Title: City of Clearwater v. Judi Acker

State: florida

Issuer: Florida Supreme Court

Document:

Supreme Court of Florida
 
____________
No. 93,800
____________
CITY OF CLEARWATER,
Petitioner,
vs.
JUDI ACKER, 
      
    Respondent.
____________
No. 93,983
____________
CITY OF CLEARWATER,
Petitioner,
vs.
 
      LAWRENCE HAHN, 
Respondent.
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____________
No. 93,984
    ____________
CITY OF CLEARWATER,
Petitioner,
vs.
TERRENCE ROWE,
Respondent.
[December 9, 1999]
QUINCE, J.
We have for review three decisions certifying the following question to be of
great public importance:
WHERE AN EMPLOYER TAKES A WORKERS'
COMPENSATION OFFSET UNDER SECTION
440.20(15), FLORIDA STATUTES (1985), AND
INITIALLY INCLUDES SUPPLEMENTAL BENEFITS
PAID UNDER SECTION 440.15(1)(e)1, FLORIDA
STATUTES (1985), IS THE EMPLOYER ENTITLED
TO RECALCULATE THE OFFSET BASED ON THE
YEARLY 5% INCREASE IN SUPPLEMENTAL
BENEFITS?
Acker v. City of Clearwater, 23 Fla. L. Weekly D1970, D1971 (Fla. 1st DCA Aug.
17, 1998); Hahn v. City of Clearwater, 23 Fla. L. Weekly D2120 (Fla. 1st DCA
Sept. 9, 1998); Rowe v. City of Clearwater, 23 Fla. L. Weekly D2120 (Fla. 1st
1   The district court's opinion refers to the average monthly wage (AMW), presumably in
response to the term used in Barragan v. City of Miami, 545 So. 2d 252 (Fla. 1989).  In Barragan,
the Court limited a worker's combined benefits from workers' compensation and pension benefits
to 100 percent of the worker's AMW, calculated by multiplying the AWW by 4.3.  All relevant
statutes and most of the other cases addressing this issue refer to the AWW, rather than the AMW;
therefore, we have modified this opinion to refer to the AWW for consistency.  This change does
not affect the substantive analysis.
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DCA Sept. 9, 1998).  We have jurisdiction.  See Art. V, § 3(b)(4), Fla. Const.  For
the reasons stated below, we answer the certified question in the negative.
City of Clearwater v. Judi Acker, Case Number 93,800
In 1986, Ms. Acker was injured in the scope of her employment.  Initially,
the City of Clearwater (the City) denied her workers' compensation benefits.  From
1986 until 1994, Ms. Acker only received an in-line-of-duty disability pension.  In
1994, she was awarded retroactive workers' compensation consisting of two lump
sum payments in excess of $150,000.  Thereafter, she received workers'
compensation permanent total disability benefits (workers' compensation benefits)
and workers' compensation permanent total supplemental disability benefits
(supplemental benefits) in addition to her in-line-of-duty disability pension benefits
(pension benefits).  
Because Ms. Acker was receiving more than 100 percent of her average
weekly wage (AWW),1 her pension benefits were offset so that her actual
compensation would not exceed 100 percent of her previous AWW.  See §
-4-
440.20(15), Fla. Stat. (1985).  The offset was initially calculated by adding together
all the benefits she was entitled to receive, including workers' compensation
benefits, pension benefits and supplemental benefits, which had accrued as of that
date, then subtracting her previous AWW.  Each year, pursuant to the supplemental
benefits statute, Ms. Acker was attributed a five percent cost-of-living increase. 
See § 440.15(1)(e)1, Fla. Stat. (1985).  However, because her total benefits already
exceeded her AWW, she never actually received any of the increases.  The five
percent increases rolled over into the offset.
Ms. Acker conceded it was proper to include supplemental benefits in the
initial offset calculation; however, she asserted it was improper for the City to
recalculate the offset annually to include subsequent increases in supplemental
benefits.  She argued the purpose of increases in supplemental benefits was to
provide permanently and totally disabled workers with cost-of-living increases, and
that including increases in supplemental benefits in the pension offset defeated the
Legislature's purpose for enacting the supplemental benefits statute.  The judge of
compensation claims (JCC) was sympathetic to the argument, but held it was
proper for the pension offset to be recalculated annually to include increases in
supplemental benefits.  The JCC relied on City of North Bay Village v. Cook, 617
So. 2d 753 (Fla. 1st DCA 1993), and Escambia County Sheriff's Department v.
