What Will a Denial of Costs Actually 'Cost' You?

Jennings v. Habana Health Care Center, 183 So. 3d 1131 (Fla. 1st DCA 2015), has been the law for almost five years, but many claims adjusters are still routinely denying entitlement to costs when responding to a petition. If you’ve been in this industry for a while and feel confident you have provided the requested benefits timely, you know it’s second nature to answer a petition indicating “costs and fees are not due or owing.” However, following the Jennings opinion, this blanket denial of entitlement to costs can have significant consequences, including exposure for attorney’s fees where fees would not have otherwise been due.

In Jennings, the First District Court of Appeal held that a claimant can be entitled to litigation costs even when the requested benefit has been timely provided. A quick recap of the facts in Jennings:

• September 9, 2014 - claimant filed a PFB for authorization of the orthopedic evaluation;
• September 11, 2014 - the carrier received the claimant’s PFB; and
• September 12, 2014 - the carrier notified the claimant’s attorney of an appointment with an orthopedic physician (to occur on September 15, 2014).

The JCC found the claimant was not entitled to costs because the employer/carrier timely responded to the petition pursuant to §440.192(8) and §440.34(3)(d), F.S., and, therefore, she was not the prevailing party. Unfortunately, the First District Court of Appeal found that timeliness is irrelevant in addressing entitlement to costs, as the statute specifically distinguishes between entitlement to costs and entitlement to attorney’s fees. Pursuant to §440.34(3), F.S., “if any party should prevail in any proceedings before a judge of compensation claims or court, there shall be taxed against the non-prevailing party the reasonable costs of such proceedings, not to include attorney’s fees.” The court found that, pursuant to the statute, there is not a time limitation for determining entitlement to costs and, based on the record, the claimant was the prevailing party since her petition included certification that she made a good faith effort to resolve the dispute over benefits, prior to filing her petition, and the employer/carrier did not challenge that certification.

In light of this decision, it is crucial for adjusters to take an extra step, upon receipt of a petition, to confirm whether or not the claimant made a good faith effort before filing the petition so the adjuster can accurately respond on the issue of cost entitlement. If the claimant made a good faith effort, the carrier should concede entitlement to costs associated with the filing of the petition even if the benefit is provided timely. Otherwise, entitlement to costs remains an issue to be litigated, which has recently led some judges of compensation claims to award attorney’s fees for securing the “benefit” of proving entitlement to costs. In these cases, denying cost entitlement (where costs were due) resulted in carriers paying thousands of dollars in attorney’s fees for benefits they timely provided.