March 28, 2024

Looking Glass Law

John D. McKinnon | 7/1/1996
A surprising new tort ruling is forcing business people to confront an old problem: the prospect of being held liable for wrongs they didn't do. The case stemmed from the rape in 1991 of a 68-year-old woman by a drunken patron in the bathroom of a Burger King in Martin County. At trial, the jury found the restaurant 20% at fault, compared to 80% for the rapist. But in an April ruling, an appeals court in West Palm Beach held the restaurant's owner liable for 100% of the woman's damages. In a major blow for tort reform advocates, the appeals court concluded that Florida's 10-year-old law allowing apportionment of damages in negligence cases does not apply where negligence claims are mixed with intentional tort claims like sexual assault. Result for business owners: Whenever a criminal commits an assault on business premises and the victim sues, the business will become 100% liable for all damages awarded. That's because when apportionment of damages isn't allowed, the fall-back rule is the ancient doctrine of joint-and-several liability, which makes each wrongdoer fully responsible for all damages where a co-defendant can't pay. (Rapists and murderers, of course, seldom can.) In the Burger King case, the restaurant owner became liable for a judgment totaling $300,000.

Like a fun house mirror, Florida's tort law again is turning very small defendants into large ones, and very large ones into small ones. "This is an absurd result, an absolutely absurd result," grumbles Jodi Chase, general counsel for Associated Industries of Florida. She vowed a major fight in 1997 over tort reform, including the restaurant case. "It's nothing more than finding another way to go after the deep pocket," says Jim Brainerd, an insurance lobbyist and member of the Florida Tort Reform Association.

Business lobbyists thought they had this problem licked 10 years ago. That's when a case called Wood v. Walt Disney World focused attention on the unfairness that the old joint-and-several doctrine was creating in the increasingly litigious modern world. Aloysia Wood, the plaintiff, was injured on Disney World's bumper car ride when her fianc?, Daniel, rammed her. She sued. The jury found the fianc? 85% at fault, the victim 14% and Disney only 1%. Nevertheless, under the joint-and-several liability rule, Disney was required to pay all of the damages Daniel did as well as its own - a total of $64,500.

Spurred by that ludicrous result, pro-business lawmakers and lobbyists hustled a tort reform measure through the Legislature in 1986. In a nutshell, the new law threw out joint-and-several liability for negligence cases and allowed apportionment of the biggest kinds of damages, such as pain-and-suffering and loss of capacity for enjoyment of life. If a particular defendant couldn't pay, then the plaintiff simply was out of luck.

The new law specifically excluded intentional torts, on the reasonable grounds that someone who commits the equivalent of a crime should bear responsibility for all the damage that flows from it.

That's not how the appeals court interpreted the law in the Burger King case, however. The court ruled that if any defendant commits an intentional tort, all of the defendants lose their right to apportionment, including those who were merely negligent, like the restaurant owners.

Lawyers for Burger King argued that this interpretation made little sense. After all, if the drunken rapist had done something merely negligent, the restaurant would have been liable only for its 20%. But because he consciously chose to do something far worse, the restaurant's owners are being held far more responsible, even though their wrongdoing - negligently ignoring a rowdy patron - was exactly the same. "It seems illogical to me," says defense lawyer Michele Nelson, of West Palm Beach's Paxton, Crow, Bragg, Smith & Keyser. The case likely will be taken up by the state Supreme Court, along with another recent decision in Miami that came to a different conclusion. It allowed apportionment between a criminal wrongdoer and a negligent defendant, in this case Alamo Rent-A-Car. The plaintiff's attorney in the Burger King case, John Shipley of Searcy, Denney, Scarola, Barnhart & Shipley, warns that lawyers won't take crime victims' cases if negligent business defendants are allowed the benefit of apportionment. That danger seems somewhat remote, however. A national study in 1993 showed that the average jury verdict had risen to $1.8 million for a rape on business premises, $2.2 million for a death. Moreover, awards are not just growing in dollar amounts but also in number, as courts - especially Florida courts - have made it much easier to prove that a business owner should have foreseen and prevented a random violent crime. Especially hard hit have been owners of apartment buildings, motels, condos and restaurants, according to Tampa lawyer F. Robert Radel II, who's developed a specialty in premises cases along with partner John Weihmuller. A few states have begun to tighten up those liberalized rules on premises liability. In Florida, meanwhile, tort law constraints continue to loosen.

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Not Made In Heaven

Two of the state's oldest law firms are going their separate ways, two years after they appeared to merge seamlessly.

The problems weren't internal, according to spokesmen for both groups. Instead, it was the clients who began to clash, as the once-staid world of electric utilities becomes increasingly competitive.

The Tampa-Clearwater firm of Macfarlane Ferguson and the Tallahassee firm of Ausley, McMullen, McGehee, Carothers & Proctor merged in 1994, becoming Macfarlane, Ausley, Ferguson & McMullen. At the time, the match seemed nearly ideal. The Tampa Bay firm's big corporate clients - notably the Lykes family companies - were expected to benefit from the Tallahassee firm's growing strength in government and regulatory areas. The two firms' cultures also were expected to mesh well because of their shared sense of tradition.

The merger began to unravel when a Lykes affiliate, Peoples Gas, decided to start competing in the deregulated end of electric energy production and sales. That created potential conflicts with a longtime Ausley firm client, Tampa Electric and its parent TECO Energy, according to firm chairman Nathan Simpson of Tampa. Both companies wanted to keep the lawyers they had. In the end, the lawyers decided to split up, said Dubose Ausley of Tallahassee, who served as chairman of the merged firm. "We're all very saddened by it," says Simpson. "We were people that were like-minded old friends who were able to work together in a lot of areas." The new Tampa Bay firm will be known as Macfarlane Ferguson & McMullen and includes about 70 lawyers in Tampa and Pinellas County. The Tallahassee firm becomes Ausley & McMullen and has 30 lawyers.

Tags: Florida Small Business, Politics & Law, Business Florida

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