SENTRY INSURANCE COMPANY, APPELLANT,
v.
WILLIAM KEEFE AND GERALDINE KEEFE, HIS WIFE, APPELLEES
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Sentry Insurance appeals a trial court's reduction of its workers' compensation third-party lien from approximately $37,000 to $802.57 out of an $80,000 settlement. The court holds that under Florida's modified workers' compensation lien statute, a carrier cannot be required to reduce its lien beyond what is justified by the plaintiff's comparative negligence or uncollectibility, and reverses for recalculation of the lien.
A trial court is mandatorily precluded from reducing a compensation carrier's third-party lien beyond reductions attributable to uncollectibility or comparative negligence. The carrier is entitled to recover a percentage of past and future benefits equal to the percentage of full damages not recovered, subject to a cap of net proceeds received by the plaintiff.
[1] The "100%" version of Section 440.39(3)(a), Florida Statutes (1981), mandates that a compensation carrier's third-party lien reduction cannot exceed the extent to which f…
[2] Under the "100%" version of Section 440.39(3)(a), Florida Statutes (1981), a compensation carrier is entitled to recover eight percent of past and future benefits, subjec…
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Join FLexlaw to unlock all legal intelligence“it is mandatorily precluded by the new "100%" version of Sec. 440.39(3)(a), Fla.Stat. (1981) from reducing a compensation carrier's third-party lien beyond the extent that full recovery is limited by uncollectibility or comparative negligence”
Establishes the core holding that courts cannot reduce liens beyond statutory limits
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Join FLexlaw to unlock all legal intelligenceA workers' compensation claimant received $37,000 in benefits from Sentry Insurance and settled a third-party claim for $80,000, despite full damages …
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SCHWARTZ, Chief Judge.
In Lee v. Risk Management, Inc., 409 So. 2d 1163, 1165, n. 5 (Fla. 3d DCA 1982), we specifically declined to decide whether the trial court is mandatorily precluded by the new “100%” version of Sec. 440.39(3)(a), Fla.Stat. (1981) from reducing a compensation carrier’s third-party lien beyond the extent that full recovery is limited by uncollectibility or comparative negligence. On the authority of and for the reasons stated in Risk Management Services, Inc. v. Scott, 414 So. 2d 220 (Fla. 1st DCA 1982), decided shortly after Lee, we now hold that it is.
An application of that conclusion results in the reversal of the order under review. Although some $37,000 in compensation benefits had already been paid, the trial court awarded the WC carrier $802.57, or less than three per cent1 of that amount from the plaintiffs $80,000 third party-settlement. On competent evidence, however, the court found that the full value of the plaintiffs damages was $1,000,000. Since, so far as this record demonstrates, the reduction in his recovery was attributable entirely to his comparative negligence,2 it follows that the carrier is entitled to recover eight per cent of past and future3 benefits, subject to a cap of the net proceeds received by the plaintiff from the settlement. Lee v. Risk Management, Inc., supra. The order under review is therefore reversed and the cause remanded for the entry of an order in accordance with this opinion.4
Reversed and remanded with directions.
. It appears that this figure resulted from applying (with an arithmetical mistake) the formula adopted in National Ben Franklin Ins. Co. v. Hall, 340 So. 2d 1269 (Fla. 4th DCA 1976). Because, however, it requires that the carrier share an “equitable” portion of the plaintiffs attorneys’ fees and costs, National Ben Franklin cannot be employed under the new statute, which forbids that result. Lee v. Risk Management, Inc., supra; Risk Management Services, Inc. v. Scott, supra. (Since the operative dates are not stated in the opinion, it is uncertain whether Orange County v. Sealy, 412 So. 2d 25 (Fla. 5th DCA 1982) is contrary to this conclusion.)
. Although this opinion eliminates one issue left open by Lee, we caution that still another, perhaps more difficult one, is not before us and therefore is yet undecided. It is whether the court may make an equitable distribution of a settlement which is reduced below full value, not only or entirely because of uncollectibility or comparative negligence, as set out in the statute, but either wholly or partially because the third-party’s liability is doubtful — which is one of the most common reasons that cases are settled in the first place.
Thus, we do not determine whether a plaintiff with a $1,000,000 recovery must remit 100% of the compensation benefits (subject to the cap) of a settlement of, say, $100,000 which was reduced to this amount only because of uncertainty of liability; or 80% of the benefits if it is found that he was only 20% comparatively negligent and the rest of the discount is attributable to that factor. . The carrier’s future entitlement should be assured by requiring, subject to the cap, that eight per cent of future compensation payments be withheld. This was the innovative and correct method adopted by the trial judge in Lee. 409 So. 2d at 1164-65, n. 2.
. Ibid.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Cited By (13 total)
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Nikula v. Mich. Mut. Ins., 531 So. 2d 330 (Fla. 1988)…that the ratio and not the percentage generally was viewed as controlling. See C & T Erectors, Inc. v. Case, 481 So. 2d 499 (Fla. 2d DCA 1985); American States Insurance v. See-Wai, 472 So. 2d 838 (Fla. 5th DCA 1985); Sentry Insurance Co. v. Keefe, 427 So. 2d 236 (Fla. 3d DCA 1983), superseded by, Cooper Transportation, Inc. v. Mincey, 459 So. 2d 339 (Fla. 3d DCA 1984). This same conclusion was reached by at least one federal court dealing with this precise issue. Miceli v. Litton Systems, Inc., 566 F.Supp.…
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AETNA Ins. Co. v. Norman, 468 So. 2d 226 (Fla. 1985)…of the amounts recovered and retained pursuant to its lien equals [the claimant’s] net recovery on the tort claim.” 420 So. 2d at 375. This net tort recovery cap on compensation liens has been followed in other cases. Sentry Insurance Co. v. Keefe, 427 So. 2d 236 (Fla. 3d DCA 1983); American States Insurance Co. v. Johnson, 426 So. 2d 1222 (Fla. 4th DCA 1983); Lee v. Risk Management, Inc., 409 So. 2d 1163 (Fla. 3d DCA 1982). While Aetna has only a fifty percent lien on benefits paid and payable, its lien sh…
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United Parcel Servs. & Liberty Mut. Ins. Co. v. Carmadella, 432 So. 2d 702 (Fla. 3d DCA 1983)…the court is precluded from reducing a workers’ compensation carrier’s third-party lien beyond the extent that full recovery is limited by uncollectibility or comparative negligence. 409 So. 2d at 1165 n. 5. [*704] In Sentry Insurance Co. v. Keefe, 427 So. 2d 236 (Fla. 3d DCA 1983), we addressed one of the questions left unanswered in Lee v. Risk Management, Inc., and held that a “trial court is mandatorily precluded by the new ‘100%’ version of Sec. 440.39(3)(a), Fla. Stat. (1981) from reducing a compensati…
Previewing 3 of 13 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Nat'l BEN Franklin Ins. Co. v. Grover Hall, 340 So. 2d 1269 (Fla. 4th DCA 1976)
- LEE v. Risk Mgmt., Inc., 409 So. 2d 1163 (Fla. 3d DCA 1982)
- Orange Cnty. v. Sealy, 412 So. 2d 25 (Fla. 5th DCA 1982)
- Denver W. Beddow v. State, 414 So. 2d 220 (Fla. 3d DCA 1982)
- Walter Mills Logging & Pulpwood v. Mills, 414 So. 2d 220 (Fla. 1st DCA 1982)