CITY OF TAMPA AND ALEXSIS RISK MANAGEMENT SERVICES, INC., APPELLANTS,
v.
WILLIAM NORTON, APPELLEE
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The Florida District Court of Appeal reversed a trial court order awarding interest to an injured worker on a workers' compensation lien settlement. The court held that under Florida workers' compensation law, an injured worker has no right to interest on settlement proceeds while the lien amount is being determined, as the right to distribution only arises after the lien is established.
No. The court held that Norton's right to distribution of any portion of his third-party settlement did not arise until the lien amount was determined by the trial court. Therefore, he was not entitled to interest for the period while disposition was pending. Additionally, Florida workers' compensation law does not provide for interest awards in this context.
[1] A workers' compensation lien on a third-party tort recovery is established to prevent double recovery.
[2] The right to distribution of proceeds from a third-party tort recovery, subject to a workers' compensation lien, arises only after the funds are collected and the pro rat…
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Join FLexlaw to unlock all legal intelligence“The right to distribution of [such] proceeds ... is after the funds are collected and the employees and carrier either agree on the pro rata share due the carrier or a court awards the pro rata share.”
Establishes that distribution rights only arise after lien determination, not before
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Join FLexlaw to unlock all legal intelligenceIn 1991, Norton, a Tampa city employee receiving workers' compensation, was injured in a third-party automobile accident. He settled his claim against…
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THREADGILL, Chief Judge.
The appellants, the City of Tampa and Alexsis Risk Management Services, Inc., challenge an order which awards interest to the appellee, William Norton, for purposes of offsetting the amount of a workers’ compensation hen. The appellants contend the trial court erred as a matter of law in entering such an award. We agree and reverse.
In 1991, while receiving workers’ compensation benefits for a work-related injury, Norton, an employee of the city of Tampa, was further injured in an automobile accident caused by a third-party. Though Norton attempted to claim additional workers’ compensation benefits for the injuries he sustained in the later accident, he also sought damages from the third-party tortfeasor. Upon Norton’s receipt of a cash settlement from the third-party tortfeasor, a workers’ compensation hen was placed on the settlement funds to prevent Norton from receiving a double recovery in violation of the workers’ compensation laws. See § 440.39(3)(a), Fla. Stat. (1991).
When Norton and the appellants were unable to agree on an equitable distribution of the settlement funds, Norton petitioned the trial court for a determination of the amount of the appellants’ lien. Following a hearing on the petition, the trial court issued an order setting forth the amount of the lien. The trial court also determined, however, “that since Mr. Norton has not received any proceeds from the settlement for approximately a year and a half to two years[,] that he would be entitled to interest at the legal rate which should be deducted from the proceeds of the City of Tampa’s lien.” The appellants filed a timely notice of appeal, challenging only that portion of the order which awards interest to Norton.
In the context of a workers’ compensation lien against a third-party tort recovery, “[t]he right to distribution of [such] proceeds ... is after the funds are collected and the employees and carrier either agree on the pro rata share due the carrier or a court awards the pro rata share.” Commercial Union Insurance Co. v. Fallen, 603 So. 2d 610, 613 (Fla. 5th DCA 1992). In the instant case, Norton’s right to the distribution of any portion of his third-party settlement did not arise until the trial court determined the amount of the appellants’ lien. He thus was not entitled to an award of interest for the time a disposition was pending. Further, the workers’ compensation laws make no provision for an award of interest in this context as section 440.39(3)(a) provides only for the deduction of costs and attorney’s fees “from the fund representing recovery.” Fallen, 603 So. 2d at 612-13.
Based on the foregoing, we conclude the trial court erred as a matter of law in entering an interest award in favor of Norton for purposes of offsetting the amount of the appellants’ workers’ compensation lien. The instant cause is therefore reversed and remanded for proceedings consistent with this opinion.
Reversed and remanded.
PATTERSON, J„ and SCHEB, JOHN M., (Senior) Judge, concur.
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Circle K Corporation/AIG Claims Servs., Inc. v. Webster, 747 So. 2d 1010 (Fla. 5th DCA 1999)…51, 452 (Fla. 4th DCA 1995), the court noted that a tortfeasor who has notice of an employer’s subrogation claim settles with an employee only at the tort-feasor’s own risk, unless the employer is notified. See also City of Tampa v. Nor [*1011] ton, 681 So. 2d 811 (Fla. 2d DCA 1996)(right to distribution of proceeds is after funds are collected and the employees and employer either agree on the pro rata share due the employer or a court awards the pro rata share). Where a case is settled in lieu of suit or d…
Authorities Cited
- Commercial Union Ins. Co. v. Fallen, 603 So. 2d 610 (Fla. 5th DCA 1992)