SOUTHEAST RECYCLING CORP. v. McCLURE

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Docket Number

No. 94-4191.

Attorney(S)

Diane L. Sudia of Rissman, Weisberg, Barrett, Hurt, Donahue McClain, P.A., Orlando, for appellants. Patrick J. Deese, Melbourne; Bill McCabe of Shepherd, McCabe Cooley, Longwood, for appellee.

Judges

PER CURIAM.

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Smart Summary

Factual and Procedural Background

The case arises from an injury sustained by Beverly McClure while cleaning a densifier machine that unexpectedly moved. Southeast Recycling Corporation and Royal Insurance Company, as the employer and carrier (E/C), accepted the injury as compensable and provided medical and indemnity benefits. No request for assistance or petition for benefits had been filed by the claimant. The claimant sought discovery by requesting production of the densifier machine for inspection, testing, and videotaping, along with related documents concerning the machine's manufacture and maintenance. The E/C objected to the discovery request, arguing it was outside the permissible scope and that no duty to cooperate existed absent a pending workers’ compensation or third-party action. The Judge of Compensation Claims (JCC) entered a nonfinal discovery order compelling production of the machine and related materials, which the E/C appealed.

Legal Issues Presented

Whether the employer/carrier has a duty under section 440.39(7), Florida Statutes (1993), to cooperate by producing non-privileged documents and allowing inspection of premises to investigate potential third-party claims prior to the filing of a third-party action.
Whether the discovery sought by the claimant is within the permissible scope of discovery in workers’ compensation cases under Florida law.
Whether the employer/carrier can condition discovery on the claimant executing a release or indemnification agreement to protect against potential tort claims against the employer.

Arguments of the Parties

Appellants' Arguments

The employer/carrier contended there was no duty to cooperate in discovery because no workers’ compensation action was pending and no third-party action had been filed.
They argued the discovery requests were outside the permissible scope for workers’ compensation discovery.
The E/C suggested the discovery might lead to a tort suit against the employer and therefore conditioned production on the claimant executing a release or indemnification agreement.
They relied on the precedent set in Suburban Propane v. Estate of Pitcher to support their position that they had no duty to produce the requested items.

Appellee's Arguments

The claimant maintained that under section 440.39(7), the parties have a duty to cooperate in investigating and prosecuting potential claims against third-party tortfeasors, including producing relevant non-privileged documents and allowing inspection of premises.
The claimant sought discovery to investigate potential third-party claims, not to establish employer liability in tort.
The claimant argued that the discovery was relevant and permissible under the statute and workers’ compensation rules.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Suburban Propane v. Estate of Pitcher, 564 So.2d 1118 (Fla. 1st DCA 1990)	Employer/carrier’s duty to cooperate in discovery; limits on scope of discovery in workers’ compensation cases.	Court found Suburban Propane inapposite due to materially different facts; emphasized that in Suburban Propane, discovery was sought solely to establish employer liability, whereas here discovery is for potential third-party claims.
Barbosa v. Liberty Mutual Insurance, 617 So.2d 1129 (Fla. 3d DCA 1993)	Interpretation of section 440.39(7) regarding duty to cooperate in investigating potential third-party claims.	Quoted to support the unambiguous statutory duty to cooperate in investigating and prosecuting potential claims against third-party tortfeasors.
Fidelity Casualty Co. of N.Y. v. Bedingfield, 60 So.2d 489, 495 (Fla. 1952)	Supporting authority for duty to cooperate in claims investigation.	Referenced via Barbosa to confirm the statutory duty to cooperate.

Court's Reasoning and Analysis

The court analyzed the statutory language of section 440.39(7), finding it unambiguous in imposing a duty on the employee, employer, and carrier to cooperate in investigating and prosecuting potential claims against third-party tortfeasors. The court distinguished the present case from Suburban Propane by noting that in Suburban Propane the discovery sought was aimed solely at establishing employer liability, constituting a "fishing expedition," and was outside the scope of workers’ compensation discovery. Here, by contrast, the claimant sought discovery to investigate potential third-party claims, which is a proper purpose under the statute. The court rejected the employer/carrier’s argument that no duty to cooperate existed absent a pending third-party or workers’ compensation action and also rejected the condition that the claimant execute a release or indemnification agreement. The court upheld the JCC’s order compelling production of the densifier machine and related documents as consistent with the statutory duty to cooperate.

Holding and Implications

The court affirmed the Judge of Compensation Claims’ order compelling the employer/carrier to produce the densifier machine and related documents for inspection and testing.

