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What's Hot in Workers' Comp

TOP 10 DEVELOPMENTS IN PENNSYLVANIA WORKERS’ COMPENSATION IN 2023

What’s Hot in Workers’ Comp, Vol. 27, No. 12, December 2023

December 1, 2023

by Francis X. Wickersham

1.    An application for Fee Review is not premature on the basis that treatment is not related to the work injury where a Utilization Review Request has not been filed.
UPMC Benefit Mgmt. Servs., Inc. v. United Pharmacy Servs. (Bureau of Workers’ Comp. Fee Rev. Hearing Off.), 287 A.3d 474 (Pa. Cmwlth. 2022)

The claimant sustained a work injury to her lower back, which was accepted by a medical-only Notice of Compensation Payable. The employer denied payment of a prescribed cream on the basis that the treatment was not related to the injury. The pharmacy filed three applications for Fee Review, and the Fee Review Office denied each on the basis that the issue of causation to the work injury remained outstanding. The pharmacy requested a hearing and argued that the applications were not premature because the injury was accepted by the employer, no party petitioned for Utilization Review and the 30-day period to remit payment lapsed. The Hearing Office concluded that the causation defense was a challenge to the reasonableness and necessity of treatment, which should have been reviewed during the UR process. The Commonwealth Court affirmed this ruling, holding that the employer was obligated to dispute liability through the UR process to render the Fee Review applications premature. A dissenting opinion pointed out that the UR process was not intended to address causation-based challenges and the Fee Review applications were properly dismissed as premature. 

2.    An employer cannot take a credit for an overpayment of workers’ compensation benefits paid for one work injury against an award of benefits for a subsequent work injury.
Columbia Cnty. Commissioners v. Rospendowski, 286 A.3d 436 (Pa. Cmwlth. 2022)

Following a work injury, the claimant returned to work without a wage loss, and her benefits were suspended. However, the employer discovered the claimant had received an overpayment in wage loss benefits for her injury of over $10,000. The claimant suffered a second work-related injury eight years later, and the employer stated it would accept the injury as a medical injury only in order to recover the outstanding overpayment from the earlier injury. The court held that the employer was not entitled to the requested credit against the wage loss benefits for the later injury for the overpayment made relative to the earlier injury. 

3.    Commonwealth Court of Pennsylvania holds that injured workers may be reimbursed for medical cannabis used for treatment of a work injury.
Fegley v. Firestone Tire & Rubber, 291 A.3d 940 (Pa. Cmwlth. 2023)

The claimant was using medical marijuana to help with her chronic back pain for a work-related low back injury she sustained in 1997. A Utilization Review determination found that the medical marijuana was reasonable and necessary, and the claimant filed a penalty petition after not receiving reimbursement. The Commonwealth Court held that reimbursement of a claimant’s out-of-pocket expenses for medical marijuana usage to treat a work injury is required by the Act. The court also rejected the employer’s argument that Section 2102 of the Medical Marijuana Act (MMA) prevented them from paying for the injured workers’ medical marijuana. Section 2103 of the MMA specifies, “Nothing in the MMA shall require an employer to commit any act that would put the employer and any person acting on its behalf in violation of Federal law.” 

4.    Commonwealth Court of Pennsylvania again finds that an injured worker can be reimbursed for medical cannabis used for treatment of a work injury.
Appel v. GWC Warranty Corp., 291 A.3d 927, 929 (Pa. Cmwlth. 2023)

The claimant had sustained a lower back injury at work and underwent two surgeries. He used medical marijuana for his pain and sought reimbursement for his medical marijuana. The Workers’ Compensation Judge concluded that reimbursement was not required under Section 2102 of the Medical Marijuana Act (MMA), and the Appeal Board affirmed. The claimant argued that, although the MMA did not require coverage, it did not prohibit it either. The Commonwealth Court agreed and held that reimbursement for the claimant’s medical marijuana usage was required by the Act. The court again rejected an employer’s argument that they were prevented by Section 2102 of the MMA from paying for the injured workers’ medical marijuana. Section 2103 of the MMA specifies, “Nothing in the MMA shall require an employer to commit any act that would put the employer and any person acting on its behalf in violation of Federal law.”

