Florida Ins. Guar. Ass'n v. Renfroe

• Decision Date: 02 October 1990
• Docket Number: No. 88-765,88-765
• Citation: 568 So.2d 962
• Parties: 15 Fla. L. Weekly D2470 FLORIDA INSURANCE GUARANTY ASSOCIATION, and Ray's Suprex, Inc., Appellants/Cross Appellees, v. Hollice C. RENFROE, Appellee/Cross-Appellant, and Division of Workers' Compensation, Cross-Appellant.
• Court: Florida District Court of Appeals

Page 962

568 So.2d 962

15 Fla. L. Weekly D2470

FLORIDA INSURANCE GUARANTY ASSOCIATION, and Ray's Suprex, Inc., Appellants/Cross Appellees, v. Hollice C. RENFROE, Appellee/Cross-Appellant and Division of Workers' Compensation, Cross-Appellant.

No. 88-765.

District Court of Appeal of Florida First District.

Oct. 2, 1990.

Rehearing Denied Oct. 31, 1990.

Greg Johnson of Rumrell and Johnson, Jacksonville, and Marguerite H. Davis of Katz, Kutter, Haigler, Alderman, Eaton & Davis, Tallahassee, for appellants/cross appellees.

Thomas W. Davis of Barton, Davis & Fernandes, Gainesville, for appellee/cross-appellant.

Michael J. Rudicell, Dept. of Labor and Employment Sec., Tallahassee, for cross-appellant.

MINER, Judge.

This case involves an appeal by the employer/carrier (E/C) from a workers' compensation order awarding bad faith attorney's fees to claimant and a cross-appeal by claimant from that portion of the same order awarding a 5% permanent total disability (PTD) supplement but commencing payment of that supplement on January 1 of the year following claimant's reaching maximum medical improvement (MMI) and attaining PTD status.

With respect to the appeal, the E/C raise three issues. First, they argue that there is no competent substantial evidence which would support the Judge of Compensation Claims' (JCC's) award of bad faith attorney's fees under section 440.34(3)(b), Florida Statutes. Next, they maintain that the Florida Insurance Guaranty Association (FIGA) cannot be held liable for bad faith attorney's fees. Lastly, they assert that the JCC erred in computing the attorney's fees awarded. Finding that the record contains competent substantial evidence to support the award of bad faith fees and that the JCC did not err in computing the amount of the award, we affirm as to those points without additional comment. We also affirm the remaining point on appeal but deem that further discussion of the issue is warranted.

FIGA argues that section 631.66, Florida Statutes (1987), precludes liability for bad faith attorney's fees because the association cannot be found liable for actions taken in the performance of its duties. We do not find this argument persuasive for, if such an interpretation were given, then FIGA would also be insulated from liability for other types of attorney's fees. Since such is not the case, we find FIGA's argument to be without merit.

FIGA next argues that section 631.57(1)(a)(3) and (1)(b), Florida Statutes (1987), shield it from liability in the premises. These subsections protect FIGA from liability beyond the policy limit and for penalties and interest. Thus, FIGA asserts, an award of bad faith attorney's fees amounts to an impermissible penalty outside the scope of the policy. It is well established, however, that an award of bad faith attorney's fees is not a penalty nor does it constitute a recovery for claimant that is over and above the amount necessary to compensate him for his loss. See Florida Erection Services v. McDonald, 395 So.2d 203 (Fla. 1st DCA 1981). Contrary to FIGA's position, we find Rivers v. S.C.A. Services of Florida, Inc., 488 So.2d 873 (Fla. 1st DCA 1986) to be inapposite. The holding in that case only states that in addition to reimbursing the claimant and his attorney, an award of bad faith fees serves to punish the carrier for ignoring the self-executing nature of Florida's Workers' Compensation Act. It cannot be said, however, that this recognition of the deterrent effect of a bad faith fee award amounts to a pronouncement that such an award is a penalty.

In Taylor v. Fulmer-Orlando, 528 So.2d 1224 (Fla. 1st DCA 1988), this court affirmed an award of bad faith attorney's fees against FIGA. Although we did not there address the arguments made by FIGA in the instant case, we find that those arguments are not so convincing as to merit a different result. Accordingly, we hold that a bad faith fee award is not a penalty within the meaning of Section 631.57.

Turning now to the cross-appeal, claimant and the Division urge that we not follow this court's stated rule as to the commencement of supplemental benefits expressed in Winter Garden Citrus v. Parrish, 438 So.2d 472 (Fla. 1st DCA 1983), arguing that that opinion was in error. In Winter Garden Citrus, the court found that the starting date for the payment of supplemental benefits would be January 1 of the year following the year in which the claimant is determined to be permanently and totally disabled (after reaching MMI). The Winter Garden Citrus opinion was erroneously reasoned, they maintain, because it misapplied Martino v. Nevins Fruit Company, IRC order 2-3775 (April 20, 1979). In Martino, the claimant was determined to be PTD the same year in which he was injured; thus supplemental benefits began running at PTD, but amounted to nothing because the calendar year had not elapsed since the injury.

For its part, the E/C argue generally that the rule of stare decisis requires that this court follow Winter Garden Citrus.

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