Pagan v. SARASOTA COUNTY PUBLIC HOSP. BD., 2D02-5672.
| Decision Date | 13 August 2004 |
| Docket Number | No. 2D02-5672.,2D02-5672. |
| Citation | 884 So.2d 257 |
| Parties | Valerie PAGAN and Jami Pagan, Appellants, v. SARASOTA COUNTY PUBLIC HOSPITAL BOARD, d/b/a Sarasota Memorial Health Care System; SMH Physician Services, Inc., a Florida not-for-profit corporation, d/b/a First Physicians Group of Sarasota; Kristen L. Paulus, M.D.; Michael M. Shroder, M.D.; Audrey Aloise Roehrig; and Florida Physicians Insurance Corporation, Inc., Appellees. |
| Court | Florida District Court of Appeals |
Mark Dungan of Icard, Merrill, Cullis, Timm, Furen & Ginsburg, P.A., Sarasota, for Appellants. David A. Wallace of Williams, Parker, Harrison, Dietz & Getzen, for Appellees Sarasota County Public Hospital Board, SMH Physician Services, Inc., Kristen L. Paulus, M.D., and Michael M. Shroder, M.D.
Stephen E. Day and Rhonda B. Boggess of Taylor, Day & Currie, Jacksonville, for Appellee First Professionals Insurance Company, Inc., f/k/a Florida Physicians Insurance Co.
No appearance for Appellee Audrey Aloise Roehrig.
Joel S. Perwin of Podhurst Orseck, P.A., Miami, for Amicus Curiae Florida Trial Lawyers.
Valerie and Jami Pagan appeal a summary final judgment that was entered in an unusual action for declaratory relief filed by Sarasota County Public Hospital Board (Hospital Board) and SMH Physician Services, Inc., d/b/a First Physicians Group of Sarasota (First Physicians Group). The Hospital Board and First Physicians Group sought a legal ruling that First Physicians Group and the doctors who practiced medicine through this nonprofit corporation were entitled to all the benefits of sovereign immunity. See § 768.28, Fla. Stat. (2001). The trial court's judgment so rules as to the Pagans' claim. We conclude that the Pagans have not demonstrated a basis that entitles them to receive a reversal of this judgment.
On the other hand, it is equally clear that the complex issues presented by this action for declaratory relief were not fully litigated and that the trial court did not intend the ruling to affect other persons who may be similarly situated to the Pagans. Accordingly, we decline to adopt the position argued by the Hospital Board and First Physicians Group that this ruling has broad application. Although the trial court's order contains language broader than necessary to decide the dispute between the Pagans and First Physicians Group, we limit the ruling to those parties. Whether this nonprofit corporation and all of the forty to fifty doctors who practice in this group are entitled to governmental immunity in all cases is not an issue that can be resolved on this record.
The Hospital Board, which is comprised of nine publicly elected members, is the governing board of the Sarasota County Public Hospital District. The Hospital Board was created by a special act of the legislature in 19491 at a time when private, for-profit corporations played little role in the construction of hospitals. It is undisputed that such hospital boards and their employees can possess the protections provided by sovereign or governmental immunity, subject to the limited waiver of sovereign immunity contained in section 768.28. See, e.g., Eldred v. N. Broward Hosp. Dist., 498 So.2d 911 (Fla.1986); Brown v. N. Broward Hosp. Dist., 521 So.2d 143 (Fla. 4th DCA 1988); Lower Fla. Keys Hosp. Dist. v. Littlejohn, 520 So.2d 56, 57 (Fla. 3d DCA 1988); see also Hillsborough County Hosp. Bd. v. Taylor, 546 So.2d 1055 (Fla.1989).
The Hospital Board's enabling legislation provides that the Hospital Board is "authorized and empowered":
(q) To the extent permitted by the Constitution and laws of this state, to establish, operate, or support subsidiaries and affiliates, either for profit or not for profit, to assist the hospital board in fulfilling its declared public purpose of provision for the health care needs of the people of the hospital district.... The establishment, operation, or support of a subsidiary or affiliate corporation... is hereby declared to be a public purpose and necessary for the preservation of the public health and for a public use and for the welfare of the hospital board and inhabitants of the hospital district.
