Holmes Reg'l Med. Ctr., Inc. v. Allstate Ins. Co.

• Citation: 225 So.3d 780
• Decision Date: 13 July 2017
• Docket Number: No. SC15–1555,SC15–1555
• Court: United States State Supreme Court of Florida
• Parties: HOLMES REGIONAL MEDICAL CENTER, INC., et al., Petitioners, v. ALLSTATE INSURANCE COMPANY, et al., Respondents.

225 So.3d 780

HOLMES REGIONAL MEDICAL CENTER, INC., et al., Petitioners,
v.
ALLSTATE INSURANCE COMPANY, et al., Respondents.

No. SC15–1555

Supreme Court of Florida.

July 13, 2017
As Corrected September 7, 2017

Sylvia H. Walbolt and Steven M. Blickensderfer of Carlton Fields Jorden Burt, P.A., Tampa, Florida; and Henry W. Jewett, II, and Karissa L. Owens of Rissman, Barrett, Hurt, Donahue & McLain, P.A., Orlando, Florida, for Petitioner Holmes Regional Medical Center

Angela E. Rodante and Dale M. Swope of Swope Rodante, P.A., Tampa, Florida; Hendrik Uiterwyk and John C. Hamilton of Abrahamson & Uiterwyk, Tampa, Florida; and Barbara Green of Barbara Green, P.A., Coral Gables, Florida, for Petitioner Douglas Stalley, as Guardian of the Property of Benjamin Edward Hintz

Thomas E. Dukes, III, and Wilbert R. Vancol of McEwan, Martinez, Dukes & Hall, P.A., Orlando, Florida, for Petitioners David Packey, M.D., and Neurology Clinic, P.A.

Stephen B. Sambol of Mateer & Harbert, P.A., Orlando, Florida, for Petitioners Basil Theodotou, M.D., and Basil Theodotou, M.D., P.A.

Daniel A. Martinez, Weslee L. Ferron, Inguna Varslavane–Callahan, and Jennifer C. Worden of Martinez Denbo, L.L.C., Saint Petersburg, Florida, for Respondents Allstate Insurance Company and Allstate Indemnity Company

Jane Anderson and Kansas R. Gooden of Boyd & Jenerette, PA, Jacksonville, Florida, for Respondent Emily Boozer

Andrew S. Bolin of Beytin, McLaughlin, McLaughlin, O'Hara, Bocchino & Bolin,

225 So.3d 782

Tampa, Florida, for Amicus Curiae Florida Hospital Association

Roy D. Wasson of Wasson & Associates, Chartered, Miami, Florida, for Amicus Curiae Florida Justice Association

Michael C. Clarke and Betsy E. Gallagher of Kubicki Draper, P.A., Tampa, Florida, for Amici Curiae American Insurance Association and Florida Insurance Council

QUINCE, J.

This case is before the Court for review of the decision of the Fifth District Court of Appeal in Allstate Insurance Co. v. Theodotou, 171 So.3d 163 (Fla. 5th DCA 2015). In its decision, the district court ruled upon the following question which the court certified to be of great public importance:

IS A PARTY THAT HAS HAD JUDGMENT ENTERED AGAINST IT ENTITLED TO SEEK EQUITABLE SUBROGATION FROM A SUBSEQUENT TORTFEASOR WHEN THE JUDGMENT HAS NOT BEEN FULLY SATISFIED?

Id. at 168. We have jurisdiction. See art. V, § 3(b)(4), Fla. Const. For the reasons that follow, we answer the certified question in the negative and quash the decision of the Fifth District.

FACTS AND PROCEDURAL HISTORY

Benjamin Edward Hintz sustained head injuries when his scooter collided with an automobile driven by Respondent Emily Boozer. Theodotou, 171 So.3d at 164. The car belonged to Boozer's father, Otto, who was insured by Respondent Allstate. Id. Hintz received medical treatment at Holmes Regional Medical Center (medical provider defendants) where, according to Respondents, his injuries were "exacerbated by medical negligence." Id.

Petitioner Douglas Stalley, guardian of Hintz's property, filed suit against Emily and Otto Boozer for damages. Id. Stalley successfully argued that Stuart v. Hertz Corp., 351 So.2d 703 (Fla. 1977), "precluded the Boozers from presenting evidence that medical negligence was a contributing cause of Hintz's injuries." Id. The jury found the Boozers liable for Hintz's injuries and awarded Stalley $14,905,585.29, which was reduced by twenty-five percent to $11,179,188.98 due to Hintz's comparative negligence. Id. In August 2012, judgment was entered and Allstate paid $1.1 million, its policy limit. Id. The Boozers have not paid the remainder of the judgment. Id.

