Workers injured in motor vehicle crashes while in the course and scope of employment may be eligible for compensation through uninsured/under-insured (UM/UIM) motor vehicle insurance. UM covers losses sustained by the insured, passengers, and family members through the fault of a party who fails to maintain Bodily Injury (BI) insurance. Hit-and-run and “phantom vehicle” scenarios also fall under UM coverage. UIM covers losses that exceed the limits of coverage available under the at-fault party’s BI insurance. Those same injured workers could also be eligible for workers’ compensation benefits for the same accident.
Section 440.39(3)(a), Florida Statutes (2019) states that in actions by the employee against a tortfeasor, the employee or his representative “shall sue for the employee individually and for the use and benefit of the employer, if a self insurer, or employer’s insurance carrier, in the event compensation benefits are claimed or paid….” Id. This means that the workers’ compensation insurance carrier has a lien against any judgment or settlement ultimately recovered by the employee. Id.
UM/UIM benefits are not subject to the workers’ compensation lien. See Volk v. Gallopo, 585 So.2d 1163 (Fla. 4th DCA 1991).
Section 627.727(6)(a) outlines the procedure for an injured person or, in the case of death, the personal representative to settle a claim with a liability insurer and its insured while maintaining the right to seek UIM. The UIM carrier must be notified in writing of the proposed settlement. The underinsured motorist insurer then has a period of 30 days after receipt of the proposed settlement to consider authorization of the settlement or retention of subrogation rights. If the UIM insurer authorizes the settlement or fails to respond timely, the injured person or PR may proceed to execute a full release in favor of the underinsured motorist’s liability insurer and its insured and finalize the proposed settlement without prejudice to any underinsured motorist claim.
In Metrix South v. Rose, 758 So. 2d 1259 (Fla. 4th DCA 2000), the liability carrier tendered its policy limit of $100,000. The UIM insured, who had also received workers’ compensation benefits for the same accident, then requested permission from the UIM insurer to accept the $100,000. The UIM insurer refused permission to settle and, instead, chose to pay the $100,000. The workers’ compensation carrier then filed a notice of lien seeking partial distribution of the $100,000 payment. The claimant/UIM insured countered by arguing, based on Volk v. Gallopo, 585 So.2d 1163 (Fla. 4th DCA 1991), that the $100,000 paid by the UIM insurer was not subject to an equitable lien by the workers’ compensation carrier. The trial court agreed with the injured worker. The trial court was reversed on appeal, with the Fourth DCA reasoning that the $100,000 paid by the UIM carrier was the equivalent of a settlement with the liability insurer. The court held “that the trial court erred in characterizing the $100,000 payment … as UM benefits and not a judgment or settlement recovered by the employee,” noting, “if the UM carrier approves a settlement, those proceeds are not considered UM benefits.” Id.
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