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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. Indianapolis employers harassment among minorities AFRICAN Americans needs to be discussed the metro Indianapolis area is horrible when it comes to harassing African American employees especially in the local healthcare facilities. Racially profiling in the workplace is an major issue. Please make it better because I'm many civil rights leaders would come here and justify that Indiana is a state the WORKS only applies to Caucasian Americans especially in Hamilton county. Indiana targets African Americans in the workplace so when governor pence is trying to convince people to vote for him this would be awesome publicity for the Presidency Elections.

  2. Wishing Mary Willis only God's best, and superhuman strength, as she attempts to right a ship that too often strays far off course. May she never suffer this personal affect, as some do who attempt to change a broken system: https://www.youtube.com/watch?v=QojajMsd2nE

  3. Indiana's seatbelt law is not punishable as a crime. It is an infraction. Apparently some of our Circuit judges have deemed settled law inapplicable if it fails to fit their litmus test of political correctness. Extrapolating to redefine terms of behavior in a violation of immigration law to the entire body of criminal law leaves a smorgasbord of opportunity for judicial mischief.

  4. I wonder if $10 diversions for failure to wear seat belts are considered moral turpitude in federal immigration law like they are under Indiana law? Anyone know?

  5. 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

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