Florida Supreme Court Finds Medical Malpractice Arbitration Agreement Unenforceable

courthouseIn response to a perceived crisis in medical insurance costs, the Florida legislature passed the Medical Malpractice Act (“MMA”), which was designed in part to deal with perceived rising medical malpractice costs in the state. See Franks v. Bowers, 116 So. 3d 1240, 1247 (Fla. 2013). In a specific effort to curb these costs, the Act included a  statutory scheme governing arbitration agreements covering potential medical malpractice claims. Although the law clearly evidences the legislature’s intent to allow medical providers to enter into arbitration agreements with patients, there continues to be ample litigation regarding how much the terms of such agreements may veer from the provisions under the MMA. See Fla. Stat. §§ 766.207, 766.212 (outlining the required contents of medical malpractice arbitration agreements). Indeed, in a recent decision, Hernandez v. Crespo, the Supreme Court of Florida ruled that a medical malpractice arbitration agreement executed by a woman who delivered a stillborn fetus after being turned away from a doctor’s appointment was void as a matter of public policy.

The key facts at issue in Crespo are as follows. The principal plaintiff in this action was 39 weeks into her pregnancy and experiencing contraction pains when she was turned away by her physician for showing up late to the appointment. The original appointment was scheduled for August 17, 2011, and she was rescheduled for an appointment on August 21, 2011. On August 20, 2011, the plaintiff delivered a stillborn fetus. A little more than a year later, on December 19, 2012, the principal plaintiff and her husband, the other plaintiff in this action, served notice on the doctor from whom she was turned away and Women’s Care Florida that they intended to initiate litigation regarding the treatment she received, which they alleged caused the stillborn birth. The plaintiffs ultimately filed suit on May 23, 2013, and about a week thereafter, the defendants moved to stay proceedings and compel arbitration pursuant to an arbitration agreement that had been executed between the parties. On August 29, 2013, the plaintiffs requested binding arbitration, pursuant to Fla. Stat. § 766.207, which the defendants rejected, arguing that they sought to enforce the signed agreement, which forestalled the need for § 766.207 arbitration. The trial court ultimately granted the motion compelling arbitration, but Florida’s Fifth District Court of Appeals reversed, finding that the arbitration agreement at issue violated public policy. The Fifth District did note, however, that its ruling was in direct conflict with a Second District decision on the issue.

To the plaintiffs’ benefit, the Supreme Court of Florida affirmed the Fifth District’s decision and repudiated the Second District’s contrary ruling. In affirming the order compelling arbitration in its contrary ruling, the Second District ruled that, although the arbitration agreement at issue in that case required that both parties share the cost of arbitration, it did not violate public policy, for nothing in the MMA precluded claims for medical malpractice from being subject to an agreement outside the statutory scheme. See Santiago v. Baker, 135 So. 3d 569 (Fla. 2d DCA 2014). The Supreme Court of Florida, however, found this reasoning unconvincing.

First, the Supreme Court acknowledged that Florida law allows individuals to enter into private contracts that regulate their conduct. Nevertheless, individuals may not enter into agreements that contain provisions that contravene Florida laws or undermine the purposes of such laws. See Bowers, 116 So. 3d at 1247. Since the terms of the contract at issue in this case were so clearly favorable to one party, the Supreme Court found that the contract’s terms ran afoul of the “‘substantial incentives for both claimants and defendants to submit their cases to binding arbitration’” that “[t]he [statutory] arbitration provisions were enacted to provide.” Chester v. Doig, 842 So. 2d 106, 107 (Fla. 2003) (quoting § 766.201(2)(b), Fla. Stat. (1997)). Indeed, the Supreme Court recounted the many ways the arbitration agreement contradicted the terms of the MMA, including the facts that the agreement did not concede liability, did not guarantee independent arbitrators, provided that the parties share arbitration costs, did not guarantee the payment of interest of any recovery by the plaintiffs, did not allow for joint and several liability, and did not permit an appeal of the ultimate arbitral decision. Turning to the Second District’s decision, the Supreme Court found that it was clearly in error, for the MMA specifically provides for the defendants to bear the costs of arbitration. Accordingly, the Supreme Court concluded that any medical malpractice arbitration agreement that alters the cost, recovery, and fairness incentives of the MMA statutory scheme is void as a matter of public policy.

Although a fairly straightforward decision, the Supreme Court’s ruling is a major victory for those harmed as a result of potential medical negligence. Indeed, medical arbitration agreements are quite common, and over the years many of them have come to contain provisions that are clearly inconsistent with the intent of the Florida legislature in passing the MMA. For those with viable medical malpractice claims, the possible effect of an arbitration agreement is just one among the many complex issues that can arise during a case. Given the many hurdles that may come up, someone with a potential medical negligence claim should consider promptly finding experienced counsel before bringing a legal action. The South Florida medical malpractice attorneys at Frankl & Kominsky have many years of experience representing Florida residents harmed as result of negligence, and they are ready to help you with a potential claim. Indeed, if you’ve recently been harmed as a result of potential medical negligence and are curious about which legal avenues you may have for recovery, feel free to contact us and schedule a complimentary case evaluation. We look forward to hearing your story.

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