Barlow v. North Okaloosa Medical Center

• Decision Date: 12 February 2004
• Docket Number: No. SC02-796.,SC02-796.
• Citation: 877 So.2d 655
• Parties: Evelyn BARLOW, etc., Petitioner, v. NORTH OKALOOSA MEDICAL CENTER, etc., Respondent.
• Court: Florida Supreme Court

877 So.2d 655

Evelyn BARLOW, etc., Petitioner, v. NORTH OKALOOSA MEDICAL CENTER, etc., Respondent.

No. SC02-796.

Supreme Court of Florida.

February 12, 2004.

Rehearing Denied July 8, 2004.

Stanley Bruce Powell of Powell & Swanick, Niceville, FL, for Petitioner.

William K. Thames, II, and Pamela K. Frazier of Lozier, Thames & Frazier, P.A., Pensacola, FL, for Respondent.

Gail Leverett Parenti of Parenti, Falk, Waas, Hernandez & Cortina, P.A., Coral Gables, FL, for Florida Defense Lawyers Association, Amicus Curiae.

PARIENTE, J.

We have for review the First District Court of Appeal's decision in Barlow v. North Okaloosa Medical Center, 809 So.2d 71 (Fla. 1st DCA 2002), based on express and direct conflict with this Court's decision in St. Mary's Hospital, Inc. v. Phillipe, 769 So.2d 961 (Fla.2000), which held that the arbitration provisions of the Medical Malpractice Act¹ specify the damages available when the parties agree to binding arbitration, regardless of whether the medical malpractice action involves a wrongful death. See id. at 973. We have jurisdiction. See art. V, § 3(b)(3), Fla. Const. For the reasons that follow, we quash the First District's decision.

FACTS

Evelyn Barlow brought suit against North Okaloosa Medical Center ("NOMC") for medical malpractice as the result of the death of her husband. NOMC admitted liability and the parties chose to proceed under the alternative arbitration procedure for medical malpractice claims set forth in section 766.207, Florida Statutes (2002). At the conclusion of the arbitration hearing, the panel awarded Mrs. Barlow economic damages in the amount of $102,365.50, which included $93,600 for lost services and $8,765.50 for funeral expenses. However, the panel awarded Mrs. Barlow nothing for loss of earning capacity and lost social security retirement benefits, which she had also claimed as economic damages.² With respect to the social security retirement benefits, the panel stated:

No award was made for lost social security benefits to the estate since [Mrs. Barlow] failed to establish that there would exist any net accumulation after consumption. Stated differently, [Mrs. Barlow] failed to demonstrate that the social security benefits did not fairly represent the monies that would have been required to maintain the decedent. Notably, Section 766.207(7)(a), Florida Statutes, calls for an award of "net economic damages," and there is no apparent reason to conclude that established principles used to calculate net economic damages should not apply to this case.

(Emphasis supplied.)

Mrs. Barlow appealed and the First District affirmed the award. See Barlow, 809 So.2d at 73. The First District explained its reason for affirming the award of zero damages for lost social security benefits as follows:

As surviving spouse and personal representative, Mrs. Barlow was entitled to recover the loss of prospective net accumulations, which might reasonably have been expected but for Mr. Barlow's wrongful death, reduced to present money value. See § 768.21(6)(a), Fla. Stat. (2001).

Mrs. Barlow was afforded an opportunity to prove as a predicate for this element of damages the amount, if any, by which Mr. Barlow's estate was diminished on account of his early death. To prove a loss in prospective net accumulations, however, she had to show not only a fall in household income, but also that lower expenses did not offset the drop. See § 768.18(5), Fla. Stat. (2001) (defining net accumulations as that part of earnings "that the decedent probably would have retained as savings and left as part of her or his estate"); Tobias v. Osorio, 681 So.2d 905, 907 (Fla. 4th DCA 1996) (explaining that under the wrongful death statute, "net accumulations" is the part of the decedent's expected income which the decedent probably would have retained as savings). The arbitration panel concluded that Mrs. Barlow failed to carry her burden to prove that there would have been net accumulations, if her husband had lived. See Ellis v. Golconda Corp., 352 So.2d 1221, 1227 (Fla. 1st DCA 1977) (concluding that there was "not any record basis for an award for loss of net accumulation of [decedent's] prospective estate" in the absence of proof of decedent's expenses); Seaboard Coast Line R.R. Corp. v. Robinson, 263 So.2d 626, 627 (Fla. 2d DCA 1972) (reversing a jury award of damages in a wrongful death action where there was no evidence that the decedent's income from social security and gratuitous financial assistance exceeded her day to day needs). On this record, no error has been shown.

