By Michael J. Gelfand, Esq. / Published March 2018
What happens if the owner of a contractor or sub-contractor business is injured on a Florida community association’s property? Frequently, owners of these businesses assert that they are “exempt” and do not need to buy workers’ compensation coverage. Is that true? Will the workers’ compensation law really protect the association when the contractor/sub-contractor has no coverage?
This situation could occur and does occur at a number of Florida communities. A similar claim was recently addressed in Gladden v. Fisher Thomas, Inc., 42 Fla. L. Weekly D 2441 (Fla. 1st DCA, November 15, 2017). The National Park Service hired Green-Simmons as the general contractor for work at the Opal Beach Ranger Station. Green-Simmons subcontrac-ted flooring work to Fisher-Thomas Inc. and Wilson Floor Covering.
As occurs from time to time, the sub-contractor contracted for a sub-sub-contractor to do the work. Thus, Wilson Flooring sub-contracted with Gladden’s Carpet & Vinyl to perform Wilson’s work. The contract between the National Park Service and Green-Simmons required the contractor and sub-contractors to maintain workers’ compensation insurance. Nonetheless, Charles Gladden, as an officer of Gladden’s Carpet, elected to be exempt from workers’ compensation coverage, and did not obtain coverage.
While performing the flooring installation, Gladden of Gladden Carpet was allegedly injured when an employee of Fischer-Thomas lifted materials to Gladden with a forklift. The load was improperly secured, and Gladden fell from the second floor of the job site, which had no railing.
Gladden sued the contractor and the sub-contractors for negligence. The trial court granted judgment for the contractor and the sub-contractors, ruling that the defendants were entitled to workers’ compensation immunity and could not be sued because Gladden was an “employee” at the time of the accident.
The Florida appellate court agreed with the decision of the trial court but, for a different, and perhaps for associations, a better reason. The appellate court explained that Gladden was not an “employee” under the Workers’ Compensation Law at the time of the accident. The court noted that the applicable law, Section 440.02(15)(d)8, Fla. Stat. (2008), provides that the definition of “employee” does not include:
[a]n officer of a corporation that is engaged in the construction industry who elects to be exempt from the provisions of this chapter, as otherwise permitted by this chapter. Such officer is not an employee for any reason until the notice of revocation of election filed pursuant to s. 440.05 is effective.
Because Gladden filed the required election for exemption, he did not fit within the definition of “employee” at the time of his accident.
The appellate court concluded that Gladden could not sue the contractor and sub-contractors for injuries sustained in the course of his employment after he elected, as a corporate officer, to be exempt from workers’ compensation coverage. As the court stated, “[s]ince the corporate employer reaps the benefit of reduced workers’ compensation premiums for the exempt officer, it makes sense that there is a risk associated with the benefit.” The risk of an election for exemption is injury and no method to easily collect compensation.
This case highlights the importance for associations to carefully review their contracts and related paperwork, especially insurance and workers’ compensation documentation. Contract terms outlining worker’s compensation coverage, duties, and responsibilities should be confirmed. Also, was the exemption paperwork proper?
Be careful because many times contractors and sub-contractors have claimed an exemption but are not exempt! Check the paperwork!
In another negligent injury case that could arise in a community association context and provides guidance, a Florida appellate court recently ruled that a property owner was not liable for a patron allegedly injured after slipping and falling on a grease spot on a sidewalk. In Miami-Dade County v. Jones, 42 Fla. L. Weekly D 2382 (Fla. 3rd DCA, November 8, 2017), the facts show that that while visiting a barbeque stand located on private property operated by a sports club, Jones slipped and fell on a greasy sidewalk owned by the county.
Jones sued the sports club for creating a dangerous condition on the sidewalk and sued the county for negligently maintaining the sidewalk by allowing the dangerous condition to remain. Jones alleged that a faulty grease disposal system underneath the barbeque stand caused grease to spill out onto the sidewalk. The jury found the sports club 50 percent liable and the county 50 percent liable.
The Florida appellate court reversed the final judgment against the county, finding that Jones failed to introduce any evidence showing that the county had notice of the dangerous condition. The court explained that in order to recover for injuries received in a slip and fall case, the plaintiff must show that the defendant responsible for the premises had notice of the dangerous condition, actual or constructive. Because Jones agreed that the county did not have actual knowledge of the grease spill on the sidewalk, Jones had to prove that the county should have known about the grease spill.
The appellate court concluded that Jones did not present any evidence that a grease spill ever occurred on the sidewalk before Jones fell. Therefore, there was no evidence that the county had constructive notice of the grease spill on the sidewalk.
Although the owner of the sidewalk was not found liable in this case, associations owning or controlling property, especially sidewalks and other walkways, should properly maintain the premises, especially if an association becomes aware of a potentially dangerous condition. When there is notice, investigate!
Michael J. Gelfand, Esq.
Senior Partner of Gelfand & Arpe, P.A.