Med Mal Arbitration Panel Cannot Award “Economic Damages” To Derivative Claimants

Medical Malpractice

In the case of Plantation General Hospital v. Division of Administrative Hearings and Belzi, Case Number 4D16-2652 (Fla. 4th DCA April 4, 2018), the Florida Fourth DCA held that it was improper for a medical malpractice arbitration panel to award “economic damages” for the “loss of companionship and guidance” to the husband and the child, who were survivors.

Facts Of The Case

This claim invovled the death of a 24-year-old woman (Patricia Belzi) when she was eight months pregnant.  Her child survived and became a party to this lawsuit just as her husband, Bernard Belzi, was a survivor under Florida’s wrongful death statute.

As Mrs. Belzi’s estate sued (including claims for her survivors) for wrongful death as a medical malpractice claim, a medical malpractice arbitration was available as a remedy under section 766.207, Fla. Stat..  The Fourth DCA does not say who offered arbitration but indicated that the parties agreed to it.  Regardless, accepting or rejecting an offer for medical malpractice arbitration has its consequences.

Damages Awardable At A Florida Medical Malpractice Arbitration

As these parties went to an arbitration, the damages were limited to the following under section 766.207:

(a) Net economic damages shall be awardable, including, but not limited to, past and future medical expenses and 80 percent of wage loss and loss of earning capacity, offset by any collateral source payments.
(b) Noneconomic damages shall be limited to a maximum of $250,000 per incident . . . .

It is important to mention that section 766.207 was amended in 2o03, which was after the case of St. Mary’s Hospital, Inc. v. Phillipe, 769 So. 2d 961 (Fla. 2000).  The St. Mary’s Hospital case is known for its interpretation that section 766.207 permits “non-economic damages” of $250,000 to apply to “each claimant” rather than the maximum of $250,000 in subsection (b) shown above.

You would think that the Florida Legislature would have corrected 766.207 when the amendment was passed but that did not happen.  As a result, trial lawyers in Florida had some degree of doubt about whether the St. Mary’s “rule” or the statutory language would apply (you should keep in mind that there are only a handful of medical malpractice decisions that have been decided in recent years).

“Net” Economic Damages

The total arbitration award was approximately $3.7 million, including $1.3 million for loss of future support, loss of household services, and funeral expenses, which are all classified as “economic damages.”

While the Fourth DCA cites 766.207, including the word “net” regarding economic damages, this opinion makes no discussion of whether the damages awarded were “offset by any collateral source payments.”

Section 766.202, Fla. Stat. defines “collateral source” below:

(2) “Collateral sources” means any payments made to the claimant, or made on his or her behalf, by or pursuant to:

(a) The United States Social Security Act; any federal, state, or local income disability act; or any other public programs providing medical expenses, disability payments, or other similar benefits, except as prohibited by federal law.
(b) Any health, sickness, or income disability insurance; automobile accident insurance that provides health benefits or income disability coverage; and any other similar insurance benefits, except life insurance benefits available to the claimant, whether purchased by him or her or provided by others.
(c) Any contract or agreement of any group, organization, partnership, or corporation to provide, pay for, or reimburse the costs of hospital, medical, dental, or other health care services.
(d) Any contractual or voluntary wage continuation plan provided by employers or by any other system intended to provide wages during a period of disability.

As the definition includes, Social Security income is explicitly enumerated but yet there was no discussion in Belzi as to how the arbitration award was arrived at.  However unfair as it may be, Florida law is supposed to operate to reduce the award at arbitration by everything in the definition.  Again, there was no discussion of the meaning of “net” economic damages in the opinion and no discussion of the subject as an argument on appeal but yet it is still a very important issue to attorneys practicing in the area of medical malpractice in Florida.

Lessons From Belzi

As a Florida medical malpractice lawyer, the biggest takeaway from this case is the notion that the St. Mary’s “rule” is good law with regard to the non-economic damages caps and applies per person despite what the statute explicitly says.  By analogy, the same rule should apply to parties who reject an offer to go to medical malpractice arbitration.  In those cases, the non-economic damages cap of $350,000 in the event a party rejects an offer of arbitration should apply to each person notwithstanding the statutory language.

Clearly, the Fourth DCA should support that notion as they said “Our supreme court has interpreted section 766.207(7)(b) as permitting the $250,000 limit on non-economic damages to apply to each claimant.”  I cannot imagine a legitimate government purpose behind not applying the rationale to cases where arbitration is rejected as that would violate the fundamental constitutional principles discussed in St. Mary’s but anything is possible depending upon the composition of the court and the political atmosphere at the time such a case is decided.

Secondly, the Belzi case was really about an arbitration award that overstepped its bounds by awarding “economic” damages to wrongful death survivors in addition to the $250,000 of “non-economic damages” pursuant to the statute.  However, this an obvious legal result because economic damages are not available to survivors in wrongful death claims.

In Florida, when a person is injured and dies before judgment, any claim that the injured person has “abates” and becomes a wrongful death case.  When that happens, the non-economic damages available to the estate become the non-economic damages of the survivors while the economic damages generally remain as a claim owned by the estate.  Therefore, damages that are not available in a courtroom would not be available in arbitration.

This is why an award of economic damages to wrongful death survivors was improper in this cases.

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June 22, 2018