5.    Supreme Court holds that the exclusivity provision of the Pennsylvania Workers’ Compensation Act precludes an employee bitten by a dog at work from filing a lawsuit against the employer for negligent acts and omissions. 
Franczyk v. Home Depot, Inc., 292 A.3d 852 (Pa. 2023)

The plaintiff was bit by a customer’s dog while working. The defendant allowed the dogs’ owners to leave the store prior to providing identifying information. The plaintiff filed suit against the defendant, claiming there was a failure to sufficiently investigate the incident and negligence in allowing the dogs’ owners and witnesses to leave the premises without obtaining necessary information. The Pennsylvania Supreme Court found that the plain language of the Act precludes a defendant’s liability beyond that provided by the Act. The court found that requiring litigation to continue on this issue would result in absurdities that the Act is meant to prevent. The court also held that permitting the suit would create perverse incentives for employees when injuries caused by a third party occur on the job and would place employers in a position to be faced with lawsuits by employees if third-party information is not obtained. 

6.    Supreme Court holds that a claimant’s dram shop claim arose out of the maintenance or use of a motor vehicle; therefore, the employer was precluded from subrogating its payment of Heart & Lung Act benefits against claimant’s settlement of the claim. 
Alpini v. WCAB, 294 A.3d 307 (Pa. 2023)

In this case, the claimant sustained multiple work-related injuries when his car was struck by an intoxicated driver. The employer accepted liability for the injuries and paid Heart & Lung Act (H&L) benefits to the claimant, and the claimant signed over his workers’ compensation wage loss benefits to the employer. The Pennsylvania Supreme Court considered whether an employer that paid H&L benefits was entitled to subrogation for a claim in which the claimant was injured and asserted both motor vehicle negligence- and Dram Shop Act-based claims. Section 1720 of the Motor Vehicle Financial Responsibility Law (MVFRL) precludes an employer from subrogating its payment of H&L Act benefits against a claimant’s third-party recovery in an action arising out of the maintenance or use of a motor vehicle. The court held that, based on a clear and unambiguous interpretation of Section 1720 of the MVFRL, the claimant’s action arose out of the maintenance or use of a motor vehicle. Because the action originated from the motor vehicle collision, the employer was precluded from subrogating its payment of H&L Act benefits against the claimant’s third-party settlement of his Dram Shop Act claims with the tavern owners. 

7.    Commonwealth Court holds that an award of specific loss benefits to a claimant who dies prior to payment is not payable to the estate where the cause of death is from the work injury.
Steets v. Celebration Fireworks, Inc., 295 A.3d 312 (Pa. Cmwlth. 2023)

The claimant sustained work injuries resulting from an explosion and subsequently was awarded specific loss benefits for the loss of use of both arms, with payments to begin once total disability benefits ceased. The claimant later passed away due to complications from a work-related respiratory deficiency. The claimant’s estate filed Petitions Seeking Payment of the claimant’s specific loss benefits and penalties for failure to pay previously awarded benefits. The Commonwealth Court held that precedent has established that the specific loss benefits may be paid following the death of an employee if the death is from a cause other than a work injury. The court also held that because the claimant’s death was related to the work injury, the employer’s only obligation under the Act was to pay $7,000 in funeral expenses. 

8.    A Hearing Officer in a Fee Review case does not have statutory authority to remedy an overpayment of medical bills made to the provider by the insurer.
Philadelphia Surgery Ctr. v. Excalibur Ins. Mgmt. Servs., LLC, 289 A.3d 157 (Pa. Cmwlth. 2023)

The Fee Review Section found that the provider was due $14,393.83 for medical services rendered to the claimant. The Hearing Office concluded that the Fee Review Section failed to acknowledge a prior payment made by the insurer to the provider and directed the provider to reimburse the insurer $39,838.05 as an overpayment. The provider appealed, and the Commonwealth Court granted the appeal on the grounds that the Hearing Office did not have the statutory authority to impose the remedy of reimbursement for an overpayment of medical services. Although the Hearing Office had the authority under the Medical Cost Containment Regulations to determine whether there was an underpayment or overpayment, Section 306(f.1)(5) of the Act establishes that the sole focus of the Fee Review process is the amount and/or timeliness of the payment from the employer or insurer; therefore, the reimbursement ordered was not proper. 

