Hinkofer, Joseph v. School District of Palm Beach County

Palm Beach Circuit Court (Andy Borah)(11-22-21) – After the parties were unable to informally resolve the School District’s WC lien on the claimant’s third-party recovery, the claimant filed  a Petition for Equitable Distribution.  Circuit Court Judge Coates presided over the Equitable Distribution Hearing to determine the School District’s third-party lien amount and the Manfredo percentage of lien recovery on the claimant’s $500,000.00 third-party settlement, which netted the claimant $286,478.00. The claimant asserted the lien recovery should be $6,395.87 while the School District demanded $98,492.53.

The claimant argued that a $127,690.00 payment to Delray Medical Center should not be included in the School District’s lien amount since such payment was not included on the payout ledger provided to claimant prior to attending the mediation in his third-party case. The Judge rejected this argument as the E/C never indicated that the amount listed on the payout ledger was a final amount and the adjuster previously sent the claimant’s attorney an email specifically indicating that the amount on a previously provided payout ledger was not final since the hospital bill still needed to be paid. The Judge further held that the claimant never provided the School District with advance notice that he would be attending a mediation in his third-party case where an accurate accounting of the School District’s lien was needed.

In determining the Manfredo percentage of lien recovery, the claimant provided expert testimony that the true value of his third-party case was $2,500,000.00 thus entitling the School District to an 11% recovery. The School District provided expert testimony that the true value of the third-party case was $536,000.00 thus entitling the School District to a 53% recovery. The Judge determined that the true value of the third-party case was $750,000.00 thus giving the School District a 38.2% recovery. When applying the 38.2% to the $185,834.97 total lien amount, the School District’s lien recovery is $70,988.96.

Equitable Distribution hearings are rare in WC liens, as the parties usually arrive at an agreement on the percentage of lien recovery. However, where claimant/plaintiff’s counsel are unreasonable, carriers should analyze whether the circuit court may provide an equal, or higher amount than initially sought.   Click here to view Hinkofer order