Opinion ID: 1831568
Heading Depth: 1
Heading Rank: 2

Heading: certified question of great public importance

Text: The district court failed to note in its opinion and certified question the distinction between noneconomic and economic damages setoffs. In our analysis, we address each type of setoff separately. We begin our discussion by referencing the relevant statutory scheme established by the three setoff statutes and the separate apportionment provisions of section 768.81, Florida Statutes (1997). We then review the critical difference between noneconomic and economic damages under this scheme by discussing each separately. Finally, we apply this distinction to the case before us.
The standard of review for the pure questions of law before us is de novo. See Armstrong v. Harris, 773 So.2d 7 (Fla. 2000). Therefore, no deference is given to the judgment of the lower courts.
Florida law regarding setoffs is found in sections 46.015(2), [6] 768.041(2), [7] and 768.31(5), [8] Florida Statutes (1997). Each of these statutes presupposes the existence of multiple defendants jointly and severally liable for the same damages. See Wells v. Tallahassee Mem'l Reg'l Med. Ctr., Inc., 659 So.2d 249, 253 (Fla.1995). After these statutes were first enacted, the Legislature enacted section 768.81, Florida Statutes (1997). Section 768.81 eliminates joint and several liability for noneconomic damages and limits joint and several liability for economic damages. The pertinent part of the statute provides: APPORTIONMENT OF DAMAGES. In cases to which this section applies, the court shall enter judgment against each party liable on the basis of such party's percentage of fault and not on the basis of the doctrine of joint and several liability; provided that with respect to any party whose percentage of fault equals or exceeds that of a particular claimant, the court shall enter judgment with respect to economic damages against that party on the basis of the doctrine of joint and several liability. § 768.81(3) Fla. Stat. (1997). [9] Section 768.81(4) expressly provides that the statute applies to negligence cases, including professional malpractice cases.
In Wells, the Court considered the interrelationship between the three setoff statutes and the apportionment provisions of section 768.81. We highlighted the critical difference this interrelationship makes between economic and noneconomic damages. Wells filed suit against Tallahassee Memorial Regional Medical Center (TMRMC) and two other defendants. Wells settled with all the defendants except TMRMC. Wells, 659 So.2d at 250. The jury was instructed to apportion fault, if any, among all the defendants. Id. The jury returned a verdict for economic and noneconomic damages, finding TMRMC 90% at fault and the other two defendants each 5% at fault. Id. TMRMC requested a setoff, arguing that the judgment should be reduced by the total amount paid by the settling defendants. Id. This Court concluded that the setoff statutes do not apply to noneconomic damages for which defendants are only severally liable pursuant to section 768.81(3), but held that the setoff statutes continue to apply to economic damages for which parties continue to be subject to joint and several liability. Wells, 659 So.2d at 253. To facilitate the pretrial application of this differentiation, the Court adopted a rule for determining the amount of the economic damages setoff in an undifferentiated economic and noneconomic damages settlement. See id. at 254. The Court held that each defendant is solely responsible for its share of the noneconomic damages and that only that portion of the settlement which represents a recovery for economic damages is available to offset a defendant's liability for economic damages. The portion of the settlement which represents economic damages is then based on the percentage of economic to noneconomic damages as determined by the jury. [10] See id. The following year in Nash v. Wells Fargo Guard Services, Inc., 678 So.2d 1262 (Fla.1996), this Court outlined the procedure for apportioning the fault of a person or entity not joined as a defendant in the suit. Under the facts in Nash, we held that the outlined procedure was a prerequisite for the apportionment of noneconomic damages under section 768.81 and Wells. Nash, an employee of Methodist Hospital, brought a negligence claim against Wells Fargo, a contractor for Methodist. Nash, 678 So.2d at 1263. Nash's complaint did not name Methodist as a defendant. Id. After the close of testimony, Wells Fargo moved to have the jury apportion noneconomic damages between it and Methodist by including Methodist on the verdict form. We held that in order to include a nonparty on the verdict form pursuant to Fabre, the defendant must plead as an affirmative defense