Florida’s Nursing Home Reform and its Anticipated Effect on Litigation
The Florida Legislature recently amended Florida’s nursing home statute1 to address many of the controversial issues pertaining to nursing home care that the state has been grappling with for almost 20 years. Patients’ advocates and plaintiffs’ attorneys have often taken the position that the state’s administrative policing of nursing homes has been ineffectual. Their argument is fueled by horror stories of abuse and neglect that have occurred at some facilities. These advocates believe that the courts are the only effective means of forcing nursing homes to provide quality care, and assert that large punitive verdicts are the only message corporate officers will understand.2
In response to these large verdicts and numerous frivolous suits, the nursing home industry began to pull out of Florida, and many insurance companies stopped writing liability policies for Florida nursing homes altogether.3 This was happening at a time when the need for nursing homes in Florida was greater than ever and continuing to increase.4 Often, even nonmeritorious suits against nursing homes would be difficult to defend because of the sensitive and inflammatory subject matter, and many of these suits resulted in disproportionate jury awards.5 Plaintiffs’ attorneys tended to paint the picture of “the evil nursing home that abused poor grandma or grandpa, putting profits over patient well-being.” Consequently, nursing homes became an easy target as the scapegoat for juries who wanted to find someone to punish for the regrettable fact that we all grow old.6 The reality is that a large number of nursing homes in Florida have themselves been victimized and are losing money.7
The statutory reform attempts to solve the problem on two fronts: first, by trying to improve the care itself; and second, by trying to level the litigation playing field by discouraging frivolous suits and restricting unbridled punitive verdicts.8 toward the first goal, the statute contains many new administrative requirements, standards, and enforcement provisions that must be implemented by nursing homes immediately. This article, however, will focus only on the second goal, which concerns litigation reform and how these statutory changes are likely to affect claims and damage awards.
In 1980, a Dade County grand jury conducted an investigation and issued a report regarding nightmarish deficiencies in many South Florida nursing homes.9 In response to this report and accompanying public outcry, the Florida Legislature enacted Ch. 400.022 which contained a list of “residents’ rights” intended to protect nursing home residents from abuses. The enactment of these residents’ rights, however, did not have much effect because the statute contained no enforcement provision.
In 1993, the legislature amended the statute to include Ch. 400.023, which provides a civil remedy enabling residents or their representatives to sue for violations of their residents’ rights. Although well-intended, this civil remedy provision opened the floodgates and countless lawsuits followed.10 Nursing homes became an easy target because of the broad wording of the statute in conjunction with the lure of unlimited compensatory and punitive damages, and attorneys’ fees.11 Often the afflictions experienced by residents were not due to any negligence or misconduct, but were due to the frail medical condition of patients who were at the end of life.12 Nevertheless, these cases tended to have large exposure due to the sensitive subject matter. The exponential increases in lawsuits and verdicts led to what many commentators referred to as the “nursing home crisis.”13
In the 2000 session, the legislature created a task force to assess this “crisis” and look into the current long-term care system in terms of the availability of alternatives to nursing homes, the quality of care in nursing homes, and the impact of lawsuits against nursing homes and other long-term care facilities on the costs of care and the financial stability of the long-term care industry.14 The task force submitted an extensive report to the legislature detailing the problems. This report, in conjunction with a report prepared by the staff of the Committee on Health, Aging, and Long-term Care, resulted in the current statutory reforms.15
The resulting statute contains significant administrative changes and tackles several legal issues that have been in a state of flux in various Florida courts. The statute also answers many questions that have been the subject of debate between plaintiffs’ attorneys and defense attorneys for years.16
New Statutory Provisions
• Claims Maintained Regardless of Whether Death Resulted from Deprivation of Residents’ Rights, but Plaintiff Must Elect Survival Damages or Wrongful Death Damages
Previously, the statute only allowed the personal representative of a deceased nursing home resident to bring a claim alleging a deprivation of the resident’s rights if the deprivation caused the resident’s death.17 In other words, if a resident’s rights were violated but he later died of unrelated causes, a Ch. 400 claim could not be maintained. The Survival Statute18 did not apply to Ch. 400 claims. The new statute allows for the personal representative of a nursing home resident to bring a cause of action regardless of whether the resident’s death resulted from a deprivation of his resident’s rights.
In effect, this new statutory provision reverses Beverly Enterprises v. Knowles, 766 So. 2d 335 (Fla. 4th DCA 2000),19 in which the Fourth DCA reinforced the previous statutory language that a Ch. 400 claim may only be brought if the resident’s death resulted from a deprivation of his or her rights. The new statute, however, allows the resident’s rights claim to survive but imposes certain limitations on the type of damages that can be claimed.20
The new statute also addresses the hotly debated issue of whether damages in a Ch. 400 claim are limited to those enumerated under the Wrongful Death Act.21 Previously, there was a conflict in the courts on whether the personal representative of a nursing home resident could recover damages for the decedent’s pain and suffering. The Fifth DCA held in Beverly Enterprises-Florida, Inc. v. Spilman, 661 So. 2d 867 (Fla. 5th DCA 1995),that damages are not limited to those enumerated under the Wrongful Death Act, and a personal representative may recover for the deceased resident’s pre-death pain and suffering.
