Criminal Coffee

It has been said that "truth is stranger than fiction." Two people have been recently convicted of fraud for their receipt of disability benefits while running a business named "Criminal Coffee."

Last February, we saw reports of a "massive Social Security disability scheme." The Manhattan District Attorney's Office rounded up over 100 people on charges of taxpayer fraud. The allegations are that "ringleaders" of the plot "coached" people on how to obtain Social Security benefits for disability. 

In May, almost 90 people were arrested, accused of scheming to defraud Medicare. They allegedly billed for treatments that were either medically unnecessary or not provided. The defendants include doctors and nurses. They allegedly paid patients cash in exchange for information that facilitated billing for these fraudulent services.  

Senator Bill Nelson, a former Florida insurance regulator and current U.S. Senator, introduced a bill recently to "Stop Schemes and Crimes Against Medicare and Seniors ("Stop SCAMS"). Does it really make a bill more effective to give it a catchy acronym? Senator Nelson was quoted in a Workcompcentral story saying "fraud continues to run rampant," claiming this to be especially true in "Florida, where South Florida remains ground zero for Medicare fraud."

But back to "Criminal Coffee." In May, ABC Newsreports that Ramona Hayes and Cory Eglash have been convicted in relation to their work for Criminal Coffee. Egash was convicted of conspiracy to defraud the U.S. and mail fraud but is appealing. Hayes is serving 12 months in federal prison after pleading guilty to mail fraud. The two ran a coffee shop called "Criminal Coffee," and were documented engaging in activities that were inconsistent with their claims of disability. 

The story says that Social Security pays about $175 billion in disability annually. They received about 72,000 fraud allegation claims last year. The Washington-based team that investigated Egash and Hayes works ten to twelve fraud cases per week.

The news is full of similar stories involving workers' compensation. Fraud is out there, some people do not make wise choices. Some fraud involves people inappropriately receiving benefits, but that is not the extent of the problem. There are a variety of ways for people to act poorly. 

The following have been accused, not convicted. There is the parks department worker whose symptoms prevented her from working. She is accused of being a singer and drummer in a band while disabled. The state is seeking prison time and restitution of over $350,000. There is the garbage collector who was arrested for seeking workers' compensation benefits days after competing in a Jiu-Jitsu competition. Not necessarily a problem on its face, but he denied participating in that competition, in a deposition. There is the police officer accused of fraud for "exaggerating the extent of his injuries." The examples of allegations are not hard to find.

One blogger concluded recently that "the media likes to profile the cases involving workers." This author is not identified by name on the blog. The author believes that worker fraud receives the most media attention because workers "are the easiest players to prosecute." The blog asserts that injured workers account for a very small percentage of the money lost to fraud, claiming that "employee fraud amounts to less than 2% of total WC fraud." In a series of posts, the blogger discusses other serious examples of fraud in the system, including doctors accused of billing for services never performed, unnecessary prescriptions and tests, and the recently publicized referral "fraud scheme" involving the Pacific Hospital in California.

Recently, there was a story about a psychologist sentenced to three years in prison and ordered to pay restitution of $1.8 million. He billed for "services not provided or he exaggerated the amount of therapy that was done. In one case, billing for care provided seven days a week. 

A Pensacola, Florida chiropractor was sentenced to six years in prison. He was convicted of racketeering and grand theft for "advising patients to exaggerate their injuries." He was caught when a patient complained, and authorities corroborated the allegations through "subsequent interviews with more of" his patients.

In May, the Washington State Department of Labor and Industries reported that two interpreters there had been convicted of fraud. They padded their mileage costs for trips they made to provide services when injured workers visited physicians. There were days that they claimed to have driven 500 to 800 miles in a day providing these services. 

Injured workers and service providers are not the only ones accused. Last December, a contractor in California was sentenced to six years in prison. He was ordered to pay over $4 million in restitution. He failed to pay proper workers' compensation premiums. He made misrepresentations to insurance carriers in obtaining coverage, and concealed his business' claims history.

Recently, the Monterey, California District Attorney reported another contractor conviction. This employer should have been a registered contractor, but simply neglected to have a license or to procure workers' compensation coverage at all.    

In an even more ambitious scheme, a Virginia man recently was sentenced for fraud in which he created fictitious businesses, impersonated the owner of each, obtained workers' compensation coverage for each, and then filed false claims on behalf of the fictitious employees of the fictitious employers to obtain workers' compensation benefits. He is to pay restitution of about $325,000 and will go to jail for 12 years. 

In February, an insurance broker was charged with stealing about $4 million from a business in an "insurance scam." This story includes allegations of bribery, kickbacks, and interesting accounting, involving the broker and an employee of an indian tribe that purchased coverage. The broker and accountant were convicted in May. One defense counsel said "the prosecution seems bothered by the profits made, and they are trying to equate profits to theft." He continued "the tribe (the insured) might have been overcharged, but is that stealing?" Another said his client "never committed a crime, and the prosecution's case boiled down to a misunderstanding of complex financial arrangements."

So, it seems, there are a variety of people who make poor choices. The Monterey DA's website prominently proclaims "workers' compensation fraud is a crime," and then describes categories including "uninsured employers," "applicant fraud," "employer fraud," "premium fraud" and "provider fraud." It is a concise and informative overview of the various fraud perspectives. Fraud indeed comes in many forms, and is committed to gain a few dollars in additional benefits or to gain millions in payments or savings.

