General Guaranty Ins. Co. v. Moore

• Decision Date: 01 August 1962
• Docket Number: No. 2965,2965
• Parties: GENERAL GUARANTY INSURANCE COMPANY, a corporation, Appellant, v. Harry E. MOORE, Robert Simmons, and L. L. Stone, Inc., Appellees.
• Court: Florida District Court of Appeals

Page 541

143 So.2d 541

GENERAL GUARANTY INSURANCE COMPANY, a corporation, Appellant, v. Harry E. MOORE, Robert Simmons, and L. L. Stone, Inc., Appellees.

No. 2965.

District Court of Appeal of Florida, Second District.

Aug. 1, 1962.

Thomas C. MacDonald, Jr., and William T. Keen, of Shackleford, Farrior, Stalling, Glos & Evans, Tampa, for appellant.

Robert C. Lane and Curtiss B. Hamilton, Miami, for appellee Moore.

ALLEN, Judge.

This appeal is brought by a workmen's compensation carrier from a final order entered on its subrogation claim in an action arising under Section 440.39(4), Florida Statutes, 1957, F.S.A. Under this provision, if an employee subject to the workmen's compensation law has been injured by a third party tort-feasor and fails within one year to bring an action against said third party, the employer or compensation carrier is permitted to sue the third party for the benefit of the employee and the employer or carrier (in this case carrier) as the case may be.

Herein, the parties will be referred to as they appeared in the lower court. Appellant was the plaintiff compensation carrier, appellee, Harry Moore, was the injured plaintiff-employee and the remaining appellees were defendants-third party tort-feasors.

As a result of an accident which occurred on June 10, 1959, the carrier paid compensation benefits to Harry Moore. Moore did not file suit against the allegedly negligent third party tort-feasors within one year from the accident. Accordingly, the carrier, being subrogated to the claim of Moore under F.S. Section 440.39, F.S.A., instituted suit in the name of Moore on June 27, 1960, against the defendants under the provisions of subsection (4) of said statute.

Shortly thereafter, suit against the same defendants was instituted by Moore individually, being represented by his own attorney. Counsel for Moore also filed a motion to dismiss the instant suit brought by the carrier, claiming that the same was not undertaken in good faith in that counsel for Moore had been attempting to negotiate a settlement with the defendants at the time the carrier filed its suit and that the carrier was so informed at the time the period of one year from the date of the accident had elapsed.

Subsequently, as a result of correspondence between the carrier's counsel and Moore's individual counsel, both counsel agreed to participate in the prosecution of the original (instant) action brought by the carrier and the suit brought by Moore, individually, was dropped. The substance of the understanding reached is expressed in the following excerpt from a letter written by counsel for the carrier to Moore's counsel.

'We have considered further the proposition which put to us in personal conversation concerning the prosecution of the captioned case. We are agreeable to the offer that you made; the general effect of which was that we would receive 100% recovery of the compensation lien on behalf of the insurance carrier whom we represent and that we would receive in addition to this 10% of your attorneys' fee on any proposition which you put to us in personal lien. You informed us that you have this on a one-third contingency and 40% on appeal.

'We, of course, intend to remain in the suit and appear as attorneys of record. We shall, of course, work with you in every way possible to effectively prosecute the case. * * *'

Still later, as a result of Moore's lack of confidence in and failure to cooperate with counsel for the carrier, the arrangement was altered as expressed in the following excerpt from another letter written to Moore's counsel by counsel for the carrier.

'This case has given us concern from the beginning due to the particular personality of the plaintiff, Harry E. Moore. As you know, this man sustained a very serious injury and this law suit means a very great deal to him. He has no confidence in our firm nor do we have his cooperation in any sense of the word. For these reasons, after further reflection, we do not want to represent Mr. Moore in any degree for his personal claim over and above the amount of the compensation claim. It is therefore our desire to withdraw from any participation in fee or moneys recovered over and above the amount of our client's compensation lien which is 100%, as you know. We, of course, shall continue to appear as attorneys of record along with your firm and will continue to work with you in every way to successfully prosecute this suit, however, we feel that you should be the primary attorney in the suit and should handle the actual preparation and trial due to your relationship with Harry Moore.'

