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What's Hot in Workers' Comp

TOP 10 DEVELOPMENTS IN NEW JERSEY WORKERS’ COMPENSATION IN 2024

What’s Hot in Workers’ Comp, Vol. 28, No. 12, December 2024

December 1, 2024

by Kiara K. Hartwell

1.    The Appellate Division addresses permanent partial vs. total disability.
Hughes v. Port Auth. of N.Y. & N.J. and State of N.J. Second Inj. Fund, No. A-1188-22 (January 30, 2024)

The Appellate Division affirmed the workers’ compensation order for an increase in the petitioner’s permanency award but denied his claim that he was permanently and totally disabled. The petitioner suffered a cardiac injury on July 14, 2004. He filed a claim, and after a trial in which he asserted he was 100% disabled, a workers’ compensation judge found he was 33 1/3% disabled. The petitioner then re-opened his claim and joined the Second Injury Fund into the litigation. The only issue at trial was whether there was any increase in permanent disability as a result of the July 14, 2024, cardiac event. After trial, which included testimony from the petitioner and experts for both sides, and review of medical records, the judge found the petitioner’s disability increased to 45% but that he was not totally disabled. The petitioner appealed, arguing he should have been found 100% disabled. The Appellate Division noted the judge thoroughly laid out the evidence and reasoning for his decision. While the petitioner argued the judge should have given more weight to his expert’s opinion, the judge explained his reasons for rejecting same. 

2.    The Appellate Division addresses pro se claim for medical and temporary benefits.
Bello v. United Panam Financial Corp., No. A-2986-21 (March 6, 2024)

A pro se petitioner appealed from a workers’ compensation order finding that his injuries were not causally related to his employment. The petitioner filed two claims, both seeking medical and temporary benefits from the respondent. He testified he had to use his own car for work and had it serviced at Holman Cadillac, noting he noticed a chemical order in his car after it was serviced. A week later, he turned on the air conditioner and noticed a stronger odor. He turned it off, stopped to see a client and then stopped at a restaurant to rinse his mouth, at which point he started coughing up blood. The petitioner hired Eagle Industrial Hygiene Associates to test the air quality in his car. In their report, they noted they detected an odor after operating the air conditioner for 1.5 hours and that the products used for his car included some dangerous components. The petitioner retained Dr. Lawrence Guzzardi as his expert, who acknowledged he was not treating patients, had not been affiliated with any hospital since 2016 and most of his income came from his real estate business. Dr. Guzzardi opined the petitioner’s injuries were due to exposure to the chemicals. In response, the respondent offered up the testimony of Dr. Howard Kipen (toxicologist) and Dr. Samuel Kahnowitz (pulmonologist), both of whom found no causal link between his symptoms and the alleged exposure. Afterwards, the judge issued an extensive written decision, finding the respondent’s experts were more credible and, thus, the petitioner failed to establish causation. The Appellate Division found no basis to disturb the judge’s decision, especially as both of the respondent’s experts provided the reasons for their conclusions.

3.    The Appellate Division finds no requirement that a lien had to be paid immediately following settlement with a third-party tortfeasor under N.J.S.A. 34:15-40.
N.J. Transit Corp. v. Joseph, No. A-1194-22 (March 19, 2024)

The Appellate Division vacated and remanded a trial court order denying New Jersey Transit’s application for satisfaction of its workers’ compensation lien as premature after the third-party settlement. The petitioner was injured while working for New Jersey Transit and filed workers’ compensation and third-party cases. While the workers’ compensation case was pending, the petitioner settled with his UM carrier, and those funds were disbursed to him. New Jersey Transit filed a verified complaint and order to show cause, seeking reimbursement of its lien. The trial court denied their application as premature, without hearing oral arguments. The Appellate Division reviewed N.J.S.A. 34:15-40, noting there was no mention of a timeline for satisfying an unperfected lien. In addition, there was no mention of a requirement that a lien had to be paid immediately following settlement with a third-party tortfeasor; instead, it could not be fully satisfied until the workers’ compensation case was finalized and the employer’s liability determined. The case was remanded to the trial court to ensure the lien was protected until the workers’ compensation case was resolved.
 