Some will get caught, others will not. Some will pay restitution and some will go to jail. Some choices result in minimal gain, others are more significant. As I consider these examples, and others that seem to permeate the daily workers' compensation news wires, I wonder whether fraud is more prevalent today than it was 30 years ago. Back then news of a fraud prosecution was rare, and I often heard the lament that prosecutions were too few and far between. Has the news coverage just improved, that is we are just more aware today, or are the actual poor choices becoming more prevalent?

I also wonder if Senator Nelson and his co-sponsors will accomplish any headway stopping "SCAMS." Do we really need more laws on the books to define and prohibit these various scams and schemes? The team that worked the Criminal Coffee investigation is working 10-12 fraud cases per week under the current laws. They say there were 72,000 complaints of fraud last year under existing law. Perhaps what is needed is more investigators, higher financial penalties, greater incentives for whistle blowers, or some combination of these?

In the event you just cannot resist doing it, perhaps you might name your coffee shop "Innocent Coffee," just to throw off the pursuit? 

The Equities of Enforcement of JCC Orders

A case from the Florida Third DCA in May provided reminders about the Rule Nisi process. Roig v. Mosquera, No. 3D13-390, 05/07/2014. The injured worker in this workers' compensation case sought enforcement of the Judge of Compensation Claims (JCC) ruling in her case.

Rule Nisi is "an expedited procedure to enforce a compensation order," as described by the Florida Fifth District in Orange County v. New, 39 So.3d 423 (Fla. 5th DCA 2010). It is a statutory remedy, provided in Fla. Stat. 440.24(1), and allows for "any beneficiary under such order" of the judge of compensation claims to apply to Florida's court of general jurisdiction, the Circuit court, for an order compelling any employer or carrier that is in default to show cause why a writ of execution or other enforcement should not be issued.

This process is specifically for instances of "default by the employer or carrier" in the payment of benefits under a compensation order, "or other failure by the employer or carrier to comply with such order" after it has become "final." In Orange County the Court explained that this remedy is for the injured worker or other beneficiary of a compensation order, not for employers or carriers seeking enforcement of orders in their favor. That inequality, according to the Court, results from the specific wording of Fla. Stat. 440.24(1).

In Roig, the JCC order was not about payment of compensation, that is indemnity to the injured worker, but about a 2007 order in which the JCC ordered the Carrier to provide orthopedic care. Contending that the ordered care had not been provided under the order, the Claimant brought that issue back to the JCC and obtained a second JCC order in 2009 essentially holding that "the 2007 order was in full force and effect;" that order "directed Appellant (the injured worker) to seek enforcement from a tribunal that has authority to enforce same."

That JCC order in 2009 was appealed to the First District Court in Tallahassee, which considers all workers' compensation appeals. The Court affirmed the JCC order in 2010.

The injured worker then sought a Rule Nisi from the Circuit Court, but it was denied. The Employer/Carrier contested enforcement, arguing that the Court lacked jurisdiction to enforce the JCC ruling because there were "factual disputes as to whether the Appellee (Carrier) complied with the 2007 order." The Circuit Court concluded that any such factual disputes should be first resolved by the JCC, before enforcement could be perfected. It therefore denied the petition for Rule Nisi. The injured worker appealed that decision to the Third District.

The Third District Court, in Roig, recited the plain language of Fla. Stat. 440.24(1), stressing that enforcement is appropriate for failure to pay pursuant to an order or for "other failure by the employer" pursuant to an order. The Court noted that "the question of whether Appellee (Carrier) complied with the 2007 order was fully resolved and not subject to re-litigation" following the decision of the JCC in 2009 (and appellate review of that decision by the First District Court in 2010).

The Rule Nisi is a summary proceeding, an "expedited procedure." The point is that the Circuit Court is there for enforcement of a final determination, not for an extended evidentiary consideration of contested factual disputes. the Third DCA's holding in Roig essentially endorses the process employed by the Claimant. That is, to litigate the factual disputes in the administrative process before the JCC. If necessary, that set of determinations can be reviewed by direct appeal, as can all JCC decisions. The 2009 order was affirmed by the First District Court of Appeal. Then, jurisdiction of the Circuit Courts is clear for the expedited enforcement procedure of Fla. Stat. 440.24(1).

On on May 7, 2014, with this explanation the Roig court remanded the case to the Circuit Court for Rule Nisi proceedings for enforcement of the JCC's 2007 order compelling the Carrier provide orthopedic care for the injured worker.

Some good lessons come from this situation. First, the appropriate process in any event of factual disputes regarding the efficacy of an order is to seek enforcement before the assigned JCC. This will afford both parties with the evidentiary proceeding in which any factual disputes can be resolved.

Second, the litigation process, including this "expedited enforcement" can be very time-consuming. In this instance, a 2007 order for medical care is in the Circuit Court for enforcement pursuant to Fla. Stat. 440.24(1) in 2014, following evidentiary proceedings before the JCC in 2009, an appeal of that order to the First District, unsuccessful Rule Nisi proceedings in the Circuit Court, and ultimately the Third District decision that Rule Nisi would be appropriate in this setting.

Seven years hardly seems consistent with our statutory goal of "quick and efficient delivery of disability and medical benefits to an injured worker" in Fla. Stat. 440.015. Seven years seems like a long time to wait for medical care.

