Articles Posted in Personal Injury

Pie-Chart-300x246Last week I blogged on the subject of the interplay between health insurance and disability insurance liens and recoveries in personal injury cases. Today’s topic has numerous similarities. It also has a significant difference.

Section 768.76(4), Florida Statutes controls health and disability insurance liens governed by Florida law. Section 440.39 is the companion statute that controls workers’ compensation liens. Each statute lays out a formula for satisfying liens from recoveries made in personal injury cases. The difference is not recognizable from the language of the respective statutes. In fact, the statutes read very much alike. It took case law to create the distinction.

Damages in personal injury cases fall into two broad categories: economic and noneconomic. Economic damages include past and future medical expenses and income loss. Noneconomic damages include past and future pain and suffering, mental anguish, and losing the capacity to enjoy life. Economic damages are objective. Noneconomic damages are subjective.

The benefits available in Florida workers’ compensation cases are limited to medical and lost wages (indemnity), making it similar to health insurance and disability insurance. Noneconomic damages are not available in workers’ compensation cases.

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Pie-Chart-300x246It is common for medical bills incurred in Florida personal injury cases to be paid by health insurance. Some people injured in accidents also receive private disability insurance benefits. Most health and disability insurance policies afford insurance carriers subrogation or reimbursement rights against the insured who has recovered all or part of the insurance payments from a tortfeasor (the at-fault party). This means that the carrier has the right to be repaid some or all of the insurance benefits paid out.

How much must be repaid depends in large measure on the law governing the relationship between the insurer and insured. Self-funded employer policies are governed by ERISA. Non-ERISA policies and fully-insured employer policies fall under the authority of section 768.76(4), Florida Statutes. This blog addresses reimbursement under the Florida Statue.

Section 768.76(4) reads as follows:

A provider of collateral sources that has a right of subrogation or reimbursement that has complied with this section shall have a right of reimbursement from a claimant to whom it has provided collateral sources if such claimant has recovered all or part of such collateral sources from a tortfeasor. Such provider’s right of reimbursement shall be limited to the actual amount of collateral sources recovered by the claimant from a tortfeasor, minus its pro rata share of costs and attorney’s fees incurred by the claimant in recovering such collateral sources from the tortfeasor. In determining the provider’s pro rata share of those costs and attorney’s fees, the provider shall have deducted from its recovery a percentage amount equal to the percentage of the judgment or settlement which is for costs and attorney’s fees.

Most statutes require some sort of judicial intervention to establish their parameters. In Magsipoc v. Larsen, 639 So.2d 1038 (Fla. 5th DCA 1994), the application of section (4) was considered on appeal in a wrongful death case involving the repayment of health insurance benefits to the carrier.

Before dying after nearly drowning in a pool, the young child received extensive medical care in an effort to save her life. Health insurance paid all of the medical expenses and costs (totaling $472,000). Thereafter, the child’s parents sued the pool owners on behalf of themselves and their daughter’s estate.

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Personal injury cases can have both active and passive tortfeasors, with both being legally responsible for compensating the injured party. The passive tortfeasor’s liability arises from the legal principle known as vicarious liability. Consider these examples:

In Florida

  • Under the principle of respondeat superior, an employer is responsible for the damages caused by its employee in the course and scope of the employment.
  • Under the dangerous instrumentality doctrine, with the exception of rental companies vehicle owners are liable for damages caused by permissive users of their vehicles.

In the typical litigated case, both the active and passive tortfeasors are sued. Interestingly, Florida law allows plaintiffs to settle with the active tortfeasor without being precluded from continuing the action against the passive torfeasor. In JFK Medical Center, Inc. v. Price, 647 So. 2d 833 (Fla. 1994), the plaintiff sued a doctor for medical malpractice and wrongful death. The plaintiff’s complaint also included a claim against the passive tortfeasor, the doctor’s employer, for vicarious liability. Id. at 833. Before trial the plaintiff and the active tortfeasor, the doctor, entered into a voluntary settlement agreement which provided that the lawsuit against the active tortfeasor would be dismissed with prejudice. Id. The passive tortfeasor thereafter moved for summary judgment asserting that the active tortfeasor’s dismissal operated as an adjudication on the merits, and thereby precluded continuation of the lawsuit against the passive tortfeasor. Id. at 833-34. The trial court granted the passive tortfeasor’s motion for summary judgment. Id. at 834. On appeal, the Florida Supreme Court held “that a voluntary dismissal of the active tortfeasor, with prejudice … is not the equivalent of an adjudication on the merits that will serve as a bar to continued litigation against the passive tortfeasor.” Id. at 834. The court based its decision on the public policy, as documented in sections 768.041(1) and 768.31(5), Florida Statutes, of encouraging the settlement of civil actions. Id. at 834.

