Bituminous Cas. Corp. v. Florida Power & Light Co., 209

• Decision Date: 09 September 1966
• Docket Number: No. 209,209
• Citation: 190 So.2d 426
• Parties: BITUMINOUS CASUALTY CORPORATION, Appellant, v. FLORIDA POWER AND LIGHT COMPANY, Appellee.
• Court: Florida District Court of Appeals

Page 426

190 So.2d 426

BITUMINOUS CASUALTY CORPORATION, Appellant, v. FLORIDA POWER AND LIGHT COMPANY, Appellee.

No. 209.

District Court of Appeal of Florida, Fourth District.

Sept. 9, 1966.

Rehearing Denied Oct. 21, 1966.

Charles Desmond Crowley, of Crowley & Nolan, Fort Lauderdale, for appellant.

George W. Wright, Jr., of Scott, McCarthy, Preston & Steel, Miami, and John M. Farrell of Burns, Middleton, Rogers & Farrell, Palm Beach, for appellee.

ANDREWS, Acting Chief Judge.

The plaintiff, Bituminous Casualty Corporation, appeals a final summary judgment for defendant, Florida Power and Light Company, alleged third party tort-feasor, limiting its subrogated claim to an equitable pro rata share of the proceeds of settlement between the injured claimant and defendant.

Plaintiff is the workmen's compensation insurance carrier for the Trio Development Company. George A. Washington, an employee of the Trio Development Company, was injured while acting within the course of his employment when a crane came into contact with defendant's overhead power line.

Plaintiff has paid and allegedly is continuing to pay workmen's compensation benefits to Washington. On January 23, 1963, plaintiff sent written notice to defendant of workmen's compensation coverage and payment of benefits to Washington pursuant to such coverage. On May 13, 1963, without suit being filed, defendant settled Washington's third party claim against the power company for personal injuries arising out of the accident for the amount of $10,000. Washington executed and delivered a release to defendant. The defendant did not give notice to the insurance carrier of the proposed settlement and release.

On July 6, 1964, plaintiff brought this action against defendant to recover the full amount of the workmen's compensation benefits paid and to be paid which at the time of suit exceeded $39,000. Defendant raised by way of answer the defense that the injured employee had given a complete release and that plaintiff's sole remedy was a pro rata share of the settlement proceeds based upon equitable distribution.

Defendant moved for a summary judgment and filed a petition for equitable distribution of the settlement proceeds. The trial court granded defendant's motion and entered a judgment against the power company awarding plaintiff $1,000 as its equitable pro rata share of the settlement proceeds. The trial court construed F.S.A. § 440.39(3)(b) to mean that, where an injured employee settles with a third party tort-feasor before suit is filed without giving notice to the compensation carrier, a release given by the employee to the third party tort-feasor will limit the carrier's right of subrogation solely to an equitable distribution of the settlement proceeds. The trial court's decision is contrary to the rule established in Dickerson v. Orange State Oil Company, Fla.App.1960, 123 So.2d 562, and Dade County v. Michigan Mutual Liability Company, Fla.App.1961, 130 So.2d 111.

Defendant urges that both the Dickerson case and the Dade County case were decided on the basis of F.S.A. § 440.39 as it existed prior to the 1959 amendment and that the proper construction of the 1959 amendment, F.S.A. § 440.39(3)(b) limits a compensation carrier's right of subrogation solely to a pro rata share based upon equitable distribution of the settlement proceeds, and therefore the Dickerson and Dade County cases are no longer authority.

The question thereby presented this court is whether or not the 1959 amendment, F.S.A. § 440.39(3)(b) limits a compensation carrier to a pro rata share based upon equitable distribution of the settlement proceeds where the carrier was Not given notice prior to the settlement and release. A comparison of section 440.39(3) of the workmen's compensation statute as it existed when the Dickerson and Dade County cases were decided and the statute as amended in 1959 discloses that the only change made was the addition of the clause (b). ¹

Prior to 1959 the employer or his compensation insurer could assert a statutory right of subrogation against a third party tort-feasor. The manner of asserting this right and the method of determining its value depended upon whether the injured employee filed suit for himself and his employer or forfeited that right to his employer. If the employee filed suit the value of the employer's subrogation claim for the sum paid or to be paid as compensation benefits was a pro rata share of the amount recovered. F.S.A. § 440.39(3)(a). If the employee failed to file suit within one year that right inured to the employer or his insurance carrier under subsection 440.39(4) which authorized full subrogation against the amount recovered for the sums paid as workmen's compensation benefits plus a pro rata share of costs. These provisions are still retained in the statute.

Prior to 1959 the statute did not specifically cover the situation existing when the injured employee settled with the third party tort-feasor, so the right of subrogation after such a settlement became the subject of much...