Appendix — Lee v. United States
Supreme Court brief1994
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Supreme Court, u.4.
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94-86 JUL 1 11994
NO.
OFFICE OF THE CLERK
SUPREME COURT OF THE
UNITED STATES
OCTOBER TERM, 1994
RONALD BELL, FRANK AROSTEGUI,
RICHARD McLEAN, ROBERT THOMAS,
ROBERT FAIR, JOHN HICKEY, KENNETH
A. LEIBNITZER, GEORGE MEYER,
EDWARD J. KING, ORLANDO PAREDES,
and ROBERT L. DAUGHERTY,
Petitioners,
vs.
CITY OF MIAMI,
Respondent.
APPENDIX TO PETITION FORA WRIT
OF CERTIORARI TO THE SUPREME
COURT OF FLORIDA
RICHARD A. SICKING, ESQUIRE
Attorney for Petitioners
2700 S. W. Third Avenue
Suite 1E
Miami, Florida 33129
(305) 858-9181
- =
SUPREME COURT OF FLORIDA
MONDAY, APRIL 11, 1994
CITY OF MIAMI,
Petitioner,
v.
Ronald V. Bell,
Respondent.
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CITY OF MIAMI,
Petitioner,
v.
Frank Arostegui,
Respondent.
CITY OF MIAMI,
Petitioner,
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V.
Richard McLean,
Respondent.
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CASE NO. 80,524
District Court of Appeal
lst District - No. 91-1878
CASE NO. 80,560
District Court of Appeal
Ist District - No. 91-675
CASE NO. 80,575
District Court of Appeal
Ist District - No. 91-2155
APPENDIX A
S
CITY OF MIAMI, *
Petitioner,
v.
George A. Meyer,
Respondent.
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CITY OF MIAMI,
Petitioner,
v.
Robert Thomas,
Respondent.
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CITY OF MIAMI,
Petitioner,
v.
Robert Fair,
Respondent.
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District Court of Appeal
1st District - No. 91-1297
CASE NO. 80,683
District Court of Appeal
1st District - No. 91-1734
CASE NO. 80,728
District Court of Appeal
1st District - No. 91-1334
CITY OF MIAMI,
Petitioner,
v.
John Hickey,
Respondent.
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CITY OF MIAMI, *
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Petitioner, .
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Kenneth A. Leibnitzer,*
Respondent.
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CITY OF MIAMI,
Petitioner,
Vv.
Edward J. King,
Respondent.
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CASE NO. 80,981
District Court of Appeal
1st District - No. 91-4025
CASE NO. 80,998
District Court of Appeal
Ist District - No. 92-1595
CASE NO. 80,999
District Court of Appeal
1st District - No. 92-1594
CITY OF MIAMI, CASE NO. 81,340
District Court of Appeal
1st District - No. 91-4150
Petitioner,
Vv.
Orlando Paredes,
Respondent.
CITY OF MIAMI, CASE NO. 81,554
Petitioner, District Court of Appeal
1st District - No. 92-1593
Vv.
Robert L. Daugherty,
Respondent.
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cee eee Se SSeS ee ee
Respondents’ Motion for Rehearing or
Clarification filed in the above causes is
hereby denied.
All Motions for Attorneys Fees filed in
the above causes are hereby denied.
OVERTON, McDONALD, SHAW, GRIMES,
KOGAN and HARDING, JJ., concur
BARKETT, C.J., recused
TC
cc: Hon. Jon S. Wheeler, Clerk
A True Copy Ms. Cecilia F. Renn
Mr. A. Quinn Jones, III
TEST: Ms. Kathryn S. Pecko
By: Mr. Arthur J. England, Jr.
Deputy Clerk Mr. Charles M. Auslander
Mr. Richard A. Sicking
Sid J. White Mr. Mark L. Zientz
Clerk, Supreme Ct. Mr. Paul J. Kneski
SUPREME COURT OF FLORIDA
CITY OF MIAMI, Petitioner,
VS. Case No. 80,524
RONALD BELL, Respondent.
CITY OF MIAMI, Petitioner,
VS. Case No. 80,560
FRANK AROSTEGUI, Respondent.
CITY OF MIAMI, Petitioner,
VS. Case No. 80,575
RICHARD McLEAN, Respondent.
CITY OF MIAMI, Petitioner,
VS. Case No. 80,652
GEORGE A. MEYER, Respondent.
CITY OF MIAMI, Petitioner,
vs. Case No. 80,683
ROBERT THOMAS, Respondent.
CITY OF MIAMI, Petitioner,
vs. Case No. 80,728
ROBERT FAIR, Respondent.
CITY OF MIAMI, Petitioner,
vs. Case No. 80,981
JOHN HICKEY, Respondent.
APPENDIX B
x.
a
CITY gd MIAMI], Petitioner,
Case No. 80,998
KENNETH A. LEIBNITZER, Respondent.
Cizs a MIAMI, Petitioner,
Case No. 80,899
EDWARD J. KING, Respondent.
CITY OF MIAMI, Petitioner,
Vs. Case No. 81,340
ORLANDO PAREDES, Respondent.
CITY OF MIAMI, Petitioner,
VS. Case No. 81,554
ROBERT L. DAUGHERTY, Respondent.
MOTION FOR REHEARING OR
CLA RIFICA TION
COME NOW the Respondents, by and
through their undersigned attorneys, and
file this motion for rehearing or
clarification and for grounds would state:
This motion is filed pursuant to Fla. R.
App. P. 9.330(a).
In the Court's Order, the Court stated
the issue:
We must now decide whether
Barragan is to be applied
prospectively only. (Opinion at page
4).
The Court heid that Barragan v. City
of Miami, 545 So. 2d 252 (Fla. 1989) was to
have no effect on the amount of disability
payments owed by the City except for those
payments accruing after the effective date of
the Barragan decision. The Court explained
its reasoning for so holding:
The City's budgeting for salary and
benefits as well as its ailocation of
tax resources was made in reliance
on the ordinance and existing
caselaw. Holding the City liable for
past offsets would require a
reallocation of municipal services
and subject today's taxpayers to
yesterday's fiscal obligations.
The City's contracts with its
employees recognized the City's
right to an offset. To now hold the
City liable for past offsets would
effectively modify com pleted
contracts without affording the City
an opportunity to renegotiate the
other terms of those contracts, such
as salaries and benefits. When
contractual rights are adversely
affected in such a manner, we are
reluctant to apply a _— decision
retroactively. Florida Forest &
Park Service v. Strickland, 154 Fla.
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NN I AREER LE ALLA TETE A OEE EEE +
ig
472, 18 So. 2d 251 (1944). We note
that our rulings in Martinez v.
Scanlan, 582 So. 2d 1167 (Fla. 1991),
and National Distributing Co. v.
Office of Comptroller, 523 So. 2d 156
(Fla. 1988), were prospective only.
To the extent the offset was taken
prior to Barragan, City employees
have received what their contracts
called for when their rights vested.
Present and future benefits required
by Barragan can be adjusted
without serious financial
consequence for City taxpayers; but
to require back benefits for prior
years would be fiscally unjust to the
taxpayers of the City of Miami.
(Opinion at page 5). |
In so reasoning, the Court may have
overlooked that the employees right to
receive his pension is a vested property
right which cannot be taken from him. In
the Florida Protection of Public Employee
Retirement Benefits Act, §112.66(2), Fla.
Stat. the Florida Legislature refers to
"vested pension benefits”. In Florida
Sheriffs Association v. Department of
Administration, Division of Retirement, 408
So. 2d 1033 (Fla. 1981), the Supreme Court of
Florida discussed voluntary versus
mandatory governmental retirement plans,
contributory versus non-contributory
retirement plans, and the interest of active
employees versus’ retired employees’ in
terms of the constitutional prohibition
against laws which impair the obligation of
contracts.! The Court held that retired
employees have a vested property right in
their pensions. |[d., at 1036.
In 1973, the Legislature passed Laws
of Florida, Ch. 73-127, repealing §440.09(4),
Fla. -Stat: This clearly expressed the
Legislature's intent that offsets for workers’
compensation that were permitted prior to
repeal were no longer to be allowed.
Therefore, when each of the Respondents
was injured after July 1, 1973,2 they had a
vested property right that their pensions
should be paid according to law. See
1 The Respondents are retired members of a mandatory, contributory plan.
2 The applicable Workers’ Compensation Law is the statute in force on the
date of the accident. Sullivan v. Mayo, 121 So. 2d 424 (Fla. 1960).
me
Florida Sheriffs Assoc. v. Department of
Admin., supra.
Since this Court held in Barragan that
the offset in the City's pension ordinance
was unlawful under state law, and since the
City admits that it was unlawful by paying
without offset since August 1, 1989, the
Court's holding in this case allows the City
to do that which is admittedly unlawful, but
for a period of time. Part of the rationale for
this extraordinary privilege (in the face of
the employee's vested property right to their
pensions) is this Court's statement:
The City's contracts with its
employees recognized the City's
right to an offset. (Opinion at page
5).
The Court may have overlooked that
this statement has no basis in fact or in law.
The record in City of Miami v. Bell does not
contain a copy of the union contract. The
record in City of Miami v. Arostegui does
not contain the union contract. The record
2
in City of Miami v. Meyer does not contain
the union contract. The record in City of
Miami v. Fair does not contain the union
contract. The record in City of Miami uv.
Hickey does not contain the union contract.
The record in City of Miami v. Letbnitzer
does not contain the union contract. The
record in City of Miami v. King does not
contain the union contract. The record in
City of Miami v. Paredes does not contain
the union contract. The record in City of
Miami v. Daugherty does not contain the
union contract.
Therefore, the Court may _ have
overlooked that it would be inappropriate for
the Court to make a finding of fact as to
what the parties had agreed to when any
such contractis notin the record. Certainly
the Respondents would not have received
due process of law in such a case. The City,
not having raised such a defense at the trial
level, did not introduce as evidence any
contract in its defense. This was not argued
in the Court below. It would be
fundamentally unfair for the City to make
such an argument for the first time before
this Court. This denies to the Respondents
due process of law because they have not
been afforded the opportunity to prove that
there was no such contract, or that they did
not agree to the City's right to an offset, or
that neither they nor the union could have
done so. The Court may have overlooked
that the statement in the Court's opinion:
"The City's contracts with its employees
recognized the City's right to an offset’, has
no basis in the record with respect to these
Respondents.
The record in City of Miami v. Thomas
does contain the union contract between the
City and the Fraternal Order of Police for
the period of time October 1, 1976, to
September 30, 1978. Article XXIX provides
that the pension ordinance will continue for
«he.
the life of the agreement. (R. Thomas 236).
However, the next article, Article XXX, is
entitled "Provisions in Conflict with Law’.
It provides that if any court of competent
jurisdiction subsequently determines that
any of the words of the agreement are in
conflict with any law, that the words in
conflict "shall be null and void and subject
to renegotiation, but the remainder of the
Agreement shall remain in full force and
effect with it being presumed that the intent
of the parties herein was to enter into the
Agreement without such invalid portion or
portions’. (R. Thomas 236). This has the
effect of voiding from the agreement the
offset provision in the pension ordinance
which was held to be invalid in Barragan.
The City agreed that if this occurred, that it
could not renegotiate any other provision of
the contract and that the offending words
were severable. However, in the Bell
opinion, this Court wrote:
an
The City's contracts with its
employees recognized the City's
right to an offset. To now hold the
City liable for past offsets would
effectively modify com pleted
contracts without affording the City
an opportunity to renegotiate the
other terms of those contracts, such
as salaries and benefits. (Opinion
at page 5).
The Court may have overlooked that in
saying that to hold the City liable for past
offsets would effectively modify completed
contracts without affording the. City an
opportunity to renegotiate the other terms of
those contracts such as_ salaries and
benefits IS EXACTLY WHAT THE CITY
AGREED TO IN THE THOMAS CONTRACT.
The City agreed that if this occurred, it
would not be able to renegotiate the other
terms of the contract, such as salaries and
benefits. The City agreed in Article XXX
that it could not renegotiate any other
provision of the Agreement if any words
were subsequently nullified on account of
conflict with state statute. The Court may
have overlooked that the Court's holding in
the Bell case is exactly the opposite of what
the City agreed toin the Thomas contract.
The record in City of Miami ov.