Conversely, in First Healthcare Corp. v. Hamilton, 740 So. 2d 1189 (Fla. 4th DCA 1999), the court held, in direct conflict with Spilman, that the personal representative of a deceased resident may not recover damages for the decedent’s pre-death pain and suffering, and that damages are limited to those enumerated under the Wrongful Death Act. The Third DCA followed Spilman in deciding Somberg v. Florida Convalescent, Ctr., 2001 Fla. App. Lexis 3500 (Fla. 3d DCA March 21, 2001). The new statute resolves this issue on causes of action that accrue on or after May 15, 2001, by providing that either wrongful death damages or survival damages may be sought, but not both.
If the action is for a violation of a resident’s rights or for negligence that caused the death of the resident, the claimant must now elect either survival damages pursuant to§46.021 or wrongful death damages pursuant to §768.21.22 In other words, the personal representative may either recover: 1) on behalf of the estate, economic damages and noneconomic damages for the resident’s pain and suffering from the time of injury until the resident’s death (survival damages); or 2) economic damages for the estate and noneconomic damages for the pain and suffering of the deceased resident’s survivors (wrongful death damages).23
On the other hand, if a plaintiff alleges a violation of resident’s rights or negligence that did not cause the resident’s death, and the resident subsequently died of some other cause, the personal representative may recover survival damages for the negligence that caused the resident’s injury.24
In enacting this new provision, it appears that the legislature was trying to remedy an anomaly inherent in the previous statutory language. The wording in the old statute denied redress under Ch. 400 to an entire class of residents whose rights were violated, but who happened to die of other causes. In essence, the statute would allow nursing homes to escape liability if they were “lucky enough” for the resident to die of some other cause before he or she could sue them. Because most nursing home residents are significantly advanced in age, the previous provision would significantly limit the claims that could be maintained under Ch. 400.25 The reformed statute does away with this defensive loophole by allowing the claim to be brought even after the resident dies, regardless of the cause of death.
The requirement that a plaintiff must choose between survival damages and wrongful death damages is apparently intended to limit the amount of compensatory damages. In most instances, a plaintiff’s attorney might elect survival damages if the resident experienced pain and suffering from the time of the injury until death, simply because his or her personal suffering would be worth more than the vicarious suffering of the family for that injury. It might be different, however, if a resident’s rights were violated but he or she could not personally experience the suffering because he or she was in a coma or was cognitively impaired. In such a case, the family would probably suffer more than the resident, and it would make more sense to elect wrongful death damages to recover for the family’s pain and suffering. Another scenario might be where the resident died instantaneously from a deprivation of his or her rights and did not suffer any pain. Here again, it would make more sense for a plaintiff to elect wrongful death damages.
All in all, this section clears up the previously murky waters and establishes a bright-line rule that a claim can be maintained even if the death did not result from a deprivation of residents’ rights. This particular change might be viewed as somewhat more beneficial to plaintiffs than it is to the nursing homes in the sense that it now allows cases to proceed where the death did not result from a deprivation, whereas such cases previously would have been dismissed under the Knowles decision.
On the other hand, the new provision benefits nursing homes more than plaintiffs on claims in which the death did result from a deprivation of the resident’s rights because it limits the amount of compensatory damages. It eliminates either the decedent’s or the family’s claim for pain and suffering, which in some cases might reduce the verdict substantially. Whereas it may increase the number of smaller claims, it is likely to decrease the verdicts in larger claims.
Although at first glance it appears that there would be an increase in the number of smaller claims under the new statute, such an increase might be negated by the elimination of the attorneys’ fees provision under the new statute (discussed infra).26 In light of the trade-off between allowing more cases to proceed while simultaneously eliminating the incentive for attorneys to advance those cases, it is hard to predict whether there will be any net reduction in the number of lawsuits and savings to nursing homes on litigation-related expenses.
• Elimination of Attorneys’ Fees Except in Claims for Injunctive Relief or Administrative Remedy
The change to the attorneys’ fees provision is perhaps one of the most significant aspects of the new statute. The previous provision allowed recovery of attorneys’ fees if a plaintiff prevailed in a Ch. 400 claim and allowed the defendant to recover fees if the plaintiff’s claim was frivolous. The new statute has eliminated this provision and only allows fees to be recovered in cases seeking injunctive relief or administrative remedies, and then such fees are limited to $25,000.27 In the event a plaintiff tries to tack a claim for injunctive relief or administrative remedy onto a negligence or residents’ rights claim, only the portion of fees attributable to the injunction or administrative relief is recoverable.28
The fees provision under the old statute tended to make even small claims interesting to plaintiffs’ attorneys because they would recover their fees if they prevailed — regardless of the amount of the verdict. Plaintiffs’ counsel’s fees have often been substantial in nursing home cases.29 Under the new statute, this incentive for large fees on cases involving only technical violations of Ch. 400 will no longer exist.
