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Reform of Florida's Assisted Living Facilities ActBy Jacey Kaps and Suzanne Singer
For example, an adverse verdict against an assisted-living facility, carrying with it an award of related attorneys' and court fees and costs, threatens to put a small underinsured facility out of business and makes owners of a larger insured facility shiver at the sight of the insurance renewal notice in the mail. In fact, several insurance carriers have retreated from the Florida market, leaving in their wake only six companies that will underwrite assisted-living facilities; and those policies come with very hefty premiums. Of course these increased costs are passed onto the facility's residents and threaten to eliminate the facility as a financially viable senior-housing option. All the while, the entrepreneurial plaintiff's lawyer will ease his conscience under the guise of nobly protecting the elderly. However, as part of Florida's overall tort reform movement, revisions were recently signed into law as Senate Bill 1202, that will provide some relief for the assisted-living industry by providing:
Before the Storm An important part of the reform is the implementation of a mandatory 75-day pre-suit notice, and an investigation procedure for violations involving resident rights and negligence resulting in personal injury or death. Under the reform, suit may not be filed for 75 days after notice of intent to initiate suit is mailed to the assisted-living facility. Pre-suit investigation includes informal exchange of documents and unsworn statements. In an effort to promote use of alternative dispute resolution and relieve pressure on Florida's courts, pre-suit mediation is mandatory under the reform and is to be completed 105 days after pre-suit notice is mailed. Suit cannot be initiated until mediation is completed. The Rainbow Is Getting Shorter The statute of limitations has been reduced to two years from the time the incident occurred, from the time the incident is discovered or from the time it should have been discovered. However, under no circumstances may an action be commenced more than four years from the date of the incident. There is also a six-year statute of limitations on cases where it is alleged that wrongful conduct went undiscovered as a result of fraud. Attorney Fees Have Been Taken Out of the Pot Plaintiff's lawyers affectionately refer to automatic attorney-fee provisions as "pot of gold statutes." This is because, before the reform, a plaintiff would only need to establish a violation of the assisted-living facility's Resident Bill of Rights to secure entitlement to an award of attorney fees and costs on top of any legal damages recovered in a civil action. Now the separate award of attorney fees has been eliminated in almost all circumstances. The sole exception is an available fee, not to exceed $25,000, to a plaintiff who prevails in seeking injunctive relief, or upon a claim for administrative remedy. The entrepreneurial plaintiff lawyer will now have to obtain either an hourly fee, or accept a percentage of the damages awarded, if any, which will be paid by the plaintiff, not the assisted-living facility. Don't Forget the Punitive Damages Pot of Gold A three-tier cap system has been created. For example, if it can be shown the facility participated in, condoned, or ratified wrongful conduct or was grossly negligent, the maximum punitive damage recovery is the greater of $1 million or three times the amount of compensatory damages. A plaintiff is entitled to $4 million or four times compensatory damages--whichever is greater--if it can be shown the alleged wrongful conduct was motivated by unreasonable financial gain, and the managing agent or officer was actually aware of the dangerous nature of the conduct. Finally, the sky is the limit--meaning there is no cap available--regarding a facility that acted with a specific intent to harm a resident. However, in an "industry concession," any award of punitive damages is to be divided between a plaintiff and the Long-Term Care Facility Improvement Trust Fund. The new caps apply to all cases accruing after May 15. For causes that accrued on or before May 15, a legal action must be instituted before Oct. 5 to fall under the pre-reform law. Less Gold, Less Litigation Litigation created a crisis in Florida with respect to long-term viability of the senior-housing market. Now, like a miner panning for gold, plaintiff lawyers (fronting the litigation expenses) are more selective in sifting through cases to pick only the nuggets. For the assisted-living industry, the elimination of exposure for attorney fees will remove some of the pressure. However, whether the reforms will result in a reduction in litigation with a simultaneous drop in insurance premiums, and a return of the insurers, remains to be seen. Implementation of the reforms and time are the only two factors that will truly reveal what lies at the end of the rainbow. Jacey Kaps and Suzanne Singer practice with the law firm Rumberger, Kirk & Caldwell and focus on defense of civil actions including medical malpractice, long-term-care facilities and home-healthcare companies. For more information, e-mail ssinger@rumberger.com or jkaps@rumberger.com.
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Never
one to miss out on an emerging client base, the entrepreneurial lawyer targeted
Florida's assisted-living facilities and nursing homes for litigation because of
the unending supply of potential plaintiffs, tremendous upside, and little, if
any, risk. Florida's statutory scheme created further incentive for the
plaintiff's lawyer by not requiring the time and expense of a pre-suit process.
Without a pre-suit process, Florida law provides a substantial period for claims
to be made and awards prevailing plaintiffs their fees and costs as a separate
item of recovery. This really tends to stack the deck against the
assisted-living facilities.|
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