sugases alleged no negligence against Family Dollar, Mr. Tsafatinos may not do so in the third-party complaint. Pursuant to the pertinent language of the insurance provision of the lease agreement, Family Dollar argued that the breach of contract count was legally impermissible because the amended complaint contained no allegation of negligence against Family Dollar, and thus Mr. Tsafatinos would not be an additional insured under the policy they were required to maintain. The trial court dismissed Mr. Tsafatinos third-party complaint with prejudice.
Mr. Tsafatinos then appealed to the Florida Second District Court of Appeals which affirmed in part and reversed in part.
APPELLATE COURT’S DECISION
As to Mr. Tsafatinos third-party complaint the appellate court stated that in the case of Sunspan Engineering & Construction Co. v. Spring–Lock Scaffolding Co., the Florida Supreme Court held that Fla. Stat. § 440.11(1), the exclusive remedy provision of the Workers’ Compensation Law, was unconstitutional as applied to bar a third-party plaintiff’s common law action for indemnification against a negligent employer who paid its injured employee workers’ compensation benefits. 310 So. 2d 4 (Fla. 1975). Thus, a third party’s claim for common law indemnification against a negligent employer was not barred by section 440.11(1). The appellate court further explained that section 440.11(1) is also unconstitutional to the extent that it functions to immunize an employer from liability to a third party where the employer contracted to indemnify the third party for losses resulting from its negligence.
The appellate court explained that Mr. Tsafatinos was not restricted by the allegations in the Sugases’ amended complaint, namely, that Mr. Tsafatinos was actively negligent, or by the fact that the Sugases did not allege negligence on the part of Family Dollar. The appellate court explained that in order for a party to state a claim for common law indemnity, a party must allege that he is without fault, that another party is at fault, and that a special relationship between the two parties makes the party seeking indemnification vicariously, constructively, derivatively, or technically liable for the acts or omissions of the other party. In this particular case, the appellate court held that Mr. Tsafatinos failed to properly plead a claim for common law indemnity because he failed to show the existence of any special relationship between himself and Family Dollar that would make Mr. Tsafatinos vicariously, constructively, derivatively, or technically liable to the Sugases. Since Family Dollar was in possession of the property Mr. Tsafatinos, as landlord and property owner, was not liable for injuries that resulted from dangerous conditions on the property. See Welch v. Complete Care Corp.,818 So.2d 579, 649 (Fla. 2d DCA 2002); Marino v. Weiner, 415 So.2d 149, 150–51 (Fla. 4th DCA 1982). Without vicarious liability, Mr. Tsafatinos’ claim for common law indemnity against Family Dollar was not viable.
The appellate court then addressed Mr. Tsafatino’s breach of contract claim. Since the appellate court found that Mr. Tsafatinos’ claim for common law indemnification failed to state a cause of action, the related claim for breach of contract could not be maintained as a third-party claim. The court found that claim could be asserted by Mr. Tsafatinos in a separate action against Family Dollar.
Therefore, the appellate court affirmed the dismissal with prejudice of the claim for common law indemnification and affirmed the dismissal of the claim for breach of contract. However, they reversed the dismissal of the breach of contract claim to the extent that such dismissal was with prejudice.
III. Bellevue v. Frenchy’s South Beach Cafe, Inc., 136 So.3d 640 (Fla. 2d DCA 2013).
FACTS AND PROCEDURAL HISTORY
This matter arose out of a personal injury action for damages sustained by Plaintiff, Jennifer Bellevue, when she was attacked inside of the Defendant’s, Frenchy’s South Beach Café, by intoxicated patrons. On the night Ms. Bellevue was attacked, she arrived at Frenchy’s just before it closed planning to give a ride home to her roommate, Shelly Kneuer, one of the bartenders. Testimony at trial established that a family of tourists from Ireland (“the Irish family”) had been drinking heavily remained inside the restaurant. The only other people in the restaurant at the time were Ms. Bellevue’s friend Christopher Malek, a manager named Jonathan Kirby, and Ms. Kneuer. At some point, a verbal exchange between the parties occurred and soon thereafter Ms. Kneuer was physically bumped or shoved by one of the Irish family members. Mr. Malek and Ms. Bellevue entered the fray, and the incident became physically violent. By the time the police arrived, Ms. Bellevue had been severely beaten. The Irish family was arrested, but subsequently jumped bail and left the country. The essence of Ms. Bellevue’s complaint was that Frenchy’s was on notice that its patrons had a propensity to become rowdy or violent and that it failed to maintain adequate security to protect its patrons.
