By: Richard E. Guttentag, Esq., Stearns, Roberts & Guttentag, LLC
Where an employer denies a claim for worker’s compensation benefits on the basis that there was no employment relationship, the employer may be prevented from asserting in a later civil action that the worker’s exclusive remedy was worker’s compensation.
In Mena v. J.I.L. Construction Group Corp., 2012 WL 469838 (Fla. 4th DCA 2012), a general contractor for a residential development subcontracted the shell construction of the homes to a shell subcontractor (“Subcontractor”). The Subcontractor contracted part of its work to a Sub-subcontractor (“Sub-subcontractor”). The Sub-subcontractor then hired Victor Mena (“Mena”) as an employee. While constructing the home, Mena fell to the ground from a second-floor roof trust and sustained multiple injuries, incurring medical expenses.
Mena filed claims for worker’s compensation benefits with the Subcontractor and Sub-subcontractor. The Subcontractor denied Mena’s claims for worker’s compensation benefits asserting that Mena was employed by the Sub-subcontractor, and that the Sub-subcontractor had provided the Subcontractor with proof that the Sub-subcontractor had a worker’s compensation insurance policy in effect for the date of Mena’s accident. The Sub-subcontractor denied Mena’s claim on the grounds that there was no employer/employee relationship established.
Subsequently, Mena voluntarily dismissed his petitions for worker’s compensation and filed a civil action against the Subcontractor and Sub-subcontractor for negligence. As an affirmative defense to the civil action, the Subcontractor asserted that Mena “was acting in the course and scope of employment performing work subcontracted by Subcontractor to the Sub-subcontractor, and therefore Mena’s claim was barred as a result of the worker’s compensation immunity.” The Sub-subcontractor now asserted that Mena’s damages were barred by Florida’s Workers Compensation Act on the grounds that it was Mena’s employer, and therefore immune from Mena’s negligence action.
The Subcontractor and Sub-subcontractor moved for summary judgment on the basis that they were immune from Mena’s tort suit because Mena’s injuries were compensable exclusively under Florida Worker’s Compensation Act. The trial court granted summary judgment for the Subcontractor and Sub-subcontractor finding that their previous denials were not inconsistent with their claims of entitlement to worker’s compensation immunity. Mena appealed the summary judgment.
On appeal, Mena argued that the Subcontractor and Sub-subcontractor should be estopped (i.e. prevented) from asserting worker’s compensation immunity because of their previous denials that there was no employer/employee relationship. Under Florida law, where injuries are not encompassed within the Worker’s Compensation Act, an injured employee is free to pursue his common law remedies. Where an employer denies a claim for worker’s compensation benefits on the grounds that there was no employer/employee relationship or the injury did not occur in the scope of employment, the employer may be estopped from asserting in a later tort action that the worker’s exclusive remedy was worker’s compensation. For the possibility of estoppel to arise, the employer’s assertion of worker’s compensation immunity must be “clearly irreconcilable” with the reason for its initial denial.
The Sub-subcontractor argued that the reason for its denial (i.e. that there was no employer/employee relationship established) left an open question as to Mena’s status as its employee, and its later admission that Mena was its employee “closes” the question, resulting in no inconsistency between its assertion that it is entitled to worker’s compensation immunity and its denial. The Appellate Court disagreed with the Sub-subcontractor’s argument, explaining that the Sub-subcontractor’s denial of “no employer/employee relationship” suggested that it was asserting that Mena was not its employee, and at the very least, the language in the notice of denial was unclear. If the language in the notice of denial could give rise to more than one interpretation, such that it cannot be fairly determined whether the employer’s positions are inconsistent, summary judgment should be denied. Therefore, the appellate court reversed the entry of summary judgment in favor of the Sub-subcontractor.
However, the Appellate Court did hold that the Subcontractor maintained consistent positions in the worker’s compensation forum and in Mena’s civil action in that Subcontractor maintained in both forums that Mena was performing work for and was employed by the Sub-subcontractor. Where the statutory employer secures coverage or ensures that the subcontractor does so, the statutory employer is immune from suit for the employees’ personal injuries. In this case, since the Sub-subcontractor procured a worker’s compensation policy, and the Subcontractor verified that the Sub-subcontractor had the coverage, the Court concluded that the Subcontractor was immune from Mena’s negligence action under the Worker’s Compensation Act.
This case demonstrates that if an employer denies a claim for worker’s compensation benefits on the basis that there was no employer/employee relationship or the injury did not occur in the scope of employment, the employer may be estopped from asserting in a later tort action that the worker’s exclusive remedy was worker’s compensation.
About the Author: Richard E. Guttentag is a partner with Stearns, Roberts & Guttentag, LLC, and is Board Certified in Construction Law by the Florida Bar. Mr. Guttentag exclusively in construction law including construction lien claims and defense, payment and performance bond claims and defense, bid protests, construction contract preparation and negotiation, and construction and design defect claims and defense. He can be reached for consultation at [email protected].