It is doubtful this change will dissuade plaintiffs’ attorneys who are pursuing cases of severe abuse since they will still be motivated by large contingency fees. Because questionable cases are less likely to generate significant fees, the absence of a general statutory fees provision may deter many plaintiffs’ attorneys from pursuing them. This may help to reduce the number of claims that might otherwise have increased because of the statute’s “reversal” of the Knowles decision.
Plaintiffs’ attorneys have often argued that they file nursing home suits to help those who are too weak to protect themselves, and assert that litigation and the resulting expense would decrease if the quality of care improved.30 The statute aims to do both: improve care and reduce litigation costs. Because the recovery of fees has now been substantially restricted, the new limitation will serve to weed out practitioners whose motives may not be as pure. Although the elimination of attorneys’ fees will clearly be detrimental to plaintiffs’ attorneys, it appears likely to provide some of the intended relief to nursing homes.
• Medical Malpractice Statute Does Not Apply to Ch. 400 Claims
Because of the medical component associated with nursing home cases, a key issue that was recurring was whether plaintiffs would have to comply with the medical malpractice statute’s pre-suit requirements. This was a gray area because nursing homes provide a mixture of “medical care or services,”31 and also provide custodial care. There is authority suggesting that if a cause of action concerns a facility’s vicarious liability for medical negligence of its employee, the medical malpractice statute would apply.32 That decision was later qualified by the same court which held that a plaintiff who alleges violations of residents’ rights and does not also allege a common law medical negligence cause of action does not have to comply with the medical malpractice statute.33
Nevertheless, disputes continued over whether medical negligence claims were being disguised as Ch. 400 claims in order to circumvent complying with the medical malpractice pre-suit requirements.34 If the pre-suit requirements had not been met, defense attorneys would seek to preclude plaintiffs’ attorneys from utilizing medical experts or criticizing “medical care or services” or care provided by “health care providers.”35 Moreover, defense attorneys would try to characterize cases as medical negligence cases in order to limit recovery by adult children under §768.21(8).
The new statute ends this wrangling and unequivocally states in three separate sections that an action for violation of rights or negligence is not a claim for medical malpractice.36 Although unambiguous on its face, this declaration, in and of itself, does not end the discussion. The question that still remains is: Why would a claim against a physician or nurse who commits a negligent act at a nursing home not be subject to compliance with the medical malpractice statute, when that same negligent act would necessitate compliance if it occurred in a hospital? The answer appears to be two-fold.
First, the filings of a Ch. 400 claim and a Ch. 766 claim do not appear to be mutually exclusive and may be pled in the alternative. The new statute allows a Ch. 400 claim to be brought independent of a medical negligence claim if desired, without any need to comply with the medical malpractice pre-suit requirements. The statute simply provides that all claims against nursing homes, whether medical or custodial in nature, can be brought under Ch. 400. The statute does not appear to preclude a plaintiff from also filing a separate medical negligence claim under Ch. 766 against a health care provider.
Despite the legislature’s attempt to be as clear as possible on this issue, there may still be some ambiguity. The new provision states:
Sections 400.023-400.0238 provide the exclusive remedy for a cause of action for recovery of damages for the personal injury or death of a nursing home resident arising out of negligence or a violation of rights specified in 400.022. The provisions of Chapter 766 do not apply to any cause of action brought under §§400.023-400.0238.37
This could be interpreted as meaning that if a claim is founded on negligence (medical or otherwise) as evidenced by a violation of a resident’s rights, the exclusive remedy would be under Ch. 400, and a claim under Ch. 766 cannot also be brought. On the other hand, because the statute does not specify whether medical negligence is precluded as an alternative theory of recovery, arguably a plaintiff’s attorney could file a Ch. 400/negligence claim and alternatively plead a separate medical malpractice claim under Ch. 766 against health care providers. It would follow, however, that if an alternative claim for medical malpractice is pled, the plaintiff would then have to comply with the pre-suit requirements under Ch. 766.
The second reason a plaintiff in a nursing home case would not have to comply with the pre-suit requirements under Ch. 766 is because the new nursing home statute contains its own pre-suit requirements. These requirements are strikingly similar to the medical malpractice pre-suit requirements (discussed infra ). The importation of these requirements into the new statute may be an acknowledgment that there was an implied requirement in the past that the medical malpractice pre-suit requirements be followed in Ch. 400 cases if medical care was at issue. These pre-suit requirements are now expressly provided in the new statue.
The legislature’s apparent goal was to write the new statute in a manner that would enable it to stand on its own without generating the kind of ambiguity that occurred when the old statute had to read in pari materia with other statutes. For example, the earlier versions of Ch. 400 conflicted with certain provisions of the Medical Malpractice Statute, the Wrongful Death Statute, and the Survival Statute, which resulted in confusion. It appears that the new statute has eliminated many of those conflicts.
