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December 1, 1994 With the holiday season upon us, it is appropriate to remember that many persons and corporations are responsible to properly operate or maintain property. Everyone has heard stories of foolish accidents that occur near holiday time. Two recent Florida court decisions point out how property owners and employers may be liable for incidents that perhaps could have been avoided with the exercise of proper care. Not to dampen the holiday spirit, the firm provides a reminder that property obligations are required to be responsibly exercised. All of us want to avoid accidents. This impulse is usually generated because of a general moral desire to avoid undue harm to others. Generally, this type of conduct makes, if nothing else, good business sense and engenders loyalty and good faith among customers, members, and employees. At the same time, officers and directors of corporations and sole proprietors must be cognizant of their legal responsibilities and potential liabilities. Thus, the two outlines follow. INSURANCE: WORKERS' COMPENSATION COVERAGE DIMINISHES
AS MANAGERS' OR SUPERVISORS' NEGLIGENCE BECOMES OUTRAGEOUS.
There is a common misperception that Florida Workers' Compensation coverage confers an absolute protection to employers when an employee is hurt. The recent decision in Hawkins v. Cordy, _____ So.2d _____, 19 Fla. L Weekly D 1940 (Fla. 3rd DCA, 1994) provides instruction to all employers. While nearly all employers have recognized the overwhelming benefits of having a safe accident-free work place, both in terms of worker productivity and loyalty, the Hawkins decision indicates that there are a few employers who may think otherwise. The facts outlined in the Hawkins decision are not complex. Hawkins was employed by a company painting a warehouse. Allegedly Hawkins and other employees told a manager, Mr. Cordy, that scaffolding was defective. In response Mr. Cordy allegedly promised to undertake repairs. Hawkins was on the scaffolding when it collapsed. Despite workers' compensation laws, Hawkins sued Cordy for damages resulting from his injuries claiming that Mr. Cordy was not just negligent, but grossly negligent. When Hawkins' claim went to court, the trial judge dismissed the case. The trial judge ruled that workers' compensation laws bar an employee from suing an employer in this situation. Hawkins appealed. The Third District Court of Appeals reversed the trial court's dismissal and directed that the claim may again proceed in the trial court. The appellate court noted that the workers' compensation laws were amended in 1988. The legislature extended workers' compensation coverage to protect "employees [who] are engaged in managerial or policy-making decisions." This immunity from suit is for acts committed in the employee's managerial capacity. The statute immunized not only corporate employers, but also sole proprietors, and partners. Interpreting the law, the appellate court ruled that the issue to be determined at trial is whether a grossly negligent employer who caused an injury was performing a policy-making function or an operational implementing function. If the former, then workers' compensation immunity is granted. If the latter, then immunity is not granted. The crux of the case is that if a complaint is filed, a factual decision must be made. Usually a trial is required for a factual decision to be made. Summary procedures such as that allowed by Florida Rules of Civil Procedure 1.510, Motion for Summary Judgment, are generally not available. Thus, while employees have added protections against employers who may be grossly negligent, the cost to employers will be greater. To provide some protection, employers may desire to ensure that they have proper directors/officers/managerial liability insurance coverage and that coverage, together with premises liability coverage, provides protection for claims such as that brought by Mr. Hawkins. PROPERTY OWNERS MAY BE LIABLE
FOR INDEPENDENT CONTRACTOR'S NEGLIGENCE
Property owners, whether associations or otherwise, constantly inquire as to the level of the owner's liability for injuries caused by contracted workers and companies. The recent decision of McCall v. Alabama Bruno's, Inc., _____ So.2d _____, 19 Fla. L Weekly D 1397 (Fla. 1st DCA 1994) provides added insight into the extent of a property owner's liability for an independent contractor's negligence. Alabama Bruno's, a 24-hour grocery store, hired United Maintenance to scrub the store's floor. At about 6:30 a.m. United Maintenance was cleaning an area of the grocery store allegedly without placing "wet floor signs". As a result, Ms. McCall claimed she slipped and fell suffering severe injuries. Alabama Bruno's claimed that it could not be sued for United Maintenance's alleged negligence. The trial court agreed with Alabama Bruno's. The First District Court of Appeals reversed the trial court's ruling and directed that the case should proceed to trial. The appellate court noted the general Florida rule that an employer of an independent contractor is not liable for an independent contractor's negligence. The rationale for the rule is that the employer has very little control over how an independent contractor undertakes the work.
McCall's claim did not deal with improper hiring, the first exception. Similarly, there was no "special relationship" present. The appellate court's decision turned upon the third exception, that there was a special or dangerous condition present. The court noted that the undertaking of floor cleaning early in the morning in an open store would create a potentially dangerous condition. The decision followed the comments of a number of legal commentators and followed from the results in other decisions. This decision should be a warning to property owners, including associations, that the hiring of an independent contractor does not ensure immunity from claims arising from a contractor's negligence. The first threshold is determining whether the employed person or company is an independent contractor. Because property owners and associations exercise greater control over contractors, many companies that were previously thought of as independent contractors may not be. Additionally, associations many times have a special duty set forth in declarations of covenants of condominiums which may otherwise exclude independent contractor's acts from the suit immunity. This case points out the inherent dangers created by many types of work. Undoubtedly, this case will relate to slip and fall claims in hallways, garages and on pool decks. The courts appear to hold that when a property owner knows or should know that work will create a dangerous condition, the owner is required to take steps to ensure that others are not damaged or injured by the condition. Thus, while associations may not be in a position to direct an independent contractor, the independent contractor's work should still be monitored and when appropriate, corrective measures implemented. QUESTION & ANSWER SHEET UPDATE
Most condominium and cooperative associations are starting new fiscal years. Most of these association's prepared the Questions and Answers Sheets required by law on a calendar basis with assessment information. Thus, the assessment information will probably be out of date after the start of the new year. The Condominium and Cooperative Acts as well as the Division of Land Sales rules require Questions and Answers sheets to be updated annually. Each Sheet must state an effective date. Thus, condominium and cooperative associations are reminded to update their question and answer sheets. Updating should include not only assessment information, but restriction, voting and litigation changes. COLLECTION COSTS INCREASE
The postal service cost increase announcement was the last straw. As clients know, the "costs" for collection letters have not increased in over three years. In that time, the firm's actual costs steadily increased. Thus, effective January 1, 1995 the collection "costs" for a ten-day "initial demand" letter will be $6.00, and for a thirty-day "notice of intent to foreclose lien" letter will be $23.25. We are proud to announce that there will be no increase in the attorney's fees for either item. CONGRATULATIONS
Clients will be receiving communications from Laurie Manoff, Esq. No, the firm has not hired a new attorney. Instead congratulations are extended to the former Laurie Cohen and Stuart Manoff, who were married last month. We wish them the best! HAPPY HOLIDAYS
The attorneys and support staff at Gelfand & Arpe, P.A. extend to our client family our best wishes for the holiday season. To allow our hard working staff time with their families the office will be closed for business on December 26th, 1994.
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