There exist various statutes in the United States that allow payers to be reimbursed a portion of their payment when there is recovery from third parties. Florida’s embodiment of this concept is in Section 440.39, F.S. That statute and the two seminal cases interpreting it, Nikula v. Michigan Mut. Ins., 531 So.2d 330 (1988) and Manfredo v. Employer's Cas. Ins. Co., 560 So.2d 1162 (1990), have together consumed hundreds of hours of my time over the years.
Section 440.39, F.S. provides the foundation for this concept in Florida:
"(2) If the employee (or dependents) accept compensation or other benefits under this law or begin proceedings therefor, the employer (or insurer) shall be subrogated to the rights of the employee (or dependents) against such third-party tortfeasor. If the injured employee (or dependents) recovers from a third-party tortfeasor by judgment or settlement . . . the amount recovered from the tortfeasor shall be set off against any compensation benefits."
An example is likely of assistance in comprehending this. Take an instance in which an employee has left the employer's (ABC Company) facility in a company vehicle, headed toward a work meeting or to call upon a company customer. Another vehicle, driven by Bruce Wayne runs a traffic signal and Bruce's vehicle hits the company vehicle, injuring the employee. The employee could both receive workers' compensation benefits and file a claim against, or even sue, Bruce Wayne (for which he or his insurance company might be responsible).
If the employee recovers from Bruce Wayne and has received workers' compensation benefits, then it is probable that some portion of the recovery or settlement from Mr. Wayne will have to be repaid to ABC company or its workers' compensation insurer. Similarly, some categories of the employee's future workers' compensation benefits may likewise be reduced. The methodology is somewhat complex and involves mathematics. It is adequately described in Langham, Recovery on the Florida Workers' Compensation Lien, Trial Advocate Quarterly, July 1995, though finding a copy of that old publication might prove a challenge (email me and I will send you a copy). I consulted in several "lien recovery" cases after publishing that article and once appeared as a witness in court regarding the procedure and somewhat difficult math.
There has also been a great deal have news coverage regarding the innovative crowd-funding concept that is GoFundMe, and similar. Today, seemingly anyone who suffers a loss has a friend, neighbor, or coworker who will deploy an Internet platform in hopes of drawing the public at large towards donating money to benefit someone.
How does "crowd funding" affect other rights or obligations? This recently made the news when a Tennessee State linebacker was injured in the course of a game against Vanderbilt (I double-checked this, Vanderbilt does indeed have a football team). According to SBNation, two people started crowd-funding efforts on his behalf. The school asked that those efforts cease to avoid "a potential violation of NCAA (National Collegiate Athletic Association) rules." The NCAA apparently will allow the university to have a campaign to raise funds, but "other crowd-funding attempts may put Abercrombie’s (the injured player) eligibility in jeopardy.”
A popular recent example of the potential of such fundraising regards a significant amount of money raised on behalf of a homeless Marine. He gained notoriety doing a good deed for a lady stranded on the highway. She started a GoFundMe campaign, and raised significant money, and now litigation has ensued as to how much the homeless vet received. There are questions as to what happened to a significant portion of the money.
Another intriguing story was documented on The WCC WorkCompWorld Blog in Groundhog Day. That post documented some naïve and ambitious sailors who put to sea in a $5000 sailboat, with $100 cash in their pockets, and found themselves almost immediately shipwrecked and in debt. Similarly, a GoFundMe effort pulled them from the financial abyss and saw them on their way.
The topic of third-party recovery and its confluence with GoFundMe came up in a recent discussion at a workers' compensation meeting. The question involved a tragic news story involving a Florida bank robbery suspect, spotted along a Kentucky highway. Local police intervened to make a traffic stop, which ended with the suspect dead, and a sheriff's deputy seriously wounded. The deputy is now reportedly "90 percent paralyzed after being shot in the back." The story is tenuously related to Florida but it is interesting.
One pertinent element of the news story is that associates of this sheriff deputy have begun fundraising for his survivors and family. This includes an effort on the ground in Kentucky. However, it also includes a GoFundMe page "set up to help cover Morales' costs, such as a wheelchair-accessible vehicle," according to a local television station. I located the site without difficulty, and there was a significant volume of contribution demonstrated, over $25,000.
The question was why would an injured worker need funds beyond workers' compensation. And then, whether the the workers' compensation carrier or the deputy's employer would have a lien as it would against Bruce Wayne in the example above.
The first question is perhaps the easiest. While workers' compensation provides a measure of benefits following a work accident, it will not necessarily cover every expense. The vehicle mentioned in the article is a great example. In some states, a workers' compensation carrier will be obligated to provide transportation to and from medical appointments or therapy, but is not liable to provide a vehicle. And a vehicle provides freedom, change of scenery, and flexibility. Thus, it is certainly possible for an injured worker to have a need that is beyond the obligations of a workers' compensation system in a particular state.
The second question is intriguing. It drew my mind back to section 440.29, and the recovery participation-type statutes (lien) which exist in so many jurisdictions similarly. Presumably, a GoFundMe balance of $5000 would not attract a payer to seek to participate. However, if a GoFundMe and treaty raised $400,000 (as it did the Marine above) to the benefit of survivors or the estate of a person injured at work, is it possible that a payer might seek to participate similarly to third-party proceeds?
The answer will be found in the particular state's statute. In Florida, the provisions of Section 440.39 are reasonably specifically focused upon recovery "against such third-party tortfeasor." That specificity seems unlikely to encompass donations in a charitable situation, such as GoFundMe or similar. Despite carrier recovery seeming unlikely under this Florida statute, it is nonetheless possible that a statute in some jurisdiction might be more broadly worded, and might be subject to some viable argument for participation.
As I told the questioner at the seminar, carrier recovery in such a situation would seem to be challenging, and ultimately would depend upon what the statute says. These are important workers' compensation reminders: that benefits may not cover everything, benefits and parameters may differ from state to state, and the wording of a state's statute will be critical to determining rights and responsibilities.