Id. (emphasis supplied). Mrs. Barlow sought review in this Court, arguing that the First District's reliance on the definition of "net accumulations," found in the Wrongful Death Act, see § 768.21(6)(a), Fla. Stat. (2002), directly and expressly conflicts with this Court's decision in St. Mary's Hospital.³

ANALYSIS

The Medical Malpractice Act, sections 766.201 through 766.212, Florida Statutes (2002), was enacted in 1988, see ch. 88-1, §§ 48-54 at 164-71, Laws of Fla., and contains two main components: "(1) a presuit investigation process to eliminate frivolous claims and (2) a voluntary arbitration process to encourage settlement of claims." University of Miami v. Echarte, 618 So.2d 189, 192 (Fla.1993). With respect to the voluntary arbitration process, section 766.207(7) provides that a claimant who submits to arbitration on the amount of damages can recover, in part,

[n]et economic damages ... including, but not limited to, past and future medical expenses and 80 percent of wage loss and loss of earning capacity, offset by any collateral source payments.

§ 766.207(7)(a), Fla. Stat. (2002). Section 766.202 defines "economic damages" as

financial losses which would not have occurred but for the injury giving rise to the cause of action, including, but not limited to, past and future medical expenses and 80 percent of wage loss and loss of earning capacity.

§ 766.202(3), Fla. Stat. (2002).

In contrast, as noted by this Court in St. Mary's Hospital, "the Wrongful Death Act does not provide claimants with such a full range of economic damages." 769 So.2d at 973. Section 768.21, Florida Statutes (2002), sets forth the damages recoverable under the Wrongful Death Act and provides in pertinent part:

(6) The decedent's personal representative may recover for the decedent's estate the following:

(a) Loss of earnings of the deceased from the date of injury to the date of death, less lost support of survivors excluding contributions in kind, with interest. Loss of the prospective net accumulations of an estate, which might reasonably have been expected but for the wrongful death, reduce to present money value, may also be recovered:

1. If the decedent's survivors include a surviving spouse....

§ 768.21(6)(a) (emphasis supplied). Section 768.18(5), Florida Statutes (2002), defines "net accumulations" as

the part of the decedent's expected net business or salary income, including pension benefits, that the decedent probably would have retained as savings and left as part of her or his estate if the decedent had lived her or his normal life expectancy. "Net business or salary income" is the part of the decedent's probable gross income after taxes, excluding income from investments continuing beyond death, that remains after deducting the decedent's personal expenses and support of survivors, excluding contributions in kind.

(Emphasis supplied.) Thus, proof of net accumulations requires not only a showing of "a fall in household income, but also that lower expenses did not offset the drop." Barlow, 809 So.2d at 73.

In St. Mary's Hospital, this Court held that the arbitration provisions of the Medical Malpractice Act specify the damages available when the parties agree to binding arbitration, regardless of whether the medical malpractice action involves a wrongful death. See 769 So.2d at 973. Specifically, we concluded:

The plain language of sections 766.202(3) and 766.207(7)(a) indicates that the full range of economic damages is available to claimants as an incentive to forego a jury trial on damages and proceed to arbitration. The legislative intent of the Medical Malpractice Act also indicates that the arbitration provisions were enacted to address soaring noneconomic damage awards, rather than the more predictable economic damage awards. See § 766.201. If the Legislature intended for the Wrongful Death Act to control the elements of damages available in a medical malpractice arbitration, it could have specifically provided for the application of the provisions of that Act in the Medical Malpractice Act. It has not done so.

Id. (emphasis supplied).

More recently we addressed whether Florida's setoff statutes apply to damages awarded under the arbitration provisions of the Medical Malpractice Act. See Chester v. Doig, 842 So.2d 106 (Fla.2003). For similar reasons as those expressed in St. Mary's Hospital, we concluded that it was not appropriate to set off the amount recovered from a settlement with one tortfeasor against the award of damages recovered in an arbitration with a second tortfeasor for the same incident. See id. at 108-09. In reaching this conclusion, we looked to the plain language of the Medical Malpractice Act and noted that the Legislature had chosen not to provide for the application of the setoff statutes to damages awarded in a medical malpractice arbitration. See id. at 109.

As our decisions in both St. Mary's Hospital and Chester indicate, it is inappropriate to look beyond the language of the Medical Malpractice Act in determining the damages available to a claimant who agrees to proceed with binding arbitration as provided for under that Act. Nonetheless, NOMC asserts that because only net economic damages are recoverable under section 766.207(7)(a), the loss of $5000 in social security retirement benefits should be reduced to achieve a "net" amount and, therefore, looking to the...