McLean does contain the union contract
between the Sanitation Em ployees
Association and the City for the period 1977
to 1979. It does not contain an article with
reference to pensions at all, but it did
contain a prevailing benefits clause, which
could be construed to include _ pension
benefits in a general way. However, it does
contain Article XXVIII entitled "Provisions
in Conflict With Law". It provides:
Section 1. If this agreement or any
provision, section, subsection,
sentence, clause, phrase, or word of
this agreement, is in conflict with
any existing State or Federal law, or
future State or Federal law; or with
any existing City ordinance,
including, but not limited to,
Ordinance No. 6945 (Civil Service
Rules and Regulations) or
Resolution; or with any
interpretation of this agreement
oy.
made by a court of competent
jurisdiction, that portion of this
agreement in conflict with said law
or ordinance or resolution, or court
interpretation of law, shall be null
and void; but the remainder of the
Agreement shall remain in full
force and effect with it being
presumed that the intent of the
parties herein was to enter into the
Agreement without such _ invalid
portion or portions. (R. McLean 176-
177).
The difference between the 1976/1978
FOP contract in Thomas and the 1977/1979
SEA contract in McLean is that in Thomas,
the offending words could be renegotiated,
but no other provisions could be
renegotiated; whereas in McLean, neither
the offending words nor any _ other
provisions could be renegotiated. Thus the
Court may have overlooked in saying that by
requiring the City to pay for the pension
offsets which were illegal under Barragan,
"would effectively modify completed
contracts without affording the City an
opportunity to renegotiate the other terms of
-18-
those contracts, such as_ salaries and
benefits" (Opinion at page 5) ----that this
reci h i r
The City could not argue that making
it liable for past offsets would effectively
modify com pleted contracts without
affording the City an opportunity to
renegotiate the other terms of those
contracts, such as salaries and benefits.
The City could not make that argument
because it would be false and overreaching.
The Court may have overlooked that it
assumed what the parties had agreed to,
which is not what the parties agreed to.
More importantly, the reference to contracts
is inappropriate under the terms of the
Court's own opinion which recognizes that
any agreement for pension offsets was
illegal and null and void.
However, this statement by the Court,
apart from having no basis in fact in the
record, is of great harm and mischief. This
2
Court held in Barragan that the offset
provision in the City of Miami's disability
ordinance, while unlawful after 1973 by
virtue of the repeal of §440.09(4), Fla. Stat.,
was also unlawful because it violated
§440.21(1), Fla. Stat., which made it a crime
for the employer to pay workers
compensation from a fund to which the
employee contributed. Barragan, supra, at
253-254.
This Court quoted this statute in the
Bell case, and further quoted the next sub-
section, which is §440.21(2), Fla. Stat.: “No
agreement by an employee to waive his right
to compensation under this chapter shall be
valid". (Opinion at page 2, footnote 1).
This statutory quote is contained in
footnote 1 on page 2 of the opinion. In the
second paragraph on page 5, the Court
explains its reasoning that the City would
be permitted to offset for the period of time
from 1973 to 1989 because:
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The Citys contracts with its
employees recognized the Citys
right to an offset. (Opinion at page
5).
Yet the Court had previously stated in
the footnote on page 2 in citing §$440.21(2),
Fla. Stat., that No agreement by an
employee to waive his right to compensation
under this chapter shall be valid
To anyone who reads the opinion, the
statement on page 5 that the parties had
contracted for the offset when compared
with the citation to the statute on page 2 of
the opinion, that such agreements are
illegal, would become gretly confused by
the decision. The decision gives effect to an
illegal agreement, which the decision
recognizes to be illegal. The decision
explains that a reason for the holding is
that the employee agreed to the illegality,
even though the statute provides that his
agreement is void. In this particular case,
the Court approves of an agreement, which
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is an agreement by the employee to have a
crime committed against him. The
criminal violation referred to in the opinion
is the violation of §440.21(1), Fla. Stat.
Barragan v. City of Miami, supra, at 253-
254.
While the Court's opinion is vague as
to which “contracts with its employees” the
Court is referring to, the only contracts that
are in the record are those in the Thomas
and McLean cases, which only cover
policemen for the years 1976 to 1978 and
sanitation workers for the years 1977 to
1979. Nonetheless, having shown that an
agreement by the employee himself to such
agreement is void under §440.21(2), Fla.
Stat., the question then occurs whether the
union, acting as the bargaining agent on
behalf of the employee, could agree to that
which the employee himself could not agree.
The answer is no. Collective bargaining
cannot vary statutory rights. See Barrentine
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vu. Arkansas-Best Freight System, Inc., 450
U.S. 728, 67 L. Ed. 641, 101 S. Ct. 1437 (1981).
A labor union may not agree to less benefits
than that provided for by statute. Ibid.
While we cannot question such a rule, we
can see the reason for it. For otherwise the
employer could commit all kinds of illegal
acts on its employees: discrimination,
unlawful hours, unlawful wages, unlawful
working conditions, unlawful! health
benefits, unlawful pensions, and simply
argue when challenged in court: "The union
said we could”. Clearly, that is not the law
and cannot be.
Since the Court in its opinion on page
5 does not specifically refer to ‘union
contracts’, but simply to contracts in a
general sense between the City and its
employees, then we could take that to mean
the contract of the employment relationship.
However, the Court states: "To hold the City
liable for past offsets would effectively
~93.
modify com pleted contracts without
affording the City an opportunity to
renegotiate the other terms of _ those
contracts, such as salaries and benefits". If
that reasoning is legally correct, then no
employee could ever collect from = an
employer for illegal wages, illegal working
conditions, illegal health coverage, illegal
pensions, or illegal workers’ compensation
because that would always be true. The
employer could point to the Bell case and
say that the illegal portion of the contract
cannot be held against him because he is
unable to “renegotiate” the other parts.
Since that statement would always be true,
the language of the decision strips
§440.21(1), Fla. Stat., and §440.21(2), Fla.
Stat., of any meaning. The Legislature says
illegal agreements are void. This Court
says they are enforceable.
Was the case a balancing of interests?9
On the one hand, there is the employees’
vested property right to receive’ their
pensions in the manner and in the amount
required by state law. On the other hand,
there is the City's claim that it should be
permitted to offset from 1973 to 1989, even
though such offset was illegal, because it
would be a hardship for the City to make
restitution for the money previously, and
illegally withheld. The Court's reasoning
for accepting the City's claim is: "Holding
the City liable for past offsets would require
a reallocation of municipal services and
subject todays taxpayers to yesterday's
fiscal obligations.” (Opinion at page 5).
And in another place, the Court says: "...but
to require back benefits for prior years
would be fiscally unjust to the taxpayers of
the City of Miami”. (Opinion at page 5).
3 All of the Respondents are permanently totally disabled, which certainly
qualifies them for the designation "physically handicapped”. Art. I, $2,
Fla. Const. does not permit any “balancing” of their interest versus the
City's finances.
- 25 ~
Again, the Court may have overlooked
thatin regard to this point, the Respondents
were not afforded procedural due process of
law. The City did not raise this point at the
trial level, nor in the District Court below.
The record contains no testimony and no
documents that would support such a
contention. It was not raised as a defense
below. The Respondents were not afforded
any opportunity to oppose it. This Court has
now found as fact that it would be a
financial hardship for the taxpayers of the
City to make restitution for the past offsets —
illegally taken, which the Court described
as "yesterday's fiscal obligations". (Opinion
at page 5). This, too, is neither factually nor
legally correct, and is an_ exceedingly
dangerous precedent.
The Court may have overlooked that
the Third District Court of Appeal had
already decided in 1981 in the case of City of
Miami v. Gates, 393 So. 2d. 586 (Fla. 3rd
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DCA 1981), that the City of Miami had
“taken” money from the employees’ pension
trust fund to pay workers’ compensation by
means of this offset. Anyone who can read
Gates in the Southern Reporter knows that
the City of Miami did this beginning in 1973,
and that the City was found guilty and was
liable to put the money back.- What this
means is that the taxpayers of 1973 and 1974
and 1975, 1976, 1977, and so on, got a tax
break they were not entitled to, because the
City paid for governmental expenses and
services, etc., by taking money from the
employees’ pension trust fund.
This case is about restitution for
money that was taken from a trust because
the Respondents also had a vested property
right in their workers’ compensation
benefits. Florida Forest & Park Service v.
Strickland, 154 Fla. 472, 18 So. 2d 251 (1944),
as well as a vested property right in their
pensions, that both should be paid according
97 .
to law. Florida Sheriffs Association uv.
Department of Administration, supra.
The Court has introduced a new idea,
which has no basis in the record, which is
that a party should not be required to make
restitution for money previously taken
illegally if it would be a hardship to the
party to make such restitution now. Does
such a question involve a_ balancing of
harm? The Court may have overlooked that
it is only looking at the financial harm to
the City and is overlooking the harm
previously done to the Respondents, the
firefighters and police officers and City
employees, who were totally disabled in the
line of duty and who had not received what
the Legislature decreed in 1973 by the repeal
of §440.09(4), Fla. Stat., that they should
have received. They were the victims of the
City's "taking" money from their trust fund
described by the Third District Court of
Appeal in City of Miami vu. Gates, supra.
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The Court may have overlooked that
the Florida Workers’ Compensation Law
provides in §440.02(14), Fia. Stat., that
sovereign immunity is completely waived in
regard to workers’ compensation. This
particular provision has_ been in_ the
Workers’ Compensation Law since 1935 in
$440.02, Fla. Stat., with various sub-section
numbers, but the _ statute has always
provided that public employment is the
Same as private employment.
Therefore, the reference to requiring
the “taxpayers of the City of Miami” to bear
the financial burden of paying what the
taxpayers of previous years should have
paid, is absolutely contrary to the waiver of
sovereign immunity. The Court should
follow the directives of the Legislature. As
the Legislature has waived sovereign
immunity completely in regard to workers’
compensation, it would be inappropriate for
the Court to interjectit. For example, if this
- 29 -
were a private employer, could we then say:
it would be unfair to the present
stockholders that they should have to bear
the financial burden of paying what the
previous stockholders should have paid
when the corporation had previously and
illegally withheld money? Obviously not; yet
private employers and public employers are
the same. Barragan v. City of Miami,
supra, at 254. By the same token, anyone
who reads the decision could come to the
conclusion that the Court is of the view that
if municipal government has_ withheld
money or taken money illegally in the past,
it should be excused from having to make
restitution because today's taxpayers would
have to make good for what past taxpayers
(maybe even some of the same taxpayers)
may have illegally enjoyed.
The Court's reasoning is: "...to require
back benefits for prior years would be
fiscally unjust to the taxpayers of the City of
- 90-
ee
Miami’. (Opinion at page 5). The Court
may have overlooked that this statement
will cause tremendous financial mischief.
First of all, the Court may have overlooked
that there are many other cities in Florida,
most all of which have pension systems,
particularly for firefighters under Chapter
175 of the Florida Statutes, or for police
officers under Chapter 185 of the Florida
Statutes. [The state of Florida and the
counties of Florida are unaffected by these
offset cases because they are all covered by
the Florida Retirement System, which
stopped offsetting with the repeal of §440.09,
Fla. Stat., in 1973.] E. g. Dept. of Hy. Safety
& Motor Vehicles v. McBride, 420 So. 2d 897
(Fla. lst DCA 1982).
Many other cities in Florida fall into
two categories: those that noticed repeal in
1973 and stopped offsetting at that time, and
those that did not, but after Barragan, paid
their retirees in accordance with the
. 31 -
Barragan decision both retrospectively and
prospectively.4 Depending upon_ the
circumstances involved, some of those
payments may have come from. pension
funds, some may have been made _ by
workers’ compensation, self insured or by
insurance, and may have. been paid
administratively and voluntarily, or by
order. The Court may have overlooked that
it cannot suppose by the way the decision is
written that this special privilege, not to
have to pay for offsets that were illegally
taken between 1973 and 1989, is a privilege
to be enjoyed only by the City of Miami. Like
the ancient joke of the waiter who tells the
customer not to complain about the fly in
the soup "because everyone else will want
one", the Court should not overlook that this
decision will wreck great mischief between
the many other cities of Florida, their
4 Daytona Beach is an example. City of Daytona Beach uv.
Amsel, 585 So. 2d 1044 (Fla. 1st DCA 1991).
- 32 -
Se
retired disabled employees, and _ their
pension trust funds, for others will claim
the same privilege.
The Court may have overlooked that
this case is not decided in a vacuum and
that there are others [the League of Cities
has appeared before this Court many times].
