Opinion
Case No. 2D19-2889
03-10-2021
Kenneth IRVIN, Jr., Appellant, v. LJ'S PACKAGE & LOUNGE INC. d/b/a LJ's Lounge and Kenneth R. Salladay, Appellees.
Dan R. Stengle of Associates & Bruce L. Scheiner, Fort Myers, for Appellant. Alexandra Valdes of Cole, Scott & Kissane, P.A., Miami, for Appellee, Kenneth R. Salladay. No appearance for remaining Appellee.
Dan R. Stengle of Associates & Bruce L. Scheiner, Fort Myers, for Appellant.
Alexandra Valdes of Cole, Scott & Kissane, P.A., Miami, for Appellee, Kenneth R. Salladay.
No appearance for remaining Appellee.
ATKINSON, Judge.
Kenneth Irvin, Jr., appeals the final judgment entered following a nonbinding arbitration award limited to the issue of the damages he sustained in a car accident with Kenneth R. Salladay, who was intoxicated. He contends that the trial court erred by setting off against the arbitration award the amounts Irvin recovered pursuant to settlement agreements with two derivatively liable establishments who served Salladay alcohol on the day of the accident. We affirm because enforcement of the statutory setoff requirement after the deadline for parties to request a trial de novo neither abrogated the arbitration statute nor unduly prejudiced Irvin.
Irvin suffered serious injuries following a car accident with Salladay. Prior to the accident, Salladay had been drinking at LJ's Package and Lounge Inc. Irvin alleged in his complaint that LJ's served Salladay despite knowing that he was habitually addicted to alcohol. He reached a settlement with LJ's for an undisclosed amount; the court entered an order dismissing the case against LJ's pursuant to the confidential settlement agreement. Irvin subsequently took the deposition of Salladay and learned that he had also been drinking at the Moose Lodge earlier on the day of the accident.
The parties filed a joint motion to extend the deadline for nonbinding arbitration by 120 days on the grounds that Irvin had "identified another potential defendant and [wa]s in the process of seeking resolution of Irvin's claims with said non-party." Appealing to "the interest of judicial economy," the motion explained that, "[s]hould Irvin not be able to resolve his claims, then he will seek leave of Court to add another defendant." The arbitration nonetheless went forward without either having occurred.
The only issue before the arbitrator was the extent of Irvin's damages. The Arbitrator's Sealed Non-binding Arbitration Findings and Award (the Arbitration Award) set forth that "there [wa]s no dispute as to liability, causation, permanency and [Irvin's] entitlement to substantial damages." The Arbitration Award noted that the parties disclosed the fact that "there may be other tortfeasors" but that "at this stage there was no argument as to the fault of others who might be culpable." As a result, the Arbitration Award was "not meant to be dispositive of issues and evidence outside this record." After noting these limitations, the Arbitration Award summarized the evidence presented and concluded that Irvin suffered damages in the amount of $11,649,770.
The arbitrator served the Arbitration Award on July 12, 2018, and filed notice with the court on July 16, 2018. Pursuant to section 44.103, Florida Statutes (2018), and Florida Rule of Civil Procedure 1.820(h), the time during which a party was permitted to request a trial in lieu of accepting the arbitration award elapsed on August 6, 2018. On August 30, 2018, Salladay moved for the entry of a final judgment pursuant to rule 1.820. Thereafter, Irvin reached a confidential settlement agreement with Moose Lodge. On October 17, 2018, Salladay filed an amended motion for entry of final judgment in which he stated that he had discovered Irvin's settlement with Moose Lodge. He asked the court to require the disclosure of the amount of that settlement, as well as the one Irvin entered into with LJ's, and to set off the Arbitration Award by those amounts prior to entry of the final judgment.
The court ordered that Irvin disclose the amounts of the two settlement agreements to Salladay. It directed the parties "to get together to either agree to the setoff amounts or if unable to agree, set the same for hearing following limited discovery, if necessary, solely as to the issue of the amount of collateral setoffs." Irvin moved to clarify the court's use of the terms "collateral setoffs" and "setoff amounts." The court clarified its previous order by directing Irvin to disclose the amounts received from LJ's and Moose Lodge and ordering that those amounts would "be set off from the total amount of the Arbitration Award." The court granted Salladay's motion to set off the settlement amounts against the Arbitration Award and entered a final judgment in the amount of $7,662,160 in favor of Irvin.
