In a duel involving amicus briefs from both the plaintiff bar as well as the state hospital association (the defense bar?), the Third District handed down a Christmas Eve decision which likely lead to some thoughtful post-egg nog conversations in households of Florida lawyers. We suspect the Florida Supreme Court may get its shot at this case in 2009.

Florida's Medical Negligence Statute (Chapter 766) is likely one of the worst written in the books, having been revised multiple times leading to a cobbling of poorly organized, quasi-consistent statements of law which is further hobbled by the public policy issues at play (e.g., health care, tort reform, caps on damages, the "insurance crisis" in Florida medicine). That said, its twisted wording and convoluted legislative history is job security for the few lawyers who still practice medical malpractice in Florida since the dawn of caps (2003 tort reform) and the continuing decline in insured providers.

Our focus is on the voluntary arbitration provision in Chapter 766, specifically as it relates to what economic damages are available when the alleged medical negligence involves death. In this case, it apparently involved flesh eating bacteria... and death.

The question in Lifemark Hospitals of Florida, Inc. d/b/a Palmetto General Hosptial v. Mercedes Alfonso, P.R. Estate of Alexis Afonso is whether the 2003 amendment to Florida Statute 766.203(2) and 766.207(7) limits a death claim to the damages available under the Wrongful Death Act, Florida Statute 768.81. The "Med Mal" Statute and the Wrongful Death Statute have never played well together, as evident by the amendments to both in just the last decade, but that goes beyond our scope today.

In a surprisingly pro-defense opinion from the Third DCA (Ramirez, Rothenberg, and Schwartz), the Court held that the wrongful death claimant in arbitration under the "new" Med Mal Statute is limited to Wrongful Death Statute damages. Of note, the exclusive focus in this case is on economic damages. Here's the math behind the result:

1. Section 766.202(3) defines "economic damages" [expenses and 80% of earning capacity], if the claimant is entitled to those types of damages under general law or the Wrongful Death Statute.
2. Section 766.207(7) says that voluntary arbitration under the Med Mal Statute can award damages allowable by Florida law in general, including the Wrongful Death Statute, where applicable.
3. Section 768.18(5) (WD Statute) limits damages in this kind of case to expenses, loss of support, and net accumulations.

The Plaintiff wanted all of #3 damages as well as loss of earning capacity. The arbitration panel gave it to them. The 3rd DCA took it away, noting that it found the med mal statute ambiguous ("clarity is lacking..."). The opinion did not indicate the value of that portion of the claim (or the total award) nor did it address non-economic damages.

The Florida Supreme Court's 1999 decision in Seifert v. U.S. Home Corp. has become the standard for the elements to enforcing arbitration. Notably, the Seiferts were suing for a personal injury and the construction company sought arbitration, which was ultimately denied under the principal that the home construction contract's arbitration clause did not contemplate a subsequent personal injury which did not have a sufficient nexus to the contract for the building of the home.

The Second District (LaRose, Northcutt, and Davis) handed down a decision in Alexander and Denise Kaplan v. Divosta Homes, L.P. and Villagewalk of Bonita Springs Homeowners Association, where the court "piggybacked" both Seifert as well as another arbitration mainstay, Buckeye Check Cashing v. Cardegna.

In the 2nd DCA's case, there was a broad ("arising from or relating to") arbitration clause in the homebuilder's contract, which is likely the standard form for Divosta Homes, a nationwide homebuilder. At some point, the home was built. At some point, an unknown personal injury allegedly occurred. Little to no details are provided, hence we question the procedural strength of this case (contrast with Seifert, where the dates, injuries and claims were more fully set out).

First, since the contract affirmatively said there were no third party beneficiaries, the (presumably builder-controlled) Association was not entitled to arbitration.

Second, the Kaplans could not avoid arbitration through challenges to the contract as a whole (as we saw just recently in this case).

Third, while "arising from or relating to" was recognized as encompassing virtually all disputes between the contracting parties, the Panel found there was no significant relationship between the (unstated, undescribed) personal injury claim and the construction contract. The nexus requires "some issue of resolution which requires reference to or construction of some portion of the contract."

In the case of Michael Depaoli v. Exotic Motorcars and Jewelry, Inc., the Southern District of Florida court (Judge Kenneth A. Marra) handled a Ferrari deal gone bad. His ruling concluded that a 2000 Fourth DCA opinion was no longer good law and that a claim of rescission, which would void the contract, is for the arbitrator when there is a valid arbitration clause.

The plaintiff sought to buy a $160,000 Ferrari but rejected it upon delivery and sued to get his money back. Prior to the delivery, the parties entered into a retail buyers order (RBO) which contained a fairly ordinary arbitration clause ("arising out of or relating to this contract..."). However, the RBO referenced the wrong car. Still prior to delivery, the Defendant tried to cure the RBO clerical error but those revised RBOs were still refused.