What is a Photocopy Machine?

I received a link recently for an article in the ABA Journal. In the article, there is a tongue-in-cheek video of a "deposition that got sidetracked." The video is entertaining and interesting. The crux of the matter is a debate about what is a "photocopy machine;" the case which it parodies involved this as a part of the deeper debate of what is a photocopy. Is a PDF image a photocopy? Is your computer a "photocopy machine?"

The dialogue comes from a case involving copy charges in Ohio. The Cuyahoga County Recorder's Office charged $2.00 per page for photocopies of documents (it appears that the actual copy provider may have been a vendor acting on behalf of the clerk, see the name of the case below). As technology evolved, and they entered the digital age like the rest of the world, there was a desire to adapt to the evolving methodology. Instead of copying papers to provide to requestors, they would copy those pages as PDF images onto a CD. 

According to the Office Depot website, CDs can be purchased for as little as $20.95 for 100, or $.21 each. In fairness, if you wanted to look really professional, the little paper envelopes cost about another $.05. So the raw materials to make someone a CD could be as high as $.26. That is of course retail, and they could likely be purchased in bulk a bit cheaper. 

There is little time required to "burn" a CD, it is a matter of a few mouse clicks to "drag and drop" files and then click "save." The computer does the real work and I have never had one fail to save, unlike the feeder on the photocopier, which you may have to watch for mis-feeds.

According to the ABA Journal, the Ohio clerk's office was taking the position that it could charge $2.00 per image (PDF) page saved to the CD. So a CD containing 100 pages, was provided for $200.00. According to the article, the capacity of a CD makes is possible that a single $.21 CD could contain up to 2,500 PDF pages to substantiate a charge of $5,000.00 using this alternative to paper copies. 

The decision, State ex rel. Data Trace Information Services LLC v. Cuyahoga County Fiscal Officer, Slip Opinion 2012-Ohio-753 is summarized on the Ohio Supreme Court website. It is described as a 7-0 per curium decision granting a writ of mandamus "ordering the Cuyahoga County Fiscal Officer to provide electronic copies of real estate title documents that have been recorded and scanned into the county’s computers to persons requesting such copies at the actual cost of copying the digital images of the requested documents onto a compact disc." (Emphasis added).

According to the ABA Journal, the Ohio Supreme Court concluded that the maximum charge for a CD full of documents should be limited to $1.00, a profit of only 284% ($.26 investment) to 376% ($.21 investment) on the actual cost of the CD. Certainly, there is also a hardware cost, computers cost money. There are personnel costs, people do not routinely work at the Clerk's office or anywhere else for free. It does take time to burn a CD. The U.S. Postal Service will still charge to deliver it, though not as expensive as paper, still a cost.

Should those who possess records have the option of how to produce duplicates? In other words, when a doctor's office or a hospital receives a request for records, should they decide how they are produced? If the documents are already PDF images on a computer, that is digital records, of medical care and treatment or personnel reports of an injured worker, and they are subpoenaed, can the owner of the documents choose to print them on paper rather than producing the images on a disc? Alternatively, if the records are in paper form, can the owner choose to scan them as PDF images and produce them on the disc instead of photocopying them? Should this be the choice of the requestor instead? Should there be a standard?

What is a fair price for the documents, whether on paper or a disc? Florida Statutes delineate the amount state agencies can charge. Section 119.07 provides "up to 15 cents per one-sided copy for duplicated copies of not more than 14 inches by 8 1/2 inches; no more than an additional 5 cents for each two-sided copy; and for all other copies, the actual cost of duplication of the public record."

I have seen charges of $1.00 to $2.00 per page for duplicates in Florida, similar to the Cuyahoga Clerk charges. Some medical providers have the records digitized already and currently want $1.00 to $2.00 per page to copy them onto CDs just like that clerk. When attorneys object, some doctors then insist on printing the digital records onto paper for their response to lawyers (at that price) because there is a huge profit margin in copies at even $1.00 per page.

The justification for the $1.00 or $2.00 per page is the cost of paying personnel to produce the CD or copies. Proponents also argue that the computers or copiers are also large hardware investments. 

Assume the document producer pays someone $10.00 per hour. A moderate copy machine prints at 35 pages per minute. With time between jobs, it would be reasonably easy to produce 1,500 pages an hour with this moderate machine (45 minutes x 35 ppm = 1,575). High-end machines can produce 100 ppm, which would be 4,500 (45 minutes x 100 ppm = 4,500) pages. 

With all the investment in the machine and toner and paper, the cost per page for duplication is less than $.10. We know that because Kinkos and others charge less than that, and they are still in business. They must be making a profit even at $.10. The state has perhaps concluded that $.15 covers the cost of producing copies. 

If someone has the moderate copier, that 1,500 pages per hour at $1.00 per page produces income of $1,500.00. The expense for that hour is $.10 to .15 per copy, so $225 ($.15 x 1,500). The expense for labor for 1 hour is $10.00, plus payroll taxes, benefits, etc. Assume that this labor is there fore $20.00 (ignoring that Kinkos has that payroll expense already included in its total charge of $.10). The profit of this one hour of copying is $1,255 ($1,500 - $20 - $225). 

Mailing the records back out presents an expense. Some will charge for that, "shipping and handling not included." If we hypothesize that the requests are for an average of 100 pages each, then the postage to send these copies back out (manila envelope, $2.50 postage) is approximately $45.00 (1,500/100 = 15 packages x $3.00 each). So after the "shipping and handling" is deducted, the profit is about $1,200 per hour. 

