Travelers Ins. Co. v. Sitko

• Citation: 496 So.2d 920,11 Fla. L. Weekly 2260
• Decision Date: 27 October 1986
• Docket Number: No. BI-146,BI-146
• Parties: 11 Fla. L. Weekly 2260 TRAVELERS INSURANCE CO., Appellant, v. Jan Boxer SITKO and Florida Insurance Guarantee Association, Inc., Appellees.
• Court: Court of Appeal of Florida (US)

Page 920

496 So.2d 920

11 Fla. L. Weekly 2260

TRAVELERS INSURANCE CO., Appellant, v. Jan Boxer SITKO and Florida Insurance Guarantee Association, Inc., Appellees.

No. BI-146.

District Court of Appeal of Florida,

First District.

Oct. 27, 1986.

Richard M. Leslie and Maxine M. Long of Shutts & Bowen, Miami, for appellant.

Jerold Feuer, Miami, for appellee Jan Boxer Sitko.

Sally R. Doerner, of Walton, Lantaff, Schroeder & Carson, Miami, for appellee Florida Ins. Guarantee Ass'n.

ZEHMER, Judge.

Travelers Insurance Co. (Travelers) appeals an order of the deputy commissioner holding that Travelers is not entitled to any recovery from the Florida Guarantee Insurance Association (FIGA) and awarding $78,759.82 to certain medical care providers notwithstanding Travelers' lien for medical benefits it paid for claimant's benefit under a medical insurance policy covering claimant. The principal issue is whether the deputy commissioner had jurisdiction to determine whether Travelers is precluded by section 631.54(3), Florida Statutes (1983), from recovering any sums from FIGA. Concluding that the deputy commissioner has no such authority, we affirm in part and reverse in part.

Claimant, Jan Sitko, was totally disabled by an automobile accident in March 1984. The employer/carrier, Kent Insurance Company (Kent), initially denied workers' compensation benefits on the ground that the injuries were not work-related. Travelers insured Sitko against nonwork-related injuries and accordingly began paying Sitko's medical expenses. Sitko later filed a workers' compensation action alleging that the injuries were work-related. Pending resolution of this dispute, Sitko's attorney, Jerold Feuer, entered into an agreement with Travelers whereby Travelers agreed to pay Sitko's medical bills in return for Feuer's agreement to protect a lien by Travelers on any workers' compensation benefits that might ultimately be recovered. Pursuant to this agreement Travelers paid $220,000 of Sitko's medical expenses, leaving approximately $80,000 unpaid.

In October 1984 the deputy commissioner ruled that Sitko's injuries were work-related and ordered Kent to pay Sitko more than $300,000 for medical bills, including those already paid by Travelers. The order specifically found that Travelers had a lien against these benefits. The order was appealed to this court, but Kent was declared insolvent before the appeal could be heard. FIGA, pursuant to chapter 631, Florida Statutes, then entered this proceeding on behalf of Kent. The deputy's order was affirmed on appeal.

After the court's decision, and presumably in compliance with the affirmed order, FIGA sent Feuer a check for $78,759.82, the amount of Sitko's medical bills which FIGA estimated remained unpaid. Attached to the check was a letter stating that, as FIGA interpreted it, section 631.54(3), Florida Statutes (1983), ¹ authorized FIGA to pay only "covered claims," i.e. only those medical bills which had not already been paid by another insurance company. The letter then stated that, because Travelers was an insurance company as defined by the statute, FIGA could not reimburse Travelers for any of the money Travelers had expended on Sitko's behalf. When notified of FIGA's contentions, Travelers claimed the $78,759.82 paid to Feuer pursuant to its lien and agreement with Feuer. Feuer deposited the check in his trust account and filed a motion for direction and modification with the deputy commissioner. He served this motion on both FIGA and Travelers, and both participated in a hearing before the deputy. The deputy found that the insolvency of Kent constituted a significant change of circumstances allowing him to modify his prior 1984 order. His new order directed Feuer to use the $78,759.82 to pay Sitko's previously unpaid medical bills, and upheld FIGA's interpretation of the provisions of chapter 631.

Travelers appeals the deputy's order modifying the 1984 order, arguing that the deputy lacked jurisdiction to determine their dispute with FIGA regarding the application of chapter 631 to Travelers. FIGA and Sitko argue that the deputy had jurisdiction to resolve this dispute under section 440.25(1), Florida Statutes, and that the deputy correctly interpreted the provisions of chapter 631.

We begin our analysis with the premise that workers' compensation is purely a creature of statute. All rights and liabilities under the system are created by chapter 440, Florida Statutes, as is the deputy's power to hear and determine issues in a workers' compensation case. If the deputy has jurisdiction over a potential party to a workers' compensation action, that jurisdiction must also stem from the statute. In this case the parties could cite no authority, nor have we found any, for the deputy's jurisdiction over Travelers, a third-party insurer having no connection to claimant's employer's workers' compensation coverage. Although section 440.25(2), Florida Statutes (1983), allows notice to "any other person other than the claimant whom the division considers an interested party," it does not define the term "interested party." Section 440.25(3)(b) allows only the claimant and the employer to give evidence at a hearing. As we interpret it, the statutory scheme contemplates that, at least in the usual case, only the employer/carrier and the claimant will be "interested parties." In any event we hold, for the reasons stated below, that the deputy did not have jurisdiction to decide the issue of FIGA's liability or lack thereof to Travelers under section 631.54(3), and we need not reach the question of the deputy's possible jurisdiction over Travelers had a different issue been involved. We note, however, that where there is no obvious statutory authority for the deputy's exercise of...