Bammac, Inc. v. Grady

• Decision Date: 22 December 1986
• Docket Number: No. BJ-127,BJ-127
• Citation: 500 So.2d 274,12 Fla. L. Weekly 32
• Parties: 12 Fla. L. Weekly 32 BAMMAC, INC., and Cigna Corporation, Appellants, v. Raymond GRADY, Appellee.
• Court: Florida District Court of Appeals

Page 274

500 So.2d 274

12 Fla. L. Weekly 32

BAMMAC, INC., and Cigna Corporation, Appellants, v. Raymond GRADY, Appellee.

No. BJ-127.

District Court of Appeal of Florida,

First District.

Dec. 22, 1986.

Rehearing Denied Jan. 26, 1987.

Ralph J. McMurphy of Green, Simmons, Green, Hightower & Gray, P.A., Ocala, and Steven A. Rissman and Manuela C. Napier of Cooper, Rissman & Weisberg, P.A., Orlando, for appellants.

Edward Hurt, Jr. of Hurt, Parrish & Dalton, P.A.; and Bill McCabe of Shepherd, McCabe & Cooley, Orlando, for appellee.

SMITH, Judge.

Appellants appeal a final order of the deputy commissioner which granted the request of appellee, Raymond Grady (claimant) for rehabilitation benefits. Appellants (hereinafter alternatively "E/C") contend that the services provided by claimant's rehabilitation provider were not "rehabilitation" as defined by section 440.49, Florida Statutes (1985), and that the record below contained insufficient evidence of claimant's need for such benefits. Appellants also contend that it was improper for the deputy commissioner to deny their objection to the furnishing of rehabilitative services to claimant by Statewide Rehabilitation, Inc., a corporation owned by the claimant's attorneys. We disapprove the representation of claimant, by his present attorneys, in claims seeking payment for rehabilitation services rendered or to be rendered by Statewide as long as the attorneys maintain their ownership in the corporation. For the reasons hereafter stated, however, we find it advisable to enforce the prohibition against representation by the attorneys only prospectively, not retrospectively, and therefore affirm the rehabilitation order under review here, with directions as to representation in connection with any further rehabilitation claims during the rehabilitation process.

Claimant was involved in an industrial accident, accepted by the E/C as compensable, on January 29, 1980. As a result of the accident, claimant suffered injuries to his left knee and femoral bone, which according to his treating physician, Dr. Fulton, left claimant a "functional amputee." Claimant was rated by Dr. Fulton as suffering a permanent impairment of 36% of the whole man. Claimant reached MMI on November 19, 1984.

Claimant testified at the hearing on his claim for rehabilitation benefits below that he received only nominal assistance from the E/C in his efforts to seek new employment after the industrial accident. According to claimant, the E/C offered no rehabilitation benefits to him even though he had expressed an interest in pursuing employment in a prior job field, electronics assembly. Instead, claimant testified, the E/C merely provided him with lists of prospective employers gleaned from a local newspaper.

Claimant was subsequently successful in securing employment with the Deland Sun Times newspaper as a newspaper carrier. Claimant testified that his net weekly income from this job was $112, based upon a "profit" of $1.05 per customer. Claimant also received a $.15 per mile reimbursement for mileage expenses he incurred. At the time of the hearing below, claimant had accepted a new 400-person route, an increase of approximately 125 customers over his previous route. Claimant's average weekly wage at the time of his industrial accident was stipulated by the parties as $193.41.

Claimant continued to seek rehabilitation benefits from the E/C after he became employed at the Deland Sun Times, expressing a lack of desire to make that job a career. As a result of his dissatisfaction with the E/C's efforts, claimant visited Statewide Rehabilitation, Inc., a company owned by claimant's attorney and members of the attorney's law firm. After undergoing certain testing procedures, an individualized written rehabilitation plan (IWRP) for claimant was submitted to appellant Cigna Corporation, the carrier below, by Charles May, president of Statewide Rehabilitation, Inc. When the E/C declined to authorize the services proposed in the IWRP, claimant filed his pending claim for rehabilitation benefits. The deputy's order granting benefits rejected the E/C's defenses that rehabilitation benefits were not due claimant since he had accepted a higher paying job with the Deland Sun Times, and that an impermissible conflict of interest was established by the ownership interest of claimant's attorney in the rehabilitation provider, Statewide Rehabilitation, Inc., who under the deputy's order would be supervising claimant's IWRP.

