FIRM NEWS. In this issue:

NEWSLETTER E S TA BL I S H E D I N 1 9 8 2 SPRING 2014 FIRM NEWS David J. Abbey, Allison Mawhinney and Marty Deptula recently presented their seminar The Florida Casualty Claim: Abbey Mawhinney Deptula Accident to Appeal to a crowd of over 100 automobile insurance professionals at the carrier s local offices. The seminar provided a broad overview of negligence actions arising from auto accidents from the pre-suit phase through appeal. Adjusters received two hours of continuing education credits including an ethics component for their attendance. Jeffrey M. Adams, former member of the Board of Directors for the Florida Defense Lawyers Association ( FDLA ), attended this year s FDLA winter conference held in Crested Butte, Colorado. Adams In this issue: Firm News...1-2 Challenging the Reasonableness of Medical Expenses:...3 Admissibility of Future Medicare Benefits... 3-4 Recovery of Reasonable Diagnostic Expenses... 4-5 Recent Developments in Co-Owner Vicarious Liability... 5-6 Alternative Fee Recovery Clauses...6 Release Is Implicit In Settelment Offer... 6-7 Appellate Practice...7 Samantha Satish, Esq., joined the Firm as a litigation associate working with Jeff Adams. Her practice focuses on the defense of automobile casualty and uninsured motorist claims. Bad Faith: Proceed with Caution When a CRN Expires on a Weekend or Holiday...8 The Seatbelt Defense... 8-9 Satish Pictured left to right are Attorney Debbie Eldridge, Patrick Moraites from Axis Group, and Joe Mueller, long-time partner of Abbey Adams. Debbie and Joe attended the Charity Polo Classic held on February 22, 2014 benefiting the Children s Cancer Center, Children s Dream Fund, and the Boys and Girls Club of Pinellas, County. Mr. Moraites is one of the event s founders. Abbey, Adams sponsored the event and was named the most valuable player sponsor. A great time was had by all! Introducing the Abbey, Adams Blog...9 Personal Injury Claims and Workers Compensation Liens: The Fly in the Ointment...9-11 The Continuing Saga of Westphal...11 MAIN OFFICE: First Central Tower 360 Central Avenue, 11th Floor St. Petersburg, FL 33701 P: 727.821.2080 F: 727.822.3970 TAMPA OFFICE: 5001 West Cypress Street Tampa, FL 33607 P: 813.223.7800 www.abbeyadams.com

NEWSLETTER LIABILITY SECTION Editors Allison G. Mawhinney, Esq. amawhinney@abbeyadams.com Michael C. Auchampau, Esq. mauchampau@abbeyadams.com Abbey, Adams co-hosted the St. Petersburg Area Chamber of Commerce annual banquet held on January 24, 2014 at the Coliseum in downtown St. Petersburg. Professionals and businesses from across the Bay area joined for music, dining and fun. Abbey, Adams sponsored, and David J. Abbey attended, the tenth annual Heroes Among Us dinner, presented by the St. Petersburg Bar Foundation at the Club at Treasure Island. Mr. Abbey introduced one of the recipients of the award, Seymour A. Gordon, Esq., who was named a Hero Among Us for his decades of service to the Bay area. Contributors Robert P. Byelick, Esq., Partner rbyelick@abbeyadams.com Deborah Eldridge, Esq., Partner Debbie Eldridge, a partner at Abbey, Adams working in our Workers Compensation and Employment Law division, recently presented her seminar Tales from the Dark Side: My Life As a Claimants Attorney to crowds of insurance professionals, litigation personnel, and employers. Her seminar provides defense professionals with a unique insight into the minds Eldridge of claimants and their lawyers. An understanding of how the other side operates provides a strategic advantage in the defense of workers compensation claims. Allison G. Mawhinney, Esq. amawhinney@abbeyadams.com Martin Deptula, Esq. mdeptula@abbeyadams.com Michael P. Falkowski, Esq. mfalkowski@abbeyadams.com Samantha Satish, Esq. ssatish@abbeyadams.com Byelick Robert P. Byelick and Debbie Eldridge presented their seminar Latest Trends in Indemnity and Medical Issues to various servicing agents. Their seminar provides a broad overview of Florida law governing workers compensation benefits as well as offering meaningful practice pointers, defenses, and potential traps. The staff and lawyers of Abbey, Adams recently gathered for food, fun and camaraderie during their annual firm party. This year s festivities were held at the home of Margaret and David J. Abbey. Special thanks to Mrs. Abbey and Donna Ernst for making the event such a success! If you would like to discuss or obtain any authorities cited in this publication please contact the Editor or the appropriate contributor. 2

