Keep it Straight or Pay More Than Your Share: Deciphering Fabre and Set-Offs in Multiple Defendant Cases
The interplay between apportionment of fault and the set-off analysis in multiple tortfeasor litigation has grown complicated and increasingly important in predicting a defendant’s share of the verdict (or potential verdict in evaluating cases). The problem arises when one or more defendants settle prior to trial and the trial proceeds against the remaining defendants. In this situation, determining the set-off based on apportionment of fault can be daunting.
Making things more difficult, because the apportionment and set-off issues are easily confused, is the bootstrap argument that the set-off analysis supersedes an application of Fabre v. Marin, 623 So. 2d 1182 (Fla. 1993). The argument, in essence, is that because the set-off provides for apportionment of fault in application, there is no reason for an application of Fabre. Thus, if there is no set-off (argue the proponents), it is because there were different “damages” being claimed (the set-off analysis); if different “damages” are being claimed, then Fabre does not apply because the defendants were not “joint tortfeasors” (the bootstrap). The key to this argument is that it applies the set-off analysis to determine whether Fabre should apply; an argument that is without support. Indeed, a careful review of the statute and case law indicates the contrary: The Fabre and set-off analysis are intertwined, but rest upon fundamentally differing issues whose elements must be carefully distinguished and cannot overlap if they are to be applied properly.
This article will begin with a discussion of the general application of fault and set-off analysis in multiple tortfeasor cases. It will then distinguish their respective analyses and expose the logical fallacy of the argument that the set-off analysis supersedes apportionment of fault. In addition, it will provide a clear formula for determining the set-off once entitlement to a set-off and apportionment is determined. Lastly, a chart is provided which synthesizes the cases and allows the practitioner to evaluate quickly whether a set-off is likely.
Liability of Multiple Tortfeasors
In Florida, when defendants act in concert, or perform separate and independent acts which combine to produce a single injury, they are joint tortfeasors; each is individually and collectively liable for the entire consequence of their collective acts.1
Apportionment of Fault
In general, where there are multiple joint tortfeasors, Fabre dictates that each tortfeasor’s share of fault, regardless of whether they are or can be a party, should be determined by the jury. In most cases, once that share of fault is determined, the defendants are liable only for their respective shares of noneconomic damages. However, they are jointly and severally liable for the economic damages, so that the entire amount can be collected from any one defendant. An easy way to remember the rule is that public policy favors reimbursement to health care providers which is better served if liability for the economic damages remains joint and several.
• Determination Whether Set-Off Will Be Allowed
Before F.S. §768.81 and Fabre, a set-off was allowed for the whole of the settlement provided the claims and damages sought from the nonsettling defendants were the same as those sought from the settling defendants.2 The key to this analysis is determining whether the “same damages” were sought. In general, the pre-§768.81 set-off analysis is currently applied by the courts in determining the extent of the set-off.
A set-off typically is allowed only where the same “damages” are claimed from the multiple defendants. It is critical to distinguish the set-off analysis from one of whether Fabre applies. As seen above, Fabre applies in cases involving joint tortfeasors. In general, the set-off analysis, as seen below, involves an analysis of whether the same “damages” are being sought from the tortfeasors. Cases discussing the “same damages” analysis are at times difficult to reconcile but a common thread emerges: Some courts analyze the issue based upon the legal elements of damage claimed; other courts analyze the issue based upon the actual physical injuries of the claimant. A review of the case law indicates that courts look to three criteria, any one of which may provide the basis for the set-off: 1) whether the same legal elements of damages were sought; 2) whether the same physical injuries were suffered; and 3) whether the same claim was brought against more than one defendant.
For instance, in Safecare Health Corp. v. Rimer, 620 So. 2d 161 (Fla. 1993), the Florida Supreme Court addressed the issue of two independent acts of negligence leading to the same injury. The plaintiff filed suit against a physician for failure to diagnose stomach cancer. The plaintiff brought a second count against Safecare, “unrelated to [the doctor’s] neglect.” The doctor settled the plaintiff’s claim in the amount of $150,000. Thereafter, the plaintiff died and the estate amended the complaint to add a count for wrongful death.
At a hearing on motions for summary judgment, the trial court granted a set-off to Safecare for the full amount of the previous settlement. The Florida Supreme Court held that there could be no set-off because damages sought under the wrongful death count were entirely different from the damages involved in the negligence action against the physician. Thus, no set-off was permitted. In a strong dissent, Justice McDonald argued that there should have been a set-off because despite the independent acts of negligence, there was but one injury (unfortunately, the injury was not described).
An example of the physical injury analysis appears in the case of Gordon v. Rosenberg, 654 So. 2d 643 (Fla. 4th DCA 1995), which involved two dentists charged with negligence. One dentist was charged with negligence resulting in various injuries. The second dentist was charged with negligence in trying to rectify the situation caused by the first dentist. The second dentist’s negligence caused an aggravation of the injuries as well as new injuries. The court held that in this case, there should be no set-off for the settlement of the second dentist because there were different damages caused by each defendant; notwithstanding the fact that some of the injuries were aggravated — there were additional separate injuries caused by the dentists and, therefore, there would be no set-off.