If you have the high capacity machine at 4,500 pages per hour, the income is $4,500.00. The payroll is the same, and the expense of actual printing is $675.00 (4,500 x $.15). The "shipping and handling is $135.00 (4,500/100 = 45 packages x $3.00 each). The profit from on hour of copying is about $3,600 ($4,500 - $675 - $20 - $135). 

Keep in mind that this profit could be generated without even buying a copy machine by paying someone to carry the records to the Kinkos and paying Kinkos full-price to make the copies while your employee stood there and watched. Profit of $1,200 to $3,600 per hour. If you only maintained that pace for four hours per day, the daily profit would be $4,800 to $14,400. You would double those figures if the charge were $2.00 per page, or if you kept it up eight hours per day. 

Keep up the lower figure of just $1,200 per day for 200 working days per year and the profit is only $240,000 per year. At the $3,600 per day the annual profit is $720,000.

I did an experiment burning a CD. I copied the content of a large "file folder" on my computer to a CD, burned it, removed the CD from my computer, inserted it into another to verify that the copy was complete, checked the copy, inserted the CD into an envelope, typed a short letter to say "here is the CD/copies," printed the letter and an envelope. Total time invested was about 7 minutes. So, I could have done that five or six times an hour. I suspect that someone could be more efficient with practice and do this faster.

If each CD had only 100 "pages" or images, then the charge using the hypothetical $1.00 per "page" or image would have been $100 per CD, or at only 5 per hour, $500.00 per hour producing CDs. The CDs and envelopes to generate that $500 is $.26 each. The postage is lower for mailing CDs, "shipping and handling" adding $1.50 per CD response. The total expense less than $2.00 each. The profit per hour, less $20.00 for labor, $3.00 for CDs/sleeves and $7.50 for postage and envelopes, is about $460.00. Keep that up just four hours a day and the profit is almost $1,800 per day producing CDs. Do that for 200 working days in a year, and the profit is a mere $360,000. 

Alternatively, at the rate cited in the ABA Journal, of $1.00 per CD, you would lose money on the CDs. That limitation would lower the revenue for that 5 CDs per hour to $5.00. The Labor, postage, etc. would still be about $31.00. So, you are losing about $26.00 per hour. If you charged separately for "shipping and handling," so that your fixed cost is limited to the $20.00 labor and your variable cost is limited to the CD and sleeve is limited to $.26, then you would break even at $1.00 per CD if you produced 27 of them each hour, or lowered that production time to about 2 minutes each. 

So, $1.00 per CD is not likely covering the actual cost of producing the images. $1.00 per page, whether on the CD or on paper is capable of producing significant profits, and $2.00 per page produces even more. Some compromise between these two may be appropriate. Allowing preparation reimbursement (that 7 minutes at $20.00 per hour) about $3.00, the actual CD cost of $.26, and the "shipping and handling" of $1.50 would result in a total cost of under $5.00 per CD regardless of it containing 100 images or 2,500 images. 

It bears thinking about. The "cost" should not be generating thousands of dollars of profit. This subject in the context of electronic court records was recently addressed by the Sun Sentinel. Of digitizing court records and providing public access, they note "Online access to court records shouldn't be the next cash cow." Likewise, no one should be losing money on providing people with the relevant information they need for decision making. Watch the video about what a photocopy machine is, and post a comment about your thoughts on all of this.

Offers of Proof

A recent ruling from North Carolina reminds us of some core issues in the administrative litigation process. 

Workers' compensation this year is witnessing Oklahoma and Tennessee transitioning to administrative rather than court processes for workers' compensation litigation. Alabama now stands alone in having their workers' compensation disputes decided at the trial level in constitutional state courts. 

In Florida, one result of the limited powers of the Judges of Compensation Claims, a product of being administrative instead of in the constitutional court, is the inability for JCCs to address constitutionality issues. Determination of those issues is not within our statutory authority. Despite this the OJCC nonetheless has an obligation to afford the litigants with their due process. Professors can wax poetic for hours on the subject, but reduced to its essentials, procedural due process under the Constitution is essentially a right to know that proceedings will occur (notice) and a chance to tell your side of the story (opportunity to be heard). 

The Florida First DCA several years ago addressed how JCCs provide due process to those challenging the constitutionality of workers compensation, in Anderson Columbia v. Brown, 902 So.2d 838 (Fla. 1st DCA 2005). There, the Court noted that the JCC lacked authority to decide the constitutional issue, which the parties each conceded. The Court held though that the claimant has every right to "build his record for appeal." That is, the parties can introduce evidence and argument at trial before a JCC, which bears on issues, such as constitutionality, that the JCC has no authority to decide. 

In that case, there was some argument that the JCC could not compel discovery or disclosure of information or evidence because it was not relevant to the issues which the JCC would decide, that is constitutional issues. Despite the inability to decide that issue, the process in our administrative setting is to raise the constitutional challenge in the administrative trial proceeding, preserve the record by presenting evidence, and then prosecute the constitutionality concerns on direct appeal of the administrative proceeding, all explained in Brown. Having built the record before the JCC, that record is complete and ready for the Court to competently address the constitutional questions. 

