Dickerson v. Orange State Oil Co., 1810

• Decision Date: 05 October 1960
• Docket Number: No. 1810,1810
• Citation: 123 So.2d 562
• Parties: Jimmy S. DICKERSON, Appellant, v. ORANGE STATE OIL COMPANY, a corporation, Appellee.
• Court: Florida District Court of Appeals

Page 562

123 So.2d 562

Jimmy S. DICKERSON, Appellant, v. ORANGE STATE OIL COMPANY, a corporation, Appellee.

No. 1810.

District Court of Appeal of Florida, Second District.

Oct. 5, 1960.

O. B. McEwan; Sanders, McEwan, Schwarz & Mims, Orlando, for appellant.

Raymer F. Maguire, Jr.; Maguire, Voorhis & Wells, Orlando, for appellee

ALLEN, Chief Judge.

The appellant, as the plaintiff in the lower court, filed a complaint on November 12, 1958, alleging that while acting and working within the scope of his employment with the Florida Department of Agriculture, he was injured as a result of defendant's negligence while performing certain work on premises owned by the defendant. The defendant answered setting up certain affirmative defenses among which were that the plaintiff's cause of action was barred by a general release executed by the plaintiff on October 28, 1955; and that plaintiff's cause of action was also barred by the statute of limitations. The defendant's motion for summary judgment was granted on the basis of the above two defenses as established by the complaint, the answer, and certain admissions by the plaintiff

The plaintiff was employed by the Florida Department of Agriculture on May 23, 1955, and on that date, while acting within the course of his employment, he was injured on premises owned by the defendant. On October 28, 1955, the plaintiff, in return for the payment of $1,400, executed to the defendant a general release of any and all claims which he had arising out of the accident on May 23, 1955. The present action was instituted on November 12, 1955, by the United States Fidelity and Guaranty Company pursuant to section 440.39, Florida Statutes, F.S.A. This insurance company was the carrier for the Florida Department of Agriculture and as such was subrogated to the rights of plaintiff Dickerson under section 440.39, Florida Statutes, F.S.A. The facts are undisputed and only questions of law are presented for our determination.

The contention of the defendant in the lower court, and one of the grounds upon which the trial judge based his decision, was that section 440.39, Florida Statutes, F.S.A., creates a new cause of action in the subrogated workmen's compensation insurance carrier thus constituting a cause of action created by statute and subject to a three year statute of limitation as provided by section 95.11(5)(a). The plaintiff contended in the lower court and similarly contends before this court that section 440.39 does not create a new cause of action but merely subrogates a party who pays workmen's compensation benefits to the rights of the injured employee, and in effect the subrogated party steps into the shoes of the injured employee for the purpose of prosecuting an action against the third party tort-feasor.

This court was confronted with a related issue in United States Casualty Company for Use and Benefit of Cheston v. Town of Palm Beach, Fla.App.1960, 119 So.2d 800, 802, which involved an action by a subrogated insurance carrier against the city as a third party tort-feasor. Claimant was injured while acting within the scope of his employment and had received compensation benefits from his employer's insurance carrier. After the claimant failed to take any action against the city within one year from the date of his injury, the insurance carrier gave the city a thirty day notice and subsequently filed an action for damages. The lower court, in entering summary judgment for the defendant, ruled that the action was barred by section 95.24, F.S.A., which provides that no action shall be brought against any city or village for any negligent or wrongful injury or damage to person or property, unless brought within twelve months from the time of the injury.

In an opinion affirming the lower court, this court held that the claimant's cause of action accrued at the time of the accident or misfortune which caused his injury, and in regard to the subrogated insurance carrier's rights, we stated:

'The rights of plaintiff carrier under the workmen's compensation law are wholly the creature of the statute and are based upon the cause of action which the claimant had against the defendant city and subject to the limited subrogation rights under the terms and conditions set forth in section 440.39, Florida Statutes, F.S.A., Cushman Baking Co. v. Hoberman, Fla.1954, 74 So.2d 69. Thus the failure of the claimant to institute an action against the negligent third party within one year operates as an assignment to the carrier of the cause of action in tort. Consequently, the carrier's suit can necessarily only be upon the cause of action in tort which the claimant could have instituted. The carrier acquires only such rights as were at the time vested in the claimant. See Annotation 41 A.L.R.2d 1044.

