Ace Disposal v. Holley, 94-3384

• Decision Date: 20 February 1996
• Docket Number: No. 94-3384,94-3384
• Citation: 668 So.2d 645
• Parties: 21 Fla. L. Weekly D492 ACE DISPOSAL and Florida Air Condition Contractors, Appellants, v. Clarence HOLLEY, Appellee.
• Court: Florida District Court of Appeals

Page 645

668 So.2d 645

21 Fla. L. Weekly D492

ACE DISPOSAL and Florida Air Condition Contractors, Appellants, v. Clarence HOLLEY, Appellee.

No. 94-3384.

District Court of Appeal of Florida First District.

Feb. 20, 1996.

An appeal from an order of Judge of Compensation Claims Gail Adams.

Thomas H. McDonald of Rissman, Weisberg, Barrett, Hurt, Donahue & McLain, P.A., Orlando, for appellants.

Irvin A. Meyers of Meyers, Mooney & Meyers, Orlando, for appellee.

KAHN, Judge.

On April 18, 1992, the claimant, Clarence Holley, sustained a compensable workers' compensation injury. Before January 1, 1994, the employer/carrier (E/C) accepted Holley as permanently and totally disabled. On January 6, 1994, Alan Duggan, a representative of the carrier, notified Holley, through his attorney, that his permanent total disability (PTD) benefits would be suspended pursuant to section 440.15(1)(f)2.b., Florida Statutes (Supp.1994), unless Holley applied for social security disability benefits. Holley's attorney responded to this notification in a letter dated January 10, 1994, consisting of the following statements:

I have your letter of January 6, 1994. I dare you to suspend Mr. Holley's compensation benefits upon your perceived notion that 440.15(1)(f)2.b. is procedural.

Also, Al, do not do anything with reference with GES that would interfere with the attorney/client relationship that I have with Mr. Holley. That could lead to a law suit and I have reached a stage in my professional career where I am just itching to sue an insurance company for that kind of behavior.

On January 30, 1994, because of Holley's failure to apply for social security disability, the E/C suspended payment of PTD benefits. Holley then filed a petition seeking payment of those benefits. In her order, the judge of compensation claims (JCC) found section 440.15(1)(f)2.b. substantive and thus not applicable to accidents that occurred prior to January 1, 1994, the effective date of the amendment. The JCC therefore awarded Holley payment of PTD and supplemental benefits from January 30, 1994. The JCC also awarded penalties, costs, and attorney's fees. The E/C have appealed this order. Because the JCC erred in finding the amendment substantive, we reverse.

"[S]ubstantive law prescribes duties and rights and procedural law concerns the means and methods to apply and enforce those duties and rights." Alamo Rent-A-Car, Inc. v. Mancusi, 632 So.2d 1352, 1358 (Fla.1994). This court has explained the significance of the characterization of amendments to the Workers' Compensation Law as substantive or procedural:

It has long been established that the parties' substantive rights under the Workers' Compensation Law are fixed at the time of the claimant's accident and injury. However, it is also well established that procedural or remedial enactments may apply without regard to the date of accident and injury, as the parties generally do not have a vested entitlement with regard to such matters. As an analysis of the various decisions in this area would suggest, it is sometimes difficult to clearly demarcate the distinction between a substantive right and a procedural or remedial enactment.

Paulk v. School Bd. of Palm Beach County, 615 So.2d 260, 261 (Fla. 1st DCA 1993). If an amendment changes the amount of benefits a claimant may receive or impacts a claimant's entitlement to services, then it should be considered substantive. See Southern Bakeries v. Cooper, 659 So.2d 339, 341 (Fla. 1st DCA 1995) ("The cases addressing whether a change in the law should be viewed as substantive or procedural have routinely treated the entitlement to a service, and the source of payment therefor, as a matter of substance." ¹ ); Meek v. Layne-Western Co., 624 So.2d 345, 347-48 (Fla. 1st DCA 1993) (1990 amendments changing the amount of benefits claimant may receive are substantive and should not be applied retroactively.). Similarly, if an amendment "substantially changes" the liability of the E/C from what it was when the injury occurred, it may not be applied retroactively. See Clay Hyder Trucking Lines v. Atherton, 450 So.2d 318, 321 (Fla. 1st DCA 1984) (Because amendment concerning who has responsibility to assume the cost of rehabilitation increases potential liability of E/C, it is substantive in nature and applies prospectively only.); Ship Shape v. Taylor, 397 So.2d 1199, 1201 (Fla. 1st DCA 1981) (Statute providing for assessment of attorney's fees against E/C substantially changed E/C's liability from what it was when injury occurred and thus did not apply retroactively.). In contrast, if a statutory change does not alter vested substantive rights, then it applies retroactively. See Paulk, 615 So.2d at 261 (Where amendment did not impact claimant's entitlement to witnesses' testimony or alter source of payment for witnesses' fees, it did not diminish claimant's substantive rights and applied retroactively.); Mr. C's TV Rental v. Murray, 559 So.2d 452, 453 (Fla. 1st DCA 1990) (Amendment limiting family members to 12 hours of attendant care per day applied retroactively because it did not affect or limit a claimant's right to receive 24 hours of attendant care per day.).