SPRING 2014 LIABILITY SECTION (CONTINUED) CHALLENGING THE REASONABLENESS OF MEDICAL EXPENSES: EVIDENCE THAT A TREATING PHYSICIAN WOULD REDUCE BILLS IN PROPORTION TO PLAINTIFF S RECOVERY WAS ADMISSIBLE AND WAS NOT IMPROPER COLLATERAL SOURCE EVIDENCE Samantha Satish, Esq. Satish Defense professionals facing inflated medical bills received a victory in a recent case from the Second DCA, Smith v. Geico Casualty Company, 38 Fla. L. Weekly D2477 (Fla. 2d DCA 2013). Frederick Smith was a passenger on a public bus involved in a motor vehicle accident. As a result of that accident, Mr. Smith claimed he sustained injuries to his back resulting in extensive treatment and multiple surgeries. Mr. Smith brought an Uninsured Motorist claim against his UM carrier, Geico, which resulted in a verdict in favor of Mr. Smith for his past medical expenses. However, the jury found that Mr. Smith had not suffered a permanent injury and therefore, was not entitled to future medical expenses. On appeal, Mr. Smith challenged the outcome of his trial arguing that certain evidence from the Defense was improper. In particular, at trial, the Court allowed defense counsel to rebut treating physicians testimony that Mr. Smith would be ultimately responsible for any unpaid bills by offering evidence of reduction-of-fee language found in Smith s letters of protection. The reduction-of-fee language stated The client and the provider agree that in the event the Settlement, Verdict, or Judgment are reduced, compromised or modified and if the client does not receive full value for their claim the provider shall also reduce its bill proportionately to the client s reduced recovery. The issue on appeal was whether a jury should be allowed to consider the availability of Medicare benefits in determining the amount of future damages. Smith argued that the trial court erred by admitting this language into evidence. He argued evidence of such provider write-offs was collateral source evidence and therefore per se inadmissible. The Second DCA disagreed, reasoning that such fee reductions do not involve payments by third parties, i.e. collateral sources. The Court explained that damages, including doctors fees, would be determined by the jury. The collateral source rule relates to offsets of damages; but there is no offset to be paid here. Implicit in the Court s decision is that provider offsets establish compensatory damages themselves; not offsets to those damages. Hence, the collateral source rule is not implicated. The decision expressly leaves open the potential for a challenge to such evidence on the basis that it is prejudicial pursuant to 90.403, Florida Statutes. Of course, regardless of any written reduction of fee agreement, medical providers commonly write off portions of their initial billings such that the plaintiff is only actually responsible for a far lesser amount than what is attempted to be presented to the jury. This case provides a basis for arguing that such writeoffs are not subject to exclusion based upon the collateral source rule. In short, the Smith decision provides an additional tool to defense professionals in challenging the reasonableness of inflated medical expenses. ADMISSIBILITY OF FUTURE MEDICARE BENEFITS Samantha Satish, Esq. State Farm Mutual Automobile Insurance Company v. John Joerg, Jr., Individually, and as natural father and guardian of Luke Augustine Joerg, 2013 WL 3107207 (Fla. 2d DCA 2013). Luke Joerg was injured when his Satish bicycle collided with a car driven by William Lazar. Joerg, a developmentally disabled adult, sued Lazar and State Farm, the uninsured motorist carrier. Because Lazar settled, 3

NEWSLETTER LIABILITY SECTION (CONTINUED) the case proceeded to trial only against State Farm. Prior to trial, the lower court ruled that evidence of past medical expenses must reflect the lower Medicare reimbursement amount because of Joerg s participation in that program due to his disability. See Coop. Leasing, Inc. v. Johnson, 872 So. 2d 956 (Fla. 2d DCA 2004). The trial court, however, did not allow State Farm to introduce evidence that Joerg s future medical expenses could similarly be reduced under the Medicare program. State Farm appealed the trial court decision. The issue on appeal was whether a jury should be allowed to consider the availability of Medicare benefits in determining the amount of future damages. The question was essentially whether Medicare benefits are a collateral source the jury may not consider in determining future damages. The appellate court concluded that the trial court erred by excluding evidence of the availability of future Medicare benefits to the Plaintiff. In reaching its decision, the Second DCA relied on the Florida Supreme Court decision in Florida Physician s Insurance Reciprocal v. Stanley, 452 So. 2d 514 (Fla. 1984). In Stanley, the Court found evidence of free or low cost services from governmental or charitable agencies available to anyone with specific disabilities is admissible on the issue of future damages. The Second DCA applied the Stanley rule because the Plaintiff had not contributed to financing of the Medicare program, and thus, had not earned benefits in any way. The Second DCA found that evidence of unearned benefits from charitable