the negligence of the nonparty and specifically identify the nonparty. Nash, 678 So.2d at 1264. We reasoned that notice prior to trial is necessary because the assertion that noneconomic damages should be apportioned against a nonparty may affect both the presentation of the case and the trial court's rulings on evidentiary issues. Id. The Court further held that the defendant has the burden of proving that the injury was caused in part by the negligence of the nonparty. If the pleading and proof requirements are met, a jury instruction should be given regarding the apportionment of fault and the nonparty should be included in the appropriate section of the verdict form. Id. The Court stated in Nash: Wells Fargo's answer to Nash's complaint did not include an affirmative defense that Methodist's negligence contributed to Nash's injuries nor was such a defense raised by Wells Fargo during the pretrial conference. In fact, throughout the trial, Wells Fargo asserted that Methodist's negligence was not at issue because Methodist was not a defendant in the case. Under these circumstances, we believe that Wells Fargo waived the defense that noneconomic damages should be apportioned to Methodist. Nash, 678 So.2d at 1265. Because the defendant in Nash did not plead the negligence of a nonparty, the Court held that the defendant had waived its right to apportionment under section 768.81 and that it was, therefore, liable for 100% of the plaintiff's noneconomic damages. Such a result is consistent with Florida Rule of Civil Procedure 1.140(h)(1), which states: A party waives all defenses and objections that the party does not present either by motion under subdivisions (b), (e), or (f) of this rule or, if the party has made no motion, in a responsive pleading except as provided in subdivision (h)(2). This principle is reiterated in Clark v. Polk County, 753 So.2d 138 (Fla. 2d DCA 2000): A defendant seeking to have the jury apportion its fault with that of a nonparty has the burden to plead and prove its entitlement to that benefit. Id. at 142.
Unlike noneconomic damages, for which section 768.81 eliminated joint and several liability, the setoff statutes continue to apply to economic damages for which parties continue to be subject to joint and several liability. Wells, 659 So.2d at 253. Therefore, a settling defendant does not have to be found liable before an economic damages setoff can be given. Six years after Wells, the Court in Gouty v. Schnepel, 795 So.2d 959 (Fla.2001), considered whether a setoff could be given when the settling defendant is expressly found not liable. In Gouty, this Court held that the setoff statutes could not be used to set off an economic damages award when the settling defendant is found to be 0% liable. Gouty, who had been shot with a gun owned by the defendant, Schnepel, sued both Schnepel and the gun's manufacturer, Glock, Inc. He settled with Glock prior to trial, but Glock remained on the verdict form as a Fabre defendant. The jury returned a verdict awarding economic and noneconomic damages and finding Schnepel 100% liable and Glock 0% liable. Schnepel requested a setoff in the full amount of the settlement with Glock. The district court of appeal certified the following question to this Court: WHERE THE PLAINTIFF HAS DELIVERED A WRITTEN RELEASE OR COVENANT NOT TO SUE TO A SETTLING DEFENDANT ALLEGEDLY JOINTLY AND SEVERALLY LIABLE FOR ECONOMIC DAMAGES, SHOULD THE SETTLEMENT PROCEEDS APPORTIONABLE TO ECONOMIC DAMAGES BE SET OFF AGAINST ANY AWARD FOR ECONOMIC DAMAGES EVEN IF THE SETTLING DEFENDANT IS NOT FOUND LIABLE? Schnepel v. Gouty, 766 So.2d 418, 419 (Fla. 1st DCA 2000) (emphasis added), quashed, 795 So.2d 959 (Fla.2001). This Court answered the certified question in the negative and stated: We conclude, following our reasoning in Wells, that the applicability of the setoff statutes is predicated on the existence of other tortfeasors who are liable for the same injury as the settling party. Gouty, 795 So.2d at 965. Where a defendant is found 100% liable for the plaintiff's damages, the settling defendant who is not found liable cannot be considered a joint tortfeasor. Id. at 965. The Court also stated: In this case, Schnepel was found 100% liable for Gouty's injuries and the jury expressly rejected a finding that Glock was a joint tortfeasor. Id. at 966. It should be noted that although the certified question concerned a defendant who was not found liable, the actual defendant in the case was found not liable. This distinction is not trivial. A defendant who is not found liable could be a defendant whose liability was not even considered by a jury, whereas a defendant may only be found not liable after a verdict. This distinction was recognized by the Second District Court of Appeal in D'Angelo.

