Old Republic Ins. Co. v. Whitworth, 83-1911

• Decision Date: 20 December 1983
• Docket Number: No. 83-1911,83-1911
• Citation: 442 So.2d 1078
• Parties: OLD REPUBLIC INSURANCE COMPANY, a foreign corporation, Petitioner, v. The Honorable Lewis B. WHITWORTH, as Circuit Judge of the Eleventh Judicial Circuit, in and for Dade County, Florida, Respondent.
• Court: Florida District Court of Appeals

Page 1078

442 So.2d 1078

OLD REPUBLIC INSURANCE COMPANY, a foreign corporation, Petitioner, v. The Honorable Lewis B. WHITWORTH, as Circuit Judge of the Eleventh Judicial Circuit, in and for Dade County, Florida, Respondent.

No. 83-1911.

District Court of Appeal of Florida Third District.

Dec. 20, 1983.

Greene & Cooper and Joan M. Bolotin and Robyn Greene, Mottlau & Wakefield, Miami, for petitioner.

Horton, Perse & Ginsberg and Mallory H. Horton, Miami, for respondent.

Before HENDRY, NESBITT and DANIEL S. PEARSON, JJ.

DANIEL S. PEARSON, Judge.

Old Republic Insurance Company, a compensation carrier, petitions for a writ prohibiting the respondent judge from exercising jurisdiction over a suit brought by a workers' compensation claimant against it for "gross negligence, outrage and punitive damages" arising out of the carrier's alleged willful breach of its obligations to make payments due the claimant under the Workers' Compensation Act. We grant the petition.

The claimant, one Robert Bird, filed compensation claims for work-related disabilities. Hearings before a deputy commissioner were held. The deputy commissioner found that Old Republic had acted in bad faith in delaying disability payments. He awarded Bird extensive benefits and imposed stringent penalties on all overdue benefits, costs and attorneys' fees, in accord with the Workers' Compensation Act's provisions. After unsuccessfully appealing these awards, Old Republic paid all damages and penalties due to Bird.

Thereafter, Bird filed the present Circuit Court action. Old Republic moved to dismiss the action on the ground that the Circuit Court had no jurisdiction to resolve this compensation dispute. When Old Republic's motion to dismiss was denied and its affirmative defense (asserting that the Circuit Court had no jurisdiction and the claim was barred by Section 440.11, Florida Statutes (1981)) ¹ was stricken, it filed its petition for writ of prohibition with this court. ²

It is well established that because the Workers' Compensation Act provides a comprehensive, exclusive and adequate administrative remedy for employees' work-related claims, the circuit court is without jurisdiction over an employee's action for additional damages for injuries covered by the Act. Winn-Lovett Tampa, Inc. v. Murphree, 73 So.2d 287 (Fla.1954). Likewise, because the exclusivity and immunity provisions of the Act, § 440.11, Fla.Stat. (1981), apply to the compensation carrier as well as the employer, Sullivan v. Liberty Mutual Insurance Co., 367 So.2d 658 (Fla. 4th DCA 1979), cert. denied, 378 So.2d 350 (1979); Carroll v. Zurich Insurance Co., 286 So.2d 21 (Fla. 1st DCA 1973), dismissed, 297 So.2d 568 (Fla.1974), a circuit court is without jurisdiction over an action against the carrier for injuries covered by the Act. Our inquiry therefore turns to whether the injury for which Bird sought compensation in his Circuit Court action is an injury covered by the Act.

The injury for which Bird sought recovery in the Circuit Court was Old Republic's alleged bad faith refusal to timely compensate him for his disabilities, an injury which is compensable under the Act, and one for which the deputy commissioner in fact imposed punitive costs and attorneys' fees in the compensation proceedings. Plainly, then, the injury is covered by the Act, and a compensation claimant cannot avoid the exclusivity of the Act and transform a delay in payments into an actionable tort cognizable in the Circuit Court simply by calling that delay outrageous, fraudulent, deceitful, or an intentional infliction of emotional distress. See, e.g., Sullivan v. Liberty Mutual Insurance Co., 367 So.2d 658 (Fla. 4th DCA 1979).

In Sullivan, a worker brought an action in the circuit court against his employer's compensation carrier for wrongful termination of medical treatment and intentional injury by willful withdrawal of authorization for treatment. He alleged that the result of the insurer's intentional withdrawal of authorization was that he suffered an amputation of his foot and other injuries. The trial court dismissed the case. The Fourth District affirmed. Sullivan's exacerbated injuries, like Bird's, were incidental to his original injury and compensable by his employer's compensation carrier. ³ The court held that the relief provided under the Act "is his sole remedy against the ... carrier." 367 So.2d at 660.

