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Allstate Ins. Co., et al. v. Basil Theodotou, M.D., et al., Case Nos. 5D14-1291, 5D14-1352, 5D14-1436 (5th DCA)

In Theodotou, the Fifth District considered whether an initial tortfeasor or her insurer may assert an equitable subrogation claim against a subsequent tortfeasor when judgment has been entered against the initial tortfeasor but the judgment has not yet been fully paid. The Fifth District answered that question in the affirmative, and certified the question to the Florida Supreme Court as one of great public importance.

The plaintiff in the underlying action suffered a head injury in a vehicular accident with the defendant. The plaintiff’s injuries were later exacerbated by medical negligence at the hospital where she treated. In the suit that followed, the plaintiff successfully argued that under Stuart v. Hertz Corp., the defendant was precluded from presenting evidence that medical negligence was a contributing cause of the plaintiff’s injuries. The suit resulted in a judgment of over $11 million being entered in favor of the plaintiff and against the defendant. Before judgment was entered, however, but after the verdict was rendered, the plaintiff filed a separate medical malpractice lawsuit against the hospital asserting the same injuries that were involved in the underlying action against the initial tortfeasor defendant. The defendant intervened in the medical malpractice suit, and filed a claim for equitable subrogation against the medical providers. The trial court in the medical malpractice action dismissed the equitable subrogation claim, finding that the claim was barred because the defendant had not yet paid the entirety of the plaintiff’s damages. This appeal followed.

The Fifth District initially noted that in Stuart v. Hertz Corp., the Florida Supreme Court held that an initial, active tortfeasor may not file a third-party complaint for indemnity against a treating physician whose subsequent medical negligence aggravated the plaintiff’s injuries. Otherwise, an active tortfeasor would be permitted to turn a simple personal injury action into a complex medical malpractice lawsuit. Rather, the plaintiff has the right to “choose the time, forum and manner in which to press his claim.” Under Stuart, a claimant may sue only the initial tortfeasor and seek recovery for all injuries resulting from both the initial and the subsequent torts against that party; or, the claimant may first recover from the initial tortfeasor for the injuries caused by the original tort and then seek recovery from the subsequent tortfeasors for the injuries caused, or aggravated, by their negligence. To avoid double recoveries, or situations where an initial tortfeasor is held responsible for injuries primarily caused by a subsequent tortfeasor, the courts permit initial tortfeasors to assert claims for equitable subrogation against subsequent tortfeasors. In such claims, the initial tortfeasor is placed in the shoes of the plaintiff and is able to recoup his losses that in fairness should be shared with a negligent doctor.

In this case, the initial tortfeasor defendant was unable to file a third party claim against the subsequent tortfeasor, nor was she permitted to introduce evidence of the medical negligence. As such, she was unable to shift any portion of liability to the medical providers, and was held liable for the entirety of the plaintiff’s injuries. The medical providers nonetheless argued that the equitable subrogation claim was precluded the initial tortfeasor had not paid the entirety of the judgment. The initial tortfeasor argued in response that the right to equitable subrogation is triggered when the victim has been fully compensated or when judgment is entered against the initial tortfeasor for the entirety of the damages. The Fifth District noted that no case is directly on point.

The Fifth District found the case law relied upon by the medical providers to be distinguishable. Those cases involved situations where a party seeking equitable subrogation settled with the victim for only the portion of the injury directly attributable to it. That was not the situation in this case, however. The Fifth District noted that in this case, judgment was entered against the initial tortfeasor for the entirety of the harm caused, including damages caused by the medical providers. The judgment is enforceable against the initial tortfeasor, and has “various severe consequences” for the initial tortfeasor. The court found that, “in fairness,” the initial tortfeasor should be able to seek subrogation from the subsequent tortfeasors. The Fifth District therefore agreed that equitable subrogation arises when either payment has been made or judgment has been entered, so long as the judgment represents the victim’s entire damages.

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