Florida Supreme Court Limits Equitable Subrogation Actions Against Subsequent Tortfeasors
ALM Media
Updated
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The Florida Supreme Court has ruled that a party that has had a judgment entered against it was not entitled to seek equitable subrogation from a subsequent tortfeasor when it had not fully satisfied the judgment.
The Case
Benjamin Edward Hintz sustained head injuries when his scooter collided with an automobile driven by Emily Boozer and owned by Ms. Boozer s father, Otto Boozer, who was insured by Allstate Insurance Company.
Mr. Hintz received medical treatment at Holmes Regional Medical Center where, according to Allstate, his injuries allegedly were exacerbated by medical negligence.
Douglas Stalley, Mr. Hintz s guardian, sued the Boozers for damages. He successfully argued that Florida law precluded the Boozers from presenting evidence that medical negligence was a contributing cause of Mr. Hintz s injuries. The jury found the Boozers liable for Mr. Hintz s injuries and awarded Mr. Stalley $14,905,585.29, which was reduced by 25 percent to $11,179,188.98 due to Mr. Hintz s comparative negligence.
Judgment was entered and Allstate paid $1.1 million, its policy limit. The Boozers did not pay the remainder of the judgment.
Following the personal injury verdict, Mr. Stalley filed a separate medical malpractice lawsuit against various medical providers, seeking recovery for the same injuries involved in his initial lawsuit against the Boozers.
Allstate and Ms. Boozer intervened, and both parties filed complaints claiming they were entitled to equitable subrogation from the medical provider defendants. In response, the medical provider defendants sought dismissal of the complaints because neither Allstate nor Boozer had paid Mr. Hintz s damages in full.
The trial court agreed with the medical provider defendants and dismissed the complaints by Allstate and Ms. Boozer with prejudice.
An intermediate appellate court reversed, and the dispute reached the Florida Supreme Court.
The Florida Supreme Court s Decision
The court reversed.
In its decision, the court ruled that for Allstate and Ms. Boozer to step in[to] the shoes of Mr. Stalley, they first had to fully discharge the debt. The court added that language in some Florida trial court decisions that an equitable subrogation claim arose once judgment had been entered was dicta.
The court said that because a claim of equitable subrogation required payment of the entire debt, Ms. Boozer s argument that she could be substituted for Mr. Hintz in the malpractice action was meritless, as she had paid no part of the $11 million judgment against her. Additionally, the court declared, Allstate s argument that it had a claim by virtue of its $1.1 million payment failed, as partial payment did not discharge the entire debt to the injured party and, therefore, did not give rise to an equitable subrogation claim.
The court also was not persuaded by Allstate s attempt to support its argument for intervention into Mr. Hintz s medical malpractice action by relying on the one-action rule. The rule against splitting a cause of action applied only to a single wrongful act, according to the court. Here, it observed, Ms. Boozer s negligence and the medical provider defendants alleged malpractice were separate wrongful acts that both allegedly injured Mr. Hintz. He was permitted to sue the initial tortfeasor and the medical provider defendants separately, the court stated.
The court concluded, therefore, that the appellate court had erred in holding that Allstate and Ms. Boozer could assert claims for contingent equitable subrogation without first paying the judgment in full.
The case is Holmes Regional Medical Center, Inc. v. Allstate Ins. Co., No. SC15-1555 (Fla. July 13, 2017). Attorneys involved include: 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 [*2] 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, 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.
Steven A. Meyerowitz, Esq., is the Director of FC&S Legal, the Editor-in-Chief of the Insurance Coverage Law Report, and the Founder and President of Meyerowitz Communications Inc. As FC&S Legal Director, Mr. Meyerowitz, a member of the team that conceptualized FC&S Legal, provides daily analysis and commentary on the most significant insurance coverage law decisions from courts across the country and news regarding legislative and regulatory developments. A graduate of Harvard Law School, Mr. Meyerowitz was an attorney at a prominent Wall Street law firm before founding Meyerowitz Communications Inc., a law firm marketing communications consulting company.