From this point on the case was largely handled by Moore's attorney. Ultimately the case came to trial, during the course of which a settlement of $30,000 was proposed by the defendants and accepted by counsel for Moore. The lower court orally awarded the carrier the sum of $3,700 from said settlement, although it was undisputed that its compensation payments totaled $7,777.07. No written order was entered and on petition for rehearing a lengthy colloquy took place between the trial judge and respective counsel in the presence of a court reporter in order to document the various factors which influenced the award as made. The trial judge reaffirmed his award to the carrier of $3,700 and, in addition, granted an oral motion by Moore's counsel for attorney's fees, awarding him $400 of the $3,700 to be paid to the carrier by the defendants. These rulings were finalized in a formal written order from which the carrier has appealed.

Two questions were raised.

1. Whether or not the trial court erred in failing to award the compensation carrier the entire amount of its compensation payments.

2. Whether or not the trial court erred in awarding the plaintiff an attorney's fee from the $3,700 awarded the compensation carrier.

We hold that in both respects the trial court committed reversible error.

The determination of the amount to be awarded a compensation carrier on a subrogation claim is controlled by statute in this state. The applicable statute in this case is Section 440.39(4), Florida Statutes, 1957, F.S.A. the law in effect at the time of the injury to Moore. See Hecht v. Parkinson, Fla.1954, 70 So.2d 505; Employers' Ins. Co. of Alabama v. Miller, Fla.App.1960, 121 So.2d 813; Aaron v. Florida Power & Light Co., Fal.App.1961, 126 So.2d 889.

Said subsection (4) reads:

'(4) If the injured employee or his dependents, as the case may be, shall fail to bring suit against such third party tort-feasor within one year after the cause of action thereof shall have accrued, the employer if a self-insurer, and if not, the insurance carrier, may institute suit against such third party tort-feasor either in his own name or as provided by subsection (3) of this section, and in the event suit is so instituted, shall be subrogated to and entitled to retain from any judgment recovered against or settlement made with such third party, the following: All amounts paid as compensation and medical benefits under the provisions of this law and the present value of all future compensation benefits payable, to be reduced to its present value, and to be retained as a trust fund from which future payments of compensation are to be made, together with all court costs, including attorney's fees expended in the prosecution of such suit, to be prorated as provided by subsection (3) of this section. The remainder of the moneys derived from such judgment or settlement to be paid to the employee or his dependents, as the case may be.' (Emphasis supplied.)

Under this subsection, when the carrier itself institutes the action against third party tort-feasors, as happened here, it is entitled to recover its actual compensation outlay plus the present value of future compensation benefits payable. If this statute had been followed to the letter in the instant case, the carrier would have recovered $7,777.07.

Had this suit been instituted within one year of the accident by the employee Moore, however, the amount to be awarded the carrier on its subrogation claim would have been controlled by Section 440.39(3), F.S.1957, F.S.A., which reads:

'(3) In actions at law against a third party tort-feasor, the employee, or his dependents, or those entitled by law to sue in the event he is deceased, shall sue for the employee individually, and for the use and benefit of the employer if a self-insurer, or employer's insurance carrier, in the event compensation benefits are claimed or paid, and such suit may be brought in the name of the employee or his dependents or those entitled by law to use in the event he is deceased, as plaintiff or, at the option of such plaintiff may be brought in the name of such plaintiff and for the use and benefit of the employer or insurance carrier, as the case may be. Upon suit being filed the employer or the insurance carrier, as the case may be, may file in the suit a notice of payment of compensation and medical benefits to the employee or his dependents which said notice shall be recorded and the same shall constitute a lien upon any judgment recovered to the extent that the court may...