The direct effect of this decision is to enforce the statutory duty under section 440.39(7) that parties cooperate in discovery related to potential third-party claims, even before any third-party action is filed. The ruling clarifies that employers/carriers cannot refuse discovery requests on the grounds that no formal action is pending or condition discovery on indemnification agreements. The opinion does not establish new precedent beyond affirming the proper application of existing statutory duties and distinguishing prior case law where discovery was sought for impermissible purposes.

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SOUTHEAST RECYCLING CORPORATION AND ROYAL INSURANCE COMPANY, APPELLANTS, v. BEVERLY McCLURE, APPELLEE.

PER CURIAM.

Southeast Recycling Corporation and Royal Insurance Company, the employer/carrier (E/C), appeal a nonfinal discovery order entered by the Judge of Compensation Claims (JCC) that compels production of the densifier machine that Beverly McClure, Claimant, was cleaning when she was injured. Because section 440.39(7), Florida Statutes (1993), provides that the employee, employer, and carrier have a duty to cooperate with each other in investigating and prosecuting claims and potential claims against third-party tortfeasors by producing non-privileged documents and allowing inspection of premises, we affirm the order compelling production.

Claimant was injured while cleaning a densifier machine when its operating system moved unexpectedly. The E/C accepted the injury as compensable and provided medical and appropriate indemnity benefits. Claimant has filed no request for assistance or petition for benefits.

Claimant scheduled a deposition of the employer's records custodian requesting production of the densifier machine for inspection, testing, and videotaping as well as certain specified documents related to the machine's manufacture and maintenance. At the scheduled deposition, the E/C's counsel objected that the items requested for production were outside the scope of permissible discovery. Claimant then moved to compel production. The E/C argued in response that because there was no pending workers' compensation action through which Claimant could obtain discovery and because no third-party action had been filed, they had no duty to cooperate. The E/C also suggested that such discovery might lead to a suit in tort against the employer (nothing in the record supports the notion that this was Claimant's purpose), and therefore demanded, as a condition of providing the requested discovery, that Claimant execute and deliver a release or indemnification agreement protecting the E/C against such a suit. The JCC correctly rejected all of these arguments, granting Claimant's motion to compel.

The E/C rely upon Suburban Propane v. Estate of Pitcher, 564 So.2d 1118 (Fla. 1st DCA 1990), for their position that they have no duty to cooperate by producing the items requested. Suburban Propane, however, is inapposite because its facts are materially different from the present case.

The language of section 440.39(7) is unambiguous and provides for a duty to cooperate in the investigation and prosecution of potential claims against third-party tortfeasors. Barbosa v. Liberty Mutual Insurance, 617 So.2d 1129 (Fla. 3d DCA 1993), quoting Fidelity Casualty Co. of N.Y. v. Bedingfield, 60 So.2d 489, 495 (Fla. 1952). In Suburban Propane v. Estate of Pitcher, 564 So.2d 1118 (Fla. 1st DCA 1990), this Court held that under the peculiar facts of that case, the E/C were not required to provide certain information to the claimant's estate concerning the installation, maintenance and repair, and/or records kept in connection with the customer location where the deceased died because, this Court held, petitioner had expressly admitted that it was on a fishing expedition to establish employer liability. Therefore, it could not be said that the depositions sought to be compelled involved an investigation or prosecution of a claim or a potential claim against a third-party tortfeasor. This court therein also determined that the requested depositions were generally outside the scope of discovery allowed in workers' compensation cases pursuant to section 440.30, Florida Statutes (1989), in that they were not relevant to the remaining issue of average weekly wage. Suburban Propane may not be read to suspend the parties' duty to cooperate prior to the filing of a third-party action. As counsel for the estate in Suburban Propane acknowledged, the sole purpose of the depositions in that case was to establish the employer's liability in tort.

In the present case, it does not appear from the record that Claimant is attempting to establish employer liability in tort. E/C's objections to production made during the deposition of Debra Fisher, the division manager and records custodian for the E/C, were that the material requested was not relevant to what is applicable to the Workers' Compensation Claim. Here the Claimant was seeking discovery to investigate potential claims against the manufacturer and others as third-party tortfeasors, a clearly proper purpose pursuant to section 440.39(7).

For these reasons, we affirm the JCC's order granting the Claimant's motion to compel.

ZEHMER, C.J., and ALLEN and KAHN, JJ., concur.