Punitive Damages Appeals

NONFINAL APPEALS UNDER RULE 9.130

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PRESENTED BY: STEPHANIE SERAFIN

KREUSLER-WALSH VARGAS & SERAFIN

Certiorari Review

• Globe Newspaper Co. v. King, 658 So. 2d 518 (Fla. 1995): failure to adhere to the procedural requirements in section 768.72 is a departure from the essential requirements of the law. Section 768.72 creates a substantive legal right not to be subjected to a punitive damages claim and financial worth discovery until the trial court makes a determination that there is a reasonable evidentiary basis for the claim. Appeal after final judgment is insufficient to restore a defendant’s statutory right under section 768.72.
• Appellate courts could not review the sufficiency of the evidence on certiorari. The alleged harm from allowing a punitive damages claim to go forward based on an insufficient proffer did not rise to the level of harm that permitted certiorari review and such review would cause harm to the court system.
• Dissent by Justice Anstead: “hollow victory” by limiting review to procedural requirements.

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Procedural Requirements

• “In any civil action, no claim for punitive damages shall be permitted unless there is a reasonable showing by evidence in the record or proffered by the claimant which would provide a reasonable basis for recovery of such damages.” § 768.72(1), Fla. Stat. (2022).
• Fla. R. Civ. P. 1.190(f)
• Three procedural requirements: (1) attachment of the proposed amended complaint to the motion to amend; (2) service of the motion to amend and proffer on all parties at least 20 days before hearing; and (3) an affirmative finding by the trial court that the plaintiff made a reasonable evidentiary showing.**

How did we get here?

• Several appellate judges expressed desire for broader review via certiorari or nonfinal appeal. See, e.g., Event Depot Corp. v. Frank, 269 So. 3d 559 (Fla. 4th DCA 2019) (Kuntz, J., concurring).
• Appellate Court Rules Committee twice rejected referrals suggesting a change to rule 9.130.
• In July 2020, the Florida Supreme Court directed the Appellate Court Rules Committee “to propose rule amendments to provide for the interlocutory appeal of nonfinal orders granting or denying leave to amend a complaint to assert a claim for punitive damages.”

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Rule 9.130(a)(3)(G)

• “Appeals to district courts of appeal of nonfinal orders are limited to those that . . . grant or deny a motion for leave to amend to assert a claim for punitive damages.”
• Justice Labarga dissented from the Court’s opinion adopting this rule amendment.
• Took effect on April 1, 2022.
• Applies to all appellate proceedings commenced after the effective date.
• Nonfinal appeal is not mandatory.

Key Statutes governing punitive damages

• §768.72, Fla. Stat.
• Sets out requirement to seek leave to amend.
• Establishes substantive right to be free from financial worth discovery until after the trial court grants leave to amend.
• Establishes clear and convincing evidence standard.
• Defines “intentional misconduct” and “gross negligence.”
• States additional requirements for seeking punitive damages against an employer, principal, corporation, or other legal entity.
• § 768.725, Fla. Stat.
• Clear and convincing evidence standard applies to entitlement; greater weight of the evidence standard applies to the amount of damages.
• § 768.73, Fla. Stat.
• Limitations on the amount of punitive damages.
• “Same act or single course of conduct”

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New avenue of appeal for plaintiffs

• Previously, orders denying leave to amend to add punitive damages claim were not reviewable by certiorari. High Five Prods., Inc. v. Riddle, 286 So. 3d 890 (Fla. 2d DCA 2019) (“[A]n order denying a motion to add a claim for punitive damages is not reviewable via certiorari because such a denial can be adequately remedied on appeal.”)
• Rule 9.130(a)(3)(G) provides an avenue for plaintiffs to appeal the denial of leave to amend in a nonfinal appeal.
• Werner Enters., Inc. v. Mendez, 2023 WL 3766709 (Fla. 5th DCA Jun. 2, 2023): Fifth DCA reversed order denying a motion for leave to amend to add punitive damages claim in a tortious interference case by employer against former employees.

