Florida Patient's Compensation Fund v. Rowe

Decision Date02 May 1985
Docket NumberNo. 64459,64459
Parties, 10 Fla. L. Weekly 249 FLORIDA PATIENT'S COMPENSATION FUND, Appellant, v. Lena ROWE, Appellee.
CourtFlorida Supreme Court

Richard B. Collins and Craig A. Dennis of Perkins and Collins, Tallahassee, for appellant.

Arnold R. Ginsberg of Horton, Perse and Ginsberg, Barranco and Kellough, P.A. and Goldberg and Vova, Miami, for appellee.

OVERTON, Justice.

This cause concerns the constitutional validity of section 768.56, Florida Statutes (1981), which directs the trial court to award a "reasonable attorney's fee" to the prevailing party in a medical malpractice action. It is before us by virtue of our "pass-through" jurisdiction, 1 the Second District Court of Appeal having certified the judgment as involving an issue of great public importance requiring immediate resolution by this Court.

The appellee, Lena Rowe, was the prevailing party in a medical malpractice action against Lee Memorial Hospital. The appellant, Florida Patient's Compensation Fund, is responsible for payment of the portion of the judgment against the hospital that exceeds the $100,000 primary coverage. The trial court expressly found constitutional section 768.56, Florida Statutes (1981), and expressed concern in its judgment regarding the appropriate method for computing reasonable attorney fees pursuant to the statute, and reserved jurisdiction for a further hearing concerning the amount of the fee.

For the reasons expressed, we hold that section 768.56 is constitutional and adopt the federal lodestar approach for computing reasonable attorney fees. We note that in our decision in the consolidated cases of Young v. Altenhaus and Mathews v. Pohlman, 472 So.2d 1152 (Fla.1985), issued simultaneously with this opinion, we held that this section may not be applied in cases where the cause of action accrued prior to July 1, 1980.

Constitutionality of Section 768.56

This attorney fee statute has been criticized and challenged as unconstitutional by medical malpractice plaintiffs, defendants, and academic commentators. See, e.g., Spence and Roth, Closing the Courthouse Door: Florida's Spurious Claims Statute, 11 Stetson L.Rev. 283 (1983). The Fund, a defendant below in this case, and Mathews, the plaintiff below in Mathews v. Pohlman, each contend that the statute fails to meet the strict scrutiny and rational basis tests under the due process and equal protection clauses of the Florida and United States Constitutions. In particular, the Fund argues that the statute "imposes a penalty" on the non-prevailing party by requiring the payment of reasonable attorney fees. In Mathews, the plaintiff contends that the statute violates the access to courts provision of the Florida Constitution 2 by "chilling" litigation that would otherwise be instituted by victims of medical malpractice.

Each district court of appeal that has addressed this issue has upheld the constitutionality of the statute. See Bayfront Medical Center, Inc. v. Ly, 465 So.2d 1383 (Fla. 2d DCA 1985); Frankowitz v. Propst, 464 So.2d 1225 (Fla. 4th DCA 1985); Davis v. North Shore Hospital, 452 So.2d 937 Fla. 3d DCA 1983); Young v. Altenhaus, 448 So.2d 1039 (Fla. 3d DCA 1983); Pohlman v. Mathews, 440 So.2d 681 (Fla. 1st DCA 1983); Florida Medical Center, Inc. v. Von Stetina, 436 So.2d 1022, 1032 (Fla. 4th DCA 1983). In Von Stetina, the district court of appeal applied the rational basis test, found that this statute creates a reasonable classification, and held that it does not violate the due process and equal protection clauses of the United States Constitution. The First District Court of Appeal, in Pohlman v. Mathews, approved the reasoning contained in the Fourth District Court's Von Stetina decision, concluding that the rational basis test applies and that the distinction drawn between medical malpractice litigants and other tort litigants bears a reasonable relationship to a legitimate government purpose, and that the provision for attorney fees bears a reasonable relationship to the legislature's objective. The First District also concluded that the statute does not abrogate the right to sue and "does not deny access to the courts even though ... it may affect the decision to bring a lawsuit." 440 So.2d at 683.

The subject statute, section 768.56, was adopted as part of the Medical Malpractice Reform Act and became effective July 1, 1980. It directs that "the court shall award a reasonable attorney's fee to the prevailing party in any civil action which involves a claim for damages by reason of injury, death, or monetary loss on account of alleged malpractice" unless the non-prevailing party "is insolvent or poverty stricken," and requires an attorney to "inform his client in writing of this statutory provision." The preamble to section 768.56 indicates that the mandatory assessment of attorney fees in favor of a prevailing party in a medical malpractice action is intended to discourage non-meritorious medical malpractice claims. See ch. 80-67, Laws of Fla.; cf. Bill Analysis, House Committee on Insurance, CS/HB 1133 (5-19-80).

