ILNews

Third-party settlement ends fund liability

Jennifer Nelson
January 1, 2008
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The Indiana Supreme Court held in a case of first impression in worker's compensation that when a settlement with a third-party ends an employer's liability, the liability of the Second Injury Fund will also be terminated. However, when the Indiana Worker's Compensation Board approves an agreement by the employer to continue paying worker's comp benefits after the settlement, the injured employee may make a claim to the Second Injury Fund.

In Ronald Mayes v. Second Injury Fund, No. 93S02-0802-EX-0107, Ronald Mayes appealed the Indiana Worker's Compensation Board's decision to deny his claim for entry into the Second Injury Fund on the basis of his confidential settlement with Federal Express, a third-party, after he was injured while working for Main Tech Corporation while on site at Fed Ex.

The Indiana Court of Appeals affirmed the board's decision, which ruled the settlement alleviated Main Tech from having to pay any further compensation and alleviated the Second Injury Fund from the need to pay. The fact Main Tech voluntarily agreed to continue to pay Mayes is outside the purview of the Indiana Worker's Compensation Act.

The Supreme Court overturned the board's decision because in the settlement between Mayes and Fed Ex, Main Tech voluntarily maintained its liability even though it would have been terminated under Indiana statute. The board approved this agreement and therefore approved a continuation of liability, wrote Chief Justice Randall T. Shepard.

"... (T)he Second Injury Fund's liability is derivative of the employer's liability. If the Board approves an agreement continuing an employer's liability despite third party settlement, it follows that the Second Injury Fund should also remain liable," he wrote.

If Main Tech and Mayes hadn't sought approval by the board, then Main Tech's payments to Mayes would have been outside the purview of the Indiana Worker's Compensation Act. The board could have refused to approve the agreement, but since it did not, Mayes' settlement with Fed Ex didn't terminate the Second Injury Fund's liability.

"In the future, if the Board is concerned about double recovery, it should refuse approval of agreements involving confidential settlements or insist that the agreement contain a provision releasing the Second Injury Fund from liability," the chief justice wrote.

The high court determined in general, under Indiana statute, the Second Injury Fund's liability is a derivative of the employer's liability, and as such, settlements with third parties preclude Second Injury Fund eligibility.

The Indiana General Assembly's decision to make explicit reference to Second Injury Fund benefits in its enactment on termination after a third-party settlement led the court to rule the legislators intended for the liability of the Second Injury Fund to be a derivative of the employer's liability.

The policy of Indiana Code Section 22-3-2-13 is to bar any worker's compensation, regardless of who pays it, in the event the employee gets money from a third-party settlement that is as much or more than the total amount of recoverable compensation, he wrote.
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  1. A traditional parade of attorneys? Really Evansville? Y'all need to get out more. When is the traditional parade of notaries? Nurses? Sanitation workers? Pole dancers? I gotta wonder, do throngs of admiring citizens gather to laud these marching servants of the constitution? "Show us your billing records!!!" Hoping some video gets posted. Ours is not a narcissistic profession by any chance, is it? Nah .....

  2. My previous comment not an aside at court. I agree with smith. Good call. Just thought posting here a bit on the if it bleeds it leads side. Most attorneys need to think of last lines of story above.

  3. Hello everyone I'm Gina and I'm here for the exact same thing you are. I have the wonderful joy of waking up every morning to my heart being pulled out and sheer terror of what DCS is going to Throw at me and my family today.Let me start from the !bebeginning.My daughter lost all rights to her 3beautiful children due to Severe mental issues she no longer lives in our state and has cut all ties.DCS led her to belive that once she done signed over her right the babies would be with their family. We have faught screamed begged and anything else we could possibly due I hired a lawyer five grand down the drain.You know all I want is my babies home.I've done everything they have even asked me to do.Now their saying I can't see my grandchildren cause I'M on a prescription for paipain.I have a very rare blood disease it causes cellulitis a form of blood poisoning to stay dormant in my tissues and nervous system it also causes a ,blood clotting disorder.even with the two blood thinners I'm on I still Continue to develop them them also.DCS knows about my illness and still they refuse to let me see my grandchildren. I Love and miss them so much Please can anyone help Us my grandchildren and I they should be worrying about what toy there going to play with but instead there worrying about if there ever coming home again.THANK YOU DCS FOR ALL YOU'VE DONE. ( And if anyone at all has any ideals or knows who can help. Please contact (765)960~5096.only serious callers

  4. He must be a Rethuglican, for if from the other side of the aisle such acts would be merely personal and thus not something that attaches to his professional life. AND ... gotta love this ... oh, and on top of talking dirty on the phone, he also, as an aside, guess we should mention, might be important, not sure, but .... "In addition to these allegations, Keaton was accused of failing to file an appeal after he collected advance payment from a client seeking to challenge a ruling that the client repay benefits because of unreported income." rimshot

  5. I am not a fan of some of the 8.4 discipline we have seen for private conduct-- but this was so egregious and abusive and had so many points of bad conduct relates to the law and the lawyer's status as a lawyer that it is clearly a proper and just disbarment. A truly despicable account of bad acts showing unfit character to practice law. I applaud the outcome.

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