Prior to trial, Frenchy’s filed a motion in limine to preclude Ms. Bellevue from introducing into evidence sixty incidents that occurred either in Frenchy’s or near its premises. The incidents were obtained either from police reports or from Frenchy’s management logs. It was Ms. Bellevue’s intention to elicit testimony from her security expert that based upon the volume and nature of these prior incidents, Frenchy’s was negligent in not taking adequate measures to protect against the type of attack suffered by Ms. Bellevue. Frenchy’s contended that these incidents were inadmissible because they were not similar crimes or were not probative of the issue of foreseeability. The court ruled that only those incidents involving damage to persons or property and starting on or ending on, or involving the premises would be admitted. As a result, only twelve of the sixty incidents were admitted. The jury assigned no liability to Frenchy’s and Ms. Bellevue appealed.
On Appeal, the Florida Second District Court of Appeals reversed on the issue of admissibility of previous incidents and remanded the case for a new trial.
APPELLATE COURT DECISION
The appellate court noted that the issue of admissibility of prior incidents to establish foreseeability and risk of harm in this context had not been previously addressed by the district. However, there was informative case law from Florida Supreme Court and each of the other districts. The appellate court explained that the starting point for this issue is a trilogy of Florida Supreme Court cases: Hall v. Billy Jack’s, Inc., 458 So. 2d 760 (Fla. 1984), Allen v. Babrab, Inc., 438 So. 2d 356 (Fla. 1983), and Stevens v. Jefferson, 436 So. 2d 33 (Fla. 1983). In each case, the plaintiff sued a bar or bar operator for injuries sustained during a criminal attack in or around the bar.
Stevens and Allen stood for the proposition that foreseeability could be established “by proving that, based on past experience, a proprietor knew of or should have recognized the likelihood of disorderly conduct by third persons in general which might endanger the safety of the proprietor’s patrons.” Allen, 438 So. 2d at 357; accord Stevens, 436 So. 2d at 35. The Florida Supreme Court in Hall also stated that foreseeability could be established by proving that a proprietor had actual or constructive knowledge of an assailants inclination towards violence or of a dangerous condition on the premises: a dangerous condition may be indicated if, according to past experience (i.e., reputation of the tavern), there is a likelihood of disorderly conduct by third persons in general that might endanger the safety of patrons or if security staffing is inadequate. The appellate court explained that in the case of Holiday Inns, Inc. v. Shelburne, the defendants tried to argue that in order to establish foreseeability, the plaintiffs had to demonstrate that the owner had actual or constructive knowledge of “similar criminal acts against invitees on their property,” a shooting of a patron. 576 So. 2d 322, 331 (Fla. 4th DCA). The trial court rejected the defendant’s argument and allowed into evidence fifty-eight offense reports pertaining to prior criminal incidents on the bar’s premises. The ruling was upheld by the Florida Fourth District Court of Appeals which stated that a ruling limiting admissibility to those reports containing only similar criminal activity would be irreconcilable with the Florida Supreme Court’s holdings in Stevens, Allen, and Hall. The ultimate weight attributed to those incidents and if they had any effect on determining foreseeability is to be decided by the trier of fact—in this case the jury.