At the outset, we note that some of the decisions of this Court contain the historically incorrect statement that attorney fee statutes are "in derogation of the common law." 3 At the time of the American Revolution, the English courts generally awarded attorney fees to the prevailing party in all civil litigation. See M. Derfner, Court Awarded Attorney Fees 1.02 (1984) (hereinafter Derfner ); Goodhart, Costs, 38 Yale L.J. 849, 851-54 (1929); Note, Attorney's Fees: Where Shall the Ultimate Burden Lie?, 20 Vand.L.Rev. 1216, 1218 (1967). By its decisions, however, this Court, along with the majority of other jurisdictions inthis country, refused to accept the "English Rule" that attorney fees are part of the costs to be charged by a taxing master, adopting instead the "American Rule" that attorney fees may be awarded by a court only when authorized by statute or by agreement of the parties. See, e.g., Hampton's Estate v. Fairchild-Florida Construction Co., 341 So.2d 759 (Fla.1976); Webb v. Scott, 129 Fla. 111, 176 So. 442 (1936); State v. Barrs, 87 Fla. 168, 99 So. 668 (1924); Zinn v. Dzialynski, 14 Fla. 187 (1872). See also Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240, 95 S.Ct. 1612, 44 L.Ed.2d 141 (1975) (reaffirming the American Rule). The English Rule has strong advocates in this country, however. See, e.g., Bishop, Let's Adopt the English Fees Award System, 4 Cal.Law. 10 (1984). This state has recognized a limited exception to this general American Rule in situations involving inequitable conduct. See Wahl, Attorney's Fees Taxed Against a Party Because of his Inequitable Conduct, 26 Fla.L.J. 281 (1952); Wahl, Attorneys' Fees Taxed Against Opposing Party, 37 Fla.B.J. 220 (1963).

The legislature of this state has not hesitated to enact statutes providing authority to the courts to award attorney fees. Section 57.105, Florida Statutes (1983), for example, directs the courts to award a reasonable attorney fee to the prevailing party in civil litigation when the court finds that the losing party raised no "justiciable issue of either law or fact." In addition, the Florida Legislature has enacted more than seventy statutes authorizing the courts to award attorney fees in specific types of actions. 4 These provisions fall into two general categories. In the first, statutes direct the courts to assess attorney fees against only one side of the litigation in certain types of actions. See, e.g., § 627.428, Fla.Stat. (1983) (attorney fees assessed against insurer), and §§ 73.091, 73.092, and 73.131, Fla.Stat. (1983) (attorney fees assessed against condemning authority in eminent domain proceedings). The second category adopts the English Rule, authorizing the prevailing party, whether plaintiff or defendant, to recover attorney fees from the opposing party. See, e.g., § 713.29, Fla.Stat. (1983) (mechanics' liens), and §§ 83.48 and 83.756, Fla.Stat. (1983) (landlord and tenant proceedings).

Statutes authorizing courts to award attorney fees to prevailing litigants have long withstood constitutional attack. See, e.g., Hunter v. Flowers, 43 So.2d 435 (Fla.1949) (upholding statute authorizing the recovery of attorney fee by a successful claimant enforcing a laborer's lien). The question of whether such provisions violate the due process and equal protection clauses of the fourteenth amendment to the United States Constitution was specifically addressed by Justice Cardozo in Life and Casualty Insurance Co. v. McCray, 291 U.S. 566, 569, 54 S.Ct. 482, 483, 78 L.Ed. 987 (1934), in which he said:

We assume in accordance with the assumption of the court below that payment was resisted in good faith and upon reasonable grounds. Even so, the unsuccessful defendant must pay the adversary's costs, and costs in the discretion of the lawmakers may include the fees of an attorney. There are systems of procedure neither arbitrary nor unenlightened, and of a stock akin to ours, in which submission to such a burden is the normal lot of the defeated litigant, whether plaintiff or defendant. The taxing master in the English courts may allow the charges of the barrister as well as the fees of the solicitor. Nothing in the Fourteenth Amendment forbids a like procedure here.

(Emphasis added; footnote omitted.)

We reject the Fund's contention that requiring an unsuccessful litigant to pay the prevailing party's attorney fees constitutes a "penalty" offensive to our system of justice. The assessment of attorney fees against an unsuccessful litigant imposes no more of a penalty than other costs of proceedings which are more commonly assessed. In certain causes of action, attorney fees historically have been considered part of litigation costs and the award of these costs is intended not only to discourage meritless claims, but also to make the prevailing plaintif...

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