(Caution must be exercised when plaintiff wishes to enter into an agreement to release the active tortfeasor only. The language of the settlement documents must be read carefully to avoid being construed as also releasing the passive tortfeasor. The Price case does not prohibit an agreement which releases both the active and passive tortfeasors.)

Parties to lawsuits, both defendants and plaintiffs, have available to them a powerful tool to encourage settlements. The tool, which goes by a different name for each side but is designed to accomplish the same end, is outlined in section 768.79(1), Florida Statutes. For defendants, the tool is known as an “offer of judgment,” while for plaintiffs it is called a “demand for judgment.” (Florida Rule of Civil Procedure 1.442, which outlines the technical requirements of these pleadings, calls them “Proposals for Settlement,” commonly referred to as “PFS.”) The pertinent language of 768.79(1) is set forth below:

In any civil action for damages filed in the courts of this state, if a defendant files an offer of judgment [a/k/a “OJ”]which is not accepted by the plaintiff within 30 days, the defendant shall be entitled to recover reasonable costs and attorney’s fees incurred by her or him or on the defendant’s behalf pursuant to a policy of liability insurance or other contract from the date of filing of the offer if the judgment is one of no liability or the judgment obtained by the plaintiff is at least 25 percent less than such offer, and the court shall set off such costs and attorney’s fees against the award. Where such costs and attorney’s fees total more than the judgment, the court shall enter judgment for the defendant against the plaintiff for the amount of the costs and fees, less the amount of the plaintiff’s award. If a plaintiff files a demand for judgment which is not accepted by the defendant within 30 days and the plaintiff recovers a judgment in an amount at least 25 percent greater than the offer, she or he shall be entitled to recover reasonable costs and attorney’s fees incurred from the date of the filing of the demand.

(Bold added)

In hard fought cases, reasonable costs and attorney’s fees can be substantial. Each side seeks to present a number that will trigger 768.79(1) without being outside the range of an appropriate settlement if accepted. The higher a defendant’s OJ, the more difficult it is for the plaintiff to beat it. Conversely, the lower the plaintiff’s PFS, the harder it is for defendant to beat it.

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A key objective of every civil law defense attorney is to limit the amount of money his or her client, the defendant, must pay to the suing party, the plaintiff. In Florida cases involving personal injuries, the damages for which the defendant may be held responsible for compensating the plaintiff fall into two categories, economic (e.g., lost wages and medical expenses) and non-economic (e.g., pain and suffering; mental anguish). (Non-economic damages are not recoverable in Florida workers’ compensation cases, where the law limits injured workers to compensation for medical and indemnity benefits only.)

Plaintiffs and defendants are in a never ending battle over the fairest and most accurate ways to demonstrate the plaintiffs’ damages past and future to juries. As it pertains to future medical expenses and past and future non-economic damages, a common area of dispute concerns what the jury is allowed to know in terms of past medical expenses. Plaintiffs argue that jurors should have the benefit of knowing the full amount of past medical charges regardless of how much was paid after reductions were made, for example, by Medicare, health insurance, settlement with another parry, and private negotiations. Defendants argue that the only relevant number is what has actually been paid or is owed, not what was billed.

In Durse v. Henn, 68 So. 2d 271 (Fla. 4th DCA 2011), the defendant in an automobile negligence action, Henn, filed a motion in limine to preclude the plaintiff, Durse, from presenting the full amount of his medical bills because his medical provider had accepted a lower amount as final satisfaction of all outstanding medical bills.  Id. at 275. The trial court granted Henn’s motion. On appeal, Durse argued that the trial court’s ruling prejudiced “his ability to establish the value of future medical expenses and non-economic damages and contend[ed] that this [was] an issue that should be resolved post-verdict.”  Id.  Henn argued that the trial court must limit introduction of the amount of medical bills to the amount actually paid by Durse, rather than the original face value of the medical bills. Id.

