Carrier can't compel worker to reimburse 'seed money' for annuity

Although the JCC has jurisdiction to determine whether a worker complied with the terms of a settlement agreement, the JCC's interpretation of the contract may not render essential terms meaningless and rewrite the agreement.

Case name: Ferreira v. Home Depot, et al., No. 1D08-5919 (Fla. 1st Dist. Ct. App. 06/09/09).

Ruling: The Florida District Court of Appeal reversed a judge of compensation claims' order granting the carrier's motion for repayment of seed money. The JCC erred by reforming a final settlement contract between the carrier and the worker.

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What it means: Although the JCC has jurisdiction to determine whether a worker complied with the terms of a settlement agreement, the JCC's interpretation of the contract may not render essential terms meaningless and rewrite the agreement.

Summary: A settlement agreement between a worker and the employer's insurance carrier allocated funds for a Medicare set-aside account. The calculation of the MSA included seed money for the purchase of an annuity, which was final, not subject to change or reallocation, and not dependent on the approval of the Center for Medicare and Medicaid Services. CMS informed the carrier that the sums projected for annual deposit into the MSA were deficient. The carrier sought to compel the worker to reimburse some of the seed money, which it would use to purchase the annuity. The JCC granted the carrier's motion to repay the seed money, reasoning that the worker had agreed to fund the difference if CMS decided more money was necessary for future medical expenses. The District Court of Appeal reversed, finding the JCC's interpretation of the written contract rendered essential terms void and constituted an impermissible rewrite of the agreement.

The court determined that the agreement clearly provided that the worker was responsible for administering the MSA and satisfying any requirements of CMS. However, nothing in the agreement required the worker to contribute to the carrier's primary responsibilities under the contract. The carrier agreed that the designated sums were final, not subject to reallocation, due within 30 days of the JCC's order, and not subject to CMS approval. The District Court of Appeal reversed and remanded the JCC's order, finding the worker did not have to reimburse the carrier.

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August 6, 2009

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