IN THE SUPREME COURT OF FLORIDA CASE NO. SC

Transcription

1 IN THE SUPREME COURT OF FLORIDA CASE NO. SC CAMBRIDGE INTEGRATED SERVICES GROUP, INC., a/s/o BUILDER S SQUARE, vs. JAMES SHAW, Petitioner, ON REVIEW FROM A CERTIFIED QUESTION OF THE FOURTH DISTRICT COURT OF APPEAL IN CASE NO. 4D Respondent. / PETITIONER S INITIAL BRIEF ON THE MERITS WALTON LANTAFF SCHROEDER & CARSON LLP By: ROBERT L. TEITLER and DAVID S. TADROS Attorneys for Petitioner 9350 Financial Centre, 10 th Floor 9350 South Dixie Highway Miami, Florida

2 TABLE OF CONTENTS Page TABLE OF AUTHORITIES...iii PRELIMINARY STATEMENT...1 STATEMENT OF THE CASE AND THE FACTS...3 ISSUES ON APPEAL...8 SUMMARY OF THE ARGUMENT...9 ARGUMENT AN EMPLOYER WHO HAS BEEN FOUND LIABLE FOR NEGLIGENTLY DESTROYING EVIDENCE CRITICAL TO ITS EMPLOYEE S RIGHT TO RECOVER FROM A THIRD PARTY TORTFEASOR, AND WHO HAS BEEN FORCED TO PAY THE EMPLOYEE DAMAGES FOR SUCH DESTRUCTION, MAY BE DEEMED A THIRD PARTY TORTFEASOR FOR PURPOSES OF A CARRIER S SUBROGATION RIGHTS UNDER (3)(a) A. BACKGROUND B. THIRD-PARTY TORTFEASOR C. DOUBLE RECOVERY/DOUBLE PUNISHMENT D. GREAT PUBLIC IMPORTANCE CONCLUSION i

3 CERTIFICATE OF SERVICE CERTIFICATE OF COMPLIANCE ii

4 TABLE OF AUTHORITIES Page Cases Aetna Casualty and Surety Co. v. Bortz, 271 So.2d 108 (Fla. 1972) Builder s Square, Inc. v. Shaw, 755 So.2d 721 (Fla. 4 th DCA 1999)...4, 15, 18 Callahan v. Stanley Works, 703 A.2d 1014 (N.J. App. 1997) Centex-Rodgers Construction Company v. Herrera, 761 So.2d 1215 (Fla. 4 th DCA 2000) City of Tampa v. Norton, 681 So.2d 811 (Fla. 2d DCA 1996)...19, 23 Dixie National Bank of Dade County v. Employers Commercial Union Insurance Company of America, 463 So.2d 1147 (Fla. 1985) General Cinema Beverages of Miami v. Mortimer, 689 So.2d 276 (Fla. 3 rd DCA 1995)...16, 18 Holly v. Auld, 450 So.2d 217 (Fla. 1984) Humana Health Plans v. Lawton, 675 So.2d 1382 (Fla. 5 th DCA 1996) Humana Workers Compensation Services v. Home Emergency Services, Inc., 842 So.2d 778 (Fla. 2003)...12, 16 iii

5 Imler Earthmovers, Inc. v. Schatten, 240 So.2d 76 (Fla. 1 st DCA 1970) Magsipoc v. Larsen, 639 So.2d 1038 (Fla. 5 th DCA 1994) National Union Fire Ins. Co. of Pitt., Pa. v. KPMG Peat Marwick, 742 So.2d 328 (Fla. 3 rd DCA 1999) Orlando Regional Healthcare System v. Tiznado, 804 So.2d 1267 (Fla. 5 th DCA 2002)...19, 23 Parkridge Associates, Ltd. v. Ledcor Industries, Inc., 54 P.3d 225, Plotch v. Gregory, 463 So.2d 432 (Fla. 4 th DCA 1985) Sandrew Construction v. DeFourny, 515 So.2d 1351 (Fla. 2d DCA 1987)...19, 23 Shaw v. Cambridge Integrated Services Group, Inc. 29 FLW D2218 (Fla 4 th DCA, Oct. 6, 2004)...1 Spridgeon v. Spridgeon, 779 So.2d 501 (Fla. 2d DCA 2000) Thompson v. Workers Compensation Appeal Board, 781 A.2d 1146 (Pa. 2001) Torres v. Matsushita Electric Corp., 762 So.2d 1014, 1019 (Fla. 5 th DCA 2000)...16, 20 Townsend v. Conshor, Inc., 832 So.2d 166 (Fla. 2 nd DCA 2002) iv

