Please E-mail suggested additions, comments and/or corrections to Kent@MoreLaw.Com.

Help support the publication of case reports on MoreLaw

Date: 09-24-2014

Case Style: VMS, Inc. a/k/a VMS Maintenance Systems, Inc. v. Elvis Alfonso

Case Number: 3D13-1044

Judge: Wells

Court: Florida Court of Appeal, Third District on appeal from the Circuit Court, Miami-Dade County

Plaintiff's Attorney: Beckham & Beckham, Pam Beckham and Gene Beckham, for appellee.

Defendant's Attorney: DeMahy Labrador Drake Victor & Cabeza, Greg Victor, Mark Boyd, Susana Nunez and Scott Markowitz, for appellant.

Description: VMS, Inc. appeals from a partial summary judgment determining that it was
estopped from asserting workers’ compensation immunity to bar an action
sounding in negligence brought by the employee of a sub-subcontractor. Because
VMS secured the payment of compensation required by statute, we find that VMS
is not estopped from asserting such immunity and reverse.
As pertinent here, the facts are undisputed. Pursuant to a written contract,
VMS contracted with the Florida Department of Transportation to maintain and
manage portions of specified roadways and bridges in Palm Beach, Broward, and
Miami-Dade Counties. As part of that contract, VMS was obligated to secure, and
secured, workers’ compensation insurance.
In September 2008, VMS subcontracted road work in some of these counties
to ABC. That subcontract, like that between VMS and the Department of
Transportation, obligated ABC to secure workers’ compensation insurance. It is
undisputed that it did so.
Thereafter, ABC hired Lazaro Contreras to perform some of the work ABC
had obligated itself to do. Contreras in turn hired a number of day laborers
including Elvis Alfonso, the plaintiff here. On October 15 or 16, 2008, while
performing work covered by the VMS/ABC/Contreras contract, Alfonso was
seriously burned when hot tar spilled on him. Alfonso immediately was taken to
2
the hospital where it was reported that he had sustained the burns while working at
home.
While the evidence regarding VMS’ knowledge of this incident is disputed,
there is no dispute that Contreras did not have workers’ compensation insurance
and that ABC and VMS did not report this incident to their compensation carriers.
Alfonso also never asserted a claim for workers’ compensation benefits; instead,
on March 2, 2012, he filed suit against both ABC and VMS for negligence. VMS
responded, claiming workers’ compensation immunity and, alternatively,
comparative negligence either on Alfonso’s or other third parties’ part. ABC
eventually entered into a settlement agreement with Alfonso and is no longer a
party to this case.
Thereafter, Alfonso moved for entry of partial summary judgment against
VMS, arguing that VMS was estopped from claiming workers’ compensation
immunity and from asserting comparative negligence because VMS had failed to
notify its workers’ compensation carrier that Alfonso had been injured. The trial
court agreed; we reverse.
Section 440.10(1)(a) of the Florida Statutes provides that “[e]very employer
. . . shall be liable for, and shall secure, the payment to his or her employees . . .
the compensation payable under ss. 440.13, 440.15, and 440.16.” § 440.10(1)(a),
Fla. Stat. (2013) (emphasis added). The liability imposed on employers to “secure
3
payment” of compensation requires only that an employer insure and keep insured
the payment of those workers’ compensation benefits guaranteed by section
440.10(1)(a); it does not impose a duty to actually pay benefits to an employee:
(1) Every employer shall secure the payment of compensation under
this chapter:
(a) By insuring and keeping insured the payment of such
compensation with any stock company or mutual company or
association or exchange, authorized to do business in the state;
(b) By furnishing satisfactory proof to the Florida Self-Insurers
Guaranty Association, Incorporated, created in s. 440.385, that it has
the financial strength necessary to ensure timely payment of all
current and future claims individually and on behalf of its subsidiary
and affiliated companies with employees in this state and receiving an
authorization from the department to pay such compensation directly.
. . .
§ 440.38, Fla. Stat. (2013); Mena v. J.I.L. Constr. Group Corp., 79 So. 3d 219, 225
n.1 (Fla. 4th DCA 2012) (rejecting the notion that the term “secure payment of
compensation” imposes an “automatic duty to actually pay benefits,” but only
requires that payment be insured “with any stock company or mutual company or
association or exchange, authorized to do business in the state” (quoting § 440.38,
Fla. Stat. (2004))); see also Limerock Indus., Inc. v. Pridgeon, 743 So. 2d 176, 177
(Fla. 1st DCA 1999) (finding section 440.38’s requirement that the employer
“secure payment of compensation” was satisfied where the employer “secur[ed] a
policy of workers’ compensation insurance that covered the injured employee”).
4
Because section 440.11(1) of the Florida Statutes makes the liability to
secure compensation imposed by section 440.10(1) the exclusive form of liability
imposed by Chapter 440 on an employer, once an employer acquires and maintains
