Unsettled lawyer’s charge liens can hinder a settlement of future benefits in Florida employees’ payment cases, as well as expose an employer/carrier to civil liability. This post talks about the different symptoms of these liens, how lienholders perfect their liens, how employer/carriers can proactively identify and deal with any fee/cost liens, so about close the file and safeguard it versus future claims.
We start with the maxim that “the best file is a closed file.” A file can not really be closed until all aspects of Fla. Stat. § 440 are resolved. The majority of cases generally include “one claimant, one lawyer”. But what are the consequences if the claimant discharges several lawyers prior to the conclusion of the case? Plenty … if the prior attorney(s) files a lien alleging he/she is entitled to charges or expenses (or both) for work done on the file prior to resolution of concerns or the whole case.
Are You Seeing More Lien Litigation?
Claimants’ lawyer charges and costs are codified in Fla. Stat. § 440.34; different modifications throughout the years have resulted in the present controversy between the claimant’s bar and employer/carriers. Presently, expectancy (and anxiety) is unprecedented pending the Florida Supreme Court’s decision on the constitutionality of the 2009 modification to § 440.34 limiting costs to a statutory portion of benefits gotten rather than a hourly rate as argued in Castellanos v. Next Door, Inc. The 2009 statutory costs reduced the expense of claims; and we have actually seen, perhaps not coincidentally, a boost in the number of controversial lien fights. Litigation emerges frequently when a case is settled without fixing a previous attorney’s lien.
In the majority of situations, the claims professional administering a file will certainly understand a lien is pending. Typically, when there is a modification in counsel, the new attorney will certainly notify the employer/carrier or if the matter is pending prior to the Judge of Compensation Claims, an official specification for replacement of counsel reserving on lawyer’s fees and costs and developing a lien is included in the Order approving the substitution. (Guideline 60Q-6.104, F.A.C.) Care must be taken by the claims professional and defense counsel, if any, to keep in mind the identity of the discharged attorney and to make inquiries of that individual as to what type of lien is asserted. The lien could be for an employer/carrier-paid fee based upon advantages protected as an outcome of submitting a Petition, a quantum meruit lien (or “charging lien”) or a fee based upon all advantages paid after overcoming a rejection of compensability. Understanding the different kinds of liens will certainly make it possible for the claims expert to identify liens which is the initial step at solving them.
1. Liens for employer/carrier-paid fees/costs
Generally, the complaintant is liable for his/her lawyer’s costs and expenses unless specific exceptions as identified in Fla. Stat. § 440.34( 3)are satisfied. However what takes place if a lawyer is discharged prior to resolution of past or pending problems or in the event of a Fla. Stat. § 440.20(11)(c) settlement of future benefits? The discharged lawyer might file a lien for any employer/carrier-paid cost that would have been due throughout his/her representation of the complaintant. Just recently, Florida’s First District Court of Appeals held that these charges related to dominating on claims raised via a Petition for Advantages are subject to termination for absence of prosecution pursuant to Fla. Stat. § 440.25(4)(i). Limith v. Lenox on the Lake, 163 So. 3d 616 (Fla. 1st DCA 2015).
2. Quantum Meruit Liens (Charging liens)
If the claimant discharges an attorney without cause, and no advantages were secured, the attorney would be entitled to a “charging” lien for a lawyer cost under the equitable theory of quantum meruit (“exactly what one has actually made”). Quantum meruit charges have actually been long recognized in Florida and were normally paid by the plaintiff.
Frequently, lien problems emerge when a subsequent attorney settles the entire case and charges are paid; if known liens are not safeguarded, the employer/carrier could be “on the hook” to the previous attorney or attorneys. Excellence of a quantum meruit lien requires only timely notice to the affected parties. Zaldivar v. Okeelanta Corp., 877 So. 2d 927 (Fla. 1st DCA 2004) The lien “ripens” when there are settlement profits to which the lien can connect.
If the attorney’s lien has actually ripened, and he was provided notification of the settlement, then failure to solve or prosecute the lien can lead to termination of the lien through the application of the equitable doctrine of laches (but not a motion for absence of prosecution, as the quantum meruit lien is not a “claim” for attorney’s fees raised by petition). Limith v. Lenox on the Lake, 163 So. 3d 616 (Fla. 1st DCA 2015).