Recently in North Carolina, the Court of Appeal addressed a similar dispute in Willard v. VP Builders, No. COA13-413. This involved a complex discovery dispute in a death case, essentially whether use of a medication prescribed following the work accident caused the death. The parties had a stipulation regarding discovery, which is part of the interest in this case. They agreed that if a particular expert disputed the results of some testing, then they would conduct certain other discovery in the case. This is interesting because it illustrates the important point that parties can often solve their own disputes, as they did in large part in this case. That is efficient and should be encouraged. 

When the parties reached a disagreement on their discovery, the Employer in Willard moved the Deputy Commissioner to "extend the record" and thereby include additional depositions in the evidence presented. The Deputy denied their request. The Employer then filed a motion to make an "offer of proof," which the Deputy also denied. The result was the Deputy depriving the appellate judges of the full record. After losing at trial, the Employer sought review by the Commission, and their request to make an offer of proof to preserve their record for the Appellate Court was again denied. 

Last December, the Appellate Court had to remand the case to the Commission for the purpose of "allowing Defendants to make an offer of proof." So, round one of the appellate process before the Court was all about the denial of an offer of proof. Time, money and effort was expended essentially on the simple question of what information should be included in the record, not whether that information is meaningful, conclusive, persuasive. No, just whether it would be seen by the appellate court. It is no surprise that the Court's December analysis of this case resulted in the answer it did, and a requirement that the Commission provide that information for appellate review. 

In May, in Willard, the North Carolina Court explained the rationale for trial courts to facilitate the appellate record. They reminded that "the offer of proof requirement is imposed for the benefit of two different audiences." These are the trial judge, who might change her or his mind about a decision excluding evidence, and the appellate court. They noted that for appeal, "the offer" is "essential." 

The Court in May held that "the appellate court can make much more intelligent decisions as to whether there was error . . . and whether the error was prejudicial" if the offer of proof, the "proffer" is included in the record by the trial judge. Without the proffer, the Court noted, "we can only speculate as to what a witness's testimony might have been." (citations omitted). The court reminded litigants that to prove trial judge's exclusion of evidence is grounds for reversal, "the significance of the excluded evidence must be made to appear in the record and a specific offer of proof is required unless the significance of the evidence is obvious." 

It seems "obvious" might be in the eye of the beholder, and the better rule for counsel would be to follow the first clause of that quote and make sure the significance is demonstrated in the record. 

As in Anderson, the court in Willard explains the due process obligations of the trial judge. Willard is a worthwhile read for the reminders it provides on preserving a sound record for the dual purposes of affording the trial judge with the appropriate opportunities to make sound decisions and for meaningful and timely appellate review. 

If the Deputy Commissioner or Commission had allowed the offer of proof, the December 2013 remand in Willard, and the expense and time associated with it would have been avoided. If the offer of proof had been allowed, the ultimate decision of the court on May 6, 2014 would likely have been made and provided to the parties six months ago in December. All of the expense and time associated with the offer of proof issue would have been avoided. 

While Willard is of course not binding on proceedings outside of North Carolina, it is a clear and helpful explanation of the benefits of offers of proof and preservation of evidence for appellate review. It is a worthwhile read.

Is your company "huggy?"

Is your company "huggy?" Should it matter?

The following analysis is about the vicarious liability of an employer, not workers' compensation. In this context, a court focused narrowly on the specific duties of the employee, without consideration of momentary deviation from employment. There have been many comp cases in which momentary deviations from employment duties have been insufficient to support a conclusion the employee was not in the "course and scope" when an employer sought to avoid workers' compensation liability. 

The Illinois Second District Court on May 2, 2014, issued Parks v. Dennis Brinkman, No. 2-13-0633. The essential facts are not that complex, the plaintff fell to the ground and suffered a personal injury. That happens somewhere every day. The cause of the fall is more interesting. Plaintiff was hugged and then picked up by defendant Brinkman, who then fell with Plaintiff in his arms and was injured. Whether Brinkmann had been drinking and whether he had a history of touching people are also discussed in the case.

The injury happened at a Jaycee event at which Brinkman, a member, was a volunteer serving beer. Plaintiff sued Brinkman for injury and sought to hold both the Jaycees and the location owner vicariously liable for his actions. She essentially alleged the Jaycee club was Brinkman's employer, and thus he was their agent. The trial court dismissed the location owner and the Plaintiff later dismissed Brinkman. Thus, the case proceeded to trial on the vicarious liability of the "employer" Jaycees, based upon their "negligent supervision" of Brinkmann.

The court noted that a "central issue" for trial and appeal was whether "hugging was within the scope of Brinkman's employment as a volunteer." This was critical in this case not in the sense of whether Parks would receive workers' compensation (she was also a Jaycee volunteer, but there was no allegation of workers' compensation liability), but whether the injury Brinkman caused was the responsibility of the Jaycees. As an aside, it is curious that Parks did not seek workers' compensation from the Jaycees as everyone seems to concede Brinkman is a Jaycee employee despite his volunteer status, so one wonders why Parks would not be the same?

Though it is not a workers' compensation case, it raises the same kind of "course and scope" issues with which workers' compensation so often struggles. Parks was volunteering at a Jaycee event, but was not a member. When she arrived that morning, she "greeted several of the Jaycees, hugging them as she did so." She had previously met Brinkman, and on other occasions "Brinkman hugged her and she hugged him back." That morning, when she encountered Brinkman, he hugged her. She testified that she was "not expecting" his hug and that he not only hugged her but hoisted her onto his shoulder. 