There is nothing in the decision that
confines this extraordinary privilege to the
City of Miami, and yet, if nothing else, how
do we handle the problem of those who have
already paid? The Court may have
overlooked that it cannot just forget about
that. First of all, for those who were paid in
workers compensation, there is authority
for the proposition that such payments
could be a credit against future payments.
Belam Florida Corp. v. Dardy, 397 So. 2d 756
(Fla. lst DCA 1981). Where payments nave
been made from pension trust funds, claims
may be made for ‘repayment’. The Court
may have overlooked that the precedential
- 99.
harm of this decision to the pensions funds
and the cities and the disabled retirees of all
of the other Florida cities is considerable.
The Ccurt offers a reason _ for
permitting the City not to have to pay what
the Court held in Barragan was illegally
offset between 1973 and 1989. The Court
allowed the City "off the hook", but only for
a period of time, on the basis that it would
be fiscally irresponsible to the taxpayers of
the City of Miami to require payment.° The
Court may have overlooked that it is fiscally
irresponsible to the other cities in Florida,
as well as to the counties and to the State,
and even to the City of Miami, itself, to do
so.
The Court says on page 5 that ‘to
require back benefits for prior years would
be fiscally unjust to the taxpayers or the
City of Miami." What does this mean?
5 The Supreme Court of the United States rejects costs-savings alone as a
justification for classifications. Shapiro v. Thompson, 394 U. S. 618, 22 L.
Ed. 2d 600, 89 S. Ct. 1322 (1969).
~ 94-
Se
"Fiscally unjust to the taxpayers” is defined
two paragraphs before that. The Court says
on page 5 that it means whatever would
“subject today's taxpayers to yesterday's
fiscal obligations." Thereby the Court
acknowledges a fiscal obligation and defines
“unjust” as holding today's taxpayers liable
to pay yesterday's fiscal obligations.
[The Court may have overlooked that it
4 a ‘ 1" ie _
the taxpavers of a municipality to pay
outstanding fiscal obligations. This cannot
be. It makes Florida look like an unstable
government that repudiates fiscal
obligations.
For such repudiation, there is no
lawsuit and no appeal. The banks in
Amsterdam and Hong Kong and London and
New York loan money to Florida, the state,
the counties and the cities. This Court
acknowledged that there was a _ legal
obligation to pay without offset between 1973
- Sp -
and 1989 (what the Court called "yesterday's
fiscal obligations"), but it absolved the City
of Miami of the debt because the Court says
it would be a hardship for today's taxpayers
to pay it. The decision is a message to the
banks that if a city or a county or even the
state itself have an obligation, and ata later
time they claim it would be a hardship to
pay that obligation, the Supreme Court of
Florida will absolve the debt. The banks
have a remedy for this. They raise the
interest that they charge Florida
government for bonds. The claim of the City
that it would be a hardship to pay is fiscally
irresponsible. The Court may _ have
overlooked that it is fiscally irresponsible to
recognize it and far more. so fiscally
irresponsible to absolve the obligation.
In the opinion, the Court states that
the City of Miami followed its own
ordinance in reducing disability payments
equal to the amount of workers
>
compensation benefits from 1973 until the
date Barragan was decided. (Opinion at
page 2-3). The Court may have overlooked
that since no one testified for the City at the
trial, and no documents were introduced on
this point, that the Court has made a
finding of fact why the City did something
without any basis in the record. This denies
the Respondents procedural due process of
law because had the City made such defense
at the trial, the Respondents would have had
the opportunity to rebut it. Since the City
did not present evidence on this point, the
Respondents have been denied a fair
hearing. More importantly, a city cannot
rely on its own ordinance to do an act which
is illegal under state statute, for that would
amount to a city giving itself permission to
violate general state law. That would be
impossible. Yet the Court's statement that
the City relied upon its own ordinance
(Opinion at page 5) in taking these illegal
. $7.
offsets, indicates that a city can give itself
permission to violate general state law. For
after all, the holding of the case is that the
City is now allowed by the Court to violate
general state law from 1973 to 1989 in this
regard.
In the opinion, this Court states that
the Third District Court of Appeal upheld
this practice in Hoffkins v. City of Miami.
(Opinion at page 5). The Court may have
overlooked that the Respondents furnished
the Court with a copy of the order in
Hoffkins v. City of Miami, which clearly
shows that Mr. Hoffkins was injured on
July 10, 1972, which was one year before
repeal. (Bell A. 2, 7). Simce the City was a
party to the Hoffkins case, it could not
possibly have relied upon Hoffkins to offset
any of the Respondents who were all injured
after repeal.
The Court may have overlooked that in
saying that Martinez v. Scanlan, 582 So. 2d
- 38 -
i
1167 (Fla. 1991), was prospective only
(Opinion at page 5) that the Court
subsequently decided in Garcia vs. Carmar
Stri ctural, Inc., 18 FLW S590 (November 10,
1993), that this was of no practical effect.
Although Martinez v. Scanlan, gupra,
declared the 1990 Workers' Compensation
Law unconstitutional for violation of the
single subject matter requirement, the
Legislature had _ re-adopted the. statute
separately prior to the decision.
$440.09(4), Fla. Stat., was repealed in
1973. The Court's decision in the Bell case
imposes this repealed statute on_ the
Respondents even though they were injured
after repeal. The Court may have
overlooked that this cannot possibly be due
process of law. Martinez v. Scanlan, supra,
does not authorize the Court to impose a
repealed statute on anyone, retrospectively
or prospectively. This is also true of the
Court's citation to National Distributing Co.
>
v. Office of Comptroller, 523 So. 2d 156 (Fla.
1988), which involves the question of
whether tax refunds on account of an
unconstitutional statute should be
“prospective only. A taxpayer does not have a
vested property right in a refund; whereas a
pensioner has a vested property right in his
pension. Nothing in National Distributing
Co. v. Office of Comptroller, supra, would
authorize absolving the City of "yesterday's
fiscal obligations” (Opinion at page _ 5),
because it would be "fiscally unjust to the
taxpayers of the City of Miami’. (Opinion at
page 5).
The Court relies upon Florida Forrest
& Park Service v. Strickland, 154 Fla. 472,
18 So. 2d 251 (1944), as authority for
prospective only application. However, the
Court may have- overlooked that in
Brackenridge v. Ametek, Inc., 517 So. 2d 667
(Fla. 1987; appeal dismissed; cert. denied,
488 U. S. 801, 102 L. Ed., 2d 9, 109 S. Ct. 30
- 40 -
(1988), the rule of Florida Forrest & Park
Service v. Strickland was qualified in that
it is only available to the party who could
establish by real evidence that he had relied
to his detriment upon an overruled Supreme
Court case and nothing else. In the present
case, the City presented no testimony and no
documents that it had relied on any
overruled case. Indeed, that would have
been chronologically impossible since Gates
vu. City of Miami, supra, held that the City
began offsetting in 1973, after repeal, by
deducting the employees’ workers’
compensation from their pensions and then
taking money from the pension fund to pay
the City in an equal amount (so that all
payments came from the pension trust fund
and the City paid no workers’ compensation
atall). This was three years before Hoffkins
vu. City of Miami was decided in 1976, so the
City could not have relied upon Hoffkins
when it began offsetting in 1973, after
oY .
repeal. Furthermore, Mr. Hoffkins was
injured before repeal and so his case could
not be relied upon for offsetting the
Respondents who were injured after repeal.
In its opinion, the Court said: "We
must now decide whether Barragan is to be
applied prospective only." (Opinion at page
4). The Court may have overlooked the rule
of Florida Forrest & Park Service v.
Strickland, supra, and Brackenridge ov.
Ametek, Inc., supra, which holds that a
decision operates both prospectively and
retrospectively unless the Court decides
otherwise at the time the decision is
rendered. The decision in Bell suggests just
the opposite: that after a case is decided, a
party may disregard the decision and come
back to the court to ask whether it should be
applied retrospectively or prospectively only.
The Court may have overlooked that
the City of Miami on rehearing in the
Barragan case asked the Court to make the
- 42 -
decision prospective only. (Bell R. 58, 63-64,
90).
In its motion for rehearing in City of
Miami v. Barragan, supra, the City of
Miami used peculiar advocacy. It argued
that the decision affected other people and
that the City did not understand the
decision. The City threatened to file a suit
for declaratory judgment if this Court did
not grant rehearing. (Bell R. 58, 63-64, 90).
The Ci hed tl lai
hibi ej ;
rehearing. In it, the City argued:
THE 2 yf contends... that
Barragan should have prospective
effect only. (Bell R. 90).
The Supreme Court of Florida denied
this Motion for Rehearing filed by the City.
(Bell R. 92).
This Court acknowledges in the Bell
case that the award below, which was
exactly the same as the award in the
Barragan and Giordano cases, is
- 43 -
“yesterday's fiscal obligations". (Opinion at
page 5). The Court may have overlooked
that having recognized the obligation of the
City to pay, the opinion plainly states that
the City is absolved of any payment between
1973 and 1989 to a handful of people, such as
the 11 Respondents, even though it was
illegal for the City not to have made
payment. The reason offered by the Court
for this extraordinary privilege is ~...to
require back benefits for prior years would
be fiscally unjust to the taxpayers of the City
of Miami." (Opinion at page 5). The Court
may have overlooked that such decision has
no factual or legal basis and is a very
dangerous precedent.
In summary, the Court explains its
holding on two bases. The first one is that
on page 5 the Court says that the City's
contracts with its employees recognized the
City's right to an offset. However, in
footnote 1 on page 2, the Court states that
th.
such agreements” are illegal under
§440.21(1), Fla. Stat. Indeed that was part of
the holding of Barragan v. City of Miami,
545 So. 2d 252 (Fla. 1989). This is a point
which the Court recognized by holding that
the City does owe after July 14, 1989. It is
confusing and inappropriate for the Court to
Say in its opinion that it is enforcing an
illegal agreement which it recognizes is an
illegal agreement, but only for a period of
time. The second reason offered by the
Court is that it would be a hardship on
today's taxpayers to have to pay for
yesterday's fiscal obligations. That
reasoning has no basis in law or in fact and
is very dangerous. It is a repudiation of
debts, which is not permitted under due
process of law guarantees. We cannot say of
the government that it owes money at a
particular point in time and then later
repudiate the debt on the basis that it would
- 45 -
be a hardship on the taxpayers to make
payment.
There is no legal or factual basis for
either of these explanations and both of
them are dangerous precedents.
W HEREFORE, the Respondents
request the Court to grant rehearing by
withdrawing the opinion of March 3, 1994,
and reconsidering the case, and granting
such other relief as to the Court seems
proper, including re-briefing or re-arguing
or affirming or modifying the decision
below, or remanding the cause to the trial
judge to determine the factual issues and
questions posed by the Court.
RICHARD A. SICKING, ESQUIRE
Richard A. Sicking, P.A.
Attorney for Respondents, Bell,
Meyer, Fair, Hickey, Leibnitzer,
King, Paredes and Daugherty
2700 S. W. Third Avenue, Suite 1E
Miami, Florida 33129
Telephone (305) 858-9181
Florida Bar No. 073747
MARK L. ZIENTZ, ESQUIRE
Williams & Zientz
Attorney for Respondents, Arostegui
and Thomas
9130 S. Dadeland Boulevard, Suite 1100
Miami, Florida 33156
Telephone: (305) 670-1100
Florida Bar No. 150168
PAUL KNESKI, ESQUIRE
Kneski & Kneski
Attorney for Respondent, McLean
19 West Flagler Street, Suite 807
Miami, Florida 33030
Telephone: (305) 358-0080
Florida Bar No. 260770
Certificate of Service
I certify that a copy of the foregoing
has been furnished by mail this 18th day of
March, 1994, to Kathryn S. Pecko, Assistant
City Attorney, City of Miami, Attorney for
Petitioner, 300 Dupont Plaza Center, 300
Biscayne Boulevard Way, Miami, Florida
33131; and to Arthur J. England, Jr.,
Esquire, Attorney for Petitioner, 1221
Brickell Avenue, Miami, Florida 33131.
Richard A. Sicking
SUPREME COURT OF FLORIDA
CITY OF MIAMI, Petitioner,
vs. No. 80,524
RONALD BELL, Respondent.
CITY OF MIAMI, Petitioner,
VS. No. 80,560
FRANK AROSTEGUI, Respondent.
CITY OF MIAMI, Petitioner,
VS. No. 80,575
RICHARD McLEAN, Respondent.