or governmental programs is admissible to avoid supra-compensatory damages, i.e., damages beyond the actual loss sustained. The Joerg decision will be helpful in limiting and/or reducing future damages awards in cases where there is evidence of the availability of free or low cost services from governmental or charitable agencies to cover future medical expenses. RECOVERY OF REASONABLE DIAGNOSTIC EXPENSES Martin G. Deptula, Esq. In Hernandez v. Gonzalez, 124 So. 3d 988 (Fla. 4th DCA 2013), the Court upheld jury verdicts that refused to award damages for emergency medical services and treatment despite Plaintiff s admission of liability. Deptula In this case, Carmen Hernandez and Carmen Feliz claimed injuries arising from a motor vehicle accident caused by the undisputed negligence of the Defendant, Linda Gonzalez. Though she admitted negligence, Ms. Gonzalez defended the case by disputing both causation and damages. In other words, Ms. Gonzalez claimed that the subject accident did not cause the Plaintiffs claimed injuries or damages. At trial, the Defendant, Ms. Gonzalez, presented evidence that neither Plaintiff was injured by the subject accident, including Ms. Hernandez s significant history of pre-existing injuries and witness testimony that Ms. Feliz was laughing and giggling at the hospital immediately after the accident. Plaintiffs each rebutted Ms. Hernandez s argument with evidence, including expert testimony, to support their claims for damages. Plaintiffs were transported from the scene by ambulance and received emergency medical care. Ms. Hernandez did not dispute the reasonableness of Plaintiffs emergency medical costs. In addition, neither Plaintiff moved for a directed verdict on the emergency medical expenses and invited the jury to return a verdict on an all or nothing basis. The jury rejected the Plaintiffs evidence, and returned a zero verdict finding that Ms. Gonzalez s negligence was not the legal cause of loss, injury or damage to the Plaintiffs. Plaintiffs moved for new trials based, in part, on the recent decision in Pack v. Geico General Insurance Co., 119 So.3d 1284 (Fla. 4th DCA 2013), which reaffirmed the general rule that a plaintiff may recover the cost of medical expenses for diagnostic testing which were reasonably necessary to determine whether the accident caused the injuries, regardless of whether or not the jury ultimately finds the accident to 4

SPRING 2014 LIABILITY SECTION (CONTINUED) be the cause of the legal cause of those claimed injuries. The Court, in denying Plaintiffs motions, recognized several exceptions to the general rule set forth in Pack, including sufficient evidence of preexisting injuries with extensive treatments, lack of candor with treating physicians, videotape evidence negating disability, and expert medical opinions. The Fourth DCA held that the record evidence was sufficient to support one or more of these recognized exceptions. The Court also recognized that by not moving for a directed verdict on the emergency medical expenses and failing to object to the verdict form and jury instructions which called for an all or nothing recovery, Plaintiffs invited the jury to return a zero verdict and cannot, on appeal, object to an adverse final judgment. RECENT DEVELOPMENTS IN CO-OWNER VICARIOUS LIABILITY Martin G. Deptula, Esq. Deptula In Ortiz v. Regalado, 113 So.3d 57 (Fla. 2d DCA 2013), the Second DCA addressed the issue of vicarious liability amongst vehicle co-owners. Mr. Ortiz jointly owned a motor vehicle with his son, Andy Ortiz. While operating the jointly-owned vehicle, Andy struck and killed Lourdes Regalado Falcon ( Ms. Regalado ). A jury found that the negligence of Andy Ortiz and Ms. Regalado herself contributed equally to the accident. The verdict resulted in a final judgment ordering the Ortiz defendants to pay more than half of the approximately $1.4 million in damages awarded to the Regalados. On appeal, Mr. Ortiz argued that, as a vicariously liable defendant, his damages were limited to $100,000 per person and $300,000 per accident pursuant to Florida Statute 324.021(9)(b)(3), which states: (b) Owner/lessor. Notwithstanding any other provisions of the Florida Statutes or existing case law:... 