6 Trevino v. Ortega, 969 S.W. 2d 950, 954 (Tex. 1998) United States v. Koch Industries, Inc., 197 F.R.D. 488, 490 (N.D. Okla. 1999) WFTV, Inc. v. Wilken, 675 So.2d 674 (Fla. 4 th DCA 1996) Rules Florida Rules of Appellate Procedure 9.210(a)(2) Statutes Florida Statute Chapter , 18 Florida Statute (1) Florida Statutes , 10, 11, 17, 19, 22 Florida Statute (3) Florida Statute (3)(a)... 6, 9, 10, 12, 14, 17, 18 Florida Statute (7)... 9, 13, 14, 15 Florida Statute v

7 PRELIMINARY STATEMENT The Petitioner, CAMBRIDGE INTEGRATED SERVICES GROUP, INC., a/s/o BUILDER S SQUARE, was the Plaintiff, and Respondent, JAMES SHAW, was the Defendant, in equitable distribution (workers compensation lien) proceedings held before The Honorable Stephen A. Rapp in the Circuit Court of the Fifteenth Judicial Circuit, in and for Palm Beach County, Florida. By order entered October 15, 2002, the trial court awarded CAMBRIDGE a lien of 59.4% on the workers compensation benefits paid and payable, with no statutory reduction of that percentage. The case was ultimately reviewed by the Fourth District Court of Appeal, Shaw v. Cambridge Integrated Services Group, Inc., 29 FLW D2218 (Fla. 4 th DCA, Oct. 6, 2004), which issued an opinion determining that an employer s workers compensation carrier may not recover a pro rata share from an employee s recovery where that recovery is based on the insured employer s own destruction (spoliation) of evidence. By subsequent order issued in the case, the Fourth District Court of Appeal granted certification of a question of great public importance, prompting this effort at review. The abbreviations Vol. and p., followed by a numeral, shall be 1

8 used to designate references to the (1 - volume, page) Record on Appeal as it existed before the Fourth District Court of Appeal. The letters S.R., followed by a descriptive term, will be used to designate references to the Supplemental Record, as was approved by the District Court on January 21,

9 STATEMENT OF THE CASE AND THE FACTS On July 11, 1991, the Defendant, JAMES SHAW, was injured in the course and scope of his employment with BUILDER S SQUARE when he fell from a ladder (Vol. I, pp. 1, 19, 61). As the result of that accident and the injuries sustained therein, BUILDER S SQUARE s servicing agent and third-party administrator, KM Administrative Services/CAMBRIDGE INTEGRATED SERVICES GROUP, INC. (hereinafter CAMBRIDGE ), provided (and continues to provide) workers compensation benefits to SHAW pursuant to the provisions of Florida Statute Chapter 440 (Vol. I, pp. 2, 19, 62). The relevant amount of those benefits is $240, (Vol. I, pp ). Mr. SHAW initially brought a third-party action against the manufacturer of the ladder, Tri-Arc, for products liability (Vol. I, pp , 85). Upon learning that the ladder had been lost or destroyed, SHAW filed an action against BUILDER S SQUARE on a spoliation of evidence theory, premised on BUILDER S SQUARE s negligent (and unintentional) failure to preserve the subject ladder 1 (Vol. I, pp. 19, 62, 77-78). 1 Mr. SHAW ultimately settled his action against Tri-Arc, the manufacturer of the ladder, for $250, (Vol. I, pp , 96). 3

