Articles Posted in Workers’ Compensation

scales of justiceFollowing the Florida Supreme Court’s April, 2016 decision in Castellanos v. Next Door Company, Florida’s workers’ compensation insurance industry quickly mobilized in an effort to obtain approval of a rate increase from the Florida Office of Insurance Regulation. It claimed that a substantial premium rate hike was needed to handle the expected increase in claim costs — in particular, fees paid to claimants’ attorneys — resulting from the decision.

Insurance industry representatives hired National Council on Compensation Insurance (NCCI), a private company authorized to request rate changes, to present its case to the Florida Office of Insurance Regulation (OIR), the regulatory agency responsible for setting insurance rates. OIR ultimately approved a 14.5% rate hike. Problem is, opponents were prevented from fully engaging  in the regulatory process.

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DisabledU.S. President Theodore Roosevelt famously said, Speak softly and carry a big stick.” The meaning of the proverb is that, if necessary, blunt force will be used to compel compliance with reasonable behavior. It works.

In Castellanos v. Next Door Company, the Florida Supreme Court gave injured workers a big stick. It is Section 440.34(3) Florida Statutes.

The Castellanos version of 440.34(3) gives employers and their workers’ compensation insurance companies thirty days (30), a safe harbor period, to provide requested benefits without risking having to pay the injured worker’s attorney’s fees. The risk can be sizeable. Hourly attorney fee rates range from $200 to $400 and complex cases can involve hundreds of hours of legal work.

This threat, the big stick, is usually effective in getting carriers to furnish needed benefits without a fight. Since the value of benefits at stake is often greater than the exposure for attorney’s fees, it makes practical sense for carriers to be cooperative. In the days when injured workers did not have the big stick, it was the policy and procedure of most insurance companies to summarily deny benefits since the adverse consequences of being proven wrong were de minimis.

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worker2Shame on the Miami Herald!

On September 30, 2016 (print) and October 4, 2016 (online), the Miami Herald published an editorial, written by Mark Wilson, president and CEO of the Florida Chamber of Commerce, titled Workers’ comp rate hike will hurt Florida businesses.

Mr. Wilson contends that two recent Florida Supreme Court decisions will cause workers’ compensation insurance premiums to rise, “all for the benefit of billboard trial lawyers.” While it is debatable whether rates will or should increase, there is no question that the decisions were just and proper. Moreover, the true and deserved beneficiaries of the court decisions are injured workers, not “billboard trial lawyers.” Positive results have already been experienced on the ground.

The first case mentioned by Mr. Wilson, Castellanos v. Next Door Company, et al. (Fla., 2016), was decided on April 28, 2016. It involved a challenge to a workers’ compensation statute that made it exceedingly difficult for injured workers to obtain adequate legal representation.

Mr. Wilson fails to present any Castellanos case facts, attempting, instead, to sway unknowing readers with inflammatory and broad brush statements. He does not even give the full case name to make it easier for curious readers to find and read the decision to reach informed conclusions.

Shame on him. Shame on the Miami Herald for providing the forum.

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greedSome catastrophically injured Florida workers qualify for both workers’ compensation permanent total disability benefits (PTD) (F.S. 440.15(1)) and taxpayer funded Social Security Disability (SSD) benefits (42 U.S.C. s. 423).

The compensation rate for PTD is 66-2/3% of the claimant’s average weekly wage (AWW) (440.14) payable bi-weekly until age 75. SSD is paid monthly until converting to Social Security Retirement at full retirement age (age 66 if born after 1942, 67 if born after 1960).

With the exception of government employees, PTD is paid by the private employer or its workers’ compensation insurance company. SSD, a Federal program, is paid from taxpayer dollars.
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accident-1307665Florida’s workers’ compensation statute of limitations, Section 440.19 Florida Statutes, is not the only time bar to bringing a workers’ compensation claim. Section 440.185(1) time bars a claim not reported to the employer “within 30 days after the date of or initial manifestation of the injury.” The statute contains four exceptions:

(a) The employer or the employer’s agent had actual knowledge of the injury;

(b) The cause of the injury could not be identified without a medical opinion and the employee advised the employer within 30 days after obtaining a medical opinion indicating that the injury arose out of and in the course of employment;

(c) The employer did not put its employees on notice of the requirements of this section by posting notice pursuant to s. 440.055; or

(d) Exceptional circumstances, outside the scope of paragraph (a) or paragraph (b) justify such failure.