3. The owner who is a natural person and loans a motor vehicle to any permissive user shall be liable for the operation of the vehicle or the acts of the operator in connection therewith only up to $100,000 per person and $300,000 per incident for bodily injury and up to $50,000 for property damage. Thus, in Florida an owner who gives authority to another to operate the owner s vehicle by either express or implied consent has a non-delegable obligation to ensure that the vehicle is operated properly. Mr. Ortiz argued he was entitled to the protections of 324.021(9)(b) (3) because the term loan was ambiguous in the context of co-owners. Mr. Ortiz took the position that co-owners must necessarily grant temporary use of a jointly owned vehicle to the other co-owner and, therefore, a loan was created by default. Based on this interpretation, Mr. Ortiz claimed he was entitled to the statutory cap on vicarious liability damages. The Second DCA rejected Mr. Ortiz s statutory interpretation based on the plain language of the statute, which requires a loan from an owner to a permissive user. In holding that an owner of an object can only loan that object to another who has no legal right to the object the Second DCA effectively eliminated a co-owners right to limit vicarious liability damages under 324.021(9)(b)(3). But the Court did not stop there. In a footnote, the Second DCA noted that Mr. Ortiz had not raised the issue, and the Court did not decide if Mr. Ortiz could be held vicariously liable for his son s negligence in the first instance. Of course, there was no reason for the Court to make this observation unless it intended to point to the fact that under Florida law, vicarious liability is premised upon the theory that one who originates the danger by entrusting the automobile to another is in the best position to make certain that there will be adequate resources with 5

NEWSLETTER LIABILITY SECTION (CONTINUED) which to pay the damages caused by its negligent operation. Aurbach v. Gallina, 753 So. 2d 60, 62 (Fla. 2000) (citation omitted). Thus, in Florida an owner who gives authority to another to operate the owner s vehicle by either express or implied consent has a non-delegable obligation to ensure that the vehicle is operated properly. Hertz Corp. v. Jackson, 617 So. 2d 1051, 1053 (Fla. 1993) (emphasis added). In other words, the cornerstone of vicarious liability is control and the relinquishment thereof. In light of the owner s right and ability to control who may operate an automobile, Florida law imposes under the common law dangerous instrumentality doctrine strict vicarious liability upon the owner of a motor vehicle who voluntarily entrusts it to another. Id. The Ortiz case implies that co-owners of a motor vehicle cannot be vicariously liable to one another because neither can relinquish control of the vehicle to the other. This, however, is a decision for another day. Significantly, the Second DCA certified the following question to the Florida Supreme Court: DOES 324.021(9)(b)(3) APPLY TO LIMIT THE AMOUNT OF DAMAGES ONE CO-OWNER OF A VEHICLE MUST PAY WHEN THE OTHER CO-OWNER OPERATES THEIR JOINTLY OWNED VEHICLE NEGLIGENTLY AND INCURS DAMAGES PAYABLE TO A THIRD PARTY? As of the date this article was written, the Supreme Court had not yet accepted review of Ortiz. But its resolution of this certified question will help clarify the matter of one co-owner s vicarious liability for another owner s negligence. ALTERNATIVE FEE RECOVERY CLAUSES Alison G. Mawhinney, Esq. Mawhinney In First Baptist Church of Cape Coral, Florida, Inc. v. Compass Construction, Inc., 115 So. 3d 978 (Fla. 2013), the Florida Supreme Court upheld the validity of an alternative fee recovery clause in a fee agreement entered into between an insurance carrier and defense counsel retained by the carrier on its insured s behalf. The fee agreement provided that the attorney would be paid the greater of either: 1. The fee specified in the written agreement between the carrier and defense counsel if the fee is paid by the client / insurance carrier; or 2. A court-awarded reasonable fee if the fee is to be paid by a third-party. Such agreements continue to allow carriers the peace-of-mind of knowing that the rates they pay to their insureds lawyers are fixed by the contract. However, the provisions have the added benefit of providing the lawyer a potentially larger fee, at the discretion of the court, where the lawyer is able to recover attorneys fees from his or her opponent. For example, where an insured defendant prevails upon an offer of judgment / proposal for settlement, an alternative fee recovery clause would permit defense counsel to seek recovery of an hourly rate from the Plaintiff that exceeds the amount stated in the lawyer s contract with the insurance carrier. Insurance carriers interested in working alternative fee recovery clauses into their contracts are encouraged to contact David Abbey (dabbey@abbeyadams.com) or Allison Mawhinney (amawhinney@ abbeyadams.com) for additional information. RELEASE IS IMPLICIT IN SETTLEMENT OFFER Alison G. Mawhinney, Esq. Litigation professionals are commonly presented with settlement offers that include the bare minimum of terms such as: 1) which claims are subject the subject of the proposed settlement, and 2) a dollar amount. If the dollar amount seems Mawhinney favorable, you may be reluctant to respond to such an offer by agreeing to the amount, but requiring the execution of a release. The concern is that such a response might raise an argument that your acceptance was actually a rejection coupled with a counteroffer, such that no settlement was ever reached. However, Florida s public policy favoring the resolution of cases, and 6

