One of the insurance liens is a creature of Florida Statute 440.39(2). This lien comes into play when a person injured in the course and scope of employment receives both workers' compensation benefits and compensation from a third-party tortfeasor. 440.39(2) provides that a portion of the proceeds received from the tortfeasor must be reimbursed to the employer or its workers' compensation insurance company.
Recently in Workers' Compensation Category
Some of Florida's most severely injured workers may qualify for Permanent Total Disability (PTD) benefits under Section 440.15(1) Florida Statutes. In the absence of a catastrophic injury such as a spinal cord injury involving severe paralysis, amputation of an arm, a hand, a foot, or a leg, severe brain or closed-head injury, or total or industrial blindness, the qualifying standard is that the injured employee is not capable of engaging in at least sedentary employment within a 50-mile radius of the employee's residence. (The Florida Legislature, under the control of Jeb Bush, changed the PTD standard from "light duty" to "sedentary employment." This significant difference keeps many severely injured, deserving workers from qualifying for PTD.)
Our firm has been hired by a woman who recently sustained a serious leg injury while walking back to her car from a company sponsored holiday party. The employer has refused to provide workers' compensation benefits, claiming that the accident did not happen in the course and scope of employment.
While our firm handles both workers' compensation and premises liability cases, we have agreed to pursue a premises liability action against the employer. (The accident happened on its property.) We believe that the employer and possibly others are responsible for creating an accident-causing dangerous condition.
Injured workers who qualify for workers' compensation permanent total disability benefits (PTD) under Florida Statue 440.15(1), receive 66-2/3% of their average weekly wage (AWW) payable biweekly. Such injured workers may also qualify for Social Security Disability (SSD) monetary benefits payable monthly.
The sum of the two benefits may exceed 100% of an injured worker's AWW. Is the injured worker allowed to receive more than his AWW? It depends.
A Judge of Compensation Claims (JCC) recently denied our firm a stipulated carrier-paid attorney's fee under the so-called medical-only section of Florida Statute 440.34. The judge rejected the stipulation because a claim for Permanent Total Disability (440.15(1)) was pending when we filed a claim for psychiatric care. The judge misread the statute.
(3) If any party should prevail in any proceedings before a judge of compensation claims or court, there shall be taxed against the nonprevailing party the reasonable costs of such proceedings, not to include attorney's fees. A claimant is responsible for the payment of her or his own attorney's fees, except that a claimant is entitled to recover an attorney's fee in an amount equal to the amount provided for in subsection (1) or subsection (7) from a carrier or employer:The judge relied on the words, "has not filed," without considering the qualifying language, "at such time."
(a) Against whom she or he successfully asserts a petition for medical benefits only, if the claimant has not filed or is not entitled to file at such time a claim for disability, permanent impairment, wage-loss, or death benefits, arising out of the same accident.
Since at least 2002, when Jeb Bush and a super-majority of Republicans passed legislation eliminating important workers' rights, Florida's workers' compensation system has been unfair and unbalanced. One circuit court judge has declared it unconstitutional -- Florida's Workers' Compensation System Unconstitutional, So Says 11th Circuit Court Judge Jorge Cueto.
The time is approaching when the Florida Supreme Court may agree with Judge Cueto.
Once again Pam Bondi, Florida's Teabagging Attorney General, has decided to waste the taxpayer's money on another anti-decency crusade. Consistent with her opposition to Gay marriage, government in the Sunshine, the Affordable Care Act, and medical marijuana, the twice-divorced Attorney General has chosen to appeal the August 13, 2014 ruling of 11th Circuit Court Judge Jorge Cueto declaring Florida's workers' compensation system in violation of both the Florida and U.S. constitutions as no longer providing a "reasonable alternative" to the tort system for workers seeking recompense for job related injuries. See this blog: Florida's Workers' Compensation System Unconstitutional, So Says 11th Circuit Court Judge Jorge Cueto.
Florida's Workers' Compensation System Unconstitutional, So Says 11th Circuit Court Judge Jorge Cueto
In 1935, Florida first enacted a workers' compensation system for the state's employers and employees. The idea was to provide a greater degree of fairness and certainty for each. The primary advantage for employers was the immunity from most personal injury lawsuits, making it easier to anticipate expenses, while employees would receive benefits without first having to prove negligence against the employer. It was a model patterned on similar systems adopted in other states. Both sides gained, both sides lost, but the overall outcome was positive.
That is, until greed began to creep into the system. It didn't take long.
Through legislative might, business interests soon began to whittle away at workers' rights and benefits. From time to time, the courts slowed and reversed the erosion, but workers could do little in the long run to resist the rising tide of selfishness and greed.
