Lovejoy Company v. Ackis , 153 Fla. 876 ( 1944 )

The basis for a reversal of a decree or judgment of the lower court is largely upon the theory that the insurance carrier is prejudiced by the settlement of the dependents of the employee.

The record here discloses that the insurance carrier, at all times, denied liability for the death of the employee on a number of grounds appearing in the record. It so contended in its answer filed with the Industrial Commission and so contends by the third question discussed in the brief here. (See Appellant's Brief, pages 32-33.)

The doctrine of subrogation is applied when, and when only, the insurance carrier has paid the compensation for which it is liable. In the case at bar it has contended in every step of the case that it was not liable as a carrier and has never paid any money and its rights cannot be prejudiced until its liability is established. See Boley v. Daniels, 72 Fla. 121, 72 So. 644; Meyer v. Florida Home Finders, 90 Fla. 128,105 So. 267. If the insurance carrier had paid the claim, it could successfully contend that its rights had been prejudiced. Its rights in the third party litigation have not been prejudiced, because it denied liability at every step of the litigation, and even in this Court. The Florida Workmen's Compensation Act is a modification of the New York Workmen's Compensation Act, enacted in 1913; Longshoremen's Act of 1927, and the Wisconsin Workmen's Compensation Act. The Supreme Court of the United States, in Chapman v. Hoag, 296 U.S. 526, 80 L. Ed. 370, 56 Sup. Ct. 333, held, on a set of facts similar to the ones here involved, that the carrier was not discharged by a compromise of a third party suit, nor prejudiced thereby, and this decision is clearly in line with our holding in Sweat v. Allen, 145 Fla. 733, 200 So. 348.

Schneider's Workmen's Compensation Law, Vol. 1, page 322, when considering an Alabama Compensation Statute, held in accord with our holding in Sweat v. Allen, supra. See Georgia Casualty Co. v. Haywood, 210 Ala. 56, 96. So. 87; Benoit Coal Mining Co. v. Moore, 215 Ala. 220, 109 So. 787.

In Workmen's Compensation cases subrogation rights do not come into existence unless the carrier has paid to the employee compensation, and this rule has been sustained in Sweat v. Allen, supra. The same rule is applied in Alabama, California, Connecticut, and practically all the States of the Union. See Schneider on Workmen's Compensation Law, Vol. 1, pp. 332-386. These several Statutes and holdings are in accord with Sweat v. Allen, supra.

We are not called upon, under the full faith and credit clause of the Federal Constitution, to recognize the judgment or proceedings in the State of Georgia where the widow-claimant brought suit against the third party. The proceeding in the Georgia Court by the claimant against the third person tort-feasor and the settlement thereof were not binding on the insurance carrier here. See Wisconsin Mutual Liability Co. v. Industrial Commission, 190 Wis. 598, 209 N.W. 697.

The Supreme Court of Wisconsin, in construing the compensation statute similar to ours, held in line with Sweat v. Allen to the effect that a settlement by claimant with a third party tort-feasor was not binding on the insurance carrier. The carrier could maintain its action after payment of the award, or could repudiate the settlement and re-litigate it, or could ratify the settlement as made between the claimant and the third party tort-feasor.

The filing of the claim by the widow with the Florida Industrial Commission in August, 1939, prior to the running of the two year statute of limitations in the State of Georgia, under Section 39 of the Compensation Act, had the legal effect of placing the insurance carrier on notice of potential liability under the terms of its policy. The law required the insurance carrier, prior to the running of the statute of limitations, immediately to take steps for the protection of its rights under the terms of its policy, but the record discloses that the insurance carrier declined so to do and contended on numerous grounds that no liability existed. See Wisconsin Mutual Liability Co. v. Industrial Commission,supra.

The denial of compensation to the widow, coupled with a departure from Sweat v. Allen, is, to say the least, a harsh ruling. The employer was immediately advised of the death of its employee; the carrier was bound to have received this information; the claimant filed with the Florida Industrial Commission her claim prior to the running of the two year statute of limitations under the Georgia Code; a denial of all liability to the employee has been asserted from the day of the accident and in question three of its brief asserts that defense in this Court.

BUFORD, C. J., concurs.