JCCs Have Discretion to Overturn Settlement Agreements

Tuesday, September 30, 2008 | 0

By David McCranie

In <i>Sanders v. City of Orlando</i>, decided on Sept. 25, the Florida Supreme Court has held 5-2 that the judges of compensation claims do have jurisdiction to vacate or set aside lump-sum settlement agreements which had previously been entered into pursuant to the terms of §440.20(11)(c), Fla. Stat., reversing the decision of the 1st District Court of Appeals that had held to the contrary.  [The case was originally styled <i>Flamily v. City of Orlando</i>, but Mr. Flamily died during the litigation, and therefore the personal representative of his estate was substituted].

To summarize the facts briefly, Mr. Flamily was employed by the City of Orlando as a firefighter.  He developed heart problems which, by virtue of §112.18(1), Fla. Stat. (the "Heart-Lung" Bill), were presumptively caused by his employment.  Those problems eventually resulted in his permanent total disability, and in December 1996 Flamily agreed to settle his right to future compensation benefits from the City for a lump sum.  The settlement documents signed by the parties at the time contained language stating that Flamily "waived any future workers' compensation claims that were either known or unknown" at the time of the settlement.

In November 2001, five years after his settlement, Flamily was diagnosed with hepatitis C after some blood tests revealed an elevated level of liver enzmes.  But evidence later showed that actually the City was in possession of some of Flamily's blood tests dating as far back as 1978 which also showed elevated liver enzymes, and Flamily testified that he was never advised about these abnormalities.  He therefore filed a petition for benefits in which he sought to establish the compensability of his hepatitis C by virtue of §112.181, Fla. Stat., which, like the "Heart-Lung" Bill, establishes a presumption of compensability for hepatitis when it is contracted by a firefighter or law enforcement officer.  He also sought to overturn his 1996 settlement agreement based on his heart condition on the grounds that it contained material misinformation upon which he relied when he agreed to the settlement.

In his 105-page order, the judge of compensation claims denied Flamily's hepatitis claim, but he did vacate the 1996 settlement agreement. The First DCA reversed the JCC on the latter point, however, concluding that by virtue of a 2001 amendment to §440.20(11)(c), the JCCs no longer have jurisdiction to vacate settlement agreements in cases where the claimant was represented by counsel at the time of the settlement.

The Florida Supreme Court quashed the decision of the First DCA.  The court concluded that although the 2001 amendment to §440.20(11) establishes that JCC approval in the first instance is no longer required for the non-attorney's fee portion of a lump sum settlement agreement in cases where the claimant is represented by counsel, the amendment does not divest the JCC of jurisdiction to vacate a previous settlement agreement based upon matters discovered after the execution of the agreement.

Another interesting aspect of the supreme court's decision is the basis upon which they concluded that they had jurisdiction to review the First DCA's decision.  The court concluded that the 1st DCA's decision "expressly and directly" conflicted with several decisions of other district courts of appeal, thus giving them the authority to review the 1st DCA's decision under Art. V, §3(b)(3), Fla. Const.  Specifically, the court cited to cases from other district courts of appeal which have held that circuit courts have no jurisdiction over workers' compensation disputes.  Justices Cantero and Bell disagreed that the Supreme Court had jurisdiction, and for that reason dissented from the majority's decision.

<i>David McCrainie has been a board certified workers' compensation lawyer since 1988, and formerly served as a law clerk at Florida's 1st District Court of Appeal, the appellate court that has had statewide jurisdiction over all workers' compensation appeals in Florida. This column was reprinted with his permission from his blog, http://www.flworkerscompensationlawyer.com</i>