B & B Steel Erectors v. Burnsed, 91-528
| Decision Date | 03 December 1991 |
| Docket Number | No. 91-528,91-528 |
| Parties | B & B STEEL ERECTORS and Claims Center, Appellants, v. William Michael BURNSED, Appellee. 591 So.2d 644, 16 Fla. L. Week. D3027 |
| Court | Florida District Court of Appeals |
Robert B. Bennett and Thomas H. McDonald, of Rissman, Weisberg, Barrett & Hurt, P.A., Orlando, for appellants.
Michael Broussard and John T. Willett, of De Ciccio & Broussard, P.A., Orlando, for appellee.
The employer/carrier (E/C) in this workers' compensation case appeal an order of the judge of compensation claims (JCC) awarding benefits to appellee, William M. Burnsed. We affirm the award for the reasons set out below.
On August 15, 1990, the claimant fell from a three-story scaffold while working for appellant, B & B Steel Erectors, sustaining severe injuries which eventually resulted in paraplegia. At the January 1991 hearing on the issue of coverage, it was claimant's position that he was entitled to coverage pursuant to section 440.02(13)(d)(4), Florida Statutes (Supp.1990) or, alternatively, that if coverage were not statutorily mandated, the E/C were estopped from denying coverage on the basis of certain representations made to the employer. The E/C took the position that the entire 1990 Workers' Compensation Act was unconstitutional or, in the alternative, that the claimant could not establish the necessary elements of estoppel.
The evidence presented at the hearing established that the claimant, his father (Lonnie Burnsed, Jr.), and his brother (Lonnie Burnsed III), were the owners and corporate officers of a construction company known as B & B Steel Erectors, which built water and sewage treatment plants and various types of water tanks. In addition to their roles as corporate officers, claimant worked as field supervisor and filled in for absent workers when necessary, his father ran one of the company's construction crews, and his brother managed the business.
At some point in 1989, Burnsed III became concerned about the high cost of B & B's workers' compensation insurance, and met with his agent, Gary Burkey, to determine On July 6, 1990, the Burnseds received a form letter from Burkey which stated:
whether the cost could be reduced. Burkey suggested that the Burnseds exempt themselves from coverage as corporate officers, and "fill the gap" with medical and disability insurance. The Burnseds followed Burkey's suggestion, keeping a health insurance policy they already had, and adding a disability policy. Certificates of exemption were filed on November 27, 1989 and February 16, 1990, and the carrier wrote to B & B on May 10, 1990, advising that if any of the three officers wanted to be covered under workers' compensation insurance in the future, to contact them so they could send the proper forms to be signed and filed
Dear Sir:
The 1990 session of the Florida Legislature made some very important changes to the Workers Compensation Law. The primary effect is to require everyone in the construction industry to be covered by Workers Compensation.
This means that as of July 1, 1990 all corporate officers who may have exempted themselves from the benefits of Workers Compensation will automatically receive them again and will be unable to reject them thereafter. The premium charge of these officers will be based upon their actual payroll, subject to a minimum of $200 per week and a maximum of $1,100 per week.
Please call our office so we can give you an estimate of the additional premium that will be generated from this new law.
No one from Burkey's office ever contacted the Burnseds following the July 6, 1990 letter, and the Burnseds never contacted Burkey, assuming that the carrier would bill B & B for the increased coverage. According to Burkey, however, B & B's workers' compensation carrier considered the amendments to the 1990 law to be "on hold," and did not increase premiums to reflect coverage of the corporate officers. Burnsed III testified that the carrier had always calculated B & B's workers' compensation premium based on the company's payroll, giving him an estimated monthly payment and adjusting the amount after a periodic audit. Therefore, when B & B's August billing failed to reflect an increase in the premium, Burnsed III was unconcerned, expecting the premium to increase after the audit. Burnsed III testified that it was not until after claimant's accident that he learned that the Burnseds were, in fact, not covered. He also learned after the accident that claimant was not covered under B & B's health insurance policy, as it contained an exclusion for on-the-job injuries. The disability policy paid claimant $421 per week following the accident.