9.    An employer does not admit liability for a work injury with a late answer to a Claim Petition where the injury is not well pled.
Alvin Hollis v. C&R Laundry Services, LLC (WCAB), 299 A.3d 1086 (Pa. Cmwlth. 2023)

The claimant suffered injuries as a result of an August 6, 2019, motor vehicle accident while he was driving for the employer. A Claim Petition was filed, and in it, the claimant pled injuries of “left rotator cuff pathology, cervical left-side radiculopathy, and cervical, thoracic and lumbar sprain/strains.” Although a late answer was filed and a Yellow Freight motion granted, the opinion of the employer’s medical expert, that the claimant’s left shoulder tendinosis was not related to the work injury, was accepted and it was found that the claimant was recovered from a sprain and strain of the shoulder. The Workers’ Compensation Judge found “left rotator cuff pathology” was not a well-pled fact, not a medical diagnosis, and not legally sufficient or definitive of the shoulder injury. The Commonwealth Court affirmed, agreeing that “left rotator cuff pathology” was not well-pled, and the claimant was, therefore, not entitled to a presumption of ongoing disability related to his shoulder under Yellow Freight. 

10.    A January 2018 email sent by claimant to employer about emergency foot surgery he had in November 2017 was not sufficient notice of a work injury under the notice provisions of the Act. 
The Hershey Company v. Shawn Woodhouse (WCAB), 300 A.3d 529 (Pa. Cmwlth. 2023)

In this case, the claimant had a pre-existing history of diabetic neuropathy. He developed a right diabetic foot ulcer in June 2017. In November 2017, emergency foot surgery was performed. In January 2018, the claimant sent an e-mail notification to the employer about the surgery. The claimant returned to work in March 2018, but in April 2018, a below-the-knee amputation of his right leg was performed. In December 2019, the claimant filed a Claim Petition for specific loss benefits, alleging his work duties aggravated a diabetic foot ulcer. The petition was granted, which the employer appealed to the Commonwealth Court, arguing that notice was untimely since it was not provided until the Claim Petition was filed in December 2019. The Commonwealth Court agreed and reversed the decisions of the Workers’ Compensation Judge and the Appeal Board. The court noted that when the claimant testified, he admitted that he suspected his amputation was related to his job duties in 2017. According to the court, under Section 311 of the Act, the claimant was required to provide notice of the injury within 120 days of the date of his foot surgery. The court also found the claimant’s January 2018 email about the surgery insufficient for constructive notice under Section 312 of the Act, since it did not specify the surgery was work-related and that his job duties aggravated his pre-existing condition. 


 

What’s Hot in Workers’ Comp, Vol. 27, No. 12, December 2023 is prepared by Marshall Dennehey to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. We would be pleased to provide such legal assistance as you require on these and other subjects when called upon. ATTORNEY ADVERTISING pursuant to New York RPC 7.1 Copyright © 2023 Marshall Dennehey, all rights reserved. No part of this publication may be reprinted without the express written permission of our firm. For reprints or inquiries, or if you wish to be removed from this mailing list, contact tamontemuro@mdwcg.com.

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106 Marshall Dennehey Attorneys Recognized in the 2027 Editions of The Best Lawyers in America® and the Best Lawyers: Ones to Watch® in America

