Opinion ID: 1954878
Heading Depth: 1
Heading Rank: 4

Heading: whether workers' compensation benefits are primary

Text: The next issue that we address, whether workers' compensation benefits should be primary when the collateral benefit is a pension plan that is employee-contributory, is yet another question left unresolved in the wake of our opinion in Grice, 692 So.2d at 898. [10] In Grice, the employee received workers' compensation benefits, state disability retirement benefits and social security disability benefits. Id. at 897. This Court interpreted section 440.20(15), Florida Statutes (1993), [11] to mean that an injured worker, except where expressly given such a right by contract, may not receive benefits from his employer and other collateral sources which, when totaled, exceed 100% of [a claimant's] average weekly wage. Id. at 898. Lombardi refers to the reduction of the workers' compensation benefits because of the existence of other collateral benefits as a  Grice offset and he contends that such an offset is inapplicable to this case because Lombardi contributed to the pension plan. In contrast, Lombardi argues that the offset that is applicable to this case is a  Barragan offset based on Barragan v. City of Miami, 545 So.2d 252, 254 (Fla. 1989), a case that he claims applies to situations where the employee has contributed to the collateral benefits. Indeed, in this case, unlike in Grice, Lombardi contributed to the pension plan that produced his disability retirement pension benefits. [12] This distinguishing factor requires us to consider the effect of section 440.21(1), Florida Statutes (1993): No agreement by an employee to pay any portion of premium paid by his employer to a carrier or to contribute to a benefit fund or department maintained by such employer for the purpose of providing compensation or medical services and supplies as required by this chapter shall be valid, and any employer who makes a deduction for such purpose from the pay of any employee entitled to the benefits of this chapter shall be guilty of a misdemeanor of the second degree, punishable as provided in s. 775.083. (Emphasis supplied.) This statute was implicated in Barragan, in which the claimant (Barragan), who was an employee of the City of Miami, suffered a permanent work-related injury and was granted both compensation benefits and disability pension benefits. 545 So.2d at 253. Although not specifically mentioned in the majority opinion, it is clear from Justice Ehrlich's special concurrence that Barragan contributed to the pension plan. See Id. at 255 (Ehrlich, J., concurring in result only). Barragan was contractually entitled to his pension benefits pursuant to a City ordinance, which was part of his pension and employment contract, [13] but the City reduced the amount of Barragan's disability benefits by the amount of his workers' compensation benefits. See Id. at 253. On review, this Court determined that [u]nder state law, section 440.21 prohibits an employer from deducting workers' compensation benefits from an employee's pension benefits. Id. at 254. We observed that since 1973 there was no state statute on this subject which authorized public employees to be treated any differently than private employees. Id. Accordingly, we held that the city's illegal reduction of workers' disability pension benefits as an offset of workers' compensation benefits permitted the Deputy Commissioner to increase compensation benefits to the worker up to a combined total that did not exceed his average monthly wage. See Barragan, 545 So.2d at 255. The First District explained our decision in Barragan as resulting in the City being required to pay the full amount of workers' compensation and could reduce pension benefits only to the extent the combination of all benefits exceeded the claimant's AWW. Lombardi, 738 So.2d at 497. In this case, Lombardi received both workers' compensation benefits and disability retirement pension plan benefits, and the combined total of the two were in excess of his average weekly wage. As explained above, the disability benefits came from a fund to which Lombardi contributed. The First District recognized that to allow workers' compensation benefits to be reduced based on disability pension benefits to which an employee contributes might violate section 440.21, the same statute implicated in Barragan. See Lombardi, 738 So.2d at 497. Nonetheless, the First District stated that it was not convinced that the Florida Supreme Court intended to create two different types of offsets, allowing employer/carriers to reduce different benefits based on the contributors to the particular funds. Id. at 497. We respond to the First District's inquiry by explaining that our decision in Grice was directed only to whether additional collateral benefits should be included in computing the AWW 100% cap for total benefits. We have acknowledged that the 100% AWW cap that we discussed in Grice did not come from a strictly literal reading of section 440.20(15), but rather from a judicial interpretation of an ambiguous statute. [14] Dixon, 767 So.2d at 445; see Acker, 755 So.2d at 601. In Grice, we were not presented with the issue of whether the state retirement fund should receive the benefit of the offset rather than the workers' compensation fund. [15] Further, in Grice, we did not discuss the policies behind which fund should receive the benefit of the offset, although the First District has observed that in Grice, the only funds within the employer's control that could be reduced were workers' compensation benefits, since the state of Florida paid the disability retirement and the federal government paid the social security disability. Lombardi, 738 So.2d at 497. Lastly, and most importantly, section 440.21 was not implicated in Grice, and therefore, in that case we could not have addressed the interplay between section 440.21(1) and section 440.20(15). Section 440.21(1) prohibits an employee from contributing to his or her workers' compensation benefits. [16] Accordingly, we hold that where the pension plan is funded at least in part with employees' contributions, decreasing workers' compensation benefits on account of pension benefits runs afoul of section 440.21, Florida Statutes (1993). Lombardi, 738 So.2d at 498. (Benton, J., concurring in part and dissenting in part). Thus, once it is determined that the pension plan is funded with employees' contributions, workers' compensation benefits are primary and it is the pension fund that is entitled to the benefit of the offset. [17] As applied to this case, therefore, the result is that the workers' compensation benefits are primary. Our holding should not be read to mean that in all other cases the workers' compensation fund automatically receives the benefit of the offset; rather, we hold only that where the fund is employee-contributory, it would violate section 440.21 for workers' compensation benefits to be reduced. Rather than merely reversing the JCC's ruling on this issue, the First District remanded with instructions to determine whether claimant's disability pension has a provision comparable to that in Barragan  and if so to apply any offset arising from the AWW cap to Lombardi's disability retirement benefits. Id. at 498. The First District also directed that if no such provision exists, the JCC was to consider Lombardi's pro rata contributions to the disability retirement plan in determining any offset to workers' compensation benefits. Id. Because the provision in Barragan was illegal, we are uncertain what effect a similar provision would have on the ultimate outcome in this case. However, because in this case we determine that workers' compensation benefits are primary when the employee has contributed to the pension plan, and because Lombardi agrees that any offset should be applied to his disability pension benefits, we find no reason to remand to determine whether a contractual provision exists. [18]