Articles Posted in Workers’ Compensation

consequences.jpgFor too long, Florida employers and their workers’ compensation insurance carriers have been able to accuse employees of insurance fraud without consequence if proven wrong. No longer.

Until the recent decision in Carrillo v. Case Engineering Inc./Claims Center, (Fla. 1st DCA 2-11-2011), employers and their insurance carriers were free to assert the so-called “fraud defense” without regard for any negative consequences. Accordingly, with nothing to lose and much to gain, namely, claimants losing the right to all benefits, combined with an absurdly low standard of proof, carriers have used the defense indiscriminately for many years. In far too many cases, the calculation has been simply to throw the defense on the wall and hope that it sticks. If nothing else, it was a way of leveraging injured workers to settle their cases for less than full value.

Carrillo has changed the no risk element of the defense.

One of the few ways in which injured workers (claimants) can be awarded attorneys fees against employers and their insurance carriers, a valuable benefit, is if “a carrier or employer denies that an accident occurred… and the claimant prevails on the issue of compensability.” Florida Statute section 440.34(3)(c).
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Florida Statute Section 440.09(4)(a) provides that an employee shall not be entitled to workers’ compensation benefits if the employee has intentionally or knowingly engaged in any of the acts described in s. 440.15 for the purpose of securing workers’ compensation benefits.

Knowingly presenting false ID to obtain employment is an act described in s. 440.15 as being prohibited. Will performing such an act prevent an employee injured on the job from receiving workers’ compensation benefits?

In Matrix Employee Leasing and FCIC/First Commercial v. Hernandez, 975 So.2d 1217 (Fla. 1st DCA 2008), Mr. Hernandez obtained employment by presenting an invalid social security card. The employer did not learn that the card was invalid until the day Mr. Hernandez was hurt on the job.

Relying on 440.15 and 440.09, the Employer/Carrier denied benefits. The claimant countered that because the invalid ID was used to obtain employment rather than secure workers’ compensation benefits, benefits should not be denied. The JCC [Judge of Compensation Claims] agreed, ordering the E/C to pay workers’ compensation benefits. The E/C appealed the JCC’s order.
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Not surprisingly, in Jennifer Kauffman v. Community Inclusions, Inc./Guarantee Insurance Company, filed on March 23, 2011, the Florida First District Court of Appeal issued an opinion finding constitutional a Florida law, Statute 440.34, that is designed to limit the ability of injured workers to obtain workers’ compensation benefits.

The Jennifer Kauffman appeal arose out of a lower court order awarding Ms. Kauffman’s attorney a fee in the amount of $648.41. The employer/carrier were ordered to pay the fee because they had lost at the trial level in their effort to deny workers’ compensation benefits to Ms. Kauffman, who was injured on the job. Her attorney spent 100.3 hours in the successful prosecution of the claim, meaning that he was awarded $6.48 per hour. (Although JCC E. Douglas Spangler, Jr. concluded in his appealed court order that the fee was patently unreasonable, he felt constrained by the statute to award the amount he did. In his opinion, based on evidence presented at the fee hearing, a reasonable fee would have been $25,075. Judge Spangler was also dismayed that the employer/carrier were able to pay their own defense attorney $14,720 in a losing effort.)
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Since the establishment of a workers’ compensation system in Florida more than 80 years ago, business and insurance interests have steadily tried to whittle away workers’ rights with varying degrees of success. The high water mark for them arrived in the late 1990s with the election of Jeb Bush as Florida’s Governor. For the next eight years, injured workers absorbed one crippling body blow after the other from Bush and his merry band of right-wing zealots in the Florida Legislature anxious to maximize the profits of the business community at the expense of individual rights. (Jeb adopted for Florida many of the measures that his brother George before him had imposed in Texas during his reign as that state’s Governor. Get the picture?)

One of the more onerous examples of rights-limiting workers’ compensation imposed in Florida is set forth at Section 440.09(1)(b) of the Florida Statutes. This section, known as the Major Contributing Cause (MCC) Doctrine, places the burden on injured workers to prove that the industrial accident is more than 50% responsible for causing the injury. An injured worker who fails to meet this burden will be denied ALL medical care and lost wage benefits from the employer. (In contrast, the personal injury system does not summarily deny compensation to persons with pre-existing conditions whose injuries were activated, i.e., made to become symptomatic, or aggravated (permanently worsened) by an accident. Instead, the finder of fact carves out the pre-existing element from the recovery and awards the difference. Not so under Bush’s MCC system.)

