Jeffrey P. Gale, P.A. /// Don’t Undervalue Potency of Florida Workers’ Compensation Statute 440.39

It is not uncommon for a personal injury case and a workers’ compensation case to arise out of the same accident. This is often the case when an employee is hurt in the course and scope of his job through the negligence of a third-party. Our law firm handles both types of cases.

Florida Statute 440.39 gives the employer or its workers’ compensation insurance carrier, as the case may be, lien rights in the proceeds of any recovery made in the personal injury liability case. In consideration of this right, the employer and carrier have a “duty to cooperate” with the employee in prosecuting claims and potential claims against third-party tortfeasors. See sec. 440.39(7).

The court in Shaw v. Cambridge Integrated Servs. Group, Inc., 888 So.2d 58, 64 (Fla. 4th DCA 2004), declared that the duty to cooperate found in section 440.39(7) is “[o]ne of the most important rules and conditions stated in the Workers Compensation statute.” For example, an employer/carrier’s failure to cooperate can have adverse consequences on their lien rights. 440.39(3)(a) provides that

the failure by the employer or carrier to comply with the duty to cooperate imposed by subsection (7) may be taken into account by the trial court in determining the amount of the employer’s or carrier’s recovery, and such recovery may be reduced, as the court deems equitable and appropriate under the circumstances, including as a mitigating factor whether a claim or potential claim against a third party is likely to impose liability upon the party whose cooperation is sought, if it finds such a failure has occurred.

A violation of 440.39 can also subject the employer/carrier to a spoliation claim for failing to preserve evidence. The cause of action is not barred by the employer’s workers’ compensation immunity outlined in section 440.11, Florida Statutes. See General Cinema Beverages of Miami v. Mortimer, 689 So.2d 276, 278 (Fla. 3d DCA 1995). 

Discovery

The statute can be useful for discovering helpful information from the employer/carrier regarding the third-party case. While interrogatories are not permitted in workers’ compensation cases, requests for production and depositions are.

In Southeast Recycling Corporation v. McClure, 658 So.2d 670 (Fla. 1st DCA 1995), the Claimant was injured while cleaning a densifier machine when its operating system moved unexpectedly. The employer/carrier was ordered by the Judge of Compensation Claims to produce the densifier machine for inspection, testing, and videotaping as well as certain specified documents related to the machine’s manufacture and maintenance. The Order was upheld on appeal.

The duty to cooperate in providing discovery is not boundless. In Suburban Propane v. Estate of Pitcher, 564 So.2d 1118 (Fla. 1st DCA 1990), the employer/carrier were not required to furnish certain information to the claimant’s estate concerning the installation, maintenance and repair, and/or records kept in connection with the customer location where the deceased died because “petitioner had expressly admitted that it was on a fishing expedition to establish employer liability. Therefore, it could not be said that the depositions sought to be compelled involved an investigation or prosecution of a claim or a potential claim against a third-party tortfeasor.” The court pointed out that its decision should not be read to suspend a party’s duty to cooperate prior to filing a lawsuit.

Spoliation

In General Cinema Beverages of Miami v. Mortimer, 689 So.2d 276, 279 (Fla. 3d DCA 1995) the court explained that the duty to cooperate “must necessarily include a duty to preserve evidence.” Accord Shaw v. Cambridge Integrated Servs., 888 So.2d 58, 61-62 (Fla. 4th DCA 2004) (recognizing that section 440.39(7), Florida Statutes, creates an independent cause of action for spoliation of evidence).

Citing these authorities, the appellate court in Gayer v Fine Line Construction & Electric, Inc. 970 So.2d 424 (Fla. 4th DCA 2007), concluded that an employer had a duty to preserve evidence for the injured laborer’s claim against a third-party tortfeasor. Gayer sustained severe injuries when he fell from a ladder furnished to him by Fine Line, his employer. He considered suing the ladder manufacturer, but the ladder could not be located. Claiming this impaired his ability to prove the lawsuit against the manufacturer, Gayer sued the employer for spoliation.

Generally, to establish a claim for spoliation, the plaintiff must prove six elements: “(1) existence of a potential civil action, (2) a legal or contractual duty to preserve evidence which is relevant to the potential civil action, (3) destruction of that evidence, (4) significant impairment and the ability to prove the lawsuit, (5) a causal relationship between the evidence destruction and the inability to prove the lawsuit, and (6) damages.” Flagstar Cos. v. Cole-Ehlinger, 909 So.2d 320, 322-23 (Fla. 4th DCA 2005) (internal quotations omitted).

The issue on appeal in Gayer was whether element two, duty to preserve, existed. Citing section 440.39(7), Florida Statutes, Gayer argued that his employer had a statutory duty to preserve evidence. The Fourth DCA agreed. The court noted that the purpose of section 440.39(7) is to preserve and aid in pursuing causes of action against third-party tortfeasors and to impose a duty of cooperation to that end.” General Cinema, 689 So.2d at 279.

Having possession of the evidence also matters. Gayer got his job with Fine Line through a help supply services company, Labor Finders of Broward, Inc. (Labor Finders), which leased workers to construction companies, paid the workers an hourly wage, and provided workers’ compensation benefits. Both Fine Line and Labor Finders were considered Gayer’s employer under the workers’ compensation system. Because Labor Finders never obtained possession of the ladder, the appellate court held that it had no duty under section 440.39(7) to acquire and preserve evidence that was never in its possession. The same result was reached in Barbosa v. Liberty Mut. Ins. Co., 617 So.2d 1129, 1129-30 (Fla. 3d DCA 1993), a case cited by the court in Gayer.

Note of caution: While not imperative, it is almost always advisable to inform the employer in writing to preserve the evidence and the purpose of the request. As stated by the court in Perez v. La Dove, Inc., 964 So.2d 777, 779 (Fla. 3rd DCA 2007), “the purpose of a spoliation claim generally is not served by permitting suit where no notice is given.” An exception to this rule was made in Builder’s Square v. Shaw, 755 So.2d 721, 724 (Fla. 4th DCA 1999), where the Fourth District Court of Appeal allowed a spoliation claim to proceed in a case in which a request for preservation has not been made, but “when the circumstances are such that [the employer] should have known that certain evidence could conceivably be critical to an employee’s claim.” “The Fourth District Court of Appeal apparently imputed to the employer a commonly perceived truth of the times that litigation arising out of the accident was ‘”foreseeable,”‘ if not inevitable, and hence the employer had a duty under section 440.39(7).” La Dove at 779. The La Dove court refused to apply the exception in its case even though the severity of the victim’s injuries limited his ability to make the preservation request.