On appeal, Irvin contends that the trial court erred by setting off the Arbitration Award by the settlement amounts. In support, he cites section 44.103(5), which provides the following in relevant part:
An arbitration decision shall be final if a request for a trial de novo is not filed within the time provided by rules promulgated by the Supreme Court. ... If no request for trial de novo is made within the time provided, the decision shall be referred to the presiding judge in the case who shall enter such orders
and judgments as are required to carry out the terms of the decision, which orders shall be enforceable by the contempt powers of the court, and for which judgments execution shall issue on request of a party.
(Emphasis added.) Rule 1.820(h) governs the time for filing a motion for trial and provides the following:
Any party may file a motion for trial. If a motion for trial is filed by any party, any party having a third-party claim at issue at the time of arbitration may file a motion for trial within 10 days of service of the first motion for trial. If a motion for trial is not made within 20 days of service on the parties of the decision, the decision shall be referred to the presiding judge, who shall enter such orders and judgments as may be required to carry out the terms of the decision as provided by section 44.103(5), Florida Statutes.
(Emphasis added.)
In support of reversal, Irvin emphasizes the finality of an arbitrator's decision after the deadline for parties to request a trial de novo has passed, noting correctly that the trial court's obligation to enter judgment in accordance with the Arbitration Award was a ministerial duty. See United Auto. Ins. Co. v. Ortiz, 931 So. 2d 1025, 1026 (Fla. 4th DCA 2006) (describing enforcement of an arbitration decision as a "ministerial act" over which "[t]he trial court has no discretion" when neither party requests a trial de novo within twenty days (quoting Connell v. City of Plantation, 901 So. 2d 317, 319 (Fla. 4th DCA 2005) )).
Indeed, the trial court lacked the discretion to alter the decision of the arbitrator. However, the decision of the arbitrator in this case did not encompass—but rather expressly avoided passing upon—the liability of released third parties, whose settlement payments Salladay had a statutory right to set off from the award entered against him for the same damages. See § 46.015(2), Fla. Stat. (2018) ("At trial, if any person shows the court that the plaintiff ... has delivered a written release or covenant not to sue to any person in partial satisfaction of the damages sued for, the court shall set off this amount from the amount of any judgment to which the plaintiff would be otherwise entitled at the time of rendering judgment."); accord § 768.041(2), Fla. Stat. (2018).
And while the arbitration statute does require the trial court to enter an executable judgment in accordance with the arbitrator's decision, the statutory text does not support Irvin's insinuation that there is no adjudicatory work to be done by a court after it receives the decision. The trial court is to enter "orders and judgments as are required to carry out the terms of the [arbitration] decision," and the statute provides that such judgments should be executable. See § 44.103(5) (providing that "execution shall issue on request of a party" for the "judgments" entered by the trial court in order to "carry out the terms of the [arbitration] decision"). That language does not preclude adjudication by the trial court, during the interim between receipt of the arbitration decision and entry of final judgment, of matters not addressed by the arbitrator.
The scope of the arbitration decision in this case was not all-encompassing: "The issue is damages, as there is no dispute as to liability, causation, permanency and [Irvin's] entitlement to substantial damages. The Arbitrator has been asked to issue an award determining and itemizing the extent of [Irvin's] damages." Those were the "terms of the decision" that the trial court was bound to "carry out" by entering "orders and judgments." See § 44.103(5). And the decision expressly reserved on the issue of "the fault of others who might be culpable," specifying that the "opinion and award is not meant to be dispositive of issues and evidence outside this record." While the trial court was bound by section 44.103 to carry out the decisions the arbitrator did make, the trial court was also statutorily bound to address that which had not been decided by the arbitrator—the liability of released tortfeasors to whom payment had been made in partial satisfaction of the damages adjudicated in the Arbitration Award. See § 46.015 (requiring the court to set off amounts paid by released parties "in partial satisfaction of damages sued for ... from the amount of any judgment"); accord § 768.041.
