FL: can hospital pass on sovereign immunity?: hospital-created physicians group held immune.

CASE FACTS: Valerie and Jami Pagan appealed a final summary judgment that was entered in a suit for declaratory relief filed by Sarasota County Public Hospital Board (Hospital Board) and SMH Physician Services, Inc., d/b/a First Physicians Group of Sarasota (FPG). The Hospital Board and FPG sought a legal ruling that its physicians were entitled to sovereign immunity. The Hospital Board, comprised of nine publicly elected members, is a governing board of the Sarasota County Public Hospital District. The Hospital Board was created by a special act of the Florida legislature in 1949 at a time, when private for-profit organizations played little role in the construction of hospitals. It is undisputed that such hospital boards and their employees can possess the protections provided by sovereign or governmental immunity. The Hospital Board's enabling legislation provided that the Hospital Board was authorized and empowered to create SMH Physicians Services, Inc., a nonprofit corporation. The rationale for that and for the corporation to posses sovereign immunity was the fact that at that time, governmental action was necessary to assure an adequate supply of primary care physicians for Sarasota County. Once incorporated, however, the corporation began providing medical services under the fictitious name of FPG. The FPG grew rapidly. By the time the Pagans filed suit in 2001, the FPG included more than 40 physicians practicing in a wide range of specialties at 15 separate locations. Most of the members of the FPG were physicians already practicing in Sarasota County. The physicians simply merged their medical practices into the nonprofit corporation. Although FPG is a nonprofit corporation, its physicians do not primarily serve the poor.

COURT'S OPINION: The Court of Appeals of Florida held that sovereign or governmental immunity is usually decided on a case by case basis as an affirmative defense by both the governmental agency and its employees. In this case, however, the Hospital Board and the FPG decided to file a separate action for a declaratory judgment, seeking a definitive ruling that they were entitled to sovereign immunity as a matter of law. The group sued Valerie and Jami Pagan as well as others. The court noted that the argument raised by the Pagans was not presented to the trial court. Accordingly, that argument could not be properly argued on appeal. Editor's Note: The failure to raise the issue at the Pagans' trial court level was fatal to a challenge to the sovereign immunity of FPG Pagan v. Sarasota County Public Hospital Board, 884 So.2d 257--FL (2004)