CITY OF MIAMI, Petitioner,
vs. No. 80,652
GEORGE A. MEYER, Respondent.
CITY OF MIAMI, Petitioner,
vs. No. 80,683
ROBERT THOMAS, Respondent.
CITY OF MIAMI, Petitioner,
VS. No. 80,728
ROBERT FAIR, Respondent.
CITY OF MIAMI, Petitioner,
VS. No. 80,981
JOHN HICKEY, Respondent.
APPENDIX C
49 -
City — MIAMI, Petitioner,
No. 80,998
KENNETH A. LEIBNITZER, Respondent.
CITY OF MIAMI, Petitioner,
VS. No. 80,999
EDWARD J. KING, Respondent.
CITY OF MIAMI, Petitioner,
vs. No. 81,340
ORLANDO PAREDES, Respondent.
CITY OF MIAMI, Petitioner,
Vs. No. 81,554
ROBERT L. DAUGHERTY, Respondent.
[March 3, 1994]
PER CURIAM.
We have for review City of Miami vy.
Bell, 606 So. 2d 1183 (Fla. Ist DCA 1992), in
which the district court -certified the
following question as one of great public
im pc rtance:
IS SECTION 440.20(7) APPLICABLE
UNDER THE CIRCUMSTANCES OF
THIS CASE, AND IF SO, CAN THE
CITY OF MIAMI, BE LEGALLY
- 50 -
EXCUSED FROM PAYING A
PENALTY PURSUANT TO THAT
SECTION ON THE AMOUNT OF
PENSION OFFSET MONIES
WITHHELD IN THE PAST
BECAUSE THE CITY DID SO IN
GOOD FAITH RELIANCE ON THE
VALIDITY OF THE CITY
ORDINANCE AUTHORIZING THE
PENSION OFFSET IN VIEW OF
THE APPELLATE DECISIONS
APPROVING ITS VALIDITY?
We have jurisdiction. Art. V, §3(b)(4), Fla.
Const.
A city ordinance authorized the City of
Miami (City) to reduce disability pension
benefits for its retired employees in an
amount equal to the workers’ compensation
benefits they were entitled to receive for the
disabling event. This Court held the
ordinance invalid based upon the
legislature’s 1973 repeal of section 440.09(4),
Florida Statutes (1971). © Barragan v, City of
6 Section 440.09(4) provided that any workers’ compensation
benefits payable to injured public employees should be
reduced by the amount of pension benefits that were also
payable. Private employers were prohibited from taking
offsets for workers’ compensation benefits by section 440.21,
which states:
-51-
Miami, 545 So. 2d 252 (Fla. 1989). The City
continued to deduct the offset until August
1, 198S.
Respondent, Ronald Bell, a Miami
firefighter, was injured in a compensable
accident on January 23, 1985. On September
24, 1987, Bell began drawing permanent
total disability (PTD) workers’ compensation
benefits of $307 per week. On the same dom,
Bell’s disability retirement pension benefits
became effective. From September 24, 1987,
until August 1, 1989, the City offset Bell’s
PTD benefits against his monthly disability
retirement pension on authority of the
invalid ordinance. After August 1, 1989, the
(1) No agreement by an employee to pay any
portion of premium paid by his employer to a
carrier or to contribute to a benefit fund or
department maintained by such employer for the
purpose of providing compensation or medical
services and supplies as required by this chapter
shall be valid, and any employer who makes a
deduction for such purpose from the pay of any
employee entitled to the benefits of this chapter
shall be guilty of a misdemeanor of the second
degree, punishable as provided in § 775.083. (2)
No agreement by an employee to waive his right
to compensation under this chapter shall be
valid.
ae.
City paid full PTD and pension benefits to
Bell.
On July 19, 1989, Bell submitted a
claim for reimbursement of his pension
offsets, with interest, penalties, costs and
attorneys’ fees. The City filed a notice to
controvert with the Division of Workers’
Compensation on August 14, 1989. The
Judge of Compensation Claims rejected the
City’s defenses and awarded Beil benefits of
$307 per week for the offset portion, with
interest, costs, attorney's fees and a ten-
percent penalty pursuant to section 440.20,
Florida Statutes (1985).7 The First District
7 Section 440.20, Florida Statutes (1985), requires that
workers’ compensation payments made by employers are to
be made when due without the claimant having to file a
formal claim. Subsection 440.20(7) provides in part:
If any installment of compensation for death or
dependency benefits, disability, permanent
impairment, or wage loss payable without an
award is not paid within 14 days after it becomes
due, as provided in subsection (2), subsection (3),
or subsection (4), there shall be added to such
unpaid installment a punitive penalty of an
amount equal to the greater of 10 percent of the
unpaid installment or $5, which shall be paid at
the same time as, but in addition to, such
«a»
Court of Appeal affirmed the order and
certified the above question.
The Bell case has been consolidated
with ten others.® In each, the respondent is
a City employee injured in a compensable
accident between 1973 and 1989. All were
awarded reimbursement for their pension
offsets with interest, a ten-percent penalty,
installment of compensation, unless notice is
filed under subsection six (6) or unless such
nonpayment results from conditions over which
the employer or carrier had no control.
Subsection 440.20(6) provides in part:
If the employer or carrier initially accepts the
claim but subsequently controvert the claim, it
shall file with the division a notice to controvert,
within 10 days after the date of initial cessation of
benefits...
5 _City of Miami y. Arostegui, No. 80,560 (police officer
injured November 2, 1976); City of Miami vy. McLean, No.
80,575 (sanitation worker injured August 26, 1976); City of
Miami v. Meyer, No. 80,652 (firefighter injured March 13,
1976); City of Miami v. Thomas, No. 80,683 (police sergeant
injured November 12, 1976); City of Miami v. Fair, No.
80,728 (firefighter injared June 18, 1975); City of Miami vy.
Hickey, No. 80,981 (police officer injured March 19, 1977);
City of Miami v. Leibnitzer, No. 80,998 (firefighter injured
July 10, 1979); City of Miami v. King, No. 80,999 (firefighter
injured January 10, 1975); City of Miami vy. Paredes, No.
81,340 (police officer injured November 23, 1979); and City of
Miami v. Daugherty, No. 81, 554 (firefighter injured March
9, 1982).
——
costs and attorneys’ fees, and the awards
were affirmed on appeal.
As noted above, this Court held in
Barragan that the 1973 repeai of section
440.09(4), Florida Statutes (1971), had the
effect of invalidating the City ordinance. We
rejected the ordinance as_ contravening
section 440.21, Florida Statutes (1987), which
prohibits the City from deducting from the
employee's income a contribution to pay
workers’ compensation benefits. We must
now decide whether Barragan is to be
applied prospectively only.
We conclude that our decision in
Barragan has no effect on the amount of
disability payments owed by the City to
pensioners except for those payments
accruing after the effective date of that
decision. From 1973 until the date Barragan
was decided, the City of Miami followed its
ordinance in reducing disability payments
by an amount equal to workers’
- 55 -
compensation benefits. The Third District
Court of Appeal upheld this practice.
Hoffkins v. City of Miami, 330 So. 2d 1145
(Fla. 3d DCA 1976). The City’s budgeting for
salary and benefits as well as its allocation
of tax resources was made in reliance on
the ordinance and_ existing caselaw.
Holding the City liable for past offsets would
require a reallocation of municipal services
and subject today’s taxpayers to yesterday's
fiscal obligations.
The City’s contracts with its employees
recognized the City’s right to an offset. To
now hold the City liable for past offsets
would effectively modify completed contracts
without affording the City an opportunity to
renegotiate the other terms of _ those
contracts, such as salaries and benefits.
When contractual rights are adversely
affected in such a manner, we are reluctant
to apply a decision retroactively. Florida
Forest & Park Service v, Strickland, 154 Fla.
- 56 -
—
472, 18 So. 2d 251 (1944). We note that our
rulings in Martinez vy. Scanlan, 582 So. 2d
1167 (Fla. 1991), and National Distributing
Co, v. Office of Comptroller, 523 So. 2d 156
(Fla. 1988), were prospective only.
To the extent the offset was taken prior
to Barragan, “‘ity employees have received
what their contracts called for when their
rights vested. Present ard future benefits
required by Barragan can be adjusted
without serious financial consequence for
City taxpayers; but to require back benefits
for prior years would be fiscally unjust to
the taxpayers of the City of Miami.
Accordingly, the City must reimburse
claimants for only those offsets taken after
the effective date of Barrigan, i.e., July 14,
1989. The penalty provision of section
440.20, Florida Statutes (1985), is
inapplicable to offsets taken prior to that
date, but applicable to those taken after.
<7.
To the extent it is inconsistent with
our present opinion, we quash Bell and
remand for proceedings consistent with this
opinion.9
It is so ordered.
OVERTON, McDONALD, SHAW, GRIMES,
KOGAN and HARDING, JJd., concur.
BARKETT, C.J., recused.
NOT FINAL UNTIL TIME EXPIRES TO
FILE REHEARING MOTION AND, IF
FILED, DETERMINED.
9 We quash the district court decisions in the consolidated
cases, see supra note 3, and remand for proceedings
consistent with this opinion.
The Cases Listed Below Are Consolidated
Case No. 80,524
Application for Review of the Decision of the
District Court of Appeal - Certified Great
Public Importance
First District - Case No. 91-1878
A. Quinn Jones, III, City Attorney and
Kathryn Pecko, Assistant City Attorney,
Miami, Florida; and Arthur J. England, Jr.
and Charles M. Auslander of Greenberg,
Traurig, Hoffman, Lipoff, Rosen & Quentel,
P.A., Miami, Florida,
for Petitioner
Richard A. Sicking, Miami, Florida,
for Respondent
Case No. 80,560
Application for Review of the Decision of the
District Court of Appeal - Certified Great
Public Importance
First District - Case No. 91-675
A. Quinn Jones, III, City Attorney and
Kathryn Pecko, Assistant City Attorney,
Miami, Florida; and Arthur J. England, dr.
and Charles M. Auslander of Greenberg,
Traurig, Hoffman, Lipoff, Rosen & Quentel,
P.A., Miami, Florida,
- 59 -
for Petitioner
Mark L. Zientz of Williams & Zientz, Miami,
Florida,
for Respondent
Case No. 80,575
Application for Review of the Decision of the
District Court of Appeal - Certified Great
Public Importance
First District - Case No. 91-2155
A. Quinn Jones, III, City Attorney and
Kathryn Pecko, Assistant City Attorney,
Miami, Florida; and Arthur J. England, Jr.
and Charles M. Auslander of Greenberg,
Traurig, Hoffman, Lipoff, Rosen & Quentel,
P.A., Miami, Florida,
for Petitioner
Paul J. Kneski of Kneski & Kneski, Miami,
Florida,
for Respondent
Case No. 80,652
Application for Review of the Decision of the
District Court of Appeal - Certified Great
Public Importance
First District - Case No. 91-1297
A. Quinn Jones, III, City Attorney and
Kathryn Pecko, Assistant City Attorney,
Miami, Florida; and Arthur J. England, Jr.
and Charles M. Auslander of Greenberg,
Traurig, Hoffman, Lipoff, Rosen & Quentel,
P.A., Miami, Florida,
for Petitioner
Richard A. Sicking, Miami, Florida,
for Respondent
Case No. 80,683
Application for Review of the Decision of the
District Court of Appeal - Certified Great
Public Importance
First District - Case No. 91-1734
A. Quinn Jones, III, City Attorney and
Kathryn Pecko, Assistant City Attorney,
Miami, Florida; and Arthur J. England, Jr.
and Charles M. Auslander of Greenberg,
Traurig, Hoffman, Lipoff, Rosen & Quentel,
P.A., Miami, Florida,
for Petitioner
Mark L. Zientz of Williams & Zientz, Miami,
Florida,
for Respondent
Case No. 80,728
Application for Review of the Decision of the
District Court of Appeal - Certified Great
Pubiic Importance
First District - Case No. 91-1334
A. Quinn Jones, III, City Attorney and
Kathryn Pecko, Assistant City Attorney,
Miami, Florida; and Arthur J. England, Jr.
and Charles M. Auslander of Greenberg,
Traurig, Hoffman, Lipoff, Rosen & Quentel,
P.A., Miami, Florida,
for Petitioner
Richard A. Sicking, Miami, Florida,
for Respondent
Case No. 80,981
Application for Review of the Decision of the
District Court of Appeal - Certified Great
Public Importance
First District - Case No. 91-4025
A. Quinn Jones, III, City Attorney and
Kathryn Pecko, Assistant City Attorney,
Miami, Florida; and Arthur J. England, Jr.
and Charles M. Auslander of Greenberg,
Traurig, Hoffman, Lipoff, Rosen & Quentel,
P.A., Miami, Florida,
for Petitioner
Richard A. Sicking, Miami, Florida,
for Respondent
Case No. 80,998
Application for Review of the Decision of the
District Court of Appeal - Certified Great
Public Importance
First District - Case No. 92-1595
A. Quinn Jones, III, City Attorney and
Kathryn Pecko, Assistant City Attorney,
Miami, Florida; and Arthur J. England, dr.
and Charles M. Auslander of Greenberg,
Traurig, Hoffman, Lipoff, Rosen & Quentel,
P.A., Miami, Florida,
for Petitioner
Richard A. Sicking, Miami, Florida,
for Respondent
Case No. 80,999
Application for Review of the Decision of the
District Court of Appeal - Certified Great
Public Importance
First District - Case No. 92-1594
A. Quinn Jones, III, City Attorney and
Kathryn Pecko, Assistant City Attorney,
Miami, Florida; and Arthur J. England, dr.
