$15K “Fine” Against Florida Comp Insurer Not Supported by Evidence

In an appeal and cross-appeal from an order granting sanctions against an insurer for failure to provide orthopedic treatment to an injured worker, a Florida appellate court held that a circuit court had jurisdiction, pursuant to § 440.23(1), Fla. Stat., to award a monetary remedy to the injured worker, but that the circuit court’s $15,000 award was not supported by the evidence [Zurich Am. Ins. Co. v. Samson, 2021 Fla. App. LEXIS 7656 (2d DCA, May 28, 2021)]. The appellate court noted that was no evidence of an actual loss suffered by worker; the $15,000 sanction was a flat, unconditional fine with no opportunity to purge prior to its imposition. Thus, the circuit court’s imposition of a fine could not be upheld as a compensatory or coercive civil contempt sanction.

Background

Samson injured his neck and shoulder in October 2018, while performing construction work for his employer. He filed a petition for workers’ compensation benefits on June 27, 2019. On July 23, Zurich filed a response asserting that it was arranging for orthopedic treatment. On August 22, the JCC entered an order requiring Zurich “to authorize and provide” orthopedic treatment.

Samson was turned away from the orthopedist’s office for two different appointments in the following months, and he filed his petition for rule nisi in the circuit court on October 28, 2019. He requested that Zurich be found in civil contempt and that the court impose a compensatory disgorgement of profits of $3.75 million, a fine of $37,000 (one percent of the profits), or a stop-work order. At the November 5 hearing on Samson’s petition, Zurich asserted that it had already coordinated Samson’s treatment by scheduling an appointment on December 2.

$15,000 “Fine”

Without objection by the parties, the court did not take testimony at the hearing but considered record evidence including: (1) the petition for rule nisi, (2) the response, (3) the insurance adjuster’s affidavit, (4) Samson’s affidavit, and (5) the various attachments to these documents. The court entered an order finding that Zurich had deliberately delayed and withheld necessary orthopedic treatment in a manner that offended the court’s judicial conscience. The court determined that it was unnecessary to impose a disgorgement of profits, daily fine, or stop-work order to coerce future compliance but instead ordered Zurich to provide treatment at the upcoming December 2, 2019, appointment. As for a remedy, the court concluded that Samson’s request for a $3.75 million disgorgement of profits or a $37,000 fine was excessive. Instead, the court ruled that “the parties may be restored to their respective positions with a fine of $15,000” to be paid to Samson.

Zurich argued on appeal that the circuit court erred by imposing a $15,000 fine because the court’s rule nisi jurisdiction was limited to determining whether Zurich violated a valid workers’ compensation order and, if so, enforcing that order. Samson argued that the $15,000 was a partial disgorgement of profits that was properly imposed as a compensatory sanction under the court’s inherent civil contempt powers.

Wide Latitude Given Circuit Court

The appellate court observed that § 440.24(1), Fla. Stat. gave the circuit court wide latitude in the enforcement of compensation orders. For example, if it was not possible to provide retroactively the benefit that was denied, the court was empowered to fashion a monetary remedy equivalent to the lost benefit.

$15,000 Fine Could Not be Justified

The appellate court stressed, however, that the circuit court’s imposition of a $15,000 “fine” could not be justified as a compensatory remedy even though the court stated that the award would restore the parties “to their respective positions.” There was simply no evidence suggesting that Samson had been deprived of any sum approaching $15,000 by Zurich’s delaying and withholding Samson’s medical treatment. As a result, the appellate court said the evidence was insufficient to support the award of a $15,000 remedy under § 440.24, Fla. Stat.

As to Samson’s argument that the $15,000 “fine” was a partial disgorgement of profits imposed as a compensatory sanction for civil contempt, the appellate court said it did not appear from the circuit court’s findings that it had intended to impose sanctions for civil contempt. Rather, the circuit court appeared to reject a contempt finding by stating that it was unnecessary to impose a disgorgement of profits, daily fine, or stop-work order to coerce future compliance. The appellate court concluded that if the circuit court intended to impose sanctions in an effort to hold Zurich in civil contempt, it did not properly do so.

The appellate court continued that civil contempt sanctions may be compensatory or coercive. The appellate court stressed that compensatory civil contempt sanctions must be based on evidence of the actual loss suffered by the injured party. In the case of coercive civil contempt sanctions, the order of contempt must contain a purge provision. Here, there was no evidence of an actual loss suffered by Samson. Rather, the $15,000 sanction was a flat, unconditional fine with no opportunity to purge prior to its imposition. Thus, the circuit court’s imposition of a fine could not be upheld as a compensatory or coercive civil contempt sanction.

Case Remanded

The appellate court concluded that while the circuit court had the jurisdiction and authority to award a monetary remedy under § 440.24(1), Fla. Stat., the amount of the award was not supported by the evidence. The court remanded the case with directions for the circuit court to reconsider the proper award. On cross-appeal, the appellate court affirmed the circuit court’s rejection of Samson’s request for a full compensatory disgorgement of profits.