Marshall Dennehey is proud to highlight the firm’s 106 attorneys who have been recognized in the 2027 editions of The Best Lawyers in America® and the Best Lawyers: Ones to Watch® in America. Less than 6% of all practicing lawyers in the U.S. were selected by their peers for this recognition. Additionally, four of the firm’s attorneys received the Best Lawyers® 2027 “Lawyer of the Year” awards in their respective practice areas and demographic regions. Since it was first published in 1983, Best Lawyers® has become universally regarded as the definitive guide to legal excellence. Best Lawyers lists are compiled based on an exhaustive peer-review evaluation. For more information, please visit https://www.bestlawyers.com/. OUR 2027 LAWYERS OF THE YEAR Harrisburg, PA Christopher Reeser, Personal Injury Litigation - Defendants Kacey Wiedt, Workers Compensation Law - Employers Roseland, NJ Justin F. Johnson, Medical Malpractice Law - Defendants Leonard Leicht, Personal Injury Litigation - Defendants   OUR 2026 BEST LAWYERS IN AMERICA Philadelphia, PA Nicholas D. Bowers, Personal Injury Litigation - Defendants Josh J. T. Byrne, Professional Malpractice Law - Defendants Jefferey J. Chomko, Insurance Law James H. Cole, Insurance Law John J. Delany III, Personal Injury Litigation - Defendants Laurianne Falcone, Personal Injury Litigation - Defendants John P. Gonzales, Employment Law - Management John Hare, Appellate Practice Daniel D. Krebbs, Personal Injury Litigation - Defendants Michele Punturi, Workers' Compensation Law - Employers Bradley D. Remick, Product Liability Litigation - Defendants Andrea Cicero Rock, Workers' Compensation Law - Employers Robin M. Romano, Workers' Compensation Law - Employers Daniel J. Ryan, Jr., Personal Injury Litigation - Defendants Gary M. Samms, Professional Malpractice Law - Defendants Christopher N. Santoro, Personal Injury Litigation – Defendants; Product Liability Litigation -Defendants Josh D. Scheets, Personal Injury Litigation - Defendants Robert P. Schenk, Workers' Compensation Law - Employers Robert E. Smith, Insurance Law Robin Snyder, Litigation - Health Care Michael L. Turner, Commercial Litigation; Criminal Defense: White-Collar; Mass Tort Litigation / Class Actions - Defendants Claire Breaux Ventola, Product Liability Litigation - Defendants Pittsburgh, PA Melissa Devich Cochran, Commercial Litigation; Mass Tort Litigation / Class Actions – Defendants; Product Liability Litigation - Defendants  John F. Deasy, Personal Injury Litigation – Defendants; Product Liability Litigation - Defendants Daniel W. Deitrick, Workers' Compensation Law - Employers Douglas C. LaSota, Litigation - Construction; Mass Tort Litigation / Class Actions - Defendants Joseph V. Lesinski, Product Liability Litigation – Defendants   Christian D. Marquis, Personal Injury Litigation - Defendants Patricia A. Monahan, Insurance Law; Litigation - Insurance Patrick T. Reilly, Commercial Litigation; Mass Tort Litigation / Class Actions – Defendants; Product Liability Litigation - Defendants Brett C. Shear, Medical Malpractice Law - Defendants Teresa O. Sirianni, Education Law; Employment Law – Management; Litigation - Labor and Employment Stuart Sostmann, Product Liability Litigation – Defendants Danielle M. Vugrinovich, Mass Tort Litigation / Class Actions - Defendants Scranton, PA Sarah E. Argo, Litigation - Insurance Michael J. Connolly, Personal Injury Litigation – Defendants; Professional Malpractice Law - Defendants Matthew Keris, Litigation - Health Care; Medical Malpractice Law - Defendants