It is common practice to seek PIP benefits for an insured who has paid money out-of-pocket to satisfy a workers’ compensation lien. Is the PIP carrier let off the hook for payments when the workers’ compensation lien is waived? According to the holding in Cannino v. Progressive Insurance Co., Fla: Dist. Court of Appeals, 2nd Dist. 2010, the answer is No.
When a person is injured in a motor vehicle accident while in the course of his employment, he may be entitled to medical and lost wage benefits from workers’ compensation and PIP (personal injury protection) insurance.
The Florida Motor Vehicle No-Fault Law, sections 627.730-.7405, Florida Statutes, requires motorists to maintain a minimum of $10,000 in insurance for PIP benefits to cover loss sustained as a result of bodily injury, sickness, or death related to motor vehicles. § 627.736(1). The insurance generally covers eighty percent of medical and related expenses and sixty percent of wage loss. Id. PIP benefits are primary, except that workers’ compensation benefits “shall be credited against” PIP benefits. § 627.736(4).
The injured person may also be able to recover money from the bodily injury coverage of the at-fault party’s insurance policy for damages such as pain and suffering.
When a workers’ compensation carrier provides benefits to an injured worker, it retains a lien (i.e., right to be reimbursed) up to the value of those benefits on any money received by the workers’ compensation claimant from the bodily injury coverage of the at-fault party’s insurance policy. (Typically, the reibursement rate is not dollar-for-dollar. See the Manfredo formula for how to calculate the rate of reimbursement.) The workers’ compensation carrier is allowed to waive the lien.
In 2004, Cannino was injured in an automobile accident while in the course of his employment by West Coast Fence of Tampa. He received workers’ compensation benefits from West Coast Fence’s carrier, Pinnacle Benefits, Inc. Cannino had a personal motor vehicle insurance policy issued by Progressive, but he did not seek immediate payment of his personal injury protection (PIP) benefits under that policy.
Cannino eventually settled his personal injury case for $100,000 and his workers’ compensation case for $20,000. As part of the workers’ compensation settlement, the workers’ compensation carrier agreed to waive its lien totaling $39,212.00. Thereafter, Mr. Cannino sought PIP benefits. Progressive refused to pay, maintaining that payment was not due because it was entitled to a credit for the workers’ compensation benefits and Cannino never eliminated the credit by paying out-of-pocket to satisfy the workers’ compensation lien. The county court* agreed with Progressive. (The case bypassed the circuit court appellate level of review, the normal route, going, instead, directly to the DCA, because the county court certified, and the DCA agreed, that its judgment was of great public importance.)
In reversing the county court and ruling for Cannino, the 2nd DCA held as follows: “We reject Progressive’s assertion that Cannino was required to directly satisfy the workers’ compensation lien by paying out-of-pocket in order to claim his PIP benefits. This would improperly place form over substance. Cannino effectively did pay from his pocket by giving consideration, i.e., giving up his right to seek future workers’ compensation benefits in exchange for a negotiated cash payment and the waiver of the lien, when settling with the workers’ compensation carrier.”
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