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IMG_5345-225x300We are representing a gentleman who was struck by a pickup truck just before sunrise while walking to a bus stop on his way to work. The driver turned quickly without warning from a main road onto a small side street while our client was halfway across after looking both ways before proceeding. Our client spent two weeks in the hospital in intensive care. The driver of the vehicle was charged with failing to yield the right of way.

We learned that the vehicle was purchased by an administratively dissolved corporation and loaned by the sole officer and shareholder of that defunct corporation to the driver for personal use. While the dissolved corporation did not maintain personal injury liability insurance, our investigation determined that the officer/sole shareholder (O/SS) owned unencumbered real estate worth in excess of $1,000,000, almost enough to cover our client’s medical expenses, lost income, and personal injuries. (We made this asset determination by searching the public records and by obtaining an asset affidavit from the O/SS. The driver of the vehicle is uninsured and does not have assets of any meaningful value.)

Through experience and legal research, we have concluded, based on two intertwining legal theories, that the O/SS is likely personally liable for our client’s significant damages.

Section 607.0204, Florida Statutes (2019), part of the Business Corporation Act, provides as follows:

Liability for preincorporation transactions.All persons purporting to act as or on behalf of a corporation, knowing that there was no incorporation under this chapter, are jointly and severally liable for all liabilities created while so acting.

For us to be able to impose personal liability on the O/SS under this statute, we must show that he knew or should have known that the corporation was dissolved when he acted. Presley v. Ponce Plaza Associates, 723 So. 2d 328 (Fla. 3rd DCA 1998) and Harry Rich Corp. v. Feinberg, 518 So.2d 377 (Fla. 3d DCA 1987). Given that the gentleman was the sole officer and shareholder of the corporation, which had been administratively dissolved years before the vehicle was purchased, we feel confident in being able to make that proof.

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joint-several-300x232Florida courts have determined that some responsibilities are so important to the community that the principal entity should not be allowed to transfer it to a third party. This defining characteristic of whether a nondelegable duty exists has been described as “rather ambiguous.” Dixon v. Whitfield, 654 So. 2d 1230, 1232 (Fla. 1st DCA 1995); W. Page Keeton et al., Prosser and Keeton on the Law of Torts § 71, at 512 (5th ed. 1984). The issue of whether a nondelegable duty exists is a question of law. McCain v. Fla. Power Corp., 593 So. 2d 500, 502 (Fla. 1992).

The standard has been applied in some unexpected ways.

The Dixon case dealt with a school board contracting with an outside entity to transport public school students and a lawsuit brought on behalf of a student who was struck and killed when he tried to cross a street after getting off a public school bus. 654 So. 2d at 1231. In holding against the parents, the appellate court set forth in part:

14525881043se8c1-300x200Every driver of an automobile in Florida who is involved in a motor vehicle accident is required to report the event to law enforcement. See § 316.062, Fla. Stat. (2019).  From 1971 to 1982, the version of the statute designed to promote this public policy, § 316.066(4), Fla. Stat. (1971), provided that accident reports were confidential and prohibited its disclosure. In 1982, the legislature added a sentence providing an exception to “the confidential privilege afforded by this subsection” for breath, urine, and blood tests. Ch. 82-155, § 6, Laws of Fla. (emphasis added). Based on this language, courts interpreted the statute as creating a true privilege. See Brackin v. Boles, 452 So. 2d 540, 544 (Fla. 1984); Pastori v. State, 456 So. 2d 1212, 1213 (Fla. 2nd DCA 1984); Nationwide, Ins. v. Monroe, 276 So. 2d 547, 548 n.2 (Fla. 2nd DCA 1973). And it became known as the “accident report privilege.” See, e.g., Hammond v. Jim Hinton Oil Co., 530 So. 2d 995, 997 (Fla. 1st DCA 1988)Johnson v. Fla. Farm Bureau Cas. Ins., 542 So. 2d 367, 368 (Fla. 4th DCA 1988); Hill v. Allstate Ins., 404 So. 2d 156, 156 (Fla. 3d DCA 1981).