2    This statutory provision has remained substantially unchanged since its enactment,
except for the clarification that the applicable statewide AWW is the statewide AWW at the time
of payment, see Shipp v. State Workers' Compensation Trust Fund, 481 So. 2d 76 (Fla. 1st DCA
1986), and the addition of a provision which terminates this benefit when the recipient becomes
eligible for social security retirement benefits and social security disability benefits.  See Burger
King Corp./Cigna Ins. Co. v. Moreno, 689 So. 2d 288 (Fla. 1st DCA 1997).  
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Grice, 692 So. 2d 896 (Fla. 1997).  The First District reversed the JCC's decision,
holding annual increases in supplemental benefits should not be used to calculate
offsets.  See Acker v. City of Clearwater, 23 Fla. L. Weekly D1970 (Fla. 1st DCA
Aug. 17, 1998).  The district court adopted Ms. Acker's argument that recalculating
the offset to encompass increases in supplemental benefits would frustrate the
legislative purpose of providing cost-of-living increases to permanently and totally
disabled workers.  See id.  The district court acknowledged its decision that not to
include the increases in supplemental benefits in the pension offset appeared to
conflict with the figures this Court used to calculate the offset in Grice, 692 So. 2d
at 896; however, it dismissed the apparent conflict, opining that this Court failed to
squarely address the supplemental benefits issue in that case.  See Acker v. City of
Clearwater,  23 Fla. L. Weekly D1970 (Fla. 1st DCA Aug. 17, 1998).
  For the reasons expressed below we answer the certified question in the
negative and approve the First District's decision in Acker.  See id.
  The supplemental benefits statute, which was enacted by the Legislature
during its 1974 session and became effective on October 1, 1974,2 provides:
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[T]he injured employee shall receive additional weekly compensation
benefits equal to 5 percent of his weekly compensation rate, as
established pursuant to the law in effect on the date of his injury,
multiplied by the number of calendar years since the date of injury. 
The weekly compensation payable and additional benefits payable
pursuant to this paragraph, when combined, shall not exceed the
maximum weekly compensation rate in effect at the time of payment
as determined pursuant to s. 440.12(2).
§ 440.15(1)(e)(1), Fla. Stat. (1985).  
The City now claims increases in supplemental benefits are compensation
and should be included in offset calculations under section 440.20(15), which
provides:
When an employee is injured and the employer pays his full
wages or any part thereof during the period of disability, or pays
medical expenses for such employee, and the case is contested by the
carrier or the carrier and employer and thereafter the carrier, either
voluntarily or pursuant to an award, makes a payment of
compensation or medical benefits, the employer shall be entitled to
reimbursement to the extent of the compensation paid or awarded,
plus medical benefits, if any, out of the first proceeds paid by the
carrier in compliance with such voluntary payment or award, provided
the employer furnishes satisfactory proof to the judge of compensation
claims of such payment of compensation and medical benefits.  Any
payment by the employer over and above compensation paid or
awarded and medical benefits, pursuant to subsection (14), shall be
considered a gratuity.
§ 440.20(15), Fla. Stat. (1985).  Section 440.20(15) has been interpreted to mean
that an injured worker's compensation from all sources cannot exceed 100 percent
of his individual AWW at the time of the injury.  See  Barragan v. City of Miami,
3    The claimant in Shipp was arguing he was entitled to supplemental benefits even
though he had settled his worker's compensation claim with a lump-sum payment.
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545 So. 2d 252 (Fla. 1989).