Then they both fell with Brinkman landing on top of Parks. She sustained injuries to her shoulder, neck, and back in the fall. She admitted she had been hugged by Jaycees before, but testified that she had never been picked up by a Jaycee, and that this was unexpected. 

The trial included ample analysis of "the role of hugging with the Jaycees." This included "various witnesses" and a discussion of whether it was "common for them to greet one another with hugs." The Court noted that this was a club that encouraged a "friendly atmosphere," where members were "warm and friendly," but were not instructed to hug. The organization had "no policy encouraging hugging of physical contact." Much trial focus on the hugs and not much on the "lifting."

The Jury sided with Plaintiff and awarded over two hundred fifty thousand dollars in damages. The Jaycees argued on appeal that Brinkman was not in the course of his duties and asked reversal of the finding of vicarious liability. 

The appellate court described a three part test of agency, and noted there was no dispute regarding the first part, that Brinkman's conduct "occurred during the time and place of his employment." The questions therefore were whether "Brinkman's conduct was of the type he was employed to perform" and whether "he was motivated partly or wholly by a desire to serve" the Jaycees. 

The Court decided the case on the failure of the second element, concluding there was ample evidence that the Jaycees were a "huggy organization." However, it noted, "the record is clear that such hugs were not required as part of the job duties." No witnesses testified that Brinkman's conduct of hugging and picking up the Plaintiff "was part of his assigned job duties." 

The Court held that Brinkman's "conduct at the time of the accident was outside of his assigned job duties" and that therefore the Jaycees were not be vicariously liable. The Court explained that even if the "huggy" nature of the group created a foreseeability issue that a jury should have been allowed to consider, the real issue for the trial was the "lifting" more than the hugging. As this "lifting" was admittedly an "unusual act," the Court concluded that its agency analysis outcome would not be different if a foreseeability analysis had been employed. The Court therefore directed entry of judgment for the Jaycees. 

Would the outcome be the same if it were Brinkman who had been injured and sought workers' compensation, or if Parks had sought those benefits as a "volunteer" employee? In that setting, one might argue that the "lifting" was horseplay, such a deviation from job duties as to justify a conclusion that he departed from the "course and scope." What if there had been no "lifting" and Brinkman was instead injured through just the hug? Since there was no employer policy requiring hugs, would the Jaycees have nonetheless avoided liability for such a comp injury caused by the hug, or would the court conclude that a voluntary hug is a minor deviation from employment?

When a court looks at a legal concept like "course and scope" should it address that concept only within the context of the current case, here an agency analysis, or consider the impact that unharmonized determinations could have throughout the law of the state? The court may later hear Parks v. Dennis Brinkman cited in workers' compensation cases in support of a more strict interpretation of course and scope. A brief discussion of the horseplay concept in regard to the "lifting" might have made for a better explanation of the outcome, and a clearer precedent. 

All that time spent at trial on the question of whether the Jaycees were "huggy" did not determine the ultimate outcome. The appellate court focused instead on whether hugging was a specific job duty. They clarified that even if the Jaycees were "huggy," that did not create foreseeability as the "lifting" caused the injury. 

I guess in this instance it did not matter the Jaycees are "huggy" and we are left to wonder whether that would ever be relevant. An interesting case, with much to think about. 

Legislative Session Wrap-up 2014

The Florida Legislative Session 2014 was relatively quiet on the workers' compensation front. Generally speaking, the Twenty-First Century has been legislatively quiet for Florida workers' compensation. Certainly, there were significant changes in 2001 and again in 2003. Since then, however, there has been little action.

In 2009, there was a minimal change in the provisions of Fla. Stat. 440.34. The Florida Supreme Court interpreted that section in 2008 in Murray v. Marriner, focusing on the statutory language and construction of this section. Following that interpretation, the Legislature reacted and removed language from Fla. Stat. 440.34.  Though it made a notable change, this action could not be characterized as sweeping legislative reform. 

In 2011, there were some changes in the statutory procedures. Most notably electronic filing became statutorily mandatory. Of course, the use of e-filing had been mandated by procedural rule in 2010. While this is again notable, it is not the kind of reform that is characterized as significant. 

So, there has been significant amendment to our law in this Century, but not really any broad amendments lately. 

In the waning years of the Twentieth Century, the Florida Legislature made what many consider to be significant changes to the law in 1979, 1989, 1990, 1991, and 1993. It was pointed out to me this session that there was an arguable trend of major reform in Florida at least every ten years through 2003. That characterization would need us to quantify "major." However, as we look forward to the 2015 session, we see a fairly quiet workers' compensation legislative situation for the last dozen years since 2003.  

There will be no shortage of prognosticators as to what 2015 holds in store for Florida workers' compensation. 

What did happen this year? There were some legislative efforts, some more successful than others. 

HB 271 passed. This one addresses stop-work orders and penalties for uninsured employers, enacts an alternative calculation of the injured workers' compensation rate and changes the assessment process for the old Special Disability Trust Fund (yes, it is still with us). There are some who see controversy in this bill. There is a perception in some quarters that the compensation rate alternative will result in litigation. They point to Escambia County School Board v. Vickery Orso, 109 So.3d 1242 (Fla. 1st DCA 2013). 

