Worker wins penalties, interest linked to lump-sum settlement

Workers represented by counsel are free to negotiate, as part of a settlement agreement, for an increased benefit if the payment of settlement proceeds is late.

Case name: Raban v. Federal Express, No. 1D08-4286 (Fla. 1st Dist. Ct. App. 06/09/09).

Ruling: The Florida District Court of Appeal reversed a judge of compensation claims' decision denying the worker's request for penalties and interest on a lump-sum settlement.

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What it means: Workers represented by counsel are free to negotiate, as part of a settlement agreement, for an increased benefit if the payment of settlement proceeds is late.

Summary: A former Federal Express worker settled his workers' compensation claim through mediation in June 2007. The agreement did not specify a time frame for payment of the settlement proceeds. The agreement also did not address penalties and interest for late payment. The worker moved for approval of attorney's fees. In October, the JCC issued an order approving attorney's fees that said "the entire settlement shall be subject to penalties and interest if payment is not rendered timely." The carrier immediately issued a check for attorney's fees. The carrier received the worker's executed release from employment on Dec. 5, 2007. The settlement checks were sent Dec. 4 and 5, 2007. The worker filed a petition for benefits seeking penalties and interest for the alleged late payment. The Court of Appeal reversed the JCC's denial of the petition, reasoning that the order approving attorney's fees was binding, and payment was not made until Dec. 4 and 5, 2007. Under Florida law, the order was final and binding 30 days after it was signed. Thus, the payment of the lump sum was considered late.

The Court of Appeal found that the order stating penalties and interest were due on the late payment was binding. The court noted that workers represented by counsel are free to negotiate for payment of an increased benefit if the payment of settlement proceeds is late. The October 2007 order expressly providing for penalties and interest was evidence suggesting the worker's attorney negotiated those terms.

The court rejected the JCC's finding that the worker's execution of a release was a condition for payment of the settlement proceeds. It held the worker was entitled to penalties and interest for the late payment.

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July 16, 2009

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