• Standard of Proof
The new statute seeks to clarify issues concerning standards of proof that previously arose in nursing home cases. In the past, there was some inconsistency as to which standard of care applied because of the mixed nature of many cases which included components of ordinary negligence, medical negligence, and statutory violations under Ch. 400. In negligence cases, the standard is a “reasonable person” standard—whether the conduct of the defendant deviated from that expected of a reasonably prudent person.38 In a medical malpractice case, the test is whether the defendant deviated from acceptable medical standards by a minimally qualified health care provider in a similar community.39 contrast, the standard in a nursing home case has been whether the resident had a right under the statute to either obtain that which the resident was denied, or had a right under the statute to be free from that which the resident experienced.40
The new provision sets forth a clear-cut standard of proof which mirrors the burden of proof in an ordinary negligence claim. The new statute provides:
The claimant shall have the burden of proving by a preponderance of the evidence, that:
(a) The defendant owed a duty to the resident;
(b) The defendant breached the duty to the resident;
(c) The breach of the duty is a legal cause of loss, injury, death or damage to the resident; and,
(d) The resident sustained loss, injury, death or damage as a result of the breach.41
As further discussed infra, the statute also establishes that a violation of the residents’ rights or administrative regulations is not negligence per se, and is only evidence of negligence. This new addition will require plaintiffs to prove their case in the same manner as any other negligence case, and will clear up any question as to which standard should apply to Ch. 400 claims.
• Violation of Residents’ Rights Is Not Negligence Per Se
In the past, plaintiffs in Ch. 400 cases would often assert that it was negligence per se if certain requirements under the Florida Administrative Code42 and Federal Nursing Home Reform Amendments Act43 were not met. Unlike Ch. 400, these administrative regulations do not contain a private right of action. Plaintiffs generally proceeded under either of two theories: first, that violations of the administrative regulations themselves were negligence per se; or second, that violations of the regulations would establish that the defendant failed to provide “adequate and appropriate health care” as required under Ch. 400.022(l), thereby resulting in a per se violation of the resident’s rights under Ch. 400.
On the first point, defendants would argue that because there is no private right of action under the administrative regulations, a direct cause of action could not be brought for violating the regulations. In response, plaintiffs would assert that although there is no express private right of action in these regulations, there is an implied right of action under the test established in Cort v. Ash, 422 U.S. 66 (1975), thereby enabling a direct claim to be made for violations. Defendants would argue that legislative intent is one of the elements under the Cort v. Ash test, and the legislature did not intend to provide a private right of action for violations of the regulations as evidenced by the fact that there is no explicit standard of care in the regulations, or for that matter, in Ch. 400.
As written, the courts had to look beyond the words of the regulations and the statute to expert affidavits and standards in the community in order to resolve questions regarding the standard of care. Moreover, if the legislature had intended a private right of action under the regulations, it would have expressly provided one as it did in Ch. 400.023. As such, direct claims of negligence per se for violations of the administrative regulations generally were unsuccessful.
On the second point, plaintiffs would assert that violations of the administrative regulations established per se violations of Ch. 400.022(l), which does provide a private right of action. Again, because Ch. 400.023 requires expert affidavits and consideration of standards in the community in order to establish the standard of care, administrative regulation violations, by themselves, have generally been insufficient to give rise to per se violations of the residents’ rights statute.
Although there is authority around the country that statutes similar to Ch. 400 are too vague to give rise to claims of negligence per se,44 The absence of Florida authority on this specific point rendered negligence per se an uncertain matter. That issue has now definitively been put to rest. The new statutory provision specifically states:
Nothing in this part shall be interpreted to create strict liability. A violation of the rights set forth in §400.022 or in any other standard or guideline specified in this part or in any applicable administrative standard or guideline of this state or a federal regulatory agency shall be evidence of negligence but shall not be considered negligence per se.45
Under the new provision, a plaintiff will not be able to merely show that a resident’s rights were violated and then ask the jury to award damages for it. Plaintiffs will have to prove all elements of the cause of action as specifically set forth in the statute.
It should be noted that in addition to eliminating any question concerning negligence per se, the new statute adds language providing that claims based on residents’ rights violations or based on negligence may be brought. A nursing home resident has always had the ability to bring claims founded on common law negligence, and often did so. Nevertheless, the new statute now expressly provides a statutory negligence cause of action that will supplant common law negligence claims by providing that §§400.023 through 400.0238 are exclusive remedies.
