As we discussed in a recent post, an injured person does not usually have the right to sue the insurance company of the person or business that caused the injury. There is a small exception to this rule, however. In situations when an injured person (or, in the case of death, his or her family) has filed a lawsuit against the negligent person or business and obtained a judgment, but the insurance company refuses to pay the injured person the money to which he or she is entitled under the judgment, the injured person may be able to sue the insurer directly.
In the case of Morales v. Zenith Insurance Company, the family of a man who was killed on the job filed suit against the man’s employer. According to the family’s complaint, the man was killed by a falling palm tree while working for a landscaping firm. The family filed a wrongful death lawsuit in state court in 1999, alleging that the landscaping firm’s negligence had caused the man’s death. A default judgment was entered against the firm. Later, a jury trial was held to assess damages, with the family ultimately being awarded $9.525 million.
The Workers’ Compensation Settlement
Meanwhile, the family accepted workers’ compensation benefits from the landscaping firm’s insurance company, which insured the firm for both workers’ compensation (“Part I”) and employer liability insurance (“Part II”). The employer liability insurance provision contained an exclusion to the effect that there would be no coverage for any obligation under workers’ compensation law. In 2003, the insurance company made a “final lump sum payment” to the family in exchange for a settlement agreement that purported to constitute an election of remedies by the man’s estate with respect to both the employer and the carrier. Including the lump sum, the family received a total of $100,000 in workers’ compensation benefits.
The Family’s Lawsuit against the Insurance Company
After the insurance company refused to pay the $9.525 million that the jury awarded the family in their negligence case against the employer, the family filed a breach of contract lawsuit in a Florida state court. The insurance company removed the case to federal court, and both sides moved for summary judgment. The federal district court ruled in the insurance company’s favor, holding that the workers’ compensation exclusion contained in Part II (the employer liability insurance portion of the policy) barred the family from recovering in their negligence suit. The family appealed.
The Decision of the Federal Appeals Court
The United States Court of Appeals for the Eleventh Circuit certified three questions to the Florida Supreme Court: 1) did the family have standing to sue the insurance company for breach of contract under Part II of the policy; 2) did the workers’ compensation exclusion in Part II exclude coverage for the family’s negligence suit; and 3) even if the family was not barred by the workers’ compensation exclusion, did the workers’ compensation settlement preclude recovery under the negligence theory?
Since the Florida Supreme Court answered “yes” to all three questions, the federal appellate court affirmed the district court’s decision to grant summary judgment to the insurance company. According to the court, the family did have standing to sue, but the exclusion and the settlement release prevented them from collecting their judgment in the negligence case from the insurance company.
To Speak to a Skilled Workplace Injury Lawyer
As one can see, accidents in the workplace can be complicated. There is no “one size fits all” formula for determining the amount that an injured person (or, in accidental death cases, his or her family) can recover. Even the party or parties against which such recovery can be sought can vary from case to case. If you have been hurt on the job in South Florida, you are entitled to know your rights as soon as possible after an injury. To speak to an experienced workers’ compensation attorney, call the law firm of Cohn & Smith, P.A. at (954)431-8100 and request a free initial consultation. We accept cases throughout South Florida, including Pompano Beach, Aventura, and Hollywood.
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