10 CAMBRIDGE filed a notice of workers compensation lien in accordance with the provisions of Florida Statute (3)(a) against any such third-party recovery (Vol. I, p. 2). The spoliation action against BUILDER S SQUARE proceeded to a jury trial wherein SHAW was awarded $1,344, in damages (Vol. I, pp. 2, 19, 62). The gross award, inclusive of interest and costs, amounted to $1,996, (Vol. I, pp. 2, 62). Mr. SHAW s net recovery, minus attorney s fees and costs, was $1,186, [which equated to 59.4% of the full value/gross award] (Vol. I, pp. 2, 20, 62). For purposes of this action, it was stipulated that SHAW recovered 59.4% of the full value of his case (Vol. I, p. 62). BUILDER S SQUARE appealed the award and judgment to the Fourth District Court of Appeal. Builder s Square, Inc. v. Shaw, 755 So.2d 721 (Fla. 4 th DCA 1999). By opinion issued September 17, 1999, the District Court affirmed the judgment on that verdict. 2 CAMBRIDGE then filed a Complaint for Distribution of Workers Compensation Lien, asserting its lien on SHAW s recovery (Vol. I, pp. 1-3, 2 In its decision, the District Court recognized that the jury considered the $250, settlement from Tri-Arc in fixing the award of damages. Shaw, supra at

11 20). In that endeavor, CAMBRIDGE filed a Motion for Summary Judgment seeking an entitlement to a lien based on the full amount of SHAW s recovery from BUILDER S SQUARE (as well as the funds that were received in settlement with the ladder manufacturer) (Vol. I, pp , ). By Order entered March 15, 2002, the trial court granted CAMBRIDGE S Motion for Summary Judgment, finding that CAMBRIDGE was entitled to a lien on the full amount of Mr. Shaw s recovery (Vol. I, p. 55). It was stipulated by and between the parties that Mr. SHAW s net recovery from the third-party spoliation action equated to 59.0% of the full value of his case (Vol. I, p. 62). CAMBRIDGE then filed a Motion for Equitable Distribution of its lien, which was heard before the trial court (Vol. I, p. 60) (S.R. Plaintiff s Memorandum; Transcripts of Final Hearing). At that proceeding, CAMBRIDGE maintained that it was entitled to a lien recovery of 59.4% on what it had previously paid ($240,771.27), and will continue to pay, in workers compensation benefits to SHAW (S.R. Plaintiff s Memorandum). As stipulated, this percentage represented the extent of SHAW s net recovery from the full value of the case. Based on that (59.4%) percentage, 5

12 the lien recovery on the workers compensation benefits previously paid ($240,771.00) amounted to $143, (Vol. I, p. 114). Mr. SHAW asserted, however, that this percentage of lien recovery should be reduced pursuant to the provisions of (3)(a), on the basis that he did not receive the full value of his case as a consequence of the spoliation of evidence (ladder) and the resultant failure to cooperate (S.R. Transcripts of Final Hearing). By Order entered October 15, 2002, the trial court determined that CAMBRIDGE s lien should not be reduced in this particular instance because to do so would amount to a double recovery and unjust enrichment by SHAW (Vol. I, pp ). The court then awarded CAMBRIDGE a recovery of 59.4% of its lien, which amounted to $143,018.13, as well as a 59.4% reduction on all future payable workers compensation benefits (Vol. I, pp ). An appeal by SHAW timely followed (Vol. I, pp ). On October 6, 2004, the Fourth District Court of Appeal issued an opinion in the matter holding, essentially, that an employer s workers compensation carrier (i.e. CAMBRIDGE) may not properly recover a pro rata share from an employee s recovery where that recovery is based on, and 6