- 63 -
|
'
|
|
|
|
and Charles M. Auslander of Greenberg,
Traurig, Hoffman, Lipoff, Rosen & Quentel,
P.A., Miami, Florida,
for Petitioner
Richard A. Sicking, Miami, ‘vrida,
for Respondent
Case No. 81,340
Application for Review of the Decision of the
District Court of Appeal - Certified Great
Public Importance
First District - Case No. 91-4150
A. Quinn Jones, III, City Attorney and
Kathryn Pecko, Assistant City Attorney,
Miami, Florida; and Arthur J. England, Jr.
and Charles M. Auslander of Greenberg,
Traurig, Hoffman, Lipoff, Rosen & Quentel,
P.A., Miami, Florida,
for Petitioner
Richard A. Sicking, Miami, Florida,
for Respondent
Case No. 81-554
Application for Review of the Decision of the
District Court of Appeal - Certified Great
Public Importance
First District - Case No. 92-1593
A. Quinn Jones, III, City Attorney and
Kathryn Pecko, Assistant City Attorney,
Miami, Florida; and Arthur J. England, dr.
and Charlies M. Auslander of Greenberg,
Traurig, Hoffman, Lipoff, Rosen & Quentel,
P.A., Miami, Florida,
for Petitioner
Richard A. Sicking, Miami, Florida,
for Respondent
DISTRICT COURT OF APPEAL OF
FLORIDA
FIRST DISTRICT
No. 91-1878
CITY OF MIAMI,
Appellant,
Vv.
RONALD V. BELL,
Appellee.
Upon consideration of the City’s
motion for rehearing, the original opinion
filed in this case is withdrawn and the
following opinion is substituted therefor. In
light of the revisions in this substituted
opinion, the motion for rehearing is denied.
This is another of the many workers’
compensation appeals by the City of Miami
arising out of the supreme court’s decision
in Barragan v. City of Miami, 545 So. 2d 252
(Fla. 1989). This appeal questions the
retroactive application of that decision,
APPENDIX D
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whether the claim for past benefits offset in
violation of state law is barred by the
doctrine of res judicata, whether the award
of a 10% penalty is error, and in what
manner the Barragan offset of combined
workers’ compensation and disability
pension benefits in excess of claimant’s
average monthly wage is to be
accomplished. Finding no error in any of
these respects, we affirm the appealed
order.
In January 1985, Ronald Bell, a
firefighter employed by the City, was
injured in a compensable accident. After a
period of temporary disability, he began
drawing permanent total disability (PTD)
compensation benefits on September 24,
1987, the same date that his_ service-
connected disability retirement pension
benefits also became effective. From that
date until August 1, 1989, the City offset
Bell’s PTD benefits in the amount of
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$1,330.03 per month against his disability
retirement monthly pension benefit of
$2,594.83 on the authority of the City of
Miami ordinance held invalid in Barragan.!
As a result, the maximum combined
benefits paid to Bell during that period
never exceeded his monthly pension amount
and, of course, never reached his average
weekly wage of $809.67 ($3481.58 monthly).
Effective August 1, 1989, shortly after the
Supreme court had denied rehearing in its
Barragan decision on July 14, 1989, the City
ceased taking this offset and began paying
Bell his full PTD benefits of $1,320.10 plus
full pension benefits of $2,594.83 monthly.
The City did not give retroactive effect to the
Barragan decision and thus did not pay any
past offset benefits.
1 The order determined that the PTD figure of $1,330.03 was
excessive and that the correct monthly amount should have
been $1,320.10, but this is not an issue on appeal.
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On July 24, 1989, Bell filed a claim for
the withheld benefits under the Barragan
decision. On August 14, 1989, the City filed
its notice to controvert” Bell’s recently filed
claim on the ground that claimant had been
paid all benefits due. In view of the City’s
action terminating the offset as of August l,
1989, its notice to controvert must be
construed as implicitly rejecting any
retroactive application of the Barragan
decision. After the hearing, the judge of
compensation claims ordered the City to pay
the full amount of past benefits due under
the Barragan decision from September 24,
1987, through August 1, 1989, and awarded a
10% penalty pursuant to section 440.20,
Florida Statutes (1985), based on the City’s
failure to controvert the claim within the 10-
day period specified in sub-paragraph (6) of
2 Although the notice was dated August 8, 1989, it was not
filed with the Division of Workers’ Compensation in
Tallahassee until August 14.
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a
that section. The order recognized that the
City could limit combined benefits to the
amount of claimant's average weekly wage
pursuant _ to the Barragan decision,
resulting in a deduction of $433.35 from total!
monthly benefits of $3914.93, but made no
provision in the order for effectuating this
offset. The judge rejected the City’s
contention that Bell’s claim was barred
under the doctrine of res judicata by reason
of a previously filed claim and award in
1988 for medical benefits.
The City raises four points on this
appeal. After hearing lengthy oral
arguments by the parties and giving this
case careful consideration, we affirm the
order in all respects for the reasons now set
forth.
3 In 1988, Bell filed a claim for payment of certain medical
bills related to his compensable injury. After a hearing, an
order was entered May 25, 1988, pursuant to a joint
stipulation of the parties, requiring the City to pay the
disputed medical expenses.
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3;
The City’s first point contends that the
order errs in applying the supreme court’s
Barragan decision retroactively. The City
argues that Barragan overruled numerous
decisions of Florida intermediate appellate
courts upholding the offset under the Miami
ordinance after the repeal of section
440.09(4) in 1973, and that the City had
detrimentally relied on these decisions
during the years it had taken the offsets
pursuant to the ordinance invalidated by the
supreme court's “surprise” decision holding
that the ordinance “flies in the face of state
law”. Retrospective application of Barragan,
the City argues, will, by judicial
construction, abridge and impair the rights,
positions and courses of action validated by
the appellate courts of this state until
Barragan was decided by the supreme court.
Further, the City argues, Barragan should
be applied prospectively, and not
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retrospectively, to avoid “inequitable
results” because otherwise Bell and other
Similarly situated claimants will receive
monies that they had no expectation they
were legally entitled to receive and that they
did not attempt to secure until after the
Supreme court “dropped” the Barragan
bomb.
[1] We can readily understand that
the Barragan decision has’ generated
something of a financial crisis for the City,
and we are not entirely unsympathetic to
the City’s impassioned plea for relief.
However, we find no valid legal basis to
support the City’s arguments against the
retroactive application of the Barragan
decision, this court having’ previously
decided this point to the contrary in City of
Miami v. Burnett, 596 So. 2d 478 (Fla. Ist
DCA 1992). In that case we followed our
decision in City of Daytona Beach v. Amsel,
585 So. 2d 1044 (Fla. lst DCA 1991), which
-?2.
held that Barragan is to be retroactively
applied to compensable injuries occurring
after the July 1, 1973, repeal of section
440.09(4).4
ES.
The City’s second point contends that
it was error to rule that Bell’s claim for the
offset was not barred as being mature when
the earlier claim for medical benefits was
filed in 1988. The City points out that
section 440.09(4), which had authorized the
offset, was repealed in 1973, so that Bell’s
claim for past monies withheld pursuant to
the City’s offset was mature at the time of
the 1988 proceeding on Bell’s claim for
medical benefits and thus should have been
asserted in the claim for medical benefits to
avoid an improper “splitting” of claims.
Since the offset claim was not filed at that
4 This case is to be distinguished from those cases involving
compensable injuries that occurred prior to the repeal of
section 440.09(4) in 1973. E.g., City of Miami v. Jones, 593 So.
2d 544 (Fla. lst DCA 1992).
time, the City argues, itis now barred by the
doctrine of res judicata.
There is no merit in this argument.
In Wagner v. Baron, 64 So. 2d 267 (Fia. 1953),
the supreme court held:
The cases are legion which hold
that res judicata is not a defense in
a subsequent action where the law
under which the first judgment was
obtained is different than _ that
applicable to the second action, or
there has been an _ intervening
decision, or a change in the law
between the (first and _ second
Judgment, creating an altered
situation. [Citations omitted.]
“The doctrine of res judicata as to
the finality of the judgment and the
doctrine of law of the case as to the
binding effect of interlocutory
orders in litigation are rules of
convenience ‘designed to prevent
repetitious law suits over matters
which have once been decided and
which have remained substantially
static, factually and legally (and
must give way where there has been
a change in the fundamental
controlling legal principles). It is
not meant to create vested rights in
decisions that have become obsolete
or erroneous with time.’” [Citations
omitted.]
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64 So. 2d at 267-68 (emphasis added). In
Hialeah Race Course, Inc. v. Gulfstream
Park Racing Association, 210 So. 2d 750, 753-
54 (Fla. 4th DCA 1968), the court explained
that the doctrine of res judicata extends
only to legal rights and relations of the
parties as fixed by the facts determined by
that judgment; when other facts’ or
conditions intervene before the second suit,
furnishing a new basis for the claims and
defenses of the respective parties, the issues '
are no longer the same and the former
judgment cannot be pleaded in bar of the
second action.
[2] Because the supreme _ court’s
Barragan decision changed the applicable
law from that previously announced in the
intermediate appellate court decisions,
Bell’s claim is governed by the exception to
the bar of res judicata recognized in the
above-cited decisions. The City had accepted
Bell as PTD in 1987 and was paying him full
Fy.
ae ee |
PTD compensation benefits, although taking
an offset in the amount of such benefits
against his disability pension benefits in
accordance with the intermediate appellate
court decisions then validating that course
of action. As noted by the supreme court in
Barragan, under the case law existing at the
time this claim was filed, several appellate
opinions had upheld the City’s right to take
the offset under the Miami pension
ordinance even though section 440.09(4) had
been repealed in 1973. Bell’s claim for
medical benefits awarded in the order of
May 25, 1988, did not include any claim for
compensation benefits; that order did not
purport to adjudicate in any manner Bell’s
future right to PTD compensation benefits
without offset should the law change.
Obviously, after the City began taking the
offset in 1987, Bell could have made a claim
that the City’s ordinance was
unconstitutional, as Barragan had done.
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But Bell was not obliged to do so in order to
prevent the doctrine of res judicata from
barring a future claim in the event the
governing law should change, so long as
such claim was not otherwise barred by
applicable statutes of limitation, which it
was notin this instance.
Il.
[3] The City’s third point contends
that it was error to award a 10% penalty
under section 440.20, Florida Statutes
(1985),5 on the retroactively awarded setoff
benefits. The appealed order recites in
respect to this award:
The claimant is entitled to a penalty
of 10% on all benefits awarded by
this order. See Brazil v. School
Board of Alachua County, 408 So. 2d
842 (Fla. Ist DCA 1982). Claim was
filed July 19, 1989. The City
certainly knew of the claimant's
entitlement on July 14, 1987 [sic],
5 The pertinent provisions of section 440.20 had not been
significantly changed between 1985, the year in which Bell
sustained his compensable injury, and 1990, when this
matter came on for hearing.
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ll
when the Supreme Court denied
rehearing in Barragan, but they did
not pay nor did they file a notice to
controvert. The notice to controvert
dated August 8, 1989, was not
timely. The City has not shown that
the failure to pay or to file a timely
notice to controvert was beyond its
control. §440.20(7), Fla. Stat. (1984).