It is undisputed that the Legislature intended supplemental benefits to
provide cost-of-living increases for permanently and totally disabled workers to
account for the impact of inflation.  See Department of Labor & Employment Sec.
v. Vaughn, 411 So. 2d 294, 295 (Fla. 1st DCA 1982)(stating purpose of five
percent increase is to "partially offset the effects of inflation").  In Shipp v. State
Workers' Compensation Trust Fund, 481 So. 2d 76 (Fla. 1st DCA 1986), the First
District elaborated on the Legislature's purpose for enacting the statute stating:
Claimant's argument[3] is inconsistent with the purpose of
supplemental benefits, which is to protect recipients of periodic
benefits from the long-term effects of inflation that reduce the value
of a fixed amount of benefits.  The effects of inflation are the same
irrespective of the method of calculating supplemental benefits.  Once
a lump-sum payment is authorized and received pursuant to section
440.20, a claimant has the option to invest the funds and offset the
effects of inflation so that the purpose of supplemental benefits is
satisfied.
Id. at 79 (emphasis added). 
 
Clearly, the stated purpose for the enactment of section 440.15(1)(e)1, as a
hedge against inflation, would be frustrated under the City's interpretation of
4   Moreover, recipients of periodic payments, especially those who are receiving 100
percent of their individual AWW and who could otherwise qualify for lump-sum payments,
would have no incentive to receive monthly payments.  See Shipp, 481 So. 2d at 79 (stating
"lump-sum payments are not a favored remedy").   Indeed, as the First District pointed out in
Shipp, a worker's compensation claimant could receive a lump-sum payment, invest it wisely, and
realize the five percent increase in benefits denied by offsetting increases in supplemental benefits
through annual recalculations.   
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section 440.20(15).4  Thus, there is an apparent conflict between the purpose of the
supplemental benefits statute and the City's argument that section 440.20(15)
requires increases in supplemental benefits to be included in offset calculations.  
"Where . . . two statutes are found to be in conflict, rules of statutory construction
must be applied to reconcile . . . the conflict.  We are aided in this task by the
maxim that 'legislative intent is the pole star by which we must be guided in
interpreting the provisions of a law.'"  DeBolt v. Department of Health &
Rehabilitative Servs., 427 So. 2d 221, 224 (Fla. 1st DCA 1983)(quoting Parker v.
State, 406 So. 2d 1089, 1092 (Fla. 1981)).
Accordingly, to read the supplemental benefits statute and the 100 percent
cap statute harmoniously, this Court must assume the Legislature did not intend
offsets to be annually recalculated to account for cost-of-living increases in
supplemental benefits.  To hold otherwise would prevent injured workers from
receiving cost-of-living increases and would render the supplemental benefits
5   Moreover, by expressly stating that supplemental benefits should only be limited by the
statewide AWW, and not mentioning any other limitations, the Legislature implicitly stated that
permanently and totally disabled workers were not otherwise limited in the amount of
supplemental benefits they could receive.
6   In 1959, $70 was the statewide AWW.  
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statute virtually meaningless.5
Additional support for this interpretation is found by looking at the statutes
from a historical perspective.  When the supplemental benefits statute was enacted
there was only one limiting cap on injured workers' benefits, the statewide AWW. 
The statewide AWW was set by the Division of Workers' Compensation and was
increased annually to account for inflation.  Therefore, the supplemental benefits
statute capped the injured workers' total combined workers' compensation and
supplemental benefits at the statewide AWW.  This allowed injured workers to
receive cost-of-living allowances. 
At the time the supplemental benefits statute was enacted, the Legislature
obviously contemplated workers would receive in excess of 100 percent of their
individual AWW from cost-of-living increases.  The supplemental benefits statute
was enacted in 1974 but was applied retroactively to all workers who had been
injured after 1959.  Accordingly, if a worker had been injured in 1959, and had an
AWW of $70,6 the worker would receive $42 in workers' compensation benefits
and $31.50 in supplemental benefits.  The combined workers' compensation and
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supplemental benefits payable to such person in 1974 would be $73.50.  That is
$3.50 more than the worker's AWW at the time of the accident.  Thus, at the time
the supplemental benefits statute was enacted, the Legislature could not have
intended combined benefits to be limited to 100 percent of the worker's AWW at
the time of the accident.    
The City contends that the Legislature's subsequent enactment of section
440.20(15) expressed the Legislature's desire that increases in supplemental
benefits be included in offset calculations because the Legislature did not state that
increases in supplemental benefits should be excluded.  We disagree.  To adopt
such a literal interpretation ignores the historical development of section
440.20(15).  
