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monopoly card.jpgOne would hope and expect in a society purporting to be civilized, that the negligence of any person or company could not be waived before it happened. Astonishingly, Florida law allows just that: pre-accident releases/waivers barring actions based on the subsequent negligence of the released party.

In other words, Florida law sanctions the equivalent of the Monopoly game, “Get out of Jail Free” pass to those whose wrongoing may injure or kill others.

Cognizant of the tremendous consquences of this law – for example, no hope of compensation for a catastrophically injured person – Florida courts have at least decided that contracts which purport to release or indemnify a party for its own negligence are looked upon with disfavor and will not be enforced unless the instrument clearly and specifically provides for a limitation or elimination of liability for such acts. University Plaza Shopping Center v. Stewart, 272 So. 2d 507, 511 (Fla. 1973). Moreover, it may be settled law that the word “negligence” must appear in the release. See, Bender v. Caregivers of America, Inc., 42 So.3d 893 (Fla 4th DCA 2010); Travent, Ltd. v. Schecter, 718 So. 2d 939, 940 (Fla. 4th DCA 1998); Witt v. Dolphin Research Ctr., Inc., 692 So. 2d 27, 28 (Fla. 3d DCA 1991); Rosenberg v. Cape Coral Plumbing Inc., 920 So. 2d 61, 66 (Fla. 2d DCA 2005); and Levine v. A. Madley Corp., 516 So. 2d 1101 (Fla. 1st DCA 1987).
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worker.jpgThe Fair Labor Standards Act (FLSA) requires employers to pay employees overtime pay, at a rate of time and a half, for all hours worked in excess of 40 hours per week. See Section 207 of the Act.

To calculate the amount of compensation an employee is owed under the FLSA, the overtime rate (OT rate) must be determined.

The first step in this equation is establishing the “regular rate of pay,” the hourly rate. If the employee has not received employer-furnished fringe benefits, such as health insurance and housing, the “regular rate of pay” is the hourly rate, and the OT rate is 1/2 of the hourly rate. For example, if the “regular rate of pay” is $10.00/hour, the overtime rate is $5.00.

Where fringe benefits have been provided, their value must be included in the calculation. In the case of health insurance, the fringe benefit value determination is relatively simple to make, with the employer’s share of the premium payment being the actual “value” of the fringe benefit. Where the employer is not making an easily identifiable payment, such as in the case of self-administered medical programs provided by some big emloyers, or where housing is provided by the employer, determining the value of the benefit is not as simple. Not infrequently, the parties will fight over the value of fringe benefits. (Caveat: the employer may try to argue that the fringe-benefit is a form of payment for overtime wages, rather than a benefit which increases the “regular rate of pay.” Paycheck stubs and tax records, among other evidence, must be considered to resolve this dispute.)

Where fringe benefits are part of the calculation, determining the OT Rate is a 3-step process:

Step 1 – Regular Weekly Pay: Hourly rate of pay times (x) hours worked per week plus (+) value of fringe benefit(s). (Example: $10/hr x 62 hours + $50 (weekly insurance premium.))

Step 2 – Regular Rate of Pay: Regular Pay divided (/) by hours per week.

Step 3 – OT Rate: Equals 1/2 of Regular Rate of Pay.

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jury box.jpgJury trials are at the very foundation of American participatory democracy. According to Alexis de Tocqueville, in Democracy in America, “The jury contributes powerfully to form the judgment and to increase the natural intelligence of a people; and this, in my opinion, is its greatest advantage. It may be regarded as a gratuitous public school, ever open, in which every juror learns his rights, enters into daily communication with the most learned and enlightened members of the upper classes, and becomes practically acquainted with the laws, which are brought within the reach of his capacity by the efforts of the bar, the advice of the judge, and even the passions of the parties. I think that the practical intelligence and political good sense of Americans are mainly attributable to the long use that they have made of the jury in civil cases.”

The foundation is at risk.

This point was brought home by U.S. District Judge Gregory Presnell at a recent Federal Court Practice Committee’s meeting in Orlando, Florida. Judge Presnell expressed alarm at the precipitous decline in Federal jury trials. He noted that in the late 1960s, 11 percent of federal civil filings wound up in jury trials, while in 2009, that number had dipped to 1.2 percent. (In the U.S. Middle District of Florida, only 0.8 percent of civil filings were resolved by a jury in 2009.)

Expressing strong feelings about the importance of jury trials, Judge Pressner asked his audience, “Where in a government this complex – and with the difficulties and issues and problems – do you have a system where six or 12 people make a critical decision affecting people’s lives and fortunes?”