Not surprisingly, the high mark of this tide of selfishness and greed came during Jeb Bush's reign as Florida's governor. Taking a page from his big brother George's system in Texas, Jeb spearheaded efforts to gut Florida's workers' compensation system. 2002's legislative session broke the system. Benefits were slashed and injured workers were denied the right to effective legal counsel.
Jeb received champagne toasts in boardrooms from Key West to northwest Florida. Mission Accomplished!
Will Jeb Bush/Right-Wing Extremism be the Straw that Breaks the Back of Florida's Workers' Compensation System?
Injured workers have experienced a steady erosion of their rights under Florida's workers' compensation system since its inception in 1935. Some periods have seen greater losses than others. None, however, were as ugly as the Jeb Bush years, when he served as the 43rd Governor of Florida from 1999 to 2007, along with a Republican-controlled House and Senate. Together, they happily gutted the system.
After years of injustice and suffering, the chickens may be coming home to roost.
Before Florida had a workers' compensation system, in order for an injured worker to receive lost wages and medical benefits, he or she was burdened with proving employer-fault caused the accident. This was a time-consuming and always difficult burden, made more tenuous by legal principles that barred any recovery if the worker - contributory fault - or a fellow servant were even slightly at fault, or the employee accepted the dangers of hazardous employment. This system, a form of common law negligence, saw most injured workers go without ever receiving benefits. The system also proved unwieldy to employers, who were regularly tied up in lawsuits and could not reasonably predict their exposure.
My Recent Experience With Florida's Workers' Compensation EMA (Expert Medical Advisor) Law (Statute 440.13(9))
While it's bad enough that the employer/carrier ("E/C") get to hand pick the injured worker's treating doctors, Section 440.13(9)(c) Florida Statutes (2013) gives them a free shot at defeating opinions they oppose. My recent experience demonstrates the point.
In pertinent part, Section 440.13(9)(c) provides:
If there is disagreement in the opinions of the health care providers, if two health care providers disagree on medical evidence supporting the employee's complaints or the need for additional medical treatment, or if two health care providers disagree that the employee is able to return to work, the department may, and the judge of compensation claims shall, upon his or her own motion or within 15 days after receipt of a written request by either the injured employee, the employer, or the carrier, order the injured employee to be evaluated by an expert medical advisor. The opinion of the expert medical advisor is presumed to be correct unless there is clear and convincing evidence to the contrary as determined by the judge of compensation claims.My client claimed to have hurt his back while trying to lift a roll of tarpaper from the floor of a van. Unbeknownst to him, the tarpaper had melted in the hot sun and stuck to adjacent rolls, causing unexpected resistance during the attempted lift. He felt the immediate onset of intense back pain.
Initially, E/C sent him to a workers' compensation clinic. A lumbar spine MRI was ordered. The diagnostic test revealed a disc herniation at L5-S1 along with bony degenerative changes. The herniation caused the clinic doctor to prescribe a consultation with an orthopedist. The orthopedist, chosen, of course, by the E/C, opined that the incident was the major contributing cause ("MCC") of the disc herniation. He also decided that his patient might benefit from surgery, so he sent him to an orthopedic surgeon, again chosen by the E/C. The surgeon, Jonathan Hyde, M.D., performed a comprehensive physical examination, took a thorough medical history, and personally reviewed the MRI images (as opposed to simply relying on the radiologist's report). He, too, opined that the incident was the MCC of the disc herniation. He prescribed physical therapy and medicine, and later performed an epidural steroid injection. When none of the conservative approaches worked, he recommended surgery consisting of a "trans-facet decompressive laminectomy approach followed by a transforaminal lumbar interbody fusion." A surgery date was scheduled for one month later.
Up to this point the E/C had been covering all of the medical care, including the epidural injection. However, it refused to authorize the expensive surgery. Its response was to challenge the treating doctors' MCC opinions.
E/C went out and hired a well-known insurance company doctor to perform a so-called "IME." This doctor had not done back surgery since 1979, had not written any articles or given any lectures on the subject of herniated discs or the type of surgery that had been recommended. His CV was only four pages long. In contrast, Dr. Hyde's CV was some thirty pages long, with entry after entry of articles and lectures on the subjects at issue. He specialized in diagnosing and treating disc herniations. In short, E/C's IME is a hired gun, Dr. Hyde is a top gun.
Florida workers severely injured at work sometimes qualify for both workers' compensation permanent total disability benefits (PTD) (F.S. 440.15(1)) and social security disability benefits (SSD) (42 U.S.C. s. 423).
