Newsome Melton Obtains $25.9 Million Verdict against Ford and The Baptist Church of New Port Richey for Single Wrongful Death

Florida Decision Weekly Wrap-up 1/8

January 11, 2010

Florida Decision Weekly Wrap-up 1/8

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY vs. GILDA MENENDEZ, et al. 3rd DCA Case No. 3D08-2969. January 06, 2010.

(Interpretation of Exclusion in Insurance Policy)

The plaintiffs below were passengers a vehicle being driven by their daughter, Fabiola Llane. The vehicle was owned and insured by Fabiola’s grandmother, Gilda Menendez. The policy of insurance included a “household exclusion” that stated that the policy did not cover bodily injury for “any insured or any member of an insured’s family residing in the insured’s household”. At the time of the accident, the Plaintiffs lived with their daughter Fabiola, but no family members lived with the grandmother, Gilda Menendez. State Farm contended that the plaintiff’s damages were not covered under the policy because Fabiola Llane fell into the category of “insureds” under a different provision of the policy and since she lived with the Plaintiffs, their claim was barred. The Plaintiffs rejected that interpretation of the policy and sought a declaratory judgment, which was granted by the Trial Court. State Farm appealed. 

The Third DCA stated:

We begin our analysis with the well-established principles guiding interpretations of insurance policies — that ‘[e]xclusionary clauses [must be] construed in favor of an insured,’ and if a policy’s language is subject to differing interpretations, the language ‘should be construed liberally in favor of the insured and strictly against the insurer.’ (Citations omitted). 

After reviewing the specific arguments of both parties, the Court held that the policy language was ambiguous and susceptible to different interpretations and therefore, must be construed in favor of the insured.

RANDY COHEN v. SONIA APONTE, Case No. 4D09-1985. 4th DCA. January 6, 2010.

(Civil Procedure. Substituted Service of Process)

This appeal arose out of an action for damages resulting from an automobile accident. The plaintiff below filed a complaint against the defendant and his employer however, after several attempts to obtain service, the plaintiff was unable to locate the defendant and his employer. Eventually, the employer was served but the plaintiff was unable to locate the defendant.

The Plaintiff then filed an amended complaint alleging that the defendant appeared to be outside the Court’s jurisdiction or evading service. The Plaintiff then attempted to obtain service through the alternative method provided by 48.161, Florida Statutes, which allows service on the Secretary of State. The Secretary of State accepted service and Plaintiff mailed the notice of acceptance to the Defendant’s last known address. The notice was returned marked “addressee unknown”. The Plaintiff filed the return receipt and an affidavit of compliance in accordance with F.S. 48.161. 

Thereafter, the Defendant filed a motion to quash service on the basis that the Plaintiff had failed to make a diligent search or perfect process. The Trial Court denied the motion. 

The Forth DCA held that substituted service under F.S. 48.161(1) is an exception to personal service and therefore, perfection of substituted service requires very strict compliance with the statute. The Court found that the Plaintiff had filed the return receipt 15 days after the deadline for doing so under the statute and therefore, failed to strictly comply with the procedures for substituted service. The Court remanded with instructions for the Trial Court to dismiss the action without prejudice and allow the Plaintiff an opportunity to perfect service on the Defendant. 

JEANIE RUSSELL v. AGENCY FOR HEALTH CARE ADMINISTRATION, et al. Case No. 2D07-2691. 2nd DCA. January 6, 2010.

(Damages. Medicaid Liens)

The Plaintiff filed a medical malpractice action that was settled for $3 million. The Florida Agency for Health Care Administration (AHCA) asserted a lien against the settlement for $221,434.24 which had been paid to the Plaintiff as a Medicaid recipient. Florida Statutes § 409.910 provides that acceptance of Medicaid benefits results in an automatic assignment to AHCA of third-party benefits, including a judgment, award, or settlement in a tort action. The statute provides that “[a]fter attorney’s fees and taxable costs . . . , one-half of the remaining recovery shall be paid to [AHCA] up to the total amount of medical assistance provided by Medicaid,” § 409.910(11)(f)(1), and that “[t]he remaining amount of the recovery shall be paid to the [Medicaid] recipient,” § 409.910(11)(f)(2).

The settlement agreement signed by the parties in the Plaintiff’s tort action did not allocate damages between medical expenses and other elements of damages. The Plaintiff argued that, since Plaintiff’s expert had testified that Plaintiff’s damages were $30 million and she settled for $3 million, or one-tenth of that amount, the Medicaid lien should be reduced to reflect that same discount. The Trial Court rejected this interpretation of the statute and held that “[s]ince the lien amount — representing the undisputed cost of medical care provided by Medicaid — does not exceed fifty percent of the amount recovered in the settlement, AHCA is entitled to full satisfaction of its lien pursuant to section 409.910(11)(f)(1).”

The Plaintiff’s argument was based on Arkansas Department of Health & Human Services v. Ahlborn, 547 U.S. 268 (2006), which interpreted the federal Medicaid law. The 2nd DCA stated that the Ahlborn case did not dictate the outcome of this case because that case turned on the fact that the settlement agreement apportioned the amount of the settlement that was attributable to medical expenses, allowing the court to apply the Medicaid Lien only to that part of the settlement, and not to amounts intended to pay for pain and suffering and economic losses. In this case, where there was no indication of what damages were attributable to medical expenses, the 2nd DCA held that the Medicaid Lien was applicable to the total amount of the settlement.

JOHN K. VREELAND, et al. v. DANNY FERRER, Case No. 2D08-248. 2nd DCA. January 6, 2010.

(Torts. Dangerous Instrumentality. Federal Preemption)

The Plaintiff in the underlying action was the Personal Representative of an airplane passenger who was killed when a private airplane crashed. The Plaintiff asserted three claims against the owner of the plane and the Trial Court granted summary judgment on all three counts. The Plaintiff appealed the decision as to the counts for vicarious liability for the negligence of the pilot and negligent inspection and maintenance of the airplane. 

Plaintiff’s claim of vicarious liability was based on Florida law holding that the owner of a “dangerous instrumentality” being operated by a third party with the owner’s consent is vicariously liable for the negligence of the operator. The Defendant argued that Florida’s dangerous instrumentality law was preempted by the Federal Aviation Act which provides that an owner of an aircraft is only liable for personal injury or death when he is in actual possession of the aircraft. After examining the Federal Aviation Act at length, the 2nd DCA held that, while the Federal Aviation Act did not expressly preempt Florida’s dangerous instrumentality law, preemption was implied because there was a conflict between the federal and state law and application of state l aw would create an obstacle to fulfilling that policy and goal of the federal law.

The second issue on appeal was Plaintiff’s claim of direct negligence on the part of the Owner in inspecting and maintaining the plane. In granting summary judgment to the Defendant on all three of Plaintiff’s claims, the only ground stated by Trial Court’s opinion that Florida law was preempted by the Federal Aviation Act.

The 2nd DCA held that the purpose of the federal statute was to shield an owner or lessor from vicarious liability, but not to relieve the owner for its own active negligence when it was in possession or control of the aircraft. Therefore, the Court held that application of state negligence law with regard to the owner’s direct negligence would not frustrate the policy and goal of the federal statute and therefore, the state law was not preempted. The Trial Court’s decision was reversed with regard to the claim of direct negligence against the owner and the case was remanded.

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