Liberty Mutual Insurance Company (Liberty) wrote the workers' compensation insurance for Raven Transport Company (Raven). Robert Luscomb worked for Raven as a truck driver. On September 8, 1999, Luscomb's right foot and ankle were severely injured while he delivered merchandise to BJ's Wholesale Club (BJ's) in Miami. The injuries led to Luscomb's right foot being amputated, resulted in huge medical expenses and the ensuing disability caused the loss of his job and income as a truck driver for Raven. Liberty paid workers compensation medical and disability benefits as required by law. Luscomb did not file a third-party tort claim during the year following his injury and neither Liberty nor Raven brought suit during the second year following the injury. By law, Luscomb's right of action against a third-party tortfeasor then reverted to him, subject to Liberty's subrogation and lien rights as provided by the same law.
In July 2003, Luscomb filed a tort claim against BJ's based on the accident and his damages. Liberty promptly filed a notice of lien in the lawsuit for compensation and medical benefits paid to Luscomb that exceeded $635,000 at the time. In 2005, the claims against BJ's were settled for $215,000 after mediation. Liberty's disbursement and lien at that time exceeded $1,000,000. After subtracting $86,000 in attorney's fees and $47,252 in costs from the settlement, the net proceeds payable to Luscomb amounted to $81,748. Liberty claimed that the statutory lien included a portion of Luscomb's attorney's fees and costs so that the correct lien amount was actually more than the net amount otherwise payable to Luscomb. The Circuit Court, Miami-Dade County imposed a lien of $132,410 but limited Luscomb's obligation to his net proceeds of $81,748. Luscomb appealed and Liberty cross-appealed.
Luscomb argued that the $215,000 settlement was not the full value of damages sustained for purposes of the lien statute, estimated by experts to be in the range of $5,000,000 to $6,000,000. This figure took into account his life expectancy, medical expenses and lost earnings capacity. He felt that the trial court should have made the determination on the full value of the tort claim against BJ's, without any reduction for his comparative negligence, for use as the denominator in calculating Liberty's lien and entitlement to any of the net proceeds. That percentage would be applied to Liberty's total benefits payments of over $1,000,000 at the time to produce its lien amount. If that figure was less than $81,748, Luscomb would recover the balance of those proceeds personally and free of the lien.
The simple and direct objective of the lien statute is to prevent double recoveries by injured employees who have recovered statutory benefits under the workers compensation law but who also have claims against responsible parties other than the employer. The process is logical but usually becomes very complicated because of the broad spectrum of circumstances involved with third-party claims and recoveries. In this case, two complicating variables were absent. The workers compensation claims had been fully settled, meaning that the maximum amount of the lien was a liquidated sum. In addition, no other non-settling third-party tortfeasors were involved.
Because the trial court did not determine the full value of damages sustained by Luscomb, the District Court of Appeals of Florida, Third District reversed and remanded this case with directions to do so. If Liberty's lien as calculated after remand exceeded $81,748, it would recover all of the net settlement proceeds. If the lien was less than that amount, Liberty would be paid its lien from the proceeds and the remainder would be paid to Luscomb. Stated in another way, Liberty's recovery under the workers compensation lien was capped at Luscomb's net recovery and the trial court had to determine the full value of damages sustained by Luscomb before determining the lien amount.
Robert Luscomb and Mary Luscomb, appellants/Cross-Appellees. V. Liberty Mutual Insurance Company; BJ's Wholesale Club, Inc., a foreign corporation; and BJCR, Ltd., a foreign limited partnership, Appellees/Cross Appellant. No 3D07-015. Oct 17, 2007. 967 So.2d 379.