SPRING 2014 LIABILITY SECTION (CONTINUED) its resulting body of case law, are on your side. In Nichols v. Martell, 612 So. 2d 657 (Fla. 3d DCA 1993), the Third District Court of Appeal analyzed precisely the scenario outlined above. Plaintiffs counsel in Nichols sent a letter to defense counsel offering to settle the case for the $10,000 limits of the defendant s automobile bodily injury liability policy. Defense counsel responded by tendering the $10,000 policy limits to settle the case and enclosing the usual settlement documents to finalized the settlement. Id. at 658. Plaintiffs argued that this response was a counteroffer. The Third District rejected that argument, concluding it was not a counteroffer in any sense. Id. See also Erhardt v. Duff 729 So. 2d 529, 530 (Fla. 4th DCA 1999) (concluding that a binding settlement was reached when a carrier responded to plaintiff s demand for policy limits by agreeing to tender those limits upon acceptance of which the claimant would be required to execute settlement drafts and Releases. The carrier s response was a binding acceptance, not a counteroffer, and execution of the release was implicit as part of the tender. Id.). More recently, in Mercury Ins. Co. of Florida v. Fonseca, 3 So. 3d 415 (Fla. 3d DCA 2009), the Third DCA again considered whether a settlement was reached between the carrier and a third party claimant following an auto accident. The injured claimant sent a letter to the carrier stating This letter shall serve as a formal demand for a tendering of any and all available policy limits including umbrella coverages. Id. at 416. The carrier responded by correspondence tendering the policy limits and stating [a]lso enclosed is a proposed settlement release which is not intended to be a final instrument until you have approved. If you should require any changes or additions, please advise. Id. On the authority of Nichols, in part, the Third DCA concluded that the initial demand did constitute a settlement offer. Once Fonseca offered to settle, all that was required to form a binding contract was acceptance by Mercury. Id. at 417. The Third District determined that, by its response tendering the limits and providing a proposed release, Mercury accomplished the required acceptance. Hence, a binding settlement was formed. The Court reasoned that a document releasing an insurance company from liability for claims arising from the same incident for which the full policy limits were tendered, particularly where the injured party is permitted to modify such a release, is the kind of usual settlement document implicit in any settlement agreement. Id. Although these decisions are neither new nor novel, the legal principles underlying them are not always at the forefront of litigation professionals and practitioners minds. It is important to recall that a settlement offer by itself may not tell the whole story. Execution of the usual settlement documents, including a release, is an implicit part of even the most Spartan of offers. APPELLATE PRACTICE Mawhinney Appellate Attorney Allison G. Mawhinney recently presented a seminar addressing the post-trial phase of a personal injury case. She addressed post-trial motions, common grounds for appeal, how to preserve those issues for appeal, as well as appellate and post-appeal matters. Attendees expressed particular interest: in the distinction between an inconsistent verdict, which is required to be brought to the trial court s attention before it can be argued on appeal, versus an inadequate verdict, which can be raised for the first time post-trial; and the fact that the filing of a notice of appeal will waive an otherwise appropriate and timely post-trial motion for new trial. This is a particularly grave consequence where an argument was required to be raised in a motion for new trial in order to be preserved for appeal. If you are interested in a seminar on the topic of post-trial remedies, appellate preservation, or otherwise, please contact Allison Mawhinney at (727) 821-2080. 7