In 1979, the Legislature enacted section 440.20(15).  The plain language of
section 440.20(15) does not state that injured workers may not receive in excess of
100 percent of their individual AWW.  Instead, it states that employers who paid
injured workers their benefits prior to a carrier's voluntary assumption or
determination of liability will only be reimbursed up to 100 percent of the injured
worker's individual AWW.  It was not until 1989 that this Court interpreted section
440.20(15) as limiting an injured worker's combined benefits from all sources to
100 percent of his or her individual AWW.  See Barragan, 545 So. 2d at 252.
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The City is asking this Court to look at the language of section 440.20(15)
and hold supplemental benefits should be included in offset calculations because
the Legislature did not specifically state that increases in supplemental benefits
should be excluded from the calculations.  Had the 100 percent cap come from a
strictly literal reading of the statute, this might be in order.  However, where the
100 percent cap is a judicial interpretation of an ambiguous statute, and any further
expansion of the statute through judicial interpretation would render another statute
meaningless, this Court must first try to read the statutes harmoniously.  This can
be done if this Court assumes the Legislature never contemplated offsets would be
annually recalculated to encompass increases in supplemental benefits made after
the initial determination of benefits.
This Court's harmonious interpretation of the supplemental benefits statute
and the 100 percent cap statute is also supported by the Legislature's subsequent
amendment of the supplemental benefits statute.  By amending the statute, the
Legislature reaffirmed its desire to give permanently and totally disabled workers
benefits based upon the current value of the dollar rather than the value of the
dollar at the time of the injury.  
Originally, there was some ambiguity as to whether the statewide AWW cap
contained in the supplemental benefits statute referred to the statewide AWW at
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the time of the injury or at the time of payment.  See id.  The statute was amended
to state that combined workers' compensation and supplemental benefits should be
capped at the statewide AWW at the time of payment.  See Polote Corp. v.
Meredith, 482 So. 2d 515, 517 (Fla. 1st DCA 1986).  By amending the statute in
this way, the Legislature reaffirmed its desire to provide permanently and totally
disabled workers with cost-of-living increases based upon the current value of the
dollar.  It would thwart the very foundation of the supplemental benefits statute if
this Court were to now hold that annual increases in supplemental benefits require
offsets to be annually recalculated to encompass the increases.
For these reasons, we approve the First District's decision in Acker v. City of
Clearwater, 23 Fla. L. Weekly D1970 (Fla. 1st DCA Aug. 17, 1998).  We do not
express any opinion as to whether supplemental benefits accruing prior to the date
the injured worker is accepted as permanently and totally disabled should be
included in the initial offset calculations because that issue is not properly before
this Court.  
City of Clearwater v. Lawrence Hahn, Case Number 93,983
In 1992, Mr. Hahn was injured in the scope of his employment as a public
service technician.  In 1994, he was accepted as permanently and totally disabled. 
Thereafter, he began to receive workers' compensation benefits and supplemental
7   The contract for hire may result in a lower base rate for calculating the offset than the
AWW because it excludes overtime and the value of health insurance.  When an injured worker's
contract of hire rate is used as the base rate to calculate the 80% or 100% cap on benefits, the rate
will be lower than the AWW where the injured worker had employer provided health insurance or
the worker had worked overtime during the thirteen weeks proceeding the accident, which is the
period used to calculate the AWW.
8   As this issue is completely separate from the certified question, the Court does not feel
obliged to address it in this opinion.
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benefits based on his individual AWW.  In 1995, in addition to his workers'
compensation benefits, Mr. Hahn also began to receive pension benefits from the
City.  
His pension offset was calculated based on his contract of hire rate rather
than his AWW.7  The offset also included workers' compensation benefits and
supplemental benefits.  The offset was recalculated annually to include cost-of-
living increases in supplemental benefits.  Mr. Hahn conceded that supplemental
benefits that had accrued prior to his being accepted as permanently and totally
disabled should be included in the offset; however, he contested including
subsequent increases in supplemental benefits and using his contract for hire rate as
a basis for calculating the offset.  