In 1989 the statute was changed by deleting (1) the term “privilege,” (2) the language making the information confidential, and (3) the language prohibiting its disclosure outside of the Department. See ch. 89-271, § 2, Laws of Fla. “By deleting this language, the legislature clearly intended to change the statute from a true privilege to a law of admissibility. Indeed, the legislative history provides that the statute was amended “to make it clear that statements made to an officer by a person involved in an accident shall not be admissible in court but shall otherwise be public record.” Fla. H.R. Comm. on Govtl. Ops., PCB GO 89-4 (1989) Staff Analysis 4 (Mar. 31, 1989).” Anderson v. Mitchell, 219 WL 1296458 (Fla. 2nd DCA 2019).

The 2019 version of the statute remains true to the purposes of the 1989 version. In pertinent part, it reads as follows:

(4) Except as specified in this subsection, each crash report made by a person involved in a crash and any statement made by such person to a law enforcement officer for the purpose of completing a crash report required by this section shall be without prejudice to the individual so reporting. Such report or statement may not be used as evidence in any trial, civil or criminal. 

Section 316.066(4), Florida Statutes (2019).

Interestingly, even after the substantial changes made in 1989, courts continued to refer to the statute as creating an “accident report privilege.” See, e.g., Perez v. State, 630 So. 2d 1231, 1232 (Fla. 2d DCA 1994)Wetherington v. State, 135 So. 3d 584, 585 (Fla. 1st DCA 2014)Alexander v. Penske Logistics, Inc., 867 So. 2d 418, 420 (Fla. 3d DCA 2003). Some courts have also used language describing the post-1989 version of section 316.066(4) as making the statements both inadmissible and privileged. See, e.g., Perez, 630 So. 2d at 1232; Nelson v. State Dep’t of Highway Safety & Motor Vehicles, 757 So. 2d 1264, 1265 (Fla. 3d DCA 2000).

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accident-1307665-162x300Most workers’ compensation and personal injury lawyers have had the occasion to deal with workers’ compensation liens. The lien, which is established by section 440.39, Florida Statutes, becomes an issue when the injured employee who has received workers’ compensation benefits also receives compensation from a third party tortfeasor in connection with the same accident. (While employers have workers’ compensation immunity providing protection against civil liability, many work-related accidents are caused by parties that don’t have the immunity.) The instructions for handling the lien are set forth in 440.39(3)(a) and Manfredo v. Employer’s Casualty Insurance Company, 560 So.2d 1162 (Fla 1990). (Read this blog for further explanation: Florida Workers’ Compensation Liens — 440.39, the Manfredo Formula, etc.)

Few lawyers realize that workers’ compensation employers and carriers (E/C) may bring a lawsuit against the third party tortfeasor in the claimant’s name in an effort to recoup their expenditures. This is authorized by 440.39(4)(a). The right is limited to a one year period, from the period beginning one year after the cause of action has accrued to two years following accrual of the action, and may only be brought if the workers’ compensation claimant fails to bring the suit within one year of the cause of action. If E/C fails to bring suit during this one year time period, it loses the right to do so. 440.39(4)(b).

Regardless of who brings the lawsuit, the rights of both the E/C and the claimant must be taken into account. E/C cannot disregard the claimant’s right to a say in the third party damages and the claimant cannot ignore E/C’s 440.39 lien right.

calculator-300x200In the context of personal injury cases, a lien is the right of a non-party to be reimbursed from the proceeds of a case for payments made on behalf of the individual for whom the proceeds are intended. Such liens include for expenditures related to property damage, workers’ compensation benefits, health insurance, Medicare and Medicaid.

Clients and their lawyers who ignore liens do so at their peril. This blog focuses on the Medicaid lien.