Of particular significance is the new statute’s express statement that a violation of residents’ rights is merely evidence of negligence. From the nursing home’s perspective, the critical effect of this provision is that plaintiffs will no longer be able to argue that they are entitled to the negligence per se jury instruction in Florida Standard Jury Instruction 4.9.46
• Prescribing Duty of Care
Previously, Ch. 400 did not prescribe a duty of care that was applicable in Ch. 400 cases. Consequently, courts struggled with which standards to apply because sometimes the subject care was provided by health care providers such as licensed nurses and physicians, and other times it was provided by nursing assistants and nonmedical personnel. The new statute adopts two duties of care: It establishes a general one which provides that a licensee, person or entity shall exercise “reasonable care” that a reasonably careful licensee, person, or entity would use under like circumstances;47 it also establishes that a licensed nurse will be held to the prevailing professional standard of care for a reasonably prudent similar nurse.48 In other words, licensed nurses will be held to a medical malpractice duty of care, and other employees will be held to an ordinary negligence duty of care. This provision will serve to clarify for attorneys, as well as for the courts, which standards will be applicable and to whom they will apply.
• New Pre-suit Requirements
Ironically, despite expressly stating that nursing home actions are not medical malpractice actions under Ch. 766, the new statute then proceeds to adopt almost verbatim the pre-suit requirements imposed on medical negligence cases under Ch. 766.49 Under the new statute, a claimant must give notice to all prospective defendants of the rights violated, and certify that a reasonable investigation gave rise to a good-faith belief that grounds exist for an action against each prospective defendant. Either a licensed physician or a registered nurse may provide support that a reasonable basis exists to file the claim.
The noteworthy differences are that the pre-suit period under the new Ch. 400 provisions will require a 75-day pre-suit period as opposed to the 90-day pre-suit period in medical negligence cases. At the end of the 75-day period, a defendant can either reject the claim or make a settlement offer.
The new nursing home statute provides that if a defendant makes a written settlement offer, the claimant shall have 15 days from the date of receipt to accept the offer, and such offer is deemed rejected unless accepted by delivery of a written notice.50 This section appears to be without any effect, however, since it does not provide any incentives one way or the other for acceptance or rejection of such offer. contrast, the medical malpractice statute provides incentives of limitations on noneconomic damages to $250,000 if the offer is accepted,51 and to $350,000 in the event the offer is rejected and the case proceeds to trial.52 Again, the new statute provides for something that already exists: that defendants may make a settlement offer and plaintiffs may reject it. In this respect, the statute merely codifies the obvious.
With regard to discovery in the pre-suit period, there is a provision similar to the medical malpractice requirement that a party is required to produce relevant and discoverable documents within that party’s possession or control, but there is limiting language that only requires such production in good faith if it can reasonably be done within the time frame of the claim’s evaluation process.53 contrast, the medical malpractice statute has a much harsher ramification for not providing requested documents, and states that failure to do so is grounds for dismissal of claims or defenses ultimately asserted.54
It is unlikely that this new provision will result in any significant changes in the way nursing home cases are initiated, simply because most plaintiffs’ attorneys have already been complying with the medical malpractice statute pre-suit requirements.55
• Limitations for Adult Children in Medical Malpractice Cases under Wrongful Death Act Do Not Apply to Ch. 400 Claims
The new statute expressly eliminates the applicability of §768.21(8) to Ch. 400 claims. This section of the Wrongful Death Act56 prohibits recovery by adult children for their own pain and suffering in medical malpractice wrongful death cases.57 This limitation had been viewed by many as unfair, particularly as applied to nursing home cases, for two reasons. First, under the Wrongful Death Act, adult children in medical negligence claims are treated differently than adult children in other types of cases. For example, in the absence of a surviving spouse, the adult child of a person who was hit and killed by a truck would be able to recover for his own pain and suffering, but the same child whose parent was killed by medical negligence would not. Thus, the Wrongful Death Act had the potential of severely limiting recovery in claims that could be characterized as medical in nature, and could deny redress to adult children whose parents suffered from medical negligence in a nursing home. Consequently, defendants would have a significant incentive to characterize claims as medical negligence and plaintiffs would vigorously oppose such characterizations.
Second, nursing home residents often do not have surviving spouses. As such, there would be no one who could bring a claim for noneconomic damages when a resident died from medical negligence. This would adversely affect the value of potential claims by an entire class of nursing home residents who were unmarried and died from medical negligence. For example, if two different residents experienced the exact same negligent medical treatment which resulted in their deaths, but one of the residents was married and the other was not, the married resident’s case would be better able to attract an attorney to prosecute the claim because the surviving spouse could recover for her pain and suffering, which would substantially increase the value of the claim. The claim in the case of the unmarried resident would be limited to economic damages, which are generally insignificant, thereby limiting the appeal to prospective attorneys for this resident’s claim. This could be viewed as limiting access to the courts based on marital status.
From a public policy standpoint, such a law might be viewed as providing an incentive to provide better care for married nursing home residents, or residents with minor children, than for unmarried patients who have adult children, because a lawsuit from the former group would be a greater deterrent than one filed by the latter group.