The reasons for the decline in civil jury trials at the federal – and the state level – include unfair arbitrary damage caps, mandatory binding arbitration, the creation of causes of action without the right to a jury trial, overly stringent gatekeeping on the part of judges to weed out cases perceived as being weak, and mandatory (although not binding) mediation.
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pills.jpgThe Fair Labor Standards Act (FLSA) requires employers to pay employees overtime pay, at a rate of time and a half, for all hours worked in excess of 40 hours per week. See Section 207 of the Act. However, the FLSA contains many exemptions, including for “administrative” employees, perhaps the most common exemption, and “outside” salespeople.

Novartis is a drug manufacturer. It sells its drugs to wholesalers, who sell to pharmacies, who sell to patients who are prescribed the drugs by their doctors. Novartis benefits from doctors prescribing its drugs.

Novartis employs a small army of individuals who do not sell the drugs directly to the doctors but instead make regular calls on doctors to encourage them to prescribe Novartis drugs to their patients. 2500 of these individuals brought a class action against Novartis for FLSA overtime wages. Novartis argued that they were exempt as outside salespeople and administrative employees. The Plaintiffs countered by arguing that they do not make sales or obtain orders, and thus are not salespeople, and do not exercise discretion and independent judgment, two of the critical indicia for the “administrative” employee exemption.
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mcdonald's.jpgIn a previous blog, The Truth About the McDonalds Coffee Spill Case – Fallacy Debunked, I presented the honest facts about the infamous McDonald’s Coffee Spill case. Sadly, the truth bears little resemblence to the shameless lies spread by Corporate America.

Why would Corporate America lie about this case? Simple. To influence the American public to push for laws making it more difficult for individuals to hold Corporate America accountable for its negligent behavior. In other words, fool people into supporting laws that are harmful to their own and America’s best interests.

Corporate America saw the case, which involved the spilling of coffee and a large jury verdict, as the perfect vehicle for attacking the civil justice system. It figured that unknowing individuals would accept its lies and distortions without question, causing them to revolt against the very system that stands between them and total control by corporate interests. Frighteningly, they figured right. (Even seemingly well-educated people have fallen for the garbage. My rabbi wrongly used the case as the theme of his Yom Kippur sermon. When I called him on it days later, he made further stupid arguments to support his misguided position, unwilling and unable through years of propoganda to admit that he was wrong. He is now my former rabbi because I have chosen to worship elsewhere.)
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congress building.jpgThere is much discussion taking place today concerning whether or not Medicare Set Asides are required in personal injury cases. The answer seems to be No, but the consequences of being wrong have many in the personal injury business, lawyers and insurance companies alike, greatly concerned.

The Medicare Secondary Payer Act of 1980 (“MSP”) was enacted to keep taxpayers from footing past and future medical expenses through Medicare that were provided through primary sources such as workers’ compensation insurance. Congress learned that Medicare was covering these expenses even though those receiving the benefits were also receiving compensation for the same benefits from primary sources.

Until 2010, the MSP’s main focus was on workers’ compensation cases. Injured workers were expected to reimburse Medicare and pay for future medical care related to their accidents from money received through workers’ compensation settlements. Although liability claimants were expected to reimburse Medicare for benefits paid, no issue was made with regard to future benefits.

In 2010, representatives from The Centers for Medicare and Medicaid Services (“CMS”), the federal agency responsible for administering Medicare and Medicaid (as well as a host of other federal programs ) within the Department of Health and Human Services, began suggesting that the MSP applied to future medical services in liability cases. It was pointed out that statutory language with regard to workers’ compensation and liability cases was the same. Speaking about liability cases, Barbara Wright of CMS stated: “So where future medicals are a consideration in arriving at the settlement, appropriate arrangements should be made for appropriate exhaustion of the settlement before Medicare is billed for related services.”

Although the statement was made at a town hall meeting, instead of by formal agency rule making like the Code of Federal Regulations, many concerned parties began to believe that MSA’s were now required in liability cases. Whether this statement and others that have followed have the same force of law as formally issued regulations is creating tremendous confusion and may well be a subject of future litigation.
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chairs.jpgAccidents caused by broken chairs are not uncommon. In some cases, the injuries can be severe (e.g., broken bones; herniated intervertebral discs). Through normal wear and tear, defects can develop that create conditions for imminent accidents. To avoid these dangerous situations, it is necessary to be reasonably observant and even pro-active with regard to determining the condition of chairs. This is especially so for commercial enterprises catering to the public.