Ch. 26468, Laws of Fla. (1949), ch. 86-373, § 1, Laws of Fla.
Based upon this provision, in 1994 the Hospital Board voted at a public meeting to create SMH Physician Services, Inc., as a nonprofit corporation. The Hospital Board's creation of this nonprofit corporation was apparently justified on the theory that Sarasota County did not have an adequate supply of primary care physicians, that market forces within the private sector could not supply these physicians, and that governmental action was necessary to assure an adequate supply of primary care physicians for the people of Sarasota County.2 Once incorporated, the corporation began providing medical services under the fictitious name of First Physicians Group.
First Physicians Group grew rapidly. By the time this lawsuit was filed in 2001, the group included more than forty physicians practicing in a wide range of specialties. It does not have a single location, but has doctors in about fifteen separate locations.3 The group has apparently attracted a few doctors into the community, but our record suggests that most of the members of this group were doctors practicing in Sarasota County in 1994 who have simply merged their medical practices into this nonprofit corporation.
Although First Physicians Group is a nonprofit corporation, this is not a group of doctors that is serving primarily or only the poor. These doctors appear to accept patients and receive payments from their patients and insurance companies just like any private clinic or professional association of physicians. The Hospital Board does not appear to control these doctors' fees or the selection of their patients. The doctors in this group are only required to perform eighteen hours of community service each year. The corporation is a nonprofit corporation, but the physicians within the group earn large salaries established by complex production formulas similar to those used in private sector medical groups. In 2000, many of the physicians had incomes in excess of $200,000 and several had incomes in excess of $400,000.
The Hospital Board created this non-profit corporation, and it has the power to dissolve it. It used government money to create this corporation. The Hospital Board elects the nine members of the corporation's board, and a majority of those elected must be sitting Hospital Board members. The corporation actually runs at a loss and receives additional government funds annually to cover its expenses.4 The doctors in this group are not required to admit their patients to Sarasota Memorial Hospital. Their patients may be admitted to other hospitals in the community. If the Hospital Board decided to dissolve the corporation, the corporation's remaining assets would revert to the Hospital Board.
Since the creation of this nonprofit corporation, First Physicians Group has taken the position that it is a governmental entity and that the doctors within the group are government employees. Patients have disagreed. The outcome of this dispute has significant ramifications for medical malpractice lawsuits, for First Physicians Group, for the doctors it employs, and for their patients.
If these doctors do not have the benefit of governmental immunity, then their patients can pursue malpractice claims just like other patients bring claims against other doctors. The duty that a typical doctor owes to a patient is governed by the professional negligence standard, which generally requires that the doctor provide that level of care that a similar and reasonably careful physician would provide. See § 766.102(1), Fla. Stat. (2003); Fla. Std. Jury Instr. 4.2(a). On the other hand, if the doctors at First Physicians Group receive the benefit of governmental immunity, they can only be personally sued if they act "in bad faith or with malicious purpose or in a manner exhibiting wanton and willful disregard of human rights, safety, or property." See § 768.28(9)(a), Fla. Stat. (2003).
For First Physicians Group the difference is equally significant. If it does not possess governmental immunity, it will be vicariously liable to its patients for the actions of its doctors just like any other private medical professional corporation. Its liability will not have any special limits or caps that are different from the rules that apply to for-profit medical professional corporations. If it is an instrumentality of a governmental agency, then it cannot be liable for a patient's claim in excess of $100,000 unless the legislature orders it to pay the claim. See § 768.28(5), Fla. Stat. (2003). Likewise, claims against it will be controlled by the governmental presuit procedures, and attorneys representing patients against First Physicians Group will be limited to a twenty-five percent contingency fee. See § 768.28(6), (8), Fla. Stat. (2003).
It is understandable that First Physicians Group, the medical community, and patients within Sarasota County would wish to obtain a final legal decision establishing whether this method of creating a nonprofit corporation controlled by a government board is effective in allowing doctors to obtain immunity from malpractice suits without sacrificing the income of private practice. If this method works, then economically it may be logical for many local physicians to join the nonprofit group. It might also be logical for many local patients to seek health care in nearby counties where doctors remain personally and professionally responsible to the patients and liable for negligence based upon the usual, reasonable levels of patient care.
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