The MCC is used as a defense in many cases. The E/C try to blame 50% or more of a claimant’s injury on a pre-existing condition. For older workers and those with similar prior complaints, the defense can be difficult to overcome. Sadly, many an injured worker has been denied workers’ compensation benefits because of the MCC.

Fortunately, the First District Court of Appeal has carved out an important exception to the MCC doctrine. In Pearson v. Paradise Ford, 951 So.2d 12 (Fla. 1st DCA 2007), the court held that an employee need not meet the rigorous MCC requirements when her or his pre-existing condition is occupationally related.
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Neither railway workers nor seamen injured on the job are covered by any state workers’ compensation system. However, they are not left unprotected. Both are covered by systems that in many respects surpass anything available under any state workers’ compensation system.

Railway workers are covered by the Federal Employees’ Liabilities Act (FELA), while seamen accidents are governed by the Jones Act. The two bodies of law are nearly identical in substance and form.

In contrast, there are significant differences between FELA/Jones Act and state workers’ compensation systems.

State workers’ compensation systems are no-fault systems, meaning that injured employees need not show that their injuries were caused through some fault of the employer. As long as the accident happened in the course and scope of the employment, the injured worker should be covered. Railway workers and seamen must prove negligence on the part of the employer.

Negligence can sometimes be difficult to prove. However, because of the inherent dangers involved in railway and maritime work, the common law (case derived law) has evolved to make the standard of proof lower than it is in other types of negligence cases. In other words, it is somewhat less difficult to prove negligence in railway and seamen accidents than it is in other types of cases.

There is also a difference in the type and quality of benefits available between the two systems.

Most, if not all, state workers’ compensation systems bar compensation for pain and suffering. Lawmakers have decided that this is a fair tradeoff for not having to prove negligence. FELA and the Jones Act do not bar compensation for pain and suffering.
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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.
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law books.jpgIn my opinion, the most important Florida workers’ compensation case of all time is Aguilera v. Inservices, Inc., 905 So.2d 84 (Fla., 2005). Aguilera made it clear that workers’ compensation insurance carriers and adjusters are not immune from being sued for the tort of intentional infliction of emotional distress where their conduct in handling a claim is more than simply bad faith or a breach of contract, but where the conduct is intentional and outrageous. What this means is that carriers and adjusters can be sued in circuit court for damages caused by outrageous conduct.

The Aguilera decision reinstated a lawsuit, which had been dismissed by a lower appellate court, the 3rd DCA, brought by an injured worker against the workers’ compensation carrier and claims adjuster. Although a confidential settlement was reached in the case, word on the street is that the case settled for in excess of one million dollars. Given the damage caused by their outrageous conduct, this was a small price to pay.

This Florida Supreme Court decision has gotten the attention of workers’ compensation insurance companies and their claims adjusters. No longer can claims be handled with complete indifference and a lack of regard for the health, safety, and welfare of injured workers without consequence. This is not to say that injured workers get everything they want. This is far from the case. There is still room for legitimate disputes. What the decision does mean is that there is no place in the workers’ compensation system for mean-spirited claims handling.

UNDERLYING FACTS:

