Justices rule on case about worker's compensation, damages

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Upholding a trial court ruling in a case stemming from a construction site accident, the Indiana Supreme Court has offered guidance for future trials about how juries should calculate a plaintiff’s already-paid compensation benefits when determining punitive damage awards.

The unanimous ruling today comes in The Travelers Indemnity Company of America v. Jerry Jarrells, No. 29S02-0908-CV-378, which comes from Hamilton Superior Judge William Hughes. The case involves a Hamilton County construction site accident in 2002 where steel worker Jerry Jarrells was seriously injured when an unbraced concrete block wall fell on him. He received worker’s compensation from Travelers, and was later awarded more than $500,000 in a third-party personal injury action against the general contractor and subcontractor. At trial, the jury determined his injury value was $925,000 and the jury was given an instruction that they should consider Jarrells' collateral source payment - nearly $66,000 of worker’s compensation payments - when determining the amount of damages.

Judge Hughes held that under the instructions given in the case, the jury had already deducted the amount of worker’s compensation payments from its award and there was no recovery for injury previously covered by that worker’s compensation. 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.

In three separate opinions last year, Indiana Court of Appeals judges disagreed as to the application of a 2005 case about worker’s compensation set-off and jury instruction. The majority found Travelers to be entitled to summary judgment although for different reasons, presuming the jury followed the trial court's instructions and applied the law contained within it – meaning Travelers is entitled to a statutory lien and or reimbursement. The panel reversed and remanded, but the justices granted transfer.

Finding both the trial and appellate courts’ interpretations plausible, the justices held that Judge Hughes’ reading should be affirmed because the trial court is in the best position to rule on a jury trial issue when everything appeared to be in order. In this case, Jarrells is not required to repay his employer’s worker’s compensation carrier after receiving a judgment against a third-party tortfeasor, Justice Theodore Boehm wrote.

“However, in future trials where the trier of fact finds the evidence establishes that the plaintiff has received payment for some of the damages from other sources, the award should include those damages, but only to the extent that the evidence establishes an obligation to repay,” Justice Boehm wrote.


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