13 results from, the insured employer s own negligent destruction of evidence. By way of dissent, Chief Judge Farmer stated that there was no reason in the law why an employer could not be deemed to be a third-party tortfeasor (in a derivative capacity) for purposes of asserting a workers compensation lien. The thrust of Judge Farmer s dissent was that the employee should be able to recover the full or whole measure of damages caused by the thirdparty tortfeasor; no less and certainly no more. Thereafter, on December 15, 2004, the District Court issued a ruling on CAMBRIDGE s Motion for Rehearing and Motion for Certification whereby it granted certification of the following question of great public importance: May an employer who has been found guilty of destroying evidence critical to its employee s right to recover from a third party tortfeasor, and who has been forced to pay the employee damages for such destruction, be deemed a third party tortfeasor for purposes of a carrier s subrogation rights under (3)(a)? CAMBRIDGE, following the certified question, then submitted its Notice to Invoke the Discretionary Jurisdiction of this Court. By Order entered December 29, 2004, this Court postponed a decision on jurisdiction and set a briefing schedule relative to the merits of the matter. 7

14 ISSUE ON APPEAL MAY AN EMPLOYER WHO HAS BEEN FOUND LIABLE FOR NEGLIGENTLY DESTROYING EVIDENCE CRITICAL TO ITS EMPLOYEE S RIGHT TO RECOVER FROM A THIRD PARTY TORTFEASOR, AND WHO HAS BEEN FORCED TO PAY THE EMPLOYEE DAMAGES FOR SUCH DESTRUCTION, BE DEEMED A THIRD PARTY TORTFEASOR FOR PURPOSES OF A CARRIER S SUBROGATION RIGHTS UNDER (3)(a)? 8

15 SUMMARY OF THE ARGUMENT Petitioner would submit, contrary to the decision of the Fourth District Court of Appeal, that the workers compensation insurance carrier (or thirdparty administrator) of a spoliating employer should be allowed to invoke the provisions of Florida Statute and assert a lien on the employee s spoliation recovery from the insured employer, in the employer s capacity as a third-party tortfeasor. Initially, and as a matter of basic statutory construction, does not exclude spoliating or uncooperative employers from being third-party tortfeasors for purposes of asserting a workers compensation lien. The statute is clear and unambiguous. Moreover, (3)(a) and (7) specifically account for any lack of cooperation by the employer and allow for the reduction of the lien in that situation. On the merits, a spoliating employer would properly stand in the shoes of the third-party (products liability) tortfeasor in a derivative capacity. Further, spoliation is a tort and a spoliator is, by definition, a tortfeasor. As such, the employer s workers compensation carrier should suffer no impediment in asserting its lien on the employee s third-party recovery. 9

16 The District Court s determination that subrogation rights only apply with respect to a bodily injury (in contrast to the nature of a spoliation action) is unfounded in the law. Section (3)(a) is drafted in terms of all claims or actions at law and is not just limited to those involving bodily injury. The proper inquiry in this analysis is not whether a claim for spoliation constitutes a bodily injury for purposes of subrogation under , but whether the employee/claimant has ultimately been made whole. Where full recovery has been made and the subject has been made whole, the employee/claimant cannot, under the law, receive multiple damages or a double recovery. By the same token, the employer/carrier cannot be subject to multiple punishments. The decision of the District Court effectively allows for both. 10

