VOLUME XVI, NUMBER 4
April, 2004

FROM THE CORNER OFFICE

Anna D. Torres as been invited to speak on a panel at the Florida Liability Claims Conference located in Orlando at the Contemporary Resort on Thursday, June 3, 2004. The time scheduled at the general session will be 3:15p.m.- 4:45p.m.

The topic will be “Determining the fault lines: Theories of Third Party Recovery - An analysis of Fault - pursuing other potentially responsible parties; tactics in multiple defendant cases; and allocating setoffs in multiple defendant cases.”

MONDAY NIGHT BOXING: RELEASE SIGNED BY PLAINTIFF DOES NOT BAR LAWSUIT, BUT PARENTS CANNOT RECOVER LOSS OF CONSORTIUM DAMAGES DUE TO INJURY TO 19 YEAR OLD SON

In Cousins Club Corp., v. Carlos A. Silva and Elizabeth Silva, 28 FLW D2426 (Fla. 4th DCA, October 22, 2003), Carlos Silva suffered severe brain injuries leaving him in a partial vegetative state from a promotional boxing match held at a nightclub. Carlos Silva’s parents sued on his behalf claiming that Club Boca (which held the boxing match), was negligent in the way it sponsored, supervised, and conducted the promotional boxing fight.

Prior to the boxing match, Carlos Silva, then nineteen (19) years old, signed a “Release, Assumption of Risk and Indemnification Agreement” which stated in pertinent part:

“In consideration of my participation in the above entitled event, and with the understanding that my participation in Monday Night Boxing is only on the condition that I enter into this agreement for myself, my heirs and assigns, I hereby assume the inherent and extraordinary risks involved in Monday Night Boxing and any risks inherent in any other activities connected with this event in which I may voluntarily participate.”

Club Boca moved for summary judgment based upon this release. The court determined that the release did not bar the plaintiff’s lawsuit, because the plaintiff only assumed the inherent risks in boxing and the release did not clearly and unequivocally release Club Boca from liability for injuries as a result of its own negligence.

After a jury trial, the jury specifically found that Club Boca was negligent in failing to provide medical treatment for Carlos, failure to maintain its premises in a reasonably safe condition and failing to properly supervise Monday Nights Boxing event. It found that Club Boca was 85% negligent and Carlos was 15% negligent. It awarded a total of $12,045,000.00 to Carlos Silva and $250,000.00 to Carlos’ mother and $50,000.00 to Carlos’ father for loss of filial consortium. The trial court entered a final judgment on the verdict reducing it by 15% for Carlos’s comparative negligence. Club Boca challenged the loss of filial consortium judgments on the basis that at the time of the injury, Carlos was over eighteen (18) years old and thus loss of filial consortium was not available to the parents.

The Fourth District reversed the award to Carlos’ parents on that basis since parents can only have a loss filial consortium for the time that the child was a minor and since Carlos was injured at age nineteen (19), he was not a minor.

Club Boca also moved to have the plaintiff’s jury award reduced by pretrial settlements with other defendants (premises owners and lessors). The trial court allowed the set-off as to economic damages but denied the set-off as to non-economic damages. Both sides appealed the Judge’s ruling regarding the set-off. Club Boca contended that the court erred in not allowing the set-off as to non-economic damages and the plaintiff appealed the fact that the court allowed a set-off to the economic damages when the other defendants were not named on the verdict form and there was no apportionment as to their respective liabilities. The Fourth District ruled that the trial court was correct in refusing to allow a set-off from the non-economic damage award because Florida Statutes require that each defendant is solely, not jointly, responsible for his or her share of non-economic damages, and that the Florida set-off statutes (§ 46.015, 768.041, 768.31) pre-suppose the existence of multiple defendants jointly liable for the same damages, and thus these do not apply to the non-economic damage portion of the claim.

The Fourth District reversed the trial court’s ruling which allowed the set-off as to the economic damages awarded to the jury for the amounts which the plaintiff received from settlements with other defendants. In its holding the court held that the defendants who settled were not placed on the verdict form, thus the jury had no opportunity to apportion liability as to them. Since the jury did not apportion liability as to other defendants, it found that Club Boca and Carlos were 100% liable for all of Carlos’ damages. Because the settling defendants could not be considered joint tortfeasors with Club Boca, the trial court erred in granting a set-off for those settlements. The Fourth District did certify the question to the Supreme Court: “Is it appropriate to set-off against the damages portion of an award against one tortfeasor in a tort action the amount recovered from settlement from another for the same incident causing the injury where the settling alleged tortfeasor was not included on the verdict form?” As of this article, the Supreme Court has not answered that certified question.

Steven C. Teebagy

INSURING OTHER PEOPLE’S PROPERTY

During construction of the Pinellas County Jail Facility Expansion Project, a crane owned by Kelley Equipment, Inc. (“Kelley”) collapsed and was damaged. Clark Construction Group, Inc. (“Clark”) the general contractor, had leased the crane from Kelley. A subcontractor, Ajax Building Corporation (‘Ajax”), was using the crane when the accident occurred. Both Clark and Ajax were insured by Hartford Insurance Company (“Hartford”) which had a builders risk policy and a supplement to this policy called the Difference in Conditions (“DIC”) policy. The DIC policy provided coverage for damages to property of others which an insured was responsible for.

