Articles Posted in Workers’ Compensation

Florida’s workers’ compensation statute of limitations is outlined in section 440.19, Florida Statues (2017). The statute is particular with regard to the requirements workers’ compensation insurance carriers must satisfy to prevail on the SOL defense. This blog points out an approach not addressed in the statute which is used by carriers to bar claims through the SOL defense.

Section 440.19 appears to condition its application on compliance with section 440.185, Florida Statutes. Section 440.185 subsection (3) provides as follows:

Within 3 days after the employer or the employee informs the carrier of an injury the carrier shall mail to the injured worker an informational brochure (italics added) approved by the department which sets forth in clear and understandable language an explanation of the rights, benefits, procedures for obtaining benefits and assistance, criminal penalties, and obligations of injured workers and their employers under the Florida Workers’ Compensation Law.

One could conclude from reading sections 440.19 and 440.185, that a carrier’s failure to mail the informational brochure would absolutely prevent the SOL defense. Such is not the case. (Here is a link to the approved brochure: Florida Department of Insurance. Page one addresses the workers’ compensation statute of limitations.)

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There is great strength in numbers. You realize that as an advocate for injured workers and a strong defender of civil justice in our state. This is the primary reason why the Florida Workers’ Advocates and the Florida Justice Association have joined forces to stand up for working people at the State Capitol and throughout Florida in a unified manner.

Whether the focus is on the manner in which rates are established or the denial of medical treatment and related benefits for injured workers, the overwhelming theme is that the workers’ compensation system has been skewed in favor of big business and the insurance industry for far too long. We have all represented individuals who have been harmed by this fractured system.

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The parties to a Florida workers’ compensation case have the unique right to conduct discovery depositions even in the absence of a pending claim, which is brought by filing a Petition for Benefits.

The right is granted under Florida Statute 440.30 and is limited to cases where the Claimant is represented by an attorney. (This means that the Employer and Carrier, known collectively as “E/C”, cannot employ the device against an unrepresented Claimant.) Significantly, “[I]f no claim has been filed, then the carrier or employer taking the deposition shall pay the claimant’s attorney a reasonable attorney’s fee for attending said deposition.”

Because both parties may conference separately with authorized medical providers — Section 440.13(4)(c) Florida Statutes grants E/C the right — it is rare for a medical provider to be deposed in the absence of a pending Petition for Benefits. From E/C’s perspective, it can learn what it needs by talking to the doctor privately without having to pay the Claimant’s attorney to attend a deposition.

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Following 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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U.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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Shame 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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Some 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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Florida’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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ISSUE: 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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On 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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