We find no error in this ruling and hold
that the 10% penalty was correctly awarded
under the particular circumstances of: this
case.
Section 440.20, entitled “Payment of
compensation,” makes the Florida Workers’
Compensation statute self-executing by
requiring that payments by the employer or
Carrier are to be made when due without the
claimant having to file a formal claim
pursuant to section 440.19. Section 440.20
sets the time when payment of
compensation benefits is due under various
circumstances. One of the enforcing
elements of this self-executing procedure is
the requirement to add a penalty to the
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award of benefits, with certain exceptions,
whenever the employer or carrier has failed
to make payments of benefits when due.
Subsection 440.20(2) states that payment of
benefits for total disability is due within 14
days after the employer has knowledge of
the injury giving rise to the claimant's
right to benefits. Subsection 44i(.20(4) states
that wage loss benefits shall be paid “within
14 days of the date upon which the carrier
or employer has’~ knowledge of the
compensable wage loss.” Subsection
440.20(7), Florida Statutes (1985), provides in
pertinent part:
If any installment of compensation
for death or dependency benefits,
disability, permanent impairment,
or wage loss payable without an
award is not paid within 14 days
after it becomes due, as provided in
subsection (2), subsection (3), or
subsection (4), there shall be added
to such unpaid installment a
punitive penalty of an amount equal
to the greater of 10 percent of the
unpaid installment or $5, which
shall be paid at the same time as,
but in addition to, such installment
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of compensation, unless notice is
filed under subsection (6) or unless
such nonpayment results from
conditions over which the employer
orcarrier had no control....
(Em phasis Added).
[4,5] This statutory language is clear
and unambiguous. The subsection plainly
states that, as a consequence of an
employer’s failure to pay compensation
benefits when due (i.e., within 14 days after
the employer gains knowledge of facts that
require payment of PTD benefits under
chapter 440), “there shall be added to such
unpaid installment a punitive penalty” of
10%. The use of the word “shall” in this
context is mandatory in meaning. See Sigg
vu. Sears, Roebuck & Co., 594 So. 2d 329 n. 1
(Fla. lst DCA 1992); City of Miami ov.
Watkins, 579 So. 2d 759 (Fla. 1st DCA 1991).
Payment of the statutory penalty required by
subsection (7) can be excused only if a
timely and appropriate notice to controvert
has been filed in accordance with subsection
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(6) or if the employer’s nonpayment has
resulted from conditions over which the
employer had nocontrol. That the employer
or carrier acted in good faith in reasonably
disputing liability for the claimed benefits is
immaterial unless compliance with the
requirements of the statutory exception is
shown. The burden of proving that
penalties are not due based on _ the
exceptions in subsection (7) is on the
employer or carrier. All American Vending
vu. Kunzelman, 482 So. 2d 609 (Fla. lst DCA
1986). The City failed to carry that burden
in this case.
The City accepted and had been paying
Bell’s claim for PTD compensation benefits.
It impermissibly withheld payments under
the pension offset provision subsequently
held illegal in the Barragan case. It could
well be argued that the City’s failure to pay
the offset benefits within 14 days after the
City accepted Bell as PTD triggered the
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penalty provision in subsection (7), even
though the City was subsequently made
eware of the invalidity of its ordinance
through the supreme court’s decision in the
Barragan case. But the ruling of the judge
of compensation claims below was not based
on this theory, and we do not consider it
necessary to pass on the validity of this
theory in resolving this appeal. Rather, we
look only to the City’s conduct after the
Barragan case became final.
We agree with the ruling of the judge
of compensation claims that by the time
rehearing was denied by the supreme court
in Barragan on July 14, 1989, the decision
was definitely final and the City then had
indisputable knowledge that it was obligated
by the provisions ef chapter 440 to pay Bell’s
PTD and pension benefits without offset
pursuant to the invalid ordinance. The
Barragan decision contained no language
stating that the declared invalidity of the
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City’s ordinance was not retroactive in
effect, so the City also had knowledge that it
was liable, or at least that it would most
probably be held liable, to pay all previously
offset benefits that had been withheld. See
City of Miami vu. Burnett, 596 So. 2d 478 (Fla.
Ist DCA 1992); City of Daytona Beach ov.
Amsel, 585 So. 2d 1044 (Fla. lst DCA 1991).
The City’s having this knowledge meant,
under any construction of section 440.20,
that all such benefits were due to be paid at
least by July 28, 1989, that is, within 14 days
after the supreme court’s July 14 order.
On August 1, the City manifested
recognition of its obligation to pay Bell
under the Barragan decision when, without
an award by the judge of compensation
claims, it initiated payment of workers’
compensation and pension benefits without
the pension offset.® The City decided,
6 Parenthetically, we note that even the August 1 date was
past the 14-day limitation in the statute, but Bell has made no
issue of this deficiency.
. 83.
however, without giving notice to the
claimant or the Division, that it would not
pay the moneys previously withheld under
the pension offset when it implemented this
change on August 1. While the City was
entitled to take the risk of an adverse
decision on the retroactivity of the Barragan
decision, in electing to do so the City
necessarily incurred the risk of having to
pay the penalty specified in subsection
440.20(7).
There is no dispute on this record that
the City declined to pay past offset benefits
within 14 days after they became payable
pursuant to the supreme court’s decision in
Barragan. The City’s failure to pay these
benefits within 14 days after it had
knowledge they should be paid requires
assessment of the 10% penalty unless the
City has shown that it is excused from such
payment, either because it timely filed a
notice to controvert authorized in subsection
440.20(6) or because its failure to timely pay
was due to conditions over which it had no
control. This record does not support
excuse on either ground.
Subsection (6) provides:
(6) If the employer or carrier
initially controverts the right to
compensation, it shall file with the
division, on or before the 21st day
after it has knowledge of the alleged
injury or death, a_ notice, in
accordance with a form prescribed
by the division, stating that the
right to com pensation Ls
controverted, the name _ of the
claimant, the name of the employer,
the date of the alleged injury or
death, and the grounds upon which
the right to compensation is
controverted, together with a
written explanation setting forth in
detail the reason or reasons why the
claim has been controverted; and a
copy of such _ notice’ shall be
furnished by the carrier to the
employee and employer. If the
employer or carrier initially accepts
the claim but subsequently
controverts the claim, it shall file
with the division a_e notice to
controvert, within 10 days after the
date of initial cessation of benefits,
stating the reasons for the delayed
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controversion; and a copy of such
notice shall be furnished by the
carrier to the employee and
em ployer.
(Emphasis added.) This is not a case in
which the City initially controverted the
claimant's right to compensation; the City
had previously accepted Bell as PTD and
was paying him PTD benefits. For this
reason, the provisions authorizing the
employer or carrier to file a notice to
controvert within 21 days “after it has
knowledge of the alleged injury” simply is
not applicable. Neither is the 10-day notice
provision in subsection (6) applicable; this is
not a case where the City had been paying,
hut then ceased paying, disputed benefits.
In any event, even if the 10-day notice
provision could be considered to authorize
the City to controvert liability for past
compensation benefits withheld, its notice to
controvert such payments, filed August 14,
was not filed within 10 days (or even within
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21 days) after the City had knowledge on
July 14 that the disputed compensation
payments were required to be paid to Bell.
We recognize that the notice to controvert
was filed on the 21st day after the claimant
filed his claim on July 24, but that fact does
not make it timely. The time constraints
prescribed in section 440.20 setting the due
dates for payment commence from the date
an employer or carrier has the requisite
knowledge that compensation is payable, not
from the date a formal claim for benefits is
filed pursuant to section 440.19. The record
clearly supports the judge’s finding that the
City had requisite knowledge as of the July
14 date that the disputed compensation was
payable to Bell.
The record also supports the finding of
the judge of compensation claims that the
City did not show that its failure to timely
pay or timely file a notice to controvert was
due to conditions beyond its control. The
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City did not attempt to make any showing
that its failure to timely pay was due to such
conditions.
Finding no basis for error in the
judge’s award of the 10% penalty pursuant
to subsection 440.20(7) under these
circumstances, that award is affirmed.
This issue was’ requested to be
considered by the courten banc based on the
views expressed in the dissenting opinion.
With one judge recused, six judges voted in
favor >f considering the issue en banc and
six voted against en banc; thus, the case
remained with the panel. In view of this
close vote, we certify the following question
of great public importance to the supreme
court:
1S SECTION 440.20(7) APPLICABLE
UNDER THE CIRCUMSTANCES OF
THIS CASE, AND IF SO, CAN THE
CITY OF MIAMI, BE LEGALLY
EXCUSED FROM PAYING A
PENALTY PURSUANT TO THAT
SECTION ON THE AMOUNT OF
PENSION OFFSET MONIES
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WITHHELD IN THE PAST
BECAUSE THE CITY DID SO IN
GOOD FAITH RELIANCE ON THE
VALIDITY OF THE Ciry
ORDINANCE AUTHORIZING THE
PENSION OFFSET IN VIEW OF
THE APPELLATE DECISIONS
APPROVING ITS VALIDITY?
IV.
The City’s fourth point raises an
interesting question regarding the
implementation of the “Barragan offset”
authorized in the final order. This offset
derives solely from the supreme court’s
opinion in Barragan, wherein it directed:
The employer may not offset
workers’ compensation payments
against any employee’s' pension
benefits except to the extent that the
total of the two exceeds’ the
em ployee’s average monthly wage.
545 So. 2d at 255.7 The order recognized this
offset was appropriate in the amount of
7 The limitation of combined benefits to no more than
“average monthly wage” in the Barragan opinion was
derived by the supreme court from its prior opinions in
Domutz vu. Southern Bell Tel. & Tel. Co., 339 So. 2d 636 (Fla.
1976), and Brown uv. S. S. Kresge Co., 305 So. 2d 191 (Fla.
1974). Both of those decisions were predicated on provisions
in court-made rules governing workers’ compensation
proceedings that no longer appear in the current Workers’
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|
$433.35 per month, but made no provision for
giving effect to this offset in the decretal
portion of the order. Because the order is
silent as to how the offset is to be recouped,
the City asks this court to specify that the
offset be taken by the City rather than the
pension fund. The claimant responds by
urging that the order was not in error in
failing to direct how this offset would be
accomplished and, alternatively, advances
the legal theory that any excess over
average monthly wage should create a lien
Compensation Rules of Procedure. Although workers’
compensation law is wholly a creature of statute, unlike
common law rights and remedies, there is no statutory
provision in chapter 440 authorizing the limitation directed
in the Barragan opinion. This matter was explored at length
during oral argument, and the City agreed that the
limitation would be applicable only to the combination of
disability pension benefits and workers’ compensation
benefits, as that was the precise factual situation present in
the Barragan case.
We have given effect to the “Barragan offset” in this
case in the absence of statutory authority because this court is
required to follow the decisions of our supreme court.
However, this limitation is a matter that should be addressed
by legislative enactment as soon as possible to avoid future
controversies.
in favor of the pension fund to the extent of
such excess.
We decline to decide this dispute. It is
most significant that the supreme court in
Barragan expressly declined to recognize
any legal distinction between the City and
the pension fund trustees regarding the
subject matter of this litigation. The court
rejected the City’s argument that the
pension fund was an indispensable party,
saying, “After all, the city is responsible for
the payment of both workers’ compensation
and pension benefits regardless of the funds
from which these monies are withdrawn,
and the city has strenuously litigated this
case on behalf of its pension fund through
these proceedings.” 545 So. 2d at 253. We
likewise decline to treat the City as a
different legal entity from its pension fund.
Accepting the supreme court's
characterization of the City’s legal
responsibility for payment of both workers’
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,
com pensation and disability pension
benefits as correct, it would seem that how
the City gives effect to the Barragan offset
and allocates the excess of benefits over
average monthly wages is an _ internal
municipal matter more _ appropriately
resolved by the City alone. No legal basis
exists for this court to resolve the dispute
presented by the City under this point.
The appealed order is in all respects
AFFIRMED.
ERVIN, J., concurs.
BOOTH, J., dissents in part with
opinion.
BOOTH, Judge, dissenting in part:
I dissent from the affirmance of
penalties awarded under section 440.20,
Florida Statutes. The majority’s efforts to
fit the facts of this case under subsection (6)
and, failing that, subsection (7), of section
440.20, fall short of wnat the law requires in
applying a penalty statute. A penalty
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statute must clearly state the conduct that
is the basis for its application. Only in this
way does the _ statute give notice and
opportunity to avoid the proscribed conduct.