HB 785 passed. This amendment provides clarity regarding the compensability of vitamins, supplements, and "medical foods." The short answer is that these are now not compensable in Florida unless the Employer/Carrier "in its sole discretion authorizes provision of such." The term "medical foods" is defined in the new law by reference to 21 U.S.C. 360ee(b)(3), which provides:

"The term “medical food” means a food which is formulated to be consumed or administered enterally under the supervision of a physician and which is intended for the specific dietary management of a disease or condition for which distinctive nutritional requirements, based on recognized scientific principles, are established by medical evaluation."

HB 785 also changes the way certain employers can negotiate their workers' compensation premiums. This looks like it is only applicable to employers who do business in more than one state, and who have reasonably large annual premiums (over $100,000) for workers' compensation coverage. Academically, this bill is interesting because of a conflict section it includes. The Legislature acknowledges in the bill that there were other legislative efforts ongoing regarding the subject, and clarified which would control if both bills passed.  

HB 7177 passed. This one is technically not a workers' compensation bill, but will be of interest to the workers' compensation community. There is a significant amount of concern regarding the amount of narcotics that people can and do obtain. Therefore, in 2009 Florida enacted a prescription drug monitoring database in Fla. Stat. 893.055. There was some concern raised in the last couple of years regarding law enforcement access to that database of information. HB 7177 clarifies how and when that information will be accessed in the law enforcement setting.

One Florida workers' compensation issue gained a significant amount of press coverage this year. The state has struggled with the implementation of a fee schedule for hospital care in workers' compensation for several years. There is a fairly constrained fee schedule in place that controls how doctors are reimbursed, which is tied to the published Medicare reimbursements. The Florida hospital reimbursement has instead been tied to calculations based on the amount hospitals charge for specific services. 

There were two bills introduced with the goal of providing clarity and constraint to hospital reimbursement. HB 1351 and SB 1580. As filed, these would have limited hospital reimbursement in workers' compensation cases to 140% of the reimbursement paid by Medicare for those hospital services. There were those who predicted this limitation would have markedly reduced workers' compensation premiums in Florida. HB1351 did not make it out of committee. SB 1580 was amended in the session to instead provide for a task force to study hospital reimbursement issues, but as amended it did not make it out of the Appropriations Committee. 

The Florida workers' compensation constituencies wait as spring 2014 fades into summer. There are three cases pending in The Florida Supreme Court regarding workers' compensation. Several of the "old guard" of the workers' compensation practice have told me they cannot remember the last time the Supreme Court accepted jurisdiction of three cases at the same time. In time, the court will address a constitutional attorney fee challenge, Castellanos, a constitutional and/or statutory construction challenge, Westphall, and a policy construction question posed by the Federal Appeals Court for the Eleventh Circuit  

One commentator, David DePaolo, wrote last summer that "the real question is whether the court's willingness to review a constitutional challenge denotes an emerging trend." He was writing about decisions by the First DCA in Westphall and other cases, but the quote could easily be about the Supreme Court's consideration of these several cases in 2014. Much will be seen in the months to come. The Court's decisions may be instructive, earth-shattering, or anticlimactic. Time will tell. We are left to wonder whether and why the 2015 legislative session may be more significant for the Florida workers' compensation system than we have seen since 2003, or another quiet session.

Whatever else you can say about Florida workers' compensation, you cannot say it is not interesting, and sometimes downright intriguing. 

"Stand Your Ground" in the Workplace?

Florida's "stand your ground" law has gotten significant attention in the last year. Some interesting cases have been highly publicized. When would "stand your ground" have any involvement in workers' compensation? Once again, the answer comes not from the First DCA, but the Third, so you may have missed it last week. The short answer is that it is not workers' compensation, but it can be a concern in a workplace assault.

Florida workers' compensation is a "no fault" system for providing benefits and treatment to people who are injured on the job. However, Florida Statutes, section 440.09(3) precludes those benefits in some limited instances, such as when the "injury was occasioned primarily by . . . the willful intention of the employee to injure or kill himself, herself or another." 

In Professional Roofing v. Flemmings (3D13-2162), the Third District Court issued a reversal on April 30, 2014. In this case the employer allegedly struck his employee with a baseball bat, for which he was charged with "aggravated battery with a deadly weapon." ' This was a criminal prosecution. 

In the criminal case, the employer defended arguing that "Stand Your Ground" (Florida Statute chapter 766) allowed him to use "justifiable force" to defend himself against what he perceived as the employee's "imminent use of unlawful force." The criminal court trial judge "agreed and dismissed the charges against" the employer. The criminal prosecution was not the end of the story however.

The employee also filed a civil suit against the business and the business' owner (the person with the bat) for damages, alleging claims for "assault, battery, negligence, and intentional infliction of emotional distress." It is this civil case that made its way to the Third DCA. 'This case was against both the employer who struck the employee and the business itself, which the employee alleged was vicariously liable. 

The opinion does not mention the workers' compensation immunity under Section 440.11. As discussed, Section 440.09 suggests that either the employee's or the bat-wielding employer's intent to injure could render the case outside of the confines of workers' compensation. Therefore the absence of this immunity argument from the Court analysis is understandable. On this basis, this is not really a workers' compensation case, but still an interesting employee/employer relations case which should be of interest to workers' compensation professionals on both sides of that relationship. 

