Teco Energy, Inc/ Teco Services, Inc. v. Michael K. Williams, 17-0233

Background

Claimant (Michael Williams), a journeyman electrician, slipped at work on April 25, 2013 and sustained an accepted left medial meniscal tear; employer/carrier (E/C) authorized treatment with Dr. Morse.
Claimant had documented preexisting left knee osteoarthritis (not treated before the accident) and prior right-knee surgery in 2011; Dr. Morse initially attributed ~70% of surgical need to the work aggravation and 30% to arthritis.
After authorized meniscal surgery and MMI with minimal residual symptoms, Claimant later developed worsening tri-compartmental osteoarthritis and Dr. Morse recommended a total left knee replacement; Dr. Morse (at depo) and the EMA attributed the primary need for replacement to preexisting osteoarthritis.
Claimant sought authorization for total knee replacement; E/C denied compensability of the surgery, asserting the work injury was not the major contributing cause (MCC). An EMA (appointed under §440.13(9)) concluded osteoarthritis was the principal cause.
The JCC found osteoarthritis qualified as a preexisting condition for MCC analysis but barred E/C from asserting the MCC defense based on the JCC’s sua sponte application of the 120-Day Rule (§440.20(4)), concluding E/C waived the right to deny compensability.
The First DCA reversed: the court held the JCC erred by raising the 120-Day Rule sua sponte and that the MCC defense was not foreclosed as a matter of law; on remand the EMA’s opinion that osteoarthritis — not the work injury — was the MCC meant the surgery was not compensable.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether claimant's preexisting arthritis qualifies as a "preexisting condition" under §440.09(1)(b) for MCC analysis	Claimant argued the E/C accepted compensability of the arthritis by authorizing treatment, so arthritis cannot be treated as a contributing cause against compensability	E/C argued arthritis is a qualifying preexisting condition and can be considered in MCC analysis	Court: Osteoarthritis qualifies as a preexisting condition for MCC analysis (per Pabellon-Nieves test: whether condition independently required treatment before/after accident)
Whether E/C was barred, as a matter of law, from asserting MCC because it failed to deny compensability within 120 days of authorizing treatment for the arthritis	Claimant argued E/C authorized treatment for arthritis and failed to timely deny compensability under §440.20(4), thus waived the right to contest compensability of the arthritis	E/C contended it preserved defenses and that waiver under §440.20(4) is an affirmative defense that must be properly pled by claimant	Court: JCC erred to apply the 120-Day Rule sua sponte; waiver under §440.20(4) is an affirmative defense that must be timely & specifically raised by claimant — JCC may not raise it sua sponte
Whether the JCC could sua sponte apply waiver under the 120-Day Rule	Claimant relied on JCC's application to foreclose E/C defenses	E/C argued due process violated; claimant must plead waiver/estoppel as affirmative defense	Court: JCC violated due process by raising waiver sua sponte; affirmative defenses must be pled and proved by the party asserting them
Whether the total knee replacement was compensable given medical testimony	Claimant contended the work accident was the MCC of need for replacement (IME supported claimant)	E/C relied on EMA who placed majority causation on preexisting osteoarthritis, showing work injury was not MCC	Court: Because EMA found osteoarthritis — not the work injury — was MCC, the surgery is not compensable (JCC's bar on MCC reversed)

Key Cases Cited

Benniefield v. City of Lakeland, 109 So. 3d 1288 (Fla. 1st DCA 2013) (standard of review: CSE for facts, de novo for law)
Engler v. Am. Friends of Hebrew Univ., 18 So. 3d 613 (Fla. 1st DCA 2009) (E/C may challenge whether accident remains MCC for treatment)
City of Pembroke Pines v. Ortagus, 50 So. 3d 31 (Fla. 1st DCA 2010) (E/C must pay while compensable condition remains MCC)
Cespedes v. Yellow Transp., Inc., 130 So. 3d 243 (Fla. 1st DCA 2013) (MCC analysis requires competing causes within statutorily enumerated categories)
Osceola Cty. Sch. Bd. v. Pabellon-Nieves, 152 So. 3d 733 (Fla. 1st DCA 2014) (test for qualifying preexisting condition: whether condition independently required treatment before/after accident)
Certistaff, Inc. v. Owen, 181 So. 3d 1218 (Fla. 1st DCA 2015) (JCC may err by focusing only on physician-provided treatment to the exclusion of other evidence of preexisting condition)
Bynum Transp., Inc. v. Snyder, 765 So. 2d 752 (Fla. 1st DCA 2000) (120-Day Rule: carrier must pay, pay-and-investigate within 120 days, or deny)
Kestel v. City of Cocoa, 840 So. 2d 1141 (Fla. 1st DCA 2003) (120-Day Rule consequences explained)
Sierra v. Metropolitan Protective Servs., 188 So. 3d 863 (Fla. 1st DCA 2015) (framework for analyzing identity of condition and timeliness under 120-Day Rule)
McIntosh v. CVS Pharmacy, 135 So. 3d 1157 (Fla. 1st DCA 2014) (120-Day Rule applies to first provision of treatment for a condition, even if long after accident)
School Dist. of Hillsborough County v. Dickson, 67 So. 3d 1080 (Fla. 1st DCA 2011) (JCC may not sua sponte raise waiver under §440.20(4); due process)
McKenzie Tank Lines, Inc. v. McCauley, 418 So. 2d 1177 (Fla. 1st DCA 1982) (waiver and estoppel are affirmative defenses that must be pleaded and proved)