D'Angelo argues that section 768.81 only applies to cases where there is more than one defendant at trial or where the defendant elects to proceed under section 768.81 by including the settling defendant(s) on the verdict form. Because D'Angelo was the only defendant at trial and was the only defendant that appeared on the verdict form, [11] he argues that section 768.81 does not apply and that he is entitled to a full setoff against both economic and noneconomic damages. Section 768.81(4)(a), Florida Statutes (1997), states: This section applies to negligence cases. No language in the statute limits its applicability to cases where more than one defendant appears on the verdict form. If section 768.81 were inapplicable in cases where only the nonsettling defendant appears on the verdict form, the section of the statute eliminating joint and several liability for noneconomic damages would not apply, and the nonsettling defendant would be entitled to a setoff for noneconomic damages in addition to economic damages. Such a result is contrary to legislative intent and this Court's reasoning in Wells and Nash.
Wells clearly stated that the setoff statutes do not apply to noneconomic damages for which defendants are only severally liable, but held that the setoff statutes do apply to economic damages for which parties continue to be subject to joint and several liability. To receive a setoff for noneconomic damages, defendants must follow the procedure outlined in Nash. The nonsettling defendant is obligated to file appropriate pleadings and to ensure that any settling party under Fabre appears on the verdict form. The jury must then allocate some portion of liability to the settling party or the nonparty. In this case, D'Angelo tactically chose not to include the settling party, Charlotte Regional, on the verdict. Consequently, no apportionment of liability was made by the jury. Accordingly, D'Angelo is not entitled to a setoff for noneconomic damages.
In Gouty, the certified question answered by this Court was whether a setoff for economic damages is permitted where a settling defendant is not found liable. Gouty, 795 So.2d at 960. We acknowledge that the Gouty opinion interchanges not found liable and found not liable. However, the tortfeasor in Gouty was listed on the verdict form and was expressly found not to be liable. The opinion states: In this case, Schnepel was found 100% liable for Gouty's injuries and the jury expressly rejected a finding that Glock was a joint tortfeasor. Id. at 966. The question, therefore, is whether Gouty stands for the proposition that a failure to establish liability will obviate set-off or that there must be a finding of no liability to preclude recovery. D'Angelo, 832 So.2d at 137. Glock appeared on the verdict form and was found 0% liable by the jury. Thus, the settling party was found not liable. In D'Angelo, Charlotte Regional did not appear on the verdict form and was not apportioned liability. Although Charlotte Regional was not found liable, the hospital also was not found not liable. The D'Angelo court held: Because the language of the specific question certified and answered was `not found liable,' we conclude this is the rule we should consider in deciding this case. D'Angelo, 832 So.2d at 137. Interpreting Gouty in this manner requires a jury finding of liability on the part of the settling party before a setoff for economic damages may be obtained. This interpretation is not supported by the is or may be jointly and severally liable language in the setoff statutes and is contradictory to this Court's holding in Wells. Accordingly, we limit the Gouty holding to cases where a settling defendant is expressly found not liable. The Florida Defense Lawyers' Association, amicus curiae, argues that the Fitzmaurices will receive a windfall unless a full noneconomic and economic damages pro tanto setoff is given. This argument is without merit. As this Court stated in Wells: Settlement dollars are not synonymous with damages but merely a contractual estimate of the settling tortfeasor's liability; they include not only damages but also the value of avoiding the risk and expense of trial. Given these components of a settlement, there is no conceptual inconsistency in allowing a plaintiff to recover more from a settlement or partial settlement than he could receive as damages. Wells, 659 So.2d at 252 (quoting Neil v. Kavena, 176 Ariz. 93, 859 P.2d 203, 206 (Ct.App.1993) (citations omitted)). The windfall argument was rejected in Wells, and we again reject the argument. We hold that D'Angelo is not entitled to a noneconomic damages setoff in accordance with Wells and Nash but is entitled to an economic damages setoff in the amount of $98,096.22. [12]