4.    The Appellate Division affirms dismissal of a workers’ compensation claim as outside the scope of employment. 
Latshaw v. Lakewood Twp. Police Dep’t, No. A-3702-21 (March 25, 2024)

The petitioner was working for the employer as a dispatcher, and while on her meal break in October 2018, she was rear-ended. She filed a workers’ compensation claim, and the employer opposed, arguing she was injured outside the scope of her employment. The petitioner testified that she had employer-approved breaks, including for lunch, and that she was paid for that time, even if she left the premises. She had driven to a restaurant for lunch and was injured on her way back to the station. The employer moved to dismiss her claim as the accident occurred while on a personal errand, and the judge granted same. The Appellate Division referenced the Supreme Court decision in Keim v. Above All Termite & Pest Control, 256 N.J. 47 (2023). Applicable case law and statute were reviewed in defining employment and exceptions, including the premises rule, special mission rule, paid travel time rule and authorized vehicle rule. In going through these exceptions, the Appellate Division emphasized that the petitioner was not covered under any of these exceptions and noted the petitioner’s paid status during her break did not mandate workers’ compensation coverage. The Division affirmed dismissal of the claim.

5.    The Appellate Division addresses compensability for a circumstance involving mandatory reporting by the employer.
Terhune v. Port Auth. of N.Y. & N.J., No. A-3206-22 (May 8, 2024)

The petitioner worked for the employer, and on December 14, 2013, reported for mandatory snow duty. As a part of same, he had to stay at an assigned Marriot Hotel for 12 hours and work the other 12 hours. He was compensated for the entire 24-hour shift. The petitioner had a pre-existing back injury, requiring light exercise. After using the hotel gym, he slipped and landed on his back as he was entering the hotel pool. The incident was reported, and the petitioner was taken to the hospital. Although the respondent denied the claim, arguing it did not arise out of his employment, the judge found the employer required the petitioner to remain at the hotel and all expenses were paid by the employer. The judge found the case compensable and entered a final decision and judgment for 75% permanent disability. The Appellate Division rejected the employer’s appeal consistent with the judge’s reasoning.

6.    The Appellate Division reviews the Workers’ Compensation Act bar.
Barrett v. Hackensack Univ. Med. Ctr., No. A-3441-22 (June 13, 2024)

The Appellate Division reversed and remanded the trial court’s order granting the employer’s summary judgment motion. The petitioner finished her overnight shift, clocked out, and accompanied her son in the respondent’s emergency room. Her son was discharged about three-and-a-half hours later. While walking to her son’s car in the garage, the petitioner tripped and fell. She filed a case against the employer, who filed a summary judgment motion. The judge granted the motion, noting the Workers’ Compensation Act barred her from suing the respondent as she never left the premises after her shift ended. The Appellate Division reversed and vacated the order, noting the petitioner was not in the course of and did not arise out of her employment when the incident occurred.

7.    The Appellate Division addresses coverage in a workers’ compensation and third-party setting.
Tejada v. 74 Industries, Inc., et al., No. A-2643-21 (July 12, 2024)

The insurance carrier issued a standard workers’ compensation and employers liability policy to the respondent. The petitioner was injured at work and filed a workers’ compensation claim, which was resolved through an order approving settlement with dismissal (Section 20). The petitioner also filed a complaint for intentional torts against the respondent, who, in turn, filed a third-party complaint against their insurance carrier, seeking coverage. At the time of the workers’ compensation settlement, there was no reference to the petitioner’s complaint in the Law Division. The petitioner’s complaint alleged intentional wrongs within the exception of the workers’ compensation bar. The respondent then tendered the complaint to their carrier for defense and indemnification, which the carrier declined. The judge granted the insurance carrier’s motion, noting its policy clearly excluded intentional wrongs from coverage. The Appellate Division confirmed the exclusion and policy language were unambiguous in excluding coverage for intentional wrongs and affirmed. 