The Sullivan court reasoned that if delay in providing services could become the subject of an independent suit, the legislatively designed exclusivity of the Act would be destroyed.

"[B]eyond the legalistic objection to appellant's position [i.e., that the Act provided his sole remedy], we must point out that if delay ... attributable to a carrier could give rise to independent third party court actions, the system of workmen's compensation could be subjected to a process of partial disintegration. In the practical operation of the plan, minor delays in getting medical service, such as for a few days or even a few hours, caused by a carrier, could become the bases of independent suits, and these could be many and manifold indeed. The uniform and exclusive application of the law would become honeycombed with independent and conflicting rulings of the courts. The objective of the Legislature and the whole pattern of workmen's compensation could thereby be partially nullified.

....

"Flagrant interference by a carrier with rendition of medical care ... should generate swift relief in the commision. The courts support the commission in affording it."

367 So.2d at 660-61, quoting Noe v. Travelers Insurance Co., 172 Cal.App.2d 731, 342 P.2d 976 (1959) (claimant's exclusive remedy for insurer's wanton misconduct is under workers' compensation law; no remedy by separate action against insurer) (emphasis supplied).

Other jurisdictions agree. Everfield v. State Compensation Insurance Fund, 115 Cal.App.3d 15, 171 Cal.Rptr. 164 (1981) (allegations that compensation carrier consistently delayed payments, arbitrarily reduced amount paid, and intentionally disregarded subpoena duces tecum resulting in physical and emotional suffering and that these acts were intentional, deceitful, fraudulent, and in bad faith insufficient to warrant departure from basic rule that worker's sole remedy lay in compensation proceedings under Act); Sandoval v. Salt River Project Agricultural Improvement & Power District, 117 Ariz. 209, 571 P.2d 706 (Ct.App.1977) (regardless of intentional or negligent manner in which insurer failed to provide worker with benefit due, compensation law provides exclusive remedy for alleged tort where essence of claim is deprivation of benefits). See generally United States v. Demko, 385 U.S. 149, 87 S.Ct. 382, 17 L.Ed.2d 258 (1966) (Federal Tort Claims Act); Gill v. United States, 641 F.2d 195 (5th Cir.1981) (same); 2A Larson, Workmen's Compensation Law § 65 (Supp. July 1983).

The recent revisions to the Workers' Compensation Act, applicable to Bird's claim, highlight the Act's all-encompassing nature. The primary purpose of these revisions was to make the Act self-executing and to give the Division of Workers' Compensation additional authority to punish recalcitrant insurers and employers. Florida Erection Services, Inc. v. McDonald, 395 So.2d 203 (Fla. 1st DCA 1981). In McDonald, the court held that the Act was broad enough to provide the Workers' Compensation Division with sufficient authority to punish a carrier for willful and intentional "bad faith" as well as negligent abuse of duty without going outside the parameters of workers' compensation law.

"Since the relationship of the parties--employer, employee, and carrier--is unique in workers' compensation matters, being solely the creature of statute, we conclude that the bad faith language as used and defined in the statute must be given its own unique application .... consistent with the history and objectives of the workers' compensation law ....

....

"The legislative intent was and is that the workers' compensation law should be self-executing ....

"[T]he obligations of the carrier to the claimant are not dependent upon the contract of insurance. They are mandated by the workers' compensation act itself. The act itself makes it clear that the obligations and duties of the employer and carrier are regarded as inseparable to the extent necessary to carry out the purpose of the law."

395 So.2d at 209.

Bird's complaint seeks to evade the exclusivity of the workers' compensation law by pleading a cause of action for intentional harm. The complaint, however, as the complaint in Sullivan, does no more than allege intentional nonperformance of a statutory duty imposed by the Act. As the Sullivan court stated in affirming the dismissal of the complaint:

"Sullivan also contends that he sufficiently alleged a cause of action against the insurer for intentionally harming him. Section 440.11(2) provides exceptions to the immunity granted in the case of certain willful assaults [physical aggression] and automobile accidents. It would appear that the immunity granted under the statute was not intended to cover instances where a carrier intentionally harms the employee. However, while it is alleged that the insurer intentionally withdrew its authorization for medical treatment, nowhere is it alleged that Liberty Mutual intentionally injured Sullivan. We agree with the trial judge that the allegations were insufficient to come within any exception to the statutory immunity." 367 So.2d at 661.

In Everfield v. State Compensation Insurance Fund, 171 Cal.Rptr. 164, the California court decided a case virtually identical to the case before us. There, a worker who had received disability payments for his injuries filed a two-count action. In Count I, he alleged consistent delay in compensation payments, arbitrary reductions in amounts paid, and intentional disregard of a subpoena duces tecum, resulting in physical and emotional...