The new statute does away with these perceived inequities by expressly stating in two separate sections that “the provision of §768.21(8) do [sic] not apply to a claim alleging death of the resident.”58 This new provision eliminates one of the defenses that was previously available to nursing homes, but serves to clarify what has been a hazy issue concerning the relationship between Ch. 400, Ch. 766, and Ch. 768. It also ensures that, in cases in which there is no surviving spouse, the adult children of nursing home residents may now recover for their pain and suffering, regardless of whether or not their claim is medical in nature.
• Statute of Limitations
Under the old statutory scheme, there was uncertainty regarding the applicable statute of limitations as applied to nursing home cases. Plaintiffs would generally assert that there was a four-year statute of limitations under §95.11(3)(a) (action founded on negligence), or §95.11(3)(f) (action founded on statutory liability). On the other hand, defendants would assert that nursing home cases were governed by a two-year statute of limitations under §95.11(4)(b) (action for medical malpractice), or §95.11(4)(d) (action for wrongful death).
This uncertainty has now been resolved by an express statute of limitations set forth in the nursing home chapter itself.59 The new provision adapts the medical malpractice limitations period and allows an action to be commenced within two years from the time the incident giving rise to the action occurred, or within two years from the time the incident is discovered or should have been discovered with the exercise of due diligence. It also provides a four-year statute of repose and a fraud provision which extends these periods by two years.
• Limitations on Punitive Damages
Another major change in the statute is the punitive damages provision.60 Section 400.0237 adapts a new, tiered punitive damages provision similar to that recently enacted in the Florida tort reform statute.61 In essence, a defendant may be held liable for punitive damages only if the trier of fact finds, based on clear and convincing evidence, that the defendant was personally guilty of intentional misconduct or gross negligence. The statute defines “intentional misconduct” as meaning that the defendant had actual knowledge of the wrongfulness of the conduct and the high probability that injury or damage to the claimant would result, and, despite that knowledge, intentionally pursued that course of conduct, resulting in injury or damage. The statute defines “gross negligence” as meaning that the defendant’s conduct was so reckless or wanting in care that it constituted a conscious disregard or indifference to the life, safety, or right of persons exposed to such conduct.
It should be noted that, with regard to an employer, principal, corporation, or other legal entity, punitive damages may be imposed for the conduct of an employee or agent only if the conduct of the employer agent meets the criterion previously mentioned and : a) the employer, principal, corporation, or other legal entity actively and knowingly participated in such conduct; b) the officers, directors, or managers of the employer, principal, corporation, or other legal entity condoned, ratified, or consented to such conduct; or c) the employer, principal, corporation, or other legal entity engaged in conduct that constituted gross negligence and that contributed to the loss, damage, or injuries suffered by the plaintiff. Since this section is a remedial statute, it took effect immediately upon being enacted into law on May 15, 2001, regardless of when the cause of action accrued.62
Some commentators have criticized this provision because it makes it too difficult to impose punitive damages on the corporate entity. They complain that a corporate officer would almost have to be physically present in the nursing home and have to be personally involved in the resident’s neglect in order to subject the corporation to punitive damages. Notwithstanding this hyperbole, the new statutory language is, in fact, intended to make it more difficult to impose punitive damages, and it appears that its design is likely to accomplish that objective.
If a plaintiff gets past the first hurdle of showing that punitive damages are recoverable, he or she will then face significant limitations in the amount of the damages recoverable. The first tier of the punitive damages limitation provides for three times the amount of compensatory damages or $1 million, whichever is greater. The second tier applies where the fact finder determines that the wrongful conduct was motivated primarily by unreasonable financial gain and determines that the unreasonably dangerous nature of the conduct, together with the high likelihood of injury resulting from the conduct was actually known by the managing agent, director, officer, or other person responsible for making policy decisions on behalf of the defendant. In such case, the jury may award punitive damages of four times the amount of compensatory damages or $4 million, whichever is greater.
The third tier of the punitive damages provision provides that if a defendant had a specific intent to harm the claimant, and the jury determines that the defendant’s conduct did in fact harm the claimant, there is no cap on punitive damages. Although these new punitive damages limitations are unpopular with plaintiffs’ attorneys, they are likely to reduce some of the exceptionally large punitive damages awards that have recently occurred in Florida, and may serve to allow needed funds to remain where they will do the most good: providing quality care to the elderly.
The changes to the nursing home statute have been significant and will affect the entire picture with regard to litigating cases of abuse and neglect in nursing homes. One possible effect may be a reduction in the number of questionable claims due to the elimination of attorneys’ fees. Additionally, there may be a reduction in compensatory damages resulting from the new requirement that the plaintiff must choose between survival damages and wrongful death damages. Punitive damages are also likely to be significantly reduced. Plaintiffs will no longer have to comply with the medical malpractice pre-suit requirements, but will now have to comply with almost identical pre-suit requirements under the new statute. These and many other nuances will have to be carefully studied both by nursing home attorneys and risk managers, so that the ramifications of the new statute can be evaluated and new litigation strategies can be developed.
