Thursday, December 4, 2014

Morales Arrives

In an earlier post, I explained the pending Supreme Court case Morales v. Zenith Insurance.  This was the first of several currently pending cases which have implications for Florida Workers' Compensation, which the Florida Supreme Court has taken up in the last year.

Understanding our government is an example of federalism, there are roles for state courts and roles for federal courts. Sometimes their responsibilities overlap somewhat. Morales is an example of that. The Eleventh Circuit Court of Appeals, a Federal Circuit Court, is reviewing an appeal of a case from a federal court in Florida. It had some questions about Florida law and so it asked the Florida Supreme Court to consider three questions of law. 

The Supreme Court oral argument was April 10, 2013. Today, the Florida Court issued its opinion. Two hundred thirty-eight (238) days from oral argument to decision. Using some averages, I had predicted in Morales, Where for Art Thou, Morales that the decision might be as early as December 11, 2014. Let the record reflect that I was wrong; sorry, I did my best.

The oral argument in Westphal occurred June 5, 2014 and the oral argument in Castellanos was November 5, 2014. If the Supreme Court addresses these other pending workers' compensation related cases in the same 238 days, there could be a decision in Westphal (argument June 5, 2014) as early as January 29, 2015 and Castellanos (argument November 5, 2014) as early as July 2, 2015 (it has to be a Thursday). Or, it could be sooner or later. There is just no predicting these things. I have been wrong before, see above.

The questions presented (essentially quotes from the opinion, but somewhat paraphrased for space) from the Eleventh Circuit to the Supreme Court were:

(1) "Does the Estate have standing to bring its breach of contract claim against Zenith under the employer liability policy?"

(2) "If so, does the provision in the policy which excludes coverage for "any obligation imposed by workers' compensation law" exclude coverage for the claim against Zenith for the tort judgement?"

(3) "If the estate's claim is not barred by the workers' compensation exclusion, does the release in the workers' compensation settlement agreement otherwise prohibit the estate's collection of the tort judgement?"
  
The decision was issued today. The Supreme Court concluded that the estate does have standing to to bring the breach of contract suit, essentially answering question one "yes." And, the Court concluded that "the workers’ compensation exclusion and the release prevent it (the Estate) from collecting the tort judgment from Zenith," essentially answering questions two and three "yes" also.

The opinion recites the facts of the case. Essentially, this employee was crushed by a tree falling from a truck. The procedural process that led the case to the Eleventh Circuit is all explained in Morales, Where for Art Thou, Morales

The Court explained that a "judgement creditor has standing to bring suit against a liability insurer that may have coverage for the judgement." The court noted that "standing" essentially means the party can bring the suit, but that "one possessing standing does not necessarily prevail upon the proper application of the legal principles he may assert." In other words, having standing means you may proceed, but not that you will necessarily win.

The Court concluded that the entire insurance policy must be considered "as a whole, endeavoring to give every provision its full meaning and operative effect." Then, "only if a provision is ambiguous after considering the policy as a whole will this Court construe the ambiguous provision against the insurer in favor of coverage."  The Court concluded that it was "clear that the workers’ compensation exclusion bars coverage of claims arising from bodily injuries for which Lawns is required to pay benefits under workers’ compensation law—i.e., claims that are covered by the workers’ compensation insurance portion of the policy." 

Thus, the Court concluded that the exclusion in the policy for workers' compensation precluded the estate from collecting from Zenith for the civil judgement. The Court explained that the Estate did not have the right to bring the civil lawsuit against the employer, Lawns, because the Estate's "exclusive remedy was under Florida’s Workers’ Compensation Law, chapter 440, Florida Statutes."

Finally, the Court concluded that "the release in the workers’ compensation settlement agreement precludes the estate from collecting the tort judgment from Zenith." While the Estate was suing Lawns (the employer) in the tort case, Ms. Morales "(who is also the personal representative of Morales’ estate), entered into a workers’ compensation settlement agreement with Lawns and Zenith." The Court interpreted the release signed in connection with that agreement as an election of that workers' compensation settlement "as the sole remedy for Morales’ death."

The first of the 2014 Supreme Court cases is decided. Of course, the decision is not final until there has been a period of time for either party to ask for reconsideration. The decision process goes back to the Eleventh Circuit then and it will make its decision on the case.

The focus of Court watchers returns now to Westphal and Castellanos. Though anytime means anytime, I suspect I will not be penning a post on these again until the new year. 

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