Blowing Both Hot and Cold: When Can Florida Employer Deny Comp Claim and Later Say Tort Action is Barred by Exclusive Remedy Rule?

Yesterday, a Florida appellate court held an employer and a co-employee were not estopped to raise the exclusive remedy defense in a civil action filed against them by a plaintiff who contended he had sustained injuries in an incident at work in spite of the fact that when the plaintiff had earlier sought workers’ compensation benefits, the employer had claimed that no compensable accident occurred, and took the position that the employee’s alleged accident did not occur within the course and scope of his employment [McNair v. Dorsey, 2020 Fla. App. LEXIS 589 (1st DCA Jan. 22, 2020)]. The case highlights an important issue for employers: Can the employer blow both hot and cold, claiming on the one hand claim that the injury did not arise out of and in the course of the employment and, on the other, later argue that a trial court may not hear the plaintiff’s civil action claim because it is barred by exclusivity?

Background

McNair and Dorsey were coworkers employed by defendant Armstrong’s company, Armstrong Tree Service. McNair claimed he was injured while carrying a tree branch with Dorsey to a wood chipper. McNair filed two petitions for workers’ compensation benefits. With regard to the first, he received a denial from Armstrong’s insurer indicating there was “no compensable accident.” With regard to the second, Armstrong denied that McNair’s accident was compensable under workers’ compensation law, claimed that no compensable accident occurred, and took the position that McNair’s accident did not occur within the course and scope of his employment.

McNair voluntarily dismissed his workers’ compensation petition and then instituted an action in circuit court alleging negligence on the part of both Armstrong and Dorsey. McNair’s amended complaint argued that Armstrong was estopped from claiming that workers’ compensation provided McNair’s exclusive remedy since he had claimed in the compensation case that McNair did not suffer a compensable accident within the course and scope of his employment. The trial court granted Final Summary Judgment in favor of Armstrong, concluding that McNair’s exclusive remedy was via a workers’ compensation claim.

Employer Can Lose the Exclusive Remedy Defense

On appeal, the court noted that under certain circumstances, an employer was estopped from asserting workers’ compensation immunity. Those circumstances had been enumerated in earlier decisions:

1. When the employer made a representation of a material fact that was contrary to a later-asserted position;
2. There had been reliance on that representation; and
3. There was a change in position detrimental to the party claiming estoppel that was caused by the reliance on said representation.

Quoting Coastal Masonry, Inc. v. Gutierrez, 30 So. 3d 545, 547 (Fla. 3d DCA 2010), which in turn had cited Schroeder v. Peoplease Corp., 18 So. 3d 1165 (Fla. 1st DCA 2009), the court observed that an employer may be equitably estopped from raising a workers’ compensation exclusivity defense if the employer denies the employee’s claim “by asserting that the injury did not occur in the course and scope of his or her employment.”

Important Distinction, However, at Work in Case at Bar

The court stressed, however, that a party should not always be foreclosed from claiming entitlement to workers’ compensation immunity to a lawsuit simply because it denied compensability in an earlier compensation claims proceeding. This was especially true when the employer, like Armstrong claimed here, asserted that no work accident causing injury occurred at all. According to the court,

McNair’s claimed accident, if it happened as he alleged, certainly occurred in the course and scope of his employment. Armstrong’s claim was that no accident causing injury occurred at all. Either the factfinder would determine that the accident occurred, in which case it was indisputably within the course and scope of employment, or that the accident did not occur, in which case there was no compensable injury.

Continuing, the court indicated that it was not inconsistent for Armstrong to claim in the compensation proceeding that no accident occurred, but to later claim in the tort suit that any injury alleged was in the course and scope of employment. While Armstrong arguably took “inconsistent positions” in the compensation proceeding and in the tort suit, the court stressed that it was simply not the kind of inconsistency that should estop them from asserting workers’ compensation immunity.

The court reiterated that an employer was not estopped from asserting workers’ compensation exclusivity “merely because it had denied compensability of an alleged workplace injury” [opinion, p. 6]. Rather, the employer was entitled to litigate whether a compensable accident occurred in a compensation forum. The employer could not, however, claim that the employee did not belong in a compensation forum because the accident was not work-related, and then turn around and claim that the employee must be in a compensation forum because the accident was work-related.

Here, Armstrong initially denied that any accident occurred within the course and scope of McNair’s employment. After McNair filed suit, Armstrong filed a motion for summary judgment. Since the alleged injury would have been covered under the workers’ compensation statute, the trial court did not err in granting summary judgment and finding that Armstrong was not estopped from claiming workers’ compensation exclusivity. In other words, Armstrong had not actually blown both hot and cold.