NEWSLETTER WORKERS COMPENSATION SECTION BAD FAITH: PROCEED WITH CAUTION WHEN A CRN EXPIRES ON A WEEKEND OR HOLIDAY Allison G. Mawhinney, Esq. Litigants have 60-days to cure or respond to bad faith allegations that are lodged in a Civil Remedy Notice filed pursuant to Section 624.155, Fla. Stat. Often, the deadline expires on a Saturday, Sunday or legal Mawhinney holiday. General Florida law provides that where a statute is silent as to the computation of a deadline, it is presumed that a statutory deadline will not expire on a weekend or legal holiday. See Fla. Jur., Time 20 ( the general rule is that, if the last day that an act must be performed falls on a Saturday, Sunday or holiday, the prescribed period runs until the end of the next day that is not a Saturday, Sunday or holiday. This rule is applied where a governing statute is silent on the time computation issue. ); citing Stockslager v. Daly Aluminum Products, Inc., 246 So. 2d 97 (Fla. 1971), et al. Unlike the Courts, Florida s online Civil Remedy Filing system does not shut down on the weekends or holidays. Florida s bad faith statute does not express how litigants should treat the expiration of a CRN on a non-business day. Hence, it would seem the general principle weighing against deadlines expiring on weekends or legal holidays should apply. However, research has uncovered no case law which expressly finds this rule applicable to the expiration of a CRN. More compelling, legal authorities addressing Florida s general rule against the running of deadlines on weekends or holidays cite the fact that making a court filing on a Saturday, Sunday or holiday would be impossible; and the Legislature would not codify such an impossibility. This is part of the intent behind the general rule extending statutory deadlines until the next business day. Unlike the Courts, Florida s online Civil Remedy Filing system does not shut down on the weekends or on holidays. Hence, a litigant defending against a CRN that expires on a weekend or holiday has an argument that its response is not due until the next business day. But nothing concrete establishes this. Further, a savvy litigant who files a CRN which would expire on a weekend or a holiday also has a strong argument that the 60-day window of time to respond to a CRN is not constrained Courthouse hours. Hence, such responses are not subject to the general rule which precludes the running of deadlines on nonbusiness days. The best practice when facing a CRN which expires on a questionable date is therefore to err on the side of caution and file a response no later than the last business day before the CRN would otherwise expire. THE SEATBELT DEFENSE Michael Falkowski, Esq. An individual s failure to wear his or her seat belt while in a vehicle involved in an accident can and should be utilized as an affirmative defense of comparative negligence. Raising the seat belt defense is another Falkowski tactic in diffusing an individual s claim of injury, loss, or damages after an accident. However, merely raising the defense does not automatically allow a jury to be instructed on an individual s failure to use a seat belt and find comparative fault. Florida case law dictates three elements must be shown by competent evidence before the seat belt defense can be raised: (1) failure to use an available and operational seat belt, (2) the failure to use the seat belt was unreasonable, and (3) there was a causal relationship between the injuries sustained and the failure to buckle up. Although not required by the courts, the most persuasive manner of showing the causal relationship between the injuries sustained and the failure to use a seat belt is through expert testimony. See State Farm Mutual Automobile Insurance Company v. Smith, 565 So. 2d 751 (Fla. 5th DCA 1990). Once these elements are established, evidence of an individual s failure to wear an available, operational seat belt may 8

SPRING 2014 WORKERS COMPENSATION SECTION (CONTINUED) be considered by a jury which will be instructed accordingly. The jury instruction regarding the seat belt defense can be found in the Florida Supreme Court Standard Instructions at 401.9. In tailoring the seat belt instruction, Florida Statute 316.614 (requiring certain vehicle occupants to wear a seatbelt) should be read aloud or paraphrased for the jury. Although the language in Florida Statute 316.614 merely discusses seatbelt violations by the driver and front seat passenger of a vehicle, Florida common law allows the seat belt defense to be raised against a rear passengers as well. See American Auto. Ass n v. Tehrani, 508 So. 2d 365 (Fla. 1st DCA 1987). Problems arise when the plaintiff and defendant negotiate and make a demand upon the workers compensation carrier out of the proverbial blue. Workers compensation adjusters may not be versed in evaluating personal injury claims. PERSONAL INJURY CLAIMS AND WORKERS COMPENSATION LIENS: THE FLY IN THE OINTMENT Robert P. Byelick, Esq. For injury litigation professionals, a workers compensation lien might be viewed as complicating factor to the resolution of your case. As a result, there may be a tendency to ignore the lien until a case is Byelick on the verge of settlement or trial. However, all sides would be better served to address the lien from the get-go. Of course, work comp liens arise when a plaintiff is injured in the course and scope of employment. The workers compensation carrier is required to provide benefits to the injured employee in the form of lost wages and medical care. When such benefits are provided, a