3. “Overall Advantages Secured” liens
This type of lien is based upon the principle that “benefits protected” can be determined on the basis of the overall benefits protected as an outcome of a rejection of compensability. § 440.34(3)(c), Fla. Stat.(2009
)In these scenarios, because the full amount of the benefits to be paid in the future might be unknown, the court has actually held that the claimant’s attorney should be permitted to decide when she or he will have the quantum of the fee figured out. Zaldivar v. Fla. Transp. 1982, Inc., 19 So. 3d 1093 (Fla. 1st DCA 2009).
Best Practices for Resolution
Generally, Florida workers’ compensation cases settle at mediation. The claims expert or defense counsel need to supply notification to any previous attorneys of the mediation conference and invite them to get involved; because fashion, the attorney’s claim will be made recognized and can be dealt with and fixed in writing in the mediation arrangement. In fact, some lawyers will not get involved and will not provide lien information to the parties or the mediator. In those cases, provisions ought to be made in a mediation arrangement regarding which celebration (claimant or employer/carrier) will certainly be accountable for any known asserted liens. When a settlement is reached, any liens have ripened as the Florida appellate court explained in Zaldivar v. Okeelanta Corp. At this point, the employer/carrier can force the lienholder to submit a Verified Motion for Lawyer’s Costs pursuant to Fla. Admin. C. Guideline, 60Q-6.124(4). Therefore, prior to disbursement of settlement proceeds, any unresolved lien/attorney cost issues should be brought before the JCC and dealt with through a proper Last Order.
Current Administrative Guideline Modifications
Prior to changes to the Florida Administrative Code which worked November 1, 2006 and enhanced efficient November 10, 2014, there was no statutory or procedural requirement that a lien be adjudicated. This exposed concerns which might not be compelled to be heard by the Judge of Payment Claims unless the attorney brought the claim prior to the JCC … with the result being employer/carrier claim files were exposed. The Florida procedural guidelines (Rule 60Q-6.124(4) and since November 10, 2014 subsection (5), F.A.C.) require the filing of a validated cost petition upon suitable movement, (usually by employer/carrier) to adjudicate the lien. A suitable movement filed with the JCC and served upon all celebrations and lawyers, consisting of those lawyers asserting liens which have not been fixed, is the preferred vehicle to “compel close” the pending lien.
Prior to Guideline 60Q-6.124(4) ending up being reliable on November 1, 2006, there was no system to need that an attorney asserting a lien file a Verified Petition to adjudicate the lien. Hence, liens might continue to be forever “in limbo”. These new procedural amendments, particularly the 2014’s modification, offer strong ammunition to the employer/carrier to require the filing of a confirmed motion for attorney charges and expenses even if entitlement is challenged, upon presentation of suitable truths. Furthermore as the Limith court showed, if the charge is petition-based, a movement to dismiss for absence of prosecution can be filed so that attorney’s costs do not keep the file open forever, tolling the statute of restrictions.
If, as part of the negotiation of the settlement, the employer/carrier accepts be liable for liens of prior lawyers, prompt resolution of the lien should be made prior to the Judge of Compensation Claims. The attorney claiming the lien has the problem of evidence that he/she was either discharged without cause (which generates the basis for the “charging”/ quantum meruit liens noted above), or showing up that an employer/carrier-paid charge is due for securing benefits on behalf of the complaintant.
Moreover, the best security against future civil lawsuits for tortious disturbance with a company relationship is to need the lienholder to solve his lien prior to the JCC authorizing the current lawyer’s costs and costs for underlying settlement. Because the lien is now ripe, and attached to the settlement profits, all the parties to the settlement (claimant, complaintant’s current lawyer, and the employer/carrier) have a responsibility to the prior lawyer(s) to safeguard their lien.
Robert J. Strunin, senior partner, Walton, Lantaff, Schroeder & & Carson LLP. Strunin’s primary areas of practice consist of analysis, discovery, technique and trial involving the defense of workers’ payment declares in addition to properties liability and vehicle negligence in the tort arena.
Michele E. Ready, partner, Walton, Lantaff, Schroeder & & Carson LLP. Ready’s main area of practice is insurance defense, employees’ payment litigation, consisting of an emphasis on Medicare Secondary Payer compliance. Ready likewise specializes in workers’ payment appellate matters.