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Broader scope of review

• Standard of review = de novo
• Appellate courts will review:
• Sufficiency of the evidentiary proffer
• Marder v. Mueller, 358 So. 3d 1242 (Fla. 4th DCA 2023)
• Cleveland Clinic Fla. Health Sys. v. Oriolo, 357 So. 3d 703 (Fla. 4th DCA 2023)
• Sufficiency of evidentiary proffer (employer/principal defendant)
• Cleveland Clinic Fla. Health Sys. v. Oriolo, 357 So. 3d 703 (Fla. 4th DCA 2023)
• HRB Tax Grp., Inc. v. Fla. Investigation Bureau, Inc., 2023 WL 3486675 (Fla. 4th DCA May 17, 2023)
• Sufficiency of evidentiary proffer (bad faith)
• Progressive Select Ins. Co. v. Ober, 353 So. 3d 1190 (Fla. 4th DCA 2023)
• Sufficiency of allegations in proposed amended complaint
• Grove Isle Assoc. v. Lindzon, 350 So. 3d 826 (Fla. 3d DCA 2022)
• Order improperly granting leave to amend based on independent tort rule
• Abad v. Lacalamita, 353 So. 3d 1217 (Fla. 3d DCA 2022) (pending in Florida Supreme Court, SC23-340).
• Procedural requirements still on the table
• Varnedore v. Copeland, 210 So. 3d 741 (Fla. 5th DCA 2017) (on certiorari, stating that the requirement to attach the proposed amended complaint to the motion to amend is mandatory)

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Trial court’s “gatekeeping role”

• The trial court is supposed to act as the “gatekeeper” and preclude punitive damages claims that lack a sufficient evidentiary basis. Bistline v. Rogers, 215 So. 3d 607 (Fla. 4th DCA 2017).
• Appellate court views the evidence and proffered evidence in the light most favorable to the plaintiffs and accepts the evidence as true for purposes of reviewing whether a reasonable evidentiary basis exists. Est. of Despain v. Avante Grp., Inc., 900 So. 2d 637 (Fla. 5th DCA 2005); Werner Enters. v. Mendez, 2023 WL 3766709 (Fla. 5th DCA June 2, 2023)
• Proffer must be more than allegations in a pleading. Bistline v. Rogers, 215 So. 3d 607 (Fla. 4th DCA 2017). The trial court must review the evidentiary proffer and cannot merely accept the allegations as true. Fla. Hosp. Med. Servs. v. Newsholme, 255 So. 3d 348 (Fla. 4th DCA 2018).
• Proffer presented in a narrative form by counsel (without timely filed depositions or documentary evidence supporting the narrative) is insufficient. White v. Boire, 320 So. 3d 814 (Fla. 2d DCA 2021); Varnedore v. Copeland, 210 So. 3d 741 (Fla. 5th DCA 2017).
• The court can consider whether the proffered evidence contradicts the plaintiff’s allegations and can weigh the evidence. Marder v. Mueller, 358 So. 3d 1242 (Fla. 4th DCA 2023); KIS Grp., LLC v. Moquin, 263 So. 3d 63 (Fla. 4th DCA 2019).

Certiorari vs. Nonfinal Appeal�Procedural Comparison

Certiorari

• Petition for writ of certiorari filed within 30 days order.
• Motion for reconsideration does not toll time for petition.
• Petition = full brief of the issues (no extensions of time).
• File appendix with Petition.
• Response and reply if ordered by the court. Petition can be disposed of without a response/reply if jurisdictional grounds not met.
• Does not automatically stay trial court proceedings or order on appeal.
• Oral argument typically not granted.
• Attorney’s fee motion filed by due date for reply.