8.    The Appellate Division analyzes the special employer rule.
Urena v. A&D Freight Logistics, LLC, et al., No. A-2302-21 (July 29, 2024)

Hartford Underwriters Insurance appealed from a February 15, 2022, order denying its motion to dismiss for lack of coverage. A&D Freight cross-appealed from the January 19, 2022, and February 15, 2022, orders, which found it was liable for dependency benefits as the decedent’s employer. The underlying claim resulted from a fatal accident involving the decedent on March 31, 2017. The decedent was the owner-operator of Triple Star Transport, LLC and was assigned to transport materials by A&D Container Logistics and A&D Freight. Triple Star was insured by Hartford; A&D Container was insured by New Jersey Casualty Insurance Company (NJCIC); and A&D Freight was insured by New Jersey Property Liability Insurance Guarantee Association (NJPLIGA). The petitioner (decedent’s wife) filed dependency claims against all three companies and their insurers, which were later amended to include NJM as A&D Container’s insurer. After trial, the judge found Hartford did not cancel its policy per the statute and that all three companies were liable to pay dependency benefits under the theory of dual employment. The Appellate Division found Hartford failed to provide proof that there was personal knowledge of the notice of cancellation being sent to the employer. As such, Hartford failed to meet its burden of proper cancellation. As for the special employer argument, the Appellate Division rejected same, noting the three factors to establish the special employee relationship was present (contract of hire, work essentially that of a special employer and right to control). As such, the Appellate Division affirmed the order denying Hartford’s motion to dismiss for lack of coverage and finding A&D Freight liable for dependency benefits as the decedent’s special employer.

9.    The Appellate Division reviews the intentional wrong exception.
Busby v. Seabrook Bros. & Sons, No. A-1925-21 (August 5, 2024)

The petitioner began working for the employer in January 2017. In April 2017, he injured his right hand while cleaning a commercial mixing machine. The petitioner filed a personal injury action against the respondent, alleging substantial certainty of harm due to removal of the machine’s guard and failure to train the petitioner. The employer moved for summary judgment. After oral arguments, the judge rendered an oral opinion granting the motion. The court found the employer did not engage in any deliberate acts that led to the petitioner’s injury and that their failure to train and to have lockout procedures in place were more akin to negligence. There was also a lack of any prior injuries on Line 9. The Appellate Division affirmed, noting there was no intentional or fraudulent deception by the employer and that the petitioner was injured when Line 9 was unexpectedly activated. 

10.    S2822/A3986 signed into law.

On August 22, 2024, Acting Governor Nicholas Scutari signed S2822/A3986 into law. Under R.S.34:15-64, the attorney fee cap in workers’ compensation cases were at 20%. This bill amends the statute to raise the attorney fee cap in workers’ compensation cases to 25%. This also impacts fees on motions for medical/temporary benefits as well as permanency awards. The rationale behind the amendment was that the 20% fee cap did not account for the additional and increasing duties of workers’ compensation attorneys since the cap was established in 1927. This amendment is effective immediately and applies to all claims pending on or after enactment of the bill. As such, any fees awarded on motions and permanency awards may be subject to this increased fee cap as of August 22, 2024. However, the workers’ compensation judges still have discretion on all fees. 


 

What’s Hot in Workers’ Comp, Vol. 28, No. 12, December 2024 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.

Firm Highlights

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.

News

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. Lindsey, Medical Malpractice Law - Defendants Tampa, FL Michael Archibald, Personal Injury Litigation - Defendants Lindsay G. McCormick, Litigation – Construction Orlando, FL Thomas F. Brown, Personal Injury Litigation - Defendants Dante C. Rohr, Commercial Litigation Fort Lauderdale, FL Kimberly Kanoff Berman, Appellate Practice Patrick M. Delong, Personal Injury Litigation – Defendants Jacksonville, FL  Heather Byrer Carbone, Workers' Compensation Law - Employers Linda Wagner Farrell, Workers' Compensation Law - Employers Elizabeth B. Ferguson, Litigation - Construction James P. Hanratty, Personal Injury Litigation – Defendants Wilmington, DE Sarah B. Cole, Litigation - Insurance Benjamin K. Durstein, Workers' Compensation Law - Employers Maria R. Granaudo, Medical Malpractice Law - Defendants  Keri L. Morris-Johnston, Workers' Compensation Law - Employers Cincinnati, OH Timothy B. Schenkel, Personal Injury Litigation - Defendants David E. 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

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

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.