Shaw v. Cambridge Integrated Services Group, Inc.

• Decision Date: 06 October 2004
• Docket Number: No. 4D02-4515.,4D02-4515.
• Citation: 888 So.2d 58
• Parties: James SHAW, Appellant, v. CAMBRIDGE INTEGRATED SERVICES GROUP, INC., Appellee.
• Court: Florida District Court of Appeals

888 So.2d 58

James SHAW, Appellant, v. CAMBRIDGE INTEGRATED SERVICES GROUP, INC., Appellee.

No. 4D02-4515.

District Court of Appeal of Florida, Fourth District.

October 6, 2004.

Order Denying Rehearing and Granting Certification December 15, 2004.

Michael G. Cooksey of Cooksey & Cooksey, P.A., Riviera Beach, for appellant.

Robert L. Teitler and David S. Tadros of Walton, Lantaff, Schroeder & Carson, Miami, for appellee.

PER CURIAM.

In this appeal we consider a decision allowing an employer's insurer to recover a pro rata share from an employee's successful action for damages resulting from the employer's spoliation of evidence. The Workers Compensation rule allows an employer's insurer to have a specified share of any recovery in an employee's action against a third party tortfeasor. We conclude that the rule does not apply when an employee recovers damages from the employer itself for destroying evidence essential to prove the injured employee's claim against a third party tortfeasor who manufactured a defective product causing the employee's injuries. In short, the insurer is not entitled to recover a share of the damages its own insured is forced to pay for the insured's negligent destruction of evidence.

The underlying facts were discussed in our opinion in Builder's Square v. Shaw, 755 So.2d 721 (Fla. 4th DCA 1999). The injured employee had sued the manufacturer of the defective ladder as a third party tortfeasor. The defective ladder was destroyed by the employer, however, and the employee settled with the ladder manufacturer for less than the full measure of his damages from the ladder's failure. He then sued his employer for spoliation of evidence, and the jury awarded him damages. We note that the fact of the settlement with the manufacturer was made known to the jury. In the prior appeal, we held:

"we must assume that the jury considered this [settlement] in reaching its verdict, and therefore find that the trial court correctly refused to set off the verdict with these same payments."

755 So.2d at 725. In other words, the jury's award in the spoliation action simply made up the difference between the full amount of the damages caused by the defective ladder and the settlement received from the manufacturer.

Upon our affirmance, the employer's Workers Compensation carrier sued the employee to recover a pro rata share of the damages awarded by the jury. The insurer contended that pursuant to section 440.39(3)(a) it was entitled to recover from the employee:

"approximately 59.0% of the sums it has had to pay to and on behalf of [the employee], and to retain approximately 59.0% of future benefits to be paid to and on behalf of [the employee] until the sum recovered and the sums retained equal ... [the employee's] net recovery."

The insurer argued that it is entitled to such a recovery as subrogee because the employer "essentially stood in the shoes of the `third-party ladder manufacturer' by being liable for the same tort and the same damages [for which] the ladder manufacturer would have been [liable] in the products liability claim." We disagree. Specifically, we disagree with the trial court's reasoning that a workers' compensation insurer should be entitled to recovery as subrogee because the employer stood in the shoes of the third party ladder manufacturer in the underlying spoliation of evidence claim.¹

Workers' compensation is a branch of law which is entirely statutory in origin and was unknown to the common law. See Fid. & Cas. Co. v. Bedingfield, 60 So.2d 489, 492 (Fla.1952). Workers' compensation is designed to protect workers and their dependents against the hardships that arise from the workers' injury or death arising out of, and occurring during, their employment. See McCoy v. Fla. Power & Light Co., 87 So.2d 809, 810 (Fla.1956). It is remedial legislation, the fundamental purpose of which is to relieve society of the burden of caring for an injured employee by placing such burden on the industry involved. See C.F. Wheeler Co. v. Pullins, 152 Fla. 96, 11 So.2d 303, 305 (1942). Workers' compensation law is to be liberally construed in such a manner as to effectuate the purposes for which the law was enacted. See Gillespie v. Anderson, 123 So.2d 458, 463 (Fla.1960).

Florida Workers' Compensation Act, which is codified in Chapter 440, Florida Statutes, has been held to benefit employee and employer alike, in that such laws provide for employers a liability that is limited and determinate, and for employees a remedy that is both expeditious and independent of proof of fault. See Lee v. Fla. Pine & Cypress, 157 So.2d 513, 516 (Fla.1963). Such statutes are mutually advantageous to workers and employers and have a stabilizing influence on business and the general economy. See Fla. Game & Fresh Water Fish Comm'n v. Driggers, 65 So.2d 723, 725 (Fla.1953).