The JCC held that it was improper to use the contract of hire as the basis for
determining the offset8 but that it was proper to recalculate the offset annually to
include increases in supplemental benefits.  The First District upheld the JCC's
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decision on the contract of hire issue but reversed the JCC's decision that the
pension offsets should be recalculated annually to include increases in
supplemental benefits.  The First District cited Acker v. City of Clearwater, 23 Fla.
L. Weekly D1970 (Fla. 1st DCA Aug. 17, 1998), and certified the same question
presented in therein.  See Hahn v. City of Clearwater, 23 Fla. L. Weekly D2120
(Fla. 1st DCA Sept. 9, 1998).
For the reasons expressed above we approve the First District's decision in
Hahn.
City of Clearwater v. Terrence Rowe, Case Number 93,984
In 1992, Mr. Rowe was injured while working as an air conditioning
technician for the City.  In 1993, he began to receive pension benefits.  In 1994, he
was accepted as permanently and totally disabled and began to receive workers'
compensation benefits and supplemental benefits.  
His initial pension offset was calculated using his individual AWW and
included supplemental benefits.  The offset was recalculated annually to include
increases in supplemental benefits.  In 1996, Mr. Rowe began to receive social
security disability in addition to his other benefits.  Mr. Rowe conceded the City
had the right to include supplemental benefits when initially calculating the offset;
however, he asserted that the City should not be allowed to increase the offset
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annually to include increases in supplemental benefits, which were meant to be a
cost-of-living increase for permanently and totally disabled workers.  
The JCC held it was proper to recalculate the offset annually to include
increases in supplemental benefits.  The First District reversed the JCC, citing
Acker v. City of Clearwater, 23 Fla. L. Weekly D1970 (Fla. 1st DCA Aug. 17,
1998), and certified the same question presented therein.  See Rowe v. City of
Clearwater, 23 Fla. L. Weekly D2120 (Fla. 1st DCA Sept. 9, 1998).  
For the reasons expressed above, we approve the First District's decision in
Rowe.  Nothing in this opinion should be read to change the workers'
compensation offset under section 440.15(9), Florida Statutes (1985).  That offset
provision is different from section 440.20(15), Florida Statutes (1985), because of
the federal social security offset provisions.
It is so ordered.
HARDING, C.J., and SHAW, WELLS, ANSTEAD, PARIENTE and LEWIS, JJ.,
concur.
NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION, AND IF
FILED, DETERMINED.
Three Cases Consolidated:
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Application for Review of the Decision of the District Court of Appeal - Certified
Great Public Importance
First District - Case Nos. 97-2719, 97-2721 & 97-4270 
H. George Kagan, Ann Marie Vernon, and Elliot B. Kula of Miller, Kagan, Rodriguez
& Silver, West Palm Beach, Florida; and Nancy A. Lauten and Mark E. Hungate of
Fowler, White, Gillen, Boggs, Villareal & Banker, P.A., Tampa, Florida,
for Petitioner
Christopher J. Smith and William H. Yanger, Jr. of Yanger & Yanger, Tampa, Florida;
and Richard A. Sicking, Coral Gables, Florida,
for Respondent
Derrick E. Cox of Hurley, Rogner, Miller, Cox & Waranch, P.A., Orlando, Florida,
for Brevard County Board of County Commissioners, Amicus Curiae
Katrina D. Callaway, Senior Attorney and Edward A. Dion, General Counsel,
Tallahassee, Florida,
for Department of Labor & Employment Security, Amicus Curiae
David A. McCranie of McCranie & Lower, P.A., Jacksonville, Florida,
for Department of Insurance, Division of Risk Management, Amicus Curiae
Richard Sicking, Coral Gables, Florida,
for Clearwater Fire Fighters Association, Inc., Local 1158, International 
Association of Fire Fighters, AFL-CIO, and Florida Professional Firefighters,
     Inc., International Association of Fire Fighters, AFL-CIO, Amicus Curiae
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Mark L. Zientz of Levine, Busch, Schnepper & Stein, P.A., Miami, Florida, 
for Florida Workers’ Advocates, Amicus Curiae