The Florida workers' compensation system, codified in Chapter 440 of Florida's statutes, sets forth the responsibilities of employers and their workers' compensation insurance companies (E/C) to injured workers. Workers whose injuries permanently prevent them from being gainfully employed are entitled to receive 66-2/3% of their average weekly wage (AWW) (440.14) from employers/carriers until age 75. These same individuals sometimes also qualify for SSD, which includes a monthly payment, when they are similarly permanently unable to work. (SSD converts to Social Security Retirement benefits at full retirement age -- 66 if born after 1942, 67 if born after 1960.) SSD is paid by taxpayers.
Florida employees injured at work may be able to bring a valid claim for damages against a third party. For purposes of this blog, a third party means an entity, including an individual, other than the employer or other entity entitled to workers' compensation immunity. A third party case may exist if the work related injury was caused by the negligence or intentional act of the non-exempt entity. A simple example is where a deliveryman is injured in a motor vehicle accident by a negligent non-exempt third party. Because the accident happened in the course and scope of the employment, the worker would is eligible to recover both workers' compensation benefits and personal injury damages.
Where workers' compensation benefits have been furnished, Section 440.39 Florida Statutes creates a lien against the compensation the injured worker receives from a third party. In other words, the employer or its insurance carrier have the statutory right to be repaid from the money paid to the injured worker by the third party. "The lien statute has a straightforward and appropriate objective--the prevention of double recoveries by injured employees who have recovered statutory benefits under the workers' compensation law but also have claims against responsible parties other than the employer. Jones v. Martin Elecs., Inc., 932 So.2d 1100, 1108 (Fla.2006). The statute allows the employer or insurer to be subrogated to the proceeds of such third-party tort recoveries to the extent of the amounts paid or to be paid by the employer or insurer." Luscomb v. Liberty Mut. Ins. Co., 967 So.2d 379 (Fla. 3rd DCA 2007). Importantly, the workers' compensation lien is capped at the claimant's net recovery. City of Hollywood v. Lombardi, 770 So.2d 1196, 1202 (Fla.2000), and Aetna Insurance Co. v. Norman, 468 So.2d 226, 228 (Fla.1985).
The lien can be waived by the employer or carrier. However, this will typically come at the cost of the workers' compensation case settling for less than if the lien remained in place.
When the lien isn't waived, how is the claimant's net recovery determined?
The formula, as set forth in the statute, can be difficult to comprehend. Extensive litigation has ensued over its meaning and application, with many appellate decisions attempting to explain the issues. In my opinion, the best play to start to understand the formula is the Florida Supreme Court case Manfredo v. Employer's Casualty Insurance Company, 560 So.2d 1162 (Fla 1990).
This is the so-called "Manfredo Formula": Third party settlement/recovery amount less (-) attorney fees and costs divided by (/) full case value = the % value of the wc lien.
Here's the formula by way of a hypothetical example:
- WC lien (medical, indemnity, settlement, etc.): $ 100,000
- $ 250,000 third party settlement less fees (40%) and costs ($ 35,000) = $ 135,000
- Full case value: $ 1,000,000. (The case was for less due to tough liability, coverage limits, etc.)
- $ 135,000 divided by $ 1,000,000 = 13.5%
- 13.5% of $ 100,000 = $ 13,500.
Resolving the WC lien is not always this simple. In the Aetna case, the Florida Supreme Court noted some complicating factors. In speaking of 440.39, the court wrote:
This very logical process, and the statute describing it, becomes more complicated because of the broad array of circumstances that may occur with the third-party claims and recoveries. They may be brought by the employee, employer, or insurer (based on the one-year windows described above), and the attorneys prosecuting the claims may therefore be compensated by the employee, employer, or insurer. The employee may have settled all the workers' compensation medical and indemnity claims for a lump sum (as here), or the benefits may continue to be payable into the future. The third-party recoveries may exceed the total benefits paid and to be paid by the employer or its insurer, or they may be less than that total (as here). There may be multiple third-party claims and recoveries, and therefore multiple computations of the lien, and the recoveries may occur at different times. A particular recovery may be less than the "full value" of the third-party claim for a variety of reasons: other third-party tortfeasors may be responsible for some of the damages, the employee may have been comparatively negligent, or the plaintiff and counsel for the plaintiff may discount the value of the claim in order to avoid the risk and delay inherent in any lawsuit.
As I have blogged here before, beginning with the election in 1998 of Jeb Bush as the governor of Florida, state Republicans have been on a mission to limit and eliminate workers' rights. An area of particular focus has been the workers' compensation system -- Chapter 440 of the Florida Statutes.
