If an employee is injured while working, there are time limits to sue the third-party tortfeasor for personal injury.
(When an employee is injured while in the course of his employment and he later accepts compensation benefits, the compensation carrier becomes subrogated to the rights of the employee against the tortfeasor to the amount of the benefits paid. §440.39(2), Fla. Stat.)
This law gives the carrier the right to sue the third-party tortfeasor if the employee does not sue during the first year after the accident. §440.39(4)(a); Jersey Insurance Co. v. Cuttriss, 220 So.2d 15 (Fla. 3d DCA 1969).
What Happens if the Employee Doesn’t Sue the Tortfeasor Within the First Year?
If the employee does not sue within the first year, the workers compensation insurance carrier can sue after giving the required 30 day notice to the employee (or his dependents) and the employee’s attorney. §440.39(4)(a).
It is clear that the right to institute suit is concurrent during the second year after the accrual of the cause of action. This means that the employee can still sue after the first year.
However, if the workers comp carrier sues first, the employee cannot also sue. Kimbrell v. Paige, 448 So.2d 1009, 1012 (Fla. 1984).
Can the Employee Still Sue After the Work Comp Carrier Gives Its 30 Day Notice To Sue?
If the employee doesn’t sue within the first year, the employee can still sue so long as the employee sues before the employer sues in the 2nd year.
So it seems that the employee can still sue after receiving the work comp carrier’s 30 day notice to sue, but before the carrier sues.
However, even though the employee can sue in the second year, if the employer sues or undertakes to negotiate a settlement (with notice to the employee, and so long as no lawsuit has been filed and no settlement has been reached by the employee and the third party), then the employer controls the lawsuit. Aetna Cas. & Sur. Co. v. Bortz, 271 So.2d 108, 114 (Fla.1972).
The Bortz court didn’t say what is considered “undertaking to negotiate a settlement”. Is it making a settlement demand? Is it receiving an offer? Is it settling the case?
In this scenario, the employee should argue that negotiating a settlement means settling the case.
Can the Worker’s Comp Carrier Sue if the Third Party Has Sent the Employee a Policy Limits Check?
If the third party’s insurer has sent the employee a check for the insurance policy limits, the employee can argue that a settlement has been reached (for purposes of this law only). The employee can argue this even if he or she hasn’t deposited the check or signed a release.
The employee can then argue that because a “settlement” has been reached, the employer doesn’t have a right to sue the third party, and the employee keeps this right.
One situation where the employee might not want to deposit the third party’s settlement check is if the employee is also making an underinsured motorist insurance (“UIM”) claim for a Florida car accident based on an out of state UIM policy.
Some out of state UIM insurance policies, such as those in Georgia, require that you sue the third party.
Why an Employee May Want to Sue the Third Party Within the First Year
If a compensation claimant delays beyond the first year to sue a third party, he or she may potentially lose money. This is because a workers compensation carrier’s subrogation rights under subsection (4) allows it to recover all amounts paid by it, plus the present value of future benefits payable, together with prorated court costs and attorney’s fees of the carrier.
If an employee sues in the first year, then the formula to pay back the workers’ compensation carrier is (Settlement Amount − Fees & Costs) ÷ Full Value of Claim = Percentage Lien. This payback formula puts more money in the claimant’s pocket.
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