Plaintiff's lawsuit was met with a motion to compel arbitration; plaintiff then claimed that there was no contract since the RBO was rescinded. The court framed the question to be whether a controversy arising out of a contract with an arbitration clause, which was allegedly rescinded, should be resolved by a court or arbitrator. Bottom line: arbitrator.

The federal court went through a two step process: (1) whether the parties agreed to arbitrate the dispute and (2) whether legal constraints external to the agreement foreclosed the arbitration of those claims. Step two was the Seifert v. U.S. Home Corp. three-step test. Of note, this is the first time we've seen a court set out the steps of analyzing arbitration this way -- arguably, step one duplicates Seifert's second prong (does an arbitrable issue exist). Nonetheless, we get to the same result.

Under Florida law, rescission voids the contract ab initio. According to the U.S. Supreme Court's 2006 Buckeye Check Cashing v. Cardegna, any challenge to the contract as a whole is heard by the arbitrator (conversely, a challenge only to the arbitration clause goes to the court). Cardegna also held that any challenge which renders the contract void or voidable -- such as rescission -- goes to the arbitrator. Here, the court found that a challenge to a contract based on rescission belongs before an arbitrator because under Florida law rescission voids a contract.

Judge Marra addressed a 2000 opinion from the Fourth DCA, Henderson v. Coral Springs Nissan, where an auto dealer rescinded a contract with an arbitration clause. The federal court offered that Henderson (2000) was likely over-ruled by Cardenga (2006) and there were some factual distinctions nonetheless. As a side note, Cardegna originally came out of a Fourth DCA decision.

Because of Cardegna's breadth and apparent application to state and federal cases, this opinion appears to be confirmation that rescission in any court is arbitrable.

Most civil practitioners make it through their entire careers without filing a Motion to Disinter a Body (don't bother flipping through the Rules of Civil Procedure, it's not there). In a well publicized plastic surgery death case, the First District interesting took an appeal from binding arbitration under the medical negligence statute to ascertain whether it was necessary discovery.

The case is Shari Beth Gottleib as Personal Rep. of the Estate of Martin J. Gottlieb v. Mohamad R. Samiian, Aesthetic & Plastic Surgery Center of Jacksonville et al. (Kahn, Benton, Barfield).

What is notable about the case is that this is an appeal of a discovery motion in arbitration. Specifically, it is a fairly unusual motion (digging up a dead body to test it for illicit drugs) and the arbitration is the statutorily-mandated process under the medical negligence statute, F.S. 766.207.

The Panel spent little time dealing with the origin of the case; it apparently was not significant to them that the motion was pending in arbitration (as opposed to circuit court). There was noticeably no discussion as to the court's basis for jurisdiction to review a certiorari petition out of arbitration. Thus, one might conclude that cert review is available and appropriate for discovery motions (if not other matters) in arbitration.

As to the merits, the court concluded that there are common-law driven grounds to support a motion to disinter but, in this case, there was insufficient basis since the motion was premised upon an anonymous and vague second-hand source.

If you are interested, oral argument is here (under May 2007).

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Florida practitioners are likely seeing more circuit court judges referring matters to special masters/general magistrates. This judicial practice appears to be arising out of the court's limited resources. Consider it a mild form of alternative dispute resolution.

The case of Washington Park Properties LLC, Doug Fleishman, Tom Smith, and Tom Smith Development, Inc. v. Ricardo Estrada, Luz E. Leon and Richard Epperly involves referring a motion to compel to a general magistrate.

In this construction case, a Broward County judge referred the defendant's motion to compel arbitration to a general magistrate under Florida Rule of Civil Procedure 1.490(c), which permits the reference if all parties consent. It appears all counsel consented.

The pleadings thereafter get a bit confusing but, suffice it to say, the plaintiff ends up filing a third amended complaint, the defendant changes its mind and does not want the "new" motion to compel arbitration of the third amended complaint referred, and new defendants appear who also object to a general master.

The plaintiff argued that the first defendant already consented to having the entire issue of arbitration heard by the master since they previously agreed to refer the first motion. It isn't clear in the opinion but it appears that the motion to compel arbitration largely had not changed in complexion between the complaint and the third amended complaint. Plaintiff also pointed out that all defendants were represented by the same defense counsel.

Fourth DCA (May, Damoorgian, and Stevenson) held that either a writ of mandamus or prohibition provided appellate jurisdiction for any objection to an order of referral to special master/general magistrate. The Court held that the first defendant was entitled to consent to the referral of the first motion but still had the right to object to the referral of the second motion (even if they were substantively the same). Finally, the newly-added defendants never consented and it did not matter that all defendants had the same counsel.

Need 3.0 hours of ethics credits? Interested to learn winning techniques from some of the best mediators in South Florida? The Palm Beach Bar Association is hosting a February 9, 2009 CLE, "Mediation and Arbitration in 2009: Finding the Hidden Gems."

The CLE includes two (short) segments on arbitration about nursing home arbitration clauses and a how-to-win-at-arbitration segment.

Check out the line up and register for the CLE at the Bar Site.