Florida was once a hotbed for punitive damage awards, earning it a spot on the ATLA judicial hellhole report for several years. While tort reform has curbed many runaway verdicts, Florida remains a source of litigation concern. In the case of Orlando Health, Inc. v. Mohan, the Florida Fifth District Court of Appeal reviewed a decision granting punitive damages against a medical provider. Orlando Health, Inc. v. Mohan, 2024 WL 2484435 (Fla. 5th DCA May 24, 2024).The claim arose from a medical malpractice case arising out of a wrong site surgery. The appellate court affirmed the trial court's decision to allow punitive damages for gross negligence but reversed the ruling regarding negligent credentialing, as the medical provider could not be held responsible on that front since its agent had been exonerated.
Relevant Background Facts
Mark Mohan underwent an appendectomy performed by Dr. Karl Hagen, but instead of removing the inflamed appendix, Dr. Hagen mistakenly removed Mohan's right ureter. This error required three corrective surgeries, including bladder reconstruction and nephrostomy. Mohan sued Orlando Health, claiming it had oversight of South Lake Hospital, where the surgery had occurred, and failed to address Dr. Hagen's history of malpractice and substance abuse. The complaint detailed Dr. Hagen's prior malpractice suits, including a wrongful death case in California, and alleged that Orlando Health negligently granted him privileges despite these issues. In addition, the complaint alleged that Orlando Health completed an investigation after Mohan's surgery and Dr. Hagen not only admitted he was at fault, but also admitted that his drinking problem had contributed to the result. Dr. Hagen subsequently resigned from Southlake Hospital.
In support of Mohan's claim, expert affidavits were submitted highlighting the reckless nature of the surgery as well as the hospital's failure to act on Dr. Hagen's well-documented incompetence. Mohan sought punitive damages, citing Orlando Health's failure to supervise Hagen and protect patients. Orlando Health's CEO was implicated in the credentialing process with evidence showing she should have been aware of Hagen's conduct. The court allowed the claim for punitive damages, noting that Orlando Health's oversight was grossly negligent, ultimately leading to this appeal.
What is Required to Plead Punitive Damages?
Under Florida law, specifically § 768.72(1), Florida Statutes, and Florida Rule of Civil Procedure 1.190(f), a party must seek court approval before amending a complaint to include punitive damages. Specifically:
"(1) In any civil action, no claim for punitive damages shall be permitted unless there is a reasonable showing by evidence in the record or proffered by the claimant which would provide a reasonable basis for recovery of such damages․
(2) A defendant may be held liable for punitive damages only if the trier of fact, based on clear and convincing evidence, finds that the defendant was personally guilty of intentional misconduct or gross negligence." § 768.72(1) Fla. Stat.
The threshold for punitive damages was highlighted in Varnedore v. Copeland, 210 So. 3d 741, 745 (Fla. 5th DCA 2017) where the court held that sufficient evidence of gross negligence must be provided to warrant a claim for punitive damages. The statute defines gross negligence as "conduct so reckless or wanting in care that it constituted a conscious disregard or indifference to the life, safety, or rights of persons exposed to such conduct." § 768.72, Fla. Stat. (2023).
In this case, Orlando Health argued there was no evidence of gross negligence or intentional misconduct sufficient to support Mohan’s punitive damages claim. The medical provider also contended that it was not involved in the credentialing process at South Lake Hospital (SLH) and that its CEO was not a managing agent of Orlando Health, which would have implicated the company in Dr. Hagen's misconduct.
The court, however, disagreed with Orlando Health's arguments, referencing a previous decision in Mohan v. Orlando Health, Inc., 163 So. 3d 1231, 1235 (Fla. 5th DCA 2015), which established that Orlando Health was in fact involved in the credentialing process at SLH. The Mohan decision in 2015 noted that Orlando Health, through its Managing Agreement, was responsible for day-to-day management, including personnel decisions, at SLH. The court found sufficient evidence to support the argument that Orlando Health had a role in credentialing Dr. Hagen, rejecting the argument that SLH alone was responsible for these decisions.
In the 2015 Mohan decision, the court also cited the CEO of Orlando Health's deposition, in which she admitted to being involved in the credentialing process. She testified that she supervised the committees that reviewed physician credentials, ensuring that protocols were followed. The CEO testified that if she had been aware of Dr. Hagen's issues, including his excessive drinking and rushing through surgeries, she would have initiated an investigation. Based on this evidence, the court determined that the CEO, as an Orlando Health appointed executive, was directly involved in re-credentialing Dr. Hagen.
Given this involvement, the court found sufficient evidence of gross negligence on Orlando Health's part to support a claim of punitive damages. Orlando Health's oversight of Dr, Hagen was characterized as reckless, with the court concluding that the company's failure to act in light of Dr. Hagen's history demonstrated a disregard for patient safety.
The Implications of Respondeat Superior in the Punitive Damage Assessment
The theory of respondeat superior holds "an employer or principal liable for an employee or agent's wrongful acts committed within the scope of the employment or agency." BLACK'S LAW DICTIONARY (9th ed. 2009). Punitive damages may be imposed for the conduct of an employee or agent only if "the employer, principal, corporation, or other legal entity engaged in conduct that constituted gross negligence and that contributed to the loss, damages, or injury suffered by the claimant." § 768.72, Fla. Stat. (2023).
The court found that Orlando Health raised a valid argument regarding the trial court's ruling on negligent credentialing claim against SLH. On this issue, the trial court granted SLH's motion for judgment on the pleadings. It dismissed the negligent credentialing claim because Dr. Hagen was an SLH employee, acting within the scope of his employment. As a result, Orlando Health could not be held liable for compensatory or punitive damages based on SLH's negligent credentialing as that claim was previously dismissed by the lower court.
Under the doctrine of respondeat superior, an employer cannot be held vicariously liable if an employee (or agent) is exonerated of the underlying claim. Since the court had dismissed the negligent credentialing claim against SLH, Orlando Health could not be held liable for punitive damages in connection with that claim. This aligns with case law, such as Buettner v. Cellular One, Inc., 700 So. 2d 48 (Fla. 1st DCA 1997), which established that "when an employer's liability is based solely on the actions of an employee, the employer cannot be held liable if the employee is exonerated."
Consequently, while the court upheld the claim for punitive damages in regard to the showing of gross negligence, it reversed the part of the ruling allowing punitive damages based on the negligent credentialing claim. The case was remanded for further proceedings.
Key Takeaways
- Gross Negligence Standard: The court affirmed that a plaintiff may plead punitive damages under Florida law when there is sufficient evidence of gross negligence, which is defined as conduct that shows a reckless disregard for safety.
- Vicarious Liability in Credentialing: Orlando Health's argument against liability under the doctrine of respondeat superior succeeded in part. The court held that Orlando Health could not be held vicariously liable for punitive damages related to SLH's negligent credentialing after SLH's dismissal from the lawsuit.
Conclusion
The court's decision reinforces that punitive damages in medical malpractice cases can hinge on clear evidence of gross negligence. However, the doctrine of respondeat superior limits punitive damage claims against an employer when an agent is exonerated. Orlando Health was shielded from liability for negligent credentialing but remained subject to punitive damages for failing to address concerns about Dr. Hagen's competence and conduct.