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Justices reaffirm precedent on worker's comp claims

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The Indiana Supreme Court has upheld a decision by the state Worker's Compensation Board dismissing an injured trucker's claim, finding the employee's settlement with a third-party driver voided whatever responsibility the company had on the issue.

But in deciding the case, the justices also called out an Indiana Court of Appeals panel for stepping away from a precedent in place since at least 1988 by doing something that should be left up to the state's lawmakers.

The unanimous ruling came Thursday afternoon in Jimmie C. Smith v. Champion Trucking Company, Inc., No. 93S02-0906-EX-276. The appeal stems from a matter before the Worker's Compensation Board of Indiana, relating to an August 2003 accident in Ohio by a truck driver working for Jeffersonville-based Champion Trucking. After the crash, the company paid $4,342 of Smith's initial medical expenses through worker's compensation coverage. About five months after leaving the company in August 2004, Smith asserted a permanent injury and tried to adjust his claim to get compensation for additional medical expenses. He also retained another attorney to try and recover from the motorist who'd mostly caused the accident in Ohio.

While Champion wasn't notified of any litigation or settlement negotiations, Smith's worker's compensation attorney at one point notified the company about the intent to sue that third-party driver. The company notified Smith's private attorney in July 2005 about its entitlement to a lien on any settlement proceeds for what it had already paid the former worker, but Smith settled for $10,342 that same month without notifying the former employer. The settlement released that third-party driver from any liability for the accident and left the dispute between Smith and Champion.

Smith's attorney paid 75 percent of the medical lien amount to Champion and kept 25 percent for the attorney's fees authorized by the worker's compensation statute, and the company soon after moved to dismiss Smith's claim adjustment application because of the settlement.

In July 2008, the Worker's Compensation Board ruled that Smith's settlement terminated Champion's liability because of Indiana Code § 22-3-2-13 (2004), which bars employees from getting any additional employer compensation after a third-party settlement. Smith appealed that the provision didn't apply because he'd settled for less than what worker's compensation had provided.

Past precedent generally addressed that topic and provided some guidance, which was an issue the Supreme Court hadn't specifically ruled on in the past. In February 2009, an Indiana Court of Appeals three-judge panel reversed the board's determination and found Smith should be allowed to continue his worker's compensation claim pending at the time of settlement. Judges Mark Bailey, Michael Barnes, and Paul Mathias relied on DePuy, Inc. v. Farmer, 847 N.E.2d 160, 164 (Ind. 2006), which held that a "final judgment" against third parties effectively ends an employer worker's compensation liability.

At that time in DePuy, justices recognized the issue that Smith is now raising but specifically chose not to address the question.

But with Smith's case now on transfer, the Indiana Supreme Court held differently and reinforced the caselaw that settlements, regardless of the amount, do in fact negate any further company responsibility for worker's compensation coverage if that person hasn't first gotten consent. The justices applied what it called a long line of state decisions to support the proposition. Specifically the high court said Paragraphs 1 and 2 of Section 13 of the Worker's Compensation Act impose a bright-line rule that's long been recognized by Indiana courts before this case.

"For at least twenty years, the Court of Appeals has held that if an employee settles with a third party without first obtaining employer's consent, the employer's sole avenue for reimbursement of worker's compensation payments is through the employee, and the employer may not continue to pursue the third party," Justice Theodore Boehm wrote for the court, citing State v. Mileff, 520 N.E. 2d 123 (Ind. Ct. App. 1988). "Although some other jurisdictions do not adhere to the same interpretation of similar provisions, the Court of Appeals, citing the interest of finality from the point of view of the third party, has long held that once an employee releases the third party from liability related to the injury-causing accident, the employer may not continue to pursue that third party. Given this longstanding precedent on an issue of statutory interpretation, we believe it is up to the legislature to implement any change."

The justices affirmed the full compensation board's dismissal of Smith's adjustment application, and Justice Brent Dickson noted that he concurred in result.

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  1. Someone off their meds? C'mon John, it is called the politics of Empire. Get with the program, will ya? How can we build one world under secularist ideals without breaking a few eggs? Of course, once it is fully built, is the American public who will feel the deadly grip of the velvet glove. One cannot lay down with dogs without getting fleas. The cup of wrath is nearly full, John Smith, nearly full. Oops, there I go, almost sounding as alarmist as Smith. Guess he and I both need to listen to this again: https://www.youtube.com/watch?v=CRnQ65J02XA

  2. Charles Rice was one of the greatest of the so-called great generation in America. I was privileged to count him among my mentors. He stood firm for Christ and Christ's Church in the Spirit of Thomas More, always quick to be a good servant of the King, but always God's first. I had Rice come speak to 700 in Fort Wayne as Obama took office. Rice was concerned that this rise of aggressive secularism and militant Islam were dual threats to Christendom,er, please forgive, I meant to say "Western Civilization". RIP Charlie. You are safe at home.

  3. It's a big fat black mark against the US that they radicalized a lot of these Afghan jihadis in the 80s to fight the soviets and then when they predictably got around to biting the hand that fed them, the US had to invade their homelands, install a bunch of corrupt drug kingpins and kleptocrats, take these guys and torture the hell out of them. Why for example did the US have to sodomize them? Dubya said "they hate us for our freedoms!" Here, try some of that freedom whether you like it or not!!! Now they got even more reasons to hate us-- lets just keep bombing the crap out of their populations, installing more puppet regimes, arming one faction against another, etc etc etc.... the US is becoming a monster. No wonder they hate us. Here's my modest recommendation. How about we follow "Just War" theory in the future. St Augustine had it right. How about we treat these obvious prisoners of war according to the Geneva convention instead of torturing them in sadistic and perverted ways.

  4. As usual, John is "spot-on." The subtle but poignant points he makes are numerous and warrant reflection by mediators and users. Oh but were it so simple.

  5. ACLU. Way to step up against the police state. I see a lot of things from the ACLU I don't like but this one is a gold star in its column.... instead of fighting it the authorities should apologize and back off.

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