1 Fla. Stat. ch. 400 et seq.
2 See This Week in South Florida — Michael Putney, March 10, 2001 (tape on file with WPLG-Channel 10, Miami), in which the nursing home crisis was debated by attorney Tom Manos on behalf of the nursing home industry and attorney Joel Perwin on behalf of Florida trial lawyers.
3 See Michele Chandler, 49 Nursing Homes to be Sold, Miami Herald, Feb. 9, 2001, at 3C.
4 See Seymore Moskowitz, New Remedies for Elder Abuse and Neglect,12 Jan. Prob. & Prop. 53 (1998); see also Associated Press, Researcher: U.S. Care for Elders Is Better Than Canada’s System, Miami Herald, Feb. 20, 2001 at 1B.
5 The average cost per claim increased from approximately $50,000 in 1988 to approximately $225,000 in 1995. See American Health Care Association – 1998 Legal Defense Conference: Strategies and Solutions for Today’s Nursing Facility Litigation, Nov. 12–13, 1998 Hyatt Regency Chicago, Illinois. Additionally, the average cost of claims has doubled between 1992 and 1997. For example, in 1992, 85 percent of settlement dollars were paid on claims of less than $250,000; whereas in 1997 46 percent of settlement dollars were paid on claims of more than $250,000. See id.
6 See Tom J. Manos, The Golden Years—Defending Nursing Homes From Abuse (Sept. 1998).
7 In the fourth quarter of 2000, the nation’s largest nursing home chain, Beverly Enterprises, lost $46.8 million, and has been trying to sell its 49 Florida nursing homes. National HealthCare Corp. of Tennessee, which owned 12 nursing homes, has also pulled out of the state, as has Extendicare of Toronto, which owned 28 nursing homes. See Chandler, supra note 3.
8 See Senate Bill 1202, signed into law by the governor on May 15, 2001, and codified as Fla. Stat ch. 400 et seq.
9 See Committee on Health and Rehabilitation Servs., Nursing Homes: Senate Staff Analysis and Economic Impact Statement, Bill No. 80-1218 (Fla. June 10, 1980).
10 See Troy J. Crotts & Daniel A. Martinez, The Nursing Home Resident’s Rights Act—A Good Idea Gone Bad! 26 Stetson L. Rev. 599 (1996).
11 See American Health Care Association, supra note 5.
12 See Appropriations Committee; Judiciary Committee; Health, Aging, and Long-Term Care Committee; and Senator Brown-Waite; Long Term Care: Senate Staff Analysis and Economic Impact Statement, Bill No: 1202 (Fla. Apr. 19, 2001) (hereinafter “Senate Staff Analysis”).
13 See Vickie Chachere (Associated Press), Nursing Home Panel Fails to Approve Plan, Miami Herald, Dec. 24, 2000, at 3B; see also This Week In South Florida, supra note 2.
14 See Senate Staff Analysis, supra note 12.
15 See id.
16 See Manos, supra note 6.
17 See Beverly Enterprises – Florida, Inc. v. Knowles, 766 So. 2d 355 (Fla. 4th D.C.A. 2000).
18 Fla. Stat. ch. 46.02.
19 The new statute will apply to causes of action that accrue on or after May 15, 2001. Causes of action that accrued prior to that date will be governed by the statutes and case law in force and effect at that time.
20 See Fla. Stat. ch. 400.023 (May 15, 2001).
21 Fla. Stat. ch. 768.21.
22 See id.
23 The Wrongful Death Act allows specified recovery for spouses, adult children, and/or minor children. See Fla. Stat. ch. 768.21; see also Senate Staff Analysis, supra note 12.
24 See Fla. Stat. ch. 400.023 (May 15, 2001);
25 The Knowles decision reduced the number of Ch. 400 claims where the resident’s death was not caused by a deprivation of his rights. The Knowles decision, however, did not affect the ability to bring negligence causes of action under the Survival Statute. Prior to the Knowles decision, that same court (Fla. 4th D.C.A.) had come to a different conclusion in Greenfield v. Manor Care, Inc.,705 So. 2d 926 (Fla. 4th D.C.A. 1997), in which it held that a Ch. 400 claim could be filed even if the resident’s death did not result from a deprivation of his rights. While Greenfield was the law in Florida, litigation against nursing homes reached an all time high. See American Health Care Association, supra note 5.
26 See Fla. Stat. ch. 400.023 (May 15, 2001).
27 See id.
28 See id. It should be noted that this provision does not preclude attorneys’ fees which may be awarded in connection with a proposal for settlement under Fla. Stat. §768.79.
29 It has not been unusual to see attorneys’ fees awards of up to $300,000 on Chapter 400 claims; see also American Health Care Association, supra note 5.
30 See Jackie Hallifax, (Associated Press) Task Force: Use “Options” to Cut Nursing Home Lawsuits, Miami Herald, Feb. 6, 2001 at 3B.