Both defendants moved to dismiss the civil suit, again arguing "Stand Your Ground." The motion also argued that the criminal court's dismissal of the criminal charges on the basis of that law should control the Stand Your Ground issue in the civil suit, which supported dismissal. The trial judge denied the motion to dismiss. 

The appeal to the Third DCA was interpreted as a petition for writ of prohibition. The appellate court noted that "a writ of prohibition is the proper vehicle for challenging a trial court's denial of a motion to dismiss a charge on the ground of immunity from prosecution pursuant to Stand Your Ground." This is an interesting element of the case analysis because the timeliness of the appellate challenge is founded on the fact that this is not an appeal but a petition for writ. The distinction can therefore be critical from a timeliness standpoint.

The appellate Court concluded that the criminal court decision/dismissal was not conclusive in the civil case. The employer essentially argued that it should not have to defend the justification for the assault twice, once in the criminal court and then again in the civil court. The legal concept is called "res judicata" or "issue preclusion." The basis for the legal concept is that parties in certain circumstances should not have to re-litigate identical issues repeatedly. 

The Court disagreed that res judicata should preclude re-litigating the issue of whether Stand Your Ground provided the employer with immunity in the civil case. The Court held that since the parties in the criminal case were the state and the employer,and not the employer and employee, that neither res judicata nor issue preclusion could be applied in the ligation between employer and employee. 

For illustration, consider a defendant that faces a claim of negligence from a plaintiff. If a finding of negligence is made in that suit, should plaintiff be allowed to then sue a second defendant and not have to prove negligence? The Court explains that this would not be appropriate because the second defendant was not a party to that first case in which the negligence finding was made. 

The Court explained that both the issue, in this case "Stand Your Ground" immunity, and the parties have to be identical for application of this legal doctrine. Because the parties were not the same in the criminal and civil cases, the Court concluded that neither res judicata or issue preclusion could be applied in the civil suit.

The Court also found no legislative intent in Stand Your Ground to have a criminal court determination in such situation control civil liability arising from the same incident or event. Since the stature does not contain a plain statement changing the mutuality requirements, the Court concluded it could not "infer such an intent."

The Court did reverse however. It concluded that Stand Your Ground is a "true immunity provision and not merely an affirmative defense" in the civil context. Therefore, the Court concluded, summary judgement is not appropriate for allegations of Stand Your Ground. Concluding that the trial court should have conducted an evidentiary hearing, the Court remanded for further proceedings. In that proceeding, the Court explained, the defendant would bear the burden of demonstrating entitlement to the statutory immunity of Stand Your Ground by a preponderance of the evidence. 

An interesting case. It illustrates that events in the workplace can have a variety of implications.

Case law you may have missed

The First District Court is the usual source for interpretations of Chapter 440. I know many workers' compensation practitioners follow the court through its website or its RSS feed. If you are not subscribed to the court's feed, you should look into it and sign up. When court opinions are released, the RSS will automatically send you an email listing the decisions, and you can review those you wish. It is a great way to stay current on the law. 

There are occasions, however, when other appellate courts in Florida weigh in on issues that may be of interest to the workers' compensation practitioners. On April 30, 2014, the Fourth District issued State of Florida v. Francisco Brock, (No.4D13-962). The defendant in this case applied for a job but used a social security number that did not belong to him. He did not file any workers' compensation claim, but was charged with violating Chapter 440. 

The circuit court (trial court) dismissed the charges against the defendant on the grounds that Chapter 440 is an insurance coverage and regulation statute. The court reasoned that therefore this law was not applicable to situations that did not involve the application for or provision of insurance benefits. 

The Fourth District explained that Section 440.105, Fla. Stat. is a prohibition on such activity regardless of whether there is or is not a claim for workers' compensation benefits. The focus of the analysis is on the word "or" in the provisions of §440.105(4)(b)9. The court held that this section's language makes it illegal for any person to:

"knowingly present or cause to be presented any false, fraudulent, or misleading oral or written statement to any person as evidence of identity for the purpose of obtaining employment or filing or supporting a claim for workers' compensation benefits." (Emphasis added).

The Fourth District Court noted that both the state and Brock argued Matrix EmployeeLeasing v. Hernandez, 975 So.2d 1217 (Fla. 1st DCA 2008) in support of their respective positions. This First DCA decision centered on whether a violation of Chapter 440 "was cause for forfeiture of compensation benefits." The Fourth DCA explained that in the context of providing a false identification "for the purpose of obtaining benefits," Matrix is controlling. However, according to Brock, the statutory provision regarding obtaining employment is co-equal and independent of the benefits process. 

The Fourth DCA reversed the trial court's dismissal. The court held that the "or," in a plain reading of the statute resulted in a "clear and unambiguous" interpretation that presentation of false information is actionable in two contexts, the obtention of benefits or the obtention of employment. It held that the statute precludes the presentation of any false, fraudulent, or misleading statement for either purpose. 

The court noted that it did not need to resort to legislative intent analysis because the statute is clear and unambiguous. However, it noted that the legislative history "confirms the legislature intended to prohibit illegal aliens from using false identification information to obtain employment . . .."

There are currently many interesting cases receiving their share of attention. Many wonder and conjecture about how the Florida Supreme Court will determine Morales, Castellanos and Westphal. Certainly, these determinations are anticipated to bring edification to practitioners and the marketplace. However, Brock is also likely worth a read, and provides a perspective that may be of interest to many who litigate workers' compensation and employment law cases in Florida.