PIP Benefits and Workers Compensation Payments

 

The insured was injured in an auto accident during the course of his employment. He received workers compensation benefits and later sought no-fault personal injury protection (PIP) benefits. The insurer denied coverage and the insured filed a lawsuit. This case is Cannino v. Progressive Express Insurance Company, 2010 WL 5129298 (Fla.App. 2 Dist.).

 

The trial court ruled in favor of the insurer and Cannino appealed. The appeals court found that Cannino reached a policy limits settlement with the third-party tortfeasor for $100,000 and then he entered into a final settlement with the workers comp (WC) carrier (which had already paid $39,212 in indemnity and medical benefits for Cannino). Under this settlement, Cannino resigned from his job and released his employer and the WC insurer from any and all future claims related to workers compensation benefits; Cannino agreed to be responsible for any future medical care. The WC insurer agreed to waive its statutory lien on Cannino's recovery from the third-party tortfeasor due to this agreement. However, when Cannino sought PIP payments, Progressive denied coverage because it said it was entitled to a credit for the workers comp benefits regardless of Cannino's agreement with the WC carrier.

 

The court noted that Florida law declared that when the injured worker recovers from a third-party tortfeasor, the employee is obligated to reimburse the workers comp carrier for any WC benefits it paid. At that point, the injured person is entitled to receive additional benefits from the PIP carrier because the credit for workers compensation no longer exists. So, when Cannino recovered from the third-party tortfeasor, he became obligated to reimburse the WC carrier for any benefits it had paid, and then he was entitled to PIP benefits.

 

Progressive argued that, due to Cannino's agreement with the WC carrier, the requirement to reimburse the WC carrier was not met. Progressive argued that Cannino was required to directly satisfy the workers compensation lien by paying out-of-pocket expenses in order to claim his PIP benefits. The appeals court disagreed. The court said that Cannino effectively did pay from his pocket by giving consideration, that is, by giving up his right to seek future workers comp benefits in exchange for a negotiated cash settlement and the waiver of the lien by the WC insurer.

 

The ruling of the trial court was reversed and remanded.

 

Editor's Note: The workers compensation insurer has a right to be reimbursed for payments it makes to an injured employee if that employee also receives payments from a third-party tortfeasor. The PIP insurer in this case argued that the insured employee had to actually pay reimbursement to the WC insurer to satisfy this requirement. The Florida Court of Appeals said, in effect, that a consideration was enough. The employee gave up his right to recover any future workers comp payments in consideration of the WC carrier giving up its legal right to a lien and this settlement was the equivalent of reimbursement. Therefore, since the employee fulfilled his obligations to the WC insurer, he was entitled to receive the PIP benefits.