John T. McGrath, Jr., Insurance Law; Medical Malpractice Law – Defendants; Product Liability Litigation - Defendants William J. McPartland, Insurance Law John R. Nealon, Product Liability Litigation - Defendants Victoria Scanlon, Health Care Law; Litigation - Health Care; Medical Malpractice Law - Defendants Michael A. Sebastian, Workers' Compensation Law - Employers Thomas A. Specht, Insurance Law; Litigation - Insurance Suzanne Tighe, Litigation Insurance Harrisburg , PA Casey Alan Coyle, Administrative/Regulatory Law; Appellate Practice; Commercial Litigation Brittany E. Bakshi, Personal Injury Litigation - Defendants Shannon P. Fellin, Workers' Compensation Law - Employers Allison Krupp, Insurance Law John R. Ninosky, Litigation – Insurance; Personal Injury Litigation - Defendants Christopher Reeser, Personal Injury Litigation - Defendants Kacey Wiedt, Workers' Compensation Law – Employers King of Prussia, PA  Michael L. Detweiler, Construction Law Joseph L. Hoynoski III, Medical Malpractice Law - Defendants Gregory J. Kelley, Construction Law, Litigation - Construction Anthony Natale III, Workers' Compensation Law - Employers Francis X. Wickersham, Workers' Compensation Law - Employers A. Judd Woytek, Workers' Compensation Law – Employers Erie, PA Patrick M. Carey, Personal Injury Litigation - Defendants Joel M. Snavely, Health Care Law; Insurance Law New Haven, CT Michael Wrona, Commercial Litigation, Litigation - Bankruptcy  Mount Laurel, NJ David D. Blake, Litigation - Insurance Barbara Davis, Personal Injury Litigation - Defendants Lynne Nahmani, Litigation - Health Care John H. Osorio, Personal Injury Litigation - Defendants John L. Slimm, Legal Malpractice Law – Defendants; Professional Malpractice Law – Defendants Roseland, NJ Robert T. Evers, Medical Malpractice Law - Defendants Justin F. Johnson, Medical Malpractice Law - Defendants Julia Klubenspies, Medical Malpractice Law - Defendants Leonard C. Leicht, Personal Injury Litigation - Defendants Patricia M. McDonagh, Appellate Practice Sunny Sparano, Litigation - Construction Randall S. Watts, Health Care Law New York, NY Tonya M. 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Williamson, Personal Injury Litigation - Defendants Cleveland, OH Vincent E. Cononico, Litigation – Insurance, Personal Injury Litigation - Defendants Jillian L. Dinehart, Personal Injury Litigation - Defendants David J. Fagnilli, Insurance Law Jason P. Ferrante, Health Care Law, Litigation - Health Care Andrew H. Isakoff, Transportation Law Leslie M. Jenny, Litigation - Health Care; Medical Malpractice Law – Defendant OUR 2026 BEST LAWYERS: ONES TO WATCH Jacksonville, FL Sean J. Reeves, Personal Injury Litigation – Defendants; Product Liability Litigation - Defendants Orlando, FL Carolin A. Pacheco, Insurance Law Mount Laurel Stacey Gorin, Insurance Law Melville, NY Kimberly Gitlin, Personal Injury Litigation – Defendants Matthew A. Gray, Insurance Law; Personal Injury Litigation - Defendants Philadelphia, PA Holli K. Archer, Health Care Law; Medical Malpractice Law – Defendants; Professional Malpractice Law Emily Pritchyk, Commercial Litigation; Product Liability Litigation – Defendants Pittsburgh, PA Taylor E. Kosko, Mass Tort Litigation / Class Actions – Defendants; Personal Injury Litigation - Defendants Alana Staniszewski, Workers' Compensation Law - Employers Michael D. Winsko, Product Liability Litigation – Defendants; Transportation Law King of Prussia, PA Richard Lechette, Commercial Litigation; Insurance Law, Personal Injury Litigation – Defendants