In reversing this case on remand for a new trial, the court did not mandate that all sixty incidents Ms. Bellevue listed should be admitted into evidence. Rather, they instructed the trial court to consider each incident based on the parameters of the case law set forth in the case. The admissibility of a given incident was not based on whether it occurred within the four walls of Frenchy’s or whether it was similar to what occurred in this case. Rather, it must be based on whether or not the event put Frenchy’s on notice that the attack resulting in Ms. Bellevue’s injury was foreseeable.
IV. Poston v. Wiggins, 112 So. 3d 783 (Fla. 1st DCA 2013)
FACTS AND PROCEDURAL HISTORY
This matter involved an auto negligence action brought by Estella and Clarence Wiggins against Ms. Susan Poston, an elderly woman who backed into the Plaintiffs car while backing out of a parking space. The Plaintiffs claimed to have suffered damages as a result, but Ms. Poston denied liability. In her sworn interrogatories, Ms. Poston responded that she had not been injured in the accident and provided details of her prescription medication usage in the 12–hour period before the accident. Ms. Poston later provided deposition testimony that her osteoarthritis had gotten worse since the accident along with details about her prescription medication usage. The Plaintiffs contend that her deposition testimony was inconsistent with her interrogatories because of the statement regarding her osteoarthritis and some difference regarding what medication Ms. Poston was taking. The Plaintiffs filed a notice of production seeking all papers and medical records from Ms. Poston’s pharmacy and from one of her treating physicians. The petitioner objected that the information sought was irrelevant, immaterial, and invaded her privacy rights. The trial court overruled the objection and ordered Ms. Poston to provide the requested documents because the Plaintiffs were entitled to the records due to the inconsistencies between the petitioner’s interrogatory responses and her deposition testimony.
Ms. Poston sought a writ of certiorari to quash the trial court’s order overruling her objection to discovery of her medical records and requiring her to produce (1) her pharmacy records for the one-year period preceding the date of the subject automobile accident, and (2) her treating physician’s medical records from the date of the accident until the date of the order. The Florida First District Court of Appeals affirmed the order as to the pharmacy records, but quashed the order as to the post-accident medical records.
APPELLATE COURT DECISION
The appellate court explained that when reviewing a discovery order the petitioner must show irreparable harm from such order. A patient’s medical records enjoy a confidential status by the right to privacy in Article I, section 23 of the Florida Constitution. State v. Johnson, 814 So. 2d 390, 393 (Fla. 2002). The trial court is charged with balancing the right to broad discovery against an individual’s competing privacy interests to prevent an undue invasion of privacy. See Barker v. Barker, 909 So.2d 333, 338 (Fla. 2d DCA 2005). In exercising its discretion to balance the competing interests, the trial court is guided by the principles of relevancy and practicality. See Friedman v. Heart Inst. of Port St. Lucie, 863 So.2d 189, 194 (Fla. 2003). In the instant case, the pre-accident pharmacy records appeared to be relevant to the issue of negligence in the case and were potentially discoverable. However, the petitioner’s alleged irreparable harm with regard to this group of records was premature and speculative because Ms. Poston can still seek a protective order and/or an in camera inspection. Thus, the appellate court affirmed the trial court’s decision regarding Ms. Poston’s pharmacy records.
The appellate court then turned to the issue of Ms. Poston’s post-accident medical records. Upon review, the appellate court stated that such records were irrelevant to the issues in the case and the trial court erred in ordering these documents to be produced. The appellate court explained that Ms. Poston had not put her post-accident medical condition at issue in the case. The Plaintiffs argued that the post-accident medical records were relevant because Ms. Poston provided inconsistent information as to whether she was injured in the accident. The appellate court did not find any inconsistency in the petitioner’s responses regarding any injuries. The appellate court explained that nothing in Ms. Poston’s statement implied or stated that her worsening arthritis was due to the subject accident. Hence, there were no inconsistencies between her interrogatory answers and her deposition testimony. Since no inconsistencies existed, the post-accident medical records were entirely irrelevant and an in camera review on remand would serve no purpose. The appellate court quashed the trial courts order requiring disclosure of Ms. Poston’s post-accident medical records.
Very truly yours,
REBECCA A. BROWNELL