  • On April 21, 1999, Aguilera was struck by a forklift and pushed against a pallet. He suffered immediate injuries and was rushed to the emergency room. Testing performed in the ER showed blood in Aguilera’s urine.
  • Subsequently, Aguilera began to complain of kidney and bladder pain.
  • On May 24, after two physicians examined him and concluded that he could not return to work, Aguilera’s attorney requested that he be examined by a board certified urologist.
  • The workers’ compensation insurance carrier denied authorization of the urologist, asserting that Aguilera’s injury was not work related.
  • On June 17, 1999, the insurance carrier was again notified that urological care was now needed on an emergency basis because Aguilera’s urine had begun to smell like feces.
  • On June 21, Aguilera was advised that his workers’ compensation benefits were being terminated as of July 9, 1999, notwithstanding the report of two doctors, including the opinion of the insurance carrier’s own doctor, that he should not return to work.
  • On June 25, 1999, the insurance company intervened and blocked Aguilera’s receipt of medication prescribed by the hospital emergency room doctor for his urinary condition.
  • On June 30, the carrier again denied authorization of emergency medical care for the urinary problems, claims it was not medically necessary.
  • On July 7, 1999, Aguilera’s treating doctor advised the carrier that his need for medical care was urgent and that his condition was deteriorating.
  • On July 9, 1999, the carrier’s own doctor issued prescriptions for various urinary tests.
  • On July 30, 2009, the adjuster intervened and simply unilaterally cancelled some of the medical testing.
  • Testing that was ultimately done revealed that Aguilera had a fistula, a hole in his bladder.
  • On August 6, 1999, Mippy Heath became the new insurance company case manager. She was specifically told by Aguilera’s attorney that she should have no direct contact with Aguilera. She also agreed that no intervention with Aguilera’s care would be attempted.
  • On August 19, Aguilera’s attorney alerted the insurance carrier that the injured employee was in need of emergency care for the fistula. Heath refused the authorization and insisted on a second opinion.
  • On August 25, Heath secretly appeared at the physician’s office for Aguilera’s appointment. She urged Aguilera to lie to his attorney that she has not appeared at his doctor’s appointment.
  • Subsequently, Heath insisted that Aguilera submit to the administration of invasive tests that were not only painful but also contraindicated by his then-present medical condition. The insurance company then proceeded to use Aguilera’s refusal to submit to the tests as a basis to justify a refusal and denial of his then needed critical, surgical treatment.
  • By November 4, 1999, Heath, the case manager, and a nurse practitioner also employed by the insurance carrier had changed positions and agreed that Aguilera needed immediate hospitalization for surgery. However, the insurance carrier’s adjuster again intervened and overruled the decision of medical personnel simply because he wanted a second opinion from a general surgeon. Notwithstanding this intervention, the insurance carrier did not follow its own position and authorize Aguilera to consult with a general surgeon, but instead again changed course and sent Aguilera to a gastroenterologist. At this point in time, Aguilera had allegedly been urinating feces and blood for over six months.
  • Aguilera’s ultimate surgery, the need for which had been diagnosed as an emergency as early as June of 1999, was not finally authorized or approved until March 22, 2000. By this time, according to the allegations, Aguilera had been urinating feces and blood for over ten months.

Florida’s workers’ compensation laws provide employees limited medical and wage loss benefits, without regard to fault, for losses resulting from accidental workplace injuries. The carrier’s failure to provide benefits in a timely manner or at all may result in the assessment of minor monetary penalites and interest. However, the workers’ compensation system does not have a mechanism for making carriers/adjusters accountable for serious injuries caused by outrageous claims handling.

In exchange for not having to prove fault for losses resulting from accidental injuries, employees have relinquished their right to seek common law recovery from the employer for those injuries. This concept is commonly known as “workers’ compensation immunity.” (See Florida Statute 440.11.)
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At the urging of Governor Jeb Bush, Florida’s Republican-controlled legislature in 2002 passed a workers’ compensation bill designed to limit carrier-paid attorney’s fees to claimants’ attorneys. The measure was challenged in the courts by claimants (injured workers), who argued that it was unconstitutional (denied access to courts & equal protection) and that it should be interpreted to allow for “reasonable” attorney’s fees.

Five years after the bill’s effective date, the Florida Supreme Court, in Murray v. Mariner Health and Ace USA, 994 So.2d 1051 (Fla.2008), held that the statute provided for reasonable attorney’s fees. The court did not rule on the constitutional issues.

In a clear rebuke to the Florida Supreme Court, in it’s next legislative session, which began on March 1, 2009, less than seven months after the Murray decision, the still-again Republican-controlled legislature took another shot at limiting fees. What it did was remove the word “reasonable” from Florida Statute 440.34. The Legislature’s goal was to make it difficult for injured workers to obtain adequate legal representation by denying their attorneys reasonable attorney’s fees.

