
    COCHRANE DISTRIBUTING COMPANY and Utica Mutual Insurance Company, Appellants, v. Paul LEWIS, Appellee.
    No. BJ-488.
    District Court of Appeal of Florida, First District.
    Jan. 13, 1987.
    Rehearing Denied April 6, 1987.
    
      Marjorie Gadarian Graham, of Jones & Foster, P.A., West Palm Beach, for appellants.
    Richard Kupfer, of Cone, Wagner, Nu-gent, Johnson, Roth & Romano, and Good-mark & Goodmark, West Palm Beach, for appellee.
   THOMPSON, Judge.

The employer/carrier (E/C) appeal compensation orders awarding claimant a lump sum advance equal to 90 percent of his future permanent total disability (PTD) benefits. We reverse.

The Claimant, a 43 year old man, was rendered PTD as a result of an industrial accident occurring in April 1972. He has a ten year old daughter and an eight year old son who now share a bedroom in his two bedroom, one bath house. He sought a partial lump sum advance of his future PTD benefits in order to have another bedroom and bath added to his house so that each child could have a room. The addition of another bedroom and bath will cost $15,-000. The claimant’s present family income, including compensation benefits, supplemental compensation benefits, social security benefits and his wife’s salary, is $2,929 per month. His present compensation benefit is $242.67 per month and he receives supplemental compensation benefits of $145.20 per month.

The claimant, instead of seeking a lump sum advance of only the $15,000 needed to build the addition to his home, sought an advance of 90 percent of all future PTD benefits. The present value of an advance of 90 percent of future benefits is $46,701. Claimant’s expert financial planner testified that if claimant spends $15,000 on the addition and invests the remaining $31,701 in five year certificates of deposit earning 10.17 percent, he will receive interest income of $268.67 without invading the principal. Because the interest income would be taxable, claimant’s net income from the CD’s would be only $228.55. However, his compensation benefit would continue, although reduced by 90 percent, and would amount to $24.27 per month. Thus claimant’s net income from the interest on the CD’s and the remaining compensation benefit of $24.27 per month would be $252.82 per month, or $10.15 per month more than he presently receives in compensation benefits. During the hearing, the deputy and both attorneys debated the question whether the Division of Worker’s Compensation would view the lump sum advance as tantamount to a washout, and would discontinue the payment of supplemental benefits. Obviously, if the Division did view the advance as the equivalent of a washout, and did discontinue supplemental benefits, the claimant’s net monthly income from all sources would be reduced by $135.05 rather than be increased by $10.15. No evidence was adduced and no legal authority was cited to show whether the granting of the request for a 90 percent lump sum advance would or would not affect claimant’s entitlement to supplemental benefits.

In response to a question by the deputy, the financial planner testified it would not be feasible for the claimant to take out a $15,000 loan to finance the addition. However, the financial planner also testified that the claimant’s total fixed monthly expense for his home mortgages, car loan and credit card loans was only $723 per month, and there was no other evidence given by the claimant or the financial planner showing why borrowing the $15,000 was not feasible.

The deputy also asked what effect claimant’s obligation to pay attorney’s fees in connection with the lump sum advance might have on his financial position, whereupon claimant’s counsel promised to work out something with claimant that will be reasonable to him and will not in any way affect his future income. Counsel did not attempt to explain how this would be possible. The deputy next asked what would happen if she ordered an advance of only the $15,000 required to pay for the addition. Claimant’s counsel’s response was simply that the E/C would have to “take back” a certain amount from each future payment of compensation benefits. Neither counsel for the claimant nor counsel for E/C made any attempt to show the amount of the reduction in claimant’s periodic compensation benefit which would result if the deputy ordered a $15,000 advance rather than the 90 percent advance asked for.

In her order, the deputy found, among other things, that an award of the 90 percent lump sum advance requested would be in claimant’s best interest because “the compensation claimant receives is small, and if the interest market opens up, he will be better able to run his life.” The meaning of this finding is unclear, but without question the finding is speculative and is unsupported by competent substantial evidence. It is clear, however, that the deputy’s finding that the lump sum advance was in the best interest of the claimant was based primarily on the fact that at the time of the hearing the claimant would receive a higher interest rate upon the advanced funds, and a better return on his expected benefits. This is insufficient to demonstrate that the lump sum payment is in claimant’s best interest. Exxon Company, U.S.A. v. Orlando, 444 So.2d 584 (Fla. 1st DCA 1984). The interest market has not opened up as the deputy speculated; indeed, it has fallen to about one-half of the 10.17% the claimant allegedly could have earned at the time of the hearing.

The deputy, apparently relying on the testimony of the financial consultant, also found that “just granting the cost of the addition to the house would not help claimant, as it would increase the monthly expenses of the claimant, and decrease his monthly receipts.” Although the deputy was certainly correct in concluding that awarding the cost of the addition would result in an increase in claimant’s monthly expenses and a decrease in his monthly receipts, these facts alone do not support the finding that an advance of only the $15,000 needed to build the addition to the house would not help the claimant. Because of the insufficiency of the evidence on the subject of claimant’s monthly expenses, there was no basis for the determination, made by the deputy during the hearing on appellant’s motion for rehearing, that awarding only the money needed to build the addition would leave claimant “in a somewhat destitute situation.”

Accordingly, this ease is reversed and remanded for further consistent proceedings.

SHIVERS, J., concurs.

ERVIN, J., dissents with opinion.

ERVIN, Judge,

dissenting.