17 ARGUMENT AN EMPLOYER WHO HAS BEEN FOUND LIABLE FOR NEGLIGENTLY DESTROYING EVIDENCE CRITICAL TO ITS EMPLOYEE S RIGHT TO RECOVER FROM A THIRD PARTY TORTFEASOR, AND WHO HAS BEEN FORCED TO PAY THE EMPLOYEE DAMAGES FOR SUCH DESTRUCTION, MAY BE DEEMED A THIRD PARTY TORTFEASOR FOR PURPOSES OF A CARRIER S SUBROGATION RIGHTS UNDER (3)(a). Pursuant to the decision of the Fourth District Court of Appeal, the workers compensation carrier of a spoliating employer may not invoke the provisions of Florida Statute to assert a workers compensation lien on the employee s spoliation recovery from the insured employer, in the employer s capacity as a third-party tortfeasor. As discussed below, the District Court has, most respectfully, misapprehended the intent behind vis-a-vis a spoliation action, and the certified question should, therefore, be answered in the affirmative. A. BACKGROUND The essential facts in this matter are that CAMBRIDGE INTEGRATED SERVICES GROUP, INC. administrated workers compensation benefits and coverage to the self-insured employer, 11

18 BUILDER S SQUARE. BUILDER S SQUARE s employee, JAMES SHAW, was injured in the course and scope of his employment when he fell from a ladder. CAMBRIDGE duly provided workers compensation benefits to SHAW. SHAW then brought a third-party products liability suit against the ladder manufacturer (Tri-Arc). CAMBRIDGE filed a workers compensation lien on any such third-party recovery. As the consequence of BUILDER S SQUARE s negligent spoliation of the ladder, SHAW brought suit against BUILDER S SQUARE for damages (SHAW settled with Tri- Arc). SHAW ultimately received a judgment in his favor against BUILDER S SQUARE, and CAMBRIDGE then attempted to assert its workers compensation lien against SHAW s recovery. 3 Florida Statute (3)(a) provides that a workers compensation employer/carrier may assert a lien on any third-party judgment or settlement received by the employee/claimant against a third-party tortfeasor to the extent the court may determine to be its pro rata share for workers 3 As recognized by this Court in Humana Workers Compensation Services v. Home Emergency Services, Inc., 842 So.2d 778 (Fla. 2003), insurance coverage for workers compensation and for spoliation damages are different and distinct. In this case, BUILDER S SQUARE was selfinsured and KM Administrative Services/CAMBRIDGE was their servicing agent/third-party administrator. CAMBRIDGE, in essence, wore two hats with respect to administering both the workers compensation benefits and the ensuing liability matter. 12

19 compensation benefits paid (and to be paid). Often, this lien amounts to a percentage of what the employer/carrier has paid, equal to the percentage that the employee s net recovery is to the full value of the employee s damages. As relevant to this matter, this statute gives the trial court the discretion to consider ( may be taken into account ) the employer/carrier s failure to cooperate, (7), in determining the amount of the employer/carrier s lien recovery, and the court may reduce any such recovery as the court deems equitable and appropriate under the circumstances. A mitigating factor in this regard is whether a claim or potential claim against a third party (i.e. Builder s Square) is likely to impose liability upon the party whose cooperation is sought. The key issue in this case was whether the workers compensation carrier or administrator, CAMBRIDGE INTEGRATED SERVICES GROUP, INC., a/s/o BUILDER S SQUARE, could properly assert a lien on the proceeds the employee received against the insured employer, BUILDER S SQUARE, in the employer s capacity as a third-party tortfeasor (in a spoliation action). The Fourth District Court of Appeal held that CAMBRIDGE could not. 13

20 B. THIRD-PARTY TORTFEASOR The majority decision of the District Court holds, essentially, that the insurer/carrier s subrogation right only applies against a compensable workrelated injury, and that a spoliation action (i.e. the loss of ladder) is not such an injury. The District Court further holds, alternatively, that the duty of the employer to cooperate, as set forth under (7), is inconsistent with an insurer s ability to stand in the shoes of the third-party tortfeasor. At the outset, and as a matter of statutory construction, the clear and unambiguous terms of (3)(a) do not exclude spoliating or uncooperative employers from being third-party tortfeasors for purposes of asserting a workers compensation lien. There is absolutely no distinction made in the statute. As such, the rules of basic statutory construction do not permit the courts to construe any such (preclusive) legislative intent. See Holly v. Auld, 450 So.2d 217 (Fla. 1984) (Courts are without power to construe unambiguous statutes in a way which would extend, modify or limit its express terms or its reasonable and obvious implications.); See also WFTV, Inc. v. Wilken, 675 So.2d 674 (Fla. 4 th DCA 1996). Furthermore, and crucial to this analysis, the Legislature s express provision within (3)(a) that the trial court may take into account 14