In the Murray case, Ms. Murray was successful at the trial level in convincing a judge of workers’ compensation claims (JCC) that her injuries were sustained in a work-related accident. (The employer/carrier (e/c) had denied her injuries.) In a subsequent attorney’s fee hearing, the JCC found that claimant’s counsel expended eighty hours of reasonable and necessary time on the case. However, the JCC, although concluding in his written order that $16,000 was a reasonable fee, felt constrained by the statute and awarded only $684.84, or an hourly rate of $8.11. According to the JCC, this amount was “manifestly unfair.” (Note: the e/c in this case paid their attorney $16,050 (135 hours at $125 an hour) in the unsuccessful effort to resist paying benefits.) It was this order that was appealed and eventually made its way to the Florida Supreme Court. As a result of the decision, Ms. Murray’s attorney was awared $16,000 for his efforts at the trial level.
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A statute of limitation is a provision that ends a person’s or company’s right to sue with regard to a legal dispute. Every legal dispute in Florida is subject to a statute of limitation, with the time period in any particular matter depending on the nature of the dispute. Florida Statute 95.11 sets forth the statute of limitation periods for most legal disputes. The statute of limitation for workers’ compensation cases is set forth in Florida Statute 440.19.

The workers’ compensation statute of limitation is a provision that ends a person’s right to claim benefits or sue for compensation and damages unless the person meets certain conditions. For accident dates after January 1, 1994, a claim or petition for benefits is forever barred unless it is filed within (1) two years of the date of the injury; or (2) after the initial two years, within one year of the last payment of compensation or provision of remedial treatment, care or attendance.

The start of every statue of limitation period is triggered by an occurence or event. For example, in a breach of contract matter, the triggering event is the breach of the contract. For wrongful death, it is the date the cause of the wrongful death was confirmed or suspected, typically the date of the accident. In workers’ compensation cases, the work-related accident starts the limitation period running.

In cases involving clearly identifiable accidents and injuries, such as breaking an ankle after falling from a ladder, the date of accident as the triggering event is obvious. However, not all triggering events are so obvious. For example, a worker may feel a twinge in his back from lifting a heavy box, and for a time feel only minor discomfort, then one day, even a week or two later, experience full-blown symptoms indicative of a bad herniated disc injury. Under this scenario, the statute of limitation period may not begin to run until the full-blown symptoms manifested, which is when the injured worker, as a reasonable person, should recognize the “nature, seriousness, and probable compensable character of his injury or disease.” [see Herb’s Exxon v. Whatmough, 487 So. 2d 1169, 1172 (Fla. 1st DCA 1986)]. In other words, the triggering event may come after the actual date of accident.

Other examples of how the workers’ compensation statute of limitation is applied:

  • Occupational Disease: An occupational disease is one that arises from the hazard of a disease particular to a job that distinguishes it from the usual run of occupations, or the incidence of the disease is substantially higher in that occupation [see Florida Statute 440.151]. In cases involving occupational disease, the statute of limitation clock begins to run from the date of disability. Disability is defined in Section 440.02(13) as “incapacity because of the injury to earn in the same or any other employment the wages which the employee was receiving at the time of the injury.” This means that the date when the SOL clock begins to run may be different from the date the injured worker was first exposed or when he or she detected the disease, or even when symptoms first appeared.
  • Injuries from Repetitive Trauma: A repetitive trauma injury is one in which disability results from months or even years of minor, but repetitive trauma. (My first workers’ compensation trial involved a repetitive trauma injury. We alleged and, fortunately, were able to prove, that our client’s serious back condition developed from years of lifting heavy bed box mattress frames from ground level to overhead shelves.) In these cases, the SOL begins to run from the date of the disability or the date of last injurious exposure, whichever is later.

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Many factors go into determining the settlement value of a Florida workers’ compensation case. Although the opposing parties are seeking different outcomes – the Claimant wants to recover as much as possible, while the Employer/Carrier wishes to settle for as little as possible – each side benefits from performing a fair and honest evaluation; neither party gains an advantage from being deluded about a case’s true value.

This is not to say that the parties, after performing their assessments, will always arrive at similar conclusions. Law is more art than science. Judgment calls based on a countless number of variables often result in significantly different conclusions. The goal of successful negotiating is to narrow the differences to an acceptable agreement.

Before considering the factors that influence case value, it should be noted that no party to a workers’ compensation case can be forced to settle. Not even a judge of workers’ compensation claims can force a settlement on the parties. Moreover, there is no jury system in workers’ compensation where a verdict is reached awarding a lump sum of money. Most workers’ compensation cases are mediated, but the settlement can only come through an agreement of the parties.

It should also be noted that compensation for non-economic damages (sometimes referred to as, Pain & Suffering) is not awardable in workers’ compensation cases. (See these blogs: personal injury; wrongful death.)
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