Nonfinal Appeal

• Jurisdiction invoked by notice of appeal filed within 30 days of order.
• Motion for reconsideration does not toll time for notice of appeal.
• 15 days from notice of appeal to file Initial Brief (subject to extensions of time).
• File appendix with Initial Brief.
• 30 days from Initial Brief to serve Answer Brief; 30 days from Answer Brief to serve Reply Brief (subject to extensions of time).
• Does not automatically stay trial court proceedings or order on appeal.
• Oral argument typically not granted.
• Attorney’s fee motion filed by due date for reply brief.

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Stay pending appeal

• Stays pending appeal are governed by rules 9.310(a) and 9.130(f).
• Motion must be filed first in the trial court; appellate court will review orders granting or denying stays.
• In the absence of a stay, the trial court can proceed with all matters, including trial or final hearing, except that the trial court cannot render a final judgment without leave from the appellate court.
• Scope of stay within trial court’s discretion.
• Financial worth discovery vs. liability discovery.
• Case management deadlines.

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Other Notable Rule Changes

• Rule 1.510
• “The court shall state on the record the reasons for granting or denying the motion [for summary judgment].”
• Rule 1.530 (and 12.530)
• “To preserve for appeal a challenge to the failure of the trial court to make required findings of fact, a party must raise that issue in a motion for rehearing under this rule.”
• 3 pending motions for rehearing in Florida Supreme Court (SC22-756).
• Unclear whether it applies only to final orders and final judgments or to all orders.
• Tucker v. LNV Corp., 2023 WL 3606462 (Fla. 4th DCA May 24, 2023): Fourth DCA applied amended rule 1.530 to an appeal filed before the amendment, reasoning the amendment merely clarified existing law.

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Lack of affirmative finding still an issue if not preserved?

• The trial court is required to make an affirmative finding that the plaintiff made a reasonable showing by evidence to support the punitive damages claim. Varnedore v. Copeland, 210 So. 3d 741 (Fla. 5th DCA 2017); Petri Positive Pest Control, Inc. v. CCM Condo. Ass’n, 174 So. 3d 1122 (Fla. 4th DCA 2015).
• Third DCA has even held that the trial court must identify the evidence it considered sufficient to meet the statutory requirement. Cat Cay Yacht Club, Inc. v. Diaz, 264 So. 3d 1071 (Fla. 3d DCA 2019).
• First DCA disagrees that an affirmative finding is statutorily required. Watt v. Lo, 302 So. 3d 1021 (Fla. 1st DCA 2020).
• Second DCA acknowledges the requirement but has held the lack of findings can be harmless error. Omega Title Naples, LLC v. Butschky, 327 So. 3d 424 (Fla. 2d DCA 2021).
• If the defendant does not challenge an insufficient order, is the error preserved for appeal under amended rule 1.530(a)?

Notable Proposed Rule Changes

• Proposed amendment to rule 9.130 (SC23-438)
• Adds nonfinal orders confirming or denying confirmation of an arbitration award or partial arbitration award, and modifying, correcting, or vacating an arbitration award.
• Currently, 9.130 includes only orders determining entitlement to arbitration.
• Proposed rule mirrors some of the categories of appealable orders listed in section 682.20, Florida Statutes.
• Comments due July 3, 2023
• Supreme Court made specific referrals to the Civil Procedure Rules Committee, RGPJA, Florida Court Technology Commission, and Trial Court Budget Commission. Reports due July 3, 2023.

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Notable Florida Supreme Court decision

• On June 15, 2023, the Florida Supreme Court issued a written decision on the plaintiff’s appellate fee motion in Coates v. R.J. Reynolds Co., SC21-175.
• The Court held that the offer of judgment statute (§768.79) is not a prevailing party fee statute. A party who loses an appellate proceeding still can be entitled to attorney’s fees under that statute if the statutory requirements have been met.
• After ruling on the merits in January in favor of RJ Reynolds, the Court ordered supplemental briefing on the attorney’s fee issue.