Appellants first assert on appeal that the services provided by Statewide Rehabilitation, Inc., are not "rehabilitation" as contemplated by section 440.49(1)(a), which requires rehabilitation benefits to provide "appropriate training and education for suitable gainful employment." Appellants maintain that the testing and evaluation procedures undertaken on claimant's behalf by Statewide Rehabilitation were not "training and education for suitable gainful employment" within the meaning of the above-noted statute. In this regard, appellants assert the sole right to determine which rehabilitation provider they would fund. We find no merit in this contention. For one thing, contrary to appellants' assertions, section 440.49(1)(b)3 c., Florida Statutes (1983), specifically describes "vocational rehabilitation services" to include "vocational ... testing, counseling [and] evaluation ...," the precise services, both provided and proposed, by Statewide Rehabilitation, Inc. Moreover, appellants' contentions that merely providing claimant with a list of prospective employers constitutes "rehabilitation," on the theory that an E/C has the sole discretion to determine a claimant's rehabilitation provider, were rejected in Viking Sprinkler Co. v. Thomas, 413 So.2d 816, 818 (Fla. 1st DCA 1982).

The second aspect of appellants' attack on the award of rehabilitation services requires extensive discussion. Appellants contend that the fact that claimant's attorney maintains an ownership interest in Statewide Rehabilitation, Inc., while at the same time seeking rehabilitation services in behalf of their client to be performed by Statewide, at the E/C's expense, creates an appearance of impropriety that is not permitted under the Florida Code of Professional Responsibility. Testimony before the deputy commissioner by Charles May, an employee of Statewide Rehabilitation, Inc., established that the corporation was formed and owned by the members of the law firm of Hurt, Parrish and Dalton, P.A., one of the law firms representing claimant. Mr. May also testified, however, that his professional judgment regarding the need for vocational rehabilitation services for claimant was not affected in any way by pressure from the law firm representing claimant.

Because we found issues arising from the attorneys' ownership of Statewide Rehabilitation and the E/C's objections on this ground appearing in two other cases pending before the court simultaneously, ¹ we consolidated the three cases for oral argument and requested additional briefing. Although we entertained some doubt as to whether the issue was sufficiently raised below and presented here in Bammac, our review of the records in Winter Park (no longer before us) and Munford disclosed that motions for disqualification of claimant's counsel were made in both cases. Further, in Munford, the facts were developed more fully, including sworn testimony by one of claimant's counsel, Mr. Edward Hurt, Sr. The pertinent facts concerning the attorneys' ownership, which are undisputed, are that Statewide Rehabilitation, Inc., was formed by Edward H. Hurt, Sr., David Parrish, and Roy Dalton, the partners in the law firm presently representing these claimants. Mr. May began work as president of the corporation on May 13, 1985, immediately after incorporation. Statewide was organized as a profit-making venture, and its incorporators are the directors of the company. Claimant's attorney, Mr. Hurt, agreed that if the deputy commissioner awarded services to the claimant by Statewide, the billing would be income to the corporation and he would realize profits as a corporate stockholder. Clients may be and have been referred to Statewide for testing and evaluation, and the preparation of an Individualized Written Rehabilitation Plan (IWRP) without the consent of the E/C and without order by the deputy. As of the hearing dates, some sixty percent, or thereabouts, of Statewide's patrons have been referrals from appellee's law firm. Mr. May testified that Statewide provides extensive testing and evaluation, but does not actually perform the retraining which may be recommended in the plan. There was testimony in behalf of the E/C that the same services could be performed by other providers. The order in Bammac (and similar order in Munford ) directed the E/C to "provide to the claimant rehabilitation under the direction of Statewide Rehabilitation, Inc., and Statewide Rehabilitation, Inc., is hereby authorized to carry out the vocational objectives as set out in their Individualized Written Rehabilitation Plan dated 5/23/85 and filed with the aforementioned Motion to Compel Rehabilitation herein at the expense of the employer/carrier." We note here that the motion to compel rehabilitation specifically requested that Statewide be authorized to provide the rehabilitation.

After consideration of the additional briefs and oral arguments of counsel for the several parties, we hold that appellee's attorneys' representation of claimants requesting the use of Statewide Rehabilitation, Inc. for the furnishing of rehabilitative testing or other services for which payment will or may be sought from the E/C, or who intend to present any evaluation, plan or recommendation prepared by any officer or employee of Statewide for the purpose of securing a rehabilitation order or award on their behalf, as long as the attorneys own an interest in Statewide, is an unacceptable practice which...