21 any failure to cooperate in determining the extent of the employer/carrier s lien, see (7), is the Legislature s obvious attempt to account for this type of situation. The lien can be reduced, but not eliminated altogether. The District Court s (majority) opinion is entirely inconsistent with this clear and unambiguous statutory provision. On the merits, it remains Petitioner s position that BUILDER S SQUARE was effectively a third party tortfeasor in the underlying spoliation action and was, as such, the entity against whom the judgment would be imposed and against whom (by subrogation) the subject lien would be asserted. As recognized by the District Court in the first appeal of this case, the damages in a spoliation claim are derivative of the damages in a products liability claim whose viability has been spoiled by the loss of critical evidence... and [for purposes of ] the spoliation claim is the same tort for the same damages as the underlying products liability claim. Builder s Square, Inc. v. Shaw, 755 So.2d 721, 725 (Fla. 4 th DCA 1999) rev. den. 751 So.2d 1250 (Fla. 2000). As such, in this third-party action, BUILDER S SQUARE essentially stood in the shoes of the thirdparty ladder manufacturer (Tri-Arc) by being liable for the same tort and the same damages that the ladder manufacturer would have been in the 15

22 products liability claim. Furthermore, and as recognized by this Court, negligent spoliation is a tort claim, see Humana Workers Compensation Services, supra, making the spoliator, by definition, a tortfeasor. Thus, BUILDER S SQUARE was, most certainly, the third party tortfeasor in the underlying action. See e.g. Torres v. Matsushita Electric Corp., 762 So.2d 1014, 1019 (Fla. 5 th DCA 2000) Harris, J., concurring; General Cinema Beverages of Miami v. Mortimer, 689 So.2d 276, 278 (Fla. 3 rd DCA 1995). The District Court now holds that subrogation rights against a thirdparty tortfeasor apply only with respect to a bodily injury that arises out of and in the course of employment. The Court concludes that since spoliation does not encompass a bodily injury that arises in the course of employment, a spoliator may not be deemed a third-party tortfeasor for purposes of subrogation. 4 Respectfully, there is no legal basis for that assertion. 4 In support of its position, the Fourth District cites to this Court s decision in Humana Workers Compensation Services, supra. Contrary to the views of the District Court, the Humana decision relates exclusively to insurance policy coverage issues and specifically to the construction of the policy term bodily injury. The controlling issue in the case at bar does not involve such policy construction. 16

23 Section (3)(a) specifically provides that the right to subrogation applies [i]n all claims or actions at law against a third-party tortfeasor (emphasis added). There is absolutely no distinction or limitation in that enactment to the effect that the claim (or tort) may only involve bodily injury. The statute refers to all claims or actions and, again, the courts are not authorized to engage in the contrary construction of such a clear and unambiguous statutory term. See e.g. Parkridge Associates, Ltd. v. Ledcor Industries, Inc., 54 P.3d 225, 229 (Wash. App. 2002) (Legislature s choice of words all claims or causes of action of any kind is broad and sweeping, and the courts will not read the word all to imply an exception for equitable indemnity claims). C. DOUBLE RECOVERY/DOUBLE PUNISHMENT Contrary to the District Court s view, the proper inquiry in this matter is not whether a claim for spoliation is an injury or bodily injury for purposes of subrogation under , but it is whether the employee/claimant has ultimately been made whole. The employee/claimant cannot, under the law, receive multiple damages in this situation and, by the same token, the employer/carrier cannot be subject to multiple punishment. The decision of the District Court effectively allows 17