The corollary of the clarity requirement is
the rule that penalty statutes must be
strictly construed in favor of the party
sought to be penalized.! The rule is stated
as follows:2
Penalties are not favored, and
should not be imposed except in
cases which are clear and free from
doubt. The law must be clear in
order to exact penalties in civil
cases.
In keeping with the _ above-stated
clarity requirement is the rule that penalty
statutes be strictly construed, viz:
1. Philip C. Owen, Chartered v. Department of Revenue, 597
So. 2d 380 (Fla. lst DCA 1992); Gardinier, Inc. v. Department
of Pollution Control, 300 So. 2d 75, 78 (Fla. lst DCA 1974);
Turner v. Department of Professional Regulation, 591 So. 2d
1136, 1137 (Fla. 4th DCA 1992).
2. 70 C.J.S. Penalties § 2 at 107 (1992).
2. Id. at §5 at 108-109 (1992).
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Statutory provisions for penalties
must be strictly construed, and may
not be extended by construction to
acts which are not within the
intention of the legislature _ to
penalize. It has even been said that
such provisions must not be
construed to include anything
beyond their letter even though
within their spirit. One who seeks
to recover a penalty imposed by
statute must bring his case clearly
with the terms of the statute.
The instant case involves the ten-
percent penalty of subsections 440.20(6) and
(7), a penalty imposed for delay in paying or
controverting the right to compensation. In
order to impose the penalty here, we must be
able to say, clearly, that the pay-back of
retirement benefits was “compensation.”
But this is not at all clear. Barragan,*
citing Jewel Tea,° holds that the JCC has
jurisdiction of claims to recover offsets
taken in violation of section 440.21,
4. Barragan v. City of Miami, 545 So. 2d 252 (Fla. 1989).
5. Jewel Tea Company v. Florida Industrial Commission, 235
So. 2d 289 (Fla. 1969).
regardless of whether the offsets are stated
to be against workers’ compensation
benefits or against retirement or other
benefits.
Neither Jewel Tea nor Barragan holds,
however, that the restored amounts are to be
treated as “compensation” under Chapter
440 or for the purposes of penalties.® In the
instant case, the restored benefits were
retirement benefits. Benefits provided
under Chapter 440 have been paid.’
The next stumbling block to the
imposition of penalties is knowing when the
offset amounts claimed first became due
and owing for the purpose of the time
requirements of the penalty statute. This is
8. See City of Miami v. Arostegui, 606 So. 2d 1192, (Fla. 1st
DCA 1992), certifying the question of whether offset amount
restored following Barragan constitutes an “installment of
compensation” for purpose of imposing penalties.
7. In State, Department of Transportation v. Davis, 416 So. 2d
1132, 1133 (Fla. lst DCA 1982), this court held that despite
Chapter 440’s providing for a social security offset [section
440.15(10), now subsection 440.15(9)], money payable under
the social security laws is not “compensation.”
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a subject fit for debate among legal scholars
and jurists, but the answer is far from clear
and should, on that basis alone, preclude
penalties. In this case, the penalty is
calculated on amounts offset prior to
Barragan’s holding that the ordinance was
invalid. The offset was made pursuant to
city ordinance 40-207(J). Several appellate
decisions held that ordinance valid, even
after the repeal in 1973 of section 440.09(4),
Florida Statutes .8
From September 1987 to August 1989,
retirement benefits were offset under what
we now know was an invalid ordinance.
Were those offset amounts “due” for penalty
purposes before Barragan or before Amsel,9
holding Barragan was _ retroactive? If
8. City of Miami v. Knight, 510 So. 2d 1069 (Fla. 1st DCA),
cert. denied, 518 So. 2d 1276 (Fla. 1987); Hoffkins v. City of
Miami, 339 So. 2d 1145 (Fla. 3d DCA 1976), cert. denied, 348
So. 2d 948 (Fla. 1977).
9. Daytona Beach v. Amsel, 585 So. 2d 1044 (Fla. lst DCA
1991).
appellant “should have known” the
ordinance was invalid, did that make the
offset amounts due? At what point did this
imputed knowledge make the offset amount
due? Should not appellee, who now seeks to
penalize this delay, also be held to know that
the ordinance would eventually be ruled
invalid and therefore be required to timely
give notice of a claim that included
penalties under subsection (7)?!
The majority forgives appellee’s
failure to claim the offset in his 1988 claim
because, under the existing law, there was
no basis for such aclaim. A different rule
is applied to appellant, however, who must
now pay the offset amounts based on the
10. §440.20(7), Fla. Stat.:
(7) ...When any installment of compensation payable
without an award has not been paid within 14 days after it
became due and the claimant concludes the prosecution of
the claim before a judge of compensation claims without
having specifically claimed additional compensation in the
nature of a penalty under this section, he will be deemed to
have acknowledged that, owing to conditions over which the
employer or carrier has no control, such installment could
not be paid within the period prescribed for payment and to
have waived his right to claim such penalty.
97 -
retroactive application of a change in the
law and pay a penalty to boot. Where was
appellant’s opportunity to avoid the penalty?
What was the effect of the ordinance
remaining on the books that authorized the
offset?
The fact that these questions can be
raised now by those of us having knowledge
of the facts and changes in the law, shows
that the penalty of subsections 440.20(6) and
(7) does not “fit” here and should not be
imposed. The statute should not be used to
penalize conduct after-the-fact based on
amounts that become due because of a
change in the law.
Despite the confusion of the majority’s
opinion, the net result of that opinion is
clear: appellant could only have avoided
this penalty by complying with Barragan in
1987, two years before the case was decided.
Not surprisingly, the majority cites no
authority for the proposition that a party
- 98 -
can be subject to penalties for failing to
anticipate the holding of a case. Only a
soothsayer with a crystal ball could have
predicted in 1985, when the original claim
arose, or in 1987, when the offsetting began,
that Barragan would be decided (July 1989)
and, eventually (October 1991), be held to
apply retroactively. Yet the JCC ruled that
appellant’s failure to file a notice to
controvert within ten days after the denial
of rehearing in Barragan subjected it to a
ten-percent penalty. Why the denial of
rehearing in that case should fit either as
an “initial cessation” of benefits under
subsection (6), or as the date = an
“installment of compensation... becomes
due” under subsection (7), as held by the
majority, is not explained. In fact, the
statute provides no point in time for filing a
notice to controvert under these facts.
There is only one provision that fits,
viz: the provision that the penalty is
. 99 -
inapplicable where “nonpayment results
from conditions over which the employer or
carrier had no control.” Cases construe
that provision to prevent the imposition of
the penalty where the employer has a valid
excuse,!! and to require a finding of fault.12
For this reason, in addition to the other
basis of section 440.20 inapplicability, the
penalty award should be reversed. In all
other respects, I concur in the opinion.
11. Four Quarters Habitat, Inc. v. Miller, 405 So. 2d 475 (Fla.
ist DCA 1981):
(T]he DC should not impose a penalty if the
employer has a legitimate excuse for not
controverting.
Compare King v. Lord Colony Enterprises, 400 So. 2d 856, 857
(Fla. lst DCA 1981), wherein employer offered no excuse for
delay in determining correct compensation rate.
12. Florida Community Health Center v. Ross, 590 So. 2d 1037,
1039 (Fla. lst DCA 1991):
In the case of penalties, section 440.20(7) awards
penalties against the employer or carrier
depending upon fault. Further, the order
awarding such penalties should contain
sufficient findings of fact and conclusions of law
supporting their imposition. Jupiter Marine v.
Spoelstra, 528 So. 2d 1270 (Fla. 1st DCA 1988).
{emphasis added]
STATE OF FLORIDA
DEPARTMENT OF LABOR &
EMPLOYMENT SECURITY
OFFICE OF JUDGE OF COMPENSATION
CLAIMS
DISTRICT" K"
Claim No.: 264-64-7265
Date of Accident: 1/23/85
RONALD V. BELL,
Em ployee, :
v.
CITY OF MIAMI,
Em ployer/Self Insured. :
Richard A. Sicking, Attorney for
Em ployee;
Ramon Irizarri, Assistant City
Attorney, Attorney for Employer/Self
Insured
ORDER
THIS CAUSE came before me for
hearing after due notice to the parties, and
after considering all of the evidence I find:
APPENDIX E
-101-
(1) The Judge of Compensation
Claims has jurisdiction of the parties and
the subject matter.
(2) Theclaim was for the payment of
compensation at the rate of $307.00 per week
from September 24, 1987, through August l,
1989, for permanent total disability, which
the City acknowledged, but which payment
was offset against a_ service-connected
disability pension. This claim was made
pursuant to the Supreme Court of Florida's
decision in Barragan v. City of Miami, 545
So. 2d 252 (Fla. 1989). Claim was also made
for penalties, interest, costs and attorney's
fees, including bad faith as a basis.
(3) The City defended on the grounds
of a general denial and no jurisdiction. The
City contended that the claimant knew the
claim was mature and failed to interpose it,
i. e., splitting a cause of action. The City
contended that Barragan is not applicable.
The City contended that the claim is barred
- 102 -
by the statute of limitation and laches. The
City contended that the claim is barred by
Gates v. City of Miamt..
(4) The parties stipulated and agreed
that the claimant suffered a compensable
accident on January 23, 1985; that he had an
average weekly wage of $809.67 with a
corresponding average monthly wage of
$3,481.58, and a maximum weekly
compensation rate of $307.00 per week,
which is a monthly compensation rate of
$1,320.10; that the claimant's monthly
pension benefit was $2,594.83; that the
claimant has been permanently totally
disabled since September 24, 1987; that the
pension offset started September 24, 1987,
and ended August 1, 1989.
(5) Theclaim was filed July 19, 1989,
and controverted August 8, 1989.
(6) The evidence consisted of
exhibits: the pretrial stipulation, a prior
pretrial stipulation and an order dated May
- 103 -
25, 1988, approving a stipulation in regard to
the payment of medical care and a
stipulation and order on attorney's fees, two
excerpts from the City Code setting forth the
City's workers’ compensation offset, the
Judge of Compensation Claims' orders in
Barragan and Giordano, the City's motion
for rehearing in Barragan, two orders in
Gates v. City of Miami, the notice to the
class in Gates, and a BCL-4 of August 17,
1988, accepting permanent total disability as
of September 24, 1987.
(7). "Tae claimant suffered an
admittedly compensable accident on
January 23, 1985, for which he has an
average weekly wage of $809.67, which is an
average monthly wage of $3,481.58. The
claimant's average weekiy wage was not at
issue and not determined in any prior
proceedings. The average weekly wage is
now jointly stipulated.
- 104 -
(8) The claimant was accepted as
permanently totally disabled as of
Septem ber 24, 1987. The claimant received a
service-connected disability retirement from
the City effective September 24, 1987, which
amounted to $2,594.83 =2r month. From that
time until August 1, 1989, the City deducted
$1,330.03 every month from the claimant's
pension on authority of the City of Miami's
offset ordinance.
(9) Beginning August 1, 1989, the
City stopped taking the offset and since then
has paid the claimant his service-connected
disability pension amounting to $2,594.83
per month and workers’ compensation
amounting to $1,320.10 per month.
(10) The claimant's monthly workers’
compensation rate of $1,320.10 plus his
monthly service-connected disability
pension of $2,594.83 totals $3,914.93 which is
more than his average monthly wage of
$3,481.58. Therefore, there is a "“Barragan
- 105 -
offset" of $433.35 per month ($3,914.93 -
$3,481.58).
(11) During the period of time that the
City took the offset from September 24, 1987,
to August 1, 1989, the City took the offset at
what was mathematically an excessive rate.
The claimant's weekly compensation rate of
$307.00 x 4.3 is $1,320.10 per month. The
City, however, deducted $1,330.03. The City
apparently made this calculation by taking
$307.00 per week and multiplying it by 52
and dividing by 12. It is, however, incorrect
to project a monthly benefit in this manner,
because in order for it to be correct, the
claimant would have to collect beyond his
last payment in order to correct the
adjustment. Consequently the City deducted
$9.93 too much each month, even by their
own calculations. The claimant would be
entitled to this adjustmentin any event.
- 106 -
(12) The City eadmits that it has
stopped taking the offset as of August l,
1989.