Thought Leadership

Appeals Court Reverses Trial Court Order Awarding Attorney’s Fees Due to Lack of Evidence to Support Fee Awarded

The Fourth District Court of Appeal reversed the trial court’s order awarding appellate fees to People’s Trust Insurance Company based upon a lack of evidence to support the attorney’s fee award in RM & Assocs. Consulting, Inc. v. People's Trust Ins. Co., 2026 Fla. App. LEXIS 4654 (Fla. 4th DCA 2026). People’s Trust was the insurer of a residential property that had sustained water damage. RM & Associates Consulting was hired by the homeowner to perform mitigation services at the property. The homeowner assigned post-loss benefits to RM and RM subsequently filed suit against People’s Trust alleging that it had not been paid the money it was owed for the mitigation services. People’s Trust defended the lawsuit on the ground that the policy required the insured to notify the insurer before authorizing repairs so People's Trust could elect to use its preferred contractor. Because the owner did not comply with that provision, People's Trust asserted its liability was limited to the amount that its preferred contractor would have charged for the work, which People's Trust contended was $2,000. People's Trust paid that amount to RM before RM filed suit. People’s Trust filed a motion for summary judgment which was granted. RM appealed the summary judgment ruling and the ruling was upheld by the Fourth District Court of Appeal. The appellate court also granted People’s Trust’s entitlement to appellate attorney’s fees, subject to the trial court’s determination of the amount of fees, based upon an offer of judgment made by People's Trust. On remand, the trial court held an evidentiary hearing to determine the amount of attorney’s fees People’s Trust was entitled to. At the hearing, People’s Trust presented testimony from it’s fee expert, supervising trial counsel and appellate counsel. People’s Trust sought recovery of $24,866.17 for work performed by appellate counsel. The request primarily consisted of work performed in preparation of the answer brief. The fee expert testified that more than ninety hours spent preparing the answer brief was reasonable given the complexity and significance of the underlying issue. The appellate court found that the fee expert’s testimony fell short of meeting the necessary standard of demonstrating that the hours expended were necessary. The appellate court found that the billing records did not serve to cure the deficient testimony, as the billing records did not contain adequate details regarding the specific tasks performed. Rather the records contained entries such as “answer brief” which the appellate court found to be insufficient. The appellate court noted that neither the fee expert or counsel addressed how the prior research and briefing in the parallel litigation informed the work in the instant matter. The appellate court noted this was significant in that a court's attorney's fees award must exclude excessive, redundant, or otherwise unnecessary hours, citing Florida Patient's Compensation Fund v. Rowe, 472 So. 2d 1145 (Fla. 1985). Based upon the record failing to support the finding of the trial court, the 4th DCA remanded the case to the trial court for a reconsideration and redetermination of reasonable appellate attorney’s fees supported by competent substantial evidence. The 4th DCA reiterated that the fee expert’s focus on the quality of the work and the importance of the work to People’s Trust did not make up for the perceived deficiencies in the position that spending over ninety hours on a single answer brief was reasonable. Whether moving for attorney’s fees or challenging the amount of fees being sought by an opposing party, practitioners should be mindful of the evidence being used to support the claims being made. Parties should pay close attention to whether the hours being sought may be impacted by prior litigation either party may have engaged in. A party must be prepared to address how prior litigation efforts did or did not impact the amount of hours being claimed in current litigation. Lastly, billing records must be sufficiently detailed so as to support any potential future fee claim.

