Estate of Despain v. Avante Group, Inc.

• Decision Date: 24 March 2005
• Docket Number: No. 5D03-3383.,5D03-3383.
• Citation: 900 So.2d 637
• Parties: ESTATE OF Beulah DESPAIN, etc., Appellant, v. AVANTE GROUP, INC. and Avante at Leesburg, Inc., Appellees.
• Court: Florida District Court of Appeals

900 So.2d 637

ESTATE OF Beulah DESPAIN, etc., Appellant, v. AVANTE GROUP, INC. and Avante at Leesburg, Inc., Appellees.

No. 5D03-3383.

District Court of Appeal of Florida, Fifth District.

March 24, 2005.

Rehearing Denied May 4, 2005.

Susan B. Morrison of Law Offices of Susan B. Morrison, P.A., and Brian L. Thompson of Wilkes & McHugh, P.A., Tampa, for Appellant.

Betsy E. Gallagher, Aram P. Megerian and Michael C. Clarke of Cole, Scott & Kissane, P.A., Tampa, for Appellee.

SAWAYA, C.J.

The Estate of Beulah Despain appeals a final judgment rendered pursuant to a jury verdict awarding compensatory damages for violation of the decedent's rights as a nursing home resident under section 400.022, Florida Statutes (1999), negligence, and the decedent's wrongful death. Despain specifically appeals the order denying the personal representative's motion to amend the complaint to allege a claim for punitive damages against Avante Group, Inc. and Avante at Leesburg, Inc. The issue we must resolve is whether Despain made a sufficient showing by evidence in the record or proffer to establish a reasonable basis to plead a claim for punitive damages pursuant to section 768.72(1), Florida Statutes (1999).

The decedent, eighty-one-year-old Beulah Despain, was admitted to a nursing home owned and operated by Avante Group, Inc. and Avante at Leesburg, Inc. on January 15, 1999. She was hospitalized on April 1, 1999, and died of respiratory arrest secondary to aspiration pneumonia on April 6, 1999. The personal representative of the estate filed suit for compensatory damages and subsequently filed a motion to amend the complaint to allege a claim for punitive damages. In a lengthy memorandum, the estate proffered the facts it asserted formed the reasonable basis for its claim of punitive damages and filed affidavits of witnesses. This motion was denied and a subsequent motion was filed. After once again considering the proffered facts and the record evidence, the trial court denied the subsequent motion and the case proceeded to trial, resulting in a verdict and judgment awarding compensatory damages to Despain.

In order to properly decide whether the requisite showing was made under section 768.72(1) to allow Despain's claim for punitive damages, we must first determine the correct standard that establishes whether misconduct is so egregious as to warrant an award of punitive damages. Next, we must determine the appropriate standard of review that will guide us in our application of the legal standard to the record evidence and the proffer presented by Despain so we can decide whether it is sufficient to establish a reasonable basis to plead a claim for punitive damages. Once these two standards are determined, we can resolve the issue on appeal and arrive at a conclusion.

I. The Requisite Showing That Must Be Made To Allow A Claim For Punitive Damages

A. The Basic Standard

A resident who has a cause of action against a nursing home under section 400.022, Florida Statutes (1999), may recover punitive damages in appropriate cases. § 400.023(1), Fla. Stat. (1999); see also Beverly Enters.-Fla., Inc. v. Spilman, 661 So.2d 867, 873 (Fla. 5th DCA 1995),review denied, 668 So.2d 602 (Fla.1996).¹ Punishment of the wrongdoer and deterrence of similar wrongful conduct in the future, rather than compensation of the injured victim, are the primary policy objectives of punitive damage awards. Owens-Corning Fiberglas Corp. v. Ballard, 749 So.2d 483 (Fla.1999); W.R. Grace & Co.-Conn. v. Waters, 638 So.2d 502 (Fla. 1994).

To merit an award of punitive damages, the defendant's conduct must transcend the level of ordinary negligence and enter the realm of willful and wanton misconduct, which the courts define as conduct that is of a

gross and flagrant character, evincing reckless disregard of human life, or of the safety of persons exposed to its dangerous effects, or there is that entire want of care which would raise the presumption of a conscious indifference to consequences, or which shows wantonness or recklessness, or a grossly careless disregard of the safety and welfare of the public, or that reckless indifference to the rights of others which is equivalent to an intentional violation of them.

White Constr. Co. v. Dupont, 455 So.2d 1026, 1029 (Fla.1984) (quoting Carraway v. Revell, 116 So.2d 16, 20 n. 12 (Fla.1959)), receded from on other grounds, Murphy v. International Robotic Sys., Inc., 766 So.2d 1010 (Fla.2000); see also Owens-Corning, 749 So.2d at 486 (quoting White Constr.). Section 400.023(5), Florida Statutes (1999), which codifies this standard, provides that "[f]or the purpose of this section, punitive damages may be awarded for conduct which is willful, wanton, gross or flagrant, reckless, or consciously indifferent to the rights of the resident."² This court and others have applied the standard adopted by the court in White Construction, and codified in section 400.023(5), to awards of punitive damages under chapter 400. See Beverly Enters.-Fla., Inc.; Key West Convalescent Ctr., Inc. v. Doherty, 619 So.2d 367 (Fla. 3d DCA 1993).