(13) The claimant was not paid
workers’ compensation for permanent total
disability from September 24, 1987, to
August 1, 1989, at $307.00 per week,
although the City admits he was entitled to
such payment. The City sent the claimant
workers’ compensation during this period of
time but he did not actually receive it,
because the City took the payment away at
the same time under its’ workers’
compensation offset ordinance.
(14) This workers’ compensation
offset ordinance was declared unlawful by
the Supreme Court of Florida in Barragen v.
City of Miami, 545 So. 2d 252 (Fla. 1989) for
two reasons: (1) the Florida Legislature has
preempted the field the workers’
compensation; the Florida Legislature has
waived sovereign immunity completely for
- 107 -
the state and its political subdivisions
including municipal corporations like the
City of Miami; the Florida Legislature
repealed statutory authorization for an
offset in 1973, Laws of Florida Ch. 73-127:
the Home Rule Powers Act does. not
authorize the City to enforce an offset
ordinance after such repeal; (2) §440.21, Fla.
Stat. prohibits any scheme by which the
employer pays benefits from a fund to which
the employee contributed; the City of
Miami's workers’ compensation offset is
such a scheme.
(15) The pension offset declared
invalid in Barragan is set forth in the City
Code which provides for an offset for
workers’ com pensation “against and
payable in lieu of any benefits payable out of
funds provided by the City under the
provisions of the retirement system on
account of the same disability or death”.
(16) Since the claimant paid into this
fund out of his bi-weekly paycheck, this is a
scheme by which the employer pays benefits
from a fund to which the employee himself
(and the other employees) contributed. This
is unlawful under §440.21, Fla. Stat. Indeed
it is so unlawful that the statute provides
that it is a crime, albeit a misdemeanor.
Plainly the Supreme Court held that the
City of Miami's workers’ compensation
offset was illegal and invalid.
(17) The City of Miami applied for
rehearing in Barragan and asked that the
decision not apply to other employees whose
benefits were offset in the past (City's
Petition for Rehearing, page 6). The
Supreme Court denied rehearing.
(18) The Barragan case applies both
retroactively and prospectively to others
besides Mr. Barragan and Mr. Giordano.
The Supreme Court did not specifically limit
that decision to the parties, nor was it stated
- 109-
to be prospective only. Therefore, the
Barragan decision would apply to the
claimant, Ronald V. Bell. See Florida
Forest and Park Service v. Strickland, 18
So. 2d 251 (Fla. 1944).
(19) This claim of Ronald V. Bell is
not splitting a cause of action.
(20) The claimant's average weekly
wage and his entitlement to be _ paid
compensation for the period of time involved
and for the class of disability the City
admits he has, were not at issue in the prior
proceedings, which involved medical
benefits only.
(21) The City had wrongfully refused
to provide the claimant with medical care
which was awarded in the order of May 25,
1988, approving of a_ stipulation. The
claimant had to file claim at that time to
obtain medical care. Had the City not
wrongfully withheld the payment of his
medical expenses, the prior litigation would
-110-
never have ensued. Since the City had
wrongfully withheld his prior medical
benefits, they should be estopped _ to
complain about any effect of the prior
litigation.
(22) Furthermore, Barragan was
decided after the earlier order on medical
benefits in this case and that is a
superseding ground. The present case does
not involve any issue requiring a
determination of the nature, degree,
duration or extent of the claimant's
disability. Itis admitted by the City that the
claimant was permanently totally disabled
from September 24, 1987, to August 1, 1989,
and that he is’ entitled to workers’
compensation of $307.00 per week during
such period. The claimant simply was
never really paid this disability.
(23) The City contends that the claim
is barred by the statute of limitation. The
claim is not barred by the statute of
-111-
limitation as it was clearly filed within two
years of the last payment of compensation
(which is currently being paid).
(24) The City has raised laches as a
defense; however, I find that laches does not
apply for a number of reasons. As was
pointed out in the oft-cited case of Florida
Erection Services, Inc. v. McDonald, 395 So.
2d 203 (Fla. lst DCA 1981) and its progeny,
the employer in a workers’ compensation
case owes the duty to the injured employee
of a fiduciary to self administer the law, to
see to it that the correct benefits are paid to
the employee in a timely and proper fashion.
This, of course, was not done in the present
case. Furthermore, §440.21, Fla. Stat.
provides thatit is unlawful for the employer
to operate a scheme by which the employee
contributes to a fund from which his own
benefits are paid. This is so prohibited that
it is a crime, albeit a misdemeanor. The
defenses of laches simply does not apply.
-112-
(25) Gates v. City of Miami does not
bar this workers’ compensation claim, nor
is it limited in any way by the union
contracts prior to Gates, nor those after.
§440.21, Fla. Stat. further provides that no
agreement by the employee to waive his
rights under this chapter shall be valid.
Since the employee cannot waive his rights
under this chapter, his bargaining
representative could not do so either, nor is
there any indication that he or they did.
The workers’ compensation offset claimed
here pre-dates collective bargaining and
was simply carried forward. The Gates
decree does not adjudicate the claimant's
workers’ compensation rights nor could it
have done so since the jurisdiction over
workers’ compensation matters was in the
judges of compensation claims.
Furthermore, the exhibits show that the
City raised the Gates decree on rehearing to
the Supreme Court in the Barragan case,
-113-
which motion for rehearing was denied.
The Circuit Judge in Gates has reached the
Same conclusion.
(26) As the claimant was not paid his
admitted permanent total disability at
$307.00 per week from September 24, 1987, to
August 1, 1989, he is entitled to such
payment from the City.
(27) The claimant is entitled to
Statutory interest on this award which shall
be paid at the same time and in addition to
this award.
(28) The claimant is entitled to a
penalty of 10% on all benefits awarded by
this order. See Brazil v. School Board of
Alachua County, 408 So. 2d 842 (Fla. lst DCA
1982). Claim was filed July 19, 1989. The
City certainly knew of the claimant's
entitlement on July 14, 1987, when the
Supreme Court denied rehearing’ in
Barragan, but they did not pay nor did they
file a notice to controvert. The notice to
-114-
controvert dated August 8, 1989, was not
timely. The City has not shown that the
failure to pay or to file a timely notice to
controvert was beyond its control.
$440.20(7), Fla. Stat. (1984).
(29) The claimant is entitled to costs
of these proceedings, if any, which shall be
paid by the employer upon presentation.
Should there be any dispute as to an item of
costs, jurisdiction is hereby specifically
reserved to determine such question upon
application for hearing by any party.
(30) The claimant's attorney, Richard
A. Sicking, is entitled to a reasonable
attorney's fee pursuant to §440.34, Fla. Stat.
(1984) for having obtained benefits for the
claimant. Jurisdiction is reserved _ to
determine who is responsible for payment
and the amount of such fee.
WHEREFORE, it is ORDERED and
ADJUDGED that the City of Miami do:
-115-
(1) Pay Ronald V. Bell permanent
total disability at the rate of $307.00 per
week from September 24, 1987, to August l,
1989.
(2) Pay a penalty of 10% on all
benefits awarded by this order.
(3) Pay statutory interest on all
benefits awarded by this order.
(4) Pay costs as provided in this
order.
IT IS FURTHER ORDERED and
ADJUDGED:
(5) Jurisdiction is reserved to
determine who is responsible for payment
and the amount of a reasonable attorney's
fee for the claimant's attorney.
- 116-
DONE and ORDERED at Miami,
Dade County, Florida, this 13th day of May,
1991.
‘s/ Alan M. Kuker
ALAN M. KUKER
Judge of Compensation Claims
(Seal)
Certificate of Mailing
THIS IS TO CERTIFY that a copy of
the foregoing Order was sent by regular
mail this 13th day of May, 1991, to: Ronald
V. Bell, claimant, Route 2, Box 2004, Obrien,
Florida 32071-9600; Richard A. Sicking,
Esquire, attorney for claimant, 2700 S. W.
Third Avenue, Suite 1E, Miami, Florida
33129; City of Miami, employer/self insured,
c/o Risk Management, P. O. Box 330708,
Miami, Florida 33233-0708; Ramon Irizarri,
Assistant City Attorney, attorney for
-117-
employer/self insured, 1100 AmeriFirst
Building, One S. E. Third Avenue, Miami,
Florida 33131.
(s/ Secretary
Secretary to Judge of
Com pensation Claims
-118-
CITY OF MIAMI, FLORIDA
INTER-OFFICE MEMORANDUM
Mr. M.L. Reese
City Manager DATE: May 10,1973 FILE:
Attention: Mr. Joel V. Lanken, Special!
Assistant to City Manager
Em ployee Services
SUBJECT: Workmen's Compensation
Program
Expenditures
REFERENCES:
W.R. Bailey
Director of Finance ENCLOSURES:
This is in response to the request of
Joel Lanken, under date of April 20,
1973, for assistance in furnishing
estimates related to Workmen's Com-
pensation expenditures for the 1973-74
fiscal year.
To assist the Office of Employee
Services in substantiating the current
1972-73 fiscal year's estimated deficit
and 1973-74 Budget preparation, the
following practices have been effected
January, 1978.
1P3. The Workmen's Compensation
payment due to retirees on
disability pension were either
issued a separate payment from
the City's Workmen's
Compensation Fund and the
APPENDIX F
-119-
eaten
gross pension issued was
reduced by an equal amount of
the pension check and rubber
stam ped to indicate tnat each
check included the amount due
as Workmen's Compensation. A
separate check was not issued.
As of January 1, 1973, the
procedure was changed so that
all disability retirees who were to
receive Workmen's
Com pensation received a check
from the City for Workmen's
Compensation bi-weekly and the
equivalent amount was deducted
from the retiree's monthly
pension check. The total amount
:
sodptind Samii. 2innae canes Worl sc
offset, plus the amount deducted
from the retiree for advance
Workmen's Compensation
deductions, is to be remitted in
total to the City as a reim-
bursement.
Under this procedure the amount
to be issued annually to disability
retirees as Workmen's
Compensation payment will be
approximately $135,000.00. The
amount that was issued
separately as Workmen's
Compensation payment under the
previous method was
approximately $35,000.00 to
$45,000.00.
- 120-
1P3 The present procedure will
& increase the requirements
1P4 against the 1973-1974 (104.01.4170)
Workmen's Compensation code
by approximately $40,000 to
$100,000 annually.
Mr. M. L. Reese May 10, 1973
City Manager
Attention: Mr. Joel V. Lanken, Special
: Assistant to City Manager
Em ployee Services
There will be a revenue recovery
into the General Fund as
“Reim bursement-Recovery from
Retirement System on
Workmen's Compensation"
approximately $145,000 annually
on which Revenue Forms for
1973-74 Budget Estimate reflect
only one month of the indicated
four (4). 1973-74 Revenue
Estimates for the Account should
be reported as annual estimate of
$145,000.00.
WRB/p
be: Betty Harris
Joel Lanken
-121-
AMENDMENT V, U.S. CONST.
No persons shall be held to answer for a
capital, or otherwise infamous’ crime,
unless on a presentment or indictment of a
Grand Jury, except in cases arising in the
land or naval forces, or in the militia, when
in actual service in time of war or public
danger; nor shall any person be subject for
the same offence to be twice put in jeopardy
of life or limb; nor shall be compelled in any
criminal case to be a witness against
himself, nor be deprived of life, liberty, or
property, without due process of law; nor
shall private property be taken for public
use, without just compensation.
APPENDIX G
- 122-
|
|
ARTICLE XIV, U. S. CONST.
SECTION 1. All persons born or
naturalized in the United States, and
subject to the jurisdiction thereof, are
citizens of the United States and of the State
wherein they reside. No State shall make or
enforce any law which shall abridge the
privileges or immunities of citizens of the
United States; nor shal! any State deprive
any person of life, liberty, or property,
without due process of law; nor deny to any
person within its jurisdiction the equal
protection of the laws.
APPENDIX H
- 123 -
CITY OF MIAMI FIRE FIGHTERS’ AND
POLICE OFFICER’ RETIREMENT TRUST
PENSION ORDINANCE
§40-212
(N) Pension offset by other
compensation benefit. Any periodic or
lump-sum amounts which may be paid or
payable under the provisions of any state
workers’ compensation or similar law to a
member or to the dependents of a member
on account of any disability or death, shall
be offset against and payable in lieu of any
benefits payable from funds provided by the
city under the provisions of the retirement
system on account of the same disability or
death. (Ord. No. 10002. §1. 6-13-85)
APPENDIX I
- 124 -
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.