Thus, any perceived obligation to enter a judgment without consideration of the liability of released third parties is in tension with the mandate in chapters 768 and 46 that a "court shall set off" any "partial satisfaction of the damages sued for" in the event the plaintiff has released anyone else for such damages. §§ 46.015(2) (emphasis added); 768.041(2). The trial court was required to enter orders and judgments to "carry out" the arbitrator's decision that the plaintiff suffered X amount of damages due to Salladay's negligence. In carrying out the arbitrator's decision, the trial court was also required, by sections 768.041(2) and 46.015(2), to set off from that amount any partial satisfaction of those damages achieved by the release of the two bars whose liability was derivative of Salladay's under the Dram Shop Act. See § 768.125 ("[A] person ... who knowingly serves a person habitually addicted to the use of any or all alcoholic beverages may become liable for injury or damage caused by or resulting from the intoxication of such minor or person.").
Irvin contends that the trial court's adjudication of the "significant issue" of setoff was untimely, undertaken after the deadline for requesting a trial, at a point when the trial court was required to enter a judgment enforcing the "binding and enforceable" Arbitration Award. But the final judgment does enforce the Arbitration Award. The trial court did not alter the findings of the arbitrator; the setoff is consistent with the "terms of the [arbitration] decision," § 44.103(5), which merely determined the global amount of damages incurred by Irvin as a result of Salladay's tortious conduct. Because Moose Lodge's liability was completely derivative of Salladay's under the Dram Shop Act, the findings of the arbitrator remain unaltered even after the setoff of the amount paid by Moose Lodge to settle its vicarious liability for Salladay's tortious actions. Cf. Felgenhauer v. Bonds, 891 So. 2d 1043, 1044–45 (Fla. 2d DCA 2004) (finding that the statutory entitlement to "a set-off of the sum the plaintiff received from a tortfeasor who was vicariously liable for the defendant's acts ... is a determination regarding damages to be made by the court after the verdict is rendered").
Irvin also argues that he was improperly deprived of notice that the Arbitration Award could be reduced by a future settlement with Moose Lodge at the time he was required to make the decision whether or not to request a trial. However, this appeal to due process is hollow in light of the notice provided by two separate statutes that require a trial court to set off the amount of settlements paid by released parties. Fully aware of Moose Lodge's potential liability at the time of arbitration and at the time of the deadline to reject the Arbitration Award, Irvin's apparent argument is that he might have requested a trial and taken his chances with a judge or jury if he had known that he would be unable to double recover for his injuries in derogation of the statutory prohibition on such a windfall. See Anderson v. Vander Meiden, 56 So. 3d 830, 833 (Fla. 2d DCA 2011) (explaining that the purpose of requiring setoffs against the amount awarded "is to prevent a party from recovering twice for the same damages"). Whatever the pecuniary benefit Irvin thought he might derive from the timing of his settlement with Moose Lodge, the court was under a statutory obligation to reduce the award by that amount. See, e.g., Yellow Cab Co. of St. Petersburg, Inc. v. Betsey, 696 So. 2d 769, 772 (Fla. 2d DCA 1996) ("Settlement proceeds must be set off against the jury verdict where defendants are liable for the same injury." (emphasis added) (citing § 768.041, Fla. Stat. (1995) )). Doing so would not be in derogation of the arbitration statute's requirement that a trial court enter orders and judgments necessary to carry out an arbitrator's decision that was expressly confined to the amount of damages caused by one tortfeasor, without regard for the potential derivative liability of released third parties.
Neither was Irvin prejudiced in his ability to present his case. At arbitration, neither Irvin nor Salladay was required to argue the liability of the dram shops because the arbitrator would have neither a reason nor the logical ability to balance the tortious culpability of Salladay against that of LJ's or Moose Lodge, whose liability was derivative and completely overlapping of the damage caused by Salladay. Cf. Publix Supermarkets v. Austin, 658 So. 2d 1064, 1068 (Fla. 5th DCA 1995) ("There is no logical way for a jury to balance the wrongdoing of the willful vendor and the intoxicated tortfeasor."). And Irvin was not deprived of an opportunity to litigate the setoff issue before the trial court after the Arbitration Award became final. The court addressed multiple filings and held a hearing on the matter before performing the straight-forward, statutorily prescribed calculation of reducing the award by the settlement amounts provided by Irvin.
The circuit court was statutorily prohibited from allowing Irvin to recover twice for the injuries caused by Salladay, and enforcement of the statutory setoff mandate after the deadline for parties to request a trial de novo did not abrogate any requirements of the arbitration statute. We therefore affirm the judgment of the trial court, which properly carried out its duties under sections 44.103, 46.015, and 768.041.
Affirmed.
NORTHCUTT and CASANUEVA, JJ., Concur.