Newman v. Select Specialty Hospital-Arizona, Inc., 720 Ariz. Adv. Rep. 12 (App. Div. I, September 1, 2015) (J. Gemmill)

PUNITIVE DAMAGE INSTRUCTION APPROPRIATE WHERE NURSES FAILED TO CARE FOR BED SORE KNOWING THE FAILURE CREATED A SUBSTANTIAL RISK OF SIGNIFICANT HARM/RIGHT TO ATTORNEYS' FEES IS SUBSTANTIVE AND VESTS WHEN SUIT IS FILED WHERE REPEAL OF STATUTE IS NOT EXPLICITLY RETROACTIVE

Plaintiff was rendered a quadriplegic in an auto accident and sued the defendant hospital for negligent medical care which resulted in a pressure sore with permanent and recurring pain, pressure and reopening of the wound. Specifically he alleged violation of Arizona's Adult Protective Services Act [APSA] and A.R.S  §§46-451 to -459, seeking compensatory and punitive damages. The trial court granted defendant's motion for directed verdict on punitive damages and the jury awarded plaintiff $250,000 compensatory damages.  Thereafter the trial court  ruled plaintiff's right to attorneys' fees under  A.R.S. §46-455(H)(4) accrued at the time his claim accrued though since the statute had been repealed. However, the trial court found the request for fees of $388,400 excessive and instead awarded $112,500. Plaintiff's request for $48,544.06 in “reasonable costs of suit” pursuant to A.R.S. §46-455(H)(4) was also rejected in favor of an award only for taxable costs as set forth in A.R.S. §12-332.  The Arizona Court of Appeal affirmed in part, reversed in part and remanded the case.

On appeal, plaintiff claimed the defendant's appeal was invalid as premature. The court of appeals agreed it was premature but found it still had jurisdiction to hear the appeal under Barassi v. Matison, 130 Ariz. 418, 421-22 (1981). Barassi  held that a premature notice of appeal is nevertheless effective if it is filed after the superior court has made a final decision, the decision is not likely to change, and the only tasks remaining are ministerial.

On the issue of punitive damages there was evidence the nurses treating plaintiff were aware he had a pressure sore, knew and were directed by hospital protocol and a manual as to how to care for it and treat it but failed to do so. The nurses also knew the potential consequences of a failure to properly treat the wound would be the very pain and suffering plaintiff now endures. Based upon such facts a jury could reasonably conclude there was clear and convincing  the defendant “knowingly and consciously disregarded a substantial risk of significant harm” thus justifying an award of punitive damages.

A.R.S. §46-455(H)(4) (2005) allowed for reasonable attorneys' fees not to exceed double the compensatory award. In 2010 the statute was amended to reduce the ceiling on fees to the amount of compensatory damages. In 2012 the right to fees was eliminated. The court of appeals noted that the right to attorneys' fees is a substantive right and cannot be taken away retroactively unless the enactment, amendment or repeal of a statute expressly so provides. Here the repeal had no retroactive clause. The court found plaintiff's right to fees did not accrue at the time of injury but rather at the time suit was filed. As such, the reduced fee amount allowed by the trial court complied with the 2010 version of the statute that applied to plaintiff's claim. The plaintiff's attorneys had a 45% contingency fee which the trial court found to be reasonable and was in fact the precise amount of fees the trial court awarded.  The plaintiff's request for a greater amount based upon an hourly rate of $400 an hour for partners and $300 an hour for associates where contemporaneous billing records were not kept was properly rejected by the trial court.

Finally, while A.R.S §46-455 (H)(4) allows recovery of “costs of suit” and does not specify “taxable” costs as defined by A.R.S. §12-332, the latter statute controls what specifically is allowed in recoverable costs of suit.