Notice and Knowledge

Gregory v. Crum Staffing. The First District Court of Appeal ruled on the issues of reporting and actual knowledge. A supervisor witnessed the accident, heard the claimant say “something regarding an injury,” although not specifically about a shoulder injury, and knew he went to a doctor less than 30 days after the accident. The Judge of Compensation Claims (JCC) ruled against the claimant, concluding that the statute required “actual knowledge of the injury to be communicated . . . to the employer within thirty days.” The JCC’s decision was reversed on appeal. The 1st DCA decided that the reporting requirement of 440.185(1) was satisfied, observing that 440.185(1) does not contain an “actual knowledge” provision like the subsection (a) exception. The court did not stop there. It also held that the employer had “actual knowledge of the injury,” explaining as follows:

the notice required to satisfy the knowledge exception to the thirty-day rule need not detail every facet of the injury sustained. Rather, it is sufficient that the employer have notice of an injury. See Alfonso v. MacDinton’s Rest., 515 So. 2d 243 (Fla. 1st DCA 1987); see also Roseboom v. H.T. Constructors, Inc., 527 So. 2d 234 (Fla. 1st DCA 1988); Winter Park Mem’l Hosp. v. Brown, 452 So. 2d 116 (Fla. 1st DCA 1984).

Alfonso v. Mac Dinton’s Restaurant, 515 So.2d 243 (Fla. 1st DCA 1987). Employee slipped and fell on her buttocks. More than five weeks later she reported back pain to her employer for the first time. Later that day she was admitted to the hospital for a back injury. The back claim was denied for late reporting. At trial, one of her employers admitted hearing claimant exclaim from the freezer in which the injury occurred that she had hit her arm on the freezer’s rack. The employer further indicated that he asked claimant if she was all right and that she replied she thought so. The DCA held in favor of the claimant.

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scales of justiceISSUE: Whether section 440.34 Florida Statutes, recently modified by the Florida Supreme Court in Castellanos v. Next Door Company, et al. (Fla., 2016), should be amended to eliminate insurance carrier-paid reasonable attorney’s fees.

DISCUSSION: In 2009, the Florida Legislature barred judges of workers’ compensation claims (JCC) from awarding reasonable carrier-paid hourly fees to the lawyers of injured workers who were successful in securing benefits for their clients. The legislature limited the allowable fee to the following statutory formula: 20 percent of the first $5,000 of the amount of the benefits secured, 15 percent of the next $5,000 of the amount of the benefits secured, 10 percent of the remaining amount of the benefits secured to be provided during the first 10 years after the date the claim is filed, and 5 percent of the benefits secured after 10 years. Section 440.34(1) Florida Statutes.

Because most of the day-to-day workers’ compensation benefits are of low value, the attorney’s fee under the statutory formula for the successful prosecution of a claim for such benefits is correspondingly low. For example, the formula fee for securing the authorization of a $1,000 MRI is $200.

In Castellanos v. Next Door Company, et al. (Fla., 2016), the Florida Supreme Court declared unconstitutional, as a violation of due process under the Florida and United States constitutions, the provisions of 440.34 restricting fees to the statutory formula. The ruling allows workers’ compensation judges to award reasonable fees based on an hourly rate. After seven long years injured workers have a fighting chance to receive all benefits that are due and owing. Unfortunately, there are some individuals within the business community who seek to reverse the effects of the Castellanos ruling through legislative action.

The carrier-pays provisions of section 440.34(3) which open the door to the reasonable hourly rates are triggered by the following limited circumstances: (1) the successful prosecution of a medical-only claim; (2) the successful prosecution of a claim after the carrier has denied the benefit; or (3) the successful prosecution of a claim after the carrier has denied that an accident occurred.

Hence, whether a carrier ever becomes obligated to pay a reasonable hourly fee is a matter entirely within its control.

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worker2On April 28, 2016, the Florida Supreme Court declared unconstitutional the mandatory fee schedule in section 440.34, Florida Statutes (2009), which eliminated the requirement of a reasonable attorney’s fee to a successful claimant. The ruling, in Castellanos v. Next Door Company, et al., sent shock waves through the workers’ compensation community. Many within the business and insurance industries instantly began howling that the sky was falling. Their protestations, amounting to hyperbole, are overblown.