I dissent. The rule is clear that we should not disturb an order directing a partial lump sum advance to a claimant, unless the deputy has abused his discretion, or unless there is no competent, substantial evidence to support the order. Zarahn v. Milton, 433 So.2d 41 (Fla. 1st DCA 1983). I find the order on review affirmable on both counts. The majority takes exception to the partial advance on several grounds: one being that the cost to build an addition to claimant’s home would only be $15,000, yet the sum ordered to be advanced was $46,701, and the remainder of that sum, after deducting the costs of the home improvement, would be used to purchase certificates of deposits, which, based upon market interest rates prevailing at the time of review, would not yield the amount of interest income available at the time of the hearing before the deputy.

The difficulty of reviewing any compensation order approving a lump sum advance, based upon market interest rates available at the time a claim is in litigation at the trial level, is that the rates have practically always changed by the time of review. Any such variation, however, should never be a factor in our determination of whether the evidence presented before the deputy sustains a compensation award. The record before us clearly supports the deputy’s decision. The financial plan prepared by claimant’s expert, and admitted into evidence without objection, discloses that five-year certificates of deposits then yielded a return of 10.17 percent annually. The fact that an appellant is unable to avail himself of a rate no longer in existence cannot be attributed to his own inactivity for the simple reason that the employer’s appeal by operation of law ordinarily suspends the payment of compensation benefits.

The majority’s opinion seems to fault the advance approved because other alternatives — such as an advance for the home addition only, or a loan for the amount of the addition — were not ordered or clearly shown in the record why they were not considered. Surely the failure to consider alternatives cannot be the basis for deciding that the lump sum advanced represents an abuse of discretion. We are required to confine our inquiry to the the order before us and the record supporting it. Whether other avenues might seem preferable to the course chosen by the deputy is not a cause for appellate incursion into what otherwise appears to be a proper exercise of the trier of facts’ discretion.

The evidence before the deputy at the time of the entry of the order supports the finding that the advance is in the claimant’s best interest, on the grounds that it would give him and his family increased spending power, as well as greater living space within the home by reason of the proposed addition to the home. While alleviation of hardship to the employee and his family is not by itself a legally sufficient reason for an advance payment, when considered together with other circumstances, such as the fact that it would place the employee in “a better short-term financial condition”, Buono v. City of Riviera Beach, 484 So.2d 50, 52 (Fla. 1st DCA 1986), it may be regarded as a valid basis for approval of the requested advancement. Moreover, there is nothing in the record suggesting that the claimant is a spendthrift. Indeed, as found by the deputy, he has demonstrated his ability to manage his financial affairs by refinancing a mortgage into an amount more than double that of the former, while paying out no greater monthly sums on the present mortgage than he had on the old.

The question of attorney’s fees is simply not pertinent to a review of the order on appeal. No portion of the funds to be advanced would be used to pay attorney’s fees. The question only arose when the deputy asked claimant’s counsel how claimant’s fees would be paid in the event the advance were approved, and counsel replied that he would work out the necessary arrangements with his client, subject to future approval by the deputy.

As to the majority’s decision that claimant presented no evidence to support the deputy’s finding that the partial lump sum advance would not affect claimant’s right to supplemental benefits, I agree with claimant that such finding is not dependent on an evidentiary predicate, but is rather a determination of law. This court has held only that washouts preclude a claimant from receiving supplemental benefits, and has never held that a partial advance has such effect. See Shipp v. Florida Work ers’ Compensation Trust Fund, 481 So.2d 76 (Fla. 1st DCA 1986), rev. dismissed, 488 So.2d 831 (Fla.1986).

The language of Section 440.15(l)(e)l, Florida Statutes, itself, pertaining to supplemental benefits, permits the payment of same in situations where “the liability of the employer has not been discharged under the provisions of s. 440.20(12)_” (e.s.) Clearly the payment of a partial advance cannot serve to discharge the employer from any further liability to provide the claimant with compensation benefits. The deputy’s interpretation of the statute is not inconsistent with its provisions.

As the claimant met his initial burden of satisfying the statutory criteria for a lump sum advance under Section 440.20(12), Florida Statutes, cf. Buono v. City of Riviera Beach, and no showing was made that the advance would materially prejudice the employer/ carrier, I would affirm the order on review.

ON REHEARING

THOMPSON, Judge.

Much of the claimant’s motion for rehearing relates to an alleged error in the majority opinion i’egarding the effect of a partial lump sum advance on supplemental benefits paid by the Division of Workers’ Compensation (Division). It is contended that without stating its reason or any citation of authority the majority has ruled that it is within the discretion of the Division to determine whether a partial lump sum advance is “tantamount to a washout”. Claimant further contends that such a ruling will impact and add a further element of uncertainty to every future claim for a partial advance of benefits, and that such result is clearly wrong under existing statutes and should not be allowed to become the law in Florida.

The majority opinion does not hold that the Division has unfettered discretion to determine whether a partial lump sum advance is “tantamount to a washout.” Rather, the majority opinion merely noted that the deputy commissioner (deputy) and the two attorneys had debated the question of whether the Division would view the lump sum advance as tantamount to a washout and would discontinue the payment of supplemental benefits. The majority opinion is not intended to convey the impression that the Division has unlimited authority to interpret statutes administered by it.

The question of the construction of the statute is a question of law, not fact. The next to the last paragraph of the original majority opinion which implies it is a question of fact is deleted. With this modification the petition for rehearing is denied.

SHIVERS, J., concurs.

ERVIN, J., dissents.

ERVIN, Judge,

dissenting.

I dissent to the majority’s denial of rehearing on substantially the same grounds stated in my original dissent. Although I am not sure if it is the majority’s purpose to say in its opinion on rehearing that its reversal of the order on review did not address the issue of whether supplemental benefits can be terminated in the event of a partial lump sum advance, I will assume that the majority, by its deletion of the next to last paragraph of its original opinion, has chosen to leave that question open, and that it was nonessential to its decision.  