Florida Supreme Court Hears Argument on Questions Certified by the Eleventh Circuit Regarding Whether Tort Judgment Is Enforceable Following Workers’ Comp Settlement
In December 1997, a tree fell while being loaded into a flatbed truck and killed an employee of the landscaping company performing the work. The company had a dual insurance coverage policy that provided 1) coverage for workers’ compensation insurance (Part I of the policy) and 2) employer liability insurance designed to insure against any damages arising from employee injuries not covered by Part I (Part II of the policy). Following the fatality, the insurer immediately began paying workers’ compensation benefits to the worker’s estate and eventually entered into a full settlement of the workers’ compensation claim (in total, the worker’s estate received more than $100,000 pursuant to Florida law and Part I of the insurance policy).
Contemporaneously, the estate filed a wrongful death action in Florida state court alleging that the employer’s negligence caused the death. The insurer agreed to defend the employer pursuant to Part II of the insurance policy and retained counsel. The employer, however, allegedly refused to cooperate with the retained counsel and the counsel eventually filed a motion to withdraw, which the state court granted. Following a default judgment entered on behalf of the state because the employer failed to respond to discovery requests or comply with court orders, a one-day jury trial on damages resulted in an award to the estate of $9.525 million.
When the insurer failed to pay the judgment, the estate brought a separate action in Florida state court against the insurer. The insurer removed the case to federal court and argued in a motion for summary judgment that the estate had elected the workers’ compensation benefits as its exclusive remedy in the settlement of that claim; the estate’s claim was excluded by language in Part II of the policy that barred coverage for “any obligation imposed by a workers compensation … law”; and the estate lacked standing to bring a claim for breach of Part II of the employer’s insurance policy. The U.S. District Court for the Middle District of Florida granted summary judgment to the insurer.
On appeal, however, the Eleventh Circuit ruled last April that the case required resolution of unsettled questions of Florida law and certified the following three questions to the Florida Supreme Court:
1) Does the estate have standing to bring its breach of contract claim against the insurer under the employer liability policy?
2) If so, does the provision in the employer liability policy which excludes from coverage “any obligation imposed by workers’ compensation … law” operate to exclude coverage of the estate’s claim against the insurer for the tort judgment?
3) If the estate’s claim is not barred by the workers’ compensation exclusion, does the release in the workers’ compensation settlement agreement otherwise prohibit the estate’s collection of the tort judgment?
Argument occurred last week before the Florida Supreme Court and we will continue to monitor any case developments.