Marvin Castellanos was injured in the course and scope of his employment. His employer’s workers’ compensation insurance carrier denied benefits, raising twelve defenses. Through the assistance of an attorney, Mr. Castellanos prevailed in his workers’ compensation claim. The Judge of Compensation Claims (JCC) determined that claimant’s attorney devoted 107.2 hours of “reasonable and necessary” time litigating the complex case. However, because section 440.34 limited a claimant’s ability to recover attorney’s fees to a sliding scale based on the amount of workers’ compensation benefits obtained, the fee awarded to Castellanos’ attorney amounted to $164.54, or $1.53 per hour.

The JCC had no choice. Section 440.34 barred him from awarding a reasonable attorney’s fee. The Florida Supreme Court considered this arbitrary and capricious constraint as unconstitutional under both the Florida and United States Constitutions.

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scales of justiceOn April 28, 2016, the Florida Supreme Court, in Castellanos v. Next Door Company, righted a wrong thirteen years in the making. The court decided that the due process edicts embodied in the Federal and Florida constitutions mandate that judges who decide workers’ compensation cases be allowed to award reasonable attorney’s fees to claimants attorneys. (Pre-Castellanos, judges of workers’ compensation claims (JCC) were prohibited from awarding reasonable fees.)
Not surprisingly, the right-wing propaganda machine quickly went on the attack. This morning I awoke to an article, Workers-comp rates could jump in Florida, published in my local newspaper, the Miami Herald, containing some of the falsehoods we can expect to hear. I sent an email to the author of the article addressing the biggest of those falsehoods.
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Dear Mr. Saunders:
This morning I read your article of the above title in the Miami Herald. I feel the need to respond to a quote in the article from Associated Industries CEO Tom Feeney, the highly controversial right-wing Republican partisan notorious for his role in the 2000 presidential election fiasco. According to Feeney, the Supreme Court’s opinion permits “unbridled hourly rate attorney fees.” This is complete and utter hogwash. If you read the subject opinion, Castellanos v. Next Door Company, and the workers’ compensation attorney’s fee statute (F.S. 440.34), you will see that the hourly attorney fee rate will be anything but “unbridled” as a result of the Castellanos decision.

IMG_2410The legal principle of respondent superior makes employers liable in civil damages for the negligence of their employees.

The typical large-scale construction project is manned by workers employed by many different companies. However, the theories of vertical and horizontal immunity contained in Florida Statute Sections 440.10(1)(b)&(e) exempt construction site employers from respondent superior liability for worker on worker accidents.*

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scales of justice.jpgOver the years, but especially since 1998, it has gotten progressively more difficult for workers injured on the job to be fairly compensated under Florida’s workers’ compensation system.  Republican governors (Jeb Bush, Charlie Crist, Rick Scott) backed by Republican-dominated legislatures have made every effort to limit and eliminate workers’ rights. Occasionally, the First District Court of Appeal and the Florida Supreme Court will throw workers a bone, but even they cannot fully contend with the overwhelming onslaught from the executive and legislative branches.

Examples of this point:

Two different types of wage loss benefits are available under Florida’s workers’ compensation system. See Florida Statute 440.15. The line of demarcation between the two is maximum medical improvement (MMI).

“Date of maximum medical improvement” means the date after which further recovery from, or lasting improvement to, an injury or disease can no longer reasonably be anticipated, based upon reasonable medical probability. 440.02(10)

While the injured worker is in the pre-MMI recovery stage, he or she is eligible to receive what is known as temporary disability benefits, either temporary partial (TPD; F.S. 440.15(4) ) or temporary total (TTD; 440.15(2)) depending on work status per the treating doctor or doctors. However, once the employee reaches MMI, eligibility for temporary benefits ends and the only available indemnity (wage loss) benefit is permanent total disability (PTD; F.S. 440.15(1)). (At the point of MMI, the treating doctor is required to assign an impairment rating for permanent injuries. The rating is expressed in terms of a percentage (%), and permanent impairment benefits (F.S. 440.15(3)) are paid thereafter according to the rating. While this is a monetary benefit, it is not an indemnity payment based on wage loss.) Except in rare instances, PTD ends at age 75. Continue reading