Title XIX of the Social Security Act authorizes payments for medical assistance and related assistance to qualifying individuals. Florida’s Agency for Health Care Administration (AHCA) is designated as the single state agency authorized to make the payments. § 409.902(1), Florida Statutes. § 409.10, known as the as the “Medicaid Third-Party Liability Act,” creates the Medicaid lien. Subsection (1) provides:

It is the intent of the Legislature that Medicaid be the payor of last resort for medically necessary goods and services furnished to Medicaid recipients. All other sources of payment for medical care are primary to medical assistance provided by Medicaid. If benefits of a liable third party are discovered or become available after medical assistance has been provided by Medicaid, it is the intent of the Legislature that Medicaid be repaid in full and prior to any other person, program, or entity. Medicaid is to be repaid in full from, and to the extent of, any third-party benefits, regardless of whether a recipient is made whole or other creditors paid. Principles of common law and equity as to assignment, lien, and subrogation are abrogated to the extent necessary to ensure full recovery by Medicaid from third-party resources. It is intended that if the resources of a liable third party become available at any time, the public treasury should not bear the burden of medical assistance to the extent of such resources.

In Arkansas Department of Health & Human Services v. Ahlborn, 547 U.S. 268 (2006), the United States Supreme Court ruled that the federal Medicaid Act’s anti-lien provision preempts a State’s effort to take any portion of a Medicaid recipient’s tort judgment or settlement not “designated as payments for medical care.” Id. at 284.

The language of 409.902(1), which speaks in terms of full recovery, and the Ahlborn opinion appear to be at odds. Because the United States Supreme Court is the final word on this subject matter, which involves the application of federal law — Title XIX of the Social Security Act — the Florida Legislature created an avenue for a Medicaid recipient to file a petition under chapter 120, Florida Statutes, with the Division of Administrative Hearings (“DOAH”) to prove “that Medicaid provided a lesser amount of medical assistance than that asserted by” the Agency for Health Care Administration. § 409.910(17)(b), Fla. Stat.

Eady v. State of Florida, Agency for Health Care Administration (Fla. 1st DCA, Sept. 12, 2019) should be considered the road map for handling Medicaid lien administrative hearings in Florida. Brandon Eady sustained catastrophic injuries in a motor vehicle crash. Florida’s Medicaid program paid $177,747.91 for his medical care. Eady later entered into confidential settlements with various at-fault parties totaling $1,000,000. He filed a petition under § 409.910(17)(b), Fla. Stat. to reduce the Medicaid lien.

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Limiting situations that could give rise to (1) disruption of family harmony and (2) fraud or collusion between family members is a legitimate public policy. In this vein, Florida once barred all personal injury negligence actions by one family member against another. In Orefice v. Albert, 237 So.2d 142 (Fla. 1970), a case in which the mother of a child killed in an airplane crash sought recovery in both her and her son’s names from the boy’s father, the Florida Supreme Court stated:

It is established policy, evidenced by many decisions, that suits will not be allowed in this state among members of a family unit for tort. Spouses may not sue each other, nor children their parents. The purpose of this policy is to protect family harmony and resources.

237 So.2d at 145.

Parental/child immunity has its origins in an 1891 Mississippi case which based its decision on the importance of “peace of society … [and] the repose of families.” Hewllette v. George, 68 Miss. 703, 711, 9 So. 885, 887 (1891). Florida adopted the rule and recognized it in several cases. Orefice v. Albert, 237 So.2d 142 (Fla. 1970)May v. Palm Beach Chemical Co., 77 So.2d 468 (Fla. 1955).

Parental/child immunity was abrogated by the Florida Supreme Court in Ard v. Ard, 414 So.2d 1066 (Fla.1982).

Ard involved a lawsuit brought by a minor child seeking compensation for serious personal injuries caused by the negligence of his mother. The defendants raised the doctrine of parental immunity as a defense. On both conflict and great public importance jurisdiction, the case ended up in the Florida Supreme Court, which decided as follows:

While we reaffirm our adherence to parental/family immunity, we hold that, in a tort action for negligence arising from an accident and brought by an unemancipated minor child against a parent, the doctrine of parental immunity is waived to the extent of the parent’s available liability insurance coverage. If the parent is without liability insurance, or if the policy contains an exclusion clause for household or family members, then parental immunity is not waived and the child cannot sue the parent. (Bold added for emphasis.)

The doctrine of interspousal tort immunity barring actions by one spouse against another has a long and established history in Florida law. See Corren v. Corren, 47 So.2d 774, (Fla. 1950). The doctrine has its origins in the fiction that the marriage of two people creates a unified entity of one singular person. Corren, supra. The reasoning was that a person or entity cannot sue itself. Sturiano v. Brooks, 523 So. 2d 1126, 1128 (Fla. 1988).

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