Following the personal injury verdict, Stalley filed a separate medical malpractice lawsuit against the medical provider defendants, who are also Petitioners in this proceeding. Id. at 165. Stalley "sought recovery for the same injuries involved in the initial lawsuit against the Boozers."¹ Id.

Respondents Allstate and Emily Boozer were granted leave to intervene in the lawsuit, and both parties filed complaints claiming they were entitled to equitable subrogation from the medical provider defendants. Id. In response, the medical provider defendants sought dismissal of the complaints because neither Allstate nor Boozer had paid Hintz's damages in full. Id. The trial court agreed with the medical provider defendants and dismissed Respondents' complaints with prejudice. Id.

225 So.3d 783

On appeal, the Fifth District considered whether

[A]n initial tortfeasor or her insurer may assert an equitable subrogation claim against a subsequent tortfeasor when: (1) the initial tortfeasor was precluded from bringing the subsequent tortfeasor into the original personal injury action under Stuart v. Hertz, 351 So.2d 703 (Fla. 1977) ; (2) judgment was entered against the initial tortfeasor for the full amount of the injured person's damages, regardless of the initial tortfeasor's portion of fault; and (3) that judgment has not been completely paid by the initial tortfeasor or her insurer.

Id. at 164. In reversing the trial court's order, the district court found that "the right to equitable subrogation arises when payment has been made or judgment has been entered, so long as the judgment represents the victim's entire damages." Id. at 167. The court reasoned that "equity favors justice and fairness over formalistic legal rules," and that the need for liability to be correctly apportioned must be considered along with the victim's need to be made whole. Id. at 167–68. Recognizing that Florida courts have allowed subrogation claims to proceed on a contingent basis, the district court saw "no reason why Appellants' subrogation claim in this case should not be allowed to proceed in a similar manner." Id. at 167.

Petitioners Holmes Regional Medical Center and Douglas Stalley now argue that under this Court's long-standing precedent, an initial tortfeasor only has a subrogation claim against a subsequent tortfeasor after fully compensating the injured party. In response, Allstate and Emily Boozer contend that equitable subrogation is a flexible doctrine and equity requires that liability be properly apportioned among all negligent parties. Because the certified question presents a pure issue of law, the standard of review is de novo. Special v. West Boca Med. Ctr., 160 So.3d 1251, 1255 (Fla. 2014).

ANALYSIS

In Stuart, this Court addressed "whether or not an active tortfeasor in an automobile accident may bring a third party action for indemnity against a physician for damages directly attributable to malpractice which aggravated the plaintiff's injuries." 351 So.2d at 704. The respondent in that case, Hertz, owned the automobile that collided with an automobile belonging to Mrs. Johnson. Id. Mrs. Johnson suffered orthopedic injuries from the crash and underwent surgery performed by the petitioner, Dr. Stuart. Id. During the surgery, Dr. Stuart accidentally severed Mrs. Johnson's carotid artery, which caused a neurological disability. Id. When Mrs. Johnson filed suit against Hertz, Hertz sought indemnity for any damages recovered because of the neurological injuries. Id. Dr. Stuart moved to dismiss the third party complaint, which the trial court denied. Id.

In reversing the trial court's order, we held that an initial tortfeasor is prohibited from presenting evidence of subsequent medical malpractice or filing a third-party complaint for alleged aggravation of injuries by medical providers. Id. at 706. We stated:

An active tortfeasor should not be permitted to confuse and obfuscate the issue of his liability by forcing the plaintiff to concurrently litigate a complex malpractice suit in order to proceed with a simple personal injury suit. To hold otherwise would in effect permit a defendant to determine the time and manner, indeed the appropriateness, of a plaintiff's action for malpractice. This decision eliminates the traditional policy of allowing the plaintiff to choose the time,

225 So.3d 784

forum and manner in which to press his claim. (citation omitted).

The choice of when and whether to sue his treating physician for medical malpractice is a personal one, which rightfully belongs to the patient. A complete outsider, and a tortfeasor at that, must not be allowed to undermine the patient-physician relationship, nor make the plaintiff's case against the original tortfeasor longer and more complex through the use of a third-party practice rule which was adopted for the purpose of expediting and simplifying litigation.

Id. We also expressed concern about "confusion and nonuniformity of application by the lower courts," complication of the issues, and prolonging the litigation. Id.

Justice Boyd concurred in part and dissented in part. Id. at 707. He explained:

I dissent to the view that any active tortfeasor sued should be unable to shift an equitable portion of the judgment obligation to others causing or increasing the injuries and damages.

Although respondent Hertz Corporation must not be permitted to join petitioner as a third party defendant, it should be permitted to allege and

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