Some previous blogs:
- Florida Workers' Compensation a Long Way From Its Roots
- Florida's Workers' Compensation System is Worse Than Ever ... If You're an Injured Worker
- Apportionment of Florida Workers' Compensation Medical and Indemnity (Lost Wages) Benefits
The qualifying legal standard for PTD has changed many times since the adoption, in 1935, of a workers' compensation system in Florida. It is not the purpose of this blog to track all of the changes. For a thorough discussion of the subject, go to: Permanent Total Disability in Florida Before and After the 1993 Reforms. Of importance to this blog is that, in 2002, the Florida Legislature enacted the toughest PTD qualifying standard ever. In the absence of one of the catastrophic injuries listed in 440.15(1), the employee was required to establish that he or she is not able to engage in at least sedentary part-time employment, within a 50-mile radius of the employee's residence, due to his or her physical limitation. Surprisingly, the "part-time" provision was eliminated in 2010, softening the standard somewhat. The current version of 440.15 reads as follows:
In all other cases [i.e., the injury is not one of the listed injuries], in order to obtain permanent total disability benefits, the employee must establish that he or she is not able to engage in at least sedentary employment, within a 50-mile radius of the employee's residence, due to his or her physical limitation.On its face, the difficulty with this standard is that few injuries prevent an employee from performing at least sedentary work, defined in §404.1567(a) of the Code of Federal Regulations as "lifting no more than 10 pounds at a time and occasionally lifting or carrying articles like docket files, ledgers, and small tools. Although a sedentary job is defined as one which involves sitting, a certain amount of walking and standing is often necessary in carrying out job duties. Jobs are sedentary if walking and standing are required occasionally and other sedentary criteria are met."
Florida Construction Site Sub Contractors are Liable for Personal Injuries Caused by Gross Negligence
Pre-Jeb Bush, Florida construction subcontractors were held liable in tort for damages caused by their negligence when the party harmed was an employee of a subcontractor with whom legal vertical privity was not shared. This powerful threat caused subcontractors to pay heightened attention to workplace safety. When subcontractors fell short of being reasonably safe and the result was bodily injury, they paid the cost.
This did not sit well with Governor Bush and his Republican cohorts who controlled Florida's legislature. Profits were at stake. Action was taken to eliminate this bothersome "loophole." Legislation was passed granting "horizontal immunity" to construction subcontractors without any contractual or other legal connection to employees of other companies. See Florida Statute § 440.10(1)(e)(2). See also § 440.11(1)(b)(2).
Thankfully, the immunity is not absolute. § 440.10(1)(e)(2) provides that gross negligence is excepted from the workers' compensation exclusivity provision. To establish gross negligence, a Plaintiff must show (1) a composite of circumstances which, together, constitute a clear and present danger; (2) an awareness of such danger by the subcontractor; and (3) a conscious voluntary act or omission by the subcontractor that is likely to result in injury. See Pyjek v. Valleycrest Landscape Development, Inc., So.3d , 38 FLW D1064 (Fla. 2nd DCA 5-15-2013); and Villalta v. Cornn Int'l, Inc., 109 So. 3d 305 (Fla. 1st DCA 2013) (citing Glaab v. Caudill, 236 So. 2d 180, 185 (Fla. 2d DCA 1970)); cf. Merryman v. Mattheus, 529 So. 2d 727, 729 (Fla. 2d DCA 1988) (explaining that mere knowledge of vulnerability of employee to the possibility of injury is insufficient to amount to gross negligence; there must be a likelihood of injury from employee's vulnerability greater than mere danger, rising to a "clear and present danger").
Most Florida employees injured at work will be limited to receiving compensation through the state's workers' compensation system as laid out in Chapter 440 of the Florida Statutes. The main reason for this limitation is that employers and fellow-employees are immune from being sued for simple negligence. See F.S. 440.11.
'"[S]imple negligence is that course of conduct which a reasonable and prudent man would know might possibly result in injury to persons . . .."' Carraway v. Revell, 116 So. 2d 16, 22 (Fla. 1959) (quoting Bridges v. Speer, 79 So. 2d 679, 682 (Fla. 1955)).
Negligence cases and workers' compensation cases are different creatures subject to their own set of laws with regard to compensation for injuries. One of the main differences is that the workers' compensation system does not authorize compensation for pain and suffering. (No Compensation for Pain & Suffering Under Florida's Workers' Compensation System.)
Chapter 440 is a no fault system for the provision of benefits. In theory, at least, the worker's compensation statutes provide a system of compensation for injured workers in which the worker receives the guarantee of rapid compensation for work related injuries. Reality is often a different story. Even when the system works as designed, its shortcomings are many. Read these blogs: