Greetings,

Today, the 1st DCA (not the Fla Supreme Court) issued an important ruling finding an aspect of the attorney fee section of the statute unconstitutional in Miles v. City of Edgewater Police Dept (1D15-0165).

Under the WC statute, a claimant’s attorney is only entitled to the guideline fee under 440.34.  It is actually a first-degree misdemeanor for an attorney to accept any  fee not approved by the Judge under 440.105(3)(c).  A JCC can only consider those benefits secured by the attorney in awarding a fee, a claimant can not just pay an attorney out of their own pocket to represent them. 

In this case, the Claimant, a police officer, filed an exposure claim, and the Employer/Carrier denied her claim.  The claimant’s first attorney withdrew.  Then, she retained a new attorney, but because exposure claims are expensive and difficult for a claimant to prove, the new attorney only agreed to represent the claimant if there was a retainer.  The police union, on behalf of the claimant, paid a $1,500 retainer ($100 an hour for 15 hours).  If there was more time spent after the 15 hours, the claimant agreed to pay an hourly fee.  In the retainer agreement, the claimant acknowledged that the WC law prohibited such a fee arrangement, but she specifically waived those prohibitions. 

The claimant’s attorney filed a motion to have the JCC approve the retainer agreement, and he certified that if fee agreement was not approved, he would have no choice but to withdraw due to the cost of litigation.  The JCC followed the statute, denied the fee agreement, and then her second attorney withdrew.

The claimant proceeded to trial pro se.  She filed 6 affidavits from other claimant’s attorneys who refused to take her case under the guideline fee.  The claimant lost her case as she did not carry her burden of proof in an exposure claim.  The claimant appealed the JCC’s denial of the retainer agreement as well as compensability of her claim to the 1^st DCA..

The 1st DCA found, that as applied in this situation, the statute prohibited the claimant from hiring an attorney and it violated her right of Freedom of Speech under the 1st Amendment.  (The court stated the speech at issue was the claimant’s own words-given voice through her attorney).  Because the statute makes it a crime for an attorney to accept a fee that is not approved by a JCC and a JCC can not approve a fee that is not tied to the amount of benefits secured, the two statute sections operated as an unconstitutional infringement on her right to hire an attorney.   

The court addressed the argument that there is a compelling governmental reason for the statutory provision on fees, protecting claimants from their attorneys “depleting” their benefits,  The court said “The equation is simple: Some compensation is superior to no compensation.”

The court also found the statute unconstitutional violated her right to contract and her right to seek redress of grievances.   The idea that these statute sections together protect claimants actually operated to harm this claimant by discouraging attorneys from representing her.   The court found a claimant could waive the prohibitions in the statute.

The court stated a claimant should be able to waive a limitation on claimant attorney’s fees and agree to pay her attorney with her own (or someone else’s) funds, subject to a JCC’s finding that the fee is reasonable.   

So, what does this all mean?  

I am certain there will be a Motion for Rehearing, and likely even an appeal to the Fla Supreme Court.  One of the nuances in this case was the argument was not that the guideline fee was unfair, it was that no one would even take her totally denied case.  So, is this going to apply only to controverts?   The 1st DCA holding does not seem to limit it to total denials, even though their logic on why this is situation is different certainly turned on the fact it was a controvert and not an unfair fee amount argument as in the Castellanos case.

Even though this only applies to claimant paid fees, it will certainly increase litigation and settlement costs.   The Employer/Carrier’s will undoubtedly be seeing an indirect increase in exposure if this stands.  Once we see the outcome of the rehearing and any Fla Supreme Ct appeal we will be able to strategize on how to combat this brave new world.

 

Sincerely,
Morgan Indek | Partner