In Fontana v. Wilson World Maingate, 717 So. 2d 199 (Fla. 5th DCA 1998), Fontana, while a guest of the defendant/appellee’s hotel, sat in a chair which was defective causing it to collapse and injure her. The defendant did not deny that the chair was defective. However, at trial it argued that the case should be dismissed because there was no evidence that it knew or reasonably should have known of the defect. The trial judge agreed, leading to a directed verdict in favor of the defendant.
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Don Johnson, known as “Sonny Crockett” in the 1980s (84-89) blockbuster television show “Miami Vice,” was awarded $23.2 million by a Los Angeles jury. Johnson sued production company Rysher Entertainment for a share of the profits from the television series, “Nash Bridges” (1996-2001) (co-star: Cheech Marin, of Cheech & Chong fame), in which he played the role of a fictional San Francisco police detective. The award was based on profits accrued to date from the show, which is still being shown in more than 40 countries around the world.
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law books.jpgMcCall vs. Alabama Bruno’s, Inc., 647 So.2d 175 (Fla. 1st DCA 1994): Florida follows the general rule that the employer of an independent contractor is not liable for the contractor’s negligence because the employer has no control over the manner in which the work is done, except when one of three exceptions apply. Those exceptions involve:

  1. Negligence in selecting, instructing or supervising the contractor;
  2. Non-delegable duties arising out of some relation toward the public or the particular plaintiff;
  3. Work which is specially, peculiarly, or “inherently” dangerous.

Peculiar does not mean that the risk must be one which is abnormal to the type of work done, or that it must be an abnormally great risk, but instead refers to a special recognizable danger arising out of the work itself. In order for the vicarious liability rules to apply, it is not essential that the work which the contractor is employed to do be in itself an extra-hazardous or abnormally dangerous activity, or that it involve a very high degree of risk to those in the vicinity. It is sufficient that it is likely to involve a peculiar risk of physical harm unless special precautions are taken, even though the risk is not abnormally great. A “peculiar risk” differs from common risks to which persons in general are commonly subjected by the ordinary forms of negligence which are usual in the community. It must involve some special hazard resulting from the nature of the work done, which calls for special precautions. Restatement (2d) Torts Sect. 416. Rules imposing vicarious liability on employers for the acts of independent contractors arise “in situations where, for reasons of policy, the employer is not permitted to shift the responsibility for the proper conduct of the work to the contractor” and it is commonly stated that “the employer is under a duty which he is not free to delegate to the contractor.” Nondelegable duties have been found under Florida law to arise out of “inherently dangerous activity,” activity involving “inherently dangerous elements,” or out of the creation of an “inherently dangerous condition.”

Webb vs. Priest, 413 So.2d 43 (Fla. 3rd DCA 1982): The general rule in Florida is that an owner is not liable for the acts of an independent contractor except when (a) the activity is inherently dangerous (see Ferguson vs. Westinghouse, 408 So.2d 659 (Fla. 3rd DCA 1981)); (b) the owner/employer had contractually assumed responsibility (Levitz vs. Continental Equities, 411 So.2d 221 (Fla. 3rd DCA 1982)); (c) there is legally imposed responsibility (Concord Florida vs. Lewin, 341 So.2d 242 (Fla. 3rd DCA 1977)); (d) the owner/employer knew or had reason to know that the independent contractor would not perform in a satisfactory manner (Williams vs. Wometco Enterprises, 287 So.2d 353 (Fla. 3rd DCA 1974)); (e) where the independent contractor had apparent authority to act on behalf of the owner/employer (Thomkin Corp. vs. Miller, 156 Fla. 388, 24 So.2d 48 (Fla. 1945).
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hospital.jpgOnce a hospital is paid by Medicare, it is barred from balance-billing the patient except for a small co-payment. Because Medicare pays less than “reasonable value” for services charged by Florida hospitals, where a hospital believes that the patient is likely to receive a monetary recovery in a personal injury case, it may refuse to bill Medicare. Hospitals do this hoping to receive more from personal injury cases than from Medicare.

Unfortunately, this conduct is legal. There appear to be no rules, statutes or case law barring this conduct.

The law is less clear with regard to Medicaid. Some believe that Medicaid must be billed, while others do not. As with Medicare, hospitals are not allowed to balance-bill after being paid by Medicaid.

Where Medicare or Medicaid pay and a personal injury recovery follows, both will be reimbursed from the recovery. Accordingly, neither (namely, taxpayers) loses out.

Hence, where hospitals refuse to bill Medicare, the consumer/patient ends up paying more.
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