American Bankers Ins. Co. v. Little

• Decision Date: 30 October 1980
• Docket Number: Nos. 56816,57851,s. 56816
• Citation: 393 So.2d 1063
• Parties: AMERICAN BANKERS INSURANCE CO., Continental Insurance Company, Petitioners, v. Vella LITTLE, Respondent. Joseph J. NEUMAN, Petitioner, v. Joe Patti SEAFOOD, Incorporated, and Auto-Owners Insurance Company andIndustrial Relations Commission, Respondents.
• Court: Florida Supreme Court

Page 1063

393 So.2d 1063

AMERICAN BANKERS INSURANCE CO., Continental Insurance Company, Petitioners, v. Vella LITTLE, Respondent.

Joseph J. NEUMAN, Petitioner, v. Joe Patti SEAFOOD, Incorporated, and Auto-Owners Insurance Company andIndustrial Relations Commission, Respondents.

Nos. 56816, 57851.

Supreme Court of Florida.

Oct. 30, 1980.

Rehearing Denied March 9, 1981.

Russell A. Ortmayer of Marlow, Shofi, Ortmayer, Smith, Connell & Valerius, Miami, for American Bankers Ins. Co.

William R. Davenport, Gulf Breeze, for Joseph J. Neuman.

Joseph J. Finkelstein of Pelzner, Schwedock & Finkelstein, P. A., Miami, for Vella Little.

William H. Clark of Clark, Partington, Hart & Hart, Pensacola, for Joe Patti Seafood, Inc., Auto-Owners Ins. Co. and Industrial Relations Commission.

ENGLAND, Justice.

These cases arise from a 1973 amendment to Florida's workmen's compensation law, section 440.15(10) of the Florida Statutes, permitting Florida employers and carriers to offset their disability payments by the amount of an injured employee's weekly federal social security benefits. This legislation was prompted by a 1965 amendment to the federal Social Security Act which allows the states to claim an offset for federal disability payments, but in the absence of such action, continues the prior practice of permitting the Social Security Administration to claim an offset for state-generated benefits. ¹ Significantly, both the Florida and the federal statutes contain a "hold harmless" provision designed to ensure that injured employees do not receive less under the combined acts than they would under either. ² The question for decision is whether Florida employers and insurance carriers are entitled to the social security offset authorized by section 440.15(10) for current payments arising out of an accident which occurred prior to that statute's effective date.

American Bankers Insurance Co. v. Little

Vella Little was permanently and totally disabled in 1966. At the time her average weekly wage ³ was $58.84, of which amount she was entitled to receive no more than eighty percent in combined federal social security and state workmen's compensation benefits, or $47.07 per week. After the enactment of section 440.15(10), American Bankers, the employer's carrier, learned that Little was receiving social security payments of $47.03 per week, and claimed an offset of that amount against their liability. This reduced her compensation payments to $.04 per week. Little does not dispute these computations but asserts that her aggregate benefits were in fact reduced by the offset, because the Social Security Administration had failed to claim the offset to which it was entitled for American Bankers' disability payments during the period of time prior to the enactment of section 440.15(10).

Neuman v. Joe Patti Seafood, Inc.

Joseph Neuman was left permanently and totally disabled from an industrial accident in 1972. At the time of his accident Neuman's average weekly wage was $114.62, of which amount he was entitled to receive no more than eighty percent in combined social security and state workmen's compensation benefits, or $91.70 per week. After the enactment of section 440.15(10), the carrier learned that the total social security and workmen's compensation payments to Neuman exceeded $91.70 per week and sought to offset its payments to the extent of that excess. In so doing, the carrier reduced its payments from $56 to $42.09-a reduction of $13.91 per week. Neuman points to record evidence that the Social Security Administration had taken an offset for state-generated benefits in computing their payments, and he argues that another offset by the carrier as authorized by section 440.15(10) will effectively cause a reduction in benefits since both sources of disability benefits will be claiming offsets to his detriment.

There is really no dispute concerning the purpose of the interplay between federal and state law with regard to offsetting benefits. The parties agree that the change in federal law was designed to give states the benefit of offsets which formerly were taken by the Social Security Administration for persons disabled in job-related injuries. ⁴ They also agree that each statute contains a hold harmless provision fashioned to prevent a double offset resulting in decreased benefits ⁵ and that the State of Florida property took advantage of the change in federal law by enacting its offset provision, effective on July 1, 1973.

Little and Neuman both claim that retroactive application of the section 440.15(10) offset impairs their substantive rights as of the time of the injury. They cite to Sullivan v. Mayo, 121 So.2d 424 (Fla.1960), in which we held that a party's substantive rights under the workmen's compensation law vest on the date of the accident. Mere procedures for the enforcement of substantive rights, however, may be changed retroactively since "no one has a vested right in any given mode of procedure." Walker v. Laberge, Inc. v. Halligan, 344 So.2d 239, 243 (Fla.1977). It is clear to us that neither Little's nor Neuman's 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.

The only legitimate dispute between the parties in these two suits is whether the facts reveal an unwarranted reduction of benefits to either injured employee. Vella Little claims a reduction of benefits in fact because the Social Security Administration has never taken the offset to which it was entitled between 1966 and the commencement of American Banker's offset. Joseph Neuman claims a putative reduction in benefits, arguing that the Social Security Administration's continuation of its offset creates a presumption that the federal weekly computation base or "average current earnings" is greater than his state-determined "average weekly wage" and that this disparity results in lower disability payments. ⁶ Neither parties' contentions warrant the requested relief.

Vella Little has simply had a windfall since 1966 because the Social Security Administration never claimed the offset to which it was entitled. ⁷ That fact hardly ...