The statute provides that workers' compensation is available only for injury or death "arising out of and in the course of employment." § 440.02(19), Fla. Stat. (2003). "For an injury to arise out of the course of employment, there must be some causal connection between the injury and the employment or it must have its origin in some work incidental to or connected with the employment, or it flowed from it as a natural consequence." Cone Bros. Contracting Co. v. Allbrook, 153 Fla. 829, 16 So.2d 61, 63 (1943).

Pursuant to statute, the liability of an employer for compensation when an employee suffers injuries arising out of and in the course of employment is exclusive and in place of all other liability of the employer to any third-party tortfeasor and to the employee, and anyone otherwise entitled to recover damages from the employer. § 440.11(1). The employer's immunity from suit as a third-party tortfeasor is conferred by its liability to secure compensation and its immunity is commensurate with this liability. See Jones v. Fla. Power Corp., 72 So.2d 285, 287 (Fla.1954); see also Richardson v. United States, 577 F.2d 133, 135 (10th Cir.1978) (interpreting Florida law). This exclusivity provision also governs the liability of a workers' compensation carrier to an employee or to anyone entitled to bring suit in his name. § 440.11(3).

The statutory provision as to exclusiveness of remedy however, does not prevent an action against a third-party for an employee's injury. Section 440.39(1) provides that an employee who "is injured ... in the course of his or her employment by the negligence or wrongful act of a third-party tortfeasor ... may accept compensation benefits under the provisions of this law, and at the same time ... may pursue his or her remedy by action at law or otherwise against such third-party tortfeasor." An injured employee however will not be allowed to keep both the entire amount of compensation and any damages awarded in the third party lawsuit. This double recovery is prevented through the statutory scheme of subrogation. If the employee accepts compensation under the law and thereafter files an action against the tortfeasor, the compensation carrier becomes subrogated to a limited extent for the benefits paid or to be paid to the employee. § 440.39(2).

It is important to not lose sight of the fact that the compensation insurer has no common law right of subrogation, and that subrogation in a workers' compensation case is solely a creature of statute. See Cont'l Ins. Co. v. Indus. Fire & Cas. Ins. Co., 427 So.2d 792, 793 (Fla. 3d DCA 1983). The statute provides that an insurance carrier is entitled to limited subrogation, but only under the terms and conditions set forth therein. Under the provisions of the Workers' Compensation Act, an insurer's statutory subrogation right only applies when an employee receives payments for the disability or medical expenses resulting from an injury in the course of his or her employment. § 440.39(2); see Southland Constr., Inc. v. Greater Orlando Aviation, 860 So.2d 1031, 1035-36 (Fla. 5th DCA 2003) (provision in Workers' Compensation Act establishing a device by which employer can recover compensation and medical benefits through subrogation or lien precluded employer from recovering increase in workers' compensation insurance premiums). In other words, in order for subrogation rights to arise there must be a compensable injury; one that arises out of and in the course of employment, for which compensation and benefits have been paid.

We believe that the proper question to be decided by this court is not whether the employer stands in the shoes of the third-party tortfeasor but, rather whether a claim for spoliation of evidence is an injury which arises out of and in the course of employment.

A spoliation claim compensates the plaintiff for the loss of recovery in the underlying case due to the plaintiff's inability to prove the case because of the lost or destroyed evidence and not for the "bodily injury" actually sustained. See Lincoln Ins. Co. v. Home Emergency Servs., 812 So.2d 433, 435-36 (Fla. 3d DCA 2001). "Because of the nature of the claim, liability for spoliation does not arise until the underlying action is completed." Id. at 434-35. This court has previously described the basis of a cause of action for spoliation of evidence as "an intangible and beneficial interest in the preservation of the evidence." DiGiulio v. Prudential Prop. & Cas. Co., 710 So.2d 3, 5 (Fla. 4th DCA 1998).

In the matter sub judice, while appellant's fall from the ladder is definitely an occurrence which caused the bodily injury, it cannot be said that this same occurrence gives rise to a spoliation of evidence claim. See Lincoln Ins. Co., 812 So.2d at 441 (Levy, J., concurring in part and dissenting in part). The "occurrence giving rise to the spoliation claim is the loss of the ladder." Id. (emphasis in original). "If [the employer] destroyed evidence under factual circumstance that would make it liable for negligent destruction of evidence, this destruction occurred subsequent...