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FLORIDA SUPREME COURT OVERTURNS WORKERS’ COMPENSATION LIMITS ON ATTORNEY FEES PAID BY EMPLOYERS AND CARRIERS

Mary Ann Stiles, Rayford H. Taylor & Rob Grace

The Florida Supreme Court issued its long awaited opinion today in the case of Murray v. Mariner Health and ACE,USA, Case No: SC07-244. The 22-page opinion reflected that five justices thought that the changes to Section 440.34(1)&(3) Fla, Stat. (2003) were ambiguous and needed clarification.

The Court discussed the statutory history of the attorney’s fee provisions and concluded the use of the word “reasonable” in those subsections required that it to interpret the statute. The Court ruled that since there was no statutory definition of “reasonable”, Rule 4-1.5(b)(1) of the Rules Regulating The Florida Bar would be utilized to determine what would be a “reasonable attorney’s fee” in all cases where an employer or a carrier is ordered to pay claimant’s counsel a fee.

The ruling resurrects the Court’s prior decision in Lee Engineering & Construction Co. v. Fellows, 209 So.2d 454 (Fla. 1968) and gives judges of compensation claims the authority to award fees based upon the greater of the statutory percentage or the attorney’s hours. The decision effectively repeals what the Florida Legislature adopted in 2003 and overturns what everyone in Florida’s workers’ compensation system knew was intended as the basis for awarding attorney’s fees. That is, attorney’s fees were to be based solely on a percentage of the benefits secured. In reaching its decision, the Court did not address the constitutional arguments because it interpreted the statute to allow attorneys to obtain fees based solely upon their hours.

It remains to be seen what will be the effects of this decision on Florida’s Workers’ Compensation system. It will now be up to the Governor, the Insurance Commissioner, and the Florida Legislature to address the effects of this ruling on employers, insurers, and the system.

A copy of the opinion is attached to this article.

Click here to read: No. SC07-244 EMMA MURRAY, Petitioner, vs. MARINER HEALTH and ACE USA, Respondents.

ATTORNEY CLIENT COMMUNICATION NO DEFENSE TO ALL DISCOVERY DEPOSITIONS

By Mary Ann Stiles

The First District recently reversed An award of benefits in the face of a statute of limitations defense in Waffle House v. Scharmen.,___ So.2d ___, 2008 WL 2115745 (Fla. 1^st DCA May 21, 2008).

The employer/carrier defended the claim on the basis the claimant had not filed a claim for benefits within two years of the date of accident or within one year of the receipt of benefits. The trial judge awarded benefits and held the employer/carrier had failed to provide the claimant with written notice of rights, and therefore was stopped from asserting the statute of limitations defense. The judge also would not allow the employer/carrier to inquire into whether the claimant’s attorney had advised the claimant about the statute of limitations. If that had occurred, then the claimant had actual knowledge of the statute and its operation.

The appellate court held that an employer/carrier was entitled to depose the claimant’s attorney about whether he had advised the claimant of the relevant statutory requirement, and that conversation was not protected by the attorney-client privilege. The District Court reversed the judge’s ruling and remanded the case for further proceedings and discovery.

CLAIMANTS CANNOT SUE THEIR EMPLOYERS MERELY BECAUSE THEY DENY ONGOING WORKERS’ COMPENSATION BENEFITS

By Mary Ann Stiles

In Coca-Cola Enterprises, Inc. v Montiel,___ So.2d ___, 2008 WL 2038790 (Fla. 2d DCA May14, 2008), the First District Court of Appeals reaffirmed the denial of benefits does not expose an employer/carrier to civil suit..

In this case, the employer paid workers’ compensation benefits following a workplace injury. Coca-Cola subsequently denied further benefits because the physician concluded the claimant’s condition was due to degenerative conditions, rather than work. The claimant sued Coca-Cola for negligence in civil court, and Coca-Cola filed a motion for summary judgment.

The trial judge denied the summary judgment motion on the basis that denial of further benefits estopped Coca-Cola from asserting or claiming workers’ compensation immunity. The Second District reversed and held Coca-Cola was entitled as a matter of law to workers’ compensation exclusivity because merely denying benefits did not remove a dispute from the workers’ compensation system. To rule otherwise would strip an employer of the defense and completely defeat the purpose of the law.

A denial of further or future benefits does not expose an employer to civil negligence liability or permit a claimant to pursue benefits outside the workers’ Compensation system.

FIRST DISTRICT COURT OF APPEALS AFFIRMS A PREVAILING EMPLOYER/CARRIER’S ENTITLEMENT TO SEEK ATTORNEY FEE AND COSTS

By Mary Ann Stiles

In Gluckenberger v. Seminole County, ___ So.2d ___ 2008 WL 1805484 (Fla. 1^st DCA April 27, 2008), it was confirmed a judge of compensation claims does have jurisdiction to award attorney fee and costs under Section 440.34(3) to prevailing employer, even though the employer did not preserve that issue in the order denying the claimant benefits. Furthermore, there was no requirement that a judge find the claims were frivolous or fraudulent before such costs could be assessed against the claimant because the statute contained no such requirement.

Likewise, in F.A.Richard & Associates v. Fernandez, 975So.2d 1224 (Fla. 1^st DCA 2008), an employer/carrier’s failure to plead entitlement to costs did not prohibit a claim for recovering costs after prevailing against a claimant. The court held all parties are on notice the statute provides for a prevailing part to seek to recover such costs as a result of the filing of a claim.

MERELY PRESENTING A FALSE SOCIAL SECURITY CARD TO EMPLOYER DOES NOT AUTOMATICLLY DEPRIVE AN EMPLOYEE OF WORKERS’ COMPENSATION BENEFITS

By Mary Ann Stiles

In Matrix Employee Leasing v. Hernandez, 975 So.2d 1217 (Fla. 1st DCA 2008), and employee presented a false social security card to obtain employment. Following a work-related injury, the employer discovered the employee’s card was invalid and denied benefits based on fraud. On appeal, the court held Section 440.105 did not deprive the claimant of entitlement to workers’ compensation benefits because the false social security information was not presented for the purpose of obtaining benefits. Therefore, he could seek to recover such benefits if appropriate.

EMPLOYEE LEASING COMPANY NOT RESPONSIBLE FOR WORKERS’ COMPENSATION COVERAGE IN ALL CASES

By Mary Ann Stiles

The First District recently held in Crum Services v. Lopez, 975 So.2d 1184 (Fla. 1^st DCA 2008) an employee leasing company is not responsible for a claimant’s workers’ compensation coverage where there is no evidence the claimant was an employee of the leasing company at the time of the accident. The court also rejected the argument the claimant was a statutory employee of the leasing company. However, the claimant could sue the contractor or primary employer under Section 440.11 as an uninsured employer.

What is also not clear from the appellate court’s decision is how the fact she did not know about the purported rating affected her waiting over four years to file a petition to seek a determination of whether she had sustained a compensable injury. After all, the right to permanent benefits would only arise if she had an otherwise compensable accident or injury.

It appears that employer/carriers need to notify claimants of any change in their cases, even when the compensability of claim has been denied and the employer/carrier has otherwise complied with the statute. While it is not clear from the opinion that failure of an employer/carrier to take some action will automatically revive an otherwise time-barred claim, if does appear that failure to disclose a material fact might have that result.