lien arises upon the plaintiff s tort claim. The basis for a workers compensation lien is found in 440.39, Fla. Stat. In the event an employee brings a personal injury claim for his or her injuries, this statute requires the employee / plaintiff to notify the workers compensation carrier of same so that the carrier can protect its lien rights. Specifically, 440.39(3)(a), Fla. Stat., provides that [n]otice of suit being filed shall be served upon the employer and compensation carrier and upon all parties to the suit or their attorneys of record by the employee. INTRODUCING THE ABBEY, ADAMS BLOG Abbey, Adams is pleased to introduce its weekly blog, in an effort to assist defense professionals with keeping a finger on the pulse of Florida law. Our in-house appellate lawyer, Allison Mawhinney, reviews all published opinions and orders from Florida s appellate, Federal, and Circuit Courts on a weekly basis to identify and share the ones that may be pertinent to our clients and friends businesses. Those cases are then gathered and posted in their entirety on our blog, which can be found at http://abbeyadamslaw.blogspot.com/. As an additional service, summaries of the relevant legal updates are circulated to our clients and other recipients on a weekly basis. If you would like to receive our weekly case law updates, please send your request to Allison at amawhinney@abbeyadams.com. 9

NEWSLETTER WORKERS COMPENSATION SECTION (CONTINUED) Once the statutory notice is provided, the burden shifts to the workers compensation carrier to put the litigants on notice of its lien pursuant to 440.39(3)(a), Fla. Stat. Then, as the parties to the lawsuit negotiate and proceed toward trial, this lien hangs over them. The question then becomes: what portion of its payments is the carrier entitled to recoup? Certain parameters for the recovery are also provided by 440.39(3)(a), Fla. Stat. That provision states that the workers compensation carrier should share in the costs and attorneys fees incurred by the plaintiff in an amount equal to the percentage of his or her recovery after costs and attorneys fees are subtracted. Subject to that deduction, the employer/ carrier may recover 100% of the benefits it has paid in the past as well future benefits to be paid. However, there is a significant exception to this rule: If the plaintiff can demonstrate that he or she did not recover the full value of his or her damages, the carrier s recovery is limited proportionally by the plaintiff s net recovery. For example, assume a plaintiff is injured on-the-job by a tortfeasor with low policy limits such as $10,000. Assume that a verdict is returned for $20,000. As a practical matter, the collectible portion of that recovery may be limited by the $10,000 policy limits. Under this hypothetical, the workers compensation carrier s recovery likewise is limited as follows: Case value: $ 20,000 Actual Recovery by Plaintiff: $ 10,000 - Fees and Costs: $ 4,000 = Net recovery: $ 6,000 $6,000 net recovery $20,000 case value =.3, or 30% In this example, if the workers compensation carrier paid out $5,000 for indemnity and medical benefits, its lien on the plaintiff s recovery (for past benefits) is worth only 30% of that amount, i.e. $1,500. Theoretically, that same percentage applies to future benefits. While we await the Supreme Court decision, it is important for employers/carriers to promptly evaluate any cases where the claimant is still totally disabled at the exhaustion the 104 weeks of temporary benefits. Hence, in negotiations, plaintiffs attorneys commonly attempt to maximize their clients recovery as follows: to the tortfeasor, the attorney might push for a higher recovery, advocating that the plaintiff has a serious claim. To the workers compensation carrier, the attorney might downplay the value of the case in an effort to limit any lien. In short, plaintiff s attorneys have an incentive to argue that the full value of the case is substantial, but the recovery is limited due to various factors such as policy limits, collectability, comparative negligence and the like. In light of these complicating factors, parties should consider including the attorney for the workers compensation carrier in the mediation of the tort claim. Providing the workers compensation carrier with necessary factual information prior to the mediation will allow the carrier to be better prepared to negotiate its lien. Problems arise when the plaintiff and defendant negotiate and make a demand upon the workers compensation carrier out of the proverbial blue. Workers compensation adjusters may not be versed in evaluating personal injury claims. Therefore, they may be reluctant to reduce their lien. Hence, such liens become a sticking point at mediation. Thus, taking the workers compensation lien into account by providing the carrier with information necessary to evaluate and potentially reduce its lien ahead of settlement negotiations may benefit both sides. If the parties are unable to agree on the amount of a workers compensation lien, 440.39, Fla. Stat., provides that the trial court judge in the tort action has jurisdiction to settle such dispute. If a lawsuit has not been filed, the statute provides that jurisdiction lies in the Circuit Court of the county in which the cause of action arose. Thus, the plaintiff, defendant/tortfeasor or the workers compensation carrier can file a motion for equitable distribution of the proceeds of litigation. Typically, the Circuit Court Judge would then convene an evidentiary hearing to enable the court to rule on the appropriate amount of the 10