workers’ compensation insurance for the benefit of its employees, it becomes
immune from suit. See § 440.11(1), Fla. Stat. (2013)1; Walker v. United Steel
Works, Inc., 606 So. 2d 1243, 1244 (Fla. 2d DCA 1992) (“Section 440.11(1)
makes [the] liability to secure compensation the exclusive form of liability of the
employer.”).
Section 440.10(1)(b) extends the liability imposed by section 440.10(1)(a)
on employers to secure insurance coverage for the payment of workers’
compensation benefits to contractors requiring them to secure coverage for the
employees of subcontractors engaged on sublet contract work:
In case a contractor sublets any part or parts of his or her contract
work to a subcontractor or subcontractors, all of the employees of
such contractor and subcontractor or subcontractors engaged on
such contract work shall be deemed to be employed in one and the
1 Section 440.11(1) provides:
The liability of an employer prescribed in s. 440.10 shall be exclusive
and in place of all other liability, including vicarious liability, of such
employer to any third-party tortfeasor and to the employee, the legal
representative thereof, husband or wife, parents, dependents, next of
kin, and anyone otherwise entitled to recover damages from such
employer at law or in admiralty on account of such injury or death . . .
.
§ 440.11(1), Fla. Stat. (2013).
5
same business or establishment, and the contractor shall be liable
for, and shall secure, the payment of compensation to all such
employees, except to employees of a subcontractor who has
secured such payment.
§ 440.10(1)(b), Fla. Stat. (2013) (emphasis added).
As the Florida Supreme Court has confirmed, liability is imposed on
employers by these provisions only to secure workers’ compensation insurance
coverage and when an employer subcontracts part of its work to another, that
contractor/employer is liable only for assuring that workers’ compensation
coverage has been secured for the subcontractor’s employees:
Section 440.10 establishes the concept of “statutory employer”
for contractors who sublet part of their work to others. Section 440.11
provides that the liability established in section 440.11 is “exclusive.”
The effect of section 440.10 is that where a subcontractor performing
part of the work of a contractor fails to secure payment of
compensation, the contractor is liable for same. If both subcontractor
and contractor fail to secure coverage, then the contractor has an
employer’s liability to the subcontractor’s injured employee for
purposes of an action for statutory benefits or damages at law. Thus
even when a subcontractor agrees to secure coverage for its
employees, a prudent contractor will prepare for or insure against its
contingent liability as “statutory employer” in case the subcontractor
fails to do so.
The exclusiveness of liability provided for by section 440.11
extends to an employer’s “liability” as defined in section 440.10.
Thus a contractor who sublets part of its work to a subcontractor,
being liable to secure coverage for employees of its subcontractor, is
also immune from suit by such employees when such coverage has
been secured. It is the liability to secure coverage for such
employees in the event the subcontractor does not do so that
immunizes a contractor from suit by such employees.
6
Motchkavitz v. L.C. Boggs Indus., Inc., 407 So. 2d 910, 912-13 (Fla. 1981)
overruled on other grounds by Employers Ins. of Wausau v. Abernathy, 442 So. 2d
953 (Fla. 1983) (emphasis added) (citation omitted); see also Miami-Dade County
v. Acosta, 757 So. 2d 539, 541 (Fla. 3d DCA 2000) (“It is clear that section
440.10(1)(b) places on the statutory employer [(the contractor)] . . . the
responsibility for providing, or ensuring that the subcontractor provides, workers’
compensation coverage to its, including its subcontractors’, employees”)
(emphasis added); Adams Homes of Nw. Fla., Inc. v. Cranfill, 7 So. 3d 611, 613
(Fla. 5th DCA 2009) (“[W]here the statutory employer secures coverage or
ensures that the subcontractor does so, the statutory employer is immune from
suit for the employees’ personal injuries.”) (emphasis added). “Put differently,
‘where a subcontractor performing part of the work of a contractor fails to secure
payment of compensation, the contractor is liable for the same.’” Mena, 79 So. 3d
at 224-25 (quoting Amorin v. Gordon, 996 So. 2d 913, 916 (Fla. 4th DCA 2008)
(quoting Motchkavicz, 407 So. 2d at 912).
In this case, there is no dispute that VMS secured coverage for ABC’s
employees by virtue of the insurance coverage secured by its subcontractor, ABC.
Having satisfied this obligation, VMS was not liable for injuries sustained by any
of ABC’s or Contreras’ employees while at work. See § 440.10(1)(b), Fla. Stat.
(2013); § 440.11(1), Fla. Stat. (2013).
7
This outcome is not affected by this court’s decision in Ocean Reef Club,
Inc. v. Wilczewski, 99 So. 3d 1 (Fla. 3d DCA 2012), because no contractors or
subcontractors were involved in that case. There, two employees sued their
employer for work-related illnesses and because that employer failed to notify its
workers’ compensation insurance carrier of their claims this court determined that
