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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. What a fine article, thank you! I can testify firsthand and by detailed legal reports (at end of this note) as to the dire consequences of rejecting this truth from the fine article above: "The inclusion and expansion of this right [to jury] in Indiana’s Constitution is a clear reflection of our state’s intention to emphasize the importance of every Hoosier’s right to make their case in front of a jury of their peers." Over $20? Every Hoosier? Well then how about when your very vocation is on the line? How about instead of a jury of peers, one faces a bevy of political appointees, mini-czars, who care less about due process of the law than the real czars did? Instead of trial by jury, trial by ideological ordeal run by Orwellian agents? Well that is built into more than a few administrative law committees of the Ind S.Ct., and it is now being weaponized, as is revealed in articles posted at this ezine, to root out post moderns heresies like refusal to stand and pledge allegiance to all things politically correct. My career was burned at the stake for not so saluting, but I think I was just one of the early logs. Due, at least in part, to the removal of the jury from bar admission and bar discipline cases, many more fires will soon be lit. Perhaps one awaits you, dear heretic? Oh, at that Ind. article 12 plank about a remedy at law for every damage done ... ah, well, the founders evidently meant only for those damages done not by the government itself, rabid statists that they were. (Yes, that was sarcasm.) My written reports available here: Denied petition for cert (this time around): http://tinyurl.com/zdmawmw Denied petition for cert (from the 2009 denial and five year banishment): http://tinyurl.com/zcypybh Related, not written by me: Amicus brief: http://tinyurl.com/hvh7qgp

  2. Justice has finally been served. So glad that Dr. Ley can finally sleep peacefully at night knowing the truth has finally come to the surface.

  3. While this right is guaranteed by our Constitution, it has in recent years been hampered by insurance companies, i.e.; the practice of the plaintiff's own insurance company intervening in an action and filing a lien against any proceeds paid to their insured. In essence, causing an additional financial hurdle for a plaintiff to overcome at trial in terms of overall award. In a very real sense an injured party in exercise of their right to trial by jury may be the only party in a cause that would end up with zero compensation.

  4. Why in the world would someone need a person to correct a transcript when a realtime court reporter could provide them with a transcript (rough draft) immediately?

  5. This article proved very enlightening. Right ahead of sitting the LSAT for the first time, I felt a sense of relief that a score of 141 was admitted to an Indiana Law School and did well under unique circumstances. While my GPA is currently 3.91 I fear standardized testing and hope that I too will get a good enough grade for acceptance here at home. Thanks so much for this informative post.

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