SPRING 2014 WORKERS COMPENSATION SECTION (CONTINUED) workers compensation lien. The burden of proof at such hearing is on the plaintiff to show that the full value of the case was not recovered. The burden of proof is upon the workers compensation carrier to establish that it has a lien and paid benefits that are reimbursable under the statute. It should be noted that the plaintiff might prefer to negotiate the lien after a settlement is reached. But, as indicated in 440.39(3)(b), Fla. Stat., it is the tortfeasor who is responsible for satisfying the lien and therefore should consider negotiating the amount of the lien before a settlement is otherwise reached. Finally, 440.39(7), Fla. Stat., requires the plaintiff, employer and the carrier to cooperate with one another in investigating and pursuing claims against tortfeasors in various manners. In turn, subsection (3) (a) allows the trial court to consider any party s failure to cooperate in determining the amount of the carrier s lien. Personal injury litigants would therefore be well-served by recognizing the issue of a workers compensation lien at the outset, keeping the carrier informed, and avoiding any appearance of non-cooperation. In the end, this will limit the potential for a workers compensation lien to become a fly in the ointment and all sides would benefit. THE CONTINUING SAGA OF WESTPHAL Deborah Eldridge, Esq. The First DCA has withdrawn from its panel opinion that the 104 week limitation on temporary total disability benefits is unconstitutional. Westphal v. City of St. Petersburg, 2013 WL 5302584; 122 So. 3d Eldridge 440 (2013). In an en banc opinion, the First DCA held that when an employee remains totally disabled as a result of a workplace accident at the expiration of the 104 weeks of total disability benefits, the employee is deemed to be at maximum medical improvement by operation of law. Thus, such an employee is eligible to assert a claim for permanent total disability. The court noted that this decision eliminated the statutory gap in which such an employee would fall if they could not apply for PTD. In so holding, the First DCA found it unnecessary to address the constitutionality of the 104 week limitation. In its conclusion, the court held that, if Mr. Westphal could prove that he was totally disabled when he reached statutory MMI, his claim for PTD benefits was not premature. Therefore, he would not have to prove that he would remain totally disabled upon reaching physical MMI whether in one week, one month or one year. Based on this case, the determination of PTD is based on a snapshot of the claimant s disability status at the exhaustion of 104 weeks of temporary benefits. If the employee can return to work after reaching physical MMI, he would no longer entitled to PTD benefits, thereby rejuvenating the oxymoronic concept of temporary permanent total disability benefits. But that is not the end of the story. The First DCA certified the following question to the Supreme Court: Is a worker who is totally disabled as a result of a workplace accident, but still improving from a medical standpoint at the time temporary total disability benefits expire, deemed to be at maximum medical improvement by operation of law and therefore eligible to assert a claim for permanent and total disability benefits? While we await the Supreme Court decision, it is important for employers/carriers to promptly evaluate any cases where the claimant is still totally disabled at the exhaustion the 104 weeks of temporary benefits. Doing so in week 98 would be most appropriate since it s the time at which the doctor must evaluate the claimant and assign an impairment rating. In the case of total disability, administratively picking up the worker as PTD seems the best option, and in doing so the E/C avoids the necessity of a court order to reclassify the benefits. None of the Westphal courts have addressed the situation in which a worker is partially disabled at the exhaustion of the 104 weeks. In the case of partial disability, a close examination of the restrictions would be in order, and with severe restrictions, picking up the worker as PTD may be the right call. 11