the employer was estopped from asserting in the civil suit the immunity that the
insurance otherwise conferred. While that decision might have some application to
ABC’s ability to assert its immunity from suit, it has no bearing on VMS’s ability
to do so.
Rather, as the court in Mena confirmed, because contractor/VMS is “liable”
solely for assuring that subcontractor/ABC secured and had in place workers’
compensation insurance, or, alternatively, had secured its own insurance in the
event ABC failed to do so, VMS was not liable for injuries to ABC’s or to
Contreras’ workers and had no obligation to notify its carrier of Alfonso’s injury:
J.I.L. [the sub-subcontractor] procured a policy of worker’s
compensation insurance that was in effect for the date of Mena’s
accident. Slorp [the subcontractor] verified that J.I.L. had coverage.
Slorp was Mena’s statutory employer because it owed a contractual
obligation to the general contractor and subcontracted a portion of that
work to J.I.L., thus taking on the responsibility to provide coverage
for Mena in the event J.I.L. failed to do so. See Candyworld, Inc. v.
Granite State Ins. Co., 652 So. 2d 1165, 1167 (Fla. 4th DCA 1995);
Woods v. Carpet Restorations, Inc., 611 So. 2d 1303, 1304 (Fla. 4th
DCA 1992). “[W]here the statutory employer secures coverage or
ensures that the subcontractor does so, the statutory employer is
immune from suit for the employees’ personal injuries.” Adams
8
Homes of Nw. Fla., Inc. v. Cranfill, 7 So. 3d 611, 613 (Fla. 5th DCA
2009) (emphasis added). Accord Latite Roofing & Sheet Metal Co. v.
Barker, 886 So. 2d 1064, 1066 (Fla. 4th DCA 2004) (contractor
“performed in the way the statute sought to encourage” and was
“entitled to immunity” where it verified that its subcontractor had
coverage); Motchkavitz, 407 So.2d at 913 (“It is the liability to secure
coverage for such employees in the event the subcontractor does not
do so that immunizes a contractor from suit by such employees.”).
Consequently, Slorp was immune from Mena’s negligence action, and
we affirm the trial court’s entry of summary judgment for Slorp.
Mena,79 So. 3d at 225. Thus, the fact that ABC may have been estopped from
asserting the exclusive remedy provided to it by Chapter 440 had no effect on
VMS’ liability or the immunity accorded to VMS by law.
In short, “so long as security for compensation is maintained for all [its]
statutory employees, the contractor[] obligated to secure such compensation [is]
immune from suit.” Walker, 606 So. 2d at 1244; see also Brickley v. Gulf Coast
Constr. Co., 14 So. 2d 265, 266 (Fla. 1943) (“If payment of compensation has been
secured by the general contractor, either directly or through the sub-contractor, a
recovery for injury or death arising out of and in the course of the contract work is
exclusively under the Workmen’s Compensation Law, for compensation.”);
Acosta, 757 So. 2d at 541 (“[W]here the statutory employer secures coverage, or
ensures that the subcontractor does so, the statutory employer is immune from suit
for the employee’s personal injuries.”); Limerock Indus., Inc., 743 So. 2d at 177
(reversing a finding that the employer was not entitled to workers’ compensation
immunity in a civil negligence action, where the employer “had secured payment
9
of compensation by securing a policy of workers’ compensation insurance that
covered the injured employee”); Broward County v. Rodrigues, 686 So. 2d 774,
775 (Fla. 4th DCA 1997) (“When the statutory employer [secures coverage for its
statutory employees], the statutory employer is immune from suit for the
employee’s personal injuries, as worker’s compensation is the exclusive remedy.”).
For these reasons, we find that VMS had no obligation to notify its carrier of
Alfonso’s injury and cannot be estopped from asserting the immunity it enjoys by
virtue of ABC having secured and having in place workers’ compensation
insurance coverage.
A

Outcome: ccordingly, the order granting summary judgment in favor of Alfonso is
reversed.
Reversed and remanded.
Before, SHEPHERD, C.J., and WELLS, SUAREZ, ROTHENBERG, LAGOA,
SALTER, EMAS, FERNANDEZ, LOGUE and SCALES, JJ.
On En Banc Consideration
During the pendency of this action, it has come to this Court’s attention that
a statement made in dicta in Catalfumo Construction, LLC v. Varella, 28 So. 3d
963, 965 (Fla. 3d DCA 2010), that as a consequence of a subcontractor’s insurer’s
denial of a worker’s claim, the contractor at issue there was required to provide
“workers’ compensation” for the subcontractor’s employee is at odds with the
10
opinion herein. We therefore recede from that statement in Catalfumo and confirm
the determination made herein that to benefit from the immunity conferred by
sections 440.10 and 440.11 of the Florida Statutes, a contractor need only ensure
that workers’ compensation insurance coverage has been secured for each worker
for whom it is the statutory employer; the contractor need not ensure that actual
payment of these insurance benefits be made to such employees.
11

Plaintiff's Experts:

Defendant's Experts:

Comments:



Find a Lawyer

Subject:
City:
State:
 

Find a Case

Subject:
County:
State: