Costs and Fees: The Latest Loophole

By: Michael Quiggins, Partner, Tallahassee

Have you ever coasted into your driveway after a long day at the office, only to realize much to your dismay that you just spent 30 minutes successfully traversing the perils of city traffic (and perhaps more) without a single conscious thought to speak of? Some neuroscientists suggest that the conscious mind provides 5% or less of our cognitive (conscious) activity during the day.  At times, the handling of workers’ compensation claims can be a lot like our instinctive, subconscious drive home: an adjuster gets a petition for benefits, and, assuming the benefit is due and will be provided within thirty days, the adjuster instinctively also denies PICA (penalties, interest, costs and attorney’s fees).   After all, on the defense side, we have been trained and often repeat this phrase, “PICA not due or owing” without much hesitation or thought.  A recent JCC order, Alfonseca vs. Marco Barquero Painting INC./NorGuard OJCC Case No. 16-009562TAH from the West Palm District, should serve as a bit of a wake up call, at least until such time as we have a ruling from the First DCA as to whether securing reimbursement of costs as the prevailing party constitutes a “benefit secured”  for attorney fee entitlement.  In Alfonseca, the JCC ruled that attorney’s fees were owed to the claimant attorney for securing the payment of prevailing party costs (which costs were initially denied by the employer/carrier).

In Alfonseca vs. Marco Barquero Painting Inc./NorGuard, the claimant filed a verified motion for attorney’s fees which was timely responded to by the employer/carrier.   The parties stipulated that 1) the claimant asserted a claim for costs in each of the petitions at issue; 2) the employer/carrier either affirmatively denied or failed to timely respond to the claim for costs in each of the petitions; 3) the employer/carrier agreed to reimburse claimant’s costs for each of the petition at issue; 4) the employer/carrier’s agreement to reimburse costs was done more than 30 days after the filing of each of the subject petitions; and, 5) the medical and indemnity benefits were provided “timely” (within 30 days) so as to avoid attorney fee entitlement.  In Alfonseca, the JCC concluded that because the medical and indemnity benefits were paid within 30 days from the date of the petition, the claimant was not entitled to an attorney fee for the substantive benefits from the employer/carrier under 440.34(3); however, the JCC also concluded that the claimant was entitled to costs as the prevailing party. See Jennings v. Habana Health Care Ctr., 183 So.3d 1131 (Fla. 1st DCA 2015). In Jennings, the Court held that a claimant is a prevailing party and is owed costs if the carrier provides the benefits requested after a petition is filed.  Thus, in Alfonseca, the following question was presented: is the claimant entitled to recover attorney’s fees for securing the costs that the employer/carrier initially denied but later agreed to?

In Alfonseca, the E/C argued that the term “benefit” should be restricted to the substantive benefits sought in the petition, i.e., medical and/or indemnity benefits.   In response, the claimant  relied upon a Florida Supreme Court decision, Poyntz v. William Adeimy, Inc., 190 So.2d 745 (Fla. 1966) in support of his position that costs are a “benefit” under workers’ compensation law.  In Poyntz, the Florida Supreme Court affirmed the Judge’s award of attorney’s fees for securing payment of expert witness fee costs and stated that it is “certainly a benefit to the claimant to have litigation costs paid by the E/C.”  The JCC found that the Poyntz holding had not been overruled despite numerous changes in workers’ compensation over the years.    The JCC ultimately found that the claimant was entitled to attorney’s fees for securing (the initially denied) costs per the petition for benefits because the employer/carrier had not conceded that costs were due on a timely basis.

Until we get further instructions from the First DCA, I believe that where appropriate, i.e., the benefit is timely as to avoid fee entitlement, employer/carriers need to carefully review and assess a separate claim for costs for each petition rather than assert the instinctive, boiler plate response that “PICA is not due.” Otherwise, the employer/carrier risks an award for hourly attorney’s fees. Going forward, it is highly recommended that employer/carriers concede that reasonable and taxable costs are due in a response to petition that yields benefits.  We will continue to monitor this development in the law and hope to have a decision from the First DCA shortly.  Until then, please scrutinize any claim for costs.