'Claimant's cause of action against the defendant city being one for recovery of damages for personal injuries and, therefore, subject to the one year limitation on such actions, the cause of action is not changed by the fact that the carrier is the plaintiff. The action remains as one for personal injuries to the claimant and, therefore subject to the same statute of limitations. Thus we conclude that the claimant's rights, having been barred by section 95.24, the carrier's rights, derived by operation of section 440.39(4), are likewise barred by section 95.24. Although there apparently is no Florida decision on this point, our holding is in accord with the majority view as set forth in Annotation 41 A.L.R.2d 1044.'

The annotation in 41 A.L.R.2d 1044, referred to in the above quote is entitled 'Statute of limitations applicable to action, by way of subrogation or the like, by employer or insurance carrier against third person for injury to employee,' and at page 1045 the writer of the text states:

'The weight of authority favors the rule that the statute of limitations applicable in actions for damages for personal injury, or for death, as the case may be, governs in actions by an employer or his insurance carrier who is subject to payment of compensation, against a third person for injury to, or death of, an employee, the theory usually accepted being that the employer is subrogated to the right of the employee to recover for the injury, or of the employee's representative to recover for his death.

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'The underlying reason for the majority rule appears to be that the cause of action is not changed by the fact that the employer or insurer is the plaintiff, the action still being one for the recovery of damages for personal injuries to or death of the employee, and therefore subject to the statute of limitations applicable to such an action.

'Generally, the courts have adhered to this rule notwithstanding the contention that it would work a hardship in that it would defeat a recovery for an employer or his insurance carrier against the third party liable for the injury or death, because he could not maintain an action against a third person until his liability for compensation had been determined, which might be after the employee's right of action or that of his representative against a third person had become barred.'

Although no Florida cases are included in the annotation cases from twenty jurisdictions are cited in support of the above view. A case somewhat analogous to the instant case, and cited in the above annotation is Exchange Mut. Indemnity Ins. Co. v. Central Hudson Gas & Electric Co., 243 N.Y. 75, 152 N.E. 470, 471, wherein the court stated in regard to whether the subrogated insurance carrier's cause of action is a distinct and separate cause of action from that which could be asserted by the employee:

'Neither assignment nor subrogation confers upon a new party rights greater than those which the original party possessed.'

The question with which we are concerned is discussed in Larson, The Law of Workmen's Compensation, sec. 75.10, wherein the author states:

'The question of what defenses are available to the third party turns most frequently on the underlying theoretical issue of the extent to which the subrogee's action is deemed to be derivative from and identified with the employee's cause of action. As to this issue, the first investigation must always be the exact language of the subrogation statute in the particular jurisdiction, since this will sometimes settle the issue by the choice of words used to describe the subrogation process. For example, if the statute 'assigns' the employee's cause of action to the employer, as the New York statute does, it seems beyond dispute that the cause of action remains the same. But at the other extreme, if the statute, like the Wisconsin statute, merely says that the employer shall have the 'right to maintain an action in tort', there is room for argument that a new and independent cause of action has been created. Between these extremes are statutes using the word 'subrogate'--a word not quite as unambiguous as 'assign'--followed usually by the phrase 'to the rights of the employee', which seems to support the usual holding that the cause of action remains the original employee's action. Some statutes, like those of Massachusetts and Illinois, allow the subrogee to bring the third party action in the name of the employer or in the name of the employee; but the courts of the two states appear to disagree on whether this disjunctive provision creates a statutory cause of action.'

In section 75.30, Larson states in regard to the applicable statute of limitation:

'Under most statutes containing no special treatment of the question of limitations, the subrogated employer's cause of action is barred by the same statute of limitations that would have applied to an action brought by the employee or his administrator. This view has usually prevailed over the argument that the subrogee's action is a new cause of action created by statute and therefore subject to the special statute of limitations for...