In this case, the amended statute provides:

The division shall provide by rule for the periodic reporting to the employer or carrier of all earnings of any nature and social security income by the injured employee entitled to or claiming benefits for permanent total disability. The employer or carrier is not required to make any payment of benefits for permanent total disability for any period during which the employee willfully fails or refuses to report upon request by the employer or carrier in the manner prescribed by such rules or if any employee who is receiving permanent total disability benefits refuses to apply for or cooperate with the employer or carrier in applying for social security benefits.

§ 440.15(1)(f)2.b., Fla.Stat. (Supp.1994) (underlined portion indicates language added by amendment at issue, Ch. 93-415, § 20, 1994 Fla.Laws 62, 120).

In 1980, the Florida Supreme Court determined that the statute authorizing the E/C to take the social security offset, section 440.15(10), Florida Statutes, is procedural. American Bankers Ins. Co. v. Little, 393 So.2d 1063 (Fla.1980). In Little, the claimants asserted that the offset impaired their substantive rights. Id. at 1065. The supreme court concluded, however, that the claimants' substantive rights were not affected and therefore the amendment authorizing the offset should apply retroactively:

It is clear to us that neither [claimants'] substantive rights have been impaired by the implementation of the section 440.15(10) offset. The claimants only vested right in this case is to receive a certain total dollar amount in combined state and federal disability payments and neither has demonstrated that he or she has suffered any diminution of those benefits by reason of the subsequent enactment and implementation of the offset authorized by section 440.15(10). Both before and after the enactment of Florida's offset provision, claimants who have been injured receive the same maximum percent of weekly earnings. The hold harmless provisions in both the federal and state statutes effectively guarantee payment of the maximum disability benefits available under either social security or workmen's compensation. Accordingly, the mere shift in the source of payments from predominantly state-generated payments to predominantly federally-generated payments is procedural and in no way affects any vested right that an injured employee has as a result of his or her disability.

Id. at 1065.

Regarding the amendment at issue in this case, if a claimant applies for social security disability and does not receive it, the claimant's workers' compensation benefits remain the same. If a claimant does receive social security disability, the claimant's total benefits are not reduced; rather, subject to certain limitations, the E/C may then offset those benefits against the claimant's workers' compensation benefits. ² With either result, the claimant's total amount of benefits received does not decrease. Here, Holley stipulated that he would actually receive more in total benefits from workers' compensation and social security, even with the offset, than he would receive in workers' compensation benefits alone. On this record, then, the amendment does not decrease the total amount of benefits the claimant may receive.

Strictly speaking, the present case does not involve the social security offset. Had the E/C sought to actually take such an offset, "the burden of proving its appropriateness and applicability would appear to be one which employer/carrier must bear." Colonel's Table v. Malena, 412 So.2d 64, 66 (Fla. 1st DCA 1982). The issue posed by the statute now before us is whether the E/C may suspend PTD benefits pending claimant's application for social security disability. We are simply unable to say whether an offset issue may arise in the future.

Nor does the statute before us impose a penalty. Instead, the statute merely has the effect of implementing the procedural provision upheld by the supreme court in Little. Following this rationale, the statute should be viewed as "remedial ... to be applied retrospectively ... to pending cases." Alamo Rent-A-Car, Inc. v. Mancusi, 632 So.2d at 1358.

Further, we construe the language used in the amended statute as requiring the E/C to notify a claimant before suspending benefits. At the least, the notification must advise the claimant that failure to cooperate will result in the discontinuance of PTD benefits. The amended statute specifically indicates that the E/C may suspend PTD benefits when a claimant "refuses to apply for or cooperate with the employer or carrier in applying for social security benefits." § 440.15(1)(f)2.b., Fla.Stat. The use of the phrase "refuses to apply for or cooperate" connotes...