31 Fla. Stat. ch. 766.106(1)(a).
32 See NME Properties, Inc. v. McCullough, 590 So. 2d 439 (Fla. 2d D.C.A. 1991).
33 See Integrated Health Care Services, Inc. v. Pauline Lang-Redway, Case No. 2D00-2905, 2001 Fla. App. LEXIS 2923 (Fla. 4th D.C.A. Mar. 9, 2001).
34 See Joseph E. Brooks, Nursing Home Litigation: Is It Medical Malpractice? Trial Advoc. Q. 35 (Apr. 2001).
35 See id.; see also §766.106(1)(a) and §766.102(1).
36 See Fla. Stat. ch. 400.023(1) (May 15, 2001); see also Fla. Stat. ch. 400.023(7) (May 15, 2001); see also Fla. Stat. ch. 400.0235 (May 15, 2001), which is duplicative of the provision in §400.023(7).
37 Fla. Stat. ch. 400.023(1) (May 15, 2001) (emphasis added).
38 See Simon v. Tampa Elec. Co., 202 So. 2d 209, 213 (Fla. 2d D.C.A. 1967).
39 See Fla. Stat. ch. 766.102(1).
40 See Fla. Stat. ch. 400.023 (1997).
41 Fla. Stat. ch. 400.023(2) (May 15, 2001).
42 Chapter 59A-4, Minimum Standards For Nursing Homes, Fla. Admin. Code, Revised Nov. 5, 1996.
43 Contained within the Omnibus Budget Reconciliation Act of 1987 (OBRA), 42 U.S.C. §1395i-3 (1988).
44 See Makas v. Hillhaven, Inc.,589 F. Supp. 736 (M.D.N.C. 1984); see also Stogsdill v. Manor Convalescent Home, Inc., 355 Ill. App. 3d 634, 343 N.E.2d 589 (1976) (requirements were too vague to be sufficient indicators of the standard of due care required of nursing homes by themselves).
45 Fla. Stat. ch. 400.023(2) (May 15, 2001).
46 Florida Standard Jury Instructions in Civil Cases, 4.9, entitled, “Violation of Non-traffic Penal Statute or Ordinance as Negligent,” states: “Violation of this [statute] [ordinance] is negligence. If you find that a person alleged to have been negligent violated this [statute] [ordinance], such person was negligent. You should then determine whether such negligence was a legal cause of the [loss] [injury] [or] [damage] complained of.”
47 Fla. Stat. ch. 400.023(3) (May 15, 2001).
48 Fla. Stat. ch. 400.023(4) (May 15, 2001).
49 See Fla. Stat. ch. 400.0233 (May 15, 2001).
50 See Fla. Stat. ch. 400.0233(9) (May 15, 2001).
51 See Fla. Stat. ch. 766.207(7)(b).
52 See Fla. Stat. ch. 766.209(4) (a).
53 See Fla. Stat. ch. 400.0233(7)(b) (May 15, 2001).
54 See Fla. Stat. ch. 766.106(6) (1999).
55 It was common practice for plaintiffs’ attorneys to comply with the pre-suit requirements under §766 until the Fourth DCA declared that it was unnecessary to comply with the pre-suit requirements in §766 in order to maintain a Chapter 400 claim. See First Healthcare Corp. v. Hamilton, 740 So. 2d 1189 (Fla. 4th D.C.A. 1999); see also Integrated Health Care Services, Inc. v. Pauline Lang-Redway, Case No. 2D00-2905, 2001 Fla. App. LEXIS 2923.
56 See Fla. Stat. ch. 768.21(8).
57 Section 768.21(8) precludes recovery for loss of parental companionship, instruction and guidance and for mental pain and suffering from the date of injury, with respect to claims of medical negligence if there is no surviving spouse.
58 Fla. Stat. ch. 400.023(7) (May 15, 2001); see also Fla. Stat. ch. 400.0235 which states that “the provision of §768.21(8) do [sic] not apply to a claim alleging death of the resident.”
59 See Fla. Stat. ch. 400.0236 (May 15, 2001).
60 Fla. Stat. ch. 400.0237 (May 15, 2001).
61 See Fla. Stat. ch. 768.72 (2000). It should be noted that The Florida Tort Reform Act of 1999 has been declared unconstitutional by a Leon County Circuit Court based on violations of the single-subject rule. See Florida Consumer Action Network v. Bush, No. 99-6689 (Fla., Leon Cty. Cir. Ct. Feb. 9, 2001). The Florida Supreme Court has not yet ruled on the case.
62 See Fla. Stat. §400.0237(5).
Tom J. Manos is an attorney with the law firm of Thornton, Davis, & Fein, P.A., in Miami. He received his bachelor of liberal studies from Barry University, summa cum laude, and his juris doctorate, magna cum laude, from the University of Miami School of Law. Mr. Manos served a judicial internship with Senior U.S. District Judge William M. Hoeveler, Southern District of Florida. He practices in the areas of medical malpractice, nursing home defense, aviation, products liability, general civil litigation, and entertainment law.
Special thanks to Holly Harvey and Patricia Leid for their helpful editing assistance and positive input.