24 for both. Under the provisions of Chapter 440, it is clear that an employer generally has immunity from tort claims. See (1); Builder s Square, Inc. v. Shaw, 755 So.2d 721 (Fla. 4 th DCA 1999). It is equally clear that an employer has a duty to cooperate (i.e. preserve evidence) in the employee/claimant s tort action against a third-party. See (3)(a), (7); Mortimer, supra. Where an employer fails to cooperate, a third-party action may then be maintained against the employer: the immunity is lifted and the employer becomes vulnerable to tort claims. Mortimer, supra. Additionally, one of the stated purposes of a cause of action for spoliation is to punish the spoliator. See e.g. United States v. Koch Industries, Inc., 197 F.R.D. 488, 490 (N.D. Okla. 1999); Trevino v. Ortega, 969 S.W. 2d 950, 954 (Tex. 1998). In a workers compensation context, as recognized in the District Court s majority opinion, a spoliating or noncooperating employer loses its tort immunity and becomes liable for both workers compensation benefits and tort damages. See e.g. Townsend v. Conshor, Inc., 832 So.2d 166 (Fla. 2 nd DCA 2002). The lien provisions of (3) are intended to prevent both the double punishment of the employer and a double recovery by the employee. 18

25 By the express terms of the statute, an employee cannot properly receive both workers compensation benefits and a related tort recovery (beyond being made whole ). This Court has recognized that the underlying theory of is that a double recovery should be avoided. Aetna Casualty and Surety Co. v. Bortz, 271 So.2d 108 (Fla. 1972). The lien statute effectively prevents such a double recovery by allowing the workers compensation employer/carrier to recoup a percentage of benefits paid to the employee by way of a lien on the third-party recovery. See e.g. Orlando Regional Healthcare System v. Tiznado, 804 So.2d 1267 (Fla. 5 th DCA 2002); City of Tampa v. Norton, 681 So.2d 811 (Fla. 2 nd DCA 1996); Sandrew Construction v. DeFourny, 515 So.2d 1351 (Fla. 2 nd DCA 1987). It is very well-settled that, where a full recovery has been made and the subject has been made whole, anything exceeding the actual damages may be viewed as a double recovery thereby warranting subrogation by the insurer. Centex-Rodgers Construction Company v. Herrera, 761 So.2d 1215 (Fla. 4 th DCA 2000); See Humana Health Plans v. Lawton, 675 So.2d 1382 (Fla. 5 th DCA 1996); Magsipoc v. Larsen, 639 So.2d 1038 (Fla. 5 th DCA 1994). By completely taking away the lien rights of the workers 19

26 compensation carrier with respect to the insured employer s status as third party tortfeasor, the District Court is effectively allowing a double recovery by the employee (workers compensation benefits and a related spoliation tort award) and is, as well, punishing the employer/carrier twice for the same offense (lifting the tort immunity and allowing a spoliation action with no statutory lien reduction). This double recovery and/or double punishment is plainly unacceptable under the law. In Callahan v. Stanley Works, 703 A.2d 1014 (N.J. App. 1997), the New Jersey appeals court held, in a factually similar situation, that the spoliating employer (Home Depot) could properly assert its workers compensation lien. The basis for this ruling is that the plaintiff/employee has been made whole by virtue of the spoliation judgment, and a lien adjustment by the spoliating employer is required because the lien would have been imposed on any recovery by [plaintiff/employee] from [the original thirdparty tortfeasor]. Callahan, supra at (Callahan has been cited favorably by the Fifth District Court of Appeal in Torres v. Matsushita Electric Corp., supra). That is precisely the situation presented in the case at bar; the Employee/Claimant has been made whole by virtue of the spoliation 20