On the date of the accident, claimant was working both as crew supervisor and as a welder, replacing an employee who had not shown up for work that day, at a project which involved building a 300,000 gallon water tank for a new housing project in Ormond Beach. As a result of his fall, he sustained a severed spinal cord and a neurogenic bowel and bladder, and was left wheelchair-confined and totally disabled.
On February 1, 1991, the JCC entered an order finding that B & B's corporate officers were covered as of July 1, 1990, pursuant to section 440.02(13)(d)(4), Florida Statutes (Supp.1990) and, alternatively, that the carrier was estopped from denying coverage by virtue of Burnsed III's reliance on Burkey's July 6, 1990 form letter. The E/C appeal the finding of coverage, raising two arguments: (1) that section 440.02(13)(d)(4), Florida Statutes (1990) violates the Equal Protection clauses of the Florida and federal Constitutions, since there is no rational basis for the section's disparate treatment of corporate officers in the construction industry; and (2) that the JCC erred in finding the carrier to have been estopped from denying coverage.
Section 440.02(12)(b), Florida Statutes (1989), provided, in part, that "any officer of a corporation may elect to be exempt from coverage under this chapter by filing written certification of the election with the division as provided in s. 440.05." Section 440.02(12)(d)(4) of the 1989 Act provided that the term "employee" did not include:
Any officer of a corporation who elects to be exempt from coverage under this chapter.
In 1990, the above section was amended, as section 440.02(13)(d)(4), to provide that the term "employee" did not include:
Any officer of a corporation who elects to be exempt from coverage under this chapter; however, no officer of a corporation engaged in the construction industry shall be exempted from coverage under this chapter. (e.s.)
The 1990 amendment to the Workers' Compensation Act (Chapter 90-201) became effective on July 1, 1990. On July 6, 1990, the employer in the instant case received the form letter from agent Burkey advising it of the changes in the Workers' Compensation law, and informing it that all officers of corporations engaged in the construction industry who had previously exempted themselves from workers' compensation benefits would automatically receive them again as of July 1, 1990. Claimant was injured on August 15, 1990.
On December 5, 1990, the Second Judicial Circuit Court ruled in Scanlon v. Martinez, no. 90-3137 (Fla. 2d Cir.Ct. December 5, 1990), that Chapter 90-201 contained two separate subjects (workers' compensation and international trade) and violated the single subject requirement of the Florida Constitution. Consequently, the Legislature convened in a special session on January 22, 1991, and accomplished two objectives with regard to Chapter 90-201. First, it separated the workers' compensation and international trade provisions into two distinct bills, and reenacted both into law. Chapter 91-1, which reenacted the workers' compensation portion, expressly provided that the law "shall operate retroactively to July 1, 1990," and that "in the event that such retroactive application is held by a court of last resort to be unconstitutional, the act shall apply prospectively from the date the act becomes a law." Chapter 91-1 reenacted the workers' compensation portion of Chapter 90-201, but did not amend section 440.02(13)(d)(4). Second, the Legislature enacted Chapter 91-2, which both reenacted and amended certain provisions of the workers' compensation law. Specifically, section 440.02(13)(d)(4) was changed back to its pre-1990 form, to provide that the term "employee" did not include "any officer of a corporation who elects to be exempt from the provisions of this chapter." Chapter 91-2 also added section 440.02(13)(d)(5), which provided that the term "employee" did not include:
A sole proprietor or officer of a corporation who actively engages in the construction industry, and a partner in a partnership that is actively engaged in the construction industry, who elects to be exempt from the provisions of this chapter. Such sole proprietor, officer, or partner is not an employee for any reason until the notice of revocation of election filed pursuant to s. 440.05 is effective.
In addition, Chapter 91-2 added section 440.02(13)(b)(2) and (3), which provided:
2. As to officers of a corporation who are actively engaged in the construction...
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