Ajax sued Hartford in the Middle District Court of Florida seeking to be reimbursed $225,000.00 for damages paid to Kelley. Hartford argued that the damages sustained by Kelley were not covered under either the builders risk policy or the DIC policy. The relevant policy provision which was at issue in AJAX Building Corp. v. Hartford Fire Ins. Co., 17 FLW Fed. C198 (M.D. Fla. January 27, 2004) was as follows:

Under the “Coverage” provisions of the Hartford DIC policy, coverage is provided as follows:

A. COVERAGE

1. We will pay for ALL RISK OF DIRECT PHYSICAL “Loss” to Covered Property...caused by any of the Covered Causes of Loss...Covered Property is defined as:

a. Structures...fixtures, equipment, machinery and similar property which will become a permanent part of the structure ...

d. Property of others used or to be used in, or incidental to the construction operations, for which you may be responsible or shall, prior to any “loss” for which you make a claim, have assumed responsibility.

2. Property Not Covered

Covered Property does not include:

a. Machinery, tools equipment, or other property which will not become a permanent part of the structure(s) described in the Declarations or Schedule unless the replacement cost of such property is included in the contract price and reported to us;

The district court determined that the coverage provision of the DIC policy was ambiguous. Thus, the district court construed the ambiguous provisions against Hartford and found that there was coverage for the damaged crane under the policy and granted summary judgment in favor of Ajax.

On appeal, however, the 11th Circuit reversed, finding that there was no ambiguity or confusion with the policy language. The court stated that “the exclusion clause in this DIC policy is not hidden among other language so as to create ambiguity or confusion. Both the coverage clause and the exclusion clause are given equal dignity within the contract

The 11th Circuit analyzed the provision finding that the crane fell into the category of “property of others used or to be used in, or incidental to the construction operations.” However, the court found that it was excluded under the “property not covered” provision because it was “equipment, or other property which will not become a permanent part of the structure.”

The court concluded that the damaged crane is not the type of property that becomes a permanent part of a structure. Thus, the damaged crane was expressly excluded under the policy and the appellate court reversed the district court and remanded the case with instructions to enter final summary judgment in favor of Hartford.

Jacqueline A. Grady

ECONOMIC CONCERNS DURING DISCOVERY

Allstate Ins. Co. v. Catherine M. Hodges, 28 FLW D1910 (2d DCA. August 15, 2003) involved a suit by a plaintiff injured in an automobile accident. Hodges propounded interrogatories to Allstate requesting extensive information concerning the relationship between Allstate and three medical groups with which Allstate’s doctors were affiliated. These interrogatories sought the following information: (1) which doctors in these medical groups had testified as expert witnesses during depositions and trials in the past three years for Allstate; (2) information on the opinions formulated by doctors associated with these medical groups for Allstate; (3) how much money individuals at these medical groups were paid in the last three years by Allstate.

Allstate’s answers to these interrogatories referred to an Affidavit stating that there was no central file, document, record, or database which had all of the information requested by Hodges. Further, the Affidavit indicated that Allstate would be unable to determine what payments were made to which physician regarding specific cases and/or services performed by the physician. In order to amass the information requested by Hodges, Allstate would have to review each claim file to determine the purpose of the payments. Allstate stated that it would take two minutes to locate each file and approximately half of the files were in storage. It would cost Allstate $2 per file to retrieve them from storage for a total cost of $845. It would then take two to four weeks to retrieve the files and then 30 minutes per file to review each file to procure the requested information. The total amount of time in this regard would be 422 hours. Thus, it would take two adjusters, working 40 hours a week, five weeks to complete the review for a total cost of $11,885.00. Allstate requested that Hodges post a bond for the estimated cost of responding to the interrogatories.

Hodges filed a motion to compel better responses to the interrogatories and the trial court agreed, relying on Allstate Ins. Co. v. Boecher, 733 So.2d 993 (Fla. 1999). The trial court concluded that a party has the right to discover information directly related to a witness’s bias. Here, the potential for bias existed in that an expert could be more likely to give favorable testimony because of the financial incentive.

The court was not persuaded that Allstate’s economic concerns rose to the level of an undue burden. The court held that Allstate could recoup these costs if it was the prevailing party. Furthermore, Allstate never asserted that it did not have access to the information, only that obtaining the information would be time consuming.

Given the finding that Allstate’s economic burden was not an undue burden, the court rejected Allstate’s request that Hodges post a bond. A party is required to post a bond when the cost of discovery is unreasonable and unduly burdensome.

The Second District determined that the trial court did not depart from the essential requirements of the law. It upheld the trial court’s order finding that information regarding how often an expert testified on behalf of an insurer and how much money the expert has been paid due to his or her relationship with the insurer, is relevant to an opposing party’s efforts to demonstrate witness bias. The Second District further agreed with the conclusion that Allstate’s economic concerns did not rise to the level of an undue burden which would support Allstate’s contention that it should not be forced to respond to the interrogatories and, accordingly, that no bond would be required.

Jacqueline A. Grady