Court: District Court of Appeal of Florida; December 4, 2003; Florida; State Appellate Court
Southland Construction, Inc. appealed a dismissal order regarding its claims for attorney's fees and increased workers' compensation insurance premiums, which it attributed to the negligence of Peoples Gas System in failing to mark a gas line. The incident occurred on May 9, 2000, when a Southland employee struck an unmarked gas line during construction at Orlando International Airport, resulting in one death and one injury. Southland contended that it had requested utility locates from both Peoples Gas and the Greater Orlando Aviation Authority (GOAA), receiving an 'all clear' response. It argued that Peoples Gas had a duty to disclose the location of underground utilities and was negligent in not doing so.
In its complaint, Southland sought recovery for the costs incurred from its workers' compensation insurance due to benefits paid to the deceased employee's family and $6,752 in attorney's fees related to an OSHA citation defense. Peoples Gas filed a motion to dismiss, claiming the damages were too remote and unforeseeable, and that Southland's recovery rights were limited by Florida’s Workers' Compensation Law (Chapter 440). The trial court agreed, stating the damages were legally too remote for recovery.
Upon appeal, Southland maintained that the trial court erred, but the appellate court affirmed the dismissal, noting a lack of precedent in Florida yet referencing consistent rulings in other jurisdictions that denied recovery for increased workers' compensation premiums based on similar grounds of remoteness and foreseeability.
In *Higbie Roth Construction Co. v. Houston Shell*, the Texas Court of Appeals determined that Higbie could not establish a negligence cause of action for increased workers' compensation premiums resulting from Houston Shell's alleged negligence. The court emphasized that to recover such damages, Higbie must demonstrate a duty to prevent the premium increase, which is a legal question determined by the court. Key factors in assessing duty include risk, foreseeability, likelihood of harm, social utility of the defendant's actions, and the burden of prevention. The court found that the injuries leading to the premium increase were not foreseeable by Houston Shell as a matter of law, and thus Higbie's claims were insufficient.
The court referenced the Pennsylvania case *Whirley Industries, Inc. v. Segel*, which held that third parties do not owe a duty to an employer to foresee increased insurance premiums from compensating an injured worker, as premium rates depend on various factors unrelated to the third party's negligence. The Texas court agreed with existing legal precedent that such damages are too remote to be recoverable, as third-party negligence may cause an employee's injury but is only a distant cause of any increase in premiums.
Additionally, the court noted that section 440.39 of the Florida Workers' Compensation Law bars Southland from claiming against third parties for increased workers' compensation premiums. This section establishes that if an employee accepts benefits under the workers' compensation law, the employer or insurer can pursue subrogation rights against the third-party tortfeasor for the amount of compensation paid, reinforcing the idea that premium increases cannot be directly recovered from third-party negligence.
Upon the filing of a suit, an employer or insurance carrier may submit a notice of payment for compensation and medical benefits, establishing a lien on any judgment or settlement recovered. This lien represents their pro rata share for benefits paid, minus the plaintiff's court costs and reasonable attorney's fees. This mechanism allows employers to recover compensation and medical benefits through subrogation or lien. Florida courts have not definitively ruled on whether the workers' compensation statute serves as an exclusive remedy for employers, but similar cases in other jurisdictions indicate that it does.
In Multiplex Concrete Co. v. Besser Co., the New Jersey court upheld that the workers' compensation statute was the exclusive remedy for employers, dismissing an employer's negligence claim against third parties as it was not a direct cause of action but linked to compensation payments under the Workers' Compensation Act. Similarly, Erie Castings Co. v. Grinding Supply, Inc. concluded that Pennsylvania's statute also provided an exclusive remedy for employers, restricting their rights to those of the employee, and ruled that increased insurance premiums were not recoverable. In Pro-Staffers, Inc. v. Premier Manufacturing Support Services, Inc., the Michigan court confirmed that the workers' compensation statute contained the employer's exclusive remedies, noting that the statutory procedure allows for full reimbursement of benefits paid to injured employees, negating the need for additional remedies. The courts reaffirmed that the statute's subrogation provision offers an adequate remedy for employers.
The Legislature did not specify remedies for employers to recover damages from increased premiums and lost profits, which indicates such claims are not permitted. The workers' compensation subrogation framework limits employers to recovery only for payments made to workers. While Southland's claim is not primarily for subrogation, it argues that the Florida Underground Facility Damage Prevention and Safety Act (the Act) allows it to assert a statutory claim for damages due to improper marking of underground facilities by Peoples Gas. The Act establishes a framework for communication between facility operators and excavators to prevent damage, and imposes liability on member operators who fail to fulfill their duties, potentially allowing recovery for damages caused by their negligence. However, Southland did not include references to the Act or its violations in its initial complaint, thus lacking a legal basis for such a claim. Southland's assertion that a violation of the Act constitutes negligence per se is undermined by the absence of this claim in its pleadings and does not address the core issue of duty owed by Peoples Gas. Furthermore, the statute does not obligate Peoples Gas to prevent increases in insurance premiums. Although Southland cites A. L Underground, Inc. v. City of Port Richey for the premise that excavators can recover economic losses due to violations of the Act, the interpretation of the statute in that case is viewed with skepticism, as it pertains primarily to losses or injuries to persons or equipment, rather than economic losses like insurance premiums.
Statutory language primarily addresses personal injury damages, direct out-of-pocket losses, and economic losses linked to equipment damage, aligning with legislative intent to protect public safety by preventing harm to individuals and property, as well as service disruptions from underground facility damage due to excavation or demolition. Even if the statute were interpreted broadly, it would not cover claims for indirect losses such as increased insurance premiums or attorney's fees related to OSHA defense. The decision is affirmed by Judges Thompson and Parsons. Notably, the Greater Orlando Aviation Authority is not part of this appeal. Relevant case law underscores that employers cannot claim damages for loss of employee services from a third-party tortfeasor. Additionally, Peoples Gas qualifies as a 'member operator' under the Act, as it provides services through underground facilities. Southland's reliance on the 'wrongful act doctrine' to support its fee claim is unfounded, as this doctrine does not establish a separate cause of action and has not been properly pleaded in this context.