Different professions can be sued for the same “damages” for purposes of determining a set-off. For instance, there is case law that supports an argument that a nursing home and a physician can be sued for the same “damages.” In Cohen v. Richter, 667 So. 2d 899 (Fla. 4th DCA 1996), a physician and a nursing home were sued for medical negligence. The nursing home settled and after trial, the court held that a set-off was appropriate for the nursing home’s settlement. Note that in this case, the nursing home and the physician were both sued for the same claim: medical negligence.
•Calculating the Set-off (Economic Damages)
Once entitlement to a set-off is determined, calculating the set-off is the next step. In Wells v. Tallahassee Memorial Regional Center, Inc., 659 So. 2d 249 (Fla. 1995), the Florida Supreme Court devised a formula to apply the set-off to economic damages. The formula initially appears difficult to follow but makes sense when numbers are used as seen below. The formula is as follows:
1) [total verdict – % plaintiff’s comp. negligence] – set-off
2) Determining Set-off:
As to economic damages, multiply the ratio of economic damages/total verdict by the settlement amount to determine the set-off. In other words, the courts will set off from the settlement the ratio of the verdict which applies to economic damages.
For instance, assume a jury verdict of 75/25 negligence for each of two co-defendants, no negligence on the part of the plaintiff; total verdict of $90,000; $32,000 economic and $58,000 in noneconomic. Defendant 1 settled pretrial for $15,000. Determining the set-off for Defendant 2 is as follows:
Noneconomic damages: Defendant 2 owes its full % share which is 25% of $90,000 = $22,500.
Economic damages: ratio of economic(32,000)/total verdict (90,000) = 35.5%. 35.5% of Defendant 1’s settlement (15,000) = $5,325 which is applied as a set-off for economic damages. Subtracting the set-off (5,325) from total economic damages (32,000) gives a net economic damage figure of $26,675.
Total owed by defendant 2: $22,500 (noneconomic) + $26,675 (economic minus set-off) = $49,175.
So, even though Defendant 2 was only 25 percent liable, in reality it paid about 55 percent of the total verdict. An important distinction is that the set-off is only applied to economic damages. The idea behind the legislation, again, is to encourage payment in full, where possible, to health care providers. With this formula, the legislature has allowed for a set-off that ensures 1) that the health care providers are paid and 2) that the plaintiff is not made to pay economic costs in an amount more than its proportionate share as determined by the verdict. Furthermore, if there is a monetary windfall, it will always benefit the plaintiff, who in many cases will receive more than the jury assessed as the case’s entire value.
The Bootstrap and Trap for the Unweary
InIn Lauth v. Olsten Home Healthcare, 678 So. 2d 447 (Fla. 2d DCA 1996), the plaintiff sued an ACLF (adult congregate living facility) and two home health agencies. The ACLF settled prior to trial for $299,900. The second home health agency also settled with the plaintiff for $30,000. The plaintiff went to trial against Olsten as the sole remaining defendant. The jury returned a verdict for $329,218.18 (economic of $309,219.18; noneconomic of $20,000). The trial court set off the full settlement amounts from the verdict. (While not in the opinion, note that the jury found that the plaintiff’s comparative negligence was greater than the defendant’s and, as such, there was no joint and several liability for the economic damages, this apparently is why the trial court granted a set-off for the entire amount rather than by the Wells ratio formula, see F. S. §768.71).
Plaintiff appealed and argued that under the set-off analysis, no set-off should have been granted because different damages were sought from the settling tortfeasors. Plaintiff argued that the suit against the ACLF was for negligent failure to transfer, whereas its suit against the two home health agencies was for negligent health care; the legal elements of damages from each being different. The Second District agreed and reversed the set-off as to the ACLF but upheld the set-off as to the first home health agency (same “claim” sought).
Some argue that Lauth supersedes application of Fabre. Simply stated, if there is a set-off, there is no reason to apply Fabre. However, the argument is a bootstrap to do away with apportionment of fault by applying a set-off analysis; an argument which is easily confused but is flawed. If, as in Lauth, there can be no set-off, then what is the purpose of Fabre since you get rid of what Fabre entitles you? The answer is simple but is easy to overlook: apportionment of noneconomic damages. Lauth deals with the set-off of economic damages. There is no support for the argument that because Lauth denied one set-off (which only affects economic damages), Fabre does not apply and, therefore, apportionment for noneconomic damages also disappears.
Rather, the analysis in Lauth was applied correctly and dealt with the limited analysis of set-offs. Indeed, in looking at the final judgment entered by the trial court, there was still an apportionment of noneconomic damages. This is critical because if the proponents of the argument that Lauth supersedes Fabre are correct, then certainly the trial court would have applied the remand accordingly; however, it did not.
The interaction of Fabre and the Wells set-off analysis in cases in which one or more defendants settle prior to trial can be confusing. However, recognizing that the two are intertwined, yet independent, reveals that the analyses make sense and, when properly applied, fairly ensure that each defendant pays its proper share of damages. q
1 University of Miami v. All-Pro Athletic Surfaces, 619 So. 2d 1034 (Fla. 3d D.C.A. 1993).
2 See Scheib v. Florida Sanitarium and Benevolent Assoc., 759 F.2d 859 (11th Cir. 1985).
Daniel A. Martinez is an associate with the St. Petersburg office of the law firm of Fowler, White, Gillen, Boggs, Villareal and Banker, P.A., where he has practiced law since 1994. Mr. Martinez graduated cum laude from Stetson University College of Law in 1994.
This column is submitted on behalf of the Trial Lawyers Section, David W. Bianchi, chair, and D. Keith Wickenden, editor.