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Judges differ in ruling application in set-off case

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Indiana Court of Appeals judges couldn't agree on the application of a previous case involving the set-off of workers' compensation payments, leading to a split court and three separate opinions in an insurance company's attempt to recoup a portion of workers' compensation benefits following a jury trial.

In Travelers Indemnity Company of America v. Jerry Jarrells, No. 29A02-0807-CV-669, Travelers claimed it was entitled to a statutory lien and/or reimbursement pursuant to Indiana Code Section 22-3-2-13 for the pro rata value of workers' compensation payments it made on behalf of Jerry Jarrells. Jarrells was injured while at work on a construction site and received workers' compensation from Travelers. Jarrells was awarded more than $500,000 in a third-party personal injury action against the general contractor and subcontractor. At trial, the jury was given an instruction that they should consider Jarrells' collateral source payment - nearly $66,000 of workers' compensation payments - when determining his amount of damages.

Travelers appealed the denial of its motion for summary judgment on whether Jarrells should have to pay back the pro rata value of the compensation benefits he received.

Judges Carr Darden, Nancy Vaidik, and Patricia Riley disagreed as to the application of Pendleton v. Aguilar, 827 N.E.2d 614, 621 (Ind. Ct. App. 2005), to the instant case. In Pendleton, the appellate court reversed a trial court's order that granted the defendant tortfeasor a set-off for workers' compensation payment after the jury received evidence of such payments and heard the same jury instruction as in Jarrells' case.

The majority - Judges Darden and Vaidik - found Travelers to be entitled to summary judgment although for different reasons. The appellate court presumed the jury followed the trial court's instructions and applied the law contained within it; thus, Travelers is entitled to a statutory lien and or reimbursement, wrote Judge Darden.

The judges couldn't agree on the application of Pendleton to the outcome of this case. Judge Darden found Pendleton to be distinguishable in that it involves an insurer, which pursuant to its contract of insurance and Indiana's statutory lien, seeking a pro rata reimbursement of the benefits after the worker recovered a judgment for damages against a third-party.

"By its language in Indiana Code section 22-3-2-13, the Indiana Legislature expressed a clear intent to create a statutory lien in and for the benefit of an employer's compensation insurance carrier who has made worker's compensation payments on behalf of an injured worker, where the injured worker has recovered a judgment against a third party who has been found liable for the worker's injuries," he wrote.

Judge Vaidik, in her concurring in result in a separate opinion, agreed Pendleton is distinguishable from Jarrells' case but not for the reasons stated by Judge Darden. She wrote it's because in Pendleton, he was a Florida resident and received workers' compensation benefits from the Florida Workers' Compensation Insurance Guaranty Fund rather than benefits pursuant to Indiana law. There's nothing in that case to indicate he was required to repay the benefits or that the jury was informed he was required to repay them. Judge Vaidik found Pendleton doesn't supersede or excuse the statutory lien obligation, so she concurred in result.

Judge Patricia Riley dissented, writing the majority attempts to distinguish Pendleton on the basis it involves an insurer seeking a pro rata reimbursement, but she believes Pendleton is on point for the situation in the instant case.

"Because the jury was instructed that Jarrells could not recover more than once for any item of loss sustained, it adjusted its damage award downwards, as was done in Pendleton," she wrote. "By enforcing the lien, the majority is in effect imposing a double set-off on Jarrells."

The majority remanded the case with instructions to enter judgment in favor of Travelers and to determine the value of Travelers' lien and pro rata share for purposes of reimbursement.

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  1. Frankly, it is tragic that you are even considering going to an expensive, unaccredited "law school." It is extremely difficult to get a job with a degree from a real school. If you are going to make the investment of time, money, and tears into law school, it should not be to a place that won't actually enable you to practice law when you graduate.

  2. As a lawyer who grew up in Fort Wayne (but went to a real law school), it is not that hard to find a mentor in the legal community without your school's assistance. One does not need to pay tens of thousands of dollars to go to an unaccredited legal diploma mill to get a mentor. Having a mentor means precisely nothing if you cannot get a job upon graduation, and considering that the legal job market is utterly terrible, these students from Indiana Tech are going to be adrift after graduation.

  3. 700,000 to 800,000 Americans are arrested for marijuana possession each year in the US. Do we need a new justice center if we decriminalize marijuana by having the City Council enact a $100 fine for marijuana possession and have the money go towards road repair?

  4. I am sorry to hear this.

  5. I tried a case in Judge Barker's court many years ago and I recall it vividly as a highlight of my career. I don't get in federal court very often but found myself back there again last Summer. We had both aged a bit but I must say she was just as I had remembered her. Authoritative, organized and yes, human ...with a good sense of humor. I also appreciated that even though we were dealing with difficult criminal cases, she treated my clients with dignity and understanding. My clients certainly respected her. Thanks for this nice article. Congratulations to Judge Barker for reaching another milestone in a remarkable career.

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