Should an arbitration demand letter that was sent a day late still have the power to cap a $3.2 million jury verdict?

A $3.2 million medical malpractice jury verdict that was slashed by a damages cap could get a new lease on life at the Fourth District Court of Appeal, which Tuesday considered whether the trial court was right to let a defendant off for being one day late in demanding arbitration.

Defendant Northwest Medical Center Inc. in Margate had 90 days to demand arbitration after it received a pre-suit notice alleging it was liable for the death of a baby during childbirth. But although the defendant had said it planned arbitrate before that deadline, it sent its demand letter one business day too late.

Jurors went on to award plaintiff Nur Clarke $2.5 million in noneconomic damages and $746,000 in economic damages. But Broward Circuit Judge David Haimes allowed the Northwest Medical to cap noneconomic damages at $350,000, because the plaintiff had rejected an offer to arbitrate.

Clarke’s attorney Joel Perwin in Miami Beach argued Tuesday that didn’t matter, as the defendant never made its deadline to request arbitration in the first place. He pointed to Florida statutes 766.106 and 766.207, designed to expedite medical malpractice cases, saying he saw no room for discretion in a specific deadline.

Perwin reasoned it was impossible to reconcile Haimes’s decision with statutory language that says a defendant’s failure to reply within 90 days “shall be deemed a final rejection of the claim for purposes of this section.”

“Respectfully, the trial court’s order here and the defendant’s position is the exact opposite of that,” Perwin said. “It is that the failure to respond within 90 days is not final at all. … Not only is it not final, it can be revoked, it can be ignored by a trial court.”

Fourth DCA Judges Robert Gross and Cory J. Ciklin presided with Palm Beach Circuit Judge Carolyn Bell, sitting by special designation.

Defense counsel Alyssa Reiter of Wicker Smith O’Hara McCoy & Ford in Fort Lauderdale argued the plaintiff clearly rejected arbitration, explaining that her client provided verbal notice, drafted the letter within 90 days, and immediately cured its mistake by mailing it the next business day.

“They’re just using this technical error, that it was put in the mailbox one business day late,” Reiter said. “They’re using that to try to avoid the intent of the legislature, the entire malpractice scheme, which is to encourage arbitration, which clearly they could have accepted if they wanted to.”

Reiter countered that plaintiffs in medical malpractice cases are often allowed to cure violations of presuit process if they’re within the statute of limitations.

“One of the plaintiff’s arguments here for us is, once the 90 days passed, that could never be cured. We never could demand arbitration,” Reiter said. “But if you extend that reasoning, then this court and the Florida Supreme Court could never have ruled the way it did in numerous cases.”

Reiter said she disagreed that the failure to respond within 90 days was a final rejection because the statute includes the word “deemed,” which she argued was comparable to ”justified.”

“I submit that the most important part of that phrase is not the word ‘final.’ It’s the word ‘deemed,’ ” Reiter said. ”It’s a word that gives the court some leeway in deciding whether, under these circumstances, that demand should be deemed a final rejection. And it shouldn’t because of all the facts that I’ve stated before.”

But Bell questioned whether there are any cases actually supporting that interpretation, leading Reiter to concede, “ No.’

Perwin shared a different definition of the word.

“If I pass the Florida Bar, I’m deemed to be a lawyer. Your honor was appointed to be a judge, you’re deemed to be a judge. There’s nothing ambiguous about it,” Perwin said. “Nobody says that you can qualify or get out of something that you’re deemed to be.”

The appeal has attracted an amicus curiae from the Florida Justice Association, which stepped in to support of the plaintiff, noting, “The resolution of this issue has potential ramifications that will affect the litigation of medical malpractice cases throughout Florida.”

“Rather than decrease adversarial proceedings, an affirmance of the trial court’s decision will multiply them,” the brief said. “This would lead to a new standard, under which trial courts would need to determine what a party intended to do during the presuit period, rather than what they actually did.”

The court is yet to rule.

Raychel Lean

Raychel Lean reports on South Florida litigation for the Daily Business Review. Send an email to rlean@alm.com, or follow her on Twitter via @raychellean.