Case Law Update – April 2016

HOURLY ATTORNEY’S FEES ARE BACK

Marvin Castellanos v. Next Door Co./Amerisure, No. SC13-2082 Florida Supreme Court (April 28, 2016)

In an extremely important case that involves far reaching implications, today the Florida Supreme Court ruled on Castellanos v. Next Door Company/Amerisure. The State’s highest Court struck down the statutory fee cap as unconstitutional and reinstated the possibility of hourly attorney’s fees in all cases. The opinion affects pending cases that have not already been settled, as well as all future claims/accidents. It basically affects any claim with any date of accident that has not already been settled and closed.

The Court indicated in its 55-page opinion that its ruling will “not provide a windfall” to claimant attorneys, because the statutory fee is still the starting point and hourly fees are only awardable if the statutory fee is inadequate and unreasonable. However, the practical effect is that hourly fees will be awardable in almost all workers’ compensation claims where the claimant’s attorney prevails in obtaining a benefit for the claimant. This impact is made even more evident by the fact that the Court issued three other opinions today on attorney’s fees, and in all three cases it found the statutory fee inadequate and reversed and remanded back to the JCC to award hourly fees.

Based upon the verbiage in the Court’s opinion, we do not see any easy way for the Florida Legislature to “fix” the problem. The Supreme Court made it clear that since 1941 claimant attorneys have been entitled to reasonable attorney’s fees when they prevail, and that is despite the fact that the legislature previously removed the word “reasonable” from the fee statute. Therefore, the legislature cannot simply pass a “quick fix” such as increasing the percentage fee and avoid hourly fees. If they do so, we believe it would simply be declared unconstitutional by the First DCA. As a result, if and when the Florida Legislature attempts to address the Court’s ruling in Castellanos, it will most likely require essentially a complete overhaul of the Florida Workers’ Compensation Law.

Practical Application:

The Castellanos decision essentially returns us to the attorney’s fee law that existed in 2003 and allowed for a JCC to award hourly fees instead of the statutory fee in any case where he deemed the fee unreasonable. As noted above, this will likely occur in most cases where the claimant attorney prevails in obtaining a benefit that was not provided timely by the employer/carrier/TPA. Therefore, we anticipate significantly increased litigation on both existing open claims, as well as on all new claims from this point forward. We anticipate there will be a significant increase in depositions taken on claims including depositions of the adjusters, as well as the employer representatives. We anticipate that the average weekly wage will potentially become a big issue as it used to be back in 2003 and prior. Therefore, it will be very important for the adjuster to make certain that the average weekly wage is correct and not subject to a successful attack.

We also anticipate that most claims will have higher settlement values, and it will likely more be difficult in many cases to settle them without the necessity of retaining a defense attorney which obviously, increases the expense or the cost of the claim. In summary, we believe this Supreme Court decision will result in significantly increased litigation in many aspects on most claims. For the past several years, claimant attorneys have simply not been able to “afford” to put any time into pushing issues because they would not be awarded a fee that would make it worthwhile. That has now changed. While we will have to wait and see how the claimant attorneys react, we anticipate that there will potentially be many claims litigated over a minimal amount of benefits, because the claimant’s attorney will be entitled to a large hourly fee if he/she prevails. As a result, adjusters are going to need to be much more vigilant than they have been over the last number of years in order to make a concerted effort to provide whatever benefits are due and owing in a timely manner.

CONSTITUTIONALITY OF FLORIDA’S WORKERS’ COMPENSATION LAW

Stahl v. Hialeah Hospital, Florida Supreme Court No. SC15-725 (April 28, 2016)

Also today, the Florida Supreme Court decided that it would decline jurisdiction in this case despite its previous acceptance of jurisdiction and therefore left the First DCA’s ruling in place. This was the case that challenged the entire workers’ compensation “scheme” as unconstitutional on the basis of the removal of wage loss benefits and replacement with IB benefits as well as the imposition of the $10.00 medical co-pay for doctor visits after the claimant reaches MMI.

Please feel free to contact any of our workers’ compensation attorneys listed below if you wish to discuss this case and its application to your claims. You may reach us at the telephone numbers or e- mail addresses listed below:

Fort Lauderdale/East Coast Office: (954) 462-4304

Walter C. Wyatt, Partner – ext. 218

wcwyatt@fla-esq.com

Robert M. Potter, III, Partner – ext. 222

rmpotter@fla-esq.com

St. Petersburg/West Coast Office: (727) 322-1739

Joseph A. Bayliss, Partner – ext. 201

jbayliss@fla-esq.com