B. The Corporate Employer Standard

A corporate employer, like an individual employer, may be held liable for punitive damages based on the legal theories of either direct or vicarious liability. Schropp v. Crown Eurocars, Inc., 654 So.2d 1158 (Fla.1995). Despite assertions to the contrary by Despain, we believe that this is not a case where direct corporate liability for punitive damages is applicable because there is an insufficient showing of willful and wanton misconduct on the part of a managing agent or primary owner of Avante Group, Inc. and Avante at Leesburg, Inc. See Schropp. Rather, if these corporate employers are to be held accountable, Despain must show that they are vicariously liable. In order to hold a corporate employer vicariously liable for punitive damages for the acts of its employees, the plaintiff must establish: (1) fault on the part of the employee that rises to the level of willful and wanton misconduct and (2) some fault on the part of the corporate employer that rises to the level of at least ordinary negligence. Schropp; Mercury Motors Express, Inc. v. Smith, 393 So.2d 545 (Fla.1981); Beverly Enters.-Fla., Inc.³

C. The Pleading Requirements

In order to plead a claim for punitive damages, a plaintiff must comply with section 768.72(1), Florida Statutes. This statute provides:

In any civil action, no claim for punitive damages shall be permitted unless there is a reasonable showing by evidence in the record or proffered by the claimant which would provide a reasonable basis for recovery of such damages. The claimant may move to amend her or his complaint to assert a claim for punitive damages as allowed by the rules of civil procedure. The rules of civil procedure shall be liberally construed so as to allow the claimant discovery of evidence which appears reasonably calculated to lead to admissible evidence on the issue of punitive damages. No discovery of financial worth shall proceed until after the pleading concerning punitive damages is permitted.

§ 768.72(1), Fla. Stat. (1999) (emphasis added);⁴ see also Fla. R. Civ. P. 1.190. Because the amount of an award may be a pittance to a rich man and ruination to a poor one, the goal of punishment must of necessity take into account the financial worth of the wrongdoer. Accordingly, although section 768.72(1) is procedural in nature, it also provides a substantive right to parties not to be subjected to a punitive damage claim and attendant discovery of financial worth until the requisite showing under the statute has been made to the trial court. Simeon, Inc. v. Cox, 671 So.2d 158, 160 (Fla.1996); Globe Newspaper Co. v. King, 658 So.2d 518 (Fla.1995).⁵ There is no definition of the term "reasonable basis" in section 768.72(1). Therefore, in deciding whether a "reasonable basis" was established by the record evidence and proffer presented by Despain to allow the requested claim for punitive damages under section 768.72(1), we must determine the appropriate standard of review—de novo or abuse of discretion—to apply.

II. Standard Of Review To Determine Whether A Reasonable Basis Has Been Shown To Allow A Claim For Punitive Damages

Because section 768.72(1) provides a substantive right to a defendant not to be subjected to discovery of his or her financial worth until the trial court has found a reasonable basis for a plaintiffs claim for punitive damages, the court in Holmes v. Bridgestone/Firestone, Inc., 891 So.2d 1188, 1191 (Fla. 4th DCA 2005), held that the abuse of discretion standard is inappropriate to review orders granting or denying a request to plead a claim for punitive damages. Although we are not much persuaded by that particular reasoning, we do agree with the part of the decision in Holmes that indicates the de novo standard of review is appropriate. We will now endeavor to explain why we arrive at this conclusion.

In discussing the requirements of section 768.72(1), the court in State of Wisconsin Investment Board v. Plantation Square Associates, Ltd., 761 F.Supp. 1569, 1581 n. 21 (S.D.Fla.1991), stated that "a `proffer' according to traditional notions of the term, connotes merely an `offer' of evidence and neither the term standing alone nor the statute itself calls for an adjudication of the underlying veracity of that which is submitted, much less for countervailing evidentiary submissions." Therefore, a proffer "is merely a representation of what evidence the defendant proposes to present and is not actual evidence." Grim v. State, 841 So.2d 455, 462 (Fla.) (citation omitted), cert. denied, 540 U.S. 892, 124 S.Ct. 230, 157 L.Ed.2d 166 (2003); LaMarca v. State, 785 So.2d 1209, 1216 (Fla.), cert. denied, 534 U.S. 925, 122 S.Ct. 281, 151 L.Ed.2d 207 (2001). A reasonable showing by evidence in the record would typically include depositions, interrogatories, and requests for admissions...