27 judgment. If the Employer/Carrier is then prevented from asserting its lien, it is twice punished and the Employee is twice rewarded. Finally, the right of an employer to [statutory] subrogation has been deemed to exist despite and regardless of its role as a spoliator. See Thompson v. Workers Compensation Appeal Board, 781 A.2d 1146 (Pa. 2001) (an employer spoliation action); compare National Union Fire Ins. Co. of Pitt., Pa. v. KPMG Peat Marwick, 742 So.2d 328 (Fla. 3 rd DCA 1999) (not involving subrogation rights established by statute). This Court has recognized that the right to subrogation is not absolute, but depends on an evaluation and balancing of the equities and attending facts and circumstances of each case. Dixie National Bank of Dade County v. Employers Commercial Union Insurance Company of America, 463 So.2d 1147 (Fla. 1985). In the scenario presented in this case, where a double recovery and double punishment occur, the equities would demand the right to subrogation. D. GREAT PUBLIC IMPORTANCE It remains quite clear that, despite the fact that BUILDER S SQUARE spoliated the evidence (ladder) relative to Mr. SHAW s third-party action, SHAW had his day in court and received a significant and sizeable jury 21

28 verdict for damages sustained in the subject accident (even with jury knowledge of the $250, settlement with the ladder manufacturer, Tri- Arc). With a jury award well in excess of one million dollars, it can be presumed that Mr. SHAW received the full share of his damages. Ergo, the spoliation did not negatively affect, and had no impact on, the results of the third-party action; significant liability was imposed on BUILDER S SQUARE. As such, and in this particular circumstance, it would not be equitable or legally appropriate to completely eliminate the insurance carrier s workers compensation lien (and thereby increase Mr. SHAW s recovery) on the basis of the failure to cooperate. This is particularly true given the lien statute s explicit allowance for a lien reduction (as opposed to elimination) in situations where the employer fails to cooperate, i.e. spoliates, vis-à-vis the third party action. Furthermore, and as discussed above, to abolish the insurer s lien in this particular situation would cause Mr. SHAW to have a double recovery and be unjustly enriched. It is clear that the legislative intent behind , and equitable liens in general, is to avoid a double recovery by the injured worker and to prevent him or her from recovering twice for the very 22

29 same damages (i.e. both civil damages and workers compensation benefits). Tiznado, supra; Spridgeon v. Spridgeon, 779 So.2d 501 (Fla. 2d DCA 2000); City of Tampa v. Norton, 681 So.2d 811 (Fla. 2d DCA 1996); DeFourny, supra; Plotch v. Gregory, 463 So.2d 432 (Fla. 4 th DCA 1985); Imler Earthmovers, Inc. v. Schatten, 240 So.2d 76 (Fla. 1 st DCA 1970). Because of the very significant trial recovery that was made in this case (in addition to the significant settlement that was made with the ladder manufacturer), any reduction or elimination of the lien would result in an inappropriate (and legally baseless) windfall to SHAW. 23

30 CONCLUSION The certified question in this matter should be answered in the affirmative. Based on the foregoing argument and authorities cited therein, Petitioner would submit that it had the legal and equitable right to assert its lien against the Respondent s spoliation judgment. WALTON LANTAFF SCHROEDER & CARSON LLP Attorneys for Petitioner 9350 Financial Centre, 10 th Floor 9350 South Dixie Highway Miami, Florida Telephone: Telecopier: By: ROBERT L. TEITLER Florida Bar No CERTIFICATE OF SERVICE WE HEREBY CERTIFY that a true and correct copy of the foregoing was mailed this day of January, 2005 to: MICHAEL G. COOKSEY, ESQ., Attorney for Respondent, Cooksey & Cooksey, P.A., 2601 Broadway, Suite 3, Riviera Beach, Florida ROBERT L. TEITLER 24

31 CERTIFICATE OF COMPLIANCE In accordance with Florida Rules of Appellate Procedure, Rule 9.210(a)(2), as amended effective January 1, 2001, undersigned counsel hereby certifies that this brief complies with the font requirements of the Rule: Times New Roman 14 - point font. ROBERT L. TEITLER RLT:fe Doc #46 25