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Dead worker's estate can't collect on liability policy

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The 11th U.S. Circuit Court of Appeals on Thursday found that Florida's workers compensation exclusive remedy provision prevents a $9.5 million liability judgment from being paid by an insurer to the estate of a Florida worker killed on the job.

The appellate court's ruling in Leticia Morales v. Zenith Insurance Co. was based on a December decision from the Florida Supreme Court, which found that employer liability insurance policies can exclude coverage for claims that could otherwise be paid by a workers comp policy.

Santana Morales Jr. was crushed to death by a palm tree being unloaded from a trailer in 1997 while working for Seffner, Florida-based Lawns Nursery & Irrigation Designs Inc., court records show. His wife, Leticia Morales, received a workers comp settlement for her husband's death from Lawns Nursery and the company's comp insurer, Zenith, which paid a total of $100,000 in comp benefits.

The settlement agreement included a release that said workers comp was the exclusive remedy for Ms. Morales in her husband's case, records show. However, Ms. Morales had filed a separate wrongful death lawsuit in Florida court that was pending when the settlement was reached, and a jury in that case awarded a $9.525 million judgment in 2005 against Lawns Nursery and Zenith.

Zenith appealed the jury award, arguing that an employer liability policy that it had issued to Lawns Nursery contained an exclusion that would have prevented the jury award from being paid under Florida workers comp exclusive remedy rules.

The case made its way to the 11th Circuit, which asked the Florida Supreme Court in 2013 to clarify whether Florida law allows employer liability policies to exclude coverage for claims that could be covered under a workers comp policy. The Florida high court found last month that exclusivity rules applied for the employer liability policy that would cover the jury award in Mr. Morales' case.

A three-judge panel of the 11th Circuit unanimously found, based on the Florida Supreme Court's ruling, that Zenith is not liable to cover the $9.5 million judgment against Lawns based on exclusive remedy rules.