Thought Leadership

First DCA Reverses Excessive Jury Award Unsupported by the Evidence

In December 2019, the plaintiffs filed a claim with Universal for damages caused by a water and sewage back up through the plumbing system and existing through multiple fixtures including the washing machine drain, kitchen sink, dishwasher, bathtub and toilet. Universal investigated the claim, issued payment for resulting water damage totaling $7,000.00 in actual cash value ($12,000.00 in replacement cost value). The plaintiffs sought additional benefits for work needed to access the below-slab cast iron plumbing system due to the failure of the system from rust, deterioration, corrosion and breaks in the line. Universal denied any additional benefits for access. In 2021, the plaintiffs filed suit. During litigation, Universal sent a plumber to inspect the home and the plumber concluded the pipes were clogged but could be cleaned. The plaintiffs’ plumber testified that the plumbing system needed to be replaced due to holes and openings in the pipes. The plaintiffs introduced two estimates prepared by Triad Restoration services totaling $79,680.22 in replacement cost value and $50,219.97 in actual cash value and an executed contract with another company for repairs with the amounts of repair redacted. Since the insurance policy did not provide coverage for repair or replacement of the plumbing system, the jury only had to decide whether the plumbing system needed to be replaced, and if it did, Universal would owe for the access costs; the jury verdict form required the jury to determine both the replacement cost value and actual cash value amounts. The jury asked if it had to rely on the Triad estimates for their amounts. The trial court advised the amount awarded had to be based on the evidence presented at trial and the law given by the trial court. The jury awarded $335,000.00 in replacement cost value or $305,000.00 in actual cash value. Universal motioned for a new trial arguing the amount awarded was unsupported by the evidence and then moved for remittitur. The trial court denied both motions and this appeal followed. The court found that while a jury’s verdict should only be disturbed with caution and discretion, the trial court must give the properly challenged award close scrutiny and determine whether it bears a reasonable relation to the damaged provided, is supported by the evidence, and could have been reached in a logical manner by reasonable means §768.74(3), (5)(d)-(e), Fla. Stat. The court found the trial court did consider the statutory requirements at the hearing on Universal’s remittitur motion and was concerned about a reasonable relation to the amount of damages proved and injury suffered and whether the award was supported by the evidence, but ultimately denied the motion, reasoning that the jury had been properly instructed to fairly and adequately compensate the plaintiffs. The court noted the only evidence providing the basis for the jury verdict was Triad’s estimates and those valued the plaintiffs' claimed loss at $79,680.22 in replacement cost value and $50,219.97 in actual cash value; no valuation evidence reasonably supported the jury verdict. The plaintiffs argued that the jury was entitled to consider more than the estimates, but the court conveyed the evidence provided did not give the jury a way to reach the amounts they awarded. The court was also not swayed by the plaintiffs’ argument regarding inflation and later price increases, but the court noted that no evidence via the contract, nor testimony regarding increase in labor, material, fuel or construction costs were entered into the record.  The court concluded the jury may draw reasonable inferences from the evidence, but it may not supply a damages number by speculation. The court did not find any of the plaintiffs’ remaining argument persuasive either. The court reversed the denial of Universal’s remittitur motion and motion for new trial as to damaged and remanded the case. The court ended its opinion with advising the trial court must determine whether replacement cost value or actual cash value is the property measure of damages under the policy and order remittitur in an amount consistent with that determination and the evidence.

Thought Leadership

United State District Court for the Middle District of Florida finds Evidence of Replacement Cost Value is Admissible and Recoverable Even When Repairs Have Not Been Made

The plaintiff filed a claim for damage as a result of Hurricane Ian. It claimed damages were over $24 million, but the carrier accepted partial coverage and paid $8,307.49 for secondary components. The carrier found hurricane damage to the building, but it was below the insurance policy’s $3.6 million deductible. The plaintiff sued for breach of the insurance policy. The carrier argued in a motion for summary judgment that plaintiff could not recover replacement cost value (RCV) because the property repairs had not been effectuated. The policy provided for RCV, but only after the repairs were completed. The carrier argued that because the repairs were not completed, the plaintiff was not entitled to RCV damages. The plaintiff argued the carrier could not withhold the actual cost value (ACV) due, which was the main allegation of the lawsuit, then fault it for not making the repairs to unlock the RCV. The United States District Court for the Middle District of Florida rejected the carrier’s argument, finding that when an insurer allegedly breached the policy by withholding coverage, it could not hide behind a repair-contingent provision to block the insured from RCV damages at trial. The court found the issue to be whether the contractual language designed to preclude certain coverage until after repairs are completed barred an insured from seeking those damages at trial when repairs were not complete. The court noted the Eleventh Circuit had not resolved this issue and neither side pointed to a definitive answer from the Florida Supreme Court. The court reasoned that it must look to the Sixth District Court of Appeal (6th DCA), which is the court which would have heard this case if it was in state court. The court noted the 6th DCA recently addressed this issue in Universal Prop. & Cas. Ins. Co. v. Rodriguez, 427 So. 3d 676 (Fla. 6th DCA 2026). The Rodriguez Court found that a breach of contract action is designed to adjudicate not only whether the contract was breached, but also evaluate the damages incurred had the breach not occurred, which the Rodriguez court found to be recovery of the RCV. This court also noted basic Florida contract principles compelled the same result, as a material breach frees the nonbreaching party to suspend its own performance and can demand the full benefit of its bargain, including RCV damages. Finally, the court found the distinction between a full denial and partial denial did not compel a different result. It found the policy required the carrier to acknowledge coverage and pay ACV for all covered damages, and the failure to do that is a material breach, entitling the insured to all of the damages available under the contract, which included the RCV.