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Nov 16, 2017

Exempt Florida Corporate Officer of Subcontractor Barred From Suing General Contractor

An officer of a Florida corporation, who elected to be exempt from workers’ compensation coverage [see § 440.02(15)(b)(1), Fla. Stat. (2008)], and whose “employing” corporation was a subcontractor on a construction project, may not sue the general contractor and other subcontractors in tort for injuries the officer sustained in a work-related accident; horizontal and vertical immunity insulate the defendants from tort liability in spite of the fact that the exempt officer is not a covered employee [Gladden v. Fisher Thomas, Inc., 2017 Fla. App. LEXIS 16821 (1st DCA, Nov. 15, 2017)].

Background

Gladden was the owner/officer of Gladden Carpet, a small Florida corporation that supplied flooring materials and installation services. Green-Simmons was general contractor for a Florida construction project. It entered into separate contracts with Fisher Thomas and Wilson Floor Covering to perform work at the site. Wilson Floor, in turn, entered into a sub-subcontract with Gladden Carpet, to perform the work Wilson Floor had contracted to perform.

The owner of the construction project required Green-Simmons and its subcontractors to maintain workers’ compensation insurance, which Green-Simmons, Fisher Thomas, and Wilson Floor did at all relevant times. As an officer of Gladden Carpet, Gladden had elected to be exempt from workers’ compensation coverage. While Gladden provided a copy of his certificate of exemption to Wilson Floor, neither Gladden nor Wilson Floor notified Green-Simmons of the exemption.

Gladden sustained severe injuries when Averett, an employee of Fisher-Thomas, lifted materials to him with a forklift. Gladden alleged that the load was improperly secured, causing Gladden to fall from the second floor.

Gladden sued Green-Simmons, Averett, and Fisher Thomas under a theory of negligence. Green-Simmons, in turn, filed a third-party complaint against Wilson Floor. The defendants argued in their motions for summary judgment that they were immune from suit because Gladden was a “statutory employee” of Green-Simmons and potentially in line for workers’ compensation benefits. Gladden countered that a corporate officer who properly elects to be exempt from the Workers’ Compensation Law is excluded from the definition of an “employee,” thereby precluding a finding of immunity.

Trial Court’s Decision

The trial court entered summary judgment in favor of the defendants, concluding that Gladden was an “employee” under the Workers’ Compensation Law at the time of the accident, notwithstanding his exemption. The defendants were, therefore, entitled to workers’ compensation immunity as a matter of law. The court additionally ruled that Wilson Floor was immune from any claims arising from the allegations levied by Gladden against Green-Simmons on the basis of workers’ compensation exclusivity.

Plaintiff Was Not an “Employee” for Purposes of Workers’ Compensation

The issue, as framed by Gladden, was whether Gladden was an “employee” under the Workers’ Compensation Law at the time of the accident. He conceded that If, as the trial court found, Gladden was an “employee” under § 440.02(15)(c)(2), Fla. Stat. (2008), the exclusive remedy for his injuries fell within the protections provided by the workers’ compensation system, since horizontal and vertical immunity would insulate the defendants from tort liability. He urged the court that since he was not an “employee” under the statute, the workers’ compensation immunity could not apply.

The appellate court acknowledged that under the plain language of the statute, Gladden did not satisfy the definition of “employee” at the time of the accident. The court stressed, however, that additional analysis was required.

Context Matters

Citing Weber v. Dobbins, 616 So. 2d 956 (Fla. 1993), the appellate court said that The context of the issue could not be ignored. In Weber, the facts were somewhat inverted. There, a worker was injured while under the direction of Howard Weber, a corporate officer of a small firm. The worker received workers’ compensation benefits from the firm, but then sued Weber in tort, arguing that since Weber had elected to be exempt from the Workers’ Compensation Act, he could not benefit from the exclusive remedy provisions of that same law.

In Weber, the Supreme Court of Florida held the exempt corporate officer could still be protected by exclusivity. Weber’s immunity was not tied to whether he himself could file a workers’ compensation claim.

In the instant case, the appellate court disagreed with the plaintiff’s contention that in electing the corporate officer exemption, he was in effect removing himself from the entire workers’ compensation scheme and opening the door to actions in tort against individuals and entities who would otherwise be entitled to workers’ compensation immunity. That was asking too much of the benefit derived from the corporate exemption in light of Weber, said the court. It was also inconsistent with other provisions of Florida’s Workers’ Compensation Law.

Quid Pro Quo for Reduced Premiums

The appellate court stressed that the quid pro quo for reduced workers’ compensation premiums associated with the exemption is that the officer electing exemption may not recover benefits or compensation under Florida Workers’ Compensation Law. Since the corporate employer reaped the benefit of reduced premiums, it made sense for that benefit to be associated with a risk. That risk: The electing officer could proceed in tort against the corporate employer. Here, however, the plaintiff’s exemption from